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Prepared by: Dean Ma. Soledad Deriquito-Mawis and the

students of Lyceum of the Philippines University
10, 2014


Alfredo R. Bautista (Bautista), petitioners predecessor, inherited in 1983 a free-patent land

located in Davao Oriental and covered by OCT No. (1572) P-6144.A few years later, he
subdivided the property and sold it to several vendees, herein respondents, via a notarized deed
of absolute sale dated May 30, 1991. Two months later, OCT No.(1572) P-6144 was canceled
and Transfer Certificates of Title (TCTs) were issued in favor of the vendees.

On August 1994, Bautista filed a complaint for repurchase against respondents before the RTC,
anchoring his cause of action on Section 119 of Commonwealth Act No. (CA) 141, otherwise
known as the Public Land Act, which reads:

SECTION 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal
heirs, within a period of five years from the date of the conveyance.

During the pendency of the action, Bautista died and was substituted by petitioner, Efipania.
Respondents, Sps. Lindo entered into a compromise agreement with petitioners, whereby they
agree to cede to Epifania 3,230 sq.m..portion of the property as well as to waive, abandon,
surrender, and withdraw all claims and counterclaims against each other. RTC approve the
compromise agreement on January 2011.

Other respondents, filed a Motion to Dismissed on February 2013 alleging lack of jurisdiction of
the RTC on the ground that the complaint failed to state the value of the property sought to be
recovered and alleges that the total value of the properties in issue is only P16,500 pesos. RTC
ruled in favor of the respondent dismissing the case.

Issue: Whether or not the RTC erred in granting the motion for the dismissal of the case on the
ground of lack of jurisdiction over the subject matter.

Yes. Jurisdiction of courts is granted by the Constitution and pertinent laws. Jurisdiction of
RTCs, as may be relevant to the instant petition, is provided in Sec. 19 of BP 129.

Whether the action filed by petitioners is one involving title to or possession of real property or
any interest therein or one incapable of pecuniary estimation.

Ratio: The Court rules that the complaint to redeem a land subject of a free patent is a civil
action incapable of pecuniary estimation.

It is a well-settled rule that jurisdiction of the court is determined by the allegations in the
complaint and the character of the relief sought. 10 In this regard, the Court, in Russell v. Vestil,
wrote that "in determining whether an action is one the subject matter of which is not capable of
pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the
principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim
is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts
or in the RTCs would depend on the amount of the claim." But where the basic issue is
something other than the right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal relief sought, this Court has considered such


actions as cases where the subject of the litigation may not be estimated in terms of money, and,
hence, are incapable of pecuniary estimation.


WHEREFORE, premises considered, the instant petition is hereby GRANTED. The April 25,
2013 and July 3, 2013 Orders of the Regional Trial Court in Civil Case No. (1798)-021 are

The Regional Trial Court, Branch 32 in Lupon, Davao Oriental is ORDERED to proceed with
dispatch in resolving Civil Case No. (1798)-021.

No pronouncement as to costs.

AVELINA ABARIENTOS REBUSQUILLO [substituted by her heirs, except Emelinda R.

Gualvez] and SALVADOR A. OROSCO, Petitioners, vs. SPS. DOMINGO and EMELINDA
Respondents. G.R. No. 204029, June 4, 2014

Doctrine: An absolutely simulated or fictitious contract is void. A relative simulation, when it

does not prejudice a third person and is not intended for any purpose contrary to law, morals,
good customs, public order or public policy binds the parties to their real agreement. (Art. 1346,

Facts: Petitioner was one of the seven children of deceased, Eulalio Abarientos and Victoria
Villareal. Both of them died intestate. The deceased left a parcel of land in Legazpi City. In 2001,
respondent Emelinda (daughter of petitioner), made petitioner sign two documents. In 2003, the
petitioner discovered that the two documents were an affidavit of self-adjudication, and a deed of
absolute sale in favor of the respondent spouses. Petitioner then filed an action to annul the two
documents before the RTC. In the respondents answer, they admitted the execution of the
affidavit and deed, but they argued that it was with the consent of all the heirs of Eulalio and
Victoria, and that such was agreed to be done to facilitate the titling of the property. Respondents
further argued that the petitioner received the amount of Php 50,000 for the sale.

The RTC ruled in favor of the petitioner. The CA reversed the RTCs decision and said that the
affidavit and the sale were valid.

Issue: Whether or not the affidavit of self-adjudication and the sale are valid. - No

Held: The petition is granted. Both the affidavit and the deed of sale are void.

Ratio: An Affidavit of Self-Adjudication is only proper when the affiant is the sole heir of the
decedent. (Sec. 1, Rule 74, ROC). As admitted by respondents, Avelina was not the sole heir of
Eulalio. In fact, as admitted by respondents, petitioner Salvador is one of the co-heirs by right of
representation of his mother. Without a doubt, Avelina had perjured herself when she declared in
the affidavit that she is the only daughter and sole heir of spouses Eulalio and Victoria. The
falsity of this claim renders her act of adjudicating to herself the inheritance left by her father

In effect, Avelina was not in the right position to sell and transfer the absolute ownership of the
subject property to respondents. As she was not the sole heir of Eulalio and her Affidavit of Self-


Adjudication is void, the subject property is still subject to partition. Avelina, in fine, did not
have the absolute ownership of the subject property but only an aliquot portion. What she could
have transferred to respondents was only the ownership of such aliquot portion. It is apparent
from the admissions of respondents and the records of this case that Avelina had no intention to
transfer the ownership, of whatever extent, over the property to respondents. Hence, the Deed of
Absolute Sale is nothing more than a simulated contract.
The Civil Code provides: Art. 1345. Simulation of a contract may be absolute or relative. The
former takes place when the parties do not intend to be bound at all; the latter, when the parties
conceal their true agreement.
Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it
does not prejudice a third person and is not intended for any purpose contrary to law, morals,
good customs, public order or public policy binds the parties to their real agreement.
In the present case, respondents admitted that the purpose of the sale was to facilitate titling and
not the transfer of ownership.


QUINTOS, JR., ET AL. VS. PELAGIA I. NICOLAS, ET AL. G.R. No. 210252. June 16,

FACTS: Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and respondents
Pelagia Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David Ibarra, Gilberto Ibarra, and the
late Augusto Ibarra are siblings. Their parents, Bienvenido and Escolastica Ibarra, were the
owners of the subject property, a 281 sqm. parcel of land situated along Quezon Ave., Poblacion
C, Camiling, Tarlac, covered by TCT No. 318717.

The deceased parents left their 10 children ownership over the subject property. In 2002,
respondent siblings brought an action for partition against petitioners. The case was docketed as
Civil Case No. 02-52 and was raffled to the RTC at Camiling, Tarlac but was later on dismissed
as neither of the parties appeared and appealed.

Respondent siblings instead resorted to executing a Deed of Adjudication to transfer the property
in favor of the 10 siblings. As a result, TCT No. 318717 was canceled and TCT No. 390484 was
issued in the names of the 10 heirs of the Ibarra spouses. The siblings sold their 7/10 undivided
share over the property in favor of their co-respondents, the spouses Recto and Rosemarie
Candelario by virtue of a Deed of Absolute Sale and Agreement of Subdivision, and the title was
partially cancelled as a result.

Petitioners filed a complaint for Quieting of Title and Damages against respondents wherein they
alleged that during their parents lifetime, the couple distributed their real and personal properties
in favor of their 10 children. Upon distribution, petitioners alleged that they received the subject
property and the house constructed thereon as their share. They had been in adverse, open,
continuous, and uninterrupted possession of the property for over 4 decades and are allegedly
entitled to equitable title. Participation in the execution of the aforementioned Deeds was denied.

Respondents, on the other hand, countered that petitioners cause of action was already barred by
estoppel when in 2006, one of petitioners offered to buy the 7/10 undivided share, which is an
admission petitioners part that the property is not entirely theirs. The Ibarras allegedly
mortgaged the property but because of financial constraints, respondent spouses Candelario had
to redeem the property. Not having been repaid, the Candelarios accepted their share in the
subject property as payment. Lastly, respondents sought, by way of counterclaim, the partition of
the property.

RTC: dismissed petitioners complaint, as it did not find merit in petitioners asseverations that
they have acquired title over the property through acquisitive prescription and noted there was no


document evidencing that their parents bequeathed the property.Subsequent transfer of the
siblings interest in favor of respondent spouses Candelario was upheld.

CA: upheld lower court decision and held that since the property is co-owned by the plaintiffs-
appellants, ( 3/10 undivided interest) and defendants-appellees Spouses Candelarios (7/10
undivided interest) and considering that plaintiffs-appellants had already constructed a 3-storey
building at the back portion of the property, partition is in order, in accord with the subdivision

ISSUES:1. Whether or not the petitioners were able to prove ownership over the property;
2. Whether or not the respondents counterclaim for partition is already barred by laches
or res judicata; and
3. Whether or not the CA was correct in approving the subdivision agreement as basis for
the partition of the property.


Petitioners were not able to prove equitable title or ownership over the property. Quieting of title
is a common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real
property.12 For an action to quiet title to prosper, two indispensable requisites must concur,
namely: (1) the plaintiff or complainant has a legal or equitable title to or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be
casting cloud on the title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or efficacy.13 In the case at bar, the CA correctly observed that
petitioners cause of action must necessarily fail mainly in view of the absence of the first

At the outset, it must be emphasized that the determination of whether or not petitioners
sufficiently proved their claim of ownership or equitable title is substantially a factual issue that
is generally improper for Us to delve into.In any event, a perusal of the records would readily
show that petitioners, as aptly observed by the courts below, indeed, failed to substantiate their
claim. Their alleged open, continuous, exclusive, and uninterrupted possession of the subject
property is belied by the fact that respondent siblings, in 2005, entered into a Contract of Lease
with the Avico Lending Investor Co. over the subject lot without any objection from the
petitioners. Petitioners inability to offer evidence tending to prove that Bienvenido and
Escolastica Ibarra transferred the ownership over the property in favor of petitioners is likewise
fatal to the latters claim.

The cardinal rule is that bare allegation of title does not suffice. The burden of proof is on the
plaintiff to establish his or her case by preponderance of evidence. Regrettably, petitioners failed
to discharge the said burden. There is no reason to disturb the finding of the RTC that all 10
siblings inherited the subject property from Bienvenido and Escolastica Ibarra, and after the
respondent siblings sold their aliquot share to the spouses Candelario, petitioners and respondent
spouses became co-owners of the same.
The counterclaim for partition is not barred by prior judgment.

As to the issue of partition as raised by respondents in their counterclaim, the petitioners

countered that the action for partition has already been barred by res judicata.

The Court had the occasion to rule that dismissal with prejudice satisfies one of the elements of
res judicata. It is understandable why petitioners would allege res judicata to bolster their claim.
However, dismissal with prejudice under Rule 17, Sec. 3 of the Rules of Court cannot defeat the
right of a co-owner to ask for partition at any time, provided that there is no actual adjudication
of ownership of shares yet. This is pertinent to Article 494 of the Civil Code which discusses
how the law generally does not favor the retention of co-ownership as a property relation, and is
interested instead in ascertaining the co-owners specific shares so as to prevent the allocation of


portions to remain perpetually in limbo. Thus, the law provides that each co-owner may demand
at any time the partition of the thing owned in common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co-owners under
Art. 494 of the Civil Code, the latter must prevail. To construe otherwise would diminish the
substantive right of a co-owner through the promulgation of procedural rules. Such a
construction is not sanctioned by the principle, which is too well settled to require citation, that a
substantive law cannot be amended by a procedural rule. Art. 494 is an exception to Rule 17,
Sec. 3 of the Rules of Court to the effect that even if the order of dismissal for failure to
prosecute is silent on whether or not it is with prejudice, it shall be deemed to be without

This is not to say, however, that the action for partition will never be barred by res judicata.
There can still be res judicata in partition cases concerning the same parties and the same subject
matter once the respective shares of the co-owners have been determined with finality by a
competent court with jurisdiction or if the court determines that partition is improper for co-
ownership does not or no longer exists.

The counterclaim for partition is not barred by laches. We now proceed to petitioners second
line of attack. According to petitioners, the claim for partition is already barred by laches since
by 1999, both Bienvenido and Escolastica Ibarra had already died and yet the respondent siblings
only belatedly filed the action for partition, Civil Case No. 02-52, in 2002. And since laches has
allegedly already set in against respondent siblings, so too should respondent spouses Candelario
be barred from claiming the same for they could not have acquired a better right than their

Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that
whichby the exercise of due diligencecould or should have been done earlier. It is the
negligence or omission to assert a right within a reasonable period, warranting the presumption
that the party entitled to assert it has either abandoned or declined to assert it. The principle is a
creation of equity which, as such, is applied not really to penalize neglect or sleeping upon ones
right, but rather to avoid recognizing a right when to do so would result in a clearly inequitable
situation. As an equitable defense, laches does not concern itself with the character of the
petitioners title, but only with whether or not by reason of the respondents long inaction or
inexcusable neglect, they should be barred from asserting this claim at all, because to allow them
to do so would be inequitable and unjust to petitioners.

As correctly appreciated by the lower courts, respondents cannot be said to have neglected to
assert their right over the subject property. They cannot be considered to have abandoned their
right given that they filed an action for partition. The fact that respondent siblings entered into a
Contract of Lease with Avico Lending Investor Co. over the subject property is evidence that
they are exercising rights of ownership over the same.

The CA erred in approving the Agreement for Subdivision. There is merit, however, in
petitioners contention that the CA erred in approving the proposal for partition submitted by
respondent spouses. Art. 496, as earlier cited, provides that partition shall either be by agreement
of the parties or in accordance with the Rules of Court. In this case, the Agreement of
Subdivision allegedly executed by respondent spouses Candelario and petitioners cannot serve as
basis for partition forrespondents admitted that the agreement was a falsity and that petitioners
never took part in preparing the same. The "agreement" was crafted without any consultation
whatsoever or any attempt to arrive at mutually acceptable terms with petitioners. It, therefore,
lacked the essential requisite of consent. Thus, to approve the agreement in spite of this fact
would be tantamount to allowing respondent spouses to divide unilaterally the property among
the co-owners based on their own whims and caprices.


Respondent. G.R. No. 201001: November 10, 2014

DOCTRINE: In a suit for the collection of money, the judge may equitably reduce the penalty
when the debtor has partly or irregularly complied with the principal obligation. Further, even if
there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or

FACTS: Monark Equipment Corp. (respondent Monark) leased 5 pieces of heavy equipment to
MCMP Construction Corporation (petitioner MCMP) covered by a Rental Equipment Contract.

In the invoice, it states that the customer agrees to the following: a) that the credit sales are
payable within 30 days from the date of invoice, b) to pay interest at 24% p.a. on all amounts, c)
to the collection fee of 1% compounded monthly and 2% per month penalty charge for late
payment on amounts overdue d) to pay a sum equal to 25% of any amount due as attorneys fees
in case of suit, and expressly submit to the jurisdiction of the courts of Quezon City, Makati,
Pasig or Manila, Metro Manila, for any legal action arising from, this transactions.

MCMP however failed to pay all the rental fees. Upon demands by Monark, MCMP was only
able to pay P100,000.00 on April 15, 2001 and PhP100,000.00 on August 15, 2001. Further
demands went unheeded. As of April 30, 2002, MCMP owed Monark the amount of

On June 18, 2002, Monark filed a suit for a Sum of Money, the RTC issued a Decision in favor
of the plaintiff, ordering MCMP to pay 1,282,481.83, as well as the 25% of the amount and the
costs of suit.

ISSUE: Can the Court reduce the penalty charges imposed?

HELD: YES. The trial court imposed upon MCMP a 24% per annum interest on the rental fees
as well as a collection fee of 1% per month compounded monthly and a 2% per month penalty
charge. In all, the effective interest rate foisted upon MCMP is 60% per annum. On top of this,
MCMP was assessed for attorneys fees at the rate of 25% of the total amount due. The Court
finds these exorbitant and unconscionable rates.

Article 1229 of the Civil Code states:

Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been
partly or irregularly complied with by the debtor. Even if there has been no performance, the
penalty may also be reduced by the courts if it is iniquitous or unconscionable. In exercising this
power to determine what is iniquitous and unconscionable, courts must consider the
circumstances of each case since what may be iniquitous and unconscionable in one may be
totally just and equitable in another."

Also, respondent promised to pay 25% of his outstanding obligations as attorneys fees in case of
non-payment thereof. Attorneys fees here are in the nature of liquidated damages. As long as
said stipulation does not contravene law, morals, or public order, it is strictly binding upon
respondent. Nonetheless, courts are empowered to reduce such rate if the same is iniquitous or
unconscionable pursuant to the above-quoted provision. This sentiment is echoed inArticle 2227
of the Civil Code, to wit:

Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable.


Following the above provisions, the interest and penalty charges as well as the stipulated
attorneys fees and the collection charge must all be reduced by the Court.

Judgment is hereby rendered in favor of the plaintiff, and ordering the defendant to pay the
1. PhP 765,380.33 representing the unpaid rental fees;
2. Interest of 12% per annum on the unpaid rental fees to be computed from March 1, 200117
until payment;
3. Penalty and collection charge of 6% per annum on the unpaid rental fees to be computed from
March 1, 2001;
4. Attorney's Fees of five percent (5%) of the total amount to be recovered; and,
5. The costs of suit.


SCANMAR MARITIME SERVICES, INC., Respondents. G.R. No. 192531: November 12,

DOCTRINE: In case of the death of an adopted child, leaving no children or descendants, his
parents and relatives by consanguinity and not by adoption, shall be his legal heirs.

FACTS: John Colcol died in a work-related accident while he was employed as an electrician by
Scanmar Maritime Services, Inc. He was enrolled under the governments Employees
Compensation Program (ECP).

Since John was childless and unmarried, petitioner Bernardina P. Bartolome, Johns biological
mother and, allegedly, sole remaining beneficiary, filed a claim for death benefits with the SSS.
However, SSS denied the claim, stating that the petitioner is not considered as the parent of John
as he was legally adopted by Cornelio Colcol, the victims great grandfather, therefore
Bernardina cannot be considered as Johns beneficiary because she is not the deceaseds
legitimate parent. Cornelio Colcol, however, already died on October 26, 1987, less than three
years since the decree of Johns adoption became final.

ISSUE: Do the biological parents of the covered qualify as the deceaseds dependent parent and,
thus, entitled to the death benefits?

HELD: YES. when Cornelio, in 1985, adoptedJohn, then about two (2) years old, petitioners
parental authority over John was severed. However, lest it be overlooked, one key detail the ECC
missed, aside from Cornelios death, was that when the adoptive parent died less than three (3)
years after the adoption decree, John was still a minor, at about four (4) years of age.

Johns minority at the time of his adopters death is a significant factor in the case at bar. Under
such circumstance, parental authority should be deemed to have reverted in favor of the
biological parents.

Moreover, this ruling finds support on the fact that even though parental authority is severed by
virtue of adoption, the ties between the adoptee and the biological parents are not entirely
eliminated. To demonstrate, the biological parents, insome instances, are able to inherit from the
adopted, as can be gleaned from Art. 190 of the Family Code:

Art. 190. Legal or intestate succession to the estate of the adopted shall be governed by the
following rules:


(2) When the parents, legitimate or illegitimate, or the legitimate ascendants of the adopted
concur withthe adopter, they shall divide the entire estate, one-half tobe inherited by the parents
or ascendants and the other half, by the adopters;
(6) When only collateral blood relatives of the adopted survive, then the ordinary rules of legal or
intestate succession shall apply.

Similarly, at the time of Cornelio Colcols death, which was prior to the effectivity of the Family
Code, the governing provision is Art. 984 of the New Civil Code, which provides:
Art. 984. In case of the death of an adopted child, leaving no children or descendants, his parents
and relatives by consanguinity and not by adoption, shall be his legal heirs.

From the provisions, it is clear that the biological parents retain their rights of succession tothe
estate of their child who was the subject of adoption. While the benefits arising from the death of
an SSS covered employee do not form part of the estate of the adopted child, the pertinent
provision on legal or intestate succession at least reveals the policy on the rights of the biological
parents and those by adoption vis--vis the right to receive benefits from the adopted. In the
same way that certain rights still attach by virtue of the blood relation, so too should certain
obligations, which, We rule, include the exercise of parental authority, in the event of the
untimely passing of their minor offsprings adoptive parent.

Thus, the Court rules that Cornelios death at the time of Johns minority resulted in the
restoration of petitioners parental authority over the adopted child.