Case Digest in Persons and Family Relations, Property and Succession.

Submitted By: Maria Lourdes GenioCiv law Rev 1 Thursday 5-9pm

Submitted To: Atty. Crisostomo Uribe

2011 Case Digest in Persons and Family Relations

1. ROSALINO L. MARABLE V MYRNA F. MARABL G.R. No. 178741 January 17, 2011

2. ALAIN M. DIÑO V MA. CARIDAD L. DIÑO G.R. No. 178044 January 19, 2011

3. CYNTHIA E. YAMBAO V REPUBLIC OF THE PHILIPPINES and PATRICIO E. YAMBAO G.R. No. 184063 January 24, 2011

4. JOSE REYNALDO B. OCHOSA V BONA J. ALANO and REPUBLIC OF THE PHILIPPINES G.R. No. 167459 January 26, 2011

5. REPUBLIC OF THE PHILIPPINES V JULIAN EDWARD EMERSON COSETENG-MAGPAYO (a.k.a. Julian Edward Emerson Marquez-Lim ) G.R. No. 19476 February 2, 2011

6. SPOUSES MOISES AND CLEMENCIA ANDRADA V PILHINO SALES CORPORATION G.R. No. 156448 February 23, 2011

7. ESTRELLITA JULIAJVO-LLAVE V REPUBLIC OF THE PHILIPPINES, et al., G.R. No. 169766 March 30, 2011

8. JOSE A. ROS and ESTRELLA AGUETE V PHILIPPINE NATIONAL BANK – LAOAG BRANCH G.R. No. 170166 April 6, 2011

9. ELENITA M. DEWARA V SPOUSES RONNIE and GINA LAMELA and STENILE ALVERO G.R. No. 179010 April 11, 2011

2011 Case Digest in Property

1. REPUBLIC OF THE PHILIPPINES V CARLOS R. VEGA, et al., G.R. No. 177790 January 17, 2011

2. LUZON DEVELOPMENT BANK V ANGELES CATHERINE ENRIQUEZ G.R. No. 168646 January 12, 2011

3. GONZALO VILLANUEVA (represented by his heirs V SPOUSES FROILAN and LEONILA BRANOCO G.R. No. 172804 January 24, 2011

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4. MARGARITA F. CASTRO V NAPOLEON A. MONSOD G.R. No. 183719 February 2, 2011

5. MANILA INTERNATIONAL AIRPORT AUTHORITY V REYNALDO AVILA, et al.,

6. INSURANCE OF THE PHILIPPINES ISLANDS CORPORATION V SPOUSES VIDAL and JULITA GREGORIO G.R. No. 174104 February 14, 2011

7. RAVELINA LIMSON V WACK WACK CONDOMINIUM CORPORATION G.R. No. 188802 February 14, 2011

8. DOLORITA C BEATINGO V LILIA BU GASIS G.R. No. 179641February 9, 2011

9. VICENTE YU CHANG and SOLEDAD YU CHANG V REPUBLIC OF THE PHILIPPINES G.R. No. 171726 February 23, 2011

10.REPUBLIC OF THE PHILIPPINES (Department of Transportation and Communications) V CITY OF MANDALUYONG G.R. No. 184879 February 23, 2011

11.RE: COMPLAINT OF CONCERNED MEMBERS OF CHINESE GROCERS ASSOCIATION AGAINST JUSTICE SOCORRO B. INTING OF THE COURT OF APPEALS A.M. OCA IPI No. 10-177-CA-J April 12, 2011

12.ESTATE OF PASTOR M. SAMSON (represented by his heir Rolando B. Samson) V MERCEDES R. SUSANO and NORBERTO R. SUSANO G.R. No. 179024 May 30, 2011

13.ROSALIA N. ESPINO V SPOUSES SHARON and CELEBI BULUT G.R. No. 183811 May 30, 2011

14.EDUARDO AGTARAP V SEBASTIAN AGTARAP G.R. No. 177099 June 8, 2011

2011 Case Digest in Succession

1. GONZALO VILLANUEVA (represented by his heirs) V SPOUSES FROILAN and LEONILA BRANOCO G.R. No. 172804 January 24, 2011

2. In re: IN THE MATTER OF THE PETITION TO APPROVE THE WILL OF RUPERTA PALAGANS WITH PRAYER FOR THE

APPOINTMENT OF SPECIAL ADMINISTRATOR

3. MANUEL MIGUEL PALAGANAS and BENJAMIN GREGORIO PALAGANA V ERNESTO PALAGANAS G.R. No. 169144 January 26, 2011

4. ATTY. RICARDO B. BERMUDO V FERMINA TAYAG-ROXAS G.R. No. 172879 February 2, 2011

5. EDUARDO AGTARAP V SEBASTIAN AGTARAP G.R. No. 177099 June 8, 2011

2011 Case Digest in Persons and Family Relations.

ROSALINO L. MARABLE, petitioner,vs.

MYRNA F. MARABLE, respondent.

G.R. No. 178741 January 17, 2011 Third Division Villarama, Jr., J.

FACTS:

The Rosalino and Myra were married. However, as the years went by, their marriage turned sour which resulted to frequent quarrels. When Rosalino could not bear anymore his relationship with Myrna, he decided to leave the family home. Later on, he converted to Islam after dating several women.

Rosalino decided to sever his marital bonds with Myrna, thus, he filed a petition for declaration of nullity of his marriage with the latter on the ground that he is psychological incapacitated to perform the essential obligations of marital life. In his petition, Rosalino averred that he came from a poor family and was already exposed to the hardships of farm life at an early age. His father, although responsible and supportive, was a compulsive gambler and womanizer. His father left their family to live with another woman with whom he had seven other children. This caused Rosalino’s mother and siblings to suffer immensely. Thus, he became obsessed with attention and worked hard to excel so he would be noticed. Rosalino further alleged that he supported himself through college and worked hard for the company he joined. He rose from the ranks at Advertising and Marketing Associates, Inc., and became Senior Executive Vice President and Chief Finance Officer therein. But despite his success at work, he alleged that his misery and loneliness as a child lingered as he experienced a void in his relationship with his own family. In support of his petition, petitioner presented the Psychological Report of Dr. Nedy L. Tayag, a clinical psychologist from the National Center for Mental Health. Dr. Tayag’s report stated that petitioner is suffering from "Antisocial Personality Disorder," characterized by a pervasive pattern of social deviancy, rebelliousness, impulsivity, self-centeredness, deceitfulness and lack of remorse. The report also revealed that petitioner’s personality disorder is rooted in deep feelings of rejection starting from the family to peers, and that his experiences have made him so self-absorbed for needed attention. It was Dr. Tayag’s conclusion that petitioner is psychologically incapacitated to perform his marital obligations.

After trial, the RTC rendered a decision annulling petitioner’s marriage to respondent on the ground of petitioner’s psychological incapacity. Upon appeal by the Office of the Solicitor General (OSG), the CA reversed the RTC decision. The CA held that the circumstances related by petitioner are insufficient to establish the existence of petitioner’s psychological incapacity. The CA noted that Dr. Tayag did not fully explain the root cause of the disorder nor did she give a concrete explanation as to how she arrived at a conclusion as to its gravity or permanence.

ISSUE:

Whether or not Rosalino’s disorder, Antisocial Personality Disorder, tantamount to psychological incapacity which will justify as a grounds for his petition of nullification of his marriage with Myrna?

RULING:

The term "psychological incapacity" to be a ground for the nullity of marriage under Article 36 of the Family Code, refers to a serious psychological illness afflicting a party even before the celebration of the marriage. These are the disorders that result in the utter insensitivity or inability of the afflicted party to give meaning and significance to the marriage he or she has contracted. Psychological incapacity must refer to no less than a mental (not physical) incapacity that causes a party to be truly in cognitive of the basic marital covenants that concomitantly must be assumed and discharged by the parties to the marriage.

In the instant case, petitioner completely relied on the psychological examination conducted by Dr. Tayag on him to establish his psychological incapacity. The result of the examination and the findings of Dr. Tayag however, are insufficient to establish petitioner's psychological incapacity. In cases of annulment of marriage based on Article 36 of the Family Code, as amended, the psychological illness and its root cause must be proven to exist from the inception of the marriage. Here, the appellate court correctly ruled that the report of Dr. Tayag failed to explain the root cause of petitioner’s alleged psychological incapacity. The evaluation of Dr. Tayag merely made a general conclusion that petitioner is suffering from an Anti-social Personality Disorder but there was no factual basis stated for the finding that petitioner is a socially deviant person, rebellious, impulsive, self-centered and deceitful.

ALAIN M. DIÑO, petitioner,vs.

MA. CARIDAD L. DIÑO, respondent.

G.R. No. 178044 January 19, 2011 Second Division Carpio, J.

FACTS:

Alain and Caridad were married. However, Alain filed an action for declaration of nullity of marriage on the ground of psychological incapacity against Caridad. Alain alleged that Caridad failed in her marital obligation to give love and support to him, and had abandoned her responsibility to the family, choosing instead to go on shopping sprees and gallivanting with her friends that depleted the family assets. He further alleged that respondent was not faithful, and would at times become violent and hurt him. Extrajudicial service of summons was effected upon respondent who, at the time of the filing of the petition, was already living in the United States of America. But despite receipt of the summons, Caridad did not file an answer to the petition within the reglementary period. Alain later on learned that Caridad filed a petition for divorce of her marriage with him before the Superior Court of California, who in turn granted the same. Alain also learned that Caridad was already married to another man. Dr. Nedy L. Tayag, a clinical psychologist, submitted a psychological report establishing that Caridad was suffering from Narcissistic Personality Disorder which was deeply ingrained in her system since her early formative years, and that Caridad’s disorder was long-lasting and by nature, incurable.

The trial court granted the petition of Alain. The trial court also ruled that a decree of absolute nullity of marriage shall be issued after liquidation, partition anddistribution of the parties’ properties under Article 147 of the Family Code. Alain assailed such ordedr of the trial court. He argues that Section 19(1) of the Rule on Declaration of Absolute Nullity of Null Marriages and Annulment of Voidable Marriages does not apply to Article 147 of the Family Code.

ISSUE:

Whether or not the trial court erred when it ordered that a decree of absolute nullity of marriage shall only be issued after liquidation, partition, and distribution of the parties’ properties under Article 147 of the Family Code?

RULING:

In a void marriage, regardless of its cause, the property relations of the parties during the period of cohabitation is governed either by Article 147 or Article 148 of the Family Code.7

Article 147 of the Family Code applies to union of parties who are legally capacitated and not barred by any impediment to contract marriage, but whose marriage is nonetheless void,8 such as petitioner and respondent in the case before the Court.

The trial court erred in ordering that a decree of absolute nullity of marriage shall be issued only after liquidation, partition and distribution of the parties’ properties under Article 147 of the Family Code. The ruling has no basis because Section 19(1) of the Rule does not apply to cases governed under Articles 147 and 148 of the Family Code. issued by the court only after compliance with Articles 50 and 51 of the Family Code as implemented under the Rule on Liquidation, Partition and Distribution of Properties.

CYNTHIA E. YAMBAO, petitioner,vs.

REPUBLIC OF THE PHILIPPINES and PATRICIO E. YAMBAO, respondents.

G.R. No. 184063 January 24, 2011 Second Division Nachura, J.

FACTS:

Cynthia and Patricio were married. After 35 years of marriage, Cynthia filed a petition before the RTC of Makati, praying that their marriage be declared void by reason of Patricio’s psychological incapacity. Cynthia averred that through all the years of their married life, she was the only one who earned a living and took care of the children. Patricio, she alleged, did nothing but eat and sleep all day, and spend time with friends. She also claimed that, Patricio became insecure and jealous and would get mad every time he would see her talking to other people, even to her relatives. When Patricio started threatening to kill her, she decided to leave the conjugal abode and live separately from him. She then consulted a psychiatrist who concluded that respondent was indeed psychologically incapacitated to comply with the essential marital obligations. In his answer, Patricio denied all the allegations of Cythia.

The RTC rendered a decision dismissing the petition for lack of merit. The RTC held that Cynthia's evidence failed to support her argument that Patricio was totally unaware of and incapacitated to perform his marital obligations such that the marriage was void from the beginning. The trial court also rejected the supposed negative effect of respondent's Dependent Personality Disorder. On appeal, the CA affirmed the RTC’s decision. Petitioner argues that respondent's Dependent Personality Disorder was sufficiently established by her testimony and that of her sister, which testimonies were both credible considering that they have personal knowledge of the circumstances prior to and during the parties' marriage. On the other hand, respondent's evidence consisted merely of his sole testimony, which was self-serving and full of inconsistencies.

ISSUES:

Does the totality of Cythia’s evidence establish Patricio’s psychological incapacity to perform the essential obligations of marriage?

RULING:

The intendment of the law has been to confine the application of Article 36 to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage. Thus, for a marriage to be annulled under Article 36 of the Family Code, the psychologically incapacitated spouse must be shown to suffer no less than a mental (not physical) incapacity that causes him or her to be truly incognitive of the basic marital covenants. It is a malady so grave and so permanent as to deprive one of awareness of the duties and responsibilities of the matrimonial bond one is about to assume.

In this case, there is no showing that respondent was suffering from a psychological condition so severe that he was unaware of his obligations to his wife and family. On the contrary, respondent's efforts, though few and far between they may be, showed an understanding of his duty to provide for his family, albeit he did not meet with much success. Whether his failure was brought about by his own indolence or irresponsibility, or by some other external factors, is not relevant. What is clear is that respondent, in showing an awareness to provide for his family, even with his many failings, does not suffer from psychological incapacity.

Article 36 contemplates incapacity or inability to take cognizance of and to assume basic marital obligations and not merely difficulty, refusal, or neglect in the performance of marital obligations or ill will. This incapacity consists of the following: (a) a true inability to commit oneself to the essentials of marriage; (b) this inability to commit oneself must refer to the essential obligations of marriage: the conjugal act, the community of life and love, the rendering

of mutual help, the procreation and education of offspring; and (c) the inability must be tantamount to a psychological abnormality. It is not enough to prove that a spouse failed to meet his responsibility and duty as a married person; it is essential that he must be shown to be incapable of doing so due to some psychological illness.

That respondent, according to petitioner, "lack[ed] effective sense of rational judgment and responsibility" does not mean he is incapable to meet his marital obligations. His refusal to help care for the children, his neglect for his business ventures, and his alleged unbearable jealousy may indicate some emotional turmoil or mental difficulty, but none have been shown to amount to a psychological abnormality.

Moreover, even assuming that respondent's faults amount to psychological incapacity, it has not been established that the same existed at the time of the celebration of the marriage.

In his psychological report, Dr. Tolentino merely said, "[b]ecause one's personality or character is formed early in life, it has a clear ANTECEDENT and it has an enduring pattern of inner experience that deviates from the expectations of the individual's culture," without explaining this antecedent. Even petitioner, in her allegations, never explained how the alleged psychological incapacity manifested itself prior to or at the time of the celebration of their marriage.

JOSE REYNALDO B. OCHOSA, petitioner,vs.

BONA J. ALANO and REPUBLIC OF THE PHILIPPINES, respondents.

G.R. No. 167459 January 26, 2011 First Division Leonardo-De Castro,

FACTS:

Jose and Bona were married. The former is a member and an officer of the AFP, thus he was often assigned to different parts of the Philippines. However, Jose was charged with rebellion for his alleged participation in the failed coup d’ etat. He was incarcerated in Camp Crame. Jose has no knowledge that Bona was an unfaithful wife. The latter had an affair with the former’s driver. When Jose learned about such illicit affair, he confronted Bona and his driver, who in turn confirmed the affair. As a result, Jose drove Bona away from their living quarters, together with their adopted child, Ramona, who later on went back to Jose and left Bona.

Jose filed a petition for declaration of nullity of marriage, seeking to nullify his marriage to Bona on the ground of the latter’s psychological incapacity to fulfill the essential obligations of marriage. Despite service of summons, Bona failed to file her answer, even before the prosecutor for the investigation of the existence of collusion. During the trial, one of the witnesses presented was Dr. Rondain, a psychiatrist, who testified that after conducting several tests, she reached the conclusion that Bona was suffering from histrionic personality disorder, and that with her extra marital affair that is her way of seeking attention and seeking emotions from other person and not from her husband, Bona is not fulfilling the basic responsibility in a marriage. According to Rondain, Bona's psychological disorder was traceable to her family history, having for a father a gambler and a womanizer and a mother who was a battered wife. There was no possibility of a cure since Bona does not have an insight of what is happening to her and refused to acknowledge the reality.

On its decision, the trial court granted the petition and nullified the parties’ marriage. On appeal, the CA reversed and set aside the trial court’s decision, thus dismissing the petition for declaration of nullity of marriage filed by Jose.

ISSUE:

Whether or not Bona is psychologically incapacitated to comply with the essential marital obligations?

RULING:

In the case at bar, the trial court granted the petition for the declaration of nullity of marriage on the basis of Dr. Elizabeth Rondain's testimony and her psychiatric evaluation report as well as the individual testimonies of Jose and his military aides.

The SC is sufficiently convinced, after a careful perusal of the evidence presented in this case, that Bona had been, on several occasions with several other men, sexually disloyal to her spouse, Jose. Likewise, we are persuaded that Bona had indeed abandoned Jose. However, the court cannot apply the same conviction to Jose's thesis that the totality of Bona's acts constituted psychological incapacity as determined by Article 36 of the Family Code. There is inadequate credible evidence that her "defects" were already present at the inception of, or prior to, the marriage. In other words, her alleged psychological incapacity did not satisfy the jurisprudential requisite of "juridical antecedence."

With regard to Bona's sexual promiscuity prior to her marriage to Jose, we have only the uncorroborated testimony of Jose made in open court to support this allegation. Dr. Rondain's testimony and psychiatric evaluation report do not provide evidentiary support to cure the doubtful veracity of Jose's one-sided assertion. Even if we take into account the psychiatrist's

conclusion that Bona harbors a Histrionic Personality Disorder that existed prior to her marriage with Jose and this mental condition purportedly made her helplessly prone to promiscuity and sexual infidelity, the same cannot be taken as credible proof of antecedence since the method by which such an inference was reached leaves much to be desired in terms of meeting the standard of evidence required in determining psychological incapacity. The psychiatrist's findings on Bona's personality profile did not emanate from a personal interview with the subject herself as admitted by Dr. Rondain in court. As a consequence thereof, Dr. Rondain merely relied on her interview with Jose and his witness. Verily, Dr. Rondain evaluated Bona's psychological condition indirectly from the information gathered solely from Jose and his witnesses. This factual circumstance evokes the possibility that the information fed to the psychiatrist is tainted with bias for Jose's cause, in the absence of sufficient corroboration.

REPUBLIC OF THE PHILIPPINES, petitioner,vs.

JULIAN EDWARD EMERSON COSETENG-MAGPAYO (a.k.a. Julian Edward Emerson Marquez-Lim)

G.R. No. 19476 February 2, 2011 Third Division Carpio-Morales, J.

FACTS:

Born in Makati, Julian Edward Emerson Coseteng Magpayo is the son of Fulvio M. Magpayo Jr. and Anna Dominique Marquez-Lim Coseteng who, as Edward's certificate of live birth shows, had contracted marriage.

Claiming, however, that his parents were never legally married, Edward filed before the RTC of Quezon City a Petition to change his name to Julian Edward Emerson Marquez Lim Coseteng. In support of his petition, he submitted a certification from the NSO stating that his mother Anna Dominique "does not appear in National Indices of Marriage." Edward also submitted his academic records from elementary up to college showing that he carried the surname "Coseteng," and the birth certificate of his child where "Coseteng" appears as his surname. In the 1998, 2001 and 2004 Elections, respondent ran and was elected as Councilor of Quezon City's 3rd District using the name "JULIAN M.L. COSETENG."

No opposition to the petition having been filed, an order of general default was entered by the trial court which then allowed respondent to present evidence ex parte. The trial court granted Edward’s petition and directed the Civil Registrar of Makati City to: (a) delete in the Certificate of live Birth the entry March 26, 1972, for date and place of marriage of parties; (b) correct the entry of the surname from Magpayo to Coseteng; (c) delee the entry Coseteng for middle name; and (d) delete the entry of the name of his father. The Republic, thru the OSG filed a petition for review before the SC contending that the deletion of the entry on the date and place of marriage of Edward's parents from his birth certificate has the effect of changing his civil status from legitimate to illegitimate, hence, any change in civil status of a person must be effected through an appropriate adversary proceeding. The Republic adds that by ordering the deletion of Edward’s parents' date of marriage and the name of his father from the entries in his birth certificate, the trial court exceeded its jurisdiction, such order not being in accord with Edward’s prayer to allow him to change his name. Edward counters that the proceeding before the trial court was adversarial in nature and that he complied with Rule 103.

ISSUE:

a. Whether or not the order of the RTC is correct in allowing Edward to change his name?

b. Whether or not Rule 103 in this case is the proper remedy?c. Whether or not the RTC’s order to delete the entry of Edward’s parents’ date of

marriage, as well as the name of his father in his Birth Certificate is correct?

RULING:

a. A person can effect a change of name under Rule 103 (CHANGE OF NAME) using valid and meritorious grounds including (a) when the name is ridiculous, dishonorable or extremely difficult to write or pronounce; (b) when the change results as a legal consequence such as legitimation; (c) when the change will avoid confusion; (d) when one has continuously used and been known since childhood by a Filipino name, and was unaware of alien parentage; (e) a sincere desire to adopt a Filipino name to erase signs of former alienage, all in good faith and without prejudicing anybody; and (f) when the surname causes embarrassment and there is no showing that the desired change of name was for a fraudulent purpose or that the change of name would prejudice public interest. Respondent's reason for changing his name cannot be considered as one of, or analogous to, recognized grounds, however.

The change being sought in respondent's petition goes so far as to affect his legal status in relation to his parents. It seeks to change his legitimacy to that of illegitimacy. Rule 103 then would not suffice to grant respondent's supplication.

b. Since respondent's desired change affects his civil status from legitimate to illegitimate, Rule 108 applies. Rule 108 clearly directs that a petition which concerns one's civil status should be filed in the civil registry in which the entry is sought to be cancelled or corrected - that of Makati in the present case, and "all persons who have or claim any interest which would be affected thereby" should be made parties to the proceeding.

As earlier stated, however, the petition of respondent was filed not in Makati where his birth certificate was registered but in Quezon City. And as the above-mentioned title of the petition filed by respondent before the RTC shows, neither the civil registrar of Makati nor his father and mother were made parties thereto.

The procedure recited in Rule 103 regarding change of name and in Rule 108 concerning the cancellation or correction of entries in the civil registry are separate and distinct. They may not be substituted one for the other for the sole purpose of expediency. To hold otherwise would render nugatory the provisions of the Rules of Court allowing the change of one's name or the correction of entries in the civil registry only upon meritorious grounds.

c. Even assuming arguendo that respondent had simultaneously availed of these two statutory remedies, respondent cannot be said to have sufficiently complied with Rule 108. For, as reflected above, aside from improper venue, he failed to implead the civil registrar of Makati and all affected parties as respondents in the case.

Republic v. Labrador mandates that "a petition for a substantial correction or change of entries in the civil registry should have as respondents the civil registrar, as well as all other persons who have or claim to have any interest that would be affected thereby." It cannot be gainsaid that change of status of a child in relation to his parents is a substantial correction or change of entry in the civil registry.

Labayo-Rowe highlights the necessity of impleading indispensable parties in a petition which involves substantial and controversial alterations.

Rule108 clearly mandates two sets of notices to different "potential oppositors." The first notice is that given to the "persons named in the petition" and the second (which is through publication) is that given to other persons who are not named in the petition but nonetheless may be considered interested or affected parties, such as creditors.

In fine, when a petition for cancellation or correction of an entry in the civil register involves substantial and controversial alterations including those on citizenship, legitimacy of paternity or filiation, or legitimacy of marriage, a strict compliance with the requirements of Rule 108 of the Rules of Court is mandated.

the petition is GRANTED and the decision of the RTC of QC is NULLIFIED

SPOUSES MOISES AND CLEMENCIA ANDRADA, petitioner,vs.

PILHINO SALES CORPORATION, respondents.

G.R. No. 156448 February 23, 2011 Third Division Bersamin, J.

FACTS:

Pilhino Sales Corporation sued Spuses Andrada in the RTC to recover the principal sum of P240,863.00, plus interest and incidental charges. The RTC issued a writ of preliminary attachment, which came to be implemented against a Hino truck and a Fuso truck both owned by Jose Andrada, Jr. However, the levies on attachment were lifted after Jose filed a counter-attachment In due course, the RTC rendered a decision against the Spouses Andrada. Philno opted to enfore the writ of execution against the properties of Spuses Jose and Maxima, and not on the counter-bond. As a result, the sheriff seized the Hino truck and sold it at the ensuing public auction, with Pilhino as the highest bidder. However, the Hino truck could not be transferred to Pilhino's name due to its having been already registered in the name of Moises Andrada. It appears that the Hino truck had been meanwhile sold by Jose to Moises, which sale was unknown to Pilhino, and that Moises had mortgaged the truck to BA Finance to secure his own obligation. BA Finance sued Moises for his failure to pay the loan. After a decision was rendered in the action in favor of BA Finance, a writ of execution issued, by which the sheriff levied upon and seized the Hino truck while it was in the possession of Pilhino and sold it at public auction, with BA Finance as the highest bidder.

Consequently, Pilhino instituted an action in the RTC against Spouses Jose Andrada, Jr. and Maxima Andrada, Spouses Moises Andrada and Clemencia Andrada, Jose Andrada, Sr., BA Finance, Land Transportation Office in Surallah, South Cotabato, and the Registrar of Deeds of General Santos City to annul the following: (a) the deed of sale between Jose Andrada, Jr. and Moises Andrada; (b) the chattel mortgage involving the Hino truck between Moises Andrada and BA Finance; (c) the deed of conveyance executed by Jose Andrada, Jr. in favor of his father, Jose Andrada, Sr., involving a hard-top jeep; and (d) the certificate of registration of the Hino truck in the name of Moises Andrada as well as the registration of the chattel mortgage with the Registry of Deeds of General Santos City. The Spouses Jose and Maxima submitted a compromise agreement in which the RCT rendered partial judgment, while further proceedings were taken against the Spouses Moises and Clemencia, and BA Finance. The Spouses Moises and Clemencia averred as defenses that they had already acquired the Hino truck from Jose Andrada, Jr. free from any lien or encumbrance prior to its seizure by the sheriff pursuant to the writ of execution; that their acquisition had been made in good faith, considering that at the time of the sale the preliminary attachment had already been lifted; and that Pilhino's recourse was to proceed against the counter-attachment. For its part, BA Finance claimed lack of knowledge of the truth of the material allegations of the complaint of Pilhino; and insisted that the Hino truck had been validly mortgaged to it by Moises Andrada, the lawful owner, to secure his own valid obligation.

The RTC, citing the compromise agreement between Pilhino and Jose Andrada, Jr. that had settled all the claims of Pilhino against Jose Andrada, Jr., and the good faith of Pilhino and BA Finance in filing their respective actions, rendered its decision, dismissing the case insofar as the Spouses Moises and Clemencia, Jose Andrada, Sr. and BA Finance, including the counterclaims. Spouses Moises and Clemencia appealed the decision to the extent that the RTC thereby: (a) dismissed their counterclaim; (b) declared that the deed of sale of the Hino truck between Jose Andrada, Jr. and Moises Andrada had been simulated; and (c) approved the compromise agreement between Pilhino and Spouses Jose Andrada, Jr. and Maxima Andrada. The CA affirmed the decision of the RTC but held that the sale of the Hino Truck by Jose Andrada, Jr. in favor of Moises is valid, subject to the rights of BA Finance as mortgagee and highest bidder.

ISSUES:

a. Whether or not Pilhino should be held liable for the damages the Spouses Moises and Clemencia sustained from Pilhino's levy on execution upon the Hino truck?

b. Whether or not Pilhino was guilty of bad faith when it proceeded with the levy on execution upon the Hino truck owned by Moises Andrada, thus justifying the grant of attorney’s fees?

RULING:

a. The petitioners assail the decision promulgated by the CA to the extent that it denied their claim for the damages they had sought by way of counterclaim. They anchored their claim on Article 21 of the Civil Code, which provides that "any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damage."

Article 21 of the Civil Code, in conjunction with Article 19 of the Civil Code, is part of the cause of action known in this jurisdiction as "abuse of rights." The elements of abuse of rights are: (a) there is a legal right or duty;(b) exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another.

In its assailed decision, the CA found that Pilhino had acted in good faith in bringing Civil Case to annul the deed of sale involving the Hino truck executed by Jose Andrada, Jr. in favor of Moises Andrada, considering that Pilhino had "believed that the sale in favor of defendants-appellants had been resorted to so that Jose Andrada might evade his obligations." The CA concluded that no remedy was available for any damages that the petitioners sustained from the filing of Civil Case No. 21,898-93 against them because "the law affords no remedy for such damages resulting from an act which does not amount to a legal injury or wrong."

Worthy to note is that the CA's finding and conclusion rested on the RTC's own persuasion that the sale of the Hino truck to Moises Andrada had been simulated.

The SC cannot side with the petitioners. Their insistence, which represents their disagreement with the CA's declaration that the second and third elements of abuse of rights, were not established, requires the consideration and review of factual issues. Hence, this appeal cannot succeed, for an appeal by petition for review on certiorari cannot determine factual issues. In the exercise of its power of review, the Court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during the trial. Perforce, the findings of fact by the CA are conclusive and binding on the Court.

The circumstances of this case do not warrant reversing or modifying the findings of the CA, which are consistent with the established facts. Verily, the petitioners did not prove the concurrence of the elements of abuse of rights.

b. The petitioners further seek attorney's fees based on Article 2208 (4) of the Civil Code, which provides that "in the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except xxx (4) in cases of clearly unfounded civil action or proceeding against the plaintiff xxx."

The petitioners are not entitled to attorney's fees.

It is well accepted in this jurisdiction that no premium should be placed on the right to litigate and that not every winning party is entitled to an automatic grant of attorney's fees. Indeed, before the effectivity of the new Civil Code, such fees could not be recovered in the absence of a stipulation. It was only with the advent of the new Civil Code that the right to collect attorney's fees in the instances mentioned in Article 2208 was recognized, and such fees are now included in the concept of actual damages. One such instance is where the defendant is guilty of gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim. This is a corollary of the general principle expressed in Article 19 of the Civil Code that everyone must, in the performance of his duties, observe honesty and good faith and the rule embodied in

Article 1170 that anyone guilty of fraud (bad faith) in the performance of his obligation shall be liable for damages.

Herein, the element of bad faith on the part of Pilhino in commencing and prosecuting Civil Case No. 21,898-93, which was necessary to predicate the lawful grant of attorney's fees based on Article 2208 (4) of the Civil Code, was not established. Accordingly, the petitioners' demand for attorney's fees must fail.

the petition for review on certiorari for its lack of merit was DENIED, and AFFIRMED the decision of the Court of Appeals.

ESTRELLITA JULIAJVO-LLAVE, petitionervs.

REPUBLIC OF THE PHILIPPINES, et al., respondents.

G.R. No. 169766 March 30, 2011 First Division Del Castillo, J.

FACTS:

Before his death, Sen. Tamano married Estrellita twice -initially under the Islamic laws and tradition, and, subsequently, under a civil ceremony officiated by an RTC Judge. In their marriage contracts, Sen. Tamano's civil status was indicated as divorced. Since then, Estrellita has been representing herself to the whole world as Sen. Tamano's wife, and upon his death, his widow.

Private respondents Zorayda, the alleged wife of Sen. Tamano, and Adib, her son, in their own behalf and in behalf of the rest of Sen. Tamano’s legitimate children, filed a complaint with the RTC for the declaration of nullity of marriage between Estrellita and Sen. Tamano. The complaint alleged that Sen. Tamano married Zorayda under civil rites, and that this marriage remained subsisting when he married Estrellita. Zorayda further alleged that her marriage with Sen. Tamano is governed by the New Civil Code as having been celebrated thereto. Moreover, the deceased did not and could not have divorced Zorayda by invoking the provision of P.D. 1083, otherwise known as the Code of Muslim Personal Laws, for the simple reason that the marriage of the deceased with Zorayda was never deemed, legally and factually, to have been one contracted under Muslim law as provided under Art. 186 (2) of P.D. 1083, since they did not register their mutual desire to be thus covered by this law. Instead of filing an Answer, Estrellita filed a Motion to Dismiss where she declared that Sen. Tamano and Zorayda are both Muslims who were married under the Muslim rites. Estrellita argued that the RTC has no jurisdiction to take cognizance of the case because under P.D. No. 1083, or the Code of Muslim Personal Laws of the Philippines, questions and issues involving Muslim marriages and divorce fall under the exclusive jurisdiction of shari'a courts.

The trial court denied Estrellita's motion and asserted its jurisdiction over the case for declaration of nullity. Thus, Estrellita filed a certiorari petition with the SC questioning the denial of her Motion to Dismiss. The SC referred the petition to the CA . During the pendency of the petition before the CA, the RTC continued to try the case since there can be no default in cases of declaration of nullity of marriage even if the respondent failed to file an answer. Estrellita was allowed to participate in the trial while her opposing parties presented their evidence. When it was A Estrellita's turn to adduce evidence, the hearings set for such purpose were postponed mostly at her instance until the trial court suspended the proceedings in view of the CA's TRO enjoining it from hearing the case. Eventually, however, the CA resolved the petition adverse to Estrellita. Estrellita then elevated the appellate court's judgment to SC by way of a petition for review on certiorari. Subsequent to the promulgation of the CA Decision, the RTC ordered Estrellita to present her evidence. As Estrellita was indisposed on that day, the hearing was reset, as well as the day before the scheduled hearing. Unhappy with the delays in the resolution of their case, Zorayda and Adib moved to submit the case for decision, reasoning that Estrellita had long been delaying the case. Estrellita opposed, on the ground that she has not yet filed her answer as she still awaits the outcome of her petition on certiorari before the SC. The SC upheld the jurisdiction of the RTC, stating as one of the reasons that as shari'a courts are not vested with original and exclusive jurisdiction in cases of marriages celebrated under both the Civil Code and PD 1083, the RTC, as a court of general jurisdiction, is not precluded from assuming jurisdiction over such cases. A few days before the resolution of SC, the RTC rendered the judgment declaring Estrellita's marriage with Sen. Tamano as void ab initio. On appeal, the CA upheld the decision of the RTC.

Estrellita argues that the CA erred in upholding the RTC judgment as the latter was prematurely issued, depriving her of the opportunity to file an answer and to present her evidence to dispute the allegations against the validity of her marriage. She invokes the application of the case of Judge Macias vs. Macias on her behalf. She maintains that she merely participated in the RTC hearings because of the trial court's assurance that the proceedings will be without prejudice to whatever action the High Court will take on her petition questioning the RTC's jurisdiction and yet, the RTC violated this commitment as it rendered an adverse judgment. She also questions the lack of a report of the public prosecutor anent a

finding of whether there was collusion, this being a prerequisite before further proceeding could be held when a party has failed to file an answer in a suit for declaration of nullity of marriage. Estrellita is also steadfast in her belief that her marriage with the late senator is valid as the latter was already divorced under the Muslim Code at the time he married her. She asserts that such law automatically applies to the marriage of Zorayda and the deceased without need of registering their consent to be covered by it, as both parties are Muslims whose marriage was solemnized under Muslim law. She pointed out that Sen. Tamano married all his wives under Muslim rites, as attested to by the affidavits of the siblings of the deceased. Lastly, Estrellita argues that Zorayda and Adib have no legal standing to file suit because only the husband or the wife can file a complaint for the declaration of nullity of marriage.

ISSUES:

1. Whether or not the CA erred in affirming the trial court's judgment, even though the latter was rendered prematurely because: a) the judgment was rendered without waiting for the Supreme Court's final resolution of her certiorari petition; b) she has not yet filed her answer and thus was denied due process; and c) the public prosecutor did not even conduct an investigation whether there was collusion;

2. Whether or not the marriage between Estrellita and the late Sen. Tamano was bigamous; and

3. Whether or not Zorayda and Adib have the legal standing to have Estrellita's marriage declared void ab initio.

RULING:

1. Estrelita’s refusal to file an answer eventually led to the loss of her right to answer; and her pending petition for certiorari or review on certiorari questioning the denial of the motion to dismiss before the higher courts does not all suspend the trial proceedings of the principal suit before the RTC.

a. Estrellita argues that the trials court prematurely issued its judgment, as it should have waited first for the resolution of her Motion to Dismiss before the CA and, subsequently, before the SC. However, in upholding the RTC, the CA correctly ailed that the pendency of, a petition for certiorari does not suspend the proceedings before the trial court. An application for certiorari is an independent action which is not part or a continuation of the trial which resulted in the rendition of the judgment complained of. Rule 65 of the Rules of Court is explicit in stating that "[t]he petition shall not interrupt the course of the principal case unless a temporary restraining order or a writ of preliminary injunction has been issued against the public respondent from further proceeding in the case." In fact, the trial court respected the CA's temporary restraining order and only after the CA rendered judgment did the RTC again require Estrellita to present her evidence.

b. It can never be argued that Estrellita was deprived of her right to due process. She was never declared in default, and she even actively participated in the trial to defend her interest. Estrellita obviously misappreciated Macias. All the SC pronounced therein is that the trial court is mandated to suspend trial until it finally resolves the motion to dismiss that is filed before it. Nothing in the above excerpt states that the trial court should suspend its proceedings should the issue of the propriety or impropriety of the motion to dismiss be raised before the appellate courts. In Macias, the trial court failed to observe due process in the course of the proceeding of the case because after it denied the wife's motion to dismiss, it immediately proceeded to allow the husband to present evidence ex parte and resolved the case with undue haste even when, under the rules of procedure, the wife still had time to file an answer. In the instant case, Estrellita had no time left for filing an answer, as she filed the motion to dismiss beyond the extended period earlier granted by the trial court after she filed motions for extension of time to file an answer.

c. Records show that the trial court immediately directed the public prosecutor to submit the required report, which the SC find to have been sufficiently complied with

by Assistant City Prosecutor Paragua in his Manifestation, wherein he attested that there could be no collusion between the parties and no fabrication of evidence because Estrellita is not the spouse of any of the private respondents.

Furthermore, the lack of collusion is evident in the case at bar. Even assuming that there is a lack of report of collusion or a lack of participation by the public prosecutor, the lack of participation of a fiscal does not invalidate the proceedings in the trial court. The role of the prosecuting attorney or fiscal in annulment of marriage and legal separation proceedings is to determine whether collusion exists between the parties and to take care that the evidence is not suppressed or fabricated. Petitioner's vehement opposition to the annulment proceedings negates the conclusion that collusion existed between the parties. There is no allegation by the petitioner that evidence was suppressed or fabricated by any of the parties. Under these circumstances, the court is convinced that the nonintervention of a prosecuting attorney to assure lack of collusion between the contending parties is not fatal to the validity of the proceedings in the trial court.

2. The Civil Code governs the marriage of Zorayda and the late Sen. Tamano; their marriage was never invalidated by PD 1083. Senm. Tamano’s subsequent marriage to Estrellita is void ab initio.

The marriage between the late Sen. Tamano and Zorayda was celebrated in 1958, solemnized under civil and Muslim rites. The only law in force governing marriage relationships between Muslims and non-Muslims alike was the Civil Code of 1950, under the provisions of which only one marriage can exist at any given time. Under the marriage provisions of the Civil Code, divorce is not recognized except during the efifectivity of Republic Act No. 394 which was not availed of during its effectivity.

As far as Estrellita is concerned, Sen. Tamano's prior marriage to Zorayda has been severed by way of divorce under PD 1083, the law that codified Muslim personal laws. However, PD 1083 cannot benefit Estrellita. Firstly, Article 13(1) thereof provides that the law applies to "marriage and divorce wherein both parties are Muslims, or wherein only the male party is a Muslim and the marriage is solemnized in accordance with Muslim law or this Code in any part of the Philippines." Article 13 of PD 1083 does not provide for a situation where the parties were married both in civil and Muslim rites."

Moreover, the Muslim Code took effect only on February 4, 1977, and this law cannot retroactively override the Civil Code which already bestowed certain rights on the marriage of Sen. Tamano and Zorayda.

Even granting that there was registration of mutual consent for the marriage to be considered as one contracted under the Muslim law, the registration of mutual consent between Zorayda and Sen. Tamano will still be ineffective, as both are Muslims whose marriage was celebrated under both civil and Muslim laws. Besides, the Civil Code governs their personal status since this was in effect at the time of the celebration of their marriage. In view of Sen. Tamano's prior marriage which subsisted at the time Estrellita married him, their subsequent marriage is correctly adjudged by the CA as void ab initio.

3. Zorayda and Adib, as the injured parties, have the legal personalities to file the declaration of nullity of marriage. A.M. No. 02-11-10SC, which limits to only the husband or wife the filing of a petition for nullity is prospective in application and does not shut out the prior spouse from filing suit if the ground is a bigamous subsequent marriage.

Estrellita relies on A.M. No. 02-11-10-SC which took effect on March 15, 2003 claiming that under Section 2(a) thereof, only the husband or the wife, to the exclusion of others, may file a petition for declaration of absolute nullity, therefore only she and Sen. Tamano may directly attack the validity of their own marriage.

Estrellita claims that only the husband or the wife in a void marriage can file a petition for declaration of nullity of marriage. However, this interpretation does not apply if the reason behind the petition is bigamy.

Note that the Rationale makes it clear that Section 2(a) of A.M. No. 02-11-10-SC refers to the "aggrieved or injured spouse." If Estrellita's interpretation is employed, the prior spouse is unjustly precluded from filing an action. Surely, this is not what the Rule contemplated.

The subsequent spouse may only be expected to take action if he or she had only discovered during the connubial period that the fnarriage was bigamous, and especially if the conjugal bliss had already vanished. Should parties in a subsequent marriage benefit from the bigamous marriage, it would not be expected that they would file an action to declare the marriage void and thus, in such circumstance, the "injured spouse" who should be given a legal remedy is the one in a subsisting previous marriage. The latter is clearly the aggrieved party as the bigamous marriage not only threatens the financial and the property ownership aspect of the prior marriage but most of all, it causes an emotional burden to the prior spouse. The subsequent marriage will always be a reminder of the infidelity of the spouse and the disregard of the prior marriage which sanctity is protected by the Constitution.

Indeed, Section 2(a) of A.M. No. 02-11-10-SC precludes the son from impugning the subsequent marriage. But in the case at bar, both Zorayda and Adib have legal personalities to file an action for nullity. Albeit the Supreme Court Resolution governs marriages celebrated under the Family Code, such is prospective in application and does not apply to cases already commenced before March 15,2003. Zorayda and Adib filed the case for declaration of nullity of Estrellita's marriage in November 1994. While the Family Code is silent with respect to the proper party who can file a petition for declaration of nullity of marriage prior to A.M. No. 02-11-10-SC, it has been held that in a void marriage, in which no marriage has taken place and cannot be the source of rights, any interested party may attack the marriage directly or collaterally without prescription, which may be filed even beyond the lifetime of the parties to the marriage. Since A.M. No. 02-11-10-SC does not apply, Adib, as one of the children of the deceased who has property rights as an heir, is likewise considered to be the real party in interest in the suit he and his mother had filed since both of them stand to be benefited or injured by the judgment in the suit.

the petition is DENIED, the decision of the CA, as well as its subsequent resolution are AFFIRMED.

JOSE A. ROS and ESTRELLA AGUETE, petitioner,vs.

PHILIPPINE NATIONAL BANK – LAOAG BRANCH, respondent.

G.R. No. 170166 April 6, 2011 Second Division Carpio, J.

FACTS:

Spouses Ros filed a complaint for the annulment of the REM and all proceedings taken thereunder against PNB, Laoag Branch. The averments in the complaint disclosed that Jose obtained a loan of P115,000.00 from PNB Laoag Branch and as security for the loan, he executed a real estate mortgage involving a parcel of land. Upon maturity, the loan remained outstanding. As a result, PNB instituted extrajudicial foreclosure proceedings on the mortgaged property. After the extrajudicial sale thereof, a Certificate of Sale was issued in favor of PNB, Laoag as the highest bidder. After the lapse of 1 year without the property being redeemed, the property was consolidated and registered in the name of PNB, Laoag Branch.

Claiming that she, Estrella, the wife, has no knowledge of the loan obtained by her husband nor she consented to the mortgage instituted on the conjugal property - a complaint was filed to annul the proceedings pertaining to the mortgage, sale and consolidation of the property - interposing the defense that her signatures affixed on the documents were forged and that the loan did not redound to the benefit of the family. In its answer, PNB prays for the dismissal of the complaint for lack of cause of action, and insists that it was Spouses’ own acts of omission/connivance that bar them from recovering the subject property on the ground of estoppel, laches, abandonment and prescription.

The trial court, in its decision ruled in favor of Spouses Ros without prejudice to the right of action of PNB to recover the amount of the loan and its interests. The trial court declared that Estrella had no knowledge of the loan and mortgage, thus, under the Civil Code, the effective law at the time of the transaction, Ros could not encumber any real property of the conjugal partnership without Aguete's consent. Aguete may, during their marriage and within ten years from the transaction questioned, ask the courts for the annulment of the contract her husband entered into without her consent, especially in the present case where her consent is required. On appeal, the CA reversed the decision of the trial court and held that the trial court concluded forgery without adequate proof; thus it was improper for the trial court to rely solely on Aguete's testimony that her signatures on the loan documents were forged. The appellate court declared that Aguete affixed her signatures on the documents knowingly and with her full consent. Assuming arguendo that Aguete did not give her consent to Ros' loan, the appellate court ruled that the conjugal partnership is still liable because the loan proceeds redounded to the benefit of the family. The records of the case reveal that the loan was used for the expansion of the family's business. Therefore, the debt obtained is chargeable against the conjugal partnership.

ISSUE:

a. Whether or not the evidence of Spouses Ros sufficiently proved that Estrella, the wife, did not consented, neither signed the loan and the REM?

b. Whether or not Jose can file the complaint?c. Whether or not the debt obtained by Jose, despite the allegation that the wife,

Estrella, did not consent to the same, is chargeable against the conjugal partnership?

RULING:

a. The husband cannot alienate or encumber any conjugal real property without the consent, express or implied, of the wife. Should the husband do so, then the contract is voidable. Article 173 of the Civil Code allows Aguete to question Ros' encumbrance of the subject property. However, the same article does not guarantee that the courts will declare the annulment of the contract. Annulment will be declared only upon a finding that the wife did not give her consent. In the present case, we follow the conclusion of the appellate court and rule that Aguete gave her consent to Ros' encumbrance of the subject property.

The documents disavowed by Aguete are acknowledged before a notary public, hence they are public documents. Every instrument duly acknowledged and certified as provided by law may be presented in evidence without further proof, the certificate of acknowledgment being prima facie evidence of the execution of the instrument or document involved. The execution of a document that has been ratified before a notary public cannot be disproved by the mere denial of the alleged signer. Petitioners did not present any corroborating witness, such as a handwriting expert, who could authoritatively declare that Aguete's signatures were really forged.

A notarized document carries the evidentiary weight conferred upon it with respect to its due execution, and it has in its favor the presumption of regularity which may only be rebutted by evidence so clear, strong and convincing as to exclude all controversy as to the falsity of the certificate. Absent such, the presumption must be upheld. The burden of proof to overcome the presumption of due execution of a notarial document lies on the one contesting the same. Furthermore, an allegation of forgery must be proved by clear and convincing evidence, and whoever alleges it has the burden of proving the same.

b. Ros himself cannot bring action against PNB, for no one can come before the courts with unclean hands. In their memorandum before the trial court, petitioners themselves admitted that Ros forged Aguete's signatures.

Ros in legal effect admitted in the complaint that the signatures of his wife in the questioned documents are forged, incriminating himself to criminal prosecution. If he were alive today, he would be prosecuted for forgery. This strengthens the testimony of his wife that her signatures on the questioned documents are not hers.

c. The application for loan shows that the loan would be used exclusively "for additional working [capital] of buy & sell of garlic & virginia tobacco." In her testimony, Aguete confirmed that Ros engaged in such business, but claimed to be unaware whether it prospered. Aguete was also aware of loans contracted by Ros, but did not know where he "wasted the money." Debts contracted by the husband for and in the exercise of the industry or profession by which he contributes to the support of the family cannot be deemed to be his exclusive and private debts.

If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be used in or for his own business or his own profession, that contract falls within the term "x x x x obligations for the benefit of the conjugal partnership." Here, no actual benefit may be proved. It is enough that the benefit to the family is apparent at the signing of the contract. From the very nature of the contract of loan or services, the family stands to benefit from the loan facility or services to be rendered to the business or profession of the husband. It is immaterial, if in the end, his business or profession fails or does not succeed. Simply stated, where the husband contracts obligations on behalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership.

For this reason, Ros' loan from PNB redounded to the benefit of the conjugal partnership. Hence, the debt is chargeable to the conjugal partnership.

the petition is DENIED, and the decision of the CA is AFFIRMED

ELENITA M. DEWARA, petitionervs.

SPOUSES RONNIE and GINA LAMELA and STENILE ALVERO

G.R. No. 179010 April 11, 2011 Second Division Nachura, J.

FACTS:

Spouses Dewara were married before the enactment of the Family Code. Elenita worked in California while Eduardo stayed in Bacolod.

While driving a private jeepney registered in the name of Elenita, Eduardo hit Ronnie. Ronnie filed a criminal case for serious physical injuries through reckless imprudence against Eduardo. The lower court found Eduardo guilty of the charge and sentenced him to suffer the penalty of imprisonment, and to pay civil indemnity. On appeal, the RTC affirmed the decision of the lower court and it became final and executory. The writ of execution on the civil liability was served on Eduardo, but it was returned unsatisfied because he had no property in his name. Ronnie requested the City Sheriff, respondent Alvero, to levy on a lot in the name of Elenita, Eduardo’s wife, to satisfy the judgment on the civil liability of Eduardo. The City Sheriff served a notice of embargo on the title of the lot and subsequently sold the lot in a public auction. In the execution sale, there were no interested buyers other than Ronnie. The City Sheriff issued a certificate of sale to spouses Ronnie and Gina Lamela to satisfy the civil liability in the decision against Eduardo. Ronnie then caused the consolidation of title in a Cadastral Proceeding before the RTC, which ordered the cancellation of the TCT in the name of Elenita and the issuance of a new certificate of title in the name of respondent spouses. The above incidents happened while Elenita was working in California.

Elenita, represented by her attorney-in-fact, Ferdinand Magallanes, filed a case for annulment of sale and for damages against Spouses Lamela and ex-officio sheriff Alvero. Elenita claimed that the levy on execution of the subject lot was illegal because the said property was her paraphernal or exclusive property and could not be made to answer for the personal liability of her husband. Furthermore, as the registered owner of the property, she received no notice of the execution sale. On the other hand, the Spouses averred that the subject lot was the conjugal property of Elenita and Eduardo. They asserted that the property was acquired by Elenita during her marriage to Eduardo; that the property was acquired with the money of Eduardo because, at the time of the acquisition of the property, Elenita was a plain housewife; that the jeep involved in the accident was registered in the name of petitioner; and that Elenita did not interpose any objection pending the levy on execution of the property. The RTC rendered a decision in favor of Elenita. The RTC declared that said property was paraphernal in nature. It arrived at this conclusion by tracing how Elenita acquired the subject property. Based on the documentary evidence submitted, Elenita’s grandfather, Exequiel, originally owned the lot. Upon his death, his children Jesus, Elenita’s father, Salud and Concepcion, inherited the property, and subsequently a new title on their favor was issued. As to how Elenita acquired the lot, the RTC gave credence to the testimony of Elenita on the circumstances surrounding the sale of the property. First, it was sold to her by her father and her aunt so that the family would remain on the lot. Second, the minimal and inadequate consideration for the 1,440 sq m property was for the purpose of helping her expand her capital in her business at the time. Thus, the sale was essentially a donation and was therefore gratuitous in character. Having declared that the property was the paraphernal property of Elenita, the RTC ruled that the civil liability of Eduardo, which was personal to him, could not be charged to the exclusive property of his wife. On appeal, the CA reversed the decision of the RTC. The CA elucidated that the gross inadequacy of the price alone does not affect a contract of sale, except that it may indicate a defect in the consent, or that the parties really intended a donation or some other act or contract. The CA ruled that Elenita and Eduardo acquired the property by onerous title during their marriage through their common fund. Thus, it belonged to the conjugal partnership of gains and might be levied upon to answer for civil liabilities adjudged against Eduardo.

ISSUES:

a. Whether the subject property is the paraphernal/exclusive property of Elenita or the conjugal property of spouses Elenita and Eduardo?

b. Whether the property may be subject to levy and execution sale to answer for the civil liability adjudged against Eduardo in the criminal case for serious physical injuries, which judgment had already attained finality?

RULING:

a. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife. Registration in the name of the husband or the wife alone does not destroy this presumption. The separation-in-fact between the husband and the wife without judicial approval shall not affect the conjugal partnership. The lot retains its conjugal nature. Moreover, the presumption of conjugal ownership applies even when the manner in which the property was acquired does not appear. The use of the conjugal funds is not an essential requirement for the presumption to arise.

There is no dispute that the subject property was acquired by spouses Elenita and Eduardo during their marriage. It is also undisputed that their marital relations are governed by the conjugal partnership of gains, since they were married before the enactment of the Family Code and they did not execute any prenuptial agreement as to their property relations. Thus, the legal presumption of the conjugal nature of the property applies to the lot in question. The presumption that the property is conjugal property may be rebutted only by strong, clear, categorical, and convincing evidence, there must be strict proof of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party asserting it.

Aside from the assertions of Elenita that the sale of the property by her father and her aunt was in the nature of a donation because of the alleged gross disparity between the actual value of the property and the monetary consideration for the sale, there is no other evidence that would convince this Court of the paraphernal character of the property. Elenita proffered no evidence of the market value or assessed value of the subject property in 1975. Elenita has not sufficiently proven that the prices involved in the sales in question were so inadequate for the Court to reach a conclusion that the transfers were in the nature of a donation rather than a sale.

Furthermore, gross inadequacy of the price does not affect a contract of sale, except as it may indicate a defect in the consent, or that the parties really intended a donation or some other act or contract.

b. However, even after having declared that Lot No. 234-C is the conjugal property of spouses Elenita and Eduardo, it does not necessarily follow that it may automatically be levied upon in an execution to answer for debts, obligations, fines, or indemnities of one of the spouses. Before debts and obligations may be charged against the conjugal partnership, it must be shown that the same were contracted for, or the debts and obligations should have redounded to, the benefit of the conjugal partnership. Fines and pecuniary indemnities imposed upon the husband or the wife, as a rule, may not be charged to the partnership. However, if the spouse who is bound should have no exclusive property or if the property should be insufficient, the fines and indemnities may be enforced upon the partnership assets only after the responsibilities enumerated in Article 161 of the Civil Code have been covered.

In this case, it is just and proper that Ronnie be compensated for the serious physical injuries he suffered. Even though the vehicle that hit Ronnie was registered in the name of Elenita, she was not made a party in the said criminal case. Thus, she may not be compelled to answer for Eduardo’s liability. Nevertheless, their conjugal partnership property may be held accountable for it since Eduardo has no property in his name. The payment of indemnity adjudged by the RTC of Bacolod City in Criminal Case in favor of Ronnie may be enforced against the partnership assets of spouses Elenita and Eduardo after the responsibilities enumerated under Article 161 of the Civil Code have been covered. Said enumeration should first be complied with before the conjugal partnership may be held to answer for the liability adjudged against Eduardo.

the resolution of the CA is ANNULED and SET ASIDE, the decision of the RTC is REINSTATED WITH MODIFOICATION that the conjugal properties of Spouses Dewara shall be held to answer for the judgment of the Criminal Case plus interest of 12% per annum from the date of the finality of the judgment of the RTC.

2011 Case Digest in Property.

REPUBLIC OF THE PHILIPPINES, petitioner,vs.

CARLOS R. VEGA, et al., respondents.

G.R. No. 177790 January 17, 2011 Third Division Sereno, J.

FACTS:

The respondents Vegas filed an application for registration of title covering a parcel of land. They alleged that they inherited the subject land from their mother, Maria, who in turn inherited it from her father, Lorenz. Their mother’s siblings died intestate, all without leaving any offspring. The Republic filed an opposition to respondents Vegas’ application for registration on the ground that the subject land or portions thereof were lands of the public domain and, as such, not subject to private appropriation. During the trial, respondents Vegas presented several exhibits in compliance with the jurisdictional requirements, as well as witnesses to prove respondents Vegas’ ownership, occupation and possession of the land subject of the registration. Significant was the testimony of Mr. Rodolfo Gonzales, a Special Investigator of the CENRO of Los Baños, Laguna, under the DENR. He attested to having conducted an inspection of the subject land and identified the corresponding Report which he had submitted to the Regional Executive Director, Region IV. The report stated that the area subject of the investigation was entirely within the alienable and disposable zone, and that there was no public land application filed for the same land by the applicant or by any other person.

During the trial, respondents-intervenors Buhays entered their appearance and moved to intervene in respondents Vegas’ application for registration. Respondents-intervenors Buhays claimed a portion of the subject land consisting purportedly sold by respondents Vegas’ mother,Maria, to the former’s predecessors-in-interest - the sisters Gabriela and Isabel - by virtue of a Bilihan ng Isang Bahagi ng Lupang Katihan. They likewise formally offered in evidence a Subdivision Plan, which indicated the portion of the subject land, which they claimed was sold to their predecessors-in-interest.

The trial court, in its decision, granted respondents Vegas’ application and directed the LRA to issue the corresponding decree of registration in the name of respondents Vegas and respondents-intervenors Buhays’ predecessors, in proportion to their claims over the subject land. The Republic appealed the Decision of the trial court, arguing that respondents Vegas failed to prove that the subject land was alienable and disposable, since the testimony of Mr. Gonzales did not contain the date when the land was declared as such. The appellate court affirmed in toto the decision of the trial court.

ISSUE:

Whether or not, based on the evidence on record, respondents Vegas have sufficiently established that the subject land is alienable and disposable?

RULING:

The best proofs in registration proceedings that a land is alienable and disposable are a certification from the CENRO or Provincial Environment and Natural Resources Office (PENRO) and a certified true copy of the DENR’s original classification of the land. The Court, however, has nonetheless recognized and affirmed applications for land registration on other substantial and convincing evidence duly presented without any opposition from the LRA or the DENR on the ground of substantial compliance.

Applying these precedents, the Court finds that despite the absence of a certification by the CENRO and a certified true copy of the original classification by the DENR Secretary, there has been substantial compliance with the requirement to show that the subject land is indeed alienable and disposable based on the evidence on record.

First, respondents Vegas were able to present Mr. Gonzales of the CENRO who testified that the subject land is alienable and disposable, and who identified his written report on his inspection of the subject land.

Second, Subdivision Plan Csd-04-02433-6, formally offered as evidence by respondents-intervenors Buhays, expressly indicates that the land is alienable and disposable.

Finally, upon being informed of respondents Vegas’ application for original registration, the LRA never raised the issue that the land subject of registration was not alienable and disposable. In the Supplementary Report submitted during the trial court proceedings, the LRA did not interpose any objection to the application on the basis of the nature of the land.

LUZON DEVELOPMENT BANK, petitioner,vs.

ANGELES CATHERINE ENRIQUEZ, respondent

G.R. No. 168646 January 12, 2011 First Division Del Castillo, J.

FACTS:

Luzon Dvelopment Bank is a domestic financial corporation that extends loans to subdivisions developers/owners. DELTA is a domestic corporation engaged in developing and selling real estate properties, particularly Delta Homes I in Cavite, and is owned by De Leon, who is the registered owner of a parcel of land, Lot4.

De Leon and his spouse obtained a 4million loan from Luzon Development Bank for the express purpose of developing Delta Homes I. To secure the loan, the spouses De Leon executed in favor of the BANK a real estate mortgage on several of their properties, including Lot4. Subsequently, this REM was amended by increasing the amount of the secured loan from 4million to 8million. Both the REM and the amendment were annotated in the TCT. DELTA then obtained a Certificate of Registration and a License to Sell from the HLURB.

Sometime in 1997, DELTA executed a Contract to Sell with Enriquez over the house and lot in Lot 4. Enriquez made a downpayment. When DELTA defaulted on its loan obligation, the BANK, instead of foreclosing the REM, agreed to a dation in payment or a dacion en pago. The Deed of Assignment in Payment of Debt was executed and stated that DELTA "assigns, transfers, and conveys and sets over [to] the assignee that real estate with the building and improvements existing thereon in payment of the total obligation owing to the Bank. Unknown to Enriquez, among the properties assigned to the BANK was the house and lot of Lot 4, which is the subject of her Contract to Sell with DELTA. It appears, however, that the dacion en pago was not annotated on the TCT of Lot 4.ralawredlaw

Enriquez filed a complaint against DELTA and the BANK before the Office of the HLURB alleging that DELTA violated the terms of its License to Sell by: (a) selling the house and lots for a price exceeding that prescribed in BP220; and (b) failing to get a clearance for the mortgage from the HLURB. Enriquez sought a full refund of what she had already paid to DELTA, award of damages, and the imposition of administrative fines on DELTA and the BANK. In his decision, HLURB Arbiter Atty. Raymundo A. Foronda upheld the validity of the purchase price, but ordered DELTA to accept payment of the balance from Enriquez, and, upon such payment, to deliver to Enriquez the title to the house and lot free from liens and encumbrances. DELTA appealed the arbiter's Decision to the HLURB Board of Commissioners questioning the imposition of an administrative fine for its alleged violation of Section 18 of PD 957. It argued that clearance was not required for mortgages that were constituted on a subdivision project prior to registration. According to DELTA, it did not violate the terms of its license because it did not obtain a new mortgage over the subdivision project. The Board held that all developers should obtain a clearance for mortgage from the HLURB, regardless of the date when the mortgage was secured, because the law does not distinguish. Having violated this legal requirement, DELTA was held liable to pay the administrative fine. The Board upheld the validity of the contract to sell between DELTA and Enriquez despite the alleged violation of the price ceilings in BP 220. The Board held that DELTA and Enriquez were presumed to have had a meeting of the minds on the object of the sale and the purchase price. Absent any circumstance vitiating Enriquez'consent, she was presumed to have willingly and voluntarily agreed to the higher purchase price; hence, she was bound by the terms of the contract. Both Enriquez and the BANK appealed to the Office of the President. The BANK disagreed with the ruling upholding Enriquez's Contract to Sell; and insisted on its ownership over Lot 4. It argued that it has become impossible for DELTA to comply with the terms of the contract to sell and to deliver Lot 4's title to Enriquez given that DELTA had already relinquished all its rights to Lot 4 in favor of the BANK via the dation in payment. Meanwhile, Enriquez insisted that the Board erred in not applying the ceiling price as prescribed in BP 220. The OP adopted by reference the findings of fact and conclusions of law of the HLURB Decisions, which it affirmed in toto. Only the BANK appealed the OP's Decision to the CA. As an alternative argument, in case the appellate court should find that DELTA retained ownership over Lot 4 and could convey the same to Enriquez, the BANK prayed that its REM over Lot 4 be respected such that DELTA would have to redeem it first before it could convey the same to Enriquez. The CA ruled against the validity of the dacion en pago executed in favor of the BANK on the ground that DELTA had earlier relinquished its ownership over Lot 4 in favor of Enriquez via the Contract to Sell. Since the dacion en pago is invalid with respect to Lot 4, the appellate court held that DELTA remained indebted to the BANK to the extent of Lot 4's value. Thus, the CA ordered DELTA to pay the corresponding value of Lot 4 to the BANK. The CA also rejected the BANK's argument that, before DELTA can deliver the title to Lot 4 to Enriquez, DELTA should first redeem the mortgaged property from the BANK. The CA held that the BANK does not have a first lien on Lot 4 because its real estate mortgage over the same had already been extinguished by the

dacion en pago. Without a mortgage, the BANK cannot require DELTA to redeem Lot 4 prior to delivery of title to Enriquez.

ISSUES:

a. Whethet or not the mortgage contract is void?b. Whether or not the Contract to Sell conveys ownership?

RULING:

a. As the HLURB Arbiter and Board of Commissioners both found, DELTA violated Section 18 of PD 957 in mortgaging the properties in Delta Homes I (including Lot 4) to the BANK without prior clearance from the HLURB.

This violation of Section 18 renders the mortgage executed by DELTA void. The SC have held before that "a mortgage contract executed in breach of Section 18 of [PD 957] is null and void." Considering that "PD 957 aims to protect innocent subdivision lot and condominium unit buyers against fraudulent real estate practices, " the court have construed Section 18 thereof as "prohibitory and acts committed contrary to it are void."

Because of the nullity of the mortgage, neither DELTA nor the BANK could assert any right arising therefrom. The BANK's loan of P 8 million to DELTA has effectively become unsecured due to the nullity of the mortgage. The said loan, however, was eventually settled by the two contracting parties via a dation in payment. In the appealed Decision, the CA invalidated this dation in payment on the ground that DELTA, by previously entering into a Contract to Sell, had already conveyed its ownership over Lot 4 to Enriquez and could no longer convey the same to the BANK. This is error, prescinding from a wrong understanding of the nature of a contract to sell.

b. Both parties are correct in arguing that the Contract to Sell executed by DELTA in favor of Enriquez did not transfer ownership over Lot 4 to Enriquez. A contract to sell is one where the prospective seller reserves the transfer of title to the prospective buyer until the happening of an event, such as full payment of the purchase price. What the seller obliges himself to do is to sell the subject property only when the entire amount of the purchase price has already been delivered to him. "In other words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus, ownership is retained by the prospective seller without further remedies by the prospective buyer." It does not, by itself, transfer ownership to the buyer.

In the instant case, there is nothing in the provisions of the contract entered into by DELTA and Enriquez that would exempt it from the general definition of a contract to sell. The terms thereof provide for the reservation of DELTA's ownership until full payment of the purchase price; such that DELTA even reserved the right to unilaterally void the contract should Enriquez fail to pay three successive monthly amortizations.

Since the Contract to Sell did not transfer ownership of Lot 4 to Enriquez, said ownership remained with DELTA. DELTA could then validly transfer such ownership (as it did) to another person (the BANK). However, the transferee BANK is bound by the Contract to Sell and has to respect Enriquez's rights thereunder. This is because the Contract to Sell, involving a subdivision lot, is covered and protected by PD 957. One of the protections afforded by PD 957 to buyers such as Enriquez is the right to have her contract to sell registered with the Register of Deeds in order to make it binding on third parties.

The purpose of registration is to protect the buyers from any future unscrupulous transactions involving the object of the sale or contract to sell, whether the purchase price therefor has been fully paid or not. Registration of the sale or contract to sell makes it binding on third parties; it serves as a notice to the whole world that the property is subject to the prior right of the buyer of the property (under a contract to sell or an

absolute sale), and anyone who wishes to deal with the said property will be held bound by such prior right.

While DELTA, in the instant case, failed to register Enriquez's Contract to Sell with the Register of Deeds, this failure will not prejudice Enriquez or relieve the BANK from its obligation to respect Enriquez's Contract to Sell. Despite the non-registration, the BANK cannot be considered, under the circumstances, an innocent purchaser for value of Lot 4 when it accepted the latter (together with other assigned properties) as payment for DELTA's obligation. The BANK was well aware that the assigned properties, including Lot 4, were subdivision lots and therefore within the purview of PD 957. It knew that the loaned amounts were to be used for the development of DELTA's subdivision project, for this was indicated in the corresponding promissory notes. The technical description of Lot 4 indicates its location, which can easily be determined as included within the subdivision development. Under these circumstances, the BANK knew or should have known of the possibility and risk that the assigned properties were already covered by existing contracts to sell in favor of subdivision lot buyers.

Further, as an entity engaged in the banking business, the BANK is required to observe more care and prudence when dealing with registered properties. The Court cannot accept that the BANK was unaware of the Contract to Sell existing in favor of Enriquez.

Bound by the terms of the Contract to Sell, the BANK is obliged to respect the same and honor the payments already made by Enriquez for the purchase price of Lot 4. Thus, the BANK can only collect the balance of the purchase price from Enriquez and has the obligation, upon full payment, to deliver to Enriquez a clean title over the subject property.

GONZALO VILLANUEVA (represented by his heirs), petitioner,vs.

SPOUSES FROILAN and LEONILA BRANOCO, respondents.

G.R. No. 172804 January 24, 2011 Second Division Carpio, J.

FACTS:

Gonzalo Villanueva, represented by his heirs, sued Spouses Branoco to recover a parcel of land. The former claimed ownership over the property thru purchase from Vere, who in turn, bought the property from Rodrigo. Gonzalo declared the property in his name for tax purposes soon after acquiring it. In their answer, the Spouses Baranoco similarly claimed ownership over the property thru purchase from Rodriguez, who in turn, acquired the property from Rodrigo by way of donation. The Spouses entered the property and paid taxes afterwards.

The trial court ruled in favor of Gonzalo and declared him owner of the property, and ordered the Spouses Branoco to surrender possession to Gonzalo. The trial court rejected Spouses Branoco’s claim of ownership after treating the Deed as a donation mortis causa which Rodrigo effectively cancelled by selling the Property to Vere. Thus, by the time Rodriguez sold the property to the Spouses, she had no title to transfer. On appeal, the CA granted the Spouses’ appeal and set aside the trial court's ruling. it held that the deed of donation is one of inter vivos. In his petition, Gonzalo seeks the reinstatement of the trial court's ruling. Alternatively, petitioner claims ownership over the Property through acquisitive prescription, having allegedly occupied it for more than 10 years.

ISSUE:

Whether or not Gonzalo acquired title over the property?

RULING:

Gonzalo acquired no title over the property.

Alternatively, petitioner grounds his claim of ownership over the Property through his and Vere's combined possession of the Property for more than ten years, counted from Vere's purchase of the Property from Rodrigo in 1970 until petitioner initiated his suit in the trial court in February 1986. Petitioner anchors his contention on an unfounded legal assumption. The ten year ordinary prescriptive period to acquire title through possession of real property in the concept of an owner requires uninterrupted possession coupled with just title and good faith. There is just title when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right. Good faith, on the other hand, consists in the reasonable belief that the person from whom the possessor received the thing was the owner thereof, and could transmit his ownership.

Although Vere and petitioner arguably had just title having successively acquired the Property through sale, neither was a good faith possessor. As Rodrigo herself disclosed in the Deed, Rodriguez already occupied and possessed the Property "in the concept of an owner" since 21 May 1962, nearly three years before Rodrigo's donation in 3 May 1965 and seven years before Vere bought the Property from Rodrigo. This admission against interest binds Rodrigo and all those tracing title to the Property through her, including Vere and petitioner.

Indeed, petitioner's insistent claim that Rodriguez occupied the Property only in 1982, when she started paying taxes, finds no basis in the records. In short, when Vere bought the Property from Rodrigo in 1970, Rodriguez was in possession of the Property, a fact that prevented Vere from being a buyer in good faith.

Lacking good faith possession, petitioner's only other recourse to maintain his claim of ownership by prescription is to show open, continuous and adverse possession of the Property for 30 years. Undeniably, petitioner is unable to meet this requirement.

MARGARITA F. CASTRO, petitioner,vs.

NAPOLEON A. MONSOD, respondent.

G.R. No. 183719 February 2, 2011 Second Division Nachura, J.

FACTS:

Castro is the registered owner of a parcel of land. Monsod, on the other hand, is the owner of the property adjoining the lot of Castro.

Monsod caused the annotation of an adverse claim against a portion of the property of Castro. The adverse claim was filed without any claim of ownership over the property. Monsod was merely asserting the existing legal easement of lateral and subjacent support at the rear portion of his estate to prevent the property from collapsing, since his property is located at an elevated plateau of 15 feet, more or less, above the level of Castro’s property. Monsod also filed a complaint for malicious mischief and malicious destruction before the office of the barangay chairman. In defiance, Castro filed a complaint for damages with temporary restraining order/writ of preliminary injunction. She also prayed that the Register of Deeds be ordered to cancel the annotation of the adverse claim on the TCT.

Prior to the filing of the case before the RTC, there were deposits of soil and rocks about two (2) meters away from the front door of the house of Castro. As such, she was not able to park her vehicle at the dead-end portion of the street. When Castro noticed a leak that caused the front portion of her house to be slippery, she hired construction workers to see where the leak was coming from. The workers had already started digging when police officers sent by Monsod came and stopped the workers from finishing their job. Castro averred that when she bought the property from Manuela Homes in 1994, there was no annotation or existence of any easement over the property. Monsod neither asked permission nor talked to her with regard to the use of 65 sq.m. of her property as easement. Upon learning of the adverse claim, she felt disturbed and experienced sleepless nights for fear that she would not be able to sell her property. Castro admitted that her TCT does not cover the open space at the dead-end portion of the Street.

For his part, Monsod claimed that he and his family had been residing in Moonwalk Village since June 1984. Adjacent to his property is the land of Castro in Manuela Homes. When he bought the property in 1983, the land elevation of Moonwalk Village was almost on the same level as Manuela Homes. However, sometime in 1985 and 1986, Pilar Development Corporation, the developer of Manuela Homes, bulldozed, excavated, and transferred portions of the elevated land to the lower portions of Manuela Homes. Thus, Manuela Homes became lower than Moonwalk Village. Before the said excavation, Monsod personally complained to Pilar Development Corporation and was assured that, as provided by the National Building Code, an embankment will be retained at the boundary of Manuela Homes and Moonwalk Village, which is more or less fifteen (15) feet higher than Manuela Homes. Manuela Homes retained the embankment consisting of soil and rocks. Monsod had the open space rip rapped with stones as reinforcement against any potential soil erosion, earthquake, and possible digging by any person. Monsod asserted that the affidavit of adverse claim was for the annotation of the lateral and subjacent easement of his property over the property of petitioner, in view of the latter's manifest determination to remove the embankment left by the developer of Manuela Homes.

The RTC rendered a decision in favor of Castro, ordering the cancellation of Monsod’s adverse claim at the back of the TCT of Castro. The trial court ratiocinated that the adverse claim of respondent was non-registrable considering that the basis of his claim was an easement and not an interest adverse to the registered owner, and neither did he contest the title of petitioner. Furthermore, the adverse claim of respondent failed to comply with the requisites provided under Section 70 of Presidential Decree No. 1529. On appeal, the CA reversed the decision of the trial court and ordered the retention of the annotation at the back of the TCT, not as an adverse claim, but a recognition of the existence of a legal easement of subjacent and lateral support constituted on the lengthwise or horizontal land support/embankment area of sixty-five (65) square meters, more or less, of the property of Castro. The CA ruled that while respondent's adverse claim could not be sanctioned because it did not fall under the requisites for registering an adverse claim, the same might be duly annotated in the title as recognition of the existence of a legal easement of subjacent and lateral support. The purpose of the annotation was to prevent Castro from making injurious excavations on the subject embankment as to deprive the residential house and lot of Monsod of its natural support and cause it to collapse.

ISSUES:

a. Whether or not the easement of lateral and subjacent support exists on the subjacent adjacent properties?

b. Whether or not the same may be annotated at the back of the title of the servient estate?

RULING:

a. Article 684 of the Civil Code provides that no proprietor shall make such excavations upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support. An owner, by virtue of his surface right, may make excavations on his land, but his right is subject to the limitation that he shall not deprive any adjacent land or building of sufficient lateral or subjacent support. Between two adjacent landowners, each has an absolute property right to have his land laterally supported by the soil of his neighbor, and if either, in excavating on his own premises, he so disturbs the lateral support of his neighbor's land as to cause it, or, in its natural state, by the pressure of its own weight, to fall away or slide from its position, the one so excavating is liable.

In the instant case, an easement of subjacent and lateral support exists in favor of respondent. It was established that the properties of petitioner and respondent adjoin each other. The residential house and lot of respondent is located on an elevated plateau of fifteen (15) feet above the level of petitioner's property. The embankment and the riprapped stones have been in existence even before petitioner became the owner of the property. It was proven that petitioner has been making excavations and diggings on the subject embankment and, unless restrained, the continued excavation of the embankment could cause the foundation of the rear portion of the house of respondent to collapse, resulting in the destruction of a huge part of the family dwelling.

b. Respondent's assertion that he has an adverse claim over the 65 sq.m. property of petitioner is misplaced since he does not have a claim over the ownership of the land. The annotation of an adverse claim over registered land under Section 70 of Presidential Decree 1529[ requires a claim on the title of the disputed land. Annotation is done to apprise third persons that there is a controversy over the ownership of the land and to preserve and protect the right of the adverse claimant during the pendency of the controversy. It is a notice to third persons that any transaction regarding the disputed land is subject to the outcome of the dispute.

In reality, what respondent is claiming is a judicial recognition of the existence of the easement of subjacent and lateral support over the 65 sq. m. portion of petitioner's property covering the land support/embankment area. His reason for the annotation is only to prevent petitioner from removing the embankment or from digging on the property for fear of soil erosion that might weaken the foundation of the rear portion of his property which is adjacent to the property of petitioner.

An annotation of the existence of the subjacent and lateral support is no longer necessary. It exists whether or not it is annotated or registered in the registry of property. A judicial recognition of the same already binds the property and the owner of the same, including her successors-in-interest. Otherwise, every adjoining landowner would come to court or have the easement of subjacent and lateral support registered in order for it to be recognized and respected.

MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner,vs.

REYNALDO AVILA, et al., respondents.

G.R. No. 185535 January 31, 2011 Second Division Mendoza, J.

FACTS:

The late Tarrosa leased a parcel of land located along the MIAA Road in Pasay City from its owner, MIAA. Before the expiration of the lease, Tarrosa filed a case against MIAA to allow him to exercise his pre-emptive right to renew the lease contract. Finding that Tarrosa violated certain provisions of its contract with MIAA, the trial court dismissed the case. Tarrosa appealed before the CA but to no avail. When Tarrosa passed away, he was substituted by his estate represented by his heirs' attorney-in-fact, Balilo. The CA decision became final and executory. Thereafter, MIAA sent letters of demand to the heirs asking them to vacate the subject land. Unheeded, MIAA instituted an ejectment suit against the Estate of Tarrosa. The lower court rendered its decision ordering the Estate of Tarrosa and all persons claiming rights under it to vacate the premises, peacefully return possession thereof to MIAA and pay rentals, attorney's fees and costs of suit. The Estate, through Balilo, appealed the case to the RTC. The trial court affirmed the decision of the lower court. On the strength of the writ of execution issued by the RTC, a notice to vacate was served on the occupants of the subject premises. The RTC Sheriff partially succeeded in evicting the Estate, Balilo and some other occupants. Still, others remained in the premises.

Among the remaining occupants were Aguirre, Avila and Spouses Quilang who filed separate special appearances with motions to quash the writ of execution. All of them interposed that they were not covered by the writ of execution because they did not derive their rights from the Estate since they entered the subject premises only after the expiration of the lease contract between MIAA and Tarrosa. They further stated that the subject premises had already been set aside as a government housing project by virtue of Presidential Proclamation No. 595. The RTC denied the motion to quash because the result of the ocular inspection revealed that the property occupied by them are not used as family dwelling but rather utilized as business establishments, thus they are not qualified as beneficiaries under Proclamation No. 595. On appeal, the CA annulled the RTC’s resolution. According to the CA, there was a grave abuse of discretion on the part of the RTC in ruling that respondents could not invoke Proclamation No. 595 because the mandate to determine the same rested with the NHA.

ISSUE:

Whether or not the naked claim of potential qualified benificiaries of a socialized housing program prevail over the rights of the person with prior physical possession and a better right over the disputed real property?

RULING:

Granting that their occupation of the subject premises was not derived from either Tarrosa or Balilo, the postulation of the respondents makes them mere trespassers or squatters acquiring no vested right whatsoever to the subject property. Thus, to thwart the decision of the court, they claim that they were potential beneficiaries of Proclamation No. 595. Certainly, this bare anticipation on their part should not be permitted to defeat the right of possession by the owner, MIAA. Juxtaposed against the evidence adduced by the MIAA showing that respondents were once tenants of either Tarrosa or Balilo, respondents' bare claim that they could be beneficiaries of Proclamation No. 595 cannot be given any consideration.

INSURANCE OF THE PHILIPPINES ISLANDS CORPORATION, petititoner,vs.

SPOUSES VIDAL and JULITA GREGORIO, respondents.

G.R. No. 174104 February 14, 2011 Second Division Peralta, J.

FACTS:

Spouses Gregorio obtained three loans from the Insurance of the Philippine Islands Corporation. By way of security for the said loan, the Spouses executed a REM in favor of the Insurance of Philippine Islands over 4 lots. The Spouses failed to pay their loans,a a result, the mortgaged properties were extrajudicially foreclosed, wherein, Insurance of the Philippine Islands was the highest bidder. Since the Spouses failed to redeem the property, Insurance of the Philippine Island consolidated its ownership over the properties.

Insurance of the Philppine Island filed a complaint against the Spouses Gregorio alleging that when it was in the process of gathering documents for the purpose of filing an application for the registration and confirmation of its title over the foreclosed properties, it discovered that the said lots were already registered in the names of third persons and TCTs were issued to them. In their answer, Spouses Gregorio contended that their obligations in favor of the Insurance of the Philippine Island were all settled by the foreclosure of the properties given as security therefor. In the alternative, they argue that the corporation’s cause of action and right of action are already barred by prescription and laches.

In its decision, the trial court ruled in favor of the corporation. On appeal, the CA reversed the decision of the trial court and dismissed the complaint of the Insurance of the Philippine Island. It ruled that the corporation’s action for damages is barred by prescription and laches.

ISSUES:

a. Whether or not the corporation’s action for damages is already barred by prescription?b. Whether or not the corporation’s action for damages is already barred by laches?

RULING:

a. Petitioner’s cause of action accrued at the time it discovered the alleged fraud committed by respondents. It is at this point that the four-year prescriptive period should be counted. The Court does not agree with the CA in its ruling that the discovery of the fraud should be reckoned from the time of registration of the titles covering the subject properties.

The Court notes that what has been given by respondents to petitioner as evidence of their ownership of the subject properties at the time that they mortgaged the same are not certificates of title but tax declarations, in the guise that the said properties are unregistered. On the basis of the tax declarations alone and by reason of respondent's misrepresentations, petitioner could not have been reasonably expected to acquire knowledge of the fact that the said properties were already titled. As a consequence, petitioner may not be charged with any knowledge of any subsequent entry of an encumbrance which may have been annotated on the said titles, much less any change of ownership of the properties covered thereby. As such, the Court agrees with petitioner that the reckoning period for prescription of petitioner's action should be from the time of actual discovery of the fraud in 1995. Hence, petitioner's suit for damages, filed on February 20, 1996, is well within the four-year prescriptive period.

b. Neither may the principle of laches apply in the present case.

The essence of laches or "stale demands" is the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it. It is not concerned with mere lapse of time; the fact of delay, standing alone, being insufficient to constitute laches.

It is significant to point out at this juncture that the overriding consideration in the instant case is that petitioner was deprived of the subject properties which it should have rightly owned were it not for the fraud committed by respondents. Hence, it would be the

height of injustice if respondents would be allowed to go scot-free simply because petitioner relied in good faith on the former's false representations. Besides, as earlier discussed, even in the exercise of due diligence, petitioner could not have been expected to immediately discover respondents' fraudulent scheme.

RAVELINA LIMSON, petitioner,vs.

WACK WACK CONDOMINIUM CORPORATION, respondent.

G.R. No. 188802 February 14, 2011 Third Division Carpio-Morales, J.

FACTS:

Spouses Limson purchased an apartment unit at Wack Wack Apartments. Upon moving in, she noticed defects in the electrical main panel located inside the unit, drawing her to report them, by letter, to Wack Wack Condominium Corporation, a non-stock corporation organized for the purpose of holding title to and managing the common areas of Wack Wack Apartments. Gonzalez, who sits as Member of the corporation’s Board of Directors, replied by letter, that under Section 3 of the House Rules and Regulations, it is the duty of the unit owner to maintain the electrical and plumbing systems at his/her expense. Another letter was sent by Limson informing the Wack Wack Corporation that the switch board is such that No. 12 wire is protected by 30 ampere fuse and that five appliances - refrigerator, freezer, iron, dryer and washing machine - are connected to only one fuse. She later sought professional assistance from a private electrical consultant, Romago, Incorporated. It was concluded that the wirings in Unit 703 are unsafe, hazardous and did not comply with the Philippine Electrical Code.

On Ravelina’s request, the City Building Office conducted an inspection of Unit 703. In its report, it was found out that the fusible cut out block enclosure is not provided with cover, exposing electrical live part that makes it hazardous, unsafe and will be difficult to maintain because a portion was blocked by a shelf. For its recommendation, it suggests for the replacement of the fusible load center, replace the embedded circular loom, check all grounded circuit and provide separate circuit for water heater lad, and o submit a built electrical plan. The report was sent by then Mayor Abalos to Wack Wack Corporation. The corporation through Architect Gonzalez, wrote Limson demanding the repairs stated in the report. Before the

deadline, the corporation’s Board of Directors convened and resolved to impose a daily fine of P1,000.00 on Spouses Limson, should the latter fail to comply.

Spouses Limson refused to undertake the repairs and to pay the fine. They claimed that the electrical main panel forms part of the common areas, citing Section 6 of Republic Act No. 4726, "An Act to Define Condominium, Establish Requirements for its Creation and Government of its Incidents.” They argued that an electrical main panel is in the nature of a utility installation.

Meanwhile, the Spouses purchased an oversized whirlpool. In the process of installation, the 7th floor utility room which is adjacent to Unit 703 was damaged. Revelina claimed that an agreement had been reached under which Wack Wack Corporation would take charge of the repair of the utility room and would bill her for the cost incurred therefor but the latter failed to do so. Yet the Board of Directors assessed her and her husband a fine of P1,000.00 per day until the utility room is repaired.

Wack Wack Corporation filed a complaint for specific performance and damages against the Spouses Limson before the SEC, to compel them to undertake the necessary repairs of the defective and hazardous condition of the electrical wiring of their Unit 703 in accordance with the report and recommendation of the Office of the Building Official of Mandaluyong City, to seek payment of the fines from the Spouses until they have complied with the report and recommendation, and to seek payment for the damages they have caused to the common area ofWack Wack Apartments due to their insistence to install in their unit an over-sized whirlpool. The complaint was later on transferred to the RTC of Mandaluyong City pursuant to A.M. No. 00-11-03.

Since Spouses Limson still failed and refused to do repairs as stated in the report, as well as to pay the fine imposed to them due to their refusal, the Wack Wack Corporation filed a Notice of Assessment with the Register of Deeds, Mandaluyong City with application for foreclosure and public auction of Unit 703. At the public auction held, the corporation emerged as highest bidder and thereupon purchased Unit 703.

The RTC rendered its decision dismissing the complaint of Wack Wack Corporation for lack of merit. On appeal, the Court of Appeals reversed the decision of the trial court, holding in the main that for the electrical main panel to be considered as part of the common areas, it should have been intended for communal use and benefit. The subject electrical main panel being located inside the unit and its principal function being to control the flow of electricity into the unit, the appellate court concluded that charges for its repair cannot be for the corporation’s account. On the imposition of fine on the spouses Limson for failure to correct the faulty electrical wiring despite notice, the appellate court upheld respondent's authority to enforce the same.

ISSUE:

Whether or not Spouses Limson is the one liable for the repairs stated in the report’s recommendation?

RULING:

Unquestionably, the fuse box controls the supply of electricity into the unit. Power is sourced through jumper cables attached to the main switch which connects the unit's electrical line to the Apartment's common electrical line. It is an integral component of a power utility installation. Respondent cannot disclaim responsibility for the maintenance of the Apartments' electrical supply system solely because a component thereof is placed inside a unit.

As earlier stated, both the law and the Master Deed refer to utility installations as forming part of the common areas, which reference is justified by practical considerations. Repairs to correct any defects in the electrical wiring should be under the control and supervision of respondent to ensure safety and compliance with the Philippine Electrical Code, not to mention security and peace of mind of the unit owners.

DOLORITA C BEATINGO, petitioner,vs.

LILIA BU GASIS, respondent.

G.R. No. 179641 February 9, 2011 Second Division Nachura, J.

FACTS:

Beatingo filed a Complaint for Annulment and Cancellation of Sale, Reconveyance, Delivery of Title and Damages against respondent Lilia Bu Gasis. She alleged that she bought a piece of land from Flora which was registered in the name of Flora's predecessor-in-interest. The sale was evidenced by a notarized Deed of Absolute Sale. Beatingo went to the Register of Deeds to have the sale registered. She, however, failed to obtain registration as she could not produce the owner's duplicate certificate of title. She, thus, filed a petition for the issuance of the owner's duplicate certificate of title but was opposed by Bu Gasis, claiming that she was in possession of the OCT as she purchased the subject property from Flora, as evidenced by a Deed of Sale. This prompted her to file the Complaint, insisting that she is the rightful owner of the subject property. She also maintained that respondent had been keeping the OCT despite knowledge that petitioner is the rightful owner. She further accused respondent of inducing Flora to violate the contract with her, which caused her damage, prejudice, mental anguish, and serious anxiety. On the other hand, Bu Gasis claimed that she purchased the subject property from Flora without knowledge of the prior sale of the same subject property to petitioner, which makes her an innocent purchaser for value. She denied having induced Flora to violate her contract with petitioner as she never knew the existence of the alleged first contract. Lastly, Bu Gasis declared that, upon payment of the purchase price, she immediately occupied the subject property and enjoyed its produce.

The RTC rendered its decision in favor of Bu Gasis. The RTC considered the controversy as one of double sale and, in resolving the issues raised by the parties, it applied the rules laid down in Article 1544 of the Civil Code. As opposed to Beatingo's admission that she did not pay the purchase price in full and that she did not acquire possession of the subject property because of the presence of tenants on it, the court gave more weight to Bu Gasis' evidence showing that she immediately acquired possession of the subject property and enjoyed its produce upon full payment of the purchase price. Since the two sales - that of petitioner and that of respondent - were not registered with the Registry of Property, the RTC held that whoever was in possession had the better right. Hence, it decided in favor of respondent.

Beatingo insists that, upon the execution of the public instrument (the notarized deed of sale), she already acquired possession thereof, and thus, considering that the execution thereof took place ahead of the actual possession by respondent of the subject property, she has a better right.

ISSUES:

a. Who has a better right over the property, Beatingo or Bu Gasis?b. Whether or not the contention of Beatingo that upon the execution of the public

instrument she already acquired possession over the property, is correct?

RULING:

a. The present controversy is a clear case of double sale, where the seller sold one property to different buyers, first to petitioner and later to respondent. In determining who has a better right, the guidelines set forth in Article 1544 of the Civil Code apply.

Admittedly, the two sales were not registered with the Registry of Property. Since there was no inscription, the next question is who, between petitioner and respondent, first took possession of the subject property in good faith. As aptly held by the trial court, it was respondent who took possession of the subject property and, therefore, has a better right.

b. Indeed, the execution of a public instrument shall be equivalent to the delivery of the thing that is the object of the contract. However, the Court has held that the execution of a public instrument gives rise only to a prima facie presumption of delivery. It is deemed negated by the failure of the vendee to take actual possession of the land sold.

In this case, though the sale was evidenced by a notarized deed of sale, petitioner admitted that she refused to make full payment on the subject property and take actual possession thereof because of the presence of tenants on the subject property. Clearly, petitioner had not taken possession of the subject property or exercised acts of dominion over it despite her assertion that she was the lawful owner thereof.

Respondent, on the other hand, showed that she purchased the subject property without knowledge that it had been earlier sold by Flora to petitioner. She had reason to believe that there was no defect in her title since the owner's duplicate copy of the OCT was delivered to her by the seller upon full payment of the purchase price. She then took possession of the subject property and exercised acts of ownership by collecting rentals from the tenants who were occupying it.

VICENTE YU CHANG and SOLEDAD YU CHANG, petitioners,vs.

REPUBLIC OF THE PHILIPPINES, respondent.

G.R. No. 171726 February 23, 2011 Third Division Villarama, Jr., J.

FACTS:

Vicente and Soledad’s father, L. Yu Chang, and the Municipality of Pili, Camarines Sur, through its then Mayor, Justo Casuncad, executed an agreement to exchange real property, wherein the former assigned and transferred to the Municipality of Pili his 400 square meter residential lot in Barrio San Roque in exchange for a 400-square-meter piece of land located in San Juan. Thereafter, L. Yu Chang and his family took possession of the property thus obtained

and erected a residential house and a gasoline station thereon. He also declared the property in his name under Tax Declaration and paid the real property taxes thereon.

When L. Yu Chang died on September 30, 1976, his wife, Donata Sta. Ana and his seven children inherited the property and succeeded in the possession of the property. A Deed of Transfer and Renunciation of their rights over the property was executed by L. Yu Chang's five children in favor of herein Vicente and Soledad. After the transfer, they had the subject property surveyed and subdivided into two lots. They also declared the lots in their names for taxation purposes and paid the real property taxes thereon.

Soledad, for herself and in representation of Vicente, filed a petition for registration of title over the aforementioned lots under the Property Registration Decree. In their petition, they declared that they are the co-owners of the subject lots; that they and their predecessors-in-interest have been in actual, physical, material, exclusive, open, occupation and possession of the above described parcels of land for more than 100 years; and that allegedly, they have continuously, peacefully, and adversely possessed the property in the concept of owners. Hence, they are entitled to confirmation of ownership and issuance and registration of title in their names. The Republic, through the OSG, filed an Opposition to the application, alleging that: (1) neither the applicants nor their predecessors-in-interest have been in open, continuous, exclusive and notorious possession of the land since June 12, 1945 or prior thereto; (2) the muniments of title, tax declarations and tax receipts do not constitute competent and sufficient evidence of a bona fide acquisition of the land; and (3) that the parcels of land applied for are portions of the public domain and are not subject to private appropriation.

After hearing, the trial court rendered a Decision granting Soledad and Vicente’s petition. On appeal, the CA reversed the tial court’s decision and dismissed the application of Vicente and Soledad. The CA considered the petition to be governed by Section 48(b) of Commonwealth Act (C.A.) No. 141 or the Public Land Act, as amended, and held that petitioners were not able to present incontrovertible evidence that the parcels of land sought to be registered are alienable and disposable. The CA relied on the testimony of Lamberto Orcena, Land Management Officer III of CENRO, Iriga City, who testified that prior to October 30, 1986, the entire area encompassing the right side of the Naga-Legaspi Highway, including the subject properties, was classified as forest land. According to the CA, even if the area within which the subject properties are located is now being used for residential and commercial purposes, such fact will not convert the subject parcels of land into agricultural land.The CA stressed that there must be a positive act from the government declassifying the land as forest land before it could be deemed alienable or disposable land for agricultural or other purposes. Additionally, the CA noted that the lands sought to be registered were declared disposable public land only on October 30, 1986. Thus, it was only from that time that the period of open, continuous and notorious possession commenced to toll against the State.

ISSUE:

Whether or not the subject property can be registered in the name of Vicente and Soledad?

RULING:

Under Section 48(b) of the Public Land Act, as amended by PD 1073, that petitioners' application for registration of title may be granted, provided that they must first establish the following: (1) that the subject land forms part of the disposable and alienable lands of the public domain and (2) that they have been in open, continuous, exclusive and notorious possession and occupation of the same under a bona fide claim of ownership, since June 12, 1945, or earlier. Applicants must overcome the presumption that the land they are applying for is part of the public domain and that they have an interest therein sufficient to warrant registration in their names arising from an imperfect title.

In the instant case, petitioners did not adduce any evidence to the effect that the lots subject of their application are alienable and disposable land of the public domain. Instead, petitioners contend that the subject properties could no longer be considered and classified as

forest land since there are building structures, residential houses and even government buildings existing and standing on the area. This, however, is hardly the proof required under the law. As clarified by this Court in Heirs of Jose Amunategui v. Director of Forestry, a forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted with crops by kaingin cultivators or other farmers. "Forest lands" do not have to be on mountains or in out-of-the-way places. The classification of land is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land classified as forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.

Moreover, during the hearing of petitioners' application, the Republic presented a Report of Rene Gomez, Land Investigator/Inspector, CENRO No. V-2-3, which disclosed that the lots applied for by the petitioners were classified as alienable and disposable under Project No. 9-E, L.C. Map No. 3393 and released and certified as such only on October 30, 1986. A Compliance dated January 19, 1999 submitted by OIC-CENR Officer Joaquin Ed A. Guerrero to the trial court also stated that Lots. 2199 are disposable only on October 30, 1986. Prior to that period, the same could not be the subject of confirmation of imperfect title. Petitioners' possession of the subject forest land prior to the date when it was classified as alienable and disposable is inconsequential and should be excluded from the computation of the period of possession. To reiterate, it is well settled that possession of forest land, prior to its classification as alienable and disposable land, is ineffective since such possession may not be considered as possession in the concept of owner. The adverse possession which can be the basis of a grant of title in confirmation of imperfect title cases cannot commence until after forest land has been declared and alienable.

REPUBLIC OF THE PHILIPPINES (Department of Transportation and Communications), petitioner,

vs.CITY OF MANDALUYONG, respondent.

G.R. No. 184879 February 23, 2011 First Division Perez, J.

FACTS:

The DOTC entered into a Revised and Restated Agreement to Build, Lease and Transfer a Light Rail System for EDSA with Metro Rail Transit Corporation Limited, a foreign corporation. Under the BLT Agreement, Metro Rail shall be responsible for the design, construction, equipping, completion, testing, and commissioning of the EDSA MRT III. The DOTC shall operate the same but ownership of the EDSA MRT III shall remain with Metro Rail during the Revenue and Construction periods. At the end of the Revenue Period, Metro Rail shall transfer to DOTC its title to and all of its rights and interests therein, in exchange for US$1.00. Metro Rail then assigned all its rights and obligations under the BLT Agreement to Metro Rail Transit Corporation, a domestic corporation.

In a joint resolution, the City Assessors of Mandaluyong City, Quezon City, Makati City and Pasay City fixed the current and market value of EDSA MRT III which will be divided proportionately according to distance traversed among these cities. The Office of the City Assessor of Mandaluyong issued Tax Declaration in the name of MRTC, fixing the market value of the railways, train cars, three (3) stations and miscellaneous expenses. Subsequently, the said Office of the City Assessor of Mandaluyong City demanded payment of real property taxes due under the aforesaid tax declaration. Since MRTC still failed to pay the tax due, the City Treasurer issued and served a Warrant of Levy upon MRTC with the corresponding Notices of Levy upon the City Assessor and the Registrar of Deeds of Mandaluyong City. Republic filed a case for Declaration of Nullity of Real Property Tax Assessment and Warrant of Levy with a prayer for a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction. The Republic alleged that since Metro Rail had transferred to the DOTC the actual use, possession and operation of the EDSA MRT III System, Metro Rail or MRTC does not have actual or beneficial use and possession of the EDSA MRT III properties as to subject it to payment of real estate taxes. On the other hand, notwithstanding the transfer to DOTC of the actual use, possession and operation of the EDSA MRT III, petitioner Republic is not liable because local government units are legally proscribed from imposing taxes of any kind on it under Section 133(o) of Republic Act No. 7160. The City of Mandaluyong filed an ex parte petition praying for the issuance of a writ of possession. Petitioner Republic countered that the instant petition does not fall within the cases when a writ of possession may be issued. Moreover, petitioner argued that the pendency of the civil case assailing the validity of the tax assessment and the subsequent auction sale of the properties pre-empts the issuance of said writ.

The RTC granted the petition for the issuance of a writ of possession. While MRTC appealed said order to the Court of Appeals, petitioner Republic filed a case before the SC raising a question of law. To support its main thesis that the RTC Branch 213 erred in issuing a writ of possession, petitioner claims that since EDSA MRT properties are beneficially owned by DOTC, it should not have been assessed for payment of real property taxes. Being a governmental entity, it is exempt from payment of real property tax under Section 234 of the

Local Government Code. Therefore, no tax delinquency exist authorizing respondent to sell the subject properties through public auction. It then follows that the City of mandaluyong has no legal right to a writ of possession. Republic then asserts that the auction sale conducted by respondent cannot be likened to an extrajudicial foreclosure sale of a real estate mortgage under Act No. 3135 as a justification for the issuance of a writ of possession. Republic reasons that the EDSA MRT properties were not put up as a collateral or security for a loan or indebtedness which was secured from respondent, nor was there any mortgage contract voluntarily entered into by petitioner or even by MRTC. Finally, petitioner Republic adds that all requisites of litis pendencia exist.

ISSUE:

Whether or not a writ of possession may be issued?

RULING:

A writ of possession is a mere incident in the transfer of title. In the instant case, it stemmed from the exercise of alleged ownership by respondent over EDSA MRT III properties by virtue of a tax delinquency sale. The issue of whether the auction sale should be enjoined is still pending before the Court of Appeals. Pending determination, it is premature for respondent to have conducted the auction sale and caused the transfer of title over the real properties to its name. The denial by the RTC to issue an injunction or TRO does not automatically give respondent the liberty to proceed with the actions sought to be enjoined, especially so in this case where a certiorari petition assailing the denial is still being deliberated in the Court of Appeals. All the more it is premature for the RTC to issue a writ of possession where the ownership of the subject properties is derived from an auction sale, the validity of which is still being threshed out in the Court of Appeals. The RTC should have held in abeyance the issuance of a writ of possession. At this juncture, the writ issued is premature and has no force and effect.

RE: COMPLAINT OF CONCERNED MEMBERS OF CHINESE GROCERS ASSOCIATION AGAINST JUSTICE SOCORRO B. INTING OF THE COURT OF

APPEALS

A.M. OCA IPI No. 10-177-CA-J April 12, 2011 First Division Brion, J.

FACTS:

The CGA is the owner of a parcel of land with an area of 315 square meters located in Manila, registered under Transfer Certificate of Title (TCT) No. 42417.

Sometime in 2008, dela Cruz filed a petition for the issuance of a new owner's duplicate copy of TCT No. 42417, claiming that the old owner's duplicate copy had been misplaced. This petition was assigned to the sala of then Judge Inting. In the petition, dela Cruz claimed that: (a) the Office of the Register of Deeds had already been notified of the loss through an Affidavit of Loss; (b) TCT No. 42417 issued in the name of the CGA is still valid and subsisting; (c) copies of the Notice of Hearing have been duly posted, as evidenced by the Sheriff's Certificate of Posting; and (d) dela Cruz's interest in filing this petition is based on his right as a vendee of the property, as evidenced by the Deed of Absolute Sale, allegedly executed between CGA, represented by Ang E. Bio, and dela Cruz. Justice Inting issued an order granting dela Cruz's petition. Since no motion for reconsideration or notice of appeal was filed challenging Justice Inting's order, the order became final and executory, and the new owner's duplicate title was given to dela Cruz.

A letter complaint was filed by the concerned members of the CGA and claimed that Justice Inting acted with gross neglect when she granted dela Cruz's petition for the issuance of a new owner's duplicate copy of TCT No. 42417. To recall, dela Cruz filed the petition as the alleged vendee of the property. However, the complainants point out that the Deed of Absolute Sale, the basis for dela Cruz's interest and right to file the petition, should have aroused Justice Inting's suspicion as it was allegedly signed on behalf of CGA by Ang E. Bio, who is already dead at the time the deed was issued. The complainants also found it suspicious that Justice Inting did not question dela Cruz on the particulars of the sale before granting the petition. The complainants further faulted Justice Inting for not asking dela Cruz why he, and not CGA, filed the petition.

Judge Inting, on his comment, averred that there was nothing suspicious in dela Cruz filing the petition as a vendee since Section 109 of Presidential Decree No. 1529 (Property Registration Decree) allows another person in interest to file a petition for the issuance of a new owner's duplicate title. She further explained that the notice of hearing was sent to CGA and was even posted to three conspicuous places. However, no representative of CGA appeared to participate in the proceedings or oppose the petition at the initial hearing. Justice Inting further emphasized that she did not transfer title over the land to dela Cruz; rather, she merely issued an order granting the issuance of a new owner's duplicate copy of TCT No. 42417, with the same terms and conditions as the original.

ISSUES:

a. Whether or not Judge Inting is correct in granting the petition of Dela cruz?b. Whether or not Judge Inting had the duty to inquire into the details of the sale before

granting the petition?

RULING:

a. The applicable law is Section 109 of Presidential Decree (P.D.) No. 1529 (Property Registration Decree), which states:

Section 109. Notice and replacement of lost duplicate certificate. - In case of loss or theft of an owner's duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest and registered.

Upon the petition of the registered owner or other person in interest, the court may, after notice and due hearing, direct the issuance of a new duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the

original duplicate, and shall thereafter be regarded as such for all purposes of this decree.

The above-quoted provision clearly allows a person who is not the owner of the property to file the petition for a new duplicate certificate, provided the person has interest in the property.

The next logical question is - was dela Cruz a person in interest to the subject property? We find that he was, given the fact that he had what appeared to be a validly notarized Deed of Absolute Sale over the subject property in his favor. As a public document, the subject Deed of Absolute Sale has in its favor the presumption of regularity. To contradict it, one must present evidence that is clear and convincing; otherwise, the document should be upheld.

In the present case, however, no one from CGA appeared during the proceedings to oppose dela Cruz's petition or to bring to Justice Inting's attention the fact that Ang Bio was already dead at the time the deed of sale was allegedly executed. Given the lack of any evidence to assume otherwise, Justice Inting correctly relied on the notarized Deed of Sale's presumption of regularity.

b. As for the complainants' allegation that Justice Inting had the duty to inquire into the details of the alleged sale, we reiterate that in a petition for the issuance of a new owner's duplicate copy of a certificate of title, the RTC, acting only as a land registration court with limited jurisdiction, has no jurisdiction to pass upon the question of actual ownership of the land covered by the lost owner's duplicate copy of the certificate of title. Questions involving the issue of ownership have to be threshed out in a separate suit where the trial court will conduct a full-blown hearing with the parties presenting their respective evidence to prove ownership over the subject realty. After all, the objective of a petition for the issuance of a new owner's duplicate copy is merely to determine two things - (1) that the owner's duplicate copy of the certificate of title was actually lost; and (2) that the person who filed the petition has sufficient interest in the property covered by the title to acquire a copy of the same. It was thus not for Justice Inting to question dela Cruz on the specifics of the purported sale (i.e., why the land was sold to dela Cruz at such a low price, whether dela Cruz paid the applicable taxes for the transfer of the property, etc.) during these proceedings.

ESTATE OF PASTOR M. SAMSON (represented by his heir Rolando B. Samson), petitioner,

vs.MERCEDES R. SUSANO and NORBERTO R. SUSANO, respondents.

G.R. No. 179024 May 30, 2011 Third Division Villarama, Jr., J.

FACTS:

Pastor owned a parcel of land and covered by TCT. In 1959, Pastor was approached by his friend Macario who asked for permission to occupy a portion of the lot to build a house for his family. Since Pastor was godfather to one of Macario's children, Pastor acceded to Macario's request. Macario and his family occupied 620 square meters of the lot and devoted the rest of the land to palay cultivation. Herein Mercedes, Macario's wife, and their son, Norberto, insist that while no agricultural leasehold contract was executed by Pastor and Macario, Macario religiously paid 15 cavans of palay per agricultural year to Pastor, which rent was reduced by Pastor in 1986 to 8 cavans of palay per agricultural year. In 1973, Pastor subdivided the lot into three portions. The first and last parcels, namely Lots 1108-A and 1108-C, remained registered in Pastor's name while Lot 1108-B was sold to Jimena in 1973 without Macario's knowledge. In 1979, Pastor sold 2,552 square meters of Lot 1108-A to Spouses Pacheco, allegedly also without Macario's knowledge and consent. As a result of the sale, Lot 1108-A was further subdivided into three portions: one parcel still registered in the name of Pastor, while the other two parcels are registered in the name of the Spouses Pacheco. Lots 1108-A-1 and 1108-C remained occupied and cultivated by Macario and his family. Pastor thereafter sold Lot 1108-C to Chan and a new TCT was issued in the name of the latter.

According to respondents, no written notice was sent by Pastor to Macario prior to the sale to Chan of Lot 1108-C. They aver that Macario came to know of the transaction only after Chan visited the property accompanied by an employee from the city government. Chan, on the other hand, claims that prior to buying Lot 1108-C from Pastor, he ascertained the location and condition of the property. He maintains that he knew the property to be a residential lot as indicated in the tax declaration issued over the said property.

On November 1990, Macario received a letter from Pastor's lawyer demanding that he vacate the property within twenty (20) days. Aggrieved, Macario filed a complaint against Pastor before the MARO of Valenzuela.

Meanwhile, it appears that Chan and Macario tried to settle amicably the dispute as between them. Macario and his wife Mercedes executed a notarized document entitled, "Kusang-Loob na Pagtatalaga" (Deed of Undertaking) wherein Macario, recognizing that Chan is a buyer in good faith, acknowledged the latter's ownership over the said landholding. Two other similar documents were executed by Macario and Mercedes in favor of Chan. In one of

these documents, Macario and Mercedes acknowledged the receipt of P10,000.00 from Chan. Chan and Macario, assisted by their respective counsels, executed a Joint Motion and Manifestation wherein Macario promised to surrender possession of the property to Chan on or before November 30, 1992.

On February 9, 1993, Macario died and was succeeded by his wife and son in the possession and cultivation of the subject landholding.

Thereafter, Mercedes and Norberto filed an action for maintenance of peaceful possession with prayer for the issuance of a restraining order/preliminary injunction and for the redemption of the subject landholding against Pastor and Chan before the DARAB. Specifically, the complaint prayed for the inclusion of lots 1108-A-1 and 1108-C, within the Coverage of the OLT Program under PD 27 or The Tenant Emancipation Decree. They also asked that an emancipation patent be issued in their favor. They tendered P12,052.80 in cash representing the reasonable redemption price over the subject landholding based on the highest land valuation prescribed by the DAR on unirrigated rice land, in which DARAB accepted.

In his Answer, Chan maintained that he is a buyer in good faith and that he relied on the tax declaration which stated that the subject property is residential in character. He also averred that agreements were made between him and Macario recognizing his ownership over the said land in exchange for P25,000 paid by him to Macario, P10,000 of which was duly acknowledged by Macario in writing. Chan insisted that Macario also promised to surrender possession of the property to him on or before November 30, 1992. Pastor, on the other hand, filed a Motion to Dismiss citing the pendency of the complaint filed against him before the MARO of Valenzuela and alleging that the property is not agricultural land but a residential lot as indicated in the tax declaration issued by the Caloocan City Assessor's Office. Pastor also argued that the land involved, Lot 1108-A-1 is only 620 square meters, too small to be considered a viable family-size farm or economic family-size farm under RA 6657 or the Comprehensive Agrarian Reform Law (CARL) and P.D. No. 27. Pastor further maintained that no tenancy relationship was established between him and the family of Macario because their occupancy was only by mere tolerance. He also alleged that Mercedes and Norberto’s cause of action, if there be any, is already barred by prescription, estoppel and/or laches.

The RARAB issued a ruling declaring that the late Macario validly acquired the status of a bona fide and de jure tenant over the subject land due to Pastor's implied acquiescence in allowing Macario to discharge the duties of a tenant for a considerable length of time until the latter's death in 1993. However, with the passage of Metro Manila Zoning Ordinance [No.] 81-01, the land in question has ceased to be agricultural. On appeal, the DARAB reversed the ruling of the RARAD. The DARAB explained that the issuance of an ordinance classifying the subject property into non-agricultural land did not have the effect of automatically converting the said land as non-agricultural land and terminating the tenancy relationship between the parties. Aggrieved, Pastor and Chan filed their respective petitions for review before the CA. The CA dismissed the petition stating that by allowing Macario to cultivate the subject landholding for a considerable length of time and by receiving a portion of the harvest therein, Pastor is deemed to have impliedly consented to a tenancy relationship with Macario. The CA also held that Pastor and Macario's tenancy relationship was not extinguished despite the reclassification of the subject land into non-agricultural land.

ISSUES:

Whether or not a tenancy relationship existed between Pastor and Macario?

RULING:

For a tenancy relationship to exist between the parties, the following essential elements must be shown: (1) the parties are the landowner and the tenant; (2) the subject matter is agricultural land; (3) there is consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and (6) there is sharing of the

harvests between the parties. The presence of all of these elements must be proved by substantial evidence.

In the case at bar, while the RARAD, DARAB and the CA are unanimous in their conclusion that an implied tenancy relationship existed between Pastor Samson and Macario Susano, no specific evidence was cited to support such conclusion other than their observation that Pastor failed to protest Macario's possession and cultivation over the subject land for more than 30 years. Contrary to what is required by law, however, no independent and concrete evidence were adduced by respondents to prove that there was indeed consent and sharing of harvests between Pastor and Macario.

It has been repeatedly held that occupancy and cultivation of an agricultural land will not ipso facto make one a de jure tenant. Independent and concrete evidence is necessary to prove personal cultivation, sharing of harvest, or consent of the landowner. Substantial evidence necessary to establish the fact of sharing cannot be satisfied by a mere scintilla of evidence; there must be concrete evidence on record adequate to prove the element of sharing. To prove sharing of harvests, a receipt or any other credible evidence must be presented, because self-serving statements are inadequate. Tenancy relationship cannot be presumed; the elements for its existence are explicit in law and cannot be done away with by conjectures. Leasehold relationship is not brought about by the mere congruence of facts but, being a legal relationship, the mutual will of the parties to that relationship should be primordial. For implied tenancy to arise it is necessary that all the essential requisites of tenancy must be present.

ROSALIA N. ESPINO, petitioner,vs.

SPOUSES SHARON and CELEBI BULUT, respondents.

G.R. No. 183811 May 30, 2011 Second Division Carpio, J.

FACTS:

Spouses Espino are the registered owners of eleven adjacent lots. Sometime in January 2006, Espino lost the owner's duplicate copies of the eleven TCTs. Espino reported the loss to the Register of Deeds and also filed a petition for issuance of new owner's copies of the

eleven TCTs before the trial court. The trial court granted Espino's petition and new copies of the eleven TCTs were issued to Espino.

Spouses Bulut filed with the trial court a petition for relief from judgment. They claimed that they had actual possession of the owner's copies of the eleven TCTs which had been declared lost and cancelled by the trial court. They explained that on Spouses Espino sold a parcel of land Lim. Thereafter, Lim allegedly subdivided the property into eleven lots but the title remained in the name of Spouses Espino because Lim lacked the funds to transfer the titles in his name. Lim then sold the eleven lots to them, Spouses Bulut, and gave them the eleven owner's copies of the TCTs. When they tried to register the properties in their name, they discovered the trial court's Decision and this prompted them to file the petition for relief from judgment.

The trial court granted Spouses Bulut’s petition for relief from judgment. The owner's copies of the 11 TCTs issues by the Register of Deeds by virtue of the Final Decision is declared null and void. The trial court declared that Espino did not have possession of the eleven owner's copies of the TCTs because respondents had been in possession of the eleven titles from the time respondents bought the properties from Lim. The trial court said that "when the original owner's copy of the title is in fact not lost but is in the possession of a new owner, being the alleged buyer," the trial court did not acquire jurisdiction over Espino's petition for issuance of new owner's copies of the eleven titles.

ISSUES:

Whether or not the trial court erred in recognizing and defending the alleged ownership rights of Spouses Bulut aspossessors of the 11 TCTs as against Espino, the registered owner of the properties?

RULING:

According to Espino, the trial court decided on the issue of ownership of the properties when it permanently enjoined the Register of Deeds from accepting or registering any kind of conveyance that may be executed by Espino to any person except as to respondents. Espino adds that the trial court recognized the status of respondents as the "buyer" and "new owners" of the properties. Espino also denies that she deceived the trial court and defrauded respondents as there was no privity of contract between Espino and respondents. Espino maintains that she had no knowledge of the unregistered sales of the properties to Lim and the respondents. Espino adds that there was no fraud, bad faith or malice when she applied for the new owner's copies of the eleven TCTs.

Contrary to Espino's allegation, the trial court's Decision and the Writ of Preliminary Injunction did not declare that respondents are the "new owners" of the properties. While the trial court did restrain the Register of Deeds from accepting or registering any document executed by Espino and any person authorized by her that will in any way encumber or cause the transfer of the properties, the trial court did not adjudge respondents as the owners of the properties.

Moreover, the trial court does not have jurisdiction to declare respondents as the "new owners" of the properties because this is not an issue in a petition for relief from judgment.

In this case, respondents' possession of the eleven TCTs is not necessarily equivalent to ownership of the lands covered by the TCTs. The certificate of title, by itself, does not vest ownership; it is merely an evidence of title over a particular property. Again, the issue of ownership of the eleven properties must be litigated in the appropriate proceedings.

2011 Case Digest in Succession.

GONZALO VILLANUEVA (represented by his heirs), petitioner,vs.

SPOUSES FROILAN and LEONILA BRANOCO, respondents.

G.R. No. 172804 January 24, 2011 Second Division Carpio, J.

FACTS:

Gonzalo Villanueva, represented by his heirs, sued Spouses Branoco to recover a parcel of land. The former claimed ownership over the property thru purchase from Vere, who in turn, bought the property from Rodrigo. Gonzalo declared the property in his name for tax purposes soon after acquiring it. In their answer, the Spouses Baranoco similarly claimed ownership over the property thru purchase from Rodriguez, who in turn, acquired the property from Rodrigo by way of donation. The Spouses entered the property and paid taxes afterwards.

The trial court ruled in favor of Gonzalo and declared him owner of the property, and ordered the Spouses Branoco to surrender possession to Gonzalo. The trial court rejected Spouses Branoco’s claim of ownership after treating the Deed as a donation mortis causa which Rodrigo effectively cancelled by selling the Property to Vere. Thus, by the time Rodriguez sold the property to the Spouses, she had no title to transfer. On appeal, the CA granted the

Spouses’ appeal and set aside the trial court's ruling. it held that the deed of donation is one of inter vivos. In his petition, Gonzalo seeks the reinstatement of the trial court's ruling. Alternatively, petitioner claims ownership over the Property through acquisitive prescription, having allegedly occupied it for more than 10 years.

ISSUE:

Whether or not the contract between Rodrigo and Rodriguez is a donation or a devise?

RULING;

It is immediately apparent that Rodrigo passed naked title to Rodriguez under a perfected donation inter vivos.

First. Rodrigo stipulated that "if the herein Donee predeceases me, the [Property] will not be reverted to the Donor, but will be inherited by the heirs of x x x Rodriguez," signaling the irrevocability of the passage of title to Rodriguez's estate, waiving Rodrigo's right to reclaim title. This transfer of title was perfected the moment Rodrigo learned of Rodriguez's acceptance of the disposition which, being reflected in the Deed, took place on the day of its execution on 3 May 1965. Rodrigo's acceptance of the transfer underscores its essence as a gift in presenti, not in futuro, as only donations inter vivosneed acceptance by the recipient. Indeed, had Rodrigo wished to retain full title over the Property, she could have easily stipulated, as the testator did in another case, that "the donor, may transfer, sell, or encumber to any person or entity the properties here donated x x x" or used words to that effect. Instead, Rodrigo expressly waived title over the Property in case Rodriguez predeceases her.

Second. What Rodrigo reserved for herself was only the beneficial title to the Property, evident from Rodriguez's undertaking to "give one [half] x x x of the produce of the land to Apoy Alve during her lifetime." Thus, the Deed's stipulation that "the ownership shall be vested on [Rodriguez] upon my demise," taking into account the non-reversion clause, could only refer to Rodrigo's beneficial title. Indeed, if Rodrigo still retained full ownership over the Property, it was unnecessary for her to reserve partial usufructuary right over it.

Third. The existence of consideration other than the donor's death, such as the donor's love and affection to the donee and the services the latter rendered, while also true of devises, nevertheless "corroborates the express irrevocability of x x x [inter vivos] transfers." Thus, the CA committed no error in giving weight to Rodrigo's statement of "love and affection" for Rodriguez, her niece, as consideration for the gift, to underscore its finding.

Nor can petitioner capitalize on Rodrigo's post-donation transfer of the Property to Vere as proof of her retention of ownership. If such were the barometer in interpreting deeds of donation, not only will great legal uncertainty be visited on gratuitous dispositions, this will give license to rogue property owners to set at naught perfected transfers of titles, which, while founded on liberality, is a valid mode of passing ownership. The interest of settled property dispositions counsels against licensing such practice.

Accordingly, having irrevocably transferred naked title over the Property to Rodriguez in 1965, Rodrigo "cannot afterwards revoke the donation nor dispose of the said property in favor of another." Thus, Rodrigo's post-donation sale of the Property vested no title to Vere. As Vere's successor-in-interest, petitioner acquired no better right than him. On the other hand, respondents bought the Property from Rodriguez, thus acquiring the latter's title which they may invoke against all adverse claimants, including petitioner.

In re: IN THE MATTER OF THE PETITION TO APPROVE THE WILL OF RUPERTA PALAGANS WITH PRAYER FOR THE APPOINTMENT OF SPECIAL

ADMINISTRATOR

MANUEL MIGUEL PALAGANAS and BENJAMIN GREGORIO PALAGANAS, petitioner,

vs.ERNESTO PALAGANAS, respondent.

G.R. No. 169144 January 26, 2011 Second Division Abad, J.

FACTS:

Ruperta, a Filipino who became a naturalized US citizen, died single and childless. In the last will and testament she executed in California, she designated her brother, Sergio, as the executor of her will for she had left properties in the Philippines and in the U.S.

Ernesto, another brother of Ruperta, filed with the RTC, a petition for the probate of Ruperta’s will and for his appointment as special administrator of her estate. However, Manuel and Benjamin, nephews of Ruperta, opposed the petition on the ground that Ruperta’s will should not be probated in the Philippines but in the U.S. where she executed it. Manuel and Benjamin added that, assuming Ruperta’s will could be probated in the Philippines, it is invalid nonetheless for having been executed under duress and without the testator’s full understanding of the consequences of such act. Ernesto, they claimed, is also not qualified to act as administrator of the estate.

Meantime, since Ruperta’s foreign-based siblings, Gloria and Sergio, were on separate occasions in the Philippines for a short visit, Ernesto filed a motion with the RTC for leave to take their deposition, which it granted. The RTC directed the parties to submit their memorandum on the issue of whether or not Ruperta’s U.S. will may be probated in and allowed by a court in the Philippiines.

The RTC issued an order: (a) admitting to probate Ruperta’s last will; (b) appointing Ernesto as special administrator at the request of Sergio, the U.S.-based executor designated in the will; and (c) issuing the Letters of Special Administration to Ernesto. Manuel and Benjamin appealed to the CA arguing that an unprobated will executed by an American citizen in the U.S. cannot be probated for the first time in the Philippines. The appellate court, in its decision, affirmed the order of the RTC, holding that the RTC properly allowed the probate of the will, subject to respondent Ernesto’s submission of the authenticated copies of the documents specified in the order and his posting of required bond. The CA pointed out that Section 2, Rule 76 of the Rules of Court does not require prior probate and allowance of the will in the country of its execution, before it can be probated in the Philippines.

ISSUE:

Whether or not a will executed by a foreigner abroad may be probated in the Philippines although it has not been previously probated and allowed in the country where it was executed?

RULING:

Our laws do not prohibit the probate of wills executed by foreigners abroad although the same have not as yet been probated and allowed in the countries of their execution. A foreign will can be given legal effects in our jurisdiction. Article 816 of the Civil Code states that the will of an alien who is abroad produces effect in the Philippines if made in accordance with the formalities prescribed by the law of the place where he resides, or according to the formalities observed in his country.

In insisting that Ruperta’s will should have been first probated and allowed by the court of California, petitioners Manuel and Benjamin obviously have in mind the procedure for the reprobate of will before admitting it here. But, reprobate or re-authentication of a will already probated and allowed in a foreign country is different from that probate where the will is presented for the first time before a competent court. Reprobate is specifically governed by Rule 77 of the Rules of Court. Contrary to petitioners’ stance, since this latter rule applies only to reprobate of a will, it cannot be made to apply to the present case. In reprobate, the local court acknowledges as binding the findings of the foreign probate court provided its jurisdiction over the matter can be established.

ATTY. RICARDO B. BERMUDO, petitioner,vs.

FERMINA TAYAG-ROXAS, respondent.

G.R. No. 172879 February 2, 2011 Second Division Abad, J.

FACTS:

Atty. Bermudo, as executor, filed a petition for his appointment as administrator of the estate of Hilario and for the allowance and probate of the latter's will. The testator instituted Roxas as his only heir but several persons, who claimed to be Hilario's relatives, opposed the petition. The RTC rendered a decision, allowing the will and recognizing Roxas as Hilario's sole heir. On appeal, the Court of Appeals affirmed the RTC decision.

When the decision constituting Roxas as the sole heir became final, Atty. Bermudo who also served as counsel for her in the actions concerning her inheritance, filed a motion to fix his legal fees and to constitute a charging lien against the estate for the legal services he rendered. The RTC granted him fees equivalent to 20% of the estate and constituted the same as lien on the estate's property. Roxas appealed the order to the CA. The CA rendered a decision that modified the RTC Order, limiting Atty. Bermudo's compensation as administrator to what Section 7, Rule 85 of the Rules of Court provides and making his lawyer's fees 20% of the value of the land belonging to the estate.

Atty. Bermudo subsequently filed a motion with the RTC for execution and appraisal of the estate on which his 20% compensation would be based. The RTC granted the motion and ordered Roxas to pay Atty. Bermudo P12,644,300.00 as attorney's fees with interest at the rate of 6% per annum. Roxas challenged the order before the CA through a petition for certiorari. Using a different valuation of the land of the estate, the CA ordered Roxas to pay Atty. Bermudo a reduced amount of P4,234,770.00 as attorney's fees with interest at 6% per annum.

ISSUE:

Whether or not Atty. Bermudo, as administrator, is entitled to collect attorney’s fees?

RULING:

Roxas asserts that Atty. Bermudo is not entitled to attorney's fees but only to compensation as administrator in accordance with Section 7, Rule 85 of the Rules of Court.

But Atty. Bermudo did not only serve as administrator of the estate. He also served as Roxas' counsel in the suit that assailed her right as sole heir. Atty. Bermudo brought the contest all the way up to the SC to defend her rights to her uncle's estate. And Atty. Bermudo succeeded. Acting as counsel in that suit for Roxas was not part of his duties as administrator of the estate. Consequently, it was but just that he is paid his attorney's fees.

EDUARDO AGTARAP, petitioner,vs.

SEBASTIAN AGTARAP, respondents.

G.R. No. 177099 June 8, 2011 Second Division Nachura, J.

FACTS:

Eduardo filed with the RTC a petition for the judicial settlement of the estate of his deceased father Joaquin. The petition alleged that Joaquin died intestate on without any known debts or obligations. During his lifetime, Joaquin contracted two marriages, first with Lucia, and second with Carida. Joaquin and Lucia had three children—Jesus (dead), Milagros, and Jose (survived by three children, namely, Gloria, Joseph, and Teresa). Joaquin and Caridad had three children--Eduardo, Sebastian, and Mercedes (survived by her daughter Cecile). At the time of his death, Joaquin left two parcels of land with improvements. Joseph, a grandson of Joaquin, had been leasing and improving the said realties and had been appropriating for himself P26,000.00 per month since April 1994. Eduardo further alleged that there was an imperative need to appoint him as special administrator to take possession and charge of the estate assets and their civil fruits, pending the appointment of a regular administrator. In addition, he prayed that an order be issued (a) confirming and declaring the named compulsory heirs of Joaquin who would be entitled to participate in the estate; (b) apportioning and allocating unto the named heirs their aliquot shares in the estate in accordance with law; and (c) entitling the distributees the right to receive and enter into possession those parts of the estate individually awarded to them.

The RTC issued an order setting the petition for initial hearing and directing Eduardo to cause its publication. Sebastian filed his comment, generally admitting the allegations in the petition, and conceding to the appointment of Eduardo as special administrator. Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the two subject lots belong to the conjugal partnership of Joaquin with Lucia, and that, upon Lucia's death, they became the pro indiviso owners of the subject properties. They said that their residence was built with the exclusive money of their late father Jose, and the expenses of the extensions to the house were shouldered by Gloria and Teresa, while the restaurant was built with the exclusive money of Joseph and his business partner. They opposed the appointment of Eduardo as administrator on the following grounds: (1) he is not physically and mentally fit to do so; (2) his interest in the lots is minimal; and (3) he does not possess the desire to earn. They claimed that the best interests of the estate dictate that Joseph be appointed as special or regular administrator.

The RTC issued a resolution appointing Eduardo as regular administrator of Joaquin's estate. Consequently, it issued him letters of administration.

After the parties were given the opportunity to be heard and to submit their respective proposed projects of partition, the RTC, issued an Order of Partition, and held that the 2 parcels of land are conjugal properties of Joaquin and Lucia. On appeal, the CA dismissed the appeal.

After the parties were given the opportunity to be heard and to submit their respective proposed projects of partition, the RTC, issued an Order of Partition, and held that the 2 parcels of land are conjugal properties of Joaquin and Lucia. On appeal, the CA dismissed the appeal.

Both Eduardo and Sebastian maintains that the certificates of title of real estate properties subject of the controversy are in the name of Joaquin Agtarap, married to Caridad Garcia, and as such are conclusive proof of their ownership thereof, and thus, they are not subject to collateral attack, but should be threshed out in a separate proceeding for that purpose. According to them, the RTC, acting as an intestate court with limited jurisdiction, was not vested with the power and authority to determine questions of ownership, which properly belongs to another court with general jurisdiction. Sebastian further alleged that Joaquin’s estate have already been settled in 1965 after the payment of the inheritance tax. Moreover, Eduardo alleges that the CA erroneously settled, together with the settlement of the estate of Joaquin, the estates of Lucia, Jesus, Jose, Mercedes, Gloria, and Milagros, in contravention of the principle of settling only one estate in one proceeding. He particularly questions the

distribution of the estate of Milagros in the intestate proceedings despite the fact that a proceeding was conducted in another court for the probate of the will of Milagros, bequeathing all to Eduardo whatever share that she would receive from Joaquin's estate. He states that this violated the rule on precedence of testate over intestate proceedings.

ISSUES:

Whether or not the parcels of land belong to the conjugal partnership of Joaquin and Lucia notwithstanding their registration under their registration under the existing certificates of title as registered in the name of Joaquin Agtarap, casado con Caridad Garcia?

RULING:

Therefore, in light of the foregoing evidence, as correctly found by the RTC and the CA, the claim of Sebastian and Eduardo that TCT Nos. 38254 and 38255 conclusively show that the owners of the properties covered therein were Joaquin and Caridad by virtue of the registration in the name of Joaquin Agtarap casado con (married to) Caridad Garcia, deserves scant consideration. This cannot be said to be a collateral attack on the said TCTs. Indeed, simple possession of a certificate of title is not necessarily conclusive of a holder's true ownership of property. A certificate of title under the Torrens system aims to protect dominion; it cannot be used as an instrument for the deprivation of ownership. Thus, the fact that the properties were registered in the name of Joaquin Agtarap, married to Caridad Garcia, is not sufficient proof that the properties were acquired during the spouses' coverture. The phrase "married to Caridad Garcia" in the TCTs is merely descriptive of the civil status of Joaquin as the registered owner, and does not necessarily prove that the realties are their conjugal properties.