Cases 6, 7, 8, 9, And 10 of Set 5

8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5

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G.R. No. 199648 January 28, 2015

FIRST OPTIMA REALT !ORPORATION, Petitioner,

vs.

SE!"RITRON SE!"RIT SER#I!ES, IN!., Respondent.

Pon$n%$& Del Castillo, J.

Fa'%(&

Desiring to expand business and add to its existing ofces,Securitron Security Services (Securitron) through its Generalanager, !ntonio "lea#ea, sent a letter to Carolina $oung, the"xecutive %ice&President o' irst pti*a Realty Corporation (irstpti*a), o+ner o' the lot adacent to the ofces o' Securitron,o-ering to buy the property at P,///.// per s0uare *eter.!lthough a series o' telephone calls +ere *ade bet+een "la#aerang $oung1s secretary, no direct negotiation occurred bet+een $oung or the board or directors, and "lea#ar. Subse0uently,"lea#er +ent directly to irst pti*a1s ofce o-ering to pay theproperty in cash +hich he brought +ith hi*, but $oung re'used toaccept the pay*ent, averring that she still need to secure hersister1s advice. She also in'or*ed hi* that prior approval o' the2oard o' Directors is re0uired 'or the sale. "lea#ar then told her he+ill a+ait the approval. 2y letter dated ebruary 3, 4//5,Securiton sent a letter to irst pti*a, enclosing there+ith a chec6

'or P7//,///.// payable to the latter. 8t stated that 9!s agreedupon, +e are *a6ing a deposit o' :" ;<:DR"D =;<S!:DP"SS (Php 7//,///.//) as earnest *oney 'or your property at thecorner o' >ayug St., ? >i*&!n St., Pasay City as per =C= :o. 745@7A+ith an area o' 45 s0. *. at ,///.//B s0. *. 'or a total o' :"8>>8: 8%" ;<:DR"D =;8R=$ S8 =;<S!:D P"SS (Php7,5@,///.//). ull pay*ent upon clearing o' the tenants at saidproperty and signing o' the Deed o' Sale.. =he letter +as receivedby an ordinary receiving cler6Breceipt +ho issued a ProvisionalReceipt 'or the sa*e +ith an annotation 9=his is issued totransactions not yet cleared but subse0uently an fcial Receipt+ill be issued. x x x. Despite the delicate nature o' the

transaction or the large a*ount o' cash, Securitron did not coursethe pay*ent directly to $oung or the co*pany1s board o' directors. =he chec6 +as eventually deposited in irst pti*a1s account.Securtiron then sent a letter de*anding that irst pti*a proceed+ith the sale o' the property, +hich the latter ans+ered, denyingthat the *oney received +as earnest *oney as the co*pany haveyet to decide on the sale o' the property. 8t then proceeded toreect the o-er to buy the property. 2ecause o' the re'usal o' irstpti*a to sell the property, Securitron then Eled a co*plaint 'orspeciEc per'or*ance +ith da*ages to co*pel irst pti*a toproceed +ith the sale o' the property. 8n the !ns+er +ithCo*pulsory Counterclai*, irst pti*a denied that it agreed to sellthe subect propertyF that its board o' directors did not authori#ethe sale thereo' to respondent, as no corresponding boardresolution to such e-ect +as issuedF that the P7//,///.// chec6pay*ent cannot be considered as earnest *oney 'or the subectproperty, since said pay*ent +as *erely coursed throughpetitioner1s receiving cler6, +ho +as 'orced to accept the sa*eF

and that respondent +as si*ply *otivated by a desire to ac0uirethe subect property at any cost. !'ter trial, the R=C ruled in 'avouro' Securitron and opined that there +as a per'ected contract o' sale bet+een the parties +ith irst pti*a1s acceptance o' theP7//,//.// chec6F nor +as there any sho+ing that harass*ent orinti*idation attended the receipt o' the chec6 by the cler6F 'or thesale o' the property, no board resolution is re0uired since $oung+as 'ree to represent the corporation. =he Court o' !ppealsafr*ed the R=C decision, hence irst pti*a Eled the instantpetition 'or revie+ on certiorari to assail the C! ruling.

I((u$&

hether or not there +as a per'ected contract o' sale bet+eenirst pti*a and Securitron.

Ru)*n+&

=he Court grants the Petition. =he trial and appellatecourts erred *aterially in deciding the caseF they overloo6edi*portant 'acts that should change the co*plexion and outco*e o' the case.

8t cannot be denied that there +ere negotiations bet+eenthe parties conducted a'ter the respondent1s Dece*ber H, 4//3

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letter&o-er and prior to the ebruary 3, 4//5 letter. =hesenegotiations cul*inated in a *eeting bet+een "lea#ar and $oung+hereby the latter declined to enter into an agree*ent and acceptcash pay*ent then being tendered by the 'or*er. 8nstead, $oungin'or*ed "lea#ar during said *eeting that she still had to con'er+ith her sister and petitioner1s board o' directorsF in turn, "lea#ar

told $oung that respondent shall a+ait the necessary approval.

=hus, the trial and appellate courts 'ailed to appreciatethat respondent1s o-er to purchase the subect property +as neveraccepted by the petitioner at any instance, even a'ter negotiations+ere held bet+een the*. =hus, as bet+een the*, there is no saleto spea6 o'. 9hen there is *erely an o-er by one party +ithoutacceptance o' the other, there is no contract.7 =o borro+ apronounce*ent in a previously decided case,

=he stages o' a contract o' sale areI (7) negotiation,starting 'ro* the ti*e the prospective contracting parties indicateinterest in the contract to the ti*e the contract is per'ectedF (4)

per'ection, +hich ta6es place upon the concurrence o' the essentialele*ents o' the saleF and (@) consu**ation, +hich co**ences+hen the parties per'or* their respective underta6ings under thecontract o' sale, cul*inating in the extinguish*ent o' the contract.

8n the present case, the parties never got past thenegotiation stage. :othing sho+s that the parties had agreed onany Enal arrange*ent containing the essential ele*ents o' acontract o' sale, na*ely, (7) consent or the *eeting o' the *indso' the partiesF (4) obect or subect *atter o' the contractF and (@)price or consideration o' the sale.4

Respondent1s subse0uent sending o' the ebruary 3, 4//5

letter and chec6 to petitioner J +ithout a+aiting the approval o' petitioner1s board o' directors and $oung1s decision, or +ithout*a6ing a ne+ o-er J constitutes a *ere reiteration o' its originalo-er +hich +as already reected previouslyF thus, petitioner +asunder no obligation to reply to the ebruary 3, 4//5 letter. 8t +ouldbe absurd to re0uire a party to reect the very sa*e o-er each andevery ti*e it is *adeF other+ise, a per'ected contract o' sale couldsi*ply arise 'ro* the 'ailure to reect the sa*e o-er *ade 'or thehundredth ti*e. =hus, said letter cannot be considered asevidence o' a per'ected sale, +hich does not exist in the Erst placeFno binding obligation on the part o' the petitioner to sell its

property arose as a conse0uence. =he letter *ade no ne+ o-erreplacing the Erst +hich +as reected.

Since there is no per'ected sale bet+een the parties,respondent had no obligation to *a6e pay*ent through the chec6Fnor did it possess the right to deliver earnest *oney to petitioner

in order to bind the latter to a sale. !s conte*plated under !rt.73A4 o' the Civil Code, 9there *ust Erst be a per'ected contract o' sale be'ore +e can spea6 o' earnest *oney.@ 9here the parties*erely exchanged o-ers and counter&o-ers, no contract isper'ected since they did not yet give their consent to such o-ers."arnest *oney applies to a per'ected sale.3

=his Court is inclined to accept petitioner1s explanation thatsince the chec6 +as *ixed up +ith all other chec6s andcorrespondence sent to and received by the corporation during thecourse o' its daily operations, $oung could not have ti*elydiscovered respondent1s chec6 pay*entF petitioner1s 'ailure toreturn the purported earnest *oney cannot *ean that it agreed to

respondent1s o-er. 2esides, respondent1s pay*ent o' supposedearnest *oney +as *ade under dubious circu*stances and indisregard o' sound business practice and co**on sense. 8ndeed,respondent *ust be 'aulted 'or ta6ing such a course o' action thatis irregular and extraordinaryI co**on sense and logic dictate thati' any pay*ent is *ade under the supposed sale transaction, itshould have been *ade directly to $oung or coursed directlythrough her ofce, since she is the ofcer directly responsible 'ornegotiating the sale, as 'ar as respondent is concerned andconsidering the a*ount o' *oney involvedF no other ran6ing ofcero' petitioner can be expected to 6no+ o' the ongoing tal6s coveringthe subect property. Respondent already 6ne+, 'ro* "lea#ar1sprevious *eeting +ith $oung, that it could only e-ectively deal

+ith herF *ore than that, it should 6no+ that corporations +or6only through the proper channels. 2y acting the +ay it did Jcoursing the ebruary 3, 4//5 letter and chec6 through petitioner1s*ere receiving cler6 or receptionist instead o' directly +ith $oung1sofce, respondent placed itsel' under grave suspicion o' puttinginto e-ect a pre*editated plan to unduly bind petitioner to itsreected o-er, in a *anner +hich it could not achieve throughnegotiation and e*ploying nor*al business practices. 8t i*pressesthe Court that respondent atte*pted to secure the consent needed'or the sale by depositing part o' the purchase price and under the'alse pretense that an agree*ent +as already arrived at, even

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though there +as none. Respondent achieved the desired e-ectup to this point, but the Court +ill not be 'ooled.

=hus, as bet+een respondent1s irregular and i*properactions and petitioner1s 'ailure to ti*ely return the P7//,///.//purported earnest *oney, this Court sides +ith petitioner. 8n a

*anner o' spea6ing, respondent cannot 'ault petitioner 'or not*a6ing a re'und since it is e0ually to bla*e 'or *a6ing suchpay*ent under 'alse pretenses and irregular circu*stances, and+ith i*proper *otives. Parties *ust co*e to court +ith cleanhands, as it +ere.

8n a potential sale transaction, the prior pay*ent o' earnest *oney even be'ore the property o+ner can agree to sellhis property is irregular, and cannot be used to bind the o+ner tothe obligations o' a seller under an other+ise per'ected contract o' saleF to cite a +ell&+orn clichK, the carriage cannot be placedbe'ore the horse. =he property o+ner&prospective seller *ay notbe legally obliged to enter into a sale +ith a prospective buyer

through the latter1s e*ploy*ent o' 0uestionable practices +hichprevent the o+ner 'ro* 'reely giving his consent to thetransactionF this constitutes a palpable transgression o' theprospective seller1s rights o' o+nership over his property, anano*aly +hich the Court +ill certainly not condone. !n agree*ent+here the prior 'ree consent o' one party thereto is +ithheld orsuppressed +ill be struc6 do+n, and the Court shall al+aysendeavor to protect a property o+ner1s rights against deviouspractices that put his property in danger o' being lost or undulydisposed +ithout his prior 6no+ledge or consent. !s this ponentehas held be'ore, 9LtMhis Court cannot presu*e the existence o' asale o' land, absent any direct proo' o' it.5

:or +ill respondent1s supposed pay*ent be treated as adeposit or guaranteeF its actions +ill not be digniEed and *ust becalled 'or +hat they areI they +ere done irregularly and +ith a vie+to ac0uiring the subect property against petitioner1s consent.

inally, since there is nothing in legal conte*plation +hichpetitioner *ust per'or* particularly 'or the respondent, it should'ollo+ that Civil Case :o. /&/3H4 C 'or speciEc per'or*ance+ith da*ages is le't +ith no leg to stand onF it *ust be dis*issed.

ith the 'oregoing vie+, there is no need to resolve theother speciEc issues and argu*ents raised by the petitioner, as

they do not *aterially a-ect the rights and obligations o' theparties J the Court having declared that no agree*ent existsbet+een the*F nor do they have the e-ect o' altering the outco*eo' the case.

;"R"R", the Petition is GR!:="D. =he Septe*ber @/, 4/77

Decision and Dece*ber H, 4/77 Resolution o' the Court o' !ppealsin C!&G.R. C% :o. H@N75, as +ell as the ebruary 7, 4//H Decisiono' the Regional =rial Court o' Pasay City, 2ranch 775 in Civil Case:o. /&/3H4 C are R"%"RS"D and S"= !S8D". Civil Case :o. /&/3H4 C is ordered D8S8SS"D.

Petitioner irst pti*a Realty Corporation is ordered to R"<:D thea*ount o' P7//,///.// to respondent Securitron Security Services,8nc. +ithout interest, unless petitioner has done so during thecourse o' the proceedings.

S RD"R"D.

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G.R. No. 199852 No$-$r 12, 2014

SPS. FELIPE SOLITARIOS an/ J"LIA TORA, Petitioners,

vs.

SPS. GASTON JA"E an/ LILIA JA"E, Respondents.

Pon$n%$& %elasco, Or., J.

Fa'%(&Plainti-s Sps. Gaston Oa0ue and >ilia Oa0ue initiated a

Co*plaint 'or +nership and Recovery o' Possession againstDe'endants Sps. elipe Solitarios and Oulia =orda.

Plainti-s alleged that 9they purchased >ot 3/AH 'ro* theLde'endantsM, spouses Solitarios in stages. !ccording to Lplainti-sM,they initially bought one&hal' o' >ot :o. 3/AH 'or N,///.//. =his saleis allegedly evidenced by a notari#ed Deed o' Sale dated ay A,7HA7. =+o *onths later, the spouses Solitarios supposedly*ortgaged the re*aining hal' o' >ot 3/AH to the Oa0ues via a Real"state ortgage (R") dated Ouly 75, 7HA7, to secure a loan

a*ounting to @,///.// !'ter al*ost t+o (4) years, the spousesSolitarios Enally agreed to sell the *ortgaged hal'. ;o+ever,instead o' executing a separate deed o' sale 'or the second hal',they executed a Deed o' Sale dated !pril 4, 7HA@ 'or the +hole lotto save on taxes, by *a6ing it appear that the consideration 'orthe sale o' the entire lot +as only 74,///.// +hen the Oa0uesactually paid 7H,///.// in cash and condoned the spousesSolitarios1 @,///.// loan. !s a result, the tile +as trans'erred andregistered 'ro* de'endants to plainti-s.

8n spite o' the sale, the Oa0ues, supposedly out o' pity 'orthe spouses Solitarios, allo+ed the latter to retain possession o' >ot3/AH, subect only to the condition that the spouses Solitarios +illregularly deliver a portion o' the property1s produce. 8n an allegedbreach o' their agree*ent, ho+ever, the spouses Solitariosstopped delivering any produce so*eti*e in 4///. orse, the

spouses Solitarios even clai*ed o+nership over >ot 3/AH. =hus,the Oa0ues Eled the adverted co*plaint +ith the R=C.

or their de'ense, de'endants spouses Solitarios 9deniedselling >ot 3/AH and explained that they *erely *ortgaged thesa*e to the Oa0ues a'ter the latter helped the* redee* the land'ro* the Philippine :ational 2an6 (P:2).

I((u$&hether or not there +as an e0uitable *ortgage.

$)/& =he parties entered into an e0uitable *ortgage over the

lot, and not an absolute contract o' sale. =hus, 9the transactionbet+een the parties o' the present case is actually one o' e0uitable*ortgage pursuant to the 'oregoing provisions o' the Civil Code. 8thas never denied by respondents that the petitioners, the spousesSolitarios, have re*ained in possession o' the subect property andexercised acts o' o+nership over the said lot even a'ter thepurported absolute sale o' >ot 3/AH. =his 'act is i**ediatelyapparent 'ro* the testi*onies o' the parties and the evidenceextant on record, sho+ing that the real intention o' the parties +as'or the transaction to secure the pay*ent o' a debt. :othing*ore.

8t +as *ore evident during proceedings. 9During pre&trial,

the Oa0ues ad*itted that the spouses Solitarios +ere in possessiono' the subect property. Gaston Oa0ue li6e+ise conEr*ed thatpetitioners +ere allo+ed to produce copra and till the rice Eeld,+hich co*prise one&hal' o' the lot that +as previously covered bythe real estate *ortgage, a'ter said portion +as allegedly sold tothe*.

Citing a previous case, it +as held that 9a purportedcontract o' sale +here the vendor re*ains in physical possessiono' the land, as lessee or other+ise, is an indiciu* o' an e0uitable*ortgage the reason 'or this rule lies in the legal reality that in acontract o' sale, the legal title to the property is i**ediately

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trans'erred to the vendee. =hus, retention by the vendor o' thepossession o' the property is inconsistent +ith the vendee1sac0uisition o' o+nership under a true sale. 8t discloses, in thealleged vendee, a lac6 o' interest in the property that belies thetruth'ulness o' the sale.

urther, the plainti-s have never asserted o+nership 'or along period o' ti*e. 9During the period *aterial to the presentcontroversy, the petitioners, spouses Solitarios, retained actualpossession o' the property. =his +as never disputed. 8' thetransaction had really been one o' sale, as the Oa0ues clai*, theyshould have asserted their rights 'or the i**ediate delivery andpossession o' the lot instead o' allo+ing the spouses Solitarios to'reely stay in the pre*ises 'or al*ost seventeen (7N) years 'ro*the ti*e o' the purported sale until their Eling o' the co*plaint.;u*an conduct and experience reveal that an actual o+ner o' aproductive land +ill not allo+ the passage o' a long period o' ti*e,as in this case, +ithout asserting his rights o' o+nership.

!s provided 'or in !rticle 7/4() o' the Civil Code, atransaction is presu*ed to be an e0uitable *ortgage 9+here it*ay be 'airly in'erred that the real intention o' the parties is thatthe transaction shall secure the pay*ent o' a debt or theper'or*ance o' any other obligation. =his provision Endsapplication in this case. 9irst, the very testi*ony o' Gaston Oa0ueand the docu*ents he presented establish the existence o' t+oloans, +hich the Oa0ues extended to the spouses Solitarios, that+ere secured by the subect propertyF and, second, the testi*onieso' the parties reveal that they ca*e to an agree*ent as to ho+these loans +ould be paid.

=he rule on e0uitable *ortgage is pri*arily designed 9'or

the protection o' the unlettered such as the spouses Solitarios, +hoare penurious vis&Q&vis their creditors. 8n this case, 9the parties+ere negotiating on une0ual 'ooting. !s opposed to theuneducated and i*poverished 'ar*er, elipe Solitarios, Gaston Oa0ue, +as a 4nd >ieutenant o' the !r*ed orces o' the Philippines+hen he retired. urther, elipe Solitarios +as constantly inEnancial distress. ;e +as constantly in debt and in dire Enancialneed. =hat he borro+ed *oney 'ro* the P:2 t+ice, Erst in 7HN5then in 7HN, and *ortgaged the subect property to the Oa0uessuggest as *uch.

oreover, it is a rule that 9+hen doubt exists as to the truenature o' the parties1 transaction, courts *ust construe suchtransaction purporting to be a sale as an e0uitable *ortgage, asthe latter involves a lesser trans*ission o' rights and interests overthe property in controversy.

8n vie+ thereo', the trans'er o' o+nership o' >ot 3/HA tothe Oac0ues +as invalidated. =o do so 9+ould a*ount to condoningthe prohibited practice o' pactu* co*issoriu*. !rticle 4/AA o' theCivil Code clearly provides that a creditor cannot appropriate orconsolidate o+nership over a *ortgaged property *erely upon'ailure o' the *ortgagor to pay a debt obligation.

>astly, 9the *ortgage debt o' the spouses Solitarios hadbeen 'ully paid. =his holds true +hether the a*ount o' the debt is74,///.//, as 'ound by the R=C or 44,///.//, the a*ount +hichthe Oa0ues clai* they paid 'or the subect property. !rticle 7/4 o' the Civil Code statesI 98n any o' the 'oregoing cases, any *oney,'ruits, or other beneEt to be received by the vendee as rent or

other+ise shall be considered as interest +hich shall be subect tothe usury la+s. !s applied by the trial court, 'ro* 7HN to 4///,de'endants +ere 9giving the one&hal' share o' the plainti-s 'ro*the proceeds o' the copras and rice land to plainti-s1 allegedcareta6er, $aning. So, i' the produce o' the land in 0uestion asclai*ed by the plainti-s is about Php5/,///.// a year, one&hal' (7B4) o' it +ould be Php45,///.// +hich is 45 ti*es higher than thePhp7,///.// interest at 74 per year 'or the alleged purchaseprice o' Php74,///.// o' the land in 0uestion. =he Php43,///.//excess interest +ould have already been sufcient to pay even theprincipal o' Php74,///.//. =hus, clearly, the Php74,///.//purchase price o' the land should no+ be considered 'ully paid.

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G.R. No. 159611 A3r*) 22, 2015

EIRS OF ANTERO SOLI#A, Petitioner,

vs.

SE#ERINO, JOEL, GRA!E, !ENON, JR., RENATO, E"ARO,

ILARIO, a)) (urna-$/ SOLI#A, ROGELIO #. ROLEA, an/

SAN#I! ENTERPRISES, IN!., r$3r$($n%$/ y *%( Mana+$r,

SANTOS PORA"E, Respondents.

Pon$n%$& 2rion, J.

Fa'%(&

7. =he Spouses Ce'erino (also 6no+n as RuEno) Soliva and Ouana

"nde#a possessed and o+ned, during their li'eti*e, three parcels

o' land in Calbayog City, speciEcallyI

(7) a 7.3@&hectare lot (Parcel 7) under =ax Declaration

(=D) :o. 34N5@F

(4) a H,33N&s0uare *eter lot (Parcel 4) under =D :o.

4337H, (a 7,//&s0uare *eter portion o' this lot, ho+ever,

+as o+ned by 2rigida ancol +hich the spouses held 'or

ancol as her tenants)F and

(@) a 5,7@&s0uare *eter Riceland under =D :o. 734HA.

4. Ce'erino died in 7H53, +hile Ouana died in 7HN4.

a. =hey had Eve children, na*elyI Dorotea (deceased), Cenon,

Severino, %ictoriano and !ntero.

b. Dorotea is survived by Ro*eo and Sergio.

@. "arlier or on Oune 44, 7H3H, ancol sold to Cenon the 7,//&

s0uare *eter portion o' Parcel 4 through a notari#ed deed entitled

"scritura de Co*pra&%enta !bsoluta.

3. !s Cenon then lived in anila, he le't the possession and

enoy*ent o' this portion to his parents.

a. ;o+ever, +hen Ce'erino died in 7H53, Cenon too6 over the

ad*inistration o' the entire estate, including Parcel 7.

5. 8n arch 7H5H, Severino received as his share in their parents1

estate the 5,7@&s0uare *eter rice land covered by =D :o. 734HA.

a. Severino subse0uently sold this lot through a Deed o' !bsolute

SaleH to ortunato Calagos on !pril @/, 7H5H.

. n :ove*ber 7@, 7HN/, Ouana sold to Cenon Parcel 4 through a

Deed o' Conditional Sale +ith Pacto ! Retro (7HN/ Pacto de Retro

Sale).

http://www.lawphil.net/judjuris/juri2015/apr2015/gr_159611_2015.html#fnt9


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a. 8n 7HN5, =D :o. 4337H covering Parcel 4 +as cancelled and =D

:o. @A//H +as issued in the na*e o' Cenon.

N. n Oanuary 47, 7HA, Cenon sold to Roleda a 3,/H4&s0uare*eter portion o' Parcel 4.

a. =D :o. @A//H +as subse0uently cancelled and =D :o. 3NNA+as

issued in Roleda1s na*e.

A. n !ugust 73, 7HH7, Roleda sold to S"8, through Pora0ue, the

3,/H4&s0uare *eter portion +hich he bought 'ro* Cenon, along

+ith >ot 4&C o' the Plan o' >and +hich Roleda ac0uired 'ro* a

certain Silverio !gura.

A. ean+hile, Cenon died in 7HANF

a. he +as survived by his children, na*elyI Ooel, Grace, Cenon,

Renato, "duardo and ;ilario.

H. n :ove*ber 44, 7HH7, !ntero instituted the Co*plaint 'or

Partition and !ccounting, originally against Severino, %ictoriano,

Ooel, Grace, Cenon, Renato, "duardo, ;ilario, Sergio, Ro*eo, and

Roleda.

a. ;e subse0uently a*ended the co*plaint, t+ice J on !pril A,

7HH4 and on !ugust 74, 7HH4N J oining %ictoriano, Sergio and

Ro*eo as plainti-s, and i*pleading the S"8 as additional

de'endant.

b. !ntero, et al. prayed the R=C toI (7) declare the 7HN/ Pacto de

Retro Sale as an e0uitable *ortgageF (4) order the partition o'

Parcels 7 and 4F (@) order Cenon1s heirs to account 'or the proceedso' the sale o' the portion o' Parcel 4 +hich Cenon sold to Roleda,

+ith legal interest to be counted 'ro* 7HAF and (3) order S"8 to

vacate the pre*ises and to pay rentals in the a*ount o' 5//.// a

*onth until the ter*ination o' the action.

7/. Proceedings be'ore the R=C

a. n ay 73, 7HH4, the R=C appointed retired Deputy Sheri-

"u'rocenio li'ernes as Co**issioner to relocate the t+o parcels o' land described in the co*plaint J Parcels 7 and 4 J and to

deter*ine the exact portion o' Parcel 4 +hich Cenon allegedly sold

to Roleda.

b. n Oune 44, 7HH4, the appointed Co**issioner sub*itted his

Report7@ increasing to 7/,H/ s0uare *eters, 'ro* H,33N s0uare

*eters as stated in the co*plaint, the area covered by Parcel 4.

=he Report attributed the discrepancy to an error *ade in the

Cadastral Survey.

c. n Oanuary 7@, 7HH@, and in the course o' the trial on the*erits, the R=C and the parties agreed to a second relocation

survey o' the property. or purposes o' this relocation survey, the

R=C appointed Geodetic "ngineers eli*on ancol and elo*ino

<nga as Co**issioners. 2ased on the testi*onies and

declarations o' the clai*ants, the Co**issioners prepared and

sub*itted the Plan o' >and (as outlined above) together +ith their

Report73 that reTected a total area o' 73,/H s0uare *eters 'or

Parcel 4.










8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


d. !s the de'endants disputed only the plainti-s a 0uo1s clai* o'

o+nership over Parcel 4, the R=C rendered a partial decision on

Dece*ber 73, 7HH3.75 8t declared Parcel 7 as o+ned in co**on by

the plainti-s and the de'endants.

e. =he Oanuary 45, 7HHN R=C DecisionI

(7) >ots 4&! (@,@/5 s0uare *eters), 4&2 (ANN s0uare

*eters) and 4&C (H54 s0uare *eters) o' the Plan o' >and

are exclusive properties o' S"8F

(4) >ots 7, @ and 5 o' the Plan o' >and are o+ned in

co**on by !ntero, %ictoriano, and Ro*eo and Sergio

(Dorotea1s heirs)F

(@) >ot 3 (@,73/ s0uare *eters) o' the Plan o' >and,

occupied by the :ational ;igh+ay, 'or*s part o' Parcel 4covered by =D :o. 4337HF and

(3) Severino and the heirs o' Cenon are excluded 'ro* any

share in the re*aining portion o' Parcel 4 a'ter deducting,

'ro* its total area o' 73,/H s0uare *eters, the area

corresponding to >ots 4&! and 4&2 sold to S"8.

=he R=C ruled thatI Erst, >ot 4&C lies at the +est o', and,

there'ore, not part o' Parcel 4. =he R=C upheld S"81s clai* over >ot

4&C as none o' the parties disputed such clai*.

Second, Roleda1s clai* over >ot 7 o' the Plan o' >and,

+hich he allegedly bought 'ro* "steban <ltra, is not supported by

evidence.

=hird, Severino is excluded 'ro* the partition o' Parcel 4 as

he had already received his share in their parents1 inheritance J

the 5,7@&s0uare *eter parcel o' Riceland covered by =D :o.

734HA. !s stated in the 7H5H Deed o' !bsolute Sale bet+een

Severino and ortunato Calagos, Ouana, Cenon, !ntero and

%ictoriano conEr*ed and agreed to the sale o' the land as part o'

the real estatead udicated and given to Severino x x x as his share

in the inheritance. 8n 'act, this 5,7@&s0uare *eter parcel o' land

'ar exceeds the portion he +ould have received as share in Parcel

4. ;ence, he is no longer entitled to participate in its partition.

ourth and last, Cenon is li6e+ise excluded 'ro* the

partition o' Parcel 4 as he li6e+ise already received his share in

their parents1 inheritance. Per the records, Cenon purchased 'ro*

ancol only a 7,//&s0uare *eter portion o' Parcel 4. =his is clear

'ro* the +ord tig6apatan used in the "scritura de Co*pra&%enta

!bsoluta +hich, per the local vernacular, *eans an area o' 3/ by

3/ar*s length e0uivalent to 7,// s0uare ar*s length, or 7,//&

s0uare *eters, *ore or less. oreover, the Deed o' !bsolute Sale

bet+een Cenon and Roleda described the portion +hich Cenon sold

to the latter as only a portion, not the +hole o' Parcel 4.

8n short, Cenon could validly sell to Roleda only the 7,//&

s0uare *eter portion +hich he bought 'ro* ancol. hen he sold

to Roleda 3,/H4 s0uare *eters (or 3,7A4 s0uare *eters per the

Plan o' >and) o' Parcel 4, he e-ectively sold an extra 4,5A4&s0uare

*eter portion +hich right'ully pertains to the heirs o' Ce'erino and

Ouana as pro indiviso o+ners.

!ccordingly, this 4,5A4&s0uare *eter portion should be

treated as his share in their parents1 estate that bars hi* 'ro*

'urther participating in the partition o' the re*aining portion o'

Parcel 4. !ntero and the de'endants a 0uo, except 'or S"8 and

Roleda, separately appealed the R=C1s Oanuary 45, 7HH3 decision+ith the C!.

77. C!I *odiEed the R=C1s decision. 8t declared the plainti-s a

0uo J !ntero, %ictoriano, Ro*eo, Sergio J and the de'endants a 0uo

J Ooel, Grace, Cenon, "duardo, Renato, ;ilario and S"8 J as co&

o+ners o' Parcel 4.



8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


a. =he C! agreed that the 7,//&s0uare *eter portion o' Parcel 4

belongs exclusively to Cenon. !dditionally, it pointed out that the

"scritura de Co*pra&%enta !bsoluta, +hich ancol executed in

'avor o' Cenon, +as duly notari#ed and there'ore a public

docu*ent that has in its 'avor the presu*ption o' regularity. !s

!ntero, et al.'ailed to sho+ convincing contradictory evidence, thisdocu*ent proves the clear and une0uivocal 'acts alleged therein,

i.e., that ancol previously o+ned the 7,//&s0uare *eter portion

+hich she sold to Cenon in 7H3H.

Pursuant to the "scritura de Co*pra&%enta !bsoluta,

Ce'erino had no right +hatsoever over the 7,//&s0uare *eter

portion o' Parcel 4F his right covered only the 7@,//H&s0uare*eter

portion (73,/H&7,//) not a-ected by this docu*ent. =hus, +hen

he died in 7H53, he trans'erred to his heirs only the rights +hich he

had over the 7@,//H&s0uare*eter portion.

>i6e+ise, the C! agreed that the 7HN/ Pacto de Retro Sale

bet+een Ouana and Cenon is not an e0uitable *ortgageF none o'

the circu*stances or conditions that serve as badges o'

ane0uitable *ortgageunder !rticle 7/4 o' the Civil Code +as

present. =hus, it is a valid and e-ective Deed o' SaleF but, only as

regards the portion o' Parcel 4 over +hich she has an alienable title

or interest.

8n these lights, Cenon validly ac0uired o+nership over a

total area o' 7/,N/.@ s0uare *eters o' Parcel 4. !s o+ner, he had

all the right to alienate it, either in its entirety or only its portion.

!ccordingly, his sale to Roleda o' the 3,/H4.A&s0uare *eter portion+as valid as it 'alls +ell +ithin his total property o+nership.

Conse0uently, Roleda1s saleto S"8 o' the sa*e 3,/H4.A&s0uare

*eter portion in 7HH7 +as also valid.

Cenon1s re*aining ,[email protected] s0uare *eters share o' Parcel 4

shall, in turn, be divided e0ually a*ong his heirs.

!s 'or Ce'erino1s other heirs, they each ac0uired a pro

indiviso share over the re*aining @,H/4.N s0uare *eters o' Parcel

4. 2ut, since Severino had already received his share in 7H5H, only

%ictoriano, !ntero and Dorotea, as represented by her heirs Sergio

and Ro*eo, are entitled to participate in its partition.

74. =he C! denied, in its !ugust 4/, 4//@ resolution,7H !ntero1s

*otion 'or reconsideration.

7@. hile this case +as pending be'ore the Court, !ntero Soliva

died on ebruary 75, 4//3.4/ ;e +as survived by his +i'e, "rlinda C.

Soliva, and nine (H) children na*elyI Peter, Susan, !ntonio, !ntero,

Or., arlen, Garry, and !nnerli#a (all surna*ed Soliva), $olanda S.

8bay, and Rosalinda S. =indogan.

I((u$(&

hether Cenon validly ac0uired o+nership o' Parcel 4 by virtue o'

the "scritura de Co*pra&%enta !bsoluta.

hether the C! correctly applied the concept o' accretion, under

!rticle 7/75 o' the Civil Code, in distributing Severino1s supposed

share in Parcel 4 in 'avor o' Ce'erino1s other heirs.

hether the 7HN/ Pacto de Retro sale +as an e0uitable *ortgage

under !rticle 7/4 o' the Civil Code.

!ssu*ing that the 7HN/ Pacto de Retro sale +as a true sale, not an

e0uitable *ortgage, +hether it covered only Ouana1s B7/ share in

Parcel 4F and +hether Ce'erino1s heirs still have @/ days 'ro*

Enality o' the R=C decision to repurchase the property.

hether Roleda and S"8 +ere buyers in bad 'aith.





8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


$)/&

e D":$ the petition 'or lac6 o' *erit.

Cenon validly acquired ownership, by

virtue of the "Escritura de Compra-Venta

Absoluta," over arcel ! but only with

respect to the specic portion sold.

=he "scritura de Co*pra&%enta !bsoluta, +hich ancol

executed in 'avor o' Cenon, +as duly notari#ed. ! notari#eddocu*ent is a public docu*ent that carries +ith it not only the

presu*ption o' regularity in its due execution.43 8t also serves, in

the absence o' sufciently contradictory evidence, as clear and

convincing proo' o' the une0uivocal 'acts stated therein.45

2ut *ore than these, +e End nothing in the records +hich

put into 0uestion the validity o' this docu*ent or the

circu*stances surrounding its execution, or +hich other+ise casts

doubt on the authority o' the notari#ing ofcer. 8n 'act, Severino

narrated in detail ho+ the docu*ent +as executed and the persons

involvedF as +itness to the actual execution, Severino1s testi*ony'urther strengthens the validity o' the docu*ent.

!ccordingly, as !ntero, et al. 'ailed to sho+ evidence

sufciently contradicting these presu*ptions, the "scritura de

Co*pra&%enta !bsoluta proves the clear and une0uivocal 'act that

ancol previously o+ned the 7,//&s0uare*eter portion o' Parcel

4 and that she sold this portion to Cenon in 7H3H.

#here was no accretion of inheritance

within the terms of Article $%$& of the Civil

Code

!rticle 7/75 o' the Civil Code providesI

!rt. 7/75. !ccretion is a right by virtue o' +hich, +hen t+o or *ore

persons are called to the sa*e inheritance, devise or legacy, the

part assigned to the one +ho renounces or cannot receive his

share, or +ho died be'ore the testator, is added or incorporated to

that o' his coheirs, co&devisees, or co&legatees. L"*phases

supplied.M

!ssailing the C!1s decision, !ntero argues that the C!

erroneously applied !rticle 7/75 inas*uch as Severino did not

repudiate the share in their parents1 inheritance +hich he received

in 7H5H.

8n this regard, the C! saidI

;o+ever, inas*uch as it is undisputed that Severino is no longer

entitled to any share o' parcel 4 since he +as already given a

separate parcel o' land x x x on @/ !pril 7H5H, his supposed share

shall be added to those o' Ouana "ndesa, %ictoriano, Cenon,

Dorotea and !ntero increasing their respective share to 7,@//

s0uare *eters each, instead o' 7,/A3 s0uare *eters. L"*phases

and underscoring supplied.M

e disagree +ith !ntero1s argu*ent. ;e obviously

*isinterprets the C!1s ruling as he vie+s this adding o' share

+ithin the ter*s o' !rticle 7/75 o' the Civil Code.

! care'ul reading o' this C! ruling +ould sho+ that the

share o' Severino +as added to the shares o' Ouana, %ictoriano,

Cenon, Dorotea and !ntero, not pursuant to the provisions o'

!rticle 7/75 o' the Civil Code. =he C! decision, 'or one, did not use

the ter* accretionF neither did it *ention, in any o' its portions,





8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


+ould be entitled to a 7B5 share o' Ce'erino1s inheritance or

7,@//.H s0uare *eters each o' Parcel 4.

<nder this 'or*ulation, Parcel 4 +as divided and

partitioned by the C! a*ong Ce'erino1s heirs in the 'ollo+ing

*annerI

7. Ouana & N,A/5.3 s0uare *eters4H

4. %ictoriano & 7,@//.H s0uare *eters

@. Cenon & 4,H// s0uare *eters@/

3. Dorotea & 7,@//.H s0uare *eters

5. !ntero & 7,@//.H s0uare *eters

<nder the Erst 'or*ulation above, Severino +ould have

received a total o' 7,/A3 s0uare *eters as his share. Considering,

ho+ever, that he had already received his share in his parents1

estate in 7H5H, the C! added this supposed share to those o'

Severino1s co&heirs J Ouana, Cenon, %ictoriano, Dorotea and !ntero.

8n e-ect, each o' these heirs +ould be receiving an

additional 47.A s0uare *eters in their respective shares or a total

o' 7,@//.H s0uare *eters. =his is precisely the sa*e area +hich

each heir, except Severino, +ould be receiving under the second

'or*ulation.

8n short, the C!1s co*putation o' the parties1 respective

interests in Parcel 4 already excludes Severino J one o' the ends

+hich !ntero see6 in this petition. or these reasons, +e End

!ntero1s argu*ent on this point to be co*pletely +ithout basis.

#he $'(% Conditional )ale with acto de

*etro is a true sale, not an equitable

mort+a+e under Article $%! of the Civil

Code

!n e0uitable *ortgage is one +hich, although lac6ing theproper 'or*alities, 'or* or +ords, or other re0uisites prescribed by

la+ 'or a *ortgage, nonetheless sho+s the real intention o' the

parties to *a6e the property subect o' the contract as security 'or

debt and contains nothing i*possible or anything contrary to la+

in this intent.@7

! contract o' sale, +hether an absolute sale or +ith a right

o' repurchase, is presu*ed by la+ to be an e0uitable *ortgage

under any o' the 'ollo+ing circu*stancesI@4

!rt. 7/4. =he contract shall be presu*ed to be an e0uitable*ortgage, in any o' the 'ollo+ing casesI

7. hen the price o' a sale +ith right to repurchase is

unusually inade0uateF

4. hen the vendor re*ains in possession as lessee or

other+iseF

@. hen upon or a'ter the expiration o' the right to

repurchase another instru*ent extending the period o'

rede*ption or granting a ne+ period is executedF

3. hen the purchaser retains 'or hi*sel' a part o' the

purchase priceF

5. hen the vendor binds hi*sel' to pay the taxes on the

thing soldF

. 8n any other case +here it *ay be 'airly in'erred that the

real intention o' the parties is that the transaction shall









8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


secure the pay*ent o' a debt or the per'or*ance o' any

other obligation.

8n any o' the 'oregoing cases, any *oney, 'ruits, or other

beneEt to be received by the vendee as rent or other+ise shall be

considered as interest +hich shall be subect to the usuryla+s.@@ or the presu*ption o' an e0uitable *ortgage to arise

under any o' the circu*stances enu*erated in !rticle7/4,

ho+ever, t+o re0uisites *ust concurI (a) that the parties entered

into a contract deno*inated as a contract o' saleF and (b) that

their intention +as to secure an existing debt by +ay o'

*ortgage.@3

=he C! debun6ed !ntero1s argu*ent that the 7HN/ Pacto

de Retro Sale +as an e0uitable *ortgage because it 'ound nothing

+hich supports his theory that the sale +ith right to repurchase

+as executed to secure a debt.@5oreover, it pointed out that

Cenon1s ad*inistration o' the property 'ro* 7H4 up to his death

in 7HAN indubitably sho+s that he had, all the +hile, been in

constructive possession o' the property.

e uphold these Endings o' the C! as +e e0ually End

nothing on the records that supports a contrary conclusion.@ ore

than this, +e uphold the C!1s ruling on this issue 'or the 'ollo+ing

reasonsI

irst, Cenon i**ediately declared in his na*e the property sold

and had continuously paid taxes 'or it, sourced 'ro* the property1s

inco*e. !s an o+ner, Cenon has the right to the property1s 'ruitsand inco*e +hich he could 'reely dispose o' according to his

discretion. =hus, contrary to !ntero1s clai*, Cenon1s pay*ent o'

the taxes 'ro* the property1s inco*e is in 'act consistent +ith his

exercise o' o+nership rights over the property.

Second, Cenon and his children beneEted 'ro* the property1s

produce.

=hird, Ouana, as the vendor a retro, never 0uestioned the nature o'

the 7HN/ Pacto de Retro sale as a *ortgage, nor argued that in

reality it +as intended to secure a debt.

ourth, other than his bare allegation, !ntero (+ith the plainti-s a

0uo) did not present any evidence to prove that +hat the parties tothe 7HN/ Sale a Retro actually intended +as to secure a debt,

instead o' a true sale. :either did they prove that she entered into

the Pacto de Retro sale believing in good 'aith that it +as one o'

*ortgage.

urther, the records sho+ that Cenon entered into the Pacto de

Retro sale to prevent Ouana 'ro* continuously *ortgaging and

encu*bering the property.@N !ntero never controverted this 'act.

!nd E'th, !ntero (or the plainti-s a 0uo) 'ailed to prove bad 'aith on

Cenon1s part in entering into the Pacto de Retro sale +ith Ouana.!bsent 'actual and legal basis, +e cannot si*ply accept !ntero1s

bad 'aith argu*ent. 2ad 'aith is never presu*ed, +hile good 'aith

is al+ays presu*edF on !ntero rested the burden o' proving bad

'aith on Cenon1s part, a burden +hich he 'ailed to discharge.@A

' course, +e did not 'ail to notice the clause in the 7HN/

Deed stating that a'ter the lapse o' said period the parties *ay

execute another docu*ent 'or any extension o' the right o'

repurchase.@H !ntero e0uates this +ith !rticle 7/4 (@) o' the Civil

Code +hich states that L+Mhen upon or a'ter the expiration o' the

right to repurchase, another instru*ent extending the period o'

rede*ption or granting a ne+ period is executed.

=his clause alone, ho+ever, did not and cannot sufciently

give the 7HN/ Pacto de Retro sale the character o' an e0uitable

*ortgage.$wphi$ :ote that the clause used the +ord *ay in

allo+ing the parties to execute another contract to extend the right

o' repurchase. ay is a per*issive +ord +hich si*ply provides

'or a situational possibility J o' extending Ouana1s exercise o' her

repurchase right J that, in this case did not even *ateriali#e.















8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


=hus, in the absence o' any evidence +hich sho+s intent,

on the part o' Ouana and Cenon, to enter into a *ortgage or to use

the property sold to secure a debtF or o' any 'act or circu*stance

+hich *ay reasonably lead this Court to conclude the existence o'

such intent, +e cannot but be convinced that the transaction

covered by the 7HN/ Deed is a true and valid sale, not an e0uitable*ortgage.

inally, +e are not una+are o' the e0uitable&*ortgage

presu*ption that the la+ accords in situations +hen doubt exists

as to the true intent o' the parties to the contract. 3/ =his legal

presu*ption, ho+ever, applies only +hen doubt, in 'act, exists as

to the nature o' the agree*ent o' the parties.

hen no doubt exists 'ro* the 'acts and the evidence, and

the parties to the transaction (speciEcally Ouana as the vendor a

retro in this case), never 0uestioned the nature o' their agree*ent

as one o' *ortgage, then this legal presu*ption shall not and

cannot apply. !'ter all, the contract is the la+ bet+een the* and

+here its ter*s are clear and leaves no doubt on their intention,

the courts +ould have no choice but to uphold the*.37

#he acto de *etro )ale covered only

Juanas /$% portion-share over arcel !

hile the 7HN/ Pacto de Retro sale is a true sale, its

validity a-ects only the B7/ portion o' Parcel 4 that right'ully

belongs to Ouana. =his conclusion 'ollo+s the rule that a person can

convey only such property (or right or interest over property)

+hich, at the ti*e it is to be delivered, he or she has such right to

convey it.34

8nterestingly, !ntero 'aults the C! 'or not holding that the

deed o' conditional sale +ith Pacto de retro dated :ove*ber @/,

7HN/ executed by Ouana "nde#a covered only her B7/ share in

parcel 4.3@ !ntero obviously 'ailed to appreciate the i*port o' the

C!1s ruling as the N,A/5.3 s0uare *eters +hich the C! declared as

Ouana1s share represents exactly her B7/ share in Parcel 4. Clearly,

the C! did not co**it any error in its deter*ination.

=hus, +e End no reason to disturb the C!1s Endings thatthe 7HN/ Pacto de Retro is valid but only as regards Ouana1s

N,A/5.3&s0uare *eter share J or B7/ share J over Parcel 4.

Antero 0includin+ the other heirs1 has

already lost the ri+ht to redeem the portion

sold2 the 3%-day redemption period +ranted

under Article $% of the Civil Code does

not apply

=he Pacto de Retro sale states that Ouana, as vendor a

retro, reserves 'or hersel', her heirs, or assigns the right o'

repurchase the property described above +ithin a period o' =":

(7/) $"!RS, 'ro* and a'ter the date o' this instru*ent, x x x.

=his Deed +as executed in 7HN/, +hile !ntero Eled the

co*plaint in 7HH7. 2et+een these dates J 7HN/ and 7HH7 J none o'

the heirs exercised, or at the least atte*pted to exercise, this right

o' repurchase granted to the* under the contract. bviously, at

the ti*e !ntero, et al. Eled the co*plaint in 7HH7, the 7/&year

repurchase period under the contract had already lapsed.

=hus, +e agree +ith the C! that !ntero, +ith the other

heirs, had already lost +hatever right they *ay have had to

redee* the portion +hich Ouana sold to Cenon by virtue o' the

7HN/ Pacto de Retro sale.

8n this regard, +e li6e+ise agree +ith the C! that

paragraph @, !rticle 7/ o' the Civil Code cannot apply to

!ntero1s case. =his is because paragraph @ o' !rticle 7/ covers









8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


only a situation +here the alleged vendor a retro clai*s, in good

'aith, that their (the vendor and the vendee) real intention (to the

contract) +as a loan +ith *ortgage.

8n Claravall v. >i*,33 the Court explainedI

!rticle 7/ is intended to cover suits +here the seller clai*s that

the real intention +as a loan +ith e0uitable *ortgage but decides

other+ise. =he seller, ho+ever, *ust entertain a good 'aith belie'

that the contract is an e0uitable *ortgage. 8n elicen, Sr., et al. v.

rias, et al., cited by petitioner, the Court explainedI

=he application o' the third paragraph o' !rticle 7/ is

predicated upon the bona Edes o' the vendor a retro. 8t *ust

appear that there +as a belie' on his part, 'ounded on 'acts

attendant upon the execution o' the sale +ith pacto de retro,

honestly and sincerely entertained, that the agree*ent +as inreality a *ortgage, one not intended to a-ect the title to the

property ostensibly sold, but *erely to give it as security 'or a loan

or obligation. 8n that event, i' the *atter o' the real nature o' the

contract is sub*itted 'or udicial resolution, the application o' the

rule is *eet and properI that the vendor a retro be allo+ed to

repurchase the property sold +ithin @/ days 'ro* rendition o' Enal

udg*ent declaring the contract to be a true sale +ith right to

repurchase. Conversely, i' it should appear that the parties1

agree*ent +as really one o' saleJ trans'erring o+nership to the

vendee, but acco*panied by a reservation to the vendor o' the

right to repurchase the property J and there are no circu*stances

that *ay reasonably be accepted as generating so*e honestdoubt as to the parties1 intention, the proviso is inapplicable. x x x

8' the rule +ere other+ise, it +ould be +ithin the po+er o' every

vendor a retroto set at naught a pacto de retro, or resurrect an

expired right o' repurchase, by si*ply instituting an action to

re'or* the contract J 6no+n to hi* to be in truth a sale +ith pacto

de retro J into an e0uitable *ortgage. x x x =he rule +ould thus be

*ade a tool to spa+n, protect and even re+ard 'raud and bad

'aith, a situation surely never conte*plated or intended by the la+.

x x x +here the proo's established that there could be no

honest doubt as to the parties1 intention, that the transaction +as

clearly and deEnitely a sale +ith pacto de retro, the Court adudged

the vendor a retro not to be entitled to the beneEt o' the third

paragraph o' !rticle 7/. ("*phases and underscoring supplied.)

!s +e have established and explained above, the real

intention o' Ouana and Cenon in this case +as to enter into a Pacto

de Retro sale, not an e0uitable *ortgage. bviously, there'ore,

!ntero1s reliance on paragraph @, !rticle 7/ o' the Civil Code is

*isplaced and his argu*ent on this point cannot prosper.

*oleda and )E4 are buyers in +ood faith

8n light o' the above and consistent +ith our Endings on thevalidity o' the "scritura de Co*pra&%enta !bsoluta and the 7HN/

Pacto de Retro Sale, +e End that Roleda and S"8 are buyers in good

'aith.

! buyer is in good 'aith i' he buys the property o' another,

+ithout notice that so*e other person has a right to, or interest in

such property and pays 'ull and 'air price 'or it at the ti*e o' the

purchase, or be'ore he has notice o' the clai* or interest o' so*e

other person in the property.35 ;e buys +ith the +ell&'ounded belie'

that the person 'ro* he receives the property had title to it and

had the capacity to convey it.3

8n Roleda and S"81s case, the 'acts do not sho+ that they

had notice o' so*e other person1s interest or right over the 3,/H4&

s0uare *eter portionF nor +as there any 'act or circu*stance that

could have put the* on notice o' so*e other person1s right or

interest over it. or one, Roleda, and subse0uently S"8, bought the

3,/H4&s0uare *eter portion 'ro* its o+ner J Cenon. !t the ti*e

Cenon sold this portion, he o+ned a total o' 7/,N/.@ s0uare

*eters share o' Parcel 4. Clearly, the portion +hich he sold to







8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


Roleda 'ell +ell +ithin his share in Parcel 4 +hich, consistent +ith

his o+nership, he had every right to dispose o'.

!dditionally, Cenon presented several =Ds, 'or the

property, +hich +ere all in his na*e.

=hen too, prior to their purchase, they inspected the

property and in0uired 'ro* the adoining property o+ners the

status o' the property1s o+nership +ho all conEr*ed the absence

o' any controversy a-ecting the property.

>astly, no one, not even !ntero, et al., inter'ered +ith or

co*plained o' Roleda1s land extraction activities, or o' S"81s

construction o' buildings over the property.

8n short, at the ti*e o' Roleda and S"81s purchase, the 'acts

une0uivocally point to Cenon (and subse0uently to Roleda) as theexclusive o+ner o' the 3,/H4&s0uare *eter portion o' Parcel 4.

verall, +e End no reason to disturb the Endings o' the C! as it

afr*s +ith *odiEcation the decision o' the R=C. !nd, in vie+ o'

+hat +e have discussed above, +e End no 'urther reason to

address the other issues and ancillary *atters raised in this

petition.

;"R"R", in light o' these considerations, +e hereby D":$ the

petition. e !8R the decision dated ay 4@, 4//@ and the

resolution dated !ugust 4/, 4//@ o' the Court o' !ppeals in C!&

G.R. C% :o. 5A7, +ith the D88C!=8: that the share o'

petitioner !ntero Soliva shall be divided in e0ual shares a*ong his

heirs, na*elyI his +i'e, "rlinda, and nine (H) children J

$olanda, Peter, Susan, !ntonio, !ntero, Or., Rosalinda, arlen, Garry

and !nnerli#a. :o costs. S RD"R"D.

8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


G.R. No. 19025, Jun$ 1, 2015!E" STATE !OLLEGE OF S!IEN!E AN TE!NOLOG !S!ST7, REPRESENTE ITS IN!"MENTPRESIENT, etitioner , v. L"IS S. MISTERIO, GARIEL S.MISTERIO, FRAN!IS S. MISTERIO, TELMA S. MISTERIO, ANESTELA S. MISTERIOTAGIMA!R", *espondent .

Pon$n%$& Peralta, J.

Fa'%(& 7. n Dece*ber @7, 7H5, the late !suncion Sadaya, *other o' herein respondents, executed a Deed o' Sale covering a parcel o' land deno*inated as >ot 7/3, consisting o' an area o' 3,5@s0uare *eters, located at >ahug, Cebu City, and covered by =rans'er CertiEcate o' =itle (#C# ) :o. 7@/A o' the Register o' Deeds, Cebu Province, in 'avor o' Sudlon !gricultural ;igh School()A5)).a. =he sale +as subect to the right o' the vendor to repurchasethe property a'ter S!;S shall have ceased to exist, or shall have

trans'erred its school site else+here, +orded in the Deed o' Sale as'ollo+sIchanroblesvirtualla+library =hat the %endee herein, S<D>: !GR8C<>=<R!> ;8G; SC;>,hereby obligates itsel' to use the a'ore*entioned >ot :o. 7/3, 'orschool purposes only, and it is the condition attached to thiscontract that the a'ore*entioned %endee obligates itsel' to give

the %endor herein, the right to repurchase the said lot by paying tothe %endee herein the a'ore*entioned consideration o' PH,7@/.//only, a'ter the a'ore*entioned S<D>: !GR8C<>=<R!> ;8G;SC;> shall (have) ceased to exist or shall have trans'erred itsschool site else+here.@crala+la+libraryConse0uently, on ay 44, 7H5N, =C= :o. 7@/A +as cancelled, andin lieu thereo', =C= :o. 75H5H +as issued in the na*e o' S!;S,+ith the vendorUs right to repurchase annotated at its dorsalportion.

4. n arch 7A, 7H/, the Provincial 2oard o' Cebu donated 37parcels o' land, covering 7/3.5337 hectares o' the 2anilad riar>ands "state to the S!;S subect to t+o (4) conditionsI (7) that i'

the S!;S ceases to operate, the o+nership o' the lots +ouldauto*atically revert to the province, and (4) that the S!;S couldnot alienate, lease or encu*ber the properties.3

@. n Oune 7/, 7HA@, 2atas Pa*bansa (6) 2lg. 374, entitled !n!ct Converting the Cebu School o' !rts and =rades in Cebu City intoa Chartered College to be Vno+n as the Cebu State College o' Science and =echnology, "xpanding its Ourisdiction and CurricularProgra*s too6 e-ect.a. 8t incorporated and consolidated several schools in the Provinceo' Cebu, including the S!8=S, as part o' the Cebu State College o' Science and =echnology (C)C)# ).b. =he la+ also trans'erred all personnel, properties, includingbuildings, sites, and i*prove*ents, records, obligations, *oniesand appropriations o' S!8=S to the CSCS=.

3. 8n the *eanti*e, the Province o' Cebu sought to recover the 37parcels o' land it previously donated to S!>8S on the basis o' aninitial report o' its provincial attorney that S!;S had no personalityto accept the donation, and thus, the deed it executed +as void.

5. n !ugust 7H, 7HAA, respondents >uis, Gabriel, rancis, =hel*a,&all surna*ed isterio, and "stella S. isterio&=agi*acru#,as heirs o' the late !suncion Sadaya, in'or*ed the then Governoro' the Province o' Cebu, "*ilio s*ena, through a tetter, o' their

8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


intention to repurchase the subect property as stipulated in theDeed o' Sale.N

. =herea'ter, on arch 7@, 7HH/, respondents, through theircounsel, !tty. Ricardo Padilla, in'or*ed petitioner o' their Uintentionto exercise their right to repurchase under the Deed o' Sale on the

ground that the S!;S had ceased to exist.

N. ;o+ever, petitionerUs %ocational School Superintendent 88, Oesus =. 2onilla, in'or*ed respondents that S!;S still existed as only thena*e o' the school +as changed.A

A. n Dece*ber 4@, 7HH@, respondents Eled a Co*plaintH be'orethe R=C o' Cebu City 'or :ullity o' Sale andBor Rede*ption againstCSCS=, its chair*an, !r*and abella, and president, Dr. ussolini2arillo, alleging the 'ollo+ing causes o' actionIchanroblesvirtualla+library7. =hat S!;S, at the ti*e o' the execution o' the deed o' sale onDece*ber @7, 7H5, had no uridical personality. !s such, it cannot

ac0uire and possess any property, including the subect parcel o' land. ;ence, the Deed o' Sale is null and voidF and4. =hat +ith the enact*ent o' 2P 2lg. 374, S!;S had ceased toexist. =hus, the right to repurchase the subect property beca*eoperative.

H. n :ove*ber 4H, 7HH5, the R=C rendered udg*ent in 'avor o' the plainti-s and against the de'endants declaring the Deed o' Sale entered into by and bet+een !suncion Sadaya and Sudlon!gricultural ;igh School as null and void 'or the latterUs lac6 o' uridical personality to ac0uire real property or to enter into suchtransaction or having ceased to exist and ordering the Cebu StateCollege o' Science and =echnology being the actual possessor o' the land, >ot 7/3, to deliver and reconvey the sa*e to plainti-supon pay*ent o' the a'ore*entioned purchased price.

7/. Petitioner appealed the a'oresaid decision to the C!.a. During the pendency thereo', respondents Eled a ani'estationand otion 'or 8nunction,74 a*ending their co*plaint and cause o' action to include, petitionerUs intent to abandon the subectproperty and to no longer use the sa*e 'or school site purposes.

77. n ctober @, 7HHN, petitioner and the Province o' Cebuexecuted a Deed 'or Reversion, by virtue o' +hich petitioner ceded

to the Province o' Cebu the subect property covered by =C= :o.75H5H.a. Conse0uently, the Register o' Deeds issued =C= :o. 73@57 inthe na*e o' the Province o' Cebu, +ith a notice annotated at thedorsal portion thereo' o' the pending, cases be'ore the R=C and theC!.73

74. n Ouly @7, 4///, the C! reversed the decision o' the R=C,ruling that +hile it agrees +ith the trial courtUs Ending that theS!;S had ceased to exist +hen 2P 2lg. 374 too6 e-ect,respondents are barred by prescription 'ro* exercising their rightto repurchase the subect property, +hich expired in Oune 7HAN, or'our years 'ro* the e-ectivity o' 2P 2lg. 374, as provided by !rticle7/75 o' the :e+ Civil Code.

7@. n Oune 4@, 4//5, this Court afr*ed the decision o' the C!and denied the petition 'or revie+ Eled by respondents, reiteratingthat con'or*ably to the condition in the deed o' sale, and under!rticle 7/ o' the :e+ Civil Code, the right o' respondents as

successors&in&interest o' the vendor a retroco**enced to run on Oune 7/, [email protected]. ;ence, they had until Oune 7/, 7HAN +ithin +hich to repurchasethe property.b. ;o+ever, they 'ailed to do so.c. 8t +as held that the 'our&year period 'or the respondents torepurchase the property +as not suspended *erely and solelybecause there +as a divergence o' opinion bet+een thepetitioners, on the one hand, and the respondents, on the other, asto the precise *eaning o' the phrase a'ter the S!;S shall cease toexist in the deed o' sale. %erily, the existence,o' the respondentsUright to repurchase the property +as not suspended 'or beingdependent upon the prior Enal interpretation by the court o' thesaid phrase.7

73. ;o+ever, on ebruary 5, 4//7, during the pendency o' theirappeal +ith this Court, respondents again Eled an !*endedCo*plaint +ith the R=C o' Cebu City, this ti*e, i*pleading theProvince o' Cebu and the Register o' Deeds, essentially allegingthat pursuant to petitionerUs trans'er o' its school site, their right o' rede*ption on said condition beca*e operative.a. 8n support thereo', respondents clai* the existence o' ne+spaper reports stating that S!;S +ill be trans'erred to 2arili,Cebu, that petitioner and the Province o' Cebu entered into ae*orandu* o' !gree*ent 'acilitating such trans'er, and that

8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


pursuant to a Deed o' Reversion, o+nership o' the subect propertyhad already been trans'erred in the na*e o' the Province o' Cebu.b. =hus, respondents assert their right to redee* the subectproperty and pray that the title in the na*e o'&the Province o' Cebube cancelled.

75. 8n its !ns+er, petitioner averred that +hen respondents 'ailedto include the ground o' trans'er o' school site in their previousco*plaint, they are dee*ed to have +aived the sa*eF thatrespondents should not split a single cause o' action by *ultiplesuitsF that the case +as dis*issible 'or being barred by litis pendentiaF that appellants +ere guilty o' 'oru* shoppingF and, thatthe action +as li6e+ise barred by prescription.

7. n ctober 7, 4//4, the R=C dis*issed respondentsU !*endedCo*plaint in Civil Case and held that the action +as barred by litis pendentia +here being another case +hich is pending bet+een thesa*e parties 'or the sa*e cause.a. Plainti-s are li6e+ise guilty o' 'oru* shopping, there being

substantial identity o' parties, rights o' action and relie's sought 'orin the instant case.

7N. n appeal, ho+ever, the C! reversed the decision o' the R=Cholding that the case is not barred by litis pendentia 'or +hile thereis an identity o' parties and relie's prayed 'or bet+een the t+oco*plaints Eled by respondents, there exists no identity o' causeso' action.a. 8t bears stressing that the right to repurchase as stated in thedeed o' sale can only be exercised on the occurrence o' either o' the t+o suspensive conditions, to +itI7. i' S!;S shall have ceased to existsF or4. i' S!;S shall have trans'erred its school site else+here.b. 8n Civil Case :o. Ceb&754N, +hich +as appealed to this Courtand doc6eted as C!&G.R. C% :o. 5@5H4, the cause o' action o' herein appellants (appellees therein) +as based on the Erstsuspensive condition, the 'act that S!;S, by virtue o' 2atasPa*bansa 2lg. 374, enacted on Oune 7/, 7HA@, has ceased to exist.n the other hand, the cause o' action, in the instant case is basedon the second suspensive condition, the 'act that the school site+as trans'erred to another location. !pparently, though the relie'ssought in both cases are the sa*e, they are not 'ounded on thesa*e 'acts +hich give rise to t+o di-erent causes o' action.

I((u$&

hether the land *ay be reconveyed bac6 to respondents.

$)/&

:ot+ithstanding the preceding discussion, respondentsUcause o' action in their second co*plaint based on petitionerUs

trans'er o' its school site *ust nonetheless 'ail.

8n cases o' conventional rede*ption +hen the vendor aretro reserves the right to repurchase the property sold,4N theparties to the sale *ust observe the para*eters set 'orth by !rticle7/ o' the :e+ Civil Code, +hich statesI!rt. 7/. =he right re'erred to in !rticle 7/7, in the absence o' anexpress agree*ent, shall last :our y$ar( 'ro* the date o' thecontract.

Should there be an agree*ent, the period cannotexceed %$n y$ar(.

;o+ever, the vendor *ay still exercise the right torepurchase +ithin thirty days 'ro* the ti*e Enal udg*ent +asrendered in a civil action on the basis that the contract +as a truesale +ith right to repurchase. ("*phasis supplied)

=hus, depending on +hether the parties have agreed upona speciEc period +ithin +hich the vendor a retro *ay exercise hisright to repurchase, the property subect o' the sale *ay beredee*ed only +ithin the li*its prescribed by the a'ore0uotedprovision.

8n the Decision dated Oune 4@, 4//5, this Court ruled thatsince, petitioner and respondents in this case did not agree on anyperiod 'or the exercise o' the right to repurchase the propertyherein, respondents *ay use said right +ithin 'our (3) years 'ro*the happening o' the allocated conditions contained in their Deedo' SaleI (a) the cessation o' the existence o' the S!;S, or (b) thetrans'er o' the school to other site.4A ;o+ever, due to respondentsU'ailure to exercise their right to redee* the property +ithin there0uired 'our (3) years 'ro* the ti*e +hen S!;S had ceased toexist, or 'ro* Oune 7/, 7HA@, the date o' e-ectivity o' 2P 2lg. 374,this Court held that respondents are barred by prescription.

Despite this, respondents nevertheless insist on therede*ption o' the subect property pursuant to the second

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suspensive condition, na*ely, petitionerUs trans'er o' its schoolsite. !pplicable la+ and urisprudence, ho+ever, runs contrary torespondentsU stance.

!s early as 7H7@, this Court had already enunciated anun'avourable notion against a prolonged uncertainty +ith respect

to the o+nership and tenure o' real property, to +itI<nder the artidas, as under the Ro*an >a+, no atte*pt +as*ade to li*it the duration o' contracts +ith pacto de retro . <nlessli*ited by the contract o' the parties, it +as generally held that theright to repurchase +as perpetual. 2y its decision o' ay 74, 7AN5,the supre*e court o' Spain Erst .atte*pted to place a restrictionupon the length o' such contracts by holding that they gave rise toa personal action o' prescription in accordance +ith the la+ onprescription o' actions. (4@ Scaevola. NN.)In %;$ r$'$n% %*-$(,;o<$$r, 3ra'%*'a))y a)) %;o($ 'oun%r*$( <;$r$ (u'; (a)$(ar' r$'o+n*=$/ ;a$ :oun/ *% a/*(a)$ %o )*-*% %;$ %*-$<*%;*n <;*'; %;$ r*+;% o: r$/$-3%*on 'an $ $>$r'*($/. (32ondUs Co*. on the Civil Code, 57H.) !s stated in7adao vs.

7adao (4/ Phil. Rep., 4/)I ! pacto de retro is, in a certain aspect,the suspension o' the title to the land involved. ?$ ar$ o: %;$o3*n*on %;a% *% <a( %;$ *n%$n%*on o: %;$ )$+*()a%ur$ %o )*-*%%;$ 'on%*nuan'$ o: (u'; a 'on/*%*on, <*%; %;$ 3ur3o($ %;a%%;$ %*%)$ %o %;$ r$a) $(%a%$ *n @u$(%*on (;ou)/ $ /$n*%$)y3)a'$/, *% $*n+, *n %;$ o3*n*on o: %;$ )$+*()a%ur$, a+a*n(%3u)*' 3o)*'y %o 3$r-*% (u'; an un'$r%a*n 'on/*%*on r$)a%*$%o %;$ %*%)$ %o r$a) $(%a%$ %o 'on%*nu$ :or -or$ %;an %$ny$ar(.4Hcrala+la+library

Consistent +ith such vie+, this Court 'ro+ned uponagree*ents indicating indeEnite stipulations 'or the exercise o' theright to repurchase and restricted the rede*ption period to ten(7/) years 'ro* the date o' the contract o' sale, in consonance +ith

the provisions o' the Civil Code. !ccordingly, +hen vendors aretro +ere granted the right to repurchase properties sold at anyti*e they have the *oney, in the *onth o' arch o' any year,or at any ti*e a'ter the Erst year, this Court had not hesitated ini*posing the ten (7/)&year period, the expiration o' +hiche-ectively bars rede*ption o' the subect properties.@/ Si*ilarly,there have been nu*erous occasions@7 +herein e invalidatedstipulations per*itting the repurchase o' property only a'ter thelapse o' at least ten (7/) years 'ro* the date o' the execution o' the contract 'or being in contravention o' the li*itation *andatedby the Civil Code provision. aivers o' such period +ere li6e+ise

held to be void 'or being against public policy.@4

urther*ore, this Court dee*ed it necessary to 6eep +ithinthe ten&year period those instances +here parties agree tosuspend the right until the occurrence o' a certain ti*e, event, orcondition, inso'ar as the application o' the 'our (3)&year period in

the Erst paragraph o' !rticle 7/ Civil Code +ould prolong theexercise o' the right beyond ten (7/) years. =hus, in *osales v.*eyes,@@ e held that in cases +here the 'our (3)&year period +ouldextend the li'e o' the contract beyond ten (7/) years, the vendor aretro +ill only have the re*ainder o' the said ten (l)&year periodto redee* the property, in line +ith the *ani'est spirit o' thela+.@3 hen, 'or instance, the contract provides that the right *ayonly be exercised a'ter seven (N), eight (A), or nine (H) years a'terthe execution o' the sale, the vendor a retro *ay only redee* theproperty be'ore the expiration o' the ten (l)&year period 'ro* thedate o' the sale. 8n line +ith this, 8male v. 9ernande:, et.al.@5 pronounces that the period o' rede*ption agreed upon by theparties *ay be extended a'ter the 'our (3)&year period so long as

the total period does not exceed ten (7/) years 'ro* the date o' the contract.

!s elucidated in 6adayos v. Court of AppealsI?;*)$ .%;$ 'oun%*n+ o: %;*( :oury$ar 3$r*o/ (;a)) $+*n:ro- %;$ $>$'u%*on o: %;$ 'on%ra'%, <;$r$ %;$ r*+;% *((u(3$n/$/ y a+r$$-$n% un%*) a:%$r a '$r%a*n %*-$, $$n%or 'on/*%*on, %;$ 3$r*o/ (;a)) $ 'oun%$/ :ro- %;$ %*-$(u'; r*+;% 'ou)/ $ $>$r'*($/, u% no% $>'$$/*n+ %$n 107y$ar( :ro- %;$ $>$'u%*on o: %;$ 'on%ra'%. !pplying theprovision to the instant case, the period to repurchase the property*ust be dee*ed to be 'our (3) years 'ro* H arch 7HN5 or until Harch 7HNH.@Ncrala+la+library

8n the instant case, +hile the 'our (3)&year period +ascounted 'ro* the ti*e the right to repurchase could be exercisedor +hen the S!;S ceased to exist, even beyond ten (7/) years'ro* the execution o' the deed o' sale, one *ust not neverthelesslose sight o' the 'unda*ental spirit and intent o' the la+ +hichhave been upheld in urisprudence, ti*e and ti*e again, vi: .I =he0uestion o' the period +ithin +hich the repurchase *ay be *ade isunani*ously considered as a 0uestion o' public interest. I% *( no%a +oo/ %;*n+ %;a% %;$ %*%)$ %o 3ro3$r%y (;ou)/ $ )$:% :or a)on+ 3$r*o/ o: %*-$ (uB$'% %o *n/$n*%$ 'on/*%*on( o: %;*(na%ur$. For %;*( r$a(on, %;$ *n%$n%*on o: %;$ )a< *(

8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


r$(%r*'%*$ an/ )*-*%a%*$. (7/ anresa)

A )on+ %$r- :or r$/$-3%*on r$n/$r( %;$ %$nur$ o: 3ro3$r%y un'$r%a*n an/ r$/oun/( %o *%( /$%r*-$n%, :orn$*%;$r /o$( %;$ 3r$'ar*ou( ;o)/$r 'u)%*a%$ %;$ +roun/<*%; %;$ (a-$ *n%$r$(% a( %;$ o<n$r, nor /o$( ;$ 3ro3$r)y

a%%$n/ %o %;$ 3r$($ra%*on o: %;$ u*)/*n+, an/ o<*n+ %o %;$:a'% %;a% ;*( $nBoy-$n% o: %;$ 3ro3$r%y *( %$-3orary, ;$$n/$aour( ao$ a)) %o /$r*$ %;$ +r$a%$(% $n$%%;$r$:ro-, $'ono-*=*n+ %o %;a% $n/ $$n %;$ -o(%$(($n%*a) $>3$n($(.

;ence, +hile the occurrence o' the second suspensivecondition *ay give rise to a separate cause o' action, the sa*e*ust al+ays be ta6en in conunction +ith the periods prescribed byla+ inso'ar as they 'ro+n upon the uncertainty o' titles to realproperty. ther+ise, vendors *ay si*ply i*pose several resolutoryconditions, the happening o' each +ill practically extend the li'e o' the contract beyond the para*eters set 'orth by the Civil Code. =his is certainly not in line +ith the spirit and intent o' the la+. =oper*it respondents to exercise their right to repurchase upon thehappening o' the second resolutory condition, +hen they utterly'ailed to ti*ely exercise the sa*e upon the happening o' the Erst,+ould e-ectively result in a circu*vention o' the periods expressly*andated by la+.

=o repeat, !rticle 7/ expressly provides that in theabsence o' an agree*ent as to the period +ithin +hich thevendor a retro *ay exercise his right to repurchase, the sa*e *ustbe done +ithin 'our (3) years 'ro* the execution o' the contract. 8nthe event the contract speciEes a period, the sa*e cannot exceedten (7/) years. =hus, +hether it be 'or a period o' 'our (3) or ten(7/) years, this Court consistently i*ple*ents the la+ and li*its

the period +ithin +hich the right to repurchase *ay be exercised,ada*antly stri6ing do+n as illicit stipulations providing 'or anunli*ited right to repurchase. 8ndubitably, it +ould be ratherabsurd to per*it respondents to repurchase the subect propertyupon the occurrence o' the second suspensive condition,particularly, the relocation o' S!;S on ctober @, 7HHN, the ti*e+hen petitioner ceded the property to the Province o' Cebu, +hichis nearly 'orty&one (37) years a'ter the execution o' the Deed o' Sale on Dece*ber @7, 7H5. =his Court *ust, there'ore, place itupon itsel' to suppress these 6inds o' atte*pts in 6eeping +ith the'unda*entally accepted principles o' la+.

8ndeed, the 'reedo* to contract is not absolute. =hecontracting parties *ay establish such stipulations, clauses, ter*sand conditions as they *ay dee* convenient, provided they arenot contrary to la+, *orals, good custo*s, public order, or publicpolicy.@H hen the conditions in a contract *ani'est an e-ective

circu*vention o' existing la+ and urisprudence, it is incu*bentupon the courts to construe the sa*e in accordance +ith itsulti*ate spirit and intent.crala+red

?EREFORE, pre*ises considered, the instant petitionis GRANTE. =he Decision dated Ouly 45, 4//N o' the Court!ppeals in C!&G.R. C% :o. NN@4H is RE#ERSE and SET ASIE.

SO ORERE.chanroblesvirtualla+library

G.R. No. 16010 O'%o$r 22, 2014

SPO"SES JAIME SEASTIAN AN E#ANGELINESEASTIAN, Petitioners,

vs.

PI FAMIL ANC, IN!., !ARMELITA ITAPO AN ENJAMIN

AO, Respondents.

Pon$n$%$& 2ersa*in, J.

8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


Fa'%(&

7. =he petitioners are spouses +ho used to +or6 'or 2P8 a*ily.

a. !t the ti*e *aterial to this case, Oai*e +as the 2ranch anager

o' 2P8 a*ily1s San rancisco del onte 2ranch in Wue#on City and

"vangeline +as a ban6 teller at the 2lu*entritt 2ranch in anila.

4. n ctober @/, 7HAN, they availed the*selves o' a housing loan

'ro* 2P8 a*ily as one o' the beneEts extended to its e*ployees.

a. =heir loan a*ounted to P4N@,///.//,

b. and +as covered by a >oan !gree*ent,4 +hereby they agreed

that the loan +ould be payable in 7/A e0ual *onthly a*orti#ations

o' P@,4NN.5N starting on Oanuary 7/, 7HAA until Dece*ber 7/,

7HHF@

c. and that the *onthly a*orti#ations +ould be deducted 'ro* his

*onthly salary.3

@. =o secure the pay*ent o' the loan, they executed a real estate*ortgage in 'avor o' 2P8 a*ily5 over the property situated in 2o.

8bayo, arilao, 2ulacan and covered by =C= :o. =&@/.A4N () o' the

Register o' Deeds o' 2ulacan.

3. !part 'ro* the loan agree*ent and the real estate *ortgage,

Oai*e signed an undated letter&*e*orandu* addressed to 2P8

a*ily,N stating as 'ollo+sI

8n connection +ith the loan extended to *e by 2P8 a*ily

2an6, 8 hereby authori#e you to auto*atically deduct an a*ount

'ro* *y salary or any *oney due to *e to be applied to *y loan,

*ore particularly described as 'ollo+sI

x x x x

=his authority is irrevocable and shall continue to exist until

*y loan is 'ully paid. 8 hereby declare that 8 have signed this

authority 'ully a+are o' the circu*stances leading to the loan

extended to *e by 2P8 a*ily 2an6 and +ith 'ull 6no+ledge o' the

rights, obligations, and liabilities o' a borro+er under the la+.

8 a* an e*ployee o' 2P8 a*ily 2an6 and 8 ac6no+ledge

that 2P8 a*ily 2an6 has granted to *e the above&*entioned loan

in consideration o' this relationship. 8n the event 8 leave, resign or

a* discharged 'ro* the service o' 2P8 a*ily 2an6 or *y

e*ploy*ent +ith 2P8 a*ily 2an6 is other+ise ter*inated, 8 also

authori#e you to apply any a*ount due *e 'ro* 2P8 a*ily 2an6 to

the pay*ent o' the outstanding principal a*ount o' the a'oresaid

loan and the interest accrued thereon +hich shall thereupon

beco*e entirely due and de*andable on the e-ective date o' such

discharge, resignation or ter*ination +ithout need o' notice o'

de*and, and to do such other acts as *ay be necessary under the

circu*stances. (2old e*phasis added)

x x x x.

5. =he petitioners1 *onthly loan a*orti#ations +ere regularly

deducted 'ro* Oai*e1s *onthly salary since Oanuary 7/, 7HAA.

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8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


. n Dece*ber 73, 7HAH, ho+ever, Oai*e received a notice o'

ter*ination 'ro* 2P8 a*ily1s %ice President, Severino P.

Coronacion,A in'or*ing hi* that he had been ter*inated 'ro*

e*ploy*ent due to loss o' trust and conEdence resulting 'ro* his

+il'ul non&observance o' standard operating procedures and

ban6ing la+s.

N. "vangeline also received a notice o' ter*ination dated ebruary

4@, 7HH/,H telling her o' the cessation o' her e*ploy*ent on the

ground o' abandon*ent.

A. 2oth notices contained a de*and 'or the 'ull pay*ent o' their

outstanding loans 'ro* 2P8 a*ily, vi#I

De*and is also *ade upon you to pay in 'ull +hatever

outstanding obligations by +ay o' ;ousing >oans,Salary >oans, etc.

that you *ay have +ith the ban6. $ou are +ell a+are that said

obligations beco*e due and de*andable upon your separation

'ro* the service o' the ban6.7/ ("*phasis supplied.)

8**ediately, the petitioners Eled a co*plaint 'or illegal

dis*issal against 2P8 a*ily in the :ational >abor Relations

Co**ission (:>RC).77

H. !bout a year a'ter their ter*ination 'ro* e*ploy*ent, the

petitioners received a de*and letter dated Oanuary 4A, 7HH7 'ro*

2P8 a*ily1s counsel re0uiring the* to pay their total outstanding

obligation a*ounting toP447,[email protected]/.74

a. 8t stated that their entire outstanding balance had beco*e due

and de*andable upon their separation 'ro* 2P8 a*ily.

7/. =hey replied through their counsel on ebruary 74, 7HH7.7@

77. 8n the *eanti*e, 2P8 a*ily instituted a petition 'or the

'oreclosure o' the real estate *ortgage.73

a. =he petitioners received on arch , 7HH7 the notice o'

extraudicial 'oreclosure o' *ortgage dated ebruary 47, 7HH7.

74. =o prevent the 'oreclosure o' their property, the petitioners

Eled against the respondents their co*plaint 'or inunction and

da*ages +ith application 'or preli*inary inunction and restrainingorder75 in the Regional =rial Court (R=C) in alolos, 2ulacan.7

a. =hey therein alleged that their obligation +as not yet due and

de*andable considering that the legality o' their dis*issal +as still

pending resolution by the labor courtF hence, there +as yet no

basis 'or the 'oreclosure o' the *ortgaged propertyF and that the

property sought to be 'oreclosed +as a 'a*ily d+elling in +hich

they and their 'our children resided.

7@. 8n its ans+er +ith counterclai*,7N 2P8 a*ily asserted that the

loan extended to the petitioners +as a special privilege granted to

its e*ployeesF that the privilege +as coter*inous +ith the tenure

o' the e*ployees +ith the co*panyF and that the 'oreclosure o' the

*ortgaged property +as ustiEed by the petitioners1 'ailure to pay

their past due loan balance.

























8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


73. n Oune 4N, 7HH5, the R=C rendered udg*ent dis*issing their

case as +ell as the de'endant ban61s counterclai* +ithout any

pronounce*ent as to costs.

75. n :ove*ber 47, 4//4, the C! pro*ulgated its assailed

decision afr*ing the udg*ent o' the R=C in toto.

7. =he petitioners then Eled their *otion 'or reconsideration,44 in

+hich they contended 'or the Erst ti*ethat their rights under

Republic !ct :o. 554 (Realty 8nstall*ent 2uyer Protection !ct) had

been disregarded, considering that Section @ o' the la+ entitled

the* to a grace period +ithin +hich to settle their unpaid

install*ents +ithout interestF and that the loan agree*ent +as inthe natureo' a contract o' adhesion that *ust be construed strictly

against the one +ho prepared it, that is, 2P8 a*ily itsel'.

7N. n Septe*ber 7A, 4//@, the C! denied the petitioners1 *otion

'or reconsideration.4@

I((u$&

hether the 'oreclosure o' the real estate *ortgage on the

petitioners1 'a*ily ho*e is in order.

$)/&

=he petition 'or revie+ has no *erit.

hen the petitioners appealed the R=C decision to the C!,

their appellants1 brie' li*ited the issues to the 'ollo+ingI

(a) hether or not appellee ban6 +rong'ully re'used toaccept pay*ents by appellants o' their *onthly

a*orti#ations.

(b) hether or not the 'oreclosure o' appellants1 real estate

*ortgage +as pre*ature.45

=he C! conEned its resolution to these issues. !ccordingly,

the petitioners could not raise the applicability o' Republic !ct :o.

554, or the strict construction o' the loan agree*ent 'or being acontract o' adhesion as issues 'or the Erst ti*e either in their

*otion 'or reconsideration or in their petition Eled in this Court. =o

allo+ the* to do so +ould violate the adverse parties1 right to

'airness and due process. !s the Court held in S.C. ega+orld

Construction and Develop*ent Corporation v. ParadaI4

8t is +ell&settled that no 0uestion +ill be entertained on

appeal unless it has been raised in the proceedings belo+. Points o'

la+, theories, issues and argu*ents not brought to the attention o'

the lo+er court, ad*inistrative agency or 0uasi&udicial body, need

not be considered by the vie+ing court, as they cannot be raised

'or the Erst ti*e at that late stage. 2asic considerations o' 'airness

and due process i*pel this rule. !ny issue raised 'or the Erst ti*e

on appeal is barred by estoppel.

=he procedural *isstep o' the petitioners not+ithstanding,

the Court Ends no substantial basis to reverse the udg*ents o' the

lo+er courts.









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Republic !ct :o. 554 +as enacted to protect buyers o'

real estate on install*ent pay*ents against onerous and

oppressive conditions.4N =he protections accorded to the buyers

+ere e*bodied in Sections @, 3 and 5 o' the la+, to +itI

Section @. 8n all transactions or contracts, involving the sale orEnancing o' real estateon install*ent pay*ents, including

residential condo*iniu* apart*ents but excluding industrial lots,

co**ercial buildings and sales to tenants under Republic !ct

:u*bered =hirty&"ight hundred 'orty&'our as a*ended byRepublic

!ct Sixty&three hundred eighty&nine, +here the buyer has paid

atleast t+o years o' install*ents, the buyer is entitled to the

'ollo+ing rights in case he de'aults in the pay*ent o' succeeding

install*entsI

(a) =o pay, +ithout additional interest, the unpaid

install*ents due +ithin the total grace period earned by

hi* +hich is hereby Exed at that rate o' one *onth grace

period 'or every one year o' install*ent pay*ents *adeF

provided, =hat this right shall be exercised by the 2uyer

only once in every Eve years o' the li'e o' the contract and

its extensions, i' any.

(b) 8' the contract is cancelled, the seller shall re'und to the

buyer the cash surrender value o' the pay*ents on the

property e0uivalent to E'ty percent o' the total pay*ents

*ade, and, a'ter Eve years o' install*ents, an additional

Eve per cent every year but not to exceed ninety per cent

o' the total pay*ents *adeF Provided, =hat the actualcancellation or the de*and 'or rescission o' the contract by

a notarial act and upon 'ull pay*ent o' the cash surrender

value to the buyer.

Do+n pay*ents, deposits or options on the contract shall

be included in the co*putation o' the total nu*ber o' install*ent

pay*ents *ade.

S"C=8: 3. 8n case +here less than t+o years o' install*ents +ere

paid, the seller shall give the buyers a grace period o' not less than

sixty days 'ro* the date the install*ent beco*e due.

8' the buyer 'ails to pay the install*ents due at the expiration o'

the grace period, the seller *ay cancel the contract a'ter thirtydays 'ro* receipt by the buyer o' the notice o' cancellation or the

de*and 'or rescission o' the contract by a notarial act.

S"C=8: 5. <nder Section @ and 3,the buyer shall have the right to

sell his rights or assign the sa*e to another person or to reinstate

the contract by updating the account during the grace period and

be'ore actual cancellation o' the contract. =he deed o' sale or

assign*ent shall be done by notarial act.

;aving paid *onthly a*orti#ations 'or t+o years and 'our

*onths, the petitioners no+ insist that they +ere entitled to the

grace period +ithin +hich to settle the unpaid a*orti#ations

+ithout interest provided under Section @, supra. 4A ther+ise, the

'oreclosure o' the *ortgaged property should be dee*ed

pre*ature inas*uch as their obligation +as not yet due and

de*andable.4H

=he petitioners1 insistence +ould have been correct i' the*onthly a*orti#ations being paid to 2P8 a*ily arose 'ro* a sale or

Enancing o' real estate. 8n their case, ho+ever, the *onthly

a*orti#ations represented the install*ent pay*ents o' a housing

loan that 2P8 a*ily had extended to the* as an e*ployee1s

beneEt. =he *onthly a*orti#ations they +ere liable 'or +as derived

'ro* a loan transaction, not a sale transaction, thereby giving rise

to a lender&borro+er relationship bet+een 2P8 a*ily and the

petitioners. 8t bears e*phasi#ing that Republic !ct :o. 554 ai*ed

to protect buyers o' real estate on install*ent pay*ents, not








8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


borro+ers or *ortgagors +ho obtained a housing loan to pay the

costs o' their purchase o' real estate and used the real estate

assecurity 'or their loan. =he Enancing o' real estate in install*ent

pay*ents re'erred to in Section @, supra, should be construed

only as a *ode o' pay*ent vis&Q&vis the seller o' the real estate,

and excluded the concept o' ban6 Enancing that +as a type o'

loan. !ccordingly, Sections @, 3 and 5, supra, *ust be read as to

grant certain rights only to de'aulting buyers o' real estate on

install*ent, +hich rights are properly de*andable only against the

seller o' real estate.

=hus, in >u#on 2ro6erage Co., 8nc. v.ariti*e 2uilding Co.,

8nc.,@/ the Court heldI

Congress in enacting in Septe*ber 7HN4 Republic !ct 554 (theaceda la+), has by la+ +hich is its proper and exclusive province

(and not that o' this Court +hich is not supposed to legislate

udicially) has ta6en care o' Oustice 2arredo1s concern over the

unhappy and helpless plight o' thousands upon thousands o'

subdivision buyers o' residential lots.

=he !ct even in residential properties recogni#es and

reafr*s the vendorUs right to cancel the contractto sell upon

breach and non&pay*ent o' the stipulated install*ents but

re0uires a grace period a'ter at least t+o years o' regular

install*ent pay*ents (o' one *onth 'or every one year o'

install*ent pay*ents *ade, but to be exercise by the buyer only

once in every Eve years o' the li'e o' the contract) +ith a re'und o'

certain percentages o' pay*ents *ade on account o' the cancelled

contract (starting +ith E'ty percent +ith gradually increasing

percentages a'ter Eve years o' install*ents). 8n case o' industrial

and co**ercial properties, as in the case at bar, the !ct

recogni#es and reafr*s the %endorUs right un0ualiEedly to cancel

the sale upon the buyerUs de'ault.

=he petitioners purchased the realestate 'ro* P;8>%8>>"Realty,@7 not 'ro* 2P8 a*ily. ithout the buyer&seller relationship

bet+een the* and 2P8 a*ily, the provisions o' Republic !ct :o.

554 +ere inapplicable and could not be invo6ed by the* against

2P8 a*ily.

!part 'ro* relying on the grace period provided in Republic

!ct :o. 554 to assert the pre*aturity o' the 'oreclosure o' the

*ortgage,@4 the petitioners argue that the 'oreclosure o' the

*ortgage +as null and void because 2P8 a*ily1s acceptance o' their late pay*ents estopped it 'ro* invo6ing sanctions against

the*.@@ =hey 'urther argue that the printed conditions appearing at

the bac6 o' 2P8 a*ily1s ofcial receipt,@3 +hich the C! cited to

afr* the validity o' the 'oreclosure, partoo6 o' a contract o'

adhesion that *ust be strictly construed against 2P8 a*ily as the

party +ho prepared the sa*e.@5

=he petitioners1 argu*ents do not persuade. =o reiterate,

their reliance on Republic !ct :o. 554 +as *isplaced because its

provisions could not extend to a situation bere't o' any seller&buyer

relationship. ;ence, they could not escape the conse0uences o'

the *aturity o' their obligation by invo6ing the grace period

provided in Section @, supra.

=he C! correctly 'ound that there +as basis to declare the

petitioners1 entire outstanding loan obligation *atureas to +arrant














8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


the 'oreclosure o' their *ortgage. 8t is settled that 'oreclosure is

valid only +hen the debtor is in de'ault in the pay*ent o' his

obligation.@ ;ere, the records sho+ that the petitioners +ere

de'aulting borro+ers, a 'act that the C! thoroughly explained in the

'ollo+ing *annerI

!ppellants insist that there +as no valid ground 'or appellee ban6

to institute the 'oreclosure proceedings because they still have a

pending case 'or illegal dis*issal be'ore the :>RC. =hey argue that

the reason 'or the ban61s 'oreclosure is their dis*issal 'ro*

e*ploy*ent. !s they are still 0uestioning the illegality o' their

dis*issal, the ban6 has no legal basis in 'oreclosing the property.

x x x x

=he argu*ents 'ail to persuade <s.

irst, appellants cannot rely on the *ere possibility that i' the

decision o' the :>RC +ill be in their 'avor, part o' the relie's prayed

'or +ould be reinstate*ent +ithout loss o' seniority and other

privilege. Such argu*ent is highly speculative. n the contrary, in

a thirteen&page decision, the >abor !rbiter exhaustively discussed

the validity o' appellant Oai*e Sebastian1s ter*ination. x x x

x x x x

oreover, appellants appealed the >abor !rbiter1s decision as early

as Oanuary 7/, 7HH3. =o date, ho+ever, nothing has been heard

'ro* appellants i' they obtained a 'avorable udg*ent 'ro* the

:>RC.

Second, even i' it turns out the appellants +ere not validly

ter*inated 'ro* their e*ploy*ent, there is valid reason to

'oreclose the *ortgaged property.

!ppellants the*selves ad*it that they +ere in arrears +hen they

*ade the late pay*ents in arch, 7HH7. hile this ad*ission +as

not in the course o' the testi*ony o' appellant Oai*e Sebastian,

this +as done during the hearing o' the case +hen the trial udge

propounded the 0uestion to hi*. ;ence, this constitute (sic)

udicial ad*ission. !n ad*ission, verbal or +ritten, *ade by a

party in the course o' the trial or other proceedings in the sa*e

case does not re0uire proo'. =he ad*ission *ay be contradicted

only by sho+ing that it +as *ade through palpable *ista6e or that

no such ad*ission is *ade. Oudicial ad*issions are those *ade

voluntarily by a party, +hich appear on record in the proceedings

o' the court. or*al acts done by a party or his attorney in court on

the trial o' a cause 'or the purpose o' dispensing +ith proo' by the

opposing party o' so*e 'act clai*ed by the latter to be true.

x x x x

ourth, the ter*s and conditions o' the loan agree*ent,

pro*issory notes and the real estate *ortgage contract, do not

parta6e o' a contract o' adhesion. 8t *ust be noted that appellantsare personnel o' the ban6.

Oai*e Sebastian +as then a branch *anager +hile his +i'e

"vangeline +as a ban6 teller. 8t is sa'e to conclude that they are

'a*iliar +ith the docu*ents they signed, including the conditions

stated therein. 8t is also presu*ed that they ta6e ordinary care o'

their concerns and that they voluntarily and 6no+ingly signed the

contract.

!ppellant Oai*e Sebastian, in his letter addressed to

appellee ban6, even ac6no+ledged that in the event o'

resignation or other+ise ter*inated 'ro* his e*ploy*ent, the

principal as +ell as the interest due shall beco*e entirely due and

de*andable ("xh. "). =he 'reedo* to enter into contracts is

protected by la+ and the courts are not 0uic6 to inter'ere +ith such





8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


'reedo* unless the contract is contrary to la+, *orals, good

custo*s, public policy or public order. Courts are not authori#ed to

extricate parties 'ro* the necessary conse0uences o' their acts,

and the 'act that the contractual stipulations *ay turn out to be

Enancially disadvantageous +ill not relieve parties thereto o' their

obligations,

i'th, e cannot also buy appellants1 argu*ent that

appellee re'used to accept the subse0uent pay*ents *ade by

the*. 8t is settled that an issue +hich +as not raised during the

trial in the court belo+ could not be raised 'or the Erst ti*e on

appeal, as to do so, +ould be o-ensive to the basic rules o' 'air

play, ustice and due process. ;ere, appellant Oai*e Sebastian

t+ice testiEed be'ore the Court, Erst, during the hearing on the

preli*inary inunction and on the trial proper. :othing +as

*entioned about the re'usal on the part o' the ban6 to accept theirsubse0uent pay*ents.

!ssu*ing, arguendo, that appellee ban6 indeed re'used to

accept the subse0uent pay*ent 'ro* appellants, they could have

consigned the sa*e be'ore the Court. =hey 'ailed to do so. =here

+as no e-ort on their part to continue paying their obligations.

=hus, having signed a deed o' *ortgage in 'avor o'

appellee ban6, appellants should have 'oreseen that+hen their

principal obligation +as not paid +hen due, the *ortgagee has the

right to 'oreclose the *ortgage and to have the property sei#ed

and sold +ith a vie+ to applying the proceeds to the pay*ent o'the

principal obligation.@N

"0ually notable +as that Oai*e1s undated letter&

*e*orandu* to 2P8 a*ily expressly stated the 'ollo+ingI

x x x 8n the event 8 leave, resign or a*discharged 'ro* the service

o' 2P8 a*ily 2an6 or *y e*ploy*ent +ith 2P8 a*ily 2an6 is

other+ise ter*inated, 8 also authori#e you to apply any a*ountdue *e 'ro* 2P8 a*ily 2an6 to the pay*ent o' the outstanding

principal a*ount o' the a'oresaid loan and the interest accrued

thereon +hich shall there upon beco*e entirely due and

de*andable on the e-ective date o' such discharge, resignation or

ter*ination +ithout need o' notice o' de*and, and to do such

other acts as *ay be necessary under the circu*stances.@A

(2old e*phasis supplied.)

=he petitioners thereby explicitly ac6no+ledged that 2P8

a*ily 2an6 had granted the housing loan inconsideration o' their

e*ployer e*ployee relationship. =hey +ere thus presu*ed to

understand the conditions 'or the grant o' their housing loan.

Considering that the *aturity o' their loan obligation did not

depend on the legality o' their ter*ination 'ro* e*ploy*ent, their

assertion that the resolution o' their labor co*plaint 'or illegal

dis*issal +as preudicial to the ripening o' 2P8 a*ily1s cause o'

action +as properly reected. 8ndeed, a Ending o' illegal dis*issal

in their 'avor +ould not auto*atically and exclusively result in their

reinstate*ent. !s Ettingly ruled in 2ani Rural 2an6, 8nc. v. De

Gu#*anI@H

2y urisprudence derived 'ro* this provision, separation pay *ay

LalsoM be a+arded to an illegally dis*issed e*ployee in lieu o'

reinstate*ent. Section 3(b), Rule 8 o' the Rules 8*ple*enting

2oo6 %8 o' the >abor Code provides the 'ollo+ing instances +hen

the a+ard o' separation pay, in lieu o' reinstate*ent to an illegally

dis*issed e*ployee, is properI (a) +hen reinstate*ent is no longer

possible, in cases +here the dis*issed e*ployee s position is no

longer availableF (b) the continued relationship bet+een the







8/17/2019 Cases 6, 7, 8, 9, And 10 of Set 5


e*ployer and the e*ployee is no longer viable due to the strained

relations bet+een the*F and(c) +hen the dis*issed e*ployee

opted not to be reinstated, or the pay*ent o' separation beneEts

+ould be 'or the best interest o' the parties involved. 8n these

instances, separation pay is the alternative re*edy to

reinstate*ent in addition to the a+ard o' bac6+ages. =he pay*ent

o' separation pay and reinstate*ent are exclusive re*edies. =he

pay*ent o' separation pay replaces the legal conse0uences o'

reinstate*ent to an e*ployee +ho +as illegally dis*issed.

:onetheless, it is note+orthy that the >abor !rbiter

ulti*ately ruled that Oai*e1s dis*issal +as valid and legal. Such

ruling afr*ed the legality o' the ter*ination o' Oa*es 'ro* 2P8

a*ily1s e*ploy*ent. <nder the circu*stances, the entire unpaid

balance o' the housing loan extended to hi* by 2P8 a*ily beca*e

due and de*andable upon such ter*ination in accordance +ith Oai*e1s express and +ritten co**it*ent to 2P8 a*ily. "ven i' +e

+ere to disregard this condition, their ad*ission o' de'ault in their

*onthly a*orti#ations constituted an event o' de'ault +ithin the

context o' Section N o' the loan agree*ent that produced the sa*e

e-ect o' rendering any outstanding loan balance due and

de*andable. Section N the loan agree*ent reads as 'ollo+sI

S"C=8: N. "%":=S D"!<>=

8' any o' the 'ollo+ing "vents o' De'ault shall have occurred and be

continuingI

a) =he 2orro+er shall 'ail to pay +hen due the >oan(s) any

install*ent thereo', or any other a*ount payable under this

!gree*ent the :ote(s) or under the CollateralF or

x x x x

then, and in any such event, the 2an6 *ay by +ritten notice to the

2orro+er cancel the Co**it*ent andBor declare all a*ounts o+ing

to the 2an6 under this !gree*ent and the :ote(s), +hether o'

principal, interest or other+ise, to be 'orth+ith due and payable,

+hereupon all such a*ounts shall beco*e i**ediately due and

payable +ithout de*and or other notice o' any 6ind, all o' +hich

are expressly +aived by the 2orro+er. =he 2orro+er shall pay on

de*and by the 2an6, in respect o' any a*ount or principal paid in

advance o' stated *aturity pursuant to this Section N, a

prepay*ent penalty e0ual to the rate *entioned in Section 4./N

(c).3/

ith de*and, albeit unnecessary, having been *ade on

the petitioners, they +ere undoubtedly in de'ault in their

obligations.

=he 'oreclosure o' a *ortgage is but the necessary

conse0uence o' the non&pay*ent o' an obligation secured by the

*ortgage.$wphi$ here the parties have stipulated in their

agree*ent, *ortgage contract and pro*issory note that the

*ortgagee is authori#ed to 'oreclose the *ortgage upon the

*ortgagorUs de'ault, the *ortgagee has a clear right to the

'oreclosure in case o' the *ortgagorUs de'ault. =hereby, the

issuance o' a +rit o' preli*inary inunction upon the application o'

the *ortgagor to prevent the 'oreclosure +ill be i*proper.37 !ssuch, the lo+er courts did not err in dis*issing the inunction

co*plaint o' the petitioners.

;"R"R", the Court D":8"S the petition 'or revie+ on certiorariF

!8RS the decision pro*ulgated on :ove*ber 47, 4//4F and

RD"RS the petitioners to pay the costs o' suit.






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Cases 6, 7, 8, 9, And 10 of Set 5

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Transcript of Cases 6, 7, 8, 9, And 10 of Set 5