Compendium civil (1)

COMPILATION OF SUPREME COURT DECISIONS
(MARCH 2014-MARCH 2015)
Prepared by: ATTY. RESCI ANGELLI RIZADA, RN
Ateneo de Davao University
1
CIVIL LAW
• G.R. No. 193684 March 5,
2014, ONE NETWORK RURAL BANK, INC.
vs.DANILO G. BARIC,
• A third party who did not
commit a violation or invasion
ofthe plaintiffor aggrieved
party's rights may not be held
liable for nominal damages.
While the Petition does not squarely
address the true issue involved, it is
nonetheless evident that the CA gravely
erred in holding Network Bank solidarily
liable with Palado for the payment of
nominal damages.
“Nominal damages are recoverable where
a legal right is technically violated and
must be vindicated against an invasion
that has produced no actual present loss
of any kind or where there has been a
breach of contract and no substantial
injury or actual damages whatsoever have
been or can be shown.
Under Article 2221 of the Civil Code,
nominal damages may be awarded to a
plaintiff whose right has been violated or
invaded by the defendant, for the purpose
o f vindicating or recognizing that right,
not for indemnifying the plaintiff for any
loss suffered." "Nominal damages are not
for indemnification of loss suffered but for
the vindication or recognition ofa right
violated or invaded.
Network Bank did not violate any of
Baric's rights; it was merely a purchaser
or transferee ofthe property. Surely, it is
not prohibited from acquiring the property
even while the forcible entry case was
pending, because as the registered owner
ofthe subject property, Palado may
transfer his title at any time
andtheleasemerelyfollowsthepropertyasali
enorencumbrance. Anyinvasion or
violation of Baric's rights as lessee was
committed solely by Palado, and Network
Bank may not be implicated or found
guilty unless it actually took part in the
commission of illegal acts, which does not
appear to be so from the evidence on
record. On the contrary, it appears that
Barie was ousted through Palado's acts
even before Network Bank acquired the
subject property or came into the picture.
Thus, it was error to hold the bank liable
for nominal damages.
With regard to Baric's argument that he
should be reinstated to the premises and
awarded damages, this may not be
allowed. He did not question the CA ruling
in an appropriate Petition before this
Court. "It is well-settled that a party who
has not appealed from a decision cannot
seek any relief other than what is
provided in the judgment appealed from.
An appellee who has himself not appealed
may not obtain from the appellate court
any affirmative relief other than the ones
granted in the decision of the court below.
• G.R. No. 180069. March 5, 2014 Philippine
Commercial International Bank (now BDO
Unibank, Inc.) Vs. Arturo P. Franco,
substituted by his heirs, namely: Mauricia
P. Franco, Floribel P. Franco, and
Alexander P. Franco
• A quick point, however, on the
issue of alleged payment by
petitioner Bank on the subject trust
certificate indentures.
Jurisprudence abounds that, in civil cases,
one who pleads payment has the burden
of proving it. Even where the plaintiff
must allege non- payment, the general
rule is that the burden rests on the
defendant to prove payment, rather than
on the plaintiff to prove non-payment.
When the creditor is in possession of the
document of credit, he need not prove
non- payment for it is presumed. The
creditor’s possession of the evidence of
debt is proof that the debt has not been
discharged by payment.
In this case, respondent's possession of
the original copies of the subject TICs
strongly supports his claim that petitioner
Bank's obligation to return the principal

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plus interest of the money placement has
not been extinguished. The TICs in the
hands of respondent is a proof of
indebtedness and a prima facie evidence
that they have not been paid. Petitioner
Bank could have easily presented
documentary evidence to dispute the
claim, but it did not. In its omission, it
may be reasonably deduced that no
evidence to that effect really exist. Worse,
the testimonies of petitioner Bank's own
witnesses, reinforce, rather than belie,
respondent's allegations of non-payment.
• G.R. No. 173423. March 5, 2014   Sps.
Antonio Fortuna and Erlinda Fortuna Vs.
Republic of the Philippines
• We deny the petition for failure of
the spouses Fortuna to sufficiently
prove their compliance with the
requisites for the acquisition of title
to alienable lands of the public
domain.
• The nature of Lot No. 4457 as
alienable and disposable public
land has not been sufficiently
established
The Constitution declares that all lands of
the public domain are owned by the State.
Of the four classes of public land, i.e.,
agricultural lands, forest or timber lands,
mineral lands, and national parks, only
agricultural lands may be alienated. Public
land that has not been classified as
alienable agricultural land remains part of
the inalienable public domain. Thus, it is
essential for any applicant for
registration of title to land derived
through a public grant to establish
foremost the alienable and disposable
nature of the land. The PLA provisions
on the grant and disposition of alienable
public lands, specifically, Sections 11 and
48(b), will find application only from the
time that a public land has been classified
as agricultural and declared as alienable
and disposable.
Under Section 6 of the PLA, the
classification and the reclassification of
public lands are the prerogative of the
Executive Department. The President,
through a presidential proclamation or
executive order, can classify or reclassify
a land to be included or excluded from the
public domain. The Department of
Environment and Natural Resources
(DENR) Secretary is likewise empowered
by law to approve a land classification and
declare such land as alienable and
disposable.
In this case, the CA declared that the
alienable nature of the land was
established by the notation in the
survey plan. It also relied on the
Certification dated July 19, 1999 from
the DENR Community Environment and
Natural Resources Office (CENRO) that
“there is, per record, neither any public
land application filed nor title previously
issued for the subject parcel[.]”However,
we find that neither of the above
documents is evidence of a positive
act from the government reclassifying
the lot as alienable and disposable
agricultural land of the public domain.
Mere notations appearing in survey
plans are inadequate proof of the
covered properties’ alienable and
disposable character. These notations,
at the very least, only establish that the
land subject of the application for
registration falls within the approved
alienable and disposable area per
verification through survey by the proper
government office. The applicant,
however, must also present a copy of
the original classification of the land
into alienable and disposable land, as
declared by the DENR Secretary or as
proclaimed by the President.
The survey plan and the DENR-CENRO
certification are not proof that the
President or the DENR Secretary has
reclassified and released the public land as
alienable and disposable. The offices that
prepared these documents are not the
official repositories or legal custodian
of the issuances of the President or the
DENR Secretary declaring the public land

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as alienable and disposable.
For failure to present incontrovertible
evidence that Lot No. 4457 has been
reclassified as alienable and disposable
land of the public domain though a
positive act of the Executive Department,
the spouses Fortuna’s claim of title
through a public land grant under the PLA
should be denied.
In judicial confirmation of imperfect
or incomplete title, the period of
possession should commence, at the
latest, as of May 9, 1947
Although the above finding that the
spouses Fortuna failed to establish the
alienable and disposable character of Lot
No. 4457 serves as sufficient ground to
deny the petition and terminate the case,
we deem it proper to continue to address
the other important legal issues raised in
the petition.
As mentioned, the PLA is the law that
governs the grant and disposition of
alienable agricultural lands. Under Section
11 of the PLA, alienable lands of the public
domain may be disposed of, among
others, by judicial confirmation of
imperfect or incomplete title.
On June 22, 1957, the cut-off date of July
26, 1894 was replaced by a 30-year
period of possession under RA No. 1942.
Section 48(b) of the PLA, as amended by
RA No. 1942, read:
(b) Those who by themselves or through
their predecessors in interest have been in
open, continuous, exclusive and notorious
possession and occupation of agricultural
lands of the public domain, under a bona
fide claim of acquisition of ownership, for
at least thirty years immediately
preceding the filing of the application for
confirmation of title, except when
prevented by war or force majeure.
[emphasis and underscore ours]
On January 25, 1977, PD No. 1073
replaced the 30-year period of possession
by requiring possession since June 12,
1945. Section 4 of PD No. 1073 reads:
SEC. 4. The provisions of Section 48(b)
and Section 48(c), Chapter VIII of the
Public Land Act are hereby amended in
the sense that these provisions shall apply
only to alienable and disposable lands of
the public domain which have been in
possession and occupation by the
applicant himself or thru his predecessor-
in-interest, under a bona fide claim of
acquisition of ownership, since June 12,
1945. [emphasis supplied]
Under the PD No. 1073 amendment,
possession of at least 32 years – from
1945 up to its enactment in 1977 – is
required. This effectively impairs the
vested rights of applicants who had
complied with the 30-year possession
required under the RA No. 1942
amendment, but whose possession
commenced only after the cut-off date of
June 12, 1945 was established by the PD
No. 1073 amendment. To remedy this, the
Court ruled in Abejaron v. Nabasa that
“Filipino citizens who by themselves or
their predecessors-in-interest have been,
prior to the effectivity of P.D. 1073 on
January 25, 1977, in open, continuous,
exclusive and notorious possession and
occupation of agricultural lands of the
public domain, under a bona fide claim of
acquisition of ownership, for at least 30
years, or at least since January 24,
1947 may apply for judicial confirmation
of their imperfect or incomplete title under
Sec. 48(b) of the [PLA].” January 24,
1947 was considered as the cut-off
date as this was exactly 30 years
counted backward from January 25,
1977 – the effectivity date of PD No.
1073.
It appears, however, that January 25,
1977 was the date PD No. 1073 was
enacted; based on the certification from
the National Printing Office, PD No. 1073
was published in Vol. 73, No. 19 of

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the Official Gazette, months later than
its enactment or on May 9, 1977. This
uncontroverted fact materially affects the
cut-off date for applications for judicial
confirmation of incomplete title under
Section 48(b) of the PLA.
Although Section 6 of PD No. 1073 states
that “[the] Decree shall take effect upon
its promulgation,” the Court has declared
in Tañada, et al. v. Hon. Tuvera, etc., et al
that the publication of laws is an
indispensable requirement for its
effectivity. “[A]ll statutes, including those
of local application and private laws, shall
be published as a condition for their
effectivity, which shall begin fifteen days
after publication unless a different
effectivity date is fixed by the legislature.”
Accordingly, Section 6 of PD No. 1073
should be understood to mean that the
decree took effect only upon its
publication, or on May 9, 1977. This,
therefore, moves the cut-off date for
applications for judicial confirmation
of imperfect or incomplete title under
Section 48(b) of the PLA to May 8,
1947. In other words, applicants must
prove that they have been in open,
continuous, exclusive and notorious
possession and occupation of
agricultural lands of the public
domain, under a bona fide claim of
acquisition of ownership, for at least
30 years, or at least since May 8,
1947.
The spouses Fortuna were unable to
prove that they possessed Lot No.
4457 since May 8, 1947
Even if the Court assumes that Lot No.
4457 is an alienable and disposable
agricultural land of the public domain, the
spouses Fortuna’s application for
registration of title would still not prosper
for failure to sufficiently prove that they
possessed the land since May 8, 1947.
The spouses Fortuna’s allegation that: (1)
the absence of a notation that Tax
Declaration No. 8366 was a new tax
declaration and (2) the notation stating
that Tax Declaration No. 8366 cancels the
earlier Tax Declaration No. 10543 both
indicate that Pastora possessed the land
prior to 1948 or, at the earliest, in 1947.
We also observe that Tax Declaration No.
8366 contains a sworn statement of the
owner that was subscribed on October 23,
1947. While these circumstances may
indeed indicate possession as of 1947,
none proves that it commenced as of the
cut-off date of May 8, 1947. Even if the
tax declaration indicates possession since
1947, it does not show the nature of
Pastora’s possession. Notably, Section
48(b) of the PLA speaks of possession and
occupation. “Since these words are
separated by the conjunction and, the
clear intention of the law is not to make
one synonymous with the other.
Possession is broader than occupation
because it includes constructive
possession. When, therefore, the law adds
the word occupation, it seeks to delimit
the all encompassing effect of constructive
possession. Taken together with the words
open, continuous, exclusive and notorious,
the word occupation serves to highlight
the fact that for an applicant to qualify, his
possession must not be a mere fiction.”
Nothing in Tax Declaration No. 8366
shows that Pastora exercised acts of
possession and occupation such as
cultivation of or fencing off the land.
Indeed, the lot was described as
“cogonal.”
• G.R. No. 184371. March 5, 184371 Spouses
Mario and Julia Campos Vs. Republic of
the Philippines
• the sole issue raised by the
Republic was merely on the
discrepancies on the area and
description of the subject land as
indicated in the documents and
evidence presented, which issue
the petitioners already addressed
in their appeal brief before the CA.
Persons applying for registration o f title
under Section 14( 1) o f Presidential
Decree No. 1529 must prove: (1) that the

5
land sought to be
registered 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.
As the CA did, we find that the petitioners
failed to prove that they and their
predecessors-in-interest have been in
possession and occupation of the subject
land, under a bona
fide claim of ownership, since June 12,
1945, or earlier. The oldest documentary
evidence presented by the petitioners was
a 1948 tax declaration over the subject
land in the name of Margarita Laigo. The
petitioners failed to present evidence of
their possession prior to 1948. In fact, the
petitioners, in their application for
registration, base their possession of
the subject land only from 1948, and
not "since June 12, 1945, or earlier"
as required by law.
We emphasize that since the effectivity
ofP.D. No. 1073 on January 25, 1977, it
must be shown that possession and
occupation of the land sought to be
registered by the applicant himself or
through his predecessors- in-interest,
started on June 12, 1945 or earlier,
which totally conforms to the requirement
under Section 14(1) of P.D. No 1529. A
mere showing of possession and
occupation for thirty (30) years or more is
no longer sufficient.
• G.R. No. 172909. March 5, 2014 Spouses
Silvestre O. Plaza and Elena Y. Plaza Vs.
Guillermo Lustiva, et al.
Issue: NULLITY OF LAND AUCTION
Sections 181 and 267 of the Local
Government Code of 1991 are
inapplicable; these provisions do not
apply to the present case
The petitioners may not invoke Section
181 of the Local Government Code of
1991 to validate their alleged title. The
law authorizes the local government unit
to purchase the auctioned property only in
instances where “ There is no bidder or
the highest bid is insufficient”. A
disqualified bidder is not among the
authorized grounds. The local government
also never undertook steps to purchase
the property under Section 181 of the
Local Government Code of 1991,
presumably because it
knew the invoked provision does not
apply.
Neither can the Court agree with the
petitioners’ stance that the respondents’
defense — the petitioners’ defective title
— must fail for want of deposit to the
court the amount required by Section 267
of the Local Government Code.
A simple reading of the title readily
reveals that the provision relates to
actions for annulment of tax sales. The
section likewise makes use of terms
“entertain” and “institution” to mean that
the deposit requirement applies only to
initiatory actions assailing the validity of
tax sales. The intent of the provision to
limit the deposit requirement to actions
for annulment of tax sales led to the
Court’s ruling in National Housing
Authority v. Iloilo City, et al. that the
deposit requirement is jurisdictional — a
condition necessary for the court to
entertain the action:
These rulings clearly render inapplicable
the petitioners’ insistence that the
respondents should have made a deposit
to the court. The suit filed by the
petitioners was an action for injunction
and damages; the issue of nullity of the

6
auction was raised by the respondents
themselves merely as a defense and in no
way converted the action to an action for
annulment of a tax sale.
The petitioners are guilty of forum
shopping
We agree with the CA that the petitioners
committed forum shopping when they
filed the specific performance case despite
the pendency of the present case before
the CA. In the recent case of Heirs of
Marcelo Sotto, etc., et al. v. Matilde S.
Palicte, the Court laid down the three
ways forum shopping may be
committed: 1) through litis pendentia —
filing multiple cases based on the same
cause of action and with the same prayer,
the previous case not having been
resolved yet; 2) through res judicata —
filing multiple cases based on the same
cause of action and the same prayer, the
previous case having been finally
resolved; and 3) splitting of causes of
action — filing multiple cases based on the
same cause of action but with different
prayers — the ground to dismiss being
either litis pendentia or res judicata. “The
requisites of litis pendentia are: (a) the
identity of parties, or at least such as
representing the same interests in both
actions; (b) the identity of rights asserted
and relief prayed for, the relief being
founded on the same facts; and (c) the
identity of the two cases such that
judgment in one, regardless of which
party is successful, would amount to res
judicata in the other.”
Noticeable among these three types of
forum shopping is the identity of the
cause of action in the different cases
filed. Cause of action is “the act or
omission by which a party violates the
right of another.”
The cause of action in the present case
(and the main case) is the petitioners’
claim of ownership of the land when they
bought it, either from the City
Government of Butuan or from Tuazon.
This ownership is the petitioners’ basis in
enjoining the respondents from
dispossessing them of the property. On
the other hand, the specific performance
case prayed that the City Government of
Butuan be ordered to issue the petitioners
the certificate of sale grounded on the
petitioners’ ownership of the land when
they had bought it, either from the City
Government of Butuan or from Tuazon.
While it may appear that the main relief
prayed for in the present injunction case is
different from what was prayed for in the
specific performance case, the cause of
action which serves as the basis for the
reliefs remains the same — the
petitioners’ alleged ownership of the
property after its purchase in a public
auction.
Thus, the petitioners' subsequent filing of
the specific performance action is forum
shopping of the third kind-splitting causes
of action or filing multiple cases based on
the same cause of action, but with
different prayers. As the Court has held in
the past, "there is still forum shopping
even if the reliefs prayed for in the two
cases are different, so long as both cases
raise substantially the same issues.
Similarly, the CA correctly found that the
petitioners and their counsel were guilty of
forum shopping based on litis pendentia.
Not only were the parties in both cases
the same insofar as the City Government
of Butuan is concerned, there was also
identity ofrights asserted and identity of
facts alleged. The cause of action in the
specific performance case had already
been ruled upon in the present case,
although it was still pending appeal before
the CA. Likewise, the prayer sought in the
specific performance case-for the City
Government ofButuan to execute a deed
of sale in favor of the petitioners - had
been indirectly ruled upon in the present
case when the RTC declared that no
certificate of sale could be issued because
there had been no valid sale.
• G.R. No. 192123. March 10, 2014 Dr.
Fernando P. Solidum Vs. People of the
Philippines

7
• This appeal is taken by a physician-
anesthesiologist who has been
pronounced guilty of reckless
imprudence resulting in serious
physical injuries by the Regional
Trial Court (RTC) and the Court of
Appeals (CA). He had been part of
the team of anesthesiologists
during the surgical pull- through
operation conducted on a three-
year old patient born with an
imperforate anus.
Applicability of the Doctrine of Res
Ipsa Loquitur
In order to allow resort to the doctrine,
therefore, the following essential
requisites must first be satisfied, to wit:
(1) the accident was of a kind that does
not ordinarily occur unless someone is
negligent; (2) the instrumentality or
agency that caused the injury was under
the exclusive control of the person
charged; and (3) the injury suffered must
not have been due to any voluntary action
or contribution of the person injured.
The Court considers the application here
of the doctrine of res ipsa loquitur
inappropriate. Although it should be
conceded without difficulty that the
second and third elements were present,
considering that the anesthetic agent and
the instruments were exclusively within
the control of Dr. Solidum, and that the
patient, being then unconscious during the
operation, could not have been guilty of
contributory negligence, the first element
was undeniably wanting. Luz delivered
Gerald to the care, custody and control of
his physicians for a pull-through
operation. Except for the imperforate
anus, Gerald was then of sound body and
mind at the time of his submission to the
physicians. Yet, he experienced
bradycardia during the operation, causing
loss of his senses and rendering him
immobile. Hypoxia, or the insufficiency of
oxygen supply to the brain that caused
the slowing of the heart rate, scientifically
termed as bradycardia, would not
ordinarily occur in the process of a pull-
through operation, or during the
administration of anesthesia to the
patient, but such fact alone did not prove
that the negligence of any of his attending
physicians, including the
anesthesiologists, had caused the injury.
In fact, the anesthesiologists attending to
him had sensed in the course of the
operation that the lack of oxygen could
have been triggered by the vago-vagal
reflex, prompting them to administer
atropine to the patient.
Negligence of Dr. Solidum
In view of the inapplicability of the
doctrine of res ipsa loquitur, the Court
next determines whether the CA correctly
affirmed the conviction of Dr. Solidum for
criminal negligence.
Negligence is defined as the failure to
observe for the protection of the interests
of another person that degree of care,
precaution, and vigilance that the
circumstances justly demand, whereby
such other person suffers injury. Reckless
imprudence, on the other hand, consists
of voluntarily doing or failing to do,
without malice, an act from which material
damage results by reason of an
inexcusable lack of precaution on the part
of the person performing or failing to
perform such act.
Dr. Solidum’s conviction by the RTC was
primarily based on his failure to monitor
and properly regulate the level of
anesthetic agent administered on Gerald
by overdosing at 100% halothane.
The Prosecution did not prove the
elements of reckless imprudence beyond
reasonable doubt because the
circumstances cited by the CA were
insufficient to establish that Dr. Solidum
had been guilty of inexcusable lack of
precaution in monitoring the
administration of the anesthetic agent to
Gerald.

8
An action upon medical negligence –
whether criminal, civil or administrative –
calls for the plaintiff to prove by
competent evidence each of the following
four elements, namely: (a) the duty owed
by the physician to the patient, as created
by the physician-patient relationship, to
act in accordance with the specific norms
or standards established by his
profession; (b) the breach of the duty by
the physician’s failing to act in accordance
with the applicable standard of care; (3)
the causation, i.e., there must be a
reasonably close and causal connection
between the negligent act or omission and
the resulting injury; and (4) the damages
suffered by the patient.
Dr. Solidum was criminally charged for
“failing to monitor and regulate properly
the levels of anesthesia administered to
said Gerald Albert Gercayo and using
100% halothane and other anesthetic
medications.” However, the foregoing
circumstances, taken together, did not
prove beyond reasonable doubt that Dr.
Solidum had been recklessly imprudent in
administering the anesthetic agent to
Gerald. Indeed, Dr. Vertido’s findings did
not preclude the probability that other
factors related to Gerald’s major
operation, which could or could not
necessarily be attributed to the
administration of the anesthesia, had
caused the hypoxia and had then led
Gerald to experience bradycardia. Dr.
Vertido revealingly concluded in his
report, instead, that “although the
anesthesiologist followed the normal
routine and precautionary procedures, still
hypoxia and its corresponding side effects
did occur.”
Liability of Ospital ng Maynila
Although the result now reached has
resolved the issue of civil liability, we have
to address the unusual decree of the RTC,
as affirmed by the CA, of expressly
holding Ospital ng Maynila civilly liable
jointly and severally with Dr. Solidum. The
decree was flawed in logic and in law.
In criminal prosecutions, the civil action
for the recovery of civil liability that is
deemed instituted with the criminal action
refers only to that arising from the offense
charged. It is puzzling, therefore, how the
RTC and the CA could have adjudged
Ospital ng Maynila jointly and severally
liable with Dr. Solidum for the damages
despite the obvious fact that Ospital ng
Maynila, being an artificial entity, had not
been charged along with Dr. Solidum. The
lower courts thereby acted capriciously
and whimsically, which rendered their
judgment against Ospital ng Maynila void
as the product of grave abuse of
discretion amounting to lack of
jurisdiction.
Not surprisingly, the flawed decree raises
other material concerns that the RTC and
the CA overlooked. We deem it important,
then, to express the following
observations for the instruction of the
Bench and Bar.
For one, Ospital ng Maynila was not at all
a party in the proceedings. Hence, its
fundamental right to be heard was not
respected from the outset. The RTC and
the CA should have been alert to this
fundamental defect. Verily, no person can
be prejudiced by a ruling rendered in an
action or proceeding in which he was not
made a party. Such a rule would enforce
the constitutional guarantee of due
process of law.
Moreover, Ospital ng Maynila could be
held civilly liable only when subsidiary
liability would be properly enforceable
pursuant to Article 103 of the Revised
Penal Code. But the subsidiary liability
seems far-fetched here. The conditions for
subsidiary liability to attach to Ospital ng
Maynila should first be complied with.
Firstly, pursuant to Article 103 of the
Revised Penal Code, Ospital ng Maynila
must be shown to be a corporation
"engaged in any kind of industry." The
term industry means any department or

9
branch of art, occupation or business,
especially one that employs labor and
capital, and is engaged in industry.
However, Ospital ng Maynila, being a
public hospital, was not engaged in
industry conducted for profit but purely in
charitable and humanitarian work.
Secondly, assuming that Ospital ng
Maynila was engaged in industry for profit,
Dr. Solidum must be shown to be an
employee of Ospital ng Maynila acting in
the discharge of his duties during the
operation on Gerald. Yet, he definitely was
not such employee but a consultant of the
hospital. And, thirdly, assuming that civil
liability was adjudged against Dr. Solidum
as an employee (which did not happen
here), the execution against him was
unsatisfied due to his being insolvent.
• G.R. No. 163767. March 10, 2014 Republic
of the Philippines represented by the
Director of Lands Vs. Rosario De Guzman
Vda. De Joson
• This case concerns the discharge of
the burden of proof by the
applicant in proceedings for the
registration ofland under Section
14 (1) and (2) of Presidential
Decree No. 1529 (Property
Registration Decree).
The respondent sought to have the land
registered in her name by alleging that
she and her predecessors-in-interest had
been in open, peaceful, continuous,
uninterrupted and adverse possession of
the land in the concept of owner since
time immemorial. However, the Republic
counters that the land was public land;
and that it could not be acquired by
prescription. The determination of the
issue hinges on whether or not the land
was public; if so, whether the respondent
satisfactorily proved that the land had
already been declared as alienable and
disposable land of the public domain; and
that she and her predecessors-in-interest
had been in open, peaceful, continuous,
uninterrupted and adverse possession of
the land in the concept of owner since
June 12, 1945, or earlier.
Under Section 14(1), therefore, the
respondent had to prove that: (1) the land
formed part of the alienable and
disposable land of the public domain; and
(2) she, by herself or through her
predecessors-in-interest, had been in
open, continuous, exclusive, and notorious
land under a bona fide claim of ownership
from June 12, 1945, or earlier.
what is left wanting is the fact that the
respondent did not discharge her burden
to prove the classification of the land as
demanded by the first requisite. She did
not present evidence of the land, albeit
public, having been declared alienable and
disposable by the State. During trial, she
testified that the land was not within any
military or naval reservation, and Frisco
Domingo, her other witness, corroborated
her. Although the Republic countered that
the verification made by the Bureau of
Forest Development showed that the land
was within the unclassified region of
Paombong, Bulacan as per BF Map LC No.
637 dated March 1, 1927, such showing
was based on the 1st
Indorsement dated
July 22, 1977 issued by the Bureau of
Forest Development, which the CA did not
accord any evidentiary weight to for
failure of the Republic to formally offer it
in evidence. Still, Fiscal Reyes, in the
opposition he filed in behalf of the
Government, argued that the land was a
portion of the Labangan Channel operated
by the Pampanga River Control System,
and could not be the subject of
appropriation or land registration. Thus,
the respondent as the applicant remained
burdened with proving her compliance
with the first requisite.
This doctrine unavoidably means that the
mere certification issued by the CENRO or
PENRO did not suffice to support the
application for registration, because the
applicant must also submit a copy of the
original classification of the land as
alienable and disposable as approved by
the DENR Secretary and certified as a true
copy by the legal custodian of the official

10
records.
Yet, even assuming that the DENR-CENRO
certification alone would have sufficed, the
respondent’s application would still be
denied considering that the reclassification
of the land as alienable or disposable
came only after the filing of the
application in court in 1976. The
certification itself indicated that the land
was reclassified as alienable or disposable
only on October 15, 1980.
On the other hand, under Section 14(2),
ownership of private lands acquired
through prescription may be registered in
the owner’s name. Did the respondent
then acquire the land through prescription
considering that her possession and
occupation of the land by her and her
predecessors-in- interest could be traced
back to as early as in 1926, and that the
nature of their possession and occupation
was that of a bona fide claim of ownership
for over 30 years?
Clearly, the respondent did not.
The period of possession prior to the
reclassification of the land as alienable
and disposable land of the public domain
is not considered in reckoning the
prescriptive period in favor of the
possessor.
In other words, the period of possession
prior to the reclassification of the land, no
matter how long, was irrelevant because
prescription did not operate against the
State before then.
In her act of dishonesty, respondent failed
to take heed of the Code of
Conduct for Court Personnel, which
regards all court personnel as sentinels
Of justice expected to refrain from any act
of impropriety. Thus,applying
the penalties under the Revised Uniform
Rules on Administrative Cases in the Civil
Service, we sanction her perfidy by
imposing upon her the penalty ofdismissal
from service with accessory penalties.
• G.R. No. 188539. March 12, 2014 Mariano
Lim Vs. Security Bank Corporation
• main issue is whether petitioner
may validly be held liable for the
principal debtor's loan obtained six
months after the execution of the
Continuing Suretyship.
In this case, what petitioner executed was
a Continuing Suretyship, which the Court
described in Saludo, Jr. v. Security Bank
Corporation as follows:
The essence of a continuing surety has
been highlighted in the case of Totanes v.
China Banking Corporation in this wise:
Comprehensive or continuing surety
agreements are, in fact, quite
commonplace in present day financial and
commercial practice. A bank or
financing company which anticipates
entering into a series of credit
transactions with a particular
company, normally requires the
projected principal debtor to execute
a continuing surety agreement along
with its sureties. By executing such
an agreement, the principal places
itself in a position to enter into the
projected series of transactions with
its creditor; with such suretyship
agreement, there would be no need to
execute a separate surety contract or
bond for each financing or credit
accommodation extended to the
principal debtor.
The terms of the Continuing Suretyship
executed by petitioner, quoted earlier, are
very clear. It states that petitioner, as
surety, shall, without need for any notice,
demand or any other act or deed,
immediately become liable and shall pay
“all credit accommodations extended

11
by the Bank to the Debtor, including
increases, renewals, roll-overs,
extensions, restructurings, amendments
or novations thereof, as well as (i) all
obligations of the Debtor presently or
hereafter owing to the Bank, as
appears in the accounts, books and
records of the Bank, whether direct or
indirect, and (ii) any and all expenses
which the Bank may incur in enforcing any
of its rights, powers and remedies under
the Credit Instruments as defined
hereinbelow.” Such stipulations are valid
and legal and constitute the law between
the parties, as Article 2053 of the Civil
Code provides that “[a] guaranty may also
be given as security for future debts, the
amount of which is not yet known; x x x.”
Thus, petitioner is unequivocally bound by
the terms of the Continuing Suretyship.
There can be no cavil then that petitioner
is liable for the principal of the loan,
together with the interest and penalties
due thereon, even if said loan was
obtained by the principal debtor even after
the date of execution of the Continuing
Suretyship.
• G.R. No. 192717. March 12, 2014 Minda S.
Gaerlan Vs. Republic of the Philippines
• Essentially, the main issue to be
resolved is whether the CA erred in
dismissing petitioner’s application
for registration of title.
Now, on the merits. Petitioner asserts that
the land subject of her
application has been declared alienable
and disposable in 1925 and that her
possession through her predecessors-in-
interest started in 1929. However, after a
careful examination of the evidence
adduced by petitioner, we find no error on
the part of the CA in dismissing
petitioner’s application for registration of
title for the failure of petitioner to prove
satisfactorily the requirements for
registration provided under the law.
To comply with the first requisite,
petitioner submitted a CENRO Certification
stating that Lot 4342, Cad-237 located in
Patag, Cagayan de Oro City falls within
the alienable and disposable area under
Project No. 8, Block I. Petitioner also
submitted LC Map No. 543 which was
certified and approved on December 31,
1925. We, however, find that the attached
certification is inadequate to prove that
the subject lot is alienable and disposable.
We held in Republic v. T.A.N. Properties,
Inc. that a CENRO certification is
insufficient to prove the alienable and
disposable character of the land sought to
be registered. The applicant must also
show sufficient proof that the DENR
Secretary has approved the land
classification and released the land in
question as alienable and disposable.
Thus, as it now stands, aside from the
CENRO certification, an application for
original registration of title over a parcel
of land must be accompanied by a copy of
the original classification approved by the
DENR Secretary and certified as a true
copy by the legal custodian of the official
records in order to establish that the land
is indeed alienable and disposable.
As to the second and third requisites, we
agree with the appellate court that
petitioner failed to establish that she and
her predecessors-in- interest have been in
land on or before June 12, 1945. Based on
the records, the earliest evidence of
possession that petitioner and her
predecessor-in-interest Mamerta Tan had
over the subject property was only in
1975 when Mamerta Tan purchased the
subject lot from Teresita Tan. While
Mamerta Tan testified that she purchased
the property from Teresita, the records
are bereft of any evidence to show
Teresita’s mode of acquisition of
ownership over the subject lot or from
whom she acquired the property and
when her possession of the subject lot had
commenced.
In fine, since petitioner failed to prove
that (1) the subject property was

12
classified as part of the disposable and
alienable land of the public domain; and
(2) she and her predecessors-in-interest
have been in open, continuous, exclusive,
and notorious possession and occupation
thereof under a bona fide claim of
ownership since June 12, 1945 or earlier,
her application for registration of title of
the subject property under P.D. No. 1529
should be denied.
• G.R. No. 154390. March 17,
2014 Metropolitan Fabrics, Inc., et al. Vs.
Prosperity Credit Resources, Inc. et al.
• The genuineness and due
execution of a deed of real estate
mortgage that has been
acknowledged before a notary
public are presumed. Any
allegation of fraud and forgery
against the deed must be
established by clear and competent
evidence.
The contested deed of real estate
mortgage was a public document by virtue
of its being acknowledged before notary
public Atty. Noemi Ferrer. As a notarized
document, the deed carried the
evidentiary weight conferred upon it with
respect to its due execution, and had in its
favor the presumption of regularity.
Hence, it was admissible in evidence
without further proof of its authenticity,
and was entitled to full faith and credit
upon its face. To rebut its authenticity and
genuineness, the contrary evidence must
be clear, convincing and more than merely
preponderant; otherwise, the deed should
be upheld.
Action to assail the mortgage already
prescribed
The next issue to address is whether the
action to assail the real estate mortgage
already prescribed.
To resolve the issue of prescription, it is
decisive to determine if the mortgage was
void or merely voidable.
It appears that the original stance of
petitioners was that the deed of real
estate mortgage was voidable. In their
complaint, they averred that the deed,
albeit in printed form, was incomplete in
essential details, and that Metropolitan,
through Enrique Ang as its president,
signed it in good faith and in absolute
confidence.
As the records show, petitioners really
agreed to mortgage their properties as
security for their loan, and signed the
deed of mortgage for the purpose.
Thereafter, they delivered the TCTs of the
properties subject of the mortgage to
respondents.
Consequently, petitioners' contention of
absence of consent had no firm moorings.
It remained unproved. To begin with, they
neither alleged nor established that they
had been forced or coerced to enter into
the mortgage. Also, they had freely and
voluntarily applied for the loan, executed
the mortgage contract and turned over
the TCTs of their properties. And, lastly,
contrary to their modified defense of
absence of consent, Vicky Ang's testimony
tended at best to prove the vitiation of
their consent through insidious words,
machinations or misrepresentations
amounting to fraud, which showed that
the contract was voidable. Where the
consent was given through fraud, the
contract was voidable, not void ab initio.
This is because a voidable or annullable
contract is existent, valid and binding,
although it can be annulled due to want of
capacity or because of the vitiated consent
of one of the parties.
With the contract being voidable,
petitioners' action to annul the real estate
mortgage already prescribed. Article
1390, in relation to Article 1391 of the
Civil Code, provides that if the consent of
the contracting parties was obtained
through fraud, the contract is considered
voidable and may be annulled within four
years from the time of the discovery of
the fraud. The discovery of fraud is
reckoned from the time the document was

13
registered in the Register of Deeds in view
of the rule that registration was notice to
the whole world. Thus, because the
mortgage involving the seven lots was
registered on September 5, 1984, they
had until September 5, 1988 within which
to assail the validity of the mortgage. But
their complaint was instituted in the RTC
only on October 10, 1991. Hence, the
action, being by then already prescribed,
should be dismissed.
• G.R. No. 200468. March 19, 2014 Macaria
Arguelles and the Heirs of the Deceased
Petronio Arguelles Vs. Malarayat Rural
Bank, Inc.
• In fine, the issue in this case is
whether the respondent Malarayat
Rural Bank is a mortgagee in good
faith who is entitled to protection
on its mortgage lien.
Petitioners imputed negligence on the part
of respondent Malarayat Rural Bank when
it approved the loan application of the
spouses Guia. They pointed out that the
bank failed to conduct a thorough ocular
inspection of the land mortgaged and an
extensive investigation of the title of the
registered owner. And since the
respondent Malarayat Rural Bank cannot
be considered a mortgagee in good faith,
petitioners argued that the unregistered
sale in their favor takes precedence over
the duly registered mortgage lien. On the
other hand, respondent Malarayat Rural
Bank claimed that it exercised the
required degree of diligence before
granting the loan application. In
particular, it asserted the absence of any
facts or circumstances that can reasonably
arouse suspicion in a prudent person.
Thus, the respondent Malarayat Rural
Bank argued that it is a mortgagee in
good faith with a better right to the
mortgaged land as compared to the
vendees to the unregistered sale.
The petition is meritorious.
In Bank of Commerce v. Spouses San
Pablo, Jr., we declared that indeed, a
mortgagee has a right to rely in good faith
on the certificate of title of the mortgagor
of the property offered as security, and in
the absence of any sign that might arouse
suspicion, the mortgagee has no
obligation to undertake further
investigation.
“[i]n cases where the mortgagee does not
directly deal with the registered owner of
real property, the law requires that a
higher degree of prudence be exercised by
the mortgagee.”
Thus, where the mortgagor is not the
registered owner of the property but is
merely an attorney-in-fact of the same, it
is incumbent upon the mortgagee to
exercise greater care and a higher degree
of prudence in dealing with such
mortgagor.
In this case, we find that the respondent
Malarayat Rural Bank fell short of the
required degree of diligence, prudence,
and care in approving the loan application
of the spouses Guia.
Respondent should have diligently
conducted an investigation of the
land offered as collateral. Although the
Report o f Inspection and Credit
Investigation found at the dorsal portion
of the Application for Agricultural Loan.
proved that the respondent Malarayat
Rural Bank inspected the land,
the respondent turned a blind eye to the
finding therein that the "lot is
planted [with] sugarcane with annual yield
(crops) in the amount of
P15,000. We disagree with respondent's
stance that the mere planting
and harvesting of sugarcane cannot
reasonably trigger suspicion that there is
adverse possession over the land offered
as mortgage. Indeed, such fact should

14
have immediately prompted the
respondent to conduct further inquiries,
especially since the spouses Guia were not
the registered owners ofthe land being
mortgaged. They merely derived the
authority to mortgage the lot from the
Special Power of Attorney allegedly
executed by the late Fermina M. Guia.
Hence, it was incumbent upon the
respondent Malarayat Rural Bank to be
more cautious in dealing with the spouses
Guia, and inquire further regarding the
identity and possible adverse claim of
those in actual possession of the property.
Pertinently, in Land Bank ofthe Philippines
v. Poblete, we ruled that "[w]here the
mortgagee acted with haste in granting
the mortgage loan and did not ascertain
the ownership of the land being
mortgaged, as well as the authority of the
supposed agent executing the mortgage,
it cannot be considered an innocent
mortgagee."
Since the subject land was not mortgaged
by the owner thereof and since the
respondent Malarayat Rural Bank is not a
mortgagee in good faith, said bank is not
entitled to protection under the law. The
unregistered sale in favor of the spouses
Arguelles must prevail over the mortgage
lien of respondent Malarayat Rural Bank.
• G.R. No. 181055. March 19, 2014 Heirs of
Teresita Montoya, et al. Vs. National
Housing Authority, et al.
• The petitioners’ presented CLTs
could not have vested them
with ownership over the
property
• A CLT is a document that the
government issues to a tenant-
farmer of an agricultural land
primarily devoted to rice and corn
production placed under the
coverage of the government’s OLT
program pursuant to P.D. No. 27.
It serves as the tenant-farmer’s
(grantee of the certificate) proof of
inchoate right over the land
covered thereby.
A CLT does not automatically grant a
tenant-farmer absolute ownership of the
covered landholding. Under PD No. 27,
land transfer is effected in two stages: (1)
issuance of the CLT to the tenant-farmer
in recognition that said person is a
“deemed owner”; and (2) issuance of an
Emancipation Patent (EP) as proof of full
ownership upon the tenant- farmer’s full
payment of the annual amortizations or
lease rentals.
As a preliminary step, therefore, the
issuance of a CLT merely evinces that the
grantee thereof is qualified to avail of the
statutory mechanism for the acquisition of
ownership of the land tilled by him, as
provided under P.D. No. 27. The CLT is
not a muniment of title that vests in the
tenant- farmer absolute ownership of his
tillage. It is only after compliance with the
conditions which entitle the tenant-farmer
to an EP that the tenant-farmer acquires
the vested right of absolute ownership in
the landholding. Stated otherwise, the
tenant-farmer does not acquire full
ownership of the covered landholding
simply by the issuance of a CLT. The
tenant-farmer must first comply with the
prescribed conditions and procedures for
acquiring full ownership but until then, the
title remains with the landowner.
• G.R. No. 199146. March 19, 2014 Heirs of
Pacifico Pocido, et al. Vs. Arsenia Avila and
Emelinda Chua
ISSUE: JURISDICTION OVER A
COMPLAINT TO QUIET TITLE TO A LAND
THAT FORMS PART OF THE PUBLIC
DOMAIN
Having established that the disputed
property is public land, the trial court was
therefore correct in dismissing the
complaint to quiet title for lack of
jurisdiction. The trial court had no
jurisdiction to determine who among the
parties have better right over the disputed
property which is admittedly still part of
the public domain.
In an action for quieting of title, the

15
complainant is seeking for “an
adjudication that a claim of title or interest
in property adverse to the claimant is
invalid, to free him from the danger of
hostile claim, and to remove a cloud upon
or quiet title to land where stale or
unenforceable claims or demands exist.”
the two indispensable requisites in an
action to quiet title are: (1) that the
plaintiff has a legal or equitable title to or
interest in the real property subject of the
action; and (2) that there is a cloud on his
title by reason of any instrument, record,
deed, claim, encumbrance or proceeding,
which must be shown to be in fact invalid
or inoperative despite its prima facie
appearance of validity.
In this case, petitioners, claiming to be
owners of the disputed property, allege
that respondents are unlawfully claiming
the disputed property by using void
documents, namely the “Catulagan” and
the Deed of Waiver of Rights. However,
the records reveal that petitioners do not
have legal or equitable title over the
disputed property, which forms part of Lot
43, a public land within the Baguio
Townsite Reservation. It is clear from the
facts of the case that petitioners’
predecessors-in-interest, the heirs of
Pocdo Pool, were not even granted a
Certificate of Ancestral Land Claim over
Lot 43, which remains public land. Thus,
the trial court had no other recourse but
to dismiss the case.
of the Philippines Vs. Zurbaran Realty &
Development Corp.
• An application for original
registration of land of the public
domain under Section 14(2) of
Presidential Decree (PD) No. 1529
must show not only that the land
has previously been declared
alienable and disposable, but also
that the land has been declared
patrimonial property of the State at
the onset of the 30-year or 10-year
period of possession and
occupation required under the law
on acquisitive prescription.
Once again, the Court applies this rule-as
clarified in Heirs ofMario Malabanan v.
Republic
• G.R. No. 161151. March 24, 2014 BJDC
Construction, represented by its
Manager/Proprieto Janet S. Dela Cruz Vs.
Nena E. Lanuzo, et al.
• The party alleging the negligence
of the other as the cause of injury
has the burden to establish the
allegation with competent
evidence. If the action based on
negligence is civil in nature, the
proof required is preponderance
ofevidence.
• This case involves a claim for
damages arising from the death of
a motorcycle rider in a nighttime
accident due to the supposed
negligence of a construction
company then undertaking re-
blocking work on a national
highway. The plaintiffs insisted that
the accident happened because the
construction company did not
provide adequate lighting on the
site, but the latter countered that
the fatal accident was caused by
the negligence of the motorcycle
rider himself. The trial court
decided in favor of the construction
company, but the Court of Appeals
(CA) reversed the decision and
ruled for the plaintiffs.
Upon a review of the records, the Court
affirms the findings of the RTC, and rules
that the Lanuzo heirs, the parties carrying
the burden of proof, did not establish by
preponderance of evidence that the
negligence on the part of the company
was the proximate cause of the fatal
accident of Balbino.
the doctrine of res ipsa loquitur had no
application here.
For the doctrine to apply, the following
requirements must be shown to exist,
namely: (a) the accident is of a kind that

16
ordinarily does not occur in the absence of
someone’s negligence; (b) it is caused by
an instrumentality within the exclusive
control of the defendant or defendants;
and (c) the possibility of contributing
conduct that would make the plaintiff
responsible is eliminated.
Based on the evidence adduced by the
Lanuzo heirs, negligence cannot be fairly
ascribed to the company considering that
it has shown its installation of the
necessary warning signs and lights in the
project site. In that context, the fatal
accident was not caused by any
instrumentality within the exclusive
control of the company. In contrast,
Balbino had the exclusive control of how
he operated and managed his motorcycle.
The records disclose that he himself did
not take the necessary precautions. As
Zamora declared, Balbino overtook
another motorcycle rider at a fast speed,
and in the process could not avoid hitting
a barricade at the site, causing him to be
thrown off his motorcycle onto the newly
cemented road. SPO1 Corporal’s
investigation report corroborated
Zamora’s declaration. This causation of
the fatal injury went uncontroverted by
the Lanuzo heirs.
Moreover, by the time of the accident, the
project, which had commenced in
September 1997, had been going on for
more than a month and was already in the
completion stage. Balbino, who had
passed there on a daily basis in going to
and from his residence and the school
where he then worked as the principal,
was thus very familiar with the risks at the
project site. Nor could the Lanuzo heirs
justly posit that the illumination was not
adequate, for it cannot be denied that
Balbino’s motorcycle was equipped with
headlights that would have enabled him at
dusk or night time to see the condition of
the road ahead. That the accident still
occurred surely indicated that he himself
did not exercise the degree of care
expected of him as a prudent motorist.
According to Dr. Abilay, the cause of
death of Balbino was the fatal depressed
fracture at the back of his head, an injury
that Dr. Abilay opined to be attributable to
his head landing on the cemented road
after being thrown off his motorcycle.
Considering that it was shown that Balbino
was not wearing any protective head gear
or helmet at the time of the accident, he
was guilty of negligence in that respect.
Had he worn the protective head gear or
helmet, his untimely death would not have
occurred.
The RTC was correct on its conclusions
and findings that the company was not
negligent in ensuring safety at the project
site. All the established circumstances
showed that the proximate and immediate
cause of the death of Balbino was his own
negligence. Hence, the Lanuzo heirs could
not recover damages.
• G.R. No. 160689. March 26, 2014 Raul H.
Sesbreño Vs. Court of Appeals, et al.
• This case conc~ms the claim for
damages of petitioner Raul H.
Sesbrefio founded on abuse of
rights. Sesbrefio accused the
violation of contract (VOC)
inspection team dispatched by the
Visayan Electric Company (VECO)
to check his electric meter with
conducting an unreasonable search
in his residential premises.
Sesbreño’s insistence has no legal and
factual basis.
The constitutional guaranty against
unlawful searches and seizures is intended
as a restraint against the Government and
its agents tasked with law enforcement. It
is to be invoked only to ensure freedom
from arbitrary and unreasonable exercise
of State power.
It is worth noting that the VOC inspectors
decided to enter the main premises only
after finding the meter of Sesbreño turned
upside down, hanging and its disc not
rotating. Their doing so would enable
them to determine the unbilled electricity

17
consumed by his household. The
circumstances justified their decision, and
their inspection of the main premises was
a continuation of the authorized entry.
There was no question then that their
ability to determine the unbilled electricity
called for them to see for themselves the
usage of electricity inside. Not being
agents of the State, they did not have to
first obtain a search warrant to do so.
Clearly, Sesbreño did not establish his
claim for damages if the respondents were
not guilty of abuse of rights. To stress, the
concept of abuse of rights prescribes that
a person should not use his right unjustly
or in bad faith; otherwise, he may be
liable to another who suffers injury. The
rationale for the concept is to present
some basic principles to be followed for
the rightful relationship between human
beings and the stability of social order.
• G.R. No. 195031. March 26,
2014 International Container Terminal
Services, Inc. Vs. Celeste M. Chua
ISSUE: LIABILITY FOR DAMAGES DUE TO
LOSS AS A RESULT OF FIRE
This Court will no longer delve on the
issue of whether or not the fire which
caused the loss of and/or damage to
respondent’s personal effects is a
fortuitous event since both the trial court
and the Court of Appeals correctly ruled
that the fire which occurred in this case
cannot be considered an act of God since
the same was not caused by lightning or a
natural disaster or other calamity not
attributable to human agency.
With respect to the issue of negligence,
there is no doubt that, under the
circumstances of this case, petitioner is
liable to respondent for damages on
account of the loss of the contents of her
container van. Petitioner itself admitted
during the pre-trial of this case that
respondent’s container van caught fire
while stored within its premises. Absent
any justifiable explanation on the part of
petitioner on the cause of the fire as
would absolve it from liability, the
presumption that there was negligence on
its part comes into play. The situation in
this case, therefore, calls for the
application of the doctrine of res ipsa
loquitur.
The doctrine of res ipsa loquitur is “based
on the theory that the defendant either
knows the cause of the accident or has
the best opportunity of ascertaining it and
the plaintiff, having no knowledge thereof,
is compelled to allege negligence in
general terms. In such instance, the
plaintiff relies on proof of the happening of
the accident alone to establish
negligence.”
Here, there was no evidence as to how or
why the fire in the container yard of
petitioner started; hence, it was up to
petitioner to satisfactorily prove that it
exercised the diligence required to prevent
the fire from happening. This it failed to
do. Thus, the trial court and the Court of
Appeals acted appropriately in applying
the principle of res ipsa loquitur to the
case at bar.
• G.R. No. 189420. March 26, 2014 Raul V.
Arambulo and Teresita Dela Cruz Vs.
Genaro Nolasco and Jeremy Spencer
Nolasco
As intimated above, the erroneous
application of Article 491 is, in this case,
an innate infirmity. The very initiatory
pleading below was captioned Petition For
Relief Under Article 491 of the New Civil
Code. Petitioners, likewise petitioners
before the RTC, filed the case on the
submission that Article 491 covers the
petition and grants the relief prayed for,
which is to compel the respondent co-
owners to agree to the sale of the co-
owned property.
That a sale constitutes an alteration as
mentioned in Article 491 is an established
jurisprudence. It is settled that alterations
include any act of strict dominion or
ownership and any encumbrance or
disposition has been held implicitly to be
an act of alteration. Alienation of the thing

18
by sale of the property is an act of strict
dominion. However, the ruling that
alienation is alteration does not mean that
a sale of commonly owned real property is
covered by the second paragraph of
Article 491, such that if a co- owner
withholds consent to the sale, the courts,
upon a showing of a clear prejudice to the
common interest, may, as adequate relief,
order the grant of the withheld consent.
Ruling that the trial court erred in its
conclusion, the Court of Appeals correctly
relied on Article 493 in support of the
finding that respondents cannot be
compelled to agree with the sale. We
affirm the reversal by the Court of Appeals
of the judgment of the trial court.
1. There is co-ownership whenever, as in
this case, the ownership of an undivided
thing, belongs to different persons. Article
493 of the Code defines the ownership of
the co-owner, clearly establishing that
each co- owner shall have full ownership
of his part and of its fruits and benefits.
Pertinent to this case, Article 493 dictates
that each one of the parties herein as co-
owners with full ownership of their parts
can sell their fully owned part. The sale by
the petitioners of their parts shall not
affect the full ownership by the
respondents of the part that belongs to
them. Their part which petitioners will sell
shall be that which may be apportioned to
them in the division upon the termination
of the co-ownership. With the full
ownership of the respondents remaining
unaffected by petitioners’ sale of their
parts, the nature of the property, as co-
owned, likewise stays. In lieu of the
petitioners, their vendees shall be co-
owners with the respondents. The text of
Article 493 says so.
2. Our reading of Article 493 as applied to
the facts of this case is a reiteration of
what was pronounced in Bailon-Casilao v.
Court of Appeals. The rights of a co-owner
of a certain property are clearly specified
in Article 493 of the Civil Code. Thus:
12 13 14 15 16
Art. 493. Each co-owner shall have the full
ownership of his part and of the fruits and
benefits pertaining thereto, and he may
therefore alienate, assign or mortgage
it[,] and even substitute another person in
its enjoyment, except when personal
rights are involved. But the effect of the
alienation or [the] mortgage, with respect
to the co-owners, shall be limited to the
portion which may be allotted to him in
the division upon the termination of the
co-ownership.
The ultimate authorities in civil law,
recognized as such by the Court, agree
that co-owners such as respondents have
over their part, the right of full and
absolute ownership. Such right is the
same as that of individual owners which is
not diminished by the fact that the entire
property is co- owned with others. That
part which ideally belongs to them, or
their mental portion, may be disposed of
as they please, independent of the
decision of their co-owners. So we rule in
this case. The respondents cannot be
ordered to sell their portion of the co-
owned properties.
3. Indeed, the respected commentaries
suggest the conclusion that, insofar as the
sale of co-owned properties is concerned,
there is no common interest that may be
prejudiced should one or more of the co-
owners refuse to sell the co-owned
property, which is exactly the factual
situation in this case. When respondents
disagreed to the sale, they merely
asserted their individual ownership rights.
Without unanimity, there is no common
interest.
Petitioners who project themselves as
prejudiced co-owners may bring a suit for
partition, which is one of the modes of
extinguishing co- ownership. Article 494 of
the Civil Code provides that no co-owner
shall be obliged to remain in the co-

19
ownership, and that each co-owner may
demand at any time partition of the thing
owned in common insofar as his share is
concerned. Corollary to this rule, Article
498 of the Civil Code states that whenever
the thing is essentially indivisible and the
co-owners cannot agree that it be allotted
to one of them who shall indemnify the
others, it shall be sold and its proceeds
accordingly distributed. This is resorted to
(a) when the right to partition the
property is invoked by any of the co-
owners but because of the nature of the
property, it cannot be subdivided or its
subdivision would prejudice the interests
of the co-owners, and (b) the co- owners
are not in agreement as to who among
them shall be allotted or assigned the
entire property upon proper
reimbursement of the co-owners. This is
the result obviously aimed at by
petitioners at the outset. As already
shown, this cannot be done while the co-
ownership exists.
of the Philippines represented by Aklan
National Colleges of Fisheries (ANCF) and
Dr. Elenita R. Adrade, in her capacity as
ANCF Superintendent Vs. Heirs of Maxima
Lachica Sin, namely: Salvacion L. Sin,
Rosario S. Enriquez, Francisco L. Sin,
Maria S. Yuchintat, Manuel L. Sin, Jaime
Cardinal Sin, Ramon L. Sin, and Ceferina
S. Vita
ISSUE: segregating from the Aklan
National College of Fisheries (ANCF)
reservation the portion of land being
claimed by respondents.
In the case at bar, it is therefore the
respondents which have the burden to
identify a positive act of the
government, such as an official
proclamation, declassifying inalienable
public land into disposable land for
agricultural or other purposes. Since
respondents failed to do so, the alleged
possession by them and by their
predecessors-in-interest is inconsequential
and could never ripen into ownership.
Accordingly, respondents cannot be
considered to have private rights within
the purview of Proclamation No. 2074 as
to prevent the application of said
proclamation to the subject property.
• A.M. No. P-09-2648/A.M. No. P-13-3174.
March 26, 2014 Office of the Court
Administrator Vs. Atty. Leah Espera
Miranda, Clerk of Court and Ms. Jocelyn H.
Divinagracia, Clerk III both of the
Regional Trial Court, Br. 38, Iloilo
City/Atty. Rex G. Rico Vs. Clerk fo Court V
Leah Espera Miranda and Clerk III Jocelyn
H. Divinagracia
• We find no merit in Miranda
and Divinagracia’s explanation.
• Their involvement was not confined
to the routinary process of
receiving the Notice of Appeal and
checking if it complied with the
requirements. They knowingly
allowed the tampering of the
Notice of Appeal to make it
appear that it complied with
Section 11, Rule 13 of the 1997
Rules of Civil Procedure.
The Code of Conduct for Court Personnel
reminds court personnel, in performing
their duties and responsibilities, to serve
as sentinels of justice. Any act of
impropriety they commit immeasurably
affects the honor and dignity of the
Judiciary and the people’s confidence in
the Judiciary.
Miranda and Divinagracia’s act of allowing
the tampering of the records of Special
Civil Action No. 02-27326 to make it
appear that the Notice of Appeal filed by
private respondents complied with the
requirements constitutes grave
misconduct.
The Attorney’s Oath mandates a lawyer,
among other duties: (a) to do no
falsehood; (b) nor consent to the doing of
the same in court; and (c) to conduct
himself as a lawyer to the best of his
knowledge and discretion with all good
fidelity to the court. Having this in mind,
Atty. Castillon and Atty. Lodero 's
involvement in the tampering o f the
records, and in the filing o f a falsified
document, should be fully investigated to

20
determine if their actions merit
disciplinary action.
• A.M. No. P-12-3093. March 26,
2014 Anonymous Complaint Against
Otelia Lyn G. Maceda, Court Interpreter,
Municipal Trial Court, Palapag, Northern
Samar
ISSUE: Complaint against a COURT
INTERPRETER alleging falsification of the
her attendance in court so she could
attend her law classes at UEP in
Catarman, Norther Samar.
We see no reason to disturb the finding of
the OCA that Maceda did indeed falsify her
DTRs and is, therefore, guilty of
dishonesty.
Judge Falcotelo stated in his Report that
for Maceda to make it on time to her law
classes at UEP, she would have to leave
the MTC at 4:00 p.m. or even earlier.
Maceda’s Summary of Scholastic Records,
submitted by UEP College Secretary
Alfredo D. Tico, showed that Maceda had
law school subjects for the school years
2009-2010 and 2010-2011 which started
at 5:30 p.m. Hence, it was impossible for
Maceda to have left the MTC only at 5:00
p.m. as she had consistently logged in her
DTRs during the months she was also
attending her classes.
Maceda’s repeated assertion that she
continued her law school classes for self-
improvement and with the permission of
the MTC Presiding Judge does little to
exculpate her of administrative liability.
These are not acceptable excuses for not
properly declaring the time she logged-off
from work in her DTRs. Time and again,
the OCA and this Court have underscored
the importance of court employees
truthfully and accurately recording in their
DTRs the time of their arrival in and
departure from office.
Maceda’s falsification of her DTRs is
dishonesty. Dishonesty is defined as the
“(d)isposition to lie, cheat, deceive, or
defraud; untrustworthiness; lack of
integrity; lack of honesty, probity or
integrity in principle; lack of fairness and
straightforwardness; disposition to
defraud, deceive or betray.”
• G.R. No. 179155. April 2, 2014 Nicomedes
J. Lozada Vs. Eulalia Bracewell, et al.
• The core issue raised for the
Court’s resolution is whether or not
the Las Piñas City-RTC has
jurisdiction over the petition for
review of Decree No. N-217036,
which was issued as a result of the
judgment rendered by the RTC of
Makati City, Branch 134.
Under Act No. 496 (Act 496), or the “Land
Registration Act,” as amended, – which
was the law in force at the time of the
commencement by both parties of their
respective registration proceedings –
jurisdiction over all applications for
registration of title was conferred upon the
Courts of First Instance (CFIs, now RTCs)
of the respective provinces in which the
land sought to be registered is
situated.
The land registration laws were updated
and codified under PD 1529, which took
effect on January 23, 1979, and under
Section 17 thereof, jurisdiction over an
application for land registration is still
vested on the CFI (now, RTC) of the
province or city where the land is
situated.
It should be pointed out, however,
that with the passage of PD 1529, the
distinction between the general
jurisdiction vested in the RTC and the
limited jurisdiction conferred upon it
as a cadastral court was eliminated.
RTCs now have the power to hear and
determine all questions, even contentious
and substantial ones, arising from
applications for original registration of
titles to lands and petitions filed after such
registration.
Since the LRA’s issuance of a decree of
registration only proceeds from the land
registration court’s directive, a petition

21
taken under Section 32 of PD 1529 is
effectively a review of the land
registration court’s ruling. As
such, case law instructs that for “as long
as a final decree has not been
entered by the [LRA] and the period of
one (1) year has not elapsed from the
date of entry of such decree, the title is
not finally adjudicated and the decision in
the registration proceeding continues to
be under the control and sound discretion
of the court rendering it.”
While it is indeed undisputed that it was
the RTC of Makati City, Branch 134 which
rendered the decision directing the LRA to
issue Decree No. N-217036, and should,
applying the general rule as above-stated,
be the same court before which a petition
for the review of Decree No. N-217036 is
filed, the Court must consider the
circumstantial milieu in this case that, in
the interest of orderly procedure, warrants
the filing of the said petition before the
Las Piñas City-RTC.
Particularly, the Court refers to the fact
that the application for original
registration in this case was only filed
before the RTC of Makati City, Branch 134
because, during that time, i.e., December
1976, Las Piñas City had no RTC. Barring
this situation, the aforesaid application
should not have been filed before the RTC
of Makati City, Branch 134 pursuant to the
rules on venue prevailing at that time.
Under Section 2, Rule 4 of the 1964
Revised Rules of Court, which took effect
on January 1, 1964, the proper venue for
real actions, such as an application for
original registration, lies with the CFI of
the province where the property is
situated,
As the land subject of this case is
undeniably situated in Las Piñas City, the
application for its original registration
should have been filed before the Las
Piñas City-RTC were it not for the fact that
the said court had yet to be created at the
time the application was filed. Be that as it
may, and considering further that the
complication at hand is actually one of
venue and not of jurisdiction (given
that RTCs do retain jurisdiction over
review of registration decree cases
pursuant to Section 32 of PD 1529), the
Court, cognizant of the peculiarity of the
situation, holds that the Las Piñas City-
RTC has the authority over the
petition for the review of Decree No.
N- 217036 filed in this case. Indeed ,
the filing of the petition for review before
the Las Piñas City-RTC was only but a
rectificatory implementation of the rules of
procedure then-existing, which was
temporarily set back only because of past
exigencies. In light of the circumstances
now prevailing, the Court perceives no
compelling reason to deviate from
applying the rightful procedure. After all,
venue is only a matter of procedure and,
hence, should succumb to the greater
interests of the orderly administration of
justice.
• G.R. No. 175540. April 7, 2014 Dr. Filoteo
A. Alano Vs. Zenaida Magud-Logmao
Concurring Opinion J. Leonen  
ISSUE: LIABILITY FOR DAMAGES [issue of
notice of death to next of kin prior to
harvesting of internal organs]
A careful reading of the above shows that
petitioner instructed his subordinates to
“make certain” that “all reasonable
efforts” are exerted to locate the patient's
next of kin, even enumerating ways in
which to ensure that notices of the death
of the patient would reach said relatives.
It also clearly stated that permission or
authorization to retrieve and remove the
internal organs of the deceased was being
given ONLY IF the provisions of the
applicable law had been complied with.
Such instructions reveal that petitioner
acted prudently by directing his
subordinates to exhaust all reasonable
means of locating the relatives of the

22
deceased. He could not have made his
directives any clearer. He even specifically
mentioned that permission is only
being granted IF the Department of
Surgery has complied with all the
requirements of the law. Verily, petitioner
could not have been faulted for having full
confidence in the ability of the doctors in
the Department of Surgery to comprehend
the instructions, obeying all his directives,
and acting only in accordance with the
requirements of the law.
Furthermore, as found by the lower courts
from the records of the case, the doctors
and personnel of NKI disseminated notices
of the death of respondent's son to the
media and sought the assistance of the
appropriate police authorities as early as
March 2, 1988, even before petitioner
issued the Memorandum. Prior to
performing the procedure for retrieval of
the deceased's internal organs, the
doctors concerned also the sought the
opinion and approval of the Medico-Legal
Officer of the NBI.
Thus, there can be no cavil that petitioner
employed reasonable means to
disseminate notifications intended to
reach the relatives of the deceased. The
only question that remains pertains to the
sufficiency of time allowed for notices to
reach the relatives of the deceased.
If respondent failed to immediately
receive notice of her son's death because
the notices did not properly state the
name or identity of the deceased, fault
cannot be laid at petitioner's door. The
trial and appellate courts found that it was
the EAMC, who had the opportunity to
ascertain the name of the deceased, who
recorded the wrong information regarding
the deceased's identity to NKI. The NKI
could not have obtained the information
about his name from the patient, because
as found by the lower courts, the
deceased was already unconscious by the
time he was brought to the NKI.
Ultimately, it is respondent's failure to
adduce adequate evidence that doomed
this case. "[i]n civil cases, it is a basic rule
that the party making allegations has the
burden of proving them by a
preponderance of evidence. The parties
must rely on the strength of their own
evidence and not upon the weakness of
the defense offered by their opponent."
Here, there is to proof that, indeed, the
period of around 24 hours from the time
notices were disseminated, cannot be
considered as reasonable under the
circumstances. They failed to present any
expert witness to prove that given the
medical technology and knowledge at that
time in the 1980's, the doctors could or
should have waited longer before
harvesting the internal organs for
transplantation.
Verily, the Court cannot, in conscience,
agree with the lower court. Finding
petitioner liable for damages is improper.
It should be emphasized that the internal
organs ofthe deceased were removed only
after he had been declared brain dead;
thus, the emotional pain suffered by
respondent due to the death of her son
cannot in any way be attributed to
petitioner. Neither can the Court find
evidence on record to show that
respondent's emotional suffering at the
sight of the pitiful state in which she found
her son's lifeless body be categorically
attributed to petitioner's conduct.
• G.R. No. 189563. April 7, 2014 Gilat
Satellite Networks Ltd., Vs. United
Coconut Planters Bank General Insurance
Co., Inc.
• The existence of a suretyship
agreement does not give the
surety the right to intervene in
the principal contract, nor can
an arbitration clause between
the buyer and the seller be
invoked by a non-party such as
the surety.
Petitioner alleges that arbitration laws
mandate that no court can compel
arbitration, unless a party entitled to it
applies for this relief. This referral,

23
however, can only be demanded by one
who is a party to the arbitration
agreement. Considering that neither
petitioner nor One Virtual has asked for a
referral, there is no basis for the CA’s
order to arbitrate.
Moreover, Articles 1216 and 2047 of the
Civil Code clearly provide that the creditor
may proceed against the surety without
having first sued the principal debtor. ven
the Surety Agreement itself states that
respondent becomes liable upon “mere
failure of the Principal to make such
prompt payment.” Thus, petitioner should
not be ordered to make a separate claim
against One Virtual (via arbitration) before
proceeding against respondent.
In suretyship, the oft-repeated rule is that
a surety’s liability is joint and solidary with
that of the principal debtor. This
undertaking makes a surety agreement an
ancillary contract, as it presupposes the
existence of a principal contract.
Nevertheless, although the contract of a
surety is in essence secondary only to a
valid principal obligation, its liability to the
creditor or “promise” of the principal is
said to be direct, primary and absolute; in
other words, a surety is directly and
equally bound with the principal. He
becomes liable for the debt and duty of
the principal obligor, even without
possessing a direct or personal interest in
the obligations constituted by the latter.
Thus, a surety is not entitled to a separate
notice of default or to the benefit of
excussion. It may in fact be sued
separately or together with the principal
debtor.
After a thorough examination of the pieces
of evidence presented by both parties, the
RTC found that petitioner had delivered all
the goods to One Virtual and installed
them. Despite these compliances, One
Virtual still failed to pay its obligation,
triggering respondent’s liability to
petitioner as the former’s surety. In other
words, the failure of One Virtual, as the
principal debtor, to fulfill its monetary
obligation to petitioner gave the latter an
immediate right to pursue respondent as
the surety.
Consequently, we cannot sustain
respondent’s claim that the Purchase
Agreement, being the principal contract to
which the Suretyship Agreement is
accessory, must take precedence over
arbitration as the preferred mode of
settling disputes.
First, we have held in Stronghold
Insurance Co. Inc. v. Tokyu Construction
Co. Ltd., that “[the] acceptance [of a
surety agreement], however, does not
change in any material way the creditor’s
relationship with the principal debtor nor
does it make the surety an active party to
the principal creditor-debtor relationship.
In other words, the acceptance does
not give the surety the right to
intervene in the principal contract.
The surety’s role arises only upon the
debtor’s default, at which time, it can be
directly held liable by the creditor for
payment as a solidary obligor.” Hence, the
surety remains a stranger to the Purchase
Agreement. We agree with petitioner that
respondent cannot invoke in its favor the
arbitration clause in the Purchase
Agreement, because it is not a party to
that contract. An arbitration agreement
being contractual in nature, it is binding
only on the parties thereto, as well as
their assigns and heirs.
Second, Section 24 of Republic Act No.
9285 is clear in stating that a referral to
arbitration may only take place “if at least
one party so requests not later than the
pre-trial conference, or upon the request
of both parties thereafter.” Respondent
has not presented even an iota of
evidence to show that either petitioner or
One Virtual submitted its contesting claim
for arbitration.
Third, sureties do not insure the solvency
of the debtor, but rather the debt itself.
They are contracted precisely to mitigate
risks of non- performance on the part of

24
the obligor. This responsibility
necessarily places a surety on the
same level as that of the principal
debtor. The effect is that the creditor is
given the right to directly proceed against
either principal debtor or surety. This is
the reason why excussion cannot be
invoked. To require the creditor to
proceed to arbitration would render the
very essence of suretyship nugatory and
diminish its value in commerce.
Interest, as a form of indemnity, may
be awarded to a creditor for the delay
incurred by a debtor in the payment
of the latter’s obligation, provided
that the delay is inexcusable.
Having held that a surety upon demand
fails to pay, it can be held liable for
interest, even if in thus paying, its liability
becomes more than the principal
obligation. The increased liability is not
because of the contract, but because of
the default and the necessity of judicial
collection.
However, for delay to merit interest, it
must be inexcusable in nature. We agree
with petitioner that records are bereft of
proof to show that respondent’s delay was
indeed justified by the circumstances –
that is, One Virtual’s advice regarding
petitioner’s alleged breach of obligations.
The lower court’s Decision itself belied this
contention when it said that “plaintiff is
not disputing that it did not complete
commissioning work on one of the two
systems because One Virtual at that time
is already in default and has not paid
GILAT. Assuming arguendo that the
commissioning work was not completed,
respondent has no one to blame but its
principal, One Virtual; if only it had paid
its obligation on time, petitioner would not
have been forced to stop operations.
Moreover, the deposition of Mr. Erez
Antebi, vice president of Gilat, repeatedly
stated that petitioner had delivered all
equipment, including the licensed
software; and that the equipment had
been installed and in fact, gone into
operation. Notwithstanding these
compliances, respondent still failed to pay.
• G.R. No. 193787. April 7, 2014 Spouses
Jose C. Roque and Beatriz Dela Cruz
Roque, et al. Vs. Ma. Pamela P. Aguado,
et al.
• The central issue in this case is
whether or not the CA erred in not
ordering the reconveyance of the
subject portion in Sps. Roque’s
favor.
The essence of an action for reconveyance
is to seek the transfer of the property
which was wrongfully or erroneously
registered in another person’s name to its
rightful owner or to one with a better
right. Thus, it is incumbent upon the
aggrieved party to show that he has a
legal claim on the property superior
to that of the registered owner and
that the property has not yet passed
to the hands of an innocent purchaser
for value.
Examining its provisions, the Court finds
that the stipulation above- highlighted
shows that the 1977 Deed of Conditional
Sale is actually in the nature of a contract
to sell and not one of sale contrary to Sps.
Roque’s belief. In this relation, it has been
consistently ruled that where the seller
promises to execute a deed of
absolute sale upon the completion by
the buyer of the payment of the
purchase price, the contract is only a
contract to sell even if their agreement is
denominated as a Deed of Conditional
Sale, as in this case. This treatment stems
from the legal characterization of a
contract to sell, that is, a bilateral contract
whereby the prospective seller, while
expressly reserving the ownership of
the subject property despite delivery
thereof to the prospective buyer, binds
himself to sell the subject property
exclusively to the prospective buyer
upon fulfillment of the condition
agreed upon, such as, the full
payment of the purchase price.
Elsewise stated, in a contract to sell,
ownership is retained by the vendor and is

25
not to pass to the vendee until full
payment of the purchase price.
On the matter of double sales, suffice it to
state that Sps. Roque’s reliance on Article
1544 of the Civil Code has been misplaced
since the contract they base their claim of
ownership on is, as earlier stated, a
contract to sell, and not one of sale. In
Cheng v. Genato, the Court stated the
circumstances which must concur in order
to determine the applicability of Article
1544, none of which are obtaining in this
case, viz.:
(a) The two (or more) sales transactions
in issue must pertain to exactly the same
subject matter, and must be valid sales
transactions;
(b) The two (or more) buyers at odds over
the rightful ownership of the subject
matter must each represent conflicting
interests; and
(c) The two (or more) buyers at odds over
the rightful ownership of the subject
matter must each have bought from the
same seller.
• G.R. No. 192669. April 21, 2014 Raul
Saberon, Joan F. Saberon and Jacqueline
Saberon Vs. Oscar Ventanilla, Jr., and
Carmen Gloria D. Ventanilla Separate
Opinion J. Velasco, Jr. 
• Resolution of the Court
• At first glance, it would seem that
the case involves convoluted issues
brought about by the number of
times the Ventanillas were impelled
by circumstances to seek judicial
action.
• readily reveal that the essential
facts are not disputed: 1) that the
subject properties have indeed
been the objects of various
transfers effected by MRCI leading
to the current controversy between
the Saberons and the Ventanillas;
and 2) that prior to the sale to the
Saberons, a notice of levy as
• Nonetheless, the antecedents
would
• an encumbrance was already in
existence.
Sections 51 and 52 of P.D. No. 1529
explain the purpose and effects of
registering both voluntary and involuntary
instruments,
These provisions encapsulate the rule that
documents, like the certificates of title do
not effect a conveyance of or
encumbrances on a parcel of land.
Registration is the operative act that
conveys ownership or affects the land
insofar as third persons are concerned. By
virtue of registration, a constructive notice
to the whole world of such voluntary or
involuntary instrument or court writ or
processes, is thereby created.
The question of utmost relevance to this
case, then, is this:
not the registration of the notice of levy
had produced constructive notice that
would bind third persons despite the
failure of the ROD-QC to annotate
whether or
the same in the certificates of title?
In answering these questions, the Court is
beckoned to rule on two conflicting rights
over the subject properties: the right of
the Ventanillas to acquire the title to the
registered land from the moment of
inscription of the notice of levy on the day
book (or entry book), on one hand; and
the right of the Saberons to rely on what
appears on the certificate of title for
purposes of voluntary dealings with the
same parcel of land, on the other.
The Saberons could not be said to have
authored the entanglement they found
themselves in. No fault can be attributed
to them for relying on the face of the title
presented by Marquez. This is bolstered
by the fact that the RTC decision shows no
categorical finding that the Saberons’
purchase of the lots from Marquez was

26
tainted with bad faith. That the Saberons
should have harbored doubts against
Marquez is too high a standard to impose
on a buyer of titled land. This is in
consonance to the rule that the one who
deals with property registered under the
Torrens system is charged with notice only
of such burdens and claims as are
annotated on the title. “All persons dealing
with property covered by Torrens
certificate of title are not required to
explore further than what the Torrens title
upon its face indicates in quest for any
hidden defect or inchoate right that may
subsequently defeat his right thereto.”
These rules remain as essential features
of the Torrens system. The present case
does not entail a modification or
overturning of these principles.
Be that as it may, no fault can likewise be
imputed to the Ventanillas.
In ultimately ruling for the Ventanillas, the
courts a quo focused on the superiority of
their notice of levy and the constructive
notice against the whole world which it
had produced and which effectively bound
third persons including the Saberons.
It has already been established in the two
previous cases decided by the Court that
the contracts to sell executed in favor of
the Ventanillas are valid and subsisting.
Clearly, it has been acknowledged, even
by MRCI, as can be seen in the latter’s
own choice to only question their solidary
liability in the 1990 case and its failure to
assign the same as an error in the 1994
case. In the same vein, the issue on
Marquez’s title had already been passed
upon and settled in the 1994 case. That
he purchased the lots prior to the
In fact, the Court explicitly declared that
MRCI’s transaction with Marquez “cannot
prevail over the final and executory
judgment ordering MRCI to execute an
absolute deed of sale in favor of the
Ventanillas.”
annotation of the notice of levy in MRCI’s
title was of no moment.
These favorable findings prompted the
Ventanillas to register the notice of levy
on the properties. The records show that
on the strength of a final and executory
decision by the Court, they successfully
obtained a writ of execution from the RTC
and a notice of levy was then entered,
albeit on the primary entry book only. The
contract to sell to Marquez was registered
on May 21, 1991, while the notice of levy
was issued ten (10) days later, or on May
31, 1991. In February 1992, MRCI
executed the Deed of Sale with Marquez,
under whose name the clean titles, sans
the notice of levy, were issued. A year
later, or on March 11, 1992, MRCI
registered the deed of sale to Marquez
who later sold the same property to the
Saberons.
This complex situation could have been
avoided if it were not for the
failure of ROD Cleofe to carry over the
notice of levy to Marquez’s title, serving as
a senior encumbrance that might have
dissuaded the Saberons
from purchasing the properties.
The Court agrees with the position of the
RTC in rejecting ROD
Cleofe’s theory.
Distinctions between a contract to sell and
a contract of sale are well-
established in jurisprudence. In a contract
of sale, the title to the property passes to
the vendee upon the delivery of the thing
sold; in a contract to sell, ownership is, by
agreement, reserved in the vendor and is
not to pass to the vendee until full
payment of the purchase price. Otherwise
stated, in a contract of sale, the vendor
loses ownership over the property and

27
cannot recover it until and unless the
contract is resolved or rescinded;
whereas, in a contract to sell, title is
retained by the vendor until full payment
of the price. In the latter contract,
payment of the price is a positive
suspensive condition, failure of which is
not a breach but an event that prevents
the
obligation of the vendor to convey title
from becoming effective.
It is undeniable, therefore, that no title
was transferred to Marquez
upon the annotation of the contract to sell
on MRCI’s title. As correctly found by the
trial court, the contract to sell cannot be
substituted by the Deed of Absolute Sale
as a “mere conclusion” of the previous
contract since the owners of the
properties under the two instruments are
different.
Considering that the deed of sale in favor
of Marquez was of later registration, the
notice of levy should have been carried
over to the title as a
senior encumbrance.
Corollary to this is the rule that a levy of a
judgment debtor creates a
lien, which nothing can subsequently
destroy except the very dissolution of the
attachment of the levy itself. Prior
registration of the lien creates a
preference, since the act of registration is
the operative act to convey and affect the
land. Jurisprudence dictates that the said
lien continues until the debt is paid, or the
sale is had under an execution issued on
the judgment or until the judgment is
satisfied, or the attachment is discharged
or vacated in
the same manner provided by law.
Under no law, not even P.D. No. 1529, is
it stated that an attachment shall be
discharged upon sale of the property
other than under execution.
Additionally, Section 59 of P.D. No. 1529
provides that, “[i]f, at the
time of the transfer, subsisting
encumbrances or annotations appear in
the registration book, they shall be carried
over and stated in the new certificate or
certificates, except so far as they may be
simultaneously released or discharged.”
This provision undoubtedly speaks of the
ministerial duty on the part of the Register
of Deeds to carry over existing
encumbrances to the
certificates of title.
From the foregoing, ROD Cleofe’s theory
that a deed of sale, as a
mere conclusion of a contract to sell, turns
into a senior encumbrance which may
surpass a notice of levy, has no leg to
stand on. It was, in fact, properly rejected
by the courts a quo. Verily, the
controversy at hand arose not from the
Ventanillas’ fault, but from ROD Cleofe’s
misplaced understanding of
his duty under the law.
Surely, the Ventanillas had every right to
presume that the Register of
Deeds would carry over the notice of levy
to subsequent titles covering the subject
properties. The notice was registered
precisely to bind the properties and to
serve as caution to third persons who
might potentially deal with the property
under the custody of the law.
While the Court is not unmindful that a
buyer is charged with notice only of such
burdens and claims as are annotated on
the title, the RTC and the CA are both
correct in applying the rule as to the
effects of involuntary registration. In

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