Departm Cases 42-78

8/15/2019 Departm Cases 42-78

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42.

G.R. No. 193804 February 27, 2013

SPOUSES NILO RAMOS a! ELIA"ORA RAMOS, Petitioners,

vs.

RAUL O#ISPO a! FAR EAS$ #AN% AN" $RUS$ &OMPAN', Respondents.

D E C I S I O N

(ILLARAMA, J.:

Assailed in this petition for review on certiorari under Rule 4 is the Decision! dated

"anuar# $%, $&!& of the Court of Appeals 'CA( in CA)*.R. C+ No. $-% which reversed

and set aside the Decision$ dated "anuar# $, $&&4 of the Re/ional 0rial Court 'R0C( of

1ue2on Cit#, 3ranch $ in Civil Case No. 1))-.

0he facts follow

Petitioner Nilo Ra5os and respondent Raul O6ispo 5et each other and 6eca5e 6est

friends while the# were wor7in/ in Saudi Ara6ia as contract wor7ers. After 6oth had

returned to the Philippines, Ra5os continued to visit O6ispo who has a hardware store.

So5eti5e in Au/ust !8, petitioners e9ecuted a Real Estate :ort/a/e 'RE:( in favor of

respondent ;ar East 3an7 and 0rust Co5pan# ';E30C();airview 3ranch, over their

propert# covered 6# 0ransfer Certi


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5ort/a/e of O6ispo@ and that ;E30C and O6ispo 6e ordered to pa# 5oral da5a/es and

attorne#s fees.

In its Answer >ith Co5pulsor# Counterclai5 and Cross)clai5, ;E30C averred that

petitioners a/reed to e9ecute the RE: over their propert# as partial securit# for the loans

o6tained 6# O6ispo with a total principal 6alance ofP$,&&,&&&.&&. Since the o6li/ation

secured 6# the RE: re5ains unpaid, ;E30C contended that it should not 6e co5pelled to

release the 5ort/a/e on the su6Bect propert#. ;E30C further asserted that petitioners are/uilt# of laches and their clai5 alread# 6arred 6# estoppel. ?nder its cross)clai5, ;E30C

pra#ed that in the event of Bud/5ent rendered in favor of petitioners, O6ispo should 6e

5ade lia6le to answer for all the clai5s that 5a# 6e adBud/ed a/ainst it plus all da5a/es

it suered.8

On 5otion of petitioners, O6ispo was declared in default for failure to ERE;ORE, pre5ises considered, Bud/5ent is here6# rendered in favor of the plaintis

and a/ainst defendants Raul ". O6ispo and ;ar East 3an7in/ 0rust Co5pan# 'now 3an7 of

the Philippine Islands( as follows

a( Declarin/ the real estate 5ort/a/e in favor of defendant ;ar East 3an7 0rust

Co5pan# 'now 3an7 of Philippine Islands( null and void@

6( Orderin/ defendant ;E30C 'now 3PI( to cancel the encu56rance on 0ransfer

Certi


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>ERE;ORE, the assailed "anuar# $, $&&4 Decision of the Re/ional 0rial Court of

1ue2on Cit#, 3ranch $ in Civil Case No. 1))- is here6# RE+ERSED and SE0 ASIDE

and a new one is entered DIS:ISSIN* the Co5plaint of plaintis)appellees in Civil Case

No. 1))-.

SO ORDERED.

Petitioners S AND SE00ED "?RISPR?DENCE >EN I0 ILE>ISE

DEE0ED IN I0S DISP?0ED DECISION 0E A>ARD O; DA:A*ES, A00ORNEHS ;EES AND

COS0 O; S?I0 IN ;A+OR O; 0E PE0I0IONERS.

0he petition has no 5erit.

0he validit# of an acco55odation 5ort/a/e is allowed under Article $& of the Civil

Code which provides that MFtGhird persons who are not parties to the principal o6li/ation

5a# secure the latter 6# pled/in/ or 5ort/a/in/ their own propert#.M An acco55odation

5ort/a/or, ordinaril#, is not hi5self a recipient of the loan, otherwise that would 6econtrar# to his desi/nation as such.!&

In this case, petitioners denied havin/ e9ecuted an acco55odation 5ort/a/e and

clai5ed to have e9ecuted the RE: to secure onl# their P$&,&&&.&& loan and not

the P!,!,&8.&& personal inde6tedness of O6ispo. 0he# clai5ed it was O6ispo who


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a5ount of P$&,&&&.&& to O6ispo, petitioners discovered that the RE: secured a 6i//er

a5ount. 3ecause of the alle/ed fraud co55itted upon the5 6# O6ispo who 5ade the5

si/n the RE: for5 in 6lan7, petitioners sou/ht to have the RE: annulled and their title

over the 5ort/a/ed propert# released 6# ;E30C. In other words, since their consent to

the RE: was vitiated, Budicial declaration of its nullit# is in order. 0he

R0C /ranted relief to petitioners while the CA found the su6Bect RE: as a valid third)part#

or acco55odation 5ort/a/e due to petitioners failure to su6stantiate their alle/ationswith the re=uisite =uantu5 of evidence.

>e sustain the decision of the CA.

In civil cases, 6asic is the rule that the part# 5a7in/ alle/ations has the 6urden of

provin/ the5 6# a preponderance of evidence. :oreover, parties 5ust rel# on the

stren/th of their own evidence, not upon the wea7ness of the defense oered 6# their

opponent. 0his principle e=uall# holds true, even if the defendant had not 6een /iven the

opportunit# to present evidence 6ecause of a default order. 0he e9tent of the relief that

5a# 6e /ranted can onl# 6e as 5uch as has 6een alle/ed and proved with preponderant

evidence re=uired under Section ! of Rule !-- of the Revised Rules on Evidence.!!

Preponderance of evidence is the wei/ht, credit, and value of the a//re/ate evidence on

either side and is usuall# considered to 6e s#non#5ous with the ter5 M/reater wei/ht of

the evidenceM or M/reater wei/ht of the credi6le evidence.M Preponderance of evidence is

a phrase which, in the last anal#sis, 5eans pro6a6ilit# of the truth. It is evidence which is

5ore convincin/ to the court as worthier of 6elief than that which is oered in opposition

thereto.!$

As to fraud, the rule is that he who alle/es fraud or 5ista7e aectin/ a transaction 5ust

su6stantiate his alle/ation, since it is presu5ed that a person ta7es ordinar# care of hisconcerns and that private transactions have 6een fair and re/ular.!- 0he Court has

stressed ti5e and a/ain that alle/ations 5ust 6e proven 6#)u*+e-

e!e+e 6ecause 5ere alle/ation is de


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6ein/ aware of the a6sence of an# docu5ent to ascertain if O6ispo indeed


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6eforehand of the entire a5ount of the loan nor should it ith the dearth of evidence to 6ac7 up petitioners stor#, the CA found i5plausi6le the

alle/ed le/al in


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Fro a !+a-o), -/e aure o !ee!a- Ob)o -o ay /) oa re)u-e! -o

-/e re5u!+e o a-6)aeee) /+/ ay /ae e! -/e -o !)o -/e

Rea E)-a-e Mor-ae -/ey ee+u-e! aor o !ee!a-aea- FE#$& -o

a++oo!a-e -/e oa o !ee!a- Ob)o.! 'E5phasis supplied(

At this Buncture, we underscore anew that the Court has alwa#s 5aintained its

i5partialit# as earl# as in the case of Vales v. Villa,$& and has warned liti/ants that

9 9 9 0he law furnishes no protection to the inferior si5pl# 6ecause he is inferior an#5ore than it protects the stron/ 6ecause he is stron/. 0he law furnishes protection to6oth ali7e to one no 5ore or less than the other. It 5a7es no distinction 6etween the

wise and the foolish, the /reat and the s5all, the stron/ and the wea7. 0he foolish 5a#

lose all the# have to the wise@ 6ut that does not 5ean that the law will /ive it 6ac7 to

the5 a/ain. Courts cannot follow one ever# step of his life and e9tricate hi5 fro5 6ad

6ar/ains, protect hi5 fro5 unwise invest5ents, relieve hi5 fro5 one)sided contracts, or

annul the eects of foolish acts. 9 9 9$!

0here 6ein/ valid consent on the part of petitioners as acco55odation 5ort/a/ors, no

reversi6le error was co55itted 6# the CA in reversin/ the trial courts decision which

declared the RE: as void and awarded da5a/es to petitioners.

A preponderance of the evidence is essential to esta6lish the invalidit# of a 5ort/a/e,

and it has 6een said that clear and convincin/ proof is necessar# to show fraud, duress,

or undue inuence.$$ An# relevant and 5aterial evidence otherwise co5petent is

ad5issi6le on the issue of the validit# of a 5ort/a/e.$- Petitioners utterl# failed to

present relevant evidence to support their factual clai5s and oered no e9planation

whatsoever. Such o5ission is fatal to their cause.

:;EREFORE, the petition for review on certiorari is "ENIE" for lac7 of5erit.1âwphi1 0he Decision dated "anuar# $%, $&!& of the Court of Appeals in CA)*.R.C+ No. $-% is here6# AFFIRME" a! UP;EL".

>ith costs a/ainst the petitioners.

SO ORDERED.

http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt19http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt20http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt21http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt22http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt19http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt20http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt21http://www.lawphil.net/judjuris/juri2013/feb2013/gr_193804_2013.html#fnt22


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44.


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FRAN&IS&O REAL$' (S &A, GR 12


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OLEA (S &A 247 S&RA 274

Oea ). &A

Fa+-)=On $% "anuar# !4% spouses ;iloteo Pacardo and Severa de Pacardo e9ecuted a deed ofSale Con Pacto de Retro over ot No. %8% of the Passi Cadastre covered 6# 0ransferCerti


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;e!= No, Sale was an E=uita6le :ort/a/e.>e cannot sustain petitioner. Art. !8&$ of the New Civil Code provides that the contractof sale with ri/ht to repurchase shall 6e presu5ed to 6e an e=uita6le 5ort/a/e in an# ofthe followin/ cases 'a( when the price of the sale is unusuall# inade=uate@ '6( when thevendor re5ains in possession aslessee or otherwise@ 'c( when upon or after the e9piration of the ri/ht to repurchaseanother instru5ent e9tendin/ the period of rede5ption or /rantin/ a new period ise9ecuted@ 'd( when the purchaser retains for hi5self a part of the purchase price@ 'e(

when the vendor 6inds hi5self to pa# the ta9es on the thin/ sold@ and, 'f( in an# othercase where it 5a# 6e fairl# inferred that the real intention of the parties is that thetransaction shall secure the pa#5ent of a de6t or the perfor5ance of an# othero6li/ation. 3ein/ re5edial in nature, Art. !8&$ 5a# 6e applied retroactivel# to casesprior to the eectivit# of the New Civil Code 3 ence it 5a# appl# to the instant casewhere the deed of sale with ri/ht to repurchase was e9ecuted on $% "anuar# !4%.It has 6een held that a contract should 6e construed as a 5ort/a/e or a loan instead of a pacto de retro sale when its ter5s are a56i/uous or the circu5stances surroundin/ itse9ecution or its perfor5ance are inco5pati6le or inconsistent with the theor# that it is asale

Even when a docu5ent appears on its face to 6e a sale with pacto de retro the owner ofthe propert# 5a# prove that the contract is reall# a loan with 5ort/a/e 6# raisin/ as anissue the fact that the docu5ent does not e9press the true intent and a/ree5ent of theparties. In this case, parol evidence then 6eco5es co5petent and ad5issi6le to provethat the instru5ent was in truth and in fact /iven 5erel# as a securit# for the repa#5entof a loan.

In pacto de retro sale the pa#5ent of the repurchase price does not 5erel# render thedocu5ent null and void 6ut there is the o6li/ation on the part of the vendee to sell 6ac7the propert#.

0his is so 6ecause pacto de retro sales with the strin/ent and onerous eects thatacco5pan# the5 are not favored. In case of dou6t, a contract purportin/ to 6e a salewith ri/ht to repurchase shall 6e construed as an e=uita6le 5ort/a/e.

Such stipulation that the ownership of the propert# would auto5aticall# pass to thevendee in case no rede5ption was eected within the stipulated period is void for 6ein/a pactum commissorium which ena6les the 5ort/a/ee to ac=uire ownership of the5ort/a/ed propert# without need of foreclosure. Its insertion in the contract is an avowalof the intention to 5ort/a/e rather than to sell the propert#.

Conse=uentl#, there was no valid sale to :aura Pala6rica. Ownership over the propert#was not transferred to her for she was 5erel# a 5ort/a/ee. 0here 6ein/ no title to theland that Pala6rica ac=uired fro5 the spouses ;iloteo and Severa Pacardo, it follows thatPala6rica had no title to the sa5e land which could 6e conve#ed to petitioner. 1< encethere is no le/al 6asis for petitioner to recover possession of the propert#.

Sps. Pacardo still /ave the !- of the produce until !% which is e=ual to the interest onthe rent. Case for recover# was


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4>.

For- #Oa+o "e?- &or ) 'a) Le! a! Lauraya

F#"& ). 'LLAS LEN"ING &ORP

G.R. No. 1, 2008

FA&$S= ;OR0 3ONI;ACIO DE+EOP:EN0 CORP. ' ;3DC( e9ecuted a lease contract in

favor of 0irreno, Inc. over a unit at the 3onifacio *lo6al Cit# in 0a/ui/, :etro :anila. 0he

parties had the lease contract notari2ed on the da# of its e9ecution. 0irreno used the

leased pre5ises for Savoia Ristorante and a Stre/a 3ar.

Due to 0irrenos alle/ed failure to settle its outstandin/ o6li/ations, ;3DC entered and

occupied the leased pre5ises. ;3DC also appropriated the e=uip5ent and properties left

6# 0irreno pursuant to Section $$ of their Contract of ease as partial pa#5ent for

0irrenos outstandin/ o6li/ations.

In $&&$, Hllas endin/ Corporation caused the sheri of the trial court to serve an alias

writ of sei2ure a/ainst ;3DC. ;3DC found out that in $&&!, respondents


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;3DC =uestioned the propriet# of the sei2ure and deliver# of the properties to

respondents without an inde5nit# 6ond 6efore the trial court, which decided a/ainst

;3DC. It stated that

!. Section $$ of the lease contract 6etween ;3DC and 0irreno is void under Article $&

of the Civil Code.

$. ;3DC should have


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?pon the ter5ination of this Contract or the e9piration of the ease Period without the

rentals, char/es andor da5a/es, if an#, 6ein/ full# paid or settled, the ESSOR shall

have the ri/ht to retain possession of the properties of the ESSEE used or situated in

the eased Pre5ises and the ESSEE here6# authori2es the ESSOR to oset the

prevailin/ value thereof as appraised 6# the ESSOR a/ainst an# unpaid rentals, char/es

andor da5a/es. If the ESSOR does not want to use said properties, it 5a# instead sell

the sa5e to third parties and appl# the proceeds thereof a/ainst an# unpaid rentals,

char/es andor da5a/es.

Articles $& and $&- of the Civil Code enu5erate -/e re@u)-e) e))e-a -o a

+o-ra+- o e!e=

'!( the pled/e is constituted to secure the ful


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the personal properties. Since Section $$ is not a contract of pled/e, there is no pactum

commissorium.

On the other hand, Article !$4 of the Civil Code de


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-. HES. Pursuant to Section !4 of Rule %, the sheri is not o6li/ated to turn over to

respondents the properties su6Bect of this case in view of respondents failure to


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the leased pre5ises, there6# cancellin/ the contract of su6)lease. Resort to Budicial

action is necessar# onl# in the a6sence of a special provision /rantin/ the power of

cancellation.!4

A lease contract 5a# contain a forfeiture clause. In the sa5e 5anner, we allow ;3DCs

forfeiture of 0irrenos properties in the leased pre5ises. 3# a/ree5ent 6etween ;3DC

and 0irreno, the properties are answera6le for an# unpaid rent or char/es at an#

ter5ination of the lease. Such a/ree5ent is not contrar# to law, 5orals, /ood custo5s,

or pu6lic polic#. ;orfeiture of the properties is the onl# securit# that ;3DC 5a# appl# in

case of 0irrenos default in its o6li/ations

47.

P;ILNI&O (S PRI(A$IA$IONB

Civil $aw% Pledge% Pactum Commissorium% &here are two elements 'or pactumcommissorium to e(ist and are present in this case) *1+ that there should ,e a pledge ormortgage wherein a property is pledged or mortgaged ,y way o' security 'or the payment o' the principal o,ligation% and *-+ that there should ,e a stipulation 'or anautomatic appropriation ,y the creditor o' the thing pledged or mortgaged in the event o' nonpayment o' the principal o,ligation within the stipulated period.

LEONAR"O "E &AS$RO, C.D

FA&$S= 0he Privati2ation and :ana/e5ent Oce 'P:O( is a holder of shares of stoc7 of

Philnico Processin/ Corporation 'PPC(. 0he two entities, to/ether with Philnico Industria

Corporation 'PIC( entered into a contract 7nown as A5ended and Restated De


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a Co5plaint for Prohi6ition a/ainst Reversion of Shares with Pra#er for >rit of Preli5inar#

InBunction and or 0RO a/ainst P:O and PPC. 0he R0C /ranted the >rit of Preli5inar#

InBunction rulin/ that the ipso facto reversion is pactu5 co55issoriu5 thus ille/al. ?pon

appeal, the CA denies the presence of pactu5 co55issoriu5 rulin/ that the ARDA is a

separate and distinct contract of sale and does not pertain to the Pled/e A/ree5ent 6ut

still declared the ipso facto reversion as invalid as contrar# to law, 5orals, /ood custo5s

pu6lic order and pu6lic polic#. ence, the instant petitions.

ISSUE= >hether or not the ipso facto reversion of the PPC shares of stoc7 to P:O in caseof default 6# PIC constitutes pactu5 co55issoriu5.

;EL"= AFFIRMA$I(E. Pactu5 co55issoriu5 is de


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48.

'ULIONGSUI (S PN#


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49.


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&AL$E (S &A

In !$, An/el de la Cru2 o6tained certi


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depositor in each C0D. On the wordin/s of the docu5ents, therefore, the a5ounts

deposited are repa#a6le to whoever 5a# 6e the 6earer thereof.

0he character of the transaction 6etween the parties is to 6e deter5ined 6# their

intention, re/ardless of what lan/ua/e was used or what the for5 of the transfer was. If

it was intended to secure the pa#5ent of 5one#, it 5ust 6e construed as a pled/e@ 6ut if

there was so5e other intention, it is not a pled/e. owever, even thou/h a transfer, if

re/arded 6# itself, appears to have 6een a6solute, its o6Bect and character 5i/ht still 6e

=uali


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On "anuar# -!, !%-, petitioner Inocente eonardo with the consent of his wife e9ecuted

in favor of their #oun/est son, private respondent 0ro#ano +. eonardo, a Deed of Sale

with Assu5ption of a Real Estate :ort/a/e Plus a Ri/ht to Repurchase with the followin/

pertinent stipulations, to wit

0hat for and in consideration of the assu5ption 6# the +endee of the

fore/oin/ o6li/ation in favor of the Develop5ent 3an7 of the Philippines, the

+endor here6# SES, 0RANS;ERS and CON+EHS unto the said +endee, hisheirs, successors or assi/ns, the a6ove descri6ed parcel of land

i5prove5ents su6Bect to the e9istin/ 5ort/a/e in favor of the Develop5ent

3an7 of the Philippines.

0hat the +endor reserves the ri/ht to repurchase fro5 the +endee, the

western ONE)A; '!$( portion of the a6ove)descri6ed parcel of land within

a period of SE+EN '%( HEARS fro5 and after the e9ecution of this instru5ent

6# pa#in/ to the +endee an a5ount e=uivalent to 0IR0H)0REE 0O?SAND

;O?R ?NDRED SE+EN0H);I+E a &!&& PESOS 'P--,4%.&(, plus interest at

the rate of !$X per annum and one half of whatever e9penses, includin/land ta9es, the +endee shall incur in connection with the sale of the

fore/oin/ lot and which he 5a# thereafter incur. 4

Said docu5ent was re/istered with the Oce of the Re/ister of Deeds of Ce6u Cit# on

:a# $!, !%8.

On ;e6ruar# , !&, private respondent ith reference to the notarial Deed of Sale, with Assu5ption of Real Estate

:ort/a/e Plus a Ri/ht of Repurchase, relative to one)half '!$( portion of ot

No. !4!4)3, I 6e/ to infor5 #ou that I will e9ercise 5#

ri/ht to repurchase fro5 #ou the said one)half '!$( portion of said ot No.

!4!4)3, as /ranted to 5e in said notarial docu5ent.

Hour wife has /iven 5e a detailed state5ent of the a5ount that I will

repurchase fro5 #ou said !$ portion of ot No. !4!4)3 with !$X interest per


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annum, a 9ero9 cop# of said detailed state5ent is herewith enclosed, asAnne9 MAM hereof.

Accordin/ to said detailed state5ent, Anne9 MAM, 5# total repurchase

account with #ou a5ounts to P%4,&&4.$, as of "anuar# -!, !&.

I a5 now tenderin/ 5# repurchase pa#5ent to #ou in the su5 of P%4,&&&.&&

as per enclosed China 3an7in/ Corporation Chec7 No.R:S)!8!)A 6elon/in/ to :rs. ourdes e#son pa#a6le to 5e 6ut which I

have endorsed the sa5e for pa#5ent to #ou. 0he dierence of P4.$ will 6e

paid to #ou at an# ti5e.

Please, therefore, the ne9t 5ove is for #ou to e9ecute in 5# favor the Deed

of Repurchase fro5 #ou of the !$ portion of said ot No. !4!4)3 within the

earliest ti5e possi6le. 9

On ;e6ruar# !8, !&, the counsel of private respondent sent a letter reBectin/

petitionerVs oer and returned the latterVs chec7 on the /round that the period to

repurchase su6Bect propert# had alread# e9pired. 10

0hereafter or on :arch 4, !&, petitioner spouses alle/ed in their Answer that the

consolidation in favor of the private respondent could not 6e le/all# eected 6ecause

the# have alread# tendered the purchase price and that the Deed of Sale with

Assu5ption Plus the Ri/ht to Repurchase did not e9press the true intention of the parties

inas5uch as the entire ot No. !4!4)3 and not 5erel# one)half '!$( portion thereof shall

6e the su6Bect of the repurchased a/ree5ent.

On "ul# !$, !&, petitioner Cristina eonardo died and was su6stituted 6# her children,

oren2o eonardo, +isitacion eonardo Asuncion and :ar/arita eonardo 3ernalconstrainin/ petitioners to


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IN +IE> O; 0E ;ORE*OIN*, Bud/5ent is here6# rendered /rantin/ the

herein a5ended petition, and the Re/ister of Deeds for the Cit# of Ce6u is

here6# ordered and directed to record and re/ister the MDeed of Sale >ith

Assu5ption of Real Estate :ort/a/e, Plus a Ri/ht of RepurchaseM in said

Oce and to issue the correspondin/ 0ransfer CertiERE;ORE, EEN 0E ;A0ER,

PE0I0IONER INOCEN0E EONARDO, AND 0E SON, RESPONDEN0 0ROHANO +.

EONARDO, >AS ONE O; SAE OR :OR0*A*EQ

$. >E0ER OR NO0 0E ORDER O; EKEC?0ION ISS?ED 3H 0E 0RIA CO?R0 ANDA;;IR:ED 3H 0E ONORA3E CO?R0 O; APPEAS >AS +AIDH ISS?EDQ 14

Durin/ the pendenc# of this case or on Nove56er !, !&, petitioner Inocente eonardo

also died. 1<

0he petition is without 5erit.


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0he issues raised in this case principall# involve =uestions of fact and the settled rule is

that


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>hat is, therefore, apparent fro5 the docu5ent of sale with ri/ht to

repurchase is that in consideration of petitionerVs assu5ption of respondentVs

o6li/ation with the D3P, respondents ceded one)half of the propert# to

petitioner while the latter /ranted respondents a period of seven '%( #ears to

repurchase the other half for the sa5e a5ounts paid 6# hi5 to the D3P,

includin/ the interests thereon.

*iven these considerations which are apparent fro5 the ter5s of thea/ree5ent and the cardinal rule of interpretation that where the ter5s of the

contract are clear and leave no dou6t upon the intention of the contractin/

parties, the literal 5eanin/ of its stipulation shall control 'Article !-%&, New

Civil Code(. >e hold that the Deed of Sale with Assu5ption of :ort/a/e Plus

a Ri/ht to Repurchase 'E9h. A( is what it purports to 6e a sale with ri/ht to

repurchase one)half of the propert# and not a 5ort/a/e, real or e=uita6le, as

6elatedl# clai5ed 6# respondents.

It is funda5ental that contracts are to 6e interpreted accordin/ to their literal

5eanin/ when the ter5s and conditions are clear and leave no dou6t as to

the intention of the contractin/ parties '*on2ales vs. Court of Appeals, !$4

SCRA 8-& F!-G(. 0hus, if the ter5s of the pacto de retro sale are clear andthe contract is not assailed as false nor its authenticit# challen/ed, the literal

sense of its ter5s shall 6e /iven eect 'OrdoYe2 vs. +illaro5an, % Phil. !!8(.

0he clai5 6# respondents in their A5ended Answer to the

A5ended Petition that the transaction is an e=uita6le 5ort/a/e is a 5ere

afterthou/ht. 17

It is clear fro5 the ter5s of the contract that the a/ree5ent entered into 6etween the

parties is one of a sale with assu5ption of real estate 5ort/a/e with ri/ht to repurchase.Said contract provides that the vendor 'herein petitioners( has the power to redee5 the

su6Bect propert# within seven '%( #ears fro5 the e9ecution of the docu5ent on "anuar#

-!, !%-, or on "anuar# -!, !&. 0hus, when private respondent received the letter of

his father, Inocente, on ;e6ruar# !$, !& si/nif#in/ his intention to e9ercise his ri/ht to

repurchase one)half '!$( portion of the propert# in =uestion, the period to repurchase,

per their contract, had alread# e9pired.

Article !8&8 para/raph '-( of the New Civil Code, allowin/ the vendor thirt# '-&( da#s

fro5 the ti5e


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tenderin/ for that purpose the su5 of P%4,&&&.&& as his repurchase pa#5ent for said

propert#. :oreover, petitioners denied the true nature of their a/ree5ent onl# after

private respondent ith respect to petitionersV contention that the trial court erred in orderin/ the e9ecution

of the decision despite the pendenc# of the appeal, this 5atter was correctl# resolved 6#

the respondent appellate court, in this wise

;inall#, the power to /rant or den# a 5otion for e9ecution is discretionar#

with the court, unless it is prevented 6# a preli5inar# inBunction issued 6# a

hi/her court. Accordin/l#, the appellate court will not interfere to 5odif#,

control or in=uire into the e9ercise of this discretion, unless it 6e shown that

there has 6een an a6use thereof, or that, since the issuance of the order,

conditions have so far chan/ed as to necessitate the intervention of the

appellate court to protect the interests of the parties a/ainst contin/encies

which were not, or could not have 6een conte5plated 6# the trial Bud/e at

the ti5e of the issuance of the order. 18

>ERE;ORE,


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;IRS0 DI+ISION

G.R. No. 1499. May 28, 2004H

P;ILIPPINE NA$IONAL #AN%, petitioner, vs. R#L EN$ERPRISES, IN&.D RAMON #.

LA&SON SR.D a! Sou)e) E":AR"O a! ;ERMINIA

LE"ESMA, respondents.

" E & I S I O N

PANGANI#AN, J.:

avin/ released


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'a( So5eti5e in !%, FrespondentsG opened a prawn hatcher# in San Enri=ue,

Ne/ros Occidental, and for this purpose, leased fro5 Nell# 3edreBo a parcel of

land where the operations were conducted@

'6( In order to increase productions and i5prove the hatcher# facilities,

FrespondentsG applied for and was approved a loan of P$,&&&,&&&.&&, 6#

FPetitionerG PN3. 0o secure its pa#5ent, FrespondentsG e9ecuted in favor of

PN3, a real estate 5ort/a/e over two '$( parcels of land, located at 3a/o Cit#,Ne/ros Occidental, covered 6# 0ransfer Certi


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the foreclosure proceedin/s includin/ the auction sale of the properties of the

FrespondentsG su6Bect 5atter of the real FestateG and chattel 5ort/a/es.F4G

0he Re/ional 0rial Court 'R0C( ruled that Philippine National 3an7 'PN3( had 6reached

its o6li/ation under the Contract of oan and should therefore 6e held lia6le for the

conse=uential da5a/es suered 6# respondents. 0he trial court held that PN3s refusal to

release the 6alance of the loan was unBusti


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Estate and Chattel :ort/a/e and considerin/ further that respondents authorit#

to 5ort/a/e the lessors propert# and leasehold ri/hts are annotated FonG the

titles of the 5ort/a/eFdG properties.

#.

>hether or not the Court of Appeals erred in holdin/ Petitioner PN3 lia6le for

actual, 5oral and e9e5plar# da5a/es as well as attorne#s fees for the non)release of the 6alance of the loan applied 6# respondents even thou/h there is no

evidence that such non)release was attended 6# 5alice or 6ad faith. F8G

Si5pl# put, the issues are as follows !( whether the non)release of the 6alance of

the loan 6# PN3 is Busti


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9 9 9. In the instant case, there is a clear and cate/orical showin/ that when the parties

have


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/oes. ?nder Article $!$ of the sa5e Code, the 5ort/a/e on the propert# 5a# still 6e

foreclosed despite the transfer.

Indeed, even if the 5ort/a/ed propert# is in the possession of the de6tor, the

creditor is still protected. 0o protect the latter fro5 the for5ers possi6le disposal of the

propert#, the chattel 5ort/a/e is 5ade eective a/ainst third persons 6# the process of

re/istration.

PN3 violated the oan A/ree5ent when it refused to release the P!,&&&,&&&

6alance. As re/ards the partial release of that a5ount, over which respondents e9ecuted

three Pro5issor# Notes, the 6an7 is dee5ed to have co5plied with its reciproca

o6li/ation. 0he Pro5issor# Notes co5pelled the5 to pa# that initial a5ount when it fell

due. 0heir failure to pa# an# overdue a5orti2ations under those Pro5issor# Notes

rendered the5 lia6le thereunder.

#$ect of %ailure of Consideration

Since PN3 failed to release the P!,&&&,&&& 6alance of the loan, the Real Estate and

Chattel :ort/a/e Contract 6eca5e unenforcea6le to that e9tent. Relevantl#, we =uotethis Courts rulin/ in Central Ban o' the Philippines v. Court o' Appeals F!!G

0he consideration of the accessor# contract of real estate 5ort/a/e is the sa5e as that

of the principal contract. ;or the de6tor, the consideration of his o6li/ation to pa# is the

e9istence of a de6t. 0hus, in the accessor# contract of real estate 5ort/a/e, the

consideration of the de6tor in furnishin/ the 5ort/a/e is the e9istence of a valid,

voida6le, or unenforcea6le de6t.

9 9 9 9 9 9 9 9 9

F>Ghen there is partial failure of consideration, the 5ort/a/e 6eco5es unenforcea6le to

the e9tent of such failure. >here the inde6tedness actuall# owin/ to the holder of the

5ort/a/e is less than the su5 na5ed in the 5ort/a/e, the 5ort/a/e cannot 6e enforced

for 5ore than the actual su5 due.F!$G

Se+o! I))ue=

Propriet& of '(ard for )a*a"es

and 'ttorne&s %ees

In reducin/ the award for actual da5a/es fro5 P,%$$.! to P-&,%!-., the CA

e9plained

0he alle/ed proBected cash ow and net inco5e for the )#ear period of operations were

not su6stantiated 6# an# other evidence to sucientl# esta6lish the attaina6ilit# of the

proBection. No evidence was also introduced to show the accounts pa#a6le of and other

e9penses incurred 6# FrespondentsG. 0he court a 6uo therefore, erred when it ruled that

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FrespondentsG incurred actual da5a/es and losses a5ountin/ to P,%$$.! fro5 !&

to !$, when no evidence was presented to esta6lish the sa5e.

Co5pensator# or actual da5a/es cannot 6e presu5ed. 0he# cannot 6e allowed if there

are no speci


44/106

loan has co5pelled respondents to institute an action for inBunction and da5a/es in

order to protect their clear ri/hts and interests.

:;EREFORE, the Petition is PAR&$> 3RAN&?. 0he assailed Decision ishere6# A==;R7?, with the 7@?;=;CA&;@N that the award of actual and e9e5plar#da5a/es is deleted. No costs.

SO OR"ERE".

PN# (S SPOUSES MARANON

;acts

A !$ s=uare 5eter lot in downtown 3acolod with a 6uildin/ leased to various tenants

was su6Bected to a loan and 5ort/a/e 6# Spouses :onteale/re with Philippine National

3an7. 0he propert# was under the na5e of E5olie:ontale/re under 0C0 !8!$. 0he

Spouses :onteale/re failed to pa# the loan and PN3 foreclosed on said lot and 6uildin/.

Durin/ auction sale PN3 was the hi/hest 6idder on Au/ust !8, !!, then was issued a

Certi


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Current controvers# is the rental 5onies deposited. :araYons ithdrawal of Deposited Rental for the P!44,&&& and P-&,&&& deposited 6# 0olete. 0he

R0C /ranted the 5otion for 6oth rental pa#5ents 6ecause the Spouses are the ri/htful

owners and the# are entitled to the civil fruits of their propert#. 0he R0C issued Orders to

return the P-&,&&& to the Spouses.

PN3 dissented sa#in/ the 5ort/a/e lien was decided to 6e respected and the# areentitled to 6oth the P!44,&&& and the P-&,&&& rental pa#5ents and hether or not the CA erred in reversin/ the R0C decision that PN3 was a 5ort/a/ee

in /ood faith.

eld

Z! No.

Rent as an accessor# follows the principal is the /eneral rule. Nor5all# when the

principal propert# is 5ort/a/ed and there is failure of the 5ort/a/or to pa#, the fruits

pass on to the 5ort/a/ee as accorded 6# the Article $!$% of the Civil Code. 3ut this is

su6Bect to =ual


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Z$ Hes

0he R0C has alread# deter5ined that PN3 was a 5ort/a/or in /ood faith and was /iven


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5ort/a/ed in case of non)pa#5ent of the principal o6li/ation within the stipulated

period.- +illars purchase of the su6Bect propert# did not violate the prohi6ition on

pactu5co55issoriu5. 0he power of attorne# provision a6ove did not provide that the

ownership over the su6Bect propert# would auto5aticall# pass to +illar upon *alass

failure to pa# the loan on ti5e. >hat it /ranted was the 5ere appoint5ent of +illar as

attorne#)in)fact, with authorit# to sell or otherwise dispose of the su6Bect propert#, and

to appl# the proceeds to the pa#5ent of the loan.4& 0his provision is custo5ar# in

5ort/a/e contracts, and is in confor5it# with Article $&% of the Civil Code, which reads

Art. $&%. It is also of the essence of these contracts that when the principal o6li/ation

6eco5es due, the thin/s in which the pled/e or 5ort/a/e consists 5a# 6e alienated for

the pa#5ent to the creditor.

*alass decision to eventuall# sell the su6Bect propert# to +illar for an additional

P!,&&,&&&.&& was well within the scope of her ri/hts as the owner of the su6Bect

propert#. 0he su6Bect propert# was transferred to +illar 6# virtue of another and separate

contract, which is the Deed of Sale. *arcia never alle/ed that the transfer of the su6Bect

propert# to +illar was auto5atic upon *alass failure to dischar/e her de6t, or that the

sale was si5ulated to cover up such auto5atic transfer.


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&AU#ANG (S &RISOLOGO

&he =acts)

0he Spouses "esus and Nanette 'Crisolo/o( 5ort/a/ed their propert# covered 6# 0C0 No.

0)!!!&- to secure their loan fro5 the PDCP Develop5ent 3an7. ;or failure to pa#

co5pletel# their loans, the 6an7 sent the5 a detailed 6rea7down of their outstandin/

o6li/ation, hence the# wrote 6ac7 to the 6an7 proposin/ to pa# their loan in full with a

re=uest that the penalt# and interest char/es 6e waived. Nothin/ happened to the oersand counter)oers of 6oth sides until such ti5e that the 6an7 wrote the5 refusin/ their

counter)oer and de5andin/ pa#5ent of the loan now a5ountin/ to P$,$$,48.& and

6allooned to P-,&4!,$%.&& 6# Octo6er, !%. PDCP then


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the @riental ?aily (aminer is not even on the list of newspapers accredited to pu6lishle/al notices, as recorded in the Davao R0Cs Oce of the Cler7 of Court. It also has no

pa#in/ su6scri6ers and it would onl# pu6lish whenever there are custo5ers. Since there

was no proper pu6lication of the notice of sale, the Spouses Crisolo/o, as well as the rest

of the /eneral pu6lic, were never infor5ed that the 5ort/a/ed propert# was a6out to 6e

foreclosed and auctioned. As a result, PDCP 3an7 6eca5e the sole 6idder. 0his allowed

the 6an7 to 6id for a ver# low price 'P!,--!,48&.&&( and /o after the spouses for a 6i//er

a5ount as de0.

Guera #auyu- ) Pobe-e


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>1

PRU"EN$IAL #AN% (S MAR$INE

Repu6lic of the Philippines

SUPREME &OUR$

:anila

;IRS0 DI+ISION

G.R. No. L8 Se-eber 14, 1990

PRU"EN$IAL #AN%, plainti)appellee,

vs.

RENA$O M. MAR$INE a! (IRGINIA C. MAR$INE, defendants)appellants.

7agno 5 Associates 'or plaintiDEappellee.

Beltran0 Beltran 5 Beltran 'or de'endantsEappellants.

ME"IAL"EA, J.:

0his case is certi


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recover and pra# for P-,&&&.&& attorne#Vs fees plus costs of liti/ation in the a5ount of

P!,&&&.&&.

>hen the issues were Boined a pre)trial was conducted and the Court issued the followin/

pre)trial order, to wit

>ith the ad5ission in the answer of para/raphs ! to of the co5plaint, the parties

6elieved that there are no controversies as to the facts. ;ro5 the point of view of thedefendants, the# will su65it the case on the followin/ issues '!( >hether plainti can

still collect the dehether the plainti

can still collect attorne#Vs fees in its eort to recover the deER CO?R0 ERRED IN A>ARDIN* 0E S?: O; P$,&&.&& AS A00ORNEHS ;EES 0O

PAIN0I;;)APPEEE. 'AppellantsV 3rief, p. , Rollo(

Appellants ar/ue that the e/islature never intended to /rant to a 5ort/a/ee the ri/ht to

recover the de


56/106

the sa5e in a Budicial foreclosure proceedin/s@ that conse=uentl#, an e9press prohi6ition

a/ainst such clai5 would 6e =uite superuous and that 6esides, there is no need to

enu5erate ne/ative re5edies or solutions in the law. ;urther, the# aver that if

5ort/a/ees were allowed such ri/ht, the de6tors would 6e at the 5erc# of their creditors

considerin/ the su55ar# nature of e9traBudicial foreclosure proceedin/s. 0he#, li7ewise,

point to the li5ited readership of auction sale notices which lead to the sale of

5ort/a/ed properties for 5uch less than their actual value notwithstandin/ that the

5ort/a/e value of the said properties is hi/her than its fair 5ar7et value. ;inall#,appellants assail the award of attorne#Vs fees in the su5 of P$,&&.&& as unconsciona6le

0he# clai5 that the co5putation of the attorne#Vs fees should have 6een 6ased on the

ter5s of pro5issor# note which provided for a ten percent '!&X( award of the principal

o6li/ation@ and that since the attorne#Vs fees were alread# collected 6# the appellee

when it foreclosed the 5ort/a/e, such fees should no lon/er 6e awarded in this case.

'Appellants 3rief, pp. 4)!!, Rollo, p. (

>e ar5.

>e have alread# ruled in several cases that in e9traBudicial foreclosure of 5ort/a/e,

where the proceeds of the sale are insucient to pa# the de6t, the 5ort/a/ee has the

ri/ht to recover the de


57/106

personall# lia6le to the plainti, ...M It is true that this refers to a Budicial foreclosure, 6ut

the underl#in/ principle is the sa5e, that the 5ort/a/e is 6ut a securit# and not a

satisfaction of inde6tedness. ...

et it 6e noted that when the le/islature intends to foreclose the ri/ht of a creditor to sue

for an# dee fail to see an#

disadvanta/e /oin/ for the 5ort/a/or. On the contrar#, a 5ort/a/or stands to /ain with

a reduced price 6ecause he possesses the ri/ht of rede5ption. >hen there is the ri/ht to

redee5, inade=uac# of price should not 6e 5aterial, 6ecause the Bud/5ent de6tor 5a#

reac=uire the propert# or also sell his ri/ht to redee5 and thus recover the loss he clai5s

to have suered 6# the reason of the price o6tained at the auction sale 'De eon v.

Salvador, )-&%!, Dece56er $, !%& and 3erna6e v. Cru2, et al., )-!8&-, Dece56er

$, !%&@ -8 SCRA 8%(. *enerall#, in forced sales, low prices are usuall# oered and the

5ere inade=uac# of the price o6tained at the sheris sale unless shoc7in/ to the

conscience will not 6e sucient to set aside a sale if there is no showin/ that in the

event of a re/ular sale, a 6etter price can 6e o6tained 'Ponce de eon v. Reha6ilitation

;inance Corporation, )$4%!, Dece56er !, !%&, -8 SCRA $(.

astl#, >e


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>3,

SPS 'AP (S SPS "'


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>4.

SPOUSES GA$USLAO (S 'ANSON


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G.R. No. 191


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sa5e throu/h a su6se=uent sale 5ade 6# PN3. Not 6ein/ the purchaser at the pu6lic

auction sale, respondent cannot


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>ERE;ORE, the :otion for Reconsideration


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FIGt is settled that a pendin/ action for annul5ent of 5ort/a/e or foreclosure sale does

not sta# the issuance of the writ of possession. 0he trial court, where the application for

a writ of possession is


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issued e9 parte.And precisel# 6ecause of this e9 parte nature of the proceedin/s no

notice is needed to 6e served4& upon the5. It has 6een stressed ti5e and a/ain that Mthe

e9 parte nature of the proceedin/ does not den# due process to the petitioners 6ecause

the issuance of the writ of possession does not prevent a separate case for annul5ent of

5ort/a/e and foreclosure sale.M4! Conse=uentl#, the R0C 5a# /rant the petition even

without petitioners participation. Nevertheless, even if the proceedin/s in this case was

supposed to 6e e9 parte, the records of the casewould show that petitioners side on this

controvers# was actuall#heard as evidenced 6# the nu5erous pleadin/s4$


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>, R$&,

ueKo &-yD a! A"(AN&E &API$AL &ORPORA$ION, respondents.

" E & I S I O N

UISUM#ING, J.=

Petitioners see7 to annul and set aside the decisionF!G dated Dece56er $&, ! of

the Court of Appeals, which '!( ar5ed the order of the Re/ional 0rial Court of 1ue2on

Cit#, 3ranch 8, in and Re/istration Case No. 1)!!84 '( /rantin/ a writ of possession

to private respondent Advance Capital Corporation@ and '$( lifted the te5porar#

restrainin/ order issued 6# the CA on Septe56er !%, !.

0he records show that petitioner spouses ;elipe and ;lora Hulienco were the owners

of a residential house and lot located at Nos. !-8)!- 3ia7)na)3ato Street, Sta. :esa

ei/hts, 1ue2on Cit#, covered 6# 0ransfer Certihen petitioners failed to

pa# the loan in full, ACC


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-)$$! 6efore 3ranch 8! of the :a7ati R0C for inBunction, refor5ation, and da5a/es

assailin/ the validit# of the loan and the 5ort/a/e.F!%G

On Septe56er -, !, the R0C of 1ue2on Cit# /ranted the petition for writ of

possession, disposin/ as follows

ACCORDIN*H, pre5ises considered, the instant petition is here6# *RAN0ED. et a writ

of possession 6e issued over the propert# covered 6# 0ransfer CertiAH NO0 IN ACCORD >I0 A> AND

O*IC ANDOR >I0 0E APPICA3E DECISIONS O; 0IS ONORA3E CO?R0. F$-G

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At issue is whether the Court of Appeals co55itted reversi6le error in ar5in/ the

R0C decision /rantin/ the writ of possession to respondent corporation. 0o resolve this

issue, we 5ust also in=uire whether prohi6ition lies to enBoin the Re/ional 0rial Court of

1ue2on Cit# fro5 issuin/ to ACC the writ of possession over the propert# covered 6# 0C0

No. !!%4& of the 1ue2on Cit# Re/ister of Deeds.

Petitioners assail the Burisdiction of the 1ue2on Cit# R0C in ta7in/ co/ni2ance of the

present case on the /round that there is a pendin/ case in the :a7ati R0C for inBunction,refor5ation, and da5a/es i5pu/nin/ the validit# of the pro5issor# notes and 5ort/a/e

contracts used as 6asis for the foreclosure sale. 0he# li7ewise la5ent that the /rant of

the writ and the displace5ent of petitioners fro5 their residence on the 6asis of fraud

s5ac7s of deprivation of propert# without due process of law.

Petitioners contention cannot stand Budicial 5uster. Act -!-, otherwise 7nown as An

Act to Re/ulate the Sale of Propert# under Special Powers Inserted in or Anne9ed to Real

Estate :ort/a/es, 5andates that Burisdiction over a petition for a writ of possession lies

in the court of the province, cit#, or 5unicipalit# where the propert# su6Bect thereof is

situated. Section % of the said Act is clear on this 5atter, thus

SEC. %. In an# sale 5ade under the provisions of this Act, the purchaser 5a# petition the

Court of ;irst Instance Fnow Re/ional 0rial CourtG of the province or place where the

propert# or an# part thereof is situated, to /ive hi5 possession thereof durin/ the

rede5ption period, furnishin/ 6ond in an a5ount e=uivalent to the use of the propert#

for a period of twelve 5onths, to inde5nif# the de6tor in case it 6e shown that the sale

was 5ade without violatin/ the 5ort/a/e or without co5pl#in/ with the re=uire5ents of

this Act.

Since the land su6Bect of the controvers# is located in 1ue2on Cit#, the cit#s R0C

should ri/htl# ta7e co/ni2ance of the case, to the e9clusion of other courts.

Neither can this Court consider the pendenc# of Special Civil Case No. -)$$! 6efore

3ranch 8! of the :a7ati R0C a procedural o6stacle. Said action for inBunction

refor5ation, and da5a/es does not raise an issue that constitutes a preBudicial =uestion

in relation to the present case.

A preBudicial =uestion is one that arises in a case the resolution of which is a lo/ica

antecedent of the issue involved therein, and the co/ni2ance of which pertains to

another tri6unal.F$4G It /enerall# co5es into pla# in a situation where a civil action and a

cri5inal action are 6oth pendin/ and there e9ists in the for5er an issue that 5ust 6epree5ptivel# resolved 6efore the cri5inal action 5a# proceed, 6ecause howsoever the

issue raised in the civil action is resolved would 6e deter5inative


73/106

is whether the pro5issor# note and 5ort/a/e a/ree5ent e9ecuted 6etween petitioners

and private respondent ACC are valid. In the latter case, the issue is whether respondent,

ar5ed with a 0C0 in its na5e, is entitled to a writ of possession. Clearl#, the two cases

can proceed separatel# and ta7e their own direction independentl# of each other.

In the present case, petitioners cannot anchor their case on the purported interest

the# have, as owners, over the land and the i5prove5ents thereon. 0he# have 6een

stripped of their ri/hts over the propert# when, as 5ort/a/ors, the# failed to redee5 itafter foreclosure too7 place. A 5ort/a/or has onl# one #ear after re/istration of sale with

the Re/ister of Deeds within which to redee5 the foreclosed real estate. F$%G After that

one)#ear period, he loses all his interests over it. 0his is in consonance with Section % of

Repu6lic Act --%, otherwise 7nown as the *eneral 3an7in/ Act, which provides

SEC. %. In the event of foreclosure, whether Budiciall# or e9traBudiciall#, of an# 5ort/a/e

on real estate which is securit# for an# loan /ranted 6efore the passa/e of this Act or

under the provisions of this Act, the 5ort/a/or or de6tor whose real propert# has 6een

sold at pu6lic auction, Budiciall# or e9traBudiciall#, for the full or partial pa#5ent of an

o6li/ation to an# 6an7, 6an7in/, or credit institution, within the purview of this Act, shall

have -/e r/-, -/ oe year a-er -/e )ae o -/e rea e)-a-e a) a re)u- o

-/e ore+o)ure o -/e re)e+-e or-ae, -o re!ee -/e roer-y 6# pa#in/

the a5ount ell esta6lished is the rule that a-er -/e +o)o!a-o o --e -/e buyer)

ae, or aure o -/e or-aor -o re!ee, -/e r- o o))e))o be+oe)

a a--er o r/-.F$G Its issuance to a purchaser in an e9traBudicial foreclosure is 5erel#

a )-era u+-o.F$G 0he writ of possession issues as a 5atter of course upon the

e note

that petitioners reliance thereon is as awed as their citation thereof.F-$G In said case

there was a pendin/ action where the validit# of the lev# and sale of the properties in

=uestion were !re+-y u- ))ue, which is not the case here. Special Civil Case No.

-)$$! pendin/ 6efore the :a7ati R0C for refor5ation of instru5ent is not the pendin/

case as conte5plated in Cometa 6ecause '!( the sale and lev# of the propert# are not

http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/141365.htm#_ftn32


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directl# put in issue, and '$( the :a7ati R0C could not have ta7en co/ni2ance of the

foreclosure proceedin/s of the 1ue2on Cit# propert# for lac7 of Burisdiction. A direct

action for annul5ent of the foreclosure sale of the su6Bect propert# should have 6een


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>>.

GREEN ASIA &ONS$RU&$ION (S P&I LEASING

>7.


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SPS SAN$IAGO (S RURAL #AN%B

>8

MA%A$I LEASING (S :EARE(ER $E$ILE


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Fa+-)=

>earever 0e9tile :ills, Inc. e9ecuted a chattel 5ort/a/e contract in favor of :a7at

easin/ and ;inance Corporation coverin/ certain raw 5aterials and 5achiner#. ?pon

default, :a7ati easin/ earever te9tiles plant would 6e to drill out or destro# the concrete oor.

>hen the 5otion for reconsideration of :a7ati easin/ was denied 6# the Court of

Appeals, :a7ati easin/ elevated the 5atter to the Supre5e Court.

I))ue=

>hether or not the 5achiner# in suit is real or personal propert# fro5 the point of view

of the parties.

;e!=

0he said 5achiner# is a personal propert#. i7e what was involved in

the &umalad case, a house of stron/ 5aterials, 5a# 6e considered as persona

propert# for purposes of e9ecutin/ a chattel 5ort/a/e thereon, as lon/ as the parties to

the contract so a/ree and no innocent third part# will 6e preBudiced there6#, there is

a6solutel# no reason wh# a 5achiner#, which is 5ova6le in its nature and 6eco5es

i55o6ili2ed onl# 6# destination or purpose, 5a# not 6e li7ewise treated as such. 0his is

reall# 6ecause one who has so a/reed is estopped fro5 the den#in/ the e9istence of the

chattel 5ort/a/e. 0he decision of the Court of Appeals was set aside and the order of the

lower court was reinstated.


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>9.

ASSO&IA$E" INSURAN&E (S I'A

;acts

+alino +alino were the owners and possessors of a house of stron/ 5aterials in Ri2al,

which the# purchased on install5ent 6asis. 0o ena6le her to purchase on credit rice fro5

NARIC, +alino hile it is true that real estate connotes the land and the 6uildin/ constructed thereon, it

is o6vious that the inclusion of the 6uildin/, separate and distinct fro5 the land, in the

enu5eration of what 5a# constitute real properties 'Article 4!(, could onl# 5ean that a

6uildin/ is 6# itself an i55ova6le propert#. :oreover, in view of the a6sence of an#

speci


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A 6uildin/ certainl# cannot 6e divested of its character of a realt# 6# the fact that the

land on which it is constructed 6elon/s to another.

In the case at 6ar, as personal properties could onl# 6e the su6Bect of a chattel 5ort/a/e

and as o6viousl# the structure in =uestion is not one, the e9ecution of the chattel

5ort/a/e coverin/ said 6uildin/ is clearl# invalid and a nullit#. >hile it is true that said

docu5ent was correspondin/l# re/istered in Chattel :ort/a/e Re/istr# of Ri2al, this act

produced no eect whatsoever, for where the interest conve#ed is in the nature of real

propert#, the re/istration of the docu5ent in the re/istr# of chattels is 5erel# a futileact. 0hus, the re/istration of the chattel 5ort/a/e of a 6uildin/ of stron/ 5aterials

produced no eect as far as the 6uildin/ is concerned.


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70

A&ME S;OE (S &A

;AC0S

Petitioner Chua Pac, the president and /eneral 5ana/er of co)petitioner Ac5e e9ecuted

a chattel 5ort/a/e in favor of private respondent Producers 3an7 as a securit# for a loan

of P-,&&&,&&&. A provision in the chattel 5ort/a/e a/ree5ent was to this eect

MIn case the :OR0*A*OR e9ecutes su6se=uent pro5issor# note or notes either as a

renewal of the for5er note, as an e9tension thereof, or as a new loan, or is /iven an#

other 7ind of acco55odations such as overdrafts, letters of credit, acceptances and 6ills

of e9chan/e, releases of i5port ship5ents on 0rust Receipts, etc., this 5ort/a/e shall

also stand as securit# for the pa#5ent of the said pro5issor# note or notes andor

acco55odations without the necessit# of e9ecutin/ a new contract and this 5ort/a/e

shall have the sa5e force and eect as if the said pro5issor# note or notes andor

acco55odations were e9istin/ on the date thereof. 0his 5ort/a/e shall also stand as

securit# for said o6li/ations and an# and all other o6li/ations of the :OR0*A*OR to the

:OR0*A*EE of whatever 7ind and nature, whether such o6li/ations have 6eencontracted 6efore, durin/ or after the constitution of this 5ort/a/e.M

In due ti5e, the loan of P-,&&&,&&&.&& was paid. Su6se=uentl# it o6tained additional loan

totallin/ P$,%&&,&&&.&& which was also dul# paid.

Another loan was a/ain e9tended 'P!,&&&,&&&.&&( covered 6# four pro5issor# notes for

P$&,&&&.&& each, 6ut went unsettled pro5ptin/ the 6an7 to appl# for an e9traBudicial

foreclosure with the Sheri.

ISS?E

>ould it 6e valid and eective to have a clause in a chattel 5ort/a/e that purports to

li7ewise e9tend its covera/e to o6li/ations #et to 6e contracted or incurredQ

ED

No. >hile a pled/e, real estate 5ort/a/e, or antichresis 5a# e9ceptionall# secure after)

incurred o6li/ations so lon/ as these future de6ts are accuratel# descri6ed, a chattel

5ort/a/e, however, can onl# cover o6li/ations e9istin/ at the ti5e the 5ort/a/e is

constituted. Althou/h a pro5ise e9pressed in a chattel 5ort/a/e to include de6ts that

are #et to 6e contracted can 6e a 6indin/ co55it5ent that can 6e co5pelled upon, the

securit# itself, however, does not co5e into e9istence or arise until after a chattel

5ort/a/e a/ree5ent coverin/ the newl# contracted de6t is e9ecuted either 6#

concludin/ a fresh chattel 5ort/a/e or 6# a5endin/ the old contract confor5a6l# with

the for5 prescri6ed 6# the Chattel :ort/a/e aw. Refusal on the part of the 6orrower to

e9ecute the a/ree5ent so as to cover the after)incurred o6li/ation can constitute an act

of default on the part of the 6orrower of the


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NOR$;ERN MO$ORS (S &OUIA


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72

FILIN(ES$ &RE"I$ (S &A


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84/106

73

&ERNA (S &A

74


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IN"US$RIAL FINAN&E (S RAMIRE

G.R. No. L43821 May 2>, 1977

IN"US$RIAL FINAN&E &ORPORA$ION, petitioner,vs.;ON. PE"RO A. RAMIRE, Cu!e o -/e &our- o Fr)- )-a+e o Maa, a!&ONSUELO AL&O#A,respondents.

C. R. Sanche4 $aw @Fce 'or petitioner.

Salva0 Car,allo 5 Associates 'or respondent Consuelo Alco,a.

AUINO, J.:

On Dece56er 4, !%& Arnaldo Di2on sold to Consuelo Alco6a his !88 5odel Chevroletcar for P!-,!%., pa#a6le in ei/hteen 5onthl# install5ents, which were secured 6# achattel 5ort/a/e on the car.

On that sa5e date, Di2on assi/ned for ten thousand pesos to Industrial ;inanceCorporation all his ri/hts and interest in the chattel 5ort/a/e. Consuelo Alco6a defaultedin the pa#5ent of the


86/106

)))))))

Pre5iu5on car

insurance ))

88.4&

0otala5ountdue ))

P!4,&.%8

Deductpa#5ents

:arch!,!%!

)

P%-!.&8

:arch$,!%! )

%-&.

"ul#,!,

!%!)

%!8.-

Insuranceproceeds,


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!)!$)%!

4,&$-.!

Interests)

$!.%8

8,4

$!.%!

3alancestilldue ))

P%,8%

.&

vvvvvvvvv

On Nove56er $&, !%!, or less than a #ear after Industrial ;inance Corporation haddiscounted Consuelo Alco6aVs pro5issor#, note to Di2on, the corporation sued her in theCourt of ;irst Instance of :anila 'Civil Case No. -(. 0he co5plaint, a printed for5

used 6# the corporation in collection cases, is deno5inated Mreplevin with da5a/esM.

It is necessar# to scrutini2e the alle/ations of the co5plaint 6ecause of the controvers#6etween the parties as to whether, 6# 5eans of that co5plaint, Industrial ;inanceCorporation sou/ht to foreclose the chattel 5ort/a/e as conte5plated in article !44 ofthe Civil Code, for5erl# Act No. 4!$$, otherwise 7nown as the Recto Install5ent Salesaw.

It is necessar# to scrutini2e the alle/ations of the co5plaint 6ecause of the controvers#6etween the parties whether, 6# 5eans of that co5plaint, Industrial ;inance Corporationsou/ht to foreclose the chattel 5ort/a/e as conte5plated in article !44 of the Civil

Code, for5erl# Act No. 4!$$, otherwise 7nown as the Recto Install5ent Sale aw.

In its co5plaint Industrial ;inance Corporation pra#ed for alternative reliefs. 0he 5aino6Bective of its co5plaint was recover# of the 5ort/a/ed car 6# 5eans of a writ ofreplevin. It su65itted a redeliver# 6ond. ?ndou6tedl#, the 5ort/a/ee)assi/nee wantedto foreclose e(tra


88/106

P!!,&-.-, plus twelve percent interest per annum, da5a/es, and attorne#Vs fees in thesu5 of P$,%%&.. 0here was no pra#er for the foreclosure of the 5ort/a/e, a relief thatshould 6e invo7ed if the co5plaint had 6een


89/106

0hat order of denial is assailed 6# the corporation in the instant certiorari case. 0he lowercourt relied on =ilipinos ;nvestment 5 =inance Corporation vs. Ridad, ) $%84,Nove56er $, !8, -& SCRA 84. In the Ridad case, the 5ort/a/ee of a car, the price ofwhich was pa#a6le in install5ents,


90/106

Accordin/ to article !44, it is onl# when there has 6een a foreclosure that the5ort/a/or is not lia6le for an# de


91/106

7


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cancela6le contract under which thelessorpurchases or ac=uires at the instance of the

lessee heav# e=uip5ent, 5otor vehicles, industrial 5achiner#, appliances, 6usiness and

oce 5achines, and other 5ova6le propert# in consideration of the periodic pa#5ent 6#

the lessee of a


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"E #ARRE$O (S (ILLANUE(A

"E #ARRE$O, E$. AL. . (ILLANUE(A, E$. AL., 19>1J

Special Pre'erred Credits

*;mportant) See 'ull te(t o' the Resolution+

Fa+-)= Rosario Cru2ado sold all her ri/ht, title, and interest and that of her children in the

house and lot herein involved to +illanueva for P!L. 0he purchaser paid P!,&& inadvance, and e9ecuted a pro5issor# note for the 6alance. owever, the 6u#er could onl#

pa# P,&& On account of the note, for which reason the vendor o6tained Bud/5ent for

the unpaid 6alance. In the 5eanti5e, the 6u#er +illanueva was a6le to secure a clean

certi


94/106

I))ue= Appellants ar/u5ent inas5uch as the unpaid vendorVs lien in this case was not

re/istered, it should not preBudice the said appellantsV re/istered ri/hts over the propert#.

;e!= 0here is nothin/ to this ar/u5ent. Note 5ust 6e ta7en of the fact that article $$4$

of the new Civil Code enu5eratin/ the preferred clai5s, 5ort/a/es and liens on

i55ova6les, speci


95/106

77J

"#P (S NLR&

Repu6lic of the PhilippinesSUPREME &OUR$

:anila

0IRD DI+ISION

G.R. No. 9717< May 18, 1993

"E(ELOPMEN$ #AN% OF $;E P;ILIPPINES, petitioner,vs.NLR& a! NA$IONAL MINES AN" ALLIE" :OR%ERS UNION, respondents.

Chie' $egal Counsel0 ?evelopment Ban o' the Philippines 'or petitioner.

Padilla 5 Associates $aw @Fce 'or respondent.

MELO, J.:

3efore us is a petition to set aside the NRC Decision dated Nove56er $, !& 'Anne9MCM, p. 4!, Rollo(, disposin/ as follows

>ERE;ORE, PRE:ISES CONSIDERED, the appealed decision is here6# setaside and a new Bud/5ent is entered, holdin/ the Develop5ent 3an7 of thePhilippines lia6le to the co5plainants for their separation pa# to the e9tent ofthe proceed of the foreclosure sale, su,


96/106

plant owned 6# :idland Ce5ent Corporation@ that on April $%, !-, the:inistr# of a6or and E5plo#5ent thru then Deput# :inister +icenteeo/ardo, "r., ordered applicant CDCP to pa# the !% aected e5plo#eesseparation pa# e=uivalent to one)half '!$( 5onth salar# for ever# #ear ofservice@ that the e5plo#ees were paid onl# 6ased on their len/th of servicewith CDCP fro5 Au/ust !, !% up to "ul# -&, !!@ the said e5plo#ees werenot paid 'with( their separation pa# when the# were e5plo#ees ofrespondent :idland Ce5ent Corporation@ that later, respondent D3P

foreclosed and assu5ed ownership over the ce5ent plant, includin/ land,6uildin/s, 5achiner#, etc., of :idland Ce5ent Corporation@ that theindividual co5plainants are clai5in/ separation 6ene


97/106

isolation 6ut 5ust 6e read in relation to the Civil Code sche5e on classi


98/106

6efore the Mclai5s of the *overn5ent and other creditorsM 5a# 6e paid. . . .'D3P vs, NRC, supra@ pp. --%)--.(

0he NRC, therefore, erred in holdin/ D3P lia6le Mto the e9tent of the proceeds of theforeclosure sale.M And 5a7in/ such lia6ilit# dependent on a 6an7ruptc# or li=uidationproceedin/s is reall# 6eside the point, for these proceedin/s are relevant onl# topreferred credits, which is not the situation in the case at 6ar. 0o e=uate D3PVs 5ort/a/elien with a preferred credit would 6e to render inutile the protective 5antle of the

5ort/a/e in D3PVs favor and thus in the process wrea7 havoc to co55ercialtransactions.

>ERE;ORE, the petition is *RAN0ED. 0he decision of the NRC dated Nove56er $,!& and the Resolution of ;e6ruar# !, !! are here6# SE0 ASIDE, and a new Bud/5entis entered a6solvin/ Develop5ent 3an7 of the Philippines of an# and all lia6ilities toprivate respondent and its 5e56ers.

No special pronounce5ent is 5ade as to costs.

SO ORDERED.


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78J

REPU#LI& (S PERAL$A

G.R. No. L8 May 20, 1987

REPU#LI& OF $;E P;ILIPPINES, rere)e-e! by -/e #ureau o &u)-o) a! -/e#ureau o I-era Reeue, petitioner,

vs.;ONORA#LE E.L. PERAL$A, PRESI"ING CU"GE OF $;E &OUR$ OF FIRS$INS$AN&E OF MANILA, #RAN&; (II, UALI$' $A#A&&O &ORPORA$ION,FRAN&IS&O, FE"ERA&ION O#RERO "E LA IN"US$RIA $A#AUERA ' O$ROS$RA#ACA"ORES "E FILIPINAS FOI$AFJ US$& EMPLO'EES ASSO&IA$ION:OR%ERS UNIONP$G:O, respondents.

@scar A. Pascua 'or assignee =. Candelaria.

&eolo C. Villarico 'or respondent =ederation.

Pedro A. $ope4 'or respondent IS&C.

FELI&IANO, J.:

0he Repu6lic of the Philippines see7s the review on certiorari of the Order dated !%Nove56er !& of the Court of ;irst Instance of :anila in its Civil Case No. !&-entitled MIn the :atter of +oluntar# Insolvenc# of 1ualit# 0o6acco Corporation, 1ualit# 0o6acco Corporation, Petitioner,M and of the Order dated ! "anuar# !! of the sa5ecourt den#in/ the 5otion for reconsideration of the earlier Order O?S0C as separation pa# for their 5e56ers. 0his a5ount plus an additional su5 ofP$&,8%$. as attorne#Vs fees had 6een awarded 6# the National a6or RelationsCo55ission in NRC Case No. R3)I+)%%)%%. 1

'ii( P-,&.& 6# the ;ederacion de la Industria 0a6a=uera # Otros 0ra6aBadores de

;ilipinas 'M;OI0A;(, as separation pa# for their 5e56ers, an a5ount si5ilarl# awarded 6#the NRC in the sa5e NRC Case.

'iii( P!,&,!.$$ 6# the 3ureau of Internal Revenue for to6acco inspection feescoverin/ the period ! Octo6er !8% to $ ;e6ruar# !%-@

'iv( P$%8,!8!.&& 6# the 3ureau of Custo5s for custo5s duties and ta9es pa#a6le onvarious i5portations 6# the Insolvent. 0hese o6li/ations appear to 6e secured 6# suret#6onds. 2 So5e of these i5ported ite5s are apparentl# still in custo5s custod# so far asthe record 6efore this Court /oes.


100/106

In its =uestioned Order of !% Nove56er !&, the trial court held that the a6ove)enu5erated clai5s of ?S0C and ;OI0A; 'hereafter collectivel# referred to as theM?nionsM( for separation pa# of their respective 5e56ers e56odied in


101/106

entitled 6ecause, havin/ previousl# rendered services, the# are separated fro5 thee5plo#erVs service. 0he relationship 6etween separation pa# and services rendered isunderscored 6# the fact that separation pa# is 5easured 6# the a5ount 'i.e., len/th( ofthe services rendered. 0his construction is sustained 6oth 6# the speci It is alsothe construction that is su//ested 6# Article 4 of the a6or Code which directs thatdou6ts assu5in/ that an# su6stantial rather than 5erel# frivolous dou6ts re5ain)inthe interpretation of the provisions of the la6or Code and its i5ple5entin/ rules and

re/ulations shall 6e Mresolved in favor of la6or.M

0he resolution of the issue of priorit# a5on/ the several clai5s hatis 5ore, these other 'non)ta9( credits, althou/h constitutin/ liens attachin/ to particularpropert#, are not preferred one over another inter se. Provided ta9 liens shall have 6eensatis


102/106

Articles $$48 to $$4 esta6lish a two)tier order of preference. 0he rst tier includes onl#ta9es, duties and fees due on speci


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A. Clai5 of the 3ureau of Custo5s for ?npaid Custo5s Duties and 0a9es)

?nder Section !$&4 of the 0ari and Custo5s Code, !$ the lia6ilit# of an i5porter

for duties, ta9es and fees and other char/es attachin/ on i5portation constitute apersonal de6t due fro5 the i5porter to the /overn5ent which can 6e dischar/ed onl# 6#pa#5ent in full of all duties, ta9es, fees and other char/es le/all# accruin/ ;t alsoconstitutes a lien upon the articles imported which may ,e en'orced while such articles

are in the custody or su, this Court held, throu/h :r.Chief "ustice Concepcion, that the ter5 Mta9M is used in Section -! of the old 0a9 Code

not in the li5ited sense Fof 6urdens i5posed upon persons andor properties,6# wa# of contri6utions to the support of the *overn5ent, in considerationof general 6ene


104/106

It follows that the clai5 of the 3ureau of Internal Revenue for unpaid to6acco inspectionfees constitutes a clai5 for unpaid internal revenue ta9es 18 which /ives rise to a ta9lien upon all the properties and assets0 mova,le and immova,le0 o' the ;nsolvent asta(payer.Clearl#, under Articles $$4! No. !, $$4$ No. !, and $$48)$$4 of the Civil Code,this ta9 clai5 5ust 6e /iven preference over an# other clai5 of an# other creditor, inrespect of an# and all properties of the Insolvent. 19

C. Clai5s of the ?nions for Separation Pa# of 0heir :e56ers

Article !!& of the a6or Code does not purport to create a lien in favor of wor7ers ore5plo#ees for unpaid wa/es either upon all of the properties or upon an# particularpropert# owned 6# their e5plo#er. Clai5s for unpaid wa/es do not therefore fall at allwithin the cate/or# of speciall# preferred clai5s esta6lished under Articles $$4! and$$4$ of the Civil Code, e(cept to the e(tent that such claims 'or unpaid wages arealready covered ,y Article --G10 num,er H. Mclai5s for la6orersV wa/es, on the /oods5anufactured or the wor7 done@M or 6# Article --G-0 num,er Mclai5s of la6orers andother wor7ers en/a/ed in the construction, reconstruction or repair of 6uildin/s, canalsand other wor7s, upon said 6uildin/s, canals or other wor7s.M 0o the e9tent that clai5sfor unpaid wa/es fall outside the scope of Article $$4!, nu56er 8 and $$4$, nu56er -,

the# would co5e within the a56it of the cate/or# of ordinar# preferred credits underArticle $$44.

Appl#in/ Article $$4!, nu56er 8 to the instant case, the clai5s of the ?nions forseparation pa# of their 5e56ers constitute liens attachin/ to the processed leaf to6acco,ci/ars and ci/arettes and other products produced or 5anufactured 6# the Insolvent, 6utnot to other assets owned 6# the Insolvent. And even in respect of such to6acco andto6acco products produced 6# the Insolvent, the clai5s of the ?nions 5a# 6e /iveneect onl# after the 3ureau of Internal RevenueVs clai5 for unpaid to6acco inspectionfees shall have 6een satise co5e to the =uestion of what i5pact Article !!& of the a6or Code has had upon theco5plete sche5e of classie 6elieve and so hold that Article !!& of the a6or Code didnot sweep awa# the overridin/ preference accorded under the sche5e of the Civil Codeto ta9 clai5s of the /overn5ent or an# su6division thereof which constitute a lien uponproperties of the Insolvent. It is fre=uentl# said that ta9es are the ver# life6lood of/overn5ent. 0he eective collection of ta9es is a tas7 of hi/hest i5portance for thesoverei/n. It is critical indeed for its own survival. It follows that lan/ua/e of a 5uchhi/her de/ree of speci


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precisel# crafted provisions of the Civil Code. It cannot 6e assu5ed simpliciter that thele/islative authorit#, 6# usin/ in Article !!& the words Me, however, do not 6elieve that Article !!& has had no i5pact at all upon the provisionsof the Civil Code. 3earin/ in 5ind the overridin/ precedence /iven to ta9es, duties andfees 6# the Civil Code and the fact that the a6or Code does not i5press an# lien on thepropert# of an e5plo#er, the use of the phrase M


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$$44, nu56er . In respect therefore of the InsolventVs Mfree propert#, M the clai5s of the?nions will enBo#

Departm Cases 42-78

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Transcript of Departm Cases 42-78