Tag: real estate

Equitable Mortgage vs. Sale: Protecting Property Rights in Loan Agreements

In the case of Spouses John T. Sy and Leny N. Sy, and Valentino T. Sy vs. Ma. Lourdes De Vera-Navarro and Benjaemy Ho Tan Landholdings, Inc., the Supreme Court ruled that a Deed of Absolute Sale was, in fact, an equitable mortgage, thereby protecting the rights of the original landowners. The Court emphasized that even if a document appears to be an absolute sale, it can be proven to be a loan with a mortgage based on the parties’ true intentions and certain circumstances. This decision safeguards property owners from losing their land due to loan agreements disguised as sales and highlights the importance of good faith in real estate transactions.

From Loan to Loss? Unmasking an Equitable Mortgage in Zamboanga City

This case revolves around a property dispute in Zamboanga City. Spouses John and Leny Sy, along with Valentino Sy, sought to nullify a Deed of Absolute Sale involving their property, claiming it was merely an equitable mortgage securing a loan from Ma. Lourdes De Vera-Navarro. The property was later sold to Benjaemy Ho Tan Landholdings, Inc. (BHTLI). The central legal question is whether the deed was genuinely a sale or a disguised mortgage, and whether BHTLI was a buyer in good faith.

The Regional Trial Court (RTC) initially sided with the Sys, declaring the deed an equitable mortgage. However, the Court of Appeals (CA) reversed this decision, leading to the Supreme Court review. The Supreme Court, in its analysis, highlighted the critical distinction between a legitimate sale and an equitable mortgage, emphasizing the importance of intent and circumstances surrounding the transaction. The Court explained that an **equitable mortgage** arises when a contract, though lacking the typical formalities of a mortgage, clearly demonstrates the intention to secure a debt with real property.

Article 1602 of the Civil Code outlines specific instances when a contract, regardless of its denomination, is presumed to be an equitable mortgage. These include situations where the price is unusually inadequate, the seller remains in possession of the property, or any circumstance indicating the real intention was to secure a debt.

“Article 1602 of the Civil Code states that a contract shall be presumed to be an equitable mortgage, in any of the following cases:

When the price of a sale with right to repurchase is unusually inadequate;

When the vendor remains in possession as lessee or otherwise;

When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;

When the purchaser retains for himself a part of the purchase price;

When the vendor binds himself to pay the taxes on the thing sold;

In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.

”

Building on this principle, the Supreme Court underscored that the presence of even one of these circumstances is sufficient to classify a sale as an equitable mortgage. The Court noted that trial courts have the crucial role of evaluating witness testimonies and evidence to ascertain the true intent behind a transaction.

In this case, the Supreme Court identified several indicators that the purported sale was actually an equitable mortgage: The Sys remained in possession of the property, the purchase price was inadequate, De Vera-Navarro retained the supposed purchase price, and the intention was for the deed to secure the debt. The Court found it “uncanny” that De Vera-Navarro did not take possession of the property after the alleged sale. This situation aligns with the second circumstance outlined in Article 1602, where the vendor remains in possession.

Furthermore, the inadequacy of the purchase price was a significant factor. The RTC took judicial notice that similar establishments in Zamboanga City were worth significantly more than the P5,000,000 indicated in the Deed of Absolute Sale. The fact that De Vera-Navarro mortgaged the property for P13,000,000 and sold it to BHTLI for the same amount further confirmed this inadequacy. These elements highlight that the real intent was to create security for a debt.

The Court also addressed the admissibility of parol evidence, clarifying that it is indeed permissible to prove that a seemingly absolute sale was, in reality, a loan with a mortgage. This principle is vital in protecting vulnerable parties from unfair agreements. The Supreme Court further stressed that courts are inclined to construe transactions as equitable mortgages when doubts arise, favoring the lesser transmission of rights.

“x x x a document which appears on its face to be a sale-absolute x x x may be proven by the vendor x x x to be one of a loan with mortgage. In this case, parol evidence becomes competent and admissible to prove that the instrument was in truth and in fact given merely as a security for the payment of a loan. And upon proof of the truth of such allegations, the court will enforce the agreement or understanding in consonance with the true intent of the parties at the time of the execution of the contract. Sales with a right to repurchase are not favored.”

A critical aspect of the case involved the documentary evidence presented by De Vera-Navarro. Because her Formal Offer of Evidence was expunged by the RTC, the CA erred in considering these documents. The Supreme Court reiterated that evidence not formally offered has no probative value and must be excluded.

Turning to BHTLI’s claim as a buyer in good faith, the Supreme Court found this argument unconvincing. The Court emphasized that the burden of proving good faith lies with the party claiming it, and BHTLI failed to discharge this burden. The continued possession of the property by the Sys should have alerted BHTLI to investigate further. Moreover, the annotation of an adverse claim on the title before BHTLI finalized the purchase should have put them on notice of a potential issue.

The Supreme Court held that BHTLI could not claim ignorance of any infirmity, considering the prior annotation of the adverse claim. The Court concluded that BHTLI was not a buyer in good faith and, therefore, the sale to them was null and void.

FAQs

What was the key issue in this case?	The key issue was whether a Deed of Absolute Sale was genuinely a sale or an equitable mortgage, and whether the subsequent buyer, BHTLI, was a buyer in good faith.
What is an equitable mortgage?	An equitable mortgage is a transaction that, despite appearing as a sale, is intended to secure a debt. Article 1602 of the Civil Code lists several circumstances that indicate an equitable mortgage.
What are the ‘badges’ of an equitable mortgage?	The “badges” are circumstances listed in Article 1602 of the Civil Code that suggest a sale is actually an equitable mortgage, such as inadequate price or the seller remaining in possession.
What does it mean to be a buyer in good faith?	A buyer in good faith is someone who purchases property without knowledge of any defects or claims against the seller’s title. They must have acted honestly and diligently in the transaction.
Why was the Deed of Absolute Sale considered an equitable mortgage?	The Deed was deemed an equitable mortgage because the price was inadequate, the Sys remained in possession, De Vera-Navarro retained the purchase price, and the intent was to secure a debt.
Why was BHTLI not considered a buyer in good faith?	BHTLI was not a buyer in good faith because the Sys remained in possession, and an adverse claim was annotated on the title before BHTLI finalized the purchase.
Can parol evidence be used to prove a sale is actually a mortgage?	Yes, parol evidence is admissible to prove that a seemingly absolute sale was actually intended as a loan with a mortgage, allowing the court to ascertain the true agreement.
What is the significance of Article 1602 of the Civil Code in this case?	Article 1602 lists circumstances indicating an equitable mortgage. The presence of even one circumstance can convert a purported sale into an equitable mortgage.

The Supreme Court’s decision reinforces the protection afforded to property owners in loan agreements. It serves as a reminder that courts will look beyond the surface of a contract to determine the true intent of the parties. The ruling underscores the importance of conducting thorough due diligence in real estate transactions and highlights that continued possession and prior notice of claims are critical factors in determining good faith.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Spouses John T. Sy and Leny N. Sy, and Valentino T. Sy, PETITIONERS, VS. Ma. Lourdes De Vera-Navarro and Benjaemy Ho Tan Landholdings, Inc., G.R. No. 239088, April 03, 2019

April 3, 2019

Valid Assignment Prevails: Contractual Obligations Rest Solely on Transacting Parties

In Dr. Rico Vargas v. Jose F. Acsayan, Jr., the Supreme Court clarified that when a property has been validly assigned, the original owner is not liable for subsequent transactions made by the assignee. The Court emphasized that contracts bind only the parties who enter into them, and a valid assignment transfers rights and obligations to the assignee. This ruling protects original owners from liabilities arising from dealings they were not a part of, reinforcing the importance of due diligence in property transactions.

When Deeds Speak Louder: Unraveling Contractual Obligations After Property Assignment

This case revolves around a land deal gone awry in Sariaya, Quezon, entangling multiple parties in a web of claims and counterclaims. Jose F. Acsayan, Jr. sought to purchase land from the Spouses Tabangcora, who claimed ownership through a Deed of Assignment from the Spouses Vargas. Acsayan paid a substantial sum towards the property, but later discovered the land was mortgaged. He then sued the Spouses Tabangcora, the Spouses Vargas, and Stardiamond International Trading, Inc., alleging conspiracy to deprive him of the land. The central legal question is: Who bears the responsibility when a property is sold based on an assignment, and the transaction subsequently falls apart?

The factual backdrop reveals a series of transactions. The Spouses Tabangcora offered to sell a parcel of land to Acsayan for P5,950,000.00. Acsayan made a down payment by settling the Spouses Tabangcora’s debt with Land Bank of the Philippines (LBP), amounting to P4,617,293.88. Acsayan was presented with a Deed of Assignment indicating that the Spouses Vargas had ceded the property to Tavar Farm & Marketing, represented by the Spouses Tabangcora. However, Acsayan later discovered that the property was mortgaged to Stardiamond. He believed all parties conspired to defraud him and filed a complaint seeking ownership of the land, nullification of the mortgage agreement with Stardiamond, and damages.

The Regional Trial Court (RTC) initially ruled in favor of Acsayan, declaring him the absolute owner of the property and nullifying the agreement between the Spouses Tabangcora and Stardiamond. The RTC also ordered the defendants to pay moral and exemplary damages, as well as attorney’s fees. However, the Court of Appeals (CA) reversed the RTC’s decision, declaring the Spouses Vargas as the registered owners, subject to Acsayan’s attachment lien. The CA held the Spouses Vargas and Tabangcora jointly liable to pay Acsayan P4,717,293.88 plus interest. The appellate court also annulled the Agreement and Real Estate Mortgage with Stardiamond, but entitled Stardiamond to compensation for improvements made on the land.

The Supreme Court, in its analysis, delved into the validity of the Deed of Assignment. Article 1624 of the Civil Code stipulates that an assignment of rights is akin to a sale, perfected when there is a meeting of minds on the object and the price. The Court emphasized that the meeting of minds should occur between the assignor and assignee. Here, the CA invalidated the Deed of Assignment because it found no evidence of valuable consideration between the Spouses Tabangcora and Vargas. However, the Supreme Court referred to Article 1354 of the Civil Code which states that consideration is presumed unless proven otherwise. The Court emphasized that a mere assertion that there was no consideration is insufficient to overturn this presumption.

The Court noted that the Deed of Assignment explicitly stated that the Spouses Vargas assigned the property to Tavar Farm & Marketing for valuable consideration. It was incumbent upon Acsayan to prove that no consideration was exchanged. The Court found that Acsayan failed to provide sufficient evidence to rebut the presumption of consideration. Acsayan argued that the Deed of Assignment was executed so that Maximino Tabangcora could apply for a loan. The Supreme Court clarified that the motives of the parties are distinct from the cause of the contract as stated in Article 1331 of the Civil Code. Since the admitted purpose was not contrary to law or public policy, it did not invalidate the Deed of Assignment.

Acsayan also argued that the lack of registration of the Deed of Assignment indicated that the parties did not intend to be bound by it. The Court dismissed this argument, stating that the parties may have had various reasons for not registering the Deed, and that this alone did not invalidate it. The Court further addressed Acsayan’s argument regarding the Special Power of Attorney (SPA) executed by the Spouses Vargas in favor of the Spouses Tabangcora. Acsayan contended that if the Spouses Tabangcora were indeed the owners by virtue of the Deed of Assignment, there would be no need for the SPAs. The Court explained that since the title was yet to be issued in the name of Tavar Farm and Marketing, it was still necessary for the assignor to execute a SPA.

The Court highlighted a critical point: Acsayan transacted with the Spouses Tabangcora while the property was still registered under the names of the Spouses Vargas. Acsayan relied on the Deed of Assignment, which ceded the rights and interest of the registered owner to the Spouses Tabangcora. Therefore, he could not now attack the validity of the Deed of Assignment. As the Deed of Assignment was deemed valid, the subject property was effectively transferred to Tavar Farm & Marketing, represented by Maximino Tabangcora. Consequently, the contract between the Spouses Tabangcora and Acsayan was binding only between them. Since there was no privity of contract between the Spouses Vargas and Acsayan, the Spouses Vargas could not be held liable to Acsayan for any amount or interest.

Addressing the nature of the transaction between the Spouses Tabangcora and Acsayan, the Court concurred with the CA that it was not a sale. Acsayan knew from the outset that the money he provided was intended to settle the Spouses Tabangcora’s loan with LBP. Furthermore, Acsayan’s ready agreement to loan a substantial amount without collateral, enticed by the promise of a 2% monthly interest, further indicated a loan rather than a sale. Citing a precedent, the Court stated that in cases of doubt, the contract must be presumed to impose the lesser obligation. Thus, the agreement was deemed a loan contract.

Consequently, the Court ruled that Acsayan was entitled to be paid the amount the Spouses Tabangcora borrowed, including the principal and legal interest. The Court stipulated that the interest on the loan would be fixed at 12% per annum from the date of default, June 20, 2000, until June 30, 2013, and at 6% per annum from July 1, 2013, until satisfaction, in accordance with prevailing jurisprudence. The Court stated that Acsayan did not have a vested right over the property that was superior to that of Stardiamond, Libarnes, and Paranis. There was also no basis to award Acsayan moral and exemplary damages or attorney’s fees. Acsayan was only entitled to the legal interest that accrued from the loan to the Spouses Tabangcora.

FAQs

What was the key issue in this case?	The key issue was determining who is liable when a property is transacted based on a Deed of Assignment, and the subsequent transaction falls apart. The Court needed to clarify the extent of liability for the original owner after a valid assignment.
What is a Deed of Assignment?	A Deed of Assignment is a legal document that transfers rights or interests in property from one party (the assignor) to another (the assignee). It is similar to a sale, transferring ownership rights.
When is a Deed of Assignment considered valid?	A Deed of Assignment is valid when there is a meeting of minds between the assignor and assignee regarding the object (the property) and the price or consideration. Consideration is presumed unless proven otherwise.
What is the significance of consideration in a contract?	Consideration is the value or benefit that each party receives in exchange for their part of the agreement. It’s an essential element for the validity of a contract, ensuring that the agreement is not gratuitous.
Who is liable for transactions made after a valid Deed of Assignment?	After a valid Deed of Assignment, the assignee (the party receiving the rights) becomes responsible for subsequent transactions related to the property. The assignor (original owner) is generally not liable.
What was the Court’s ruling on the nature of the transaction between the Spouses Tabangcora and Acsayan?	The Court ruled that the transaction was a loan, not a sale, based on the intent of the parties and the circumstances surrounding the payment made by Acsayan. This determination affected the remedies available to Acsayan.
What interest rate was applied to the loan?	The Court applied a legal interest rate of 12% per annum from the date of judicial demand (June 20, 2000) until June 30, 2013, and 6% per annum from July 1, 2013, until full payment, consistent with prevailing jurisprudence.
What damages were awarded in this case?	The Court did not award moral or exemplary damages, or attorney’s fees. Acsayan was only entitled to the repayment of the loan principal plus legal interest.
What is privity of contract?	Privity of contract means that only the parties to a contract are bound by it and can enforce it. A third party cannot enforce a contract unless they are directly involved in the agreement.

This case serves as a reminder of the importance of thoroughly investigating property titles and ensuring proper documentation in real estate transactions. It clarifies the liability of parties involved in property assignments, emphasizing that contractual obligations primarily bind the transacting parties. It underscores the need for due diligence and understanding the nature of agreements before entering into them, especially when dealing with assignments and transfers of property rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

March 20, 2019

Land Registration: Proving Alienable and Disposable Status and Open Possession Since June 12, 1945

In D.M. Consunji, Inc. v. Republic of the Philippines, the Supreme Court affirmed the Court of Appeals’ decision denying D.M. Consunji Inc.’s (DMCI) application for land registration. The Court ruled that DMCI failed to sufficiently prove that the subject land was both part of the alienable and disposable land of the public domain and that DMCI and its predecessors-in-interest had been in open, continuous, exclusive, and notorious possession of the land since June 12, 1945, or earlier. This decision emphasizes the stringent requirements for proving land ownership through registration, particularly the necessity of demonstrating the land’s alienable and disposable status with proper documentation and establishing a clear history of possession under a claim of ownership.

From Private Claim to Public Proof: Did D.M. Consunji Establish Ownership Rights?

This case revolves around DMCI’s attempt to register title over a parcel of land located in Taguig City. DMCI claimed ownership through a Deed of Absolute Sale from Filomena D. San Pedro, asserting that both they and their predecessors had been in open, continuous, exclusive, and notorious possession of the land since June 12, 1945, or earlier. Julian Cruz, later substituted by his heirs, opposed the application, claiming ownership based on their predecessors’ occupation since the 1920s. The Republic of the Philippines, through the Office of the Solicitor General (OSG), also opposed, arguing that DMCI failed to prove the land’s alienable and disposable status and their continuous possession in the concept of an owner.

To secure land registration under Section 14(1) of Presidential Decree No. 1529, also known as the Property Registration Decree, an applicant must demonstrate that: (1) the land is part of the disposable and alienable lands of the public domain, and (2) the applicant has been in open, continuous, exclusive, and notorious possession and occupation of the land under a bona fide claim of ownership since June 12, 1945, or earlier. The burden of proof lies with the applicant to establish these requirements convincingly. The significance of the June 12, 1945 date stems from its historical context, marking the point after which open, continuous, exclusive, and notorious possession could ripen into ownership capable of judicial confirmation.

DMCI attempted to prove the alienable and disposable status of the land by presenting a Field Inspection Report from the Community Environment and Natural Resources Office (CENRO) and a Survey Plan. The report stated that the land was within the alienable and disposable zone as classified under Project No. 27-B, L.C. Map No. 2623. However, the Court found these documents insufficient. Echoing the doctrine established in Sps. Fortuna v. Republic, the Court reiterated that mere notations on survey plans are inadequate proof of a property’s alienable and disposable nature.

Mere notations appearing in survey plans are inadequate proof of the covered properties’ alienable and disposable character. The applicant, however, must also present a copy of the original classification of the land into alienable and disposable land, as declared by the DENR Secretary or as proclaimed by the President.

The Supreme Court clarified that establishing the alienable and disposable nature of the land requires presenting a copy of the original classification approved by the DENR Secretary, certified as a true copy by the legal custodian of the official records, and a certificate of land classification status issued by the CENRO or the Provincial Environment and Natural Resources Office (PENRO) based on the approved land classification. These documents serve as authoritative proof that the land has been officially released from the public domain for private ownership. This requirement ensures that only lands properly designated for private use are subject to registration, safeguarding the integrity of public land management.

Building on this principle, the Court emphasized that the CENRO report and survey plan, while indicating the land’s location within an alienable zone, do not substitute for the original classification documents. The offices preparing these documents are not the official custodians of presidential proclamations or DENR Secretary declarations classifying public land as alienable and disposable. Therefore, DMCI’s failure to present these crucial documents proved fatal to their application for land registration. Without them, the Court could not definitively conclude that the land was indeed available for private ownership.

Regarding the requirement of open, continuous, exclusive, and notorious possession since June 12, 1945, the Court found DMCI’s evidence lacking as well. The Court noted that the records lacked proof of how San Pedro’s father came to own the subject land and how she inherited it. These facts are necessary to determine the veracity of San Pedro’s claim of ownership over the subject land. The Court agreed with the CA, stating that:

evidence on record is insufficient to prove that San Pedro or her father possessed or occupied the subject land in the concept of an owner since June 12, 1945, or earlier.

The absence of such evidence undermined DMCI’s claim of continuous possession through its predecessors-in-interest. Furthermore, the Cruz heirs presented Tax Declaration No. 10845 dated October 26, 1941, which cast doubt on DMCI’s claim of continuous, open, exclusive and notorious possession. Tax declarations, while not conclusive evidence of ownership, can serve as strong indicators of possession and claim of ownership. The presence of a tax declaration from the Cruz heirs predating DMCI’s claimed period of possession further weakened DMCI’s case.

DMCI cited Victoria v. Republic, arguing that similar evidence was deemed sufficient in that case. However, the Court distinguished the present case from Victoria. In Victoria, the Court had ordered the OSG to verify the authority of the DENR officer who issued the certification and to submit a copy of the administrative order declaring the land alienable and disposable, which the OSG complied with. Crucially, in Victoria, the applicant had also submitted tax declarations dating back to 1948, demonstrating long-standing possession. The Court was convinced that the applicant had been in possession of the subject lot continuously, uninterruptedly, openly, publicly, adversely and in the concept of owners since the early 1940s. In contrast, DMCI did not present the same level of documentary support or elicit the same level of confidence from the Court regarding their possession and the land’s status.

This case highlights the importance of adhering to the stringent requirements for land registration in the Philippines. Applicants must meticulously gather and present evidence demonstrating both the alienable and disposable nature of the land and their continuous, open, exclusive, and notorious possession under a claim of ownership since June 12, 1945, or earlier. Failure to meet these requirements can result in the denial of their application, underscoring the need for thorough preparation and documentation in land registration proceedings.

FAQs

What was the key issue in this case?	The key issue was whether D.M. Consunji, Inc. (DMCI) sufficiently proved that the land it sought to register was both part of the alienable and disposable land of the public domain and that it had been in open, continuous, exclusive, and notorious possession since June 12, 1945.
What is required to prove land is alienable and disposable?	To prove land is alienable and disposable, an applicant must present a copy of the original classification approved by the DENR Secretary, certified by the legal custodian, and a certificate of land classification status from CENRO or PENRO based on the approved classification.
What is the significance of June 12, 1945, in land registration cases?	June 12, 1945, is the date before which open, continuous, exclusive, and notorious possession of land can ripen into ownership that can be judicially confirmed through land registration proceedings.
What kind of evidence did DMCI present to prove the land’s status?	DMCI presented a Field Inspection Report from CENRO and a Survey Plan, but the Court found these insufficient to prove that the land was alienable and disposable.
Why was the evidence presented by DMCI deemed insufficient?	The Court ruled that mere notations on survey plans and certifications from CENRO are inadequate; original classification documents from the DENR Secretary or a presidential proclamation are required.
What did DMCI need to show regarding possession of the land?	DMCI needed to prove that it and its predecessors-in-interest had been in open, continuous, exclusive, and notorious possession and occupation of the land under a bona fide claim of ownership since June 12, 1945, or earlier.
How did the Cruz heirs’ evidence affect DMCI’s claim?	The Cruz heirs presented Tax Declaration No. 10845 dated October 26, 1941, which cast doubt on DMCI’s claim of continuous, open, exclusive and notorious possession since June 12, 1945 or earlier.
*How did the Court distinguish this case from Victoria v. Republic?*	In Victoria, the OSG verified the DENR officer’s authority and submitted the administrative order declaring the land alienable and disposable, and the applicant presented older tax declarations showing a longer history of possession, unlike in DMCI’s case.

The Supreme Court’s decision in D.M. Consunji, Inc. v. Republic of the Philippines serves as a reminder of the rigorous standards for land registration in the Philippines. Land ownership claims must be substantiated with complete and convincing evidence. It also reinforces the importance of proper due diligence when purchasing land.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: D.M. Consunji, Inc. vs. Republic of the Philippines, G.R. No. 233339, February 13, 2019

February 13, 2019

Good Faith in Property Sales: Protecting Buyers Without Notice of Claims

In Lifestyle Redefined Realty Corporation v. Heirs of Uvas, the Supreme Court addressed the rights of a buyer in good faith in a property sale. The Court ruled that Lifestyle Redefined Realty Corporation (Lifestyle Corporation) and Evelyn S. Barte (Evelyn), who purchased a property from Rizal Commercial Banking Corporation (RCBC), were buyers in good faith because they relied on the clean title of the property at the time of the sale, without notice of any adverse claims. This means that the sale was valid, and Lifestyle Corporation and Evelyn were protected despite a later claim by the heirs of the original owner, Dennis A. Uvas. This decision highlights the importance of clear property titles and protects buyers who conduct due diligence by checking the title before purchasing property.

When a Clean Title Meets Conflicting Claims: Upholding Good Faith in Property Transactions

The case revolves around a property originally owned by Spouses Dennis and Nimfa Uvas, who obtained loans from RCBC using the property as collateral. After U-Bex Integrated Resources, Inc. (U-Bex), controlled by Spouses Uvas, defaulted on the loans, RCBC foreclosed on the property and eventually sold it to Lifestyle Corporation and Evelyn. Subsequently, the Heirs of Dennis Uvas (respondent Heirs) filed a complaint seeking to annul the foreclosure sale, arguing that they were not properly notified and that the sale lacked proper publication. This legal battle brought into question the validity of the sale to Lifestyle Corporation and Evelyn, and hinged on whether the corporation and Evelyn acted in good faith when they purchased the property from RCBC.

The central issue was whether Lifestyle Corporation and Evelyn could be considered buyers in good faith, thereby protecting their ownership despite the alleged irregularities in the foreclosure process. The Court of Appeals (CA) had previously ruled against Lifestyle Corporation and Evelyn, citing the annotation of lis pendens (a notice of pending litigation) on RCBC’s title prior to the final notarization of the sale. However, the Supreme Court disagreed, emphasizing that Lifestyle Corporation and Evelyn were entitled to rely on the clean title presented by RCBC at the time of the sale’s negotiation and payment. This perspective aligns with the principle that an ordinary buyer need not investigate beyond the title of the subject property unless there is clear evidence of bad faith.

Building on this principle, the Supreme Court highlighted that at the time Lifestyle Corporation and Evelyn negotiated and paid for the property, the title was in RCBC’s name and showed no indication of any claims by the respondent Heirs. Therefore, Lifestyle Corporation and Evelyn had no reason to suspect any defects in the title or the foreclosure process. The Court noted that the annotation of lis pendens occurred after Lifestyle Corporation and Evelyn had already completed their payments and taken ownership of the property. As the Supreme Court has stated, “one who deals with property registered under the Torrens System is charged with notice only of such burdens and claims as are annotated on the title.” The court further explained the concept of good faith, clarifying that it implies freedom from knowledge of circumstances that would put a prudent person on inquiry.

Furthermore, the Court pointed out that the respondent Heirs’ mother, Nimfa, had facilitated the sale between Lifestyle Corporation and Evelyn, and RCBC. This fact reinforced the belief of Lifestyle Corporation and Evelyn that they were entering into a legitimate transaction, free from any adverse claims. The Court quoted from the trial testimony, noting that Carl James Uvas stated that his mother was endorsing Evelyn as the buyer of the property from RCBC. This endorsement further solidified Lifestyle Corporation and Evelyn’s belief in the legitimacy of the sale. The Supreme Court emphasized that the sale would not have materialized without the involvement of the respondent Heirs’ mother. Therefore, it was reasonable for Lifestyle Corporation and Evelyn to believe that the transaction was bona fide and free from any adverse interests.

The Supreme Court also addressed the lower court’s order to restructure the loan obligations of the respondent Heirs, deeming it impractical and legally unsound. The Court emphasized the respondent Heirs and their predecessors’ continuous failure to satisfy their loan obligations to RCBC. The Supreme Court stated, “This Court cannot turn a blind eye to the fact that the entire controversy would not have arisen had respondent Heirs’ predecessors not requested for postponement of the originally scheduled auction sale of the subject property.” Further, the Court highlighted that it was the respondent Heirs’ predecessor, their mother Nimfa, who introduced the buyer to RCBC, expecting a commission from the sale. Thus, the Court concluded that the principles of equity could not be applied to justify giving the respondent Heirs another chance to pay their obligations.

In its final ruling, the Supreme Court emphasized that Lifestyle Corporation and Evelyn acted in good faith. Therefore, the transfers of the subject property were valid. The foreclosure, as well as the subsequent sale of the property to Lifestyle Corporation and Evelyn, were upheld. The Court concluded that the foreclosure of the property resulted in the satisfaction of the respondent Heirs’ loan liabilities. Therefore, the Court did not see the necessity to rule on RCBC’s issue on restructuring of the loan. The Supreme Court thereby reversed the Court of Appeals’ decision, effectively validating the property sale to Lifestyle Corporation and Evelyn.

FAQs

What was the key issue in this case?	The central issue was whether Lifestyle Corporation and Evelyn acted in good faith when they purchased the property from RCBC, despite claims of irregularities in the foreclosure process by the Heirs of Dennis Uvas. This determination would decide the validity of the property sale.
What does it mean to be a buyer in good faith?	A buyer in good faith is someone who purchases property without notice of any adverse claims or rights of another party, and who pays the purchase price at the time of the sale or before receiving notice of any such claims. Good faith implies an honest intention and freedom from knowledge of circumstances that would put a prudent person on inquiry.
*What is lis pendens, and how did it affect this case?*	Lis pendens is a notice of pending litigation that is annotated on the title of a property. In this case, the annotation of lis pendens occurred after Lifestyle Corporation and Evelyn had already completed their payments and taken ownership of the property, so it did not affect their status as buyers in good faith.
Why did the Supreme Court rule in favor of Lifestyle Corporation and Evelyn?	The Supreme Court ruled in favor of Lifestyle Corporation and Evelyn because they relied on the clean title of the property at the time of the sale, had no knowledge of any adverse claims, and had already completed their payments before the annotation of lis pendens. Additionally, the Heirs’ mother had facilitated the sale, reinforcing their belief in the legitimacy of the transaction.
What is the significance of a clean title in property transactions?	A clean title is crucial because it provides assurance to the buyer that there are no existing claims, liens, or encumbrances on the property. Buyers are generally entitled to rely on the information reflected in the title, and are not expected to conduct exhaustive investigations beyond what the title indicates.
What duty does a buyer have to investigate a property’s title?	Generally, a buyer is only charged with notice of such burdens and claims as are annotated on the title. The law protects a purchaser who buys from the registered owner themselves, and does not necessarily need to investigate further unless there are clear signs of issues.
How did the actions of the Heirs’ mother impact the Court’s decision?	The fact that the Heirs’ mother, Nimfa, had facilitated the sale and endorsed Evelyn as the buyer reinforced Lifestyle Corporation and Evelyn’s belief that they were entering into a legitimate transaction. This endorsement contributed to the Court’s finding that Lifestyle Corporation and Evelyn acted in good faith.
What was the outcome regarding the restructuring of the loan?	The Supreme Court deemed the lower court’s order to restructure the loan impractical and legally unsound, given the Heirs’ continuous failure to meet their loan obligations. The court did not see the necessity to rule on RCBC’s issue on restructuring of the loan as the foreclosure resulted in the satisfaction of the loan.

The Supreme Court’s decision in this case reinforces the principle of protecting buyers in good faith who rely on clean property titles. It clarifies that buyers are not expected to conduct exhaustive investigations beyond the title unless there is clear evidence of bad faith. This ruling underscores the importance of the Torrens system in providing security and stability in property transactions.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Lifestyle Redefined Realty Corporation v. Heirs of Uvas, G.R. No. 217716, September 17, 2018

September 17, 2018

Beyond Paper Trails: Establishing Legal Relationships and Mortgage Validity Through Overwhelming Evidence

The Supreme Court’s decision underscores that proving a legal relationship extends beyond mere documentary evidence; it embraces object and testimonial evidence as well. This ruling validates that a preponderance of evidence, encompassing all relevant facts and circumstances, can sufficiently establish such a relationship. Additionally, the Court reiterated that a valid mortgage requires the mortgagor to be the property’s owner or have the legal authority to mortgage it. If not, the mortgage is deemed null and void, protecting property rights against unauthorized transactions.

Unraveling a Mortgage Mystery: Can a Defectively Proven Relationship Invalidate a Real Estate Deal?

This case revolves around a dispute over a real estate mortgage. Sofia Tabuada and her daughters filed a case to nullify a mortgage on a property that they claim was improperly mortgaged by Eleanor Tabuada, who misrepresented herself as the deceased owner, Loreta Tabuada. The Regional Trial Court (RTC) initially ruled in favor of Sofia Tabuada, declaring the mortgage null and void. However, the Court of Appeals (CA) reversed this decision, questioning the sufficiency of the evidence presented to prove Sofia Tabuada’s relationship to the deceased Loreta Tabuada, the registered owner of the property. This appeal to the Supreme Court seeks to determine whether the CA erred in its assessment of the evidence and the validity of the mortgage itself.

The Supreme Court addressed the core issue of whether Sofia Tabuada adequately proved her legal relationship to the late Loreta Tabuada. The CA emphasized that the death certificate presented by the petitioners was not an authenticated copy and cited discrepancies in the name of the deceased as grounds to doubt the veracity of their claim. The Supreme Court, however, found that the CA erred in its strict interpretation of the evidence. According to the High Court, the Rules of Court recognize three types of evidence: object, documentary, and testimonial. While documentary evidence is often preferred, other forms of competent and relevant evidence should not be excluded.

The principle of preponderance of evidence, applicable in civil cases, requires that the existence of a contested fact be more probable than its nonexistence. This determination involves considering all the facts and circumstances, regardless of the type of evidence presented. The Court elucidated that even the perceived discrepancy in the name on the death certificate did not necessarily negate the legal relationship between Sofia Tabuada and Loreta Tabuada. The court emphasized that, to establish filiation, courts must consider not only the relevant testimonies but also other pertinent evidence.

In this case, Sofia Tabuada’s unchallenged declaration of being the daughter-in-law of the registered titleholder, coupled with the petitioners’ actual possession and use of the property as their family residence, strongly indicated a legal relationship. Furthermore, the Spouses Certeza, the mortgagees, were aware that Eleanor Tabuada and Tabuco were related to Sofia Tabuada and that their families resided on the same lot. The Court held that, taken together, these facts and circumstances competently affirmed the legal relationship between Sofia Tabuada and the late titleholder Loreta H. Tabuada, satisfying the requirement of preponderance of evidence. The Supreme Court cited People v. Sales, G.R. No. 177218, October 3, 2011, 658 SCRA 367, emphasizing the importance of considering relevant testimonies and other evidence in establishing filiation.

Building on this principle, the Supreme Court then turned to the validity of the real estate mortgage. Article 2085 of the Civil Code explicitly outlines the essential requisites for a valid mortgage:

(a) that it be constituted to secure the fulfillment of a principal obligation; (b) that the mortgagor be the absolute owner of the thing mortgaged; and (c) that the person constituting the mortgage has free disposal of the property, and in the absence of the right of free disposal, that the person be legally authorized for the purpose.

In this case, Loreta Tabuada had died in 1990, four years before the mortgage was constituted. Eleanor Tabuada and Trabuco admitted to Sofia Tabuada that they had mortgaged the property to the Spouses Certezas. Based on these facts, the RTC rightfully declared the mortgage null and void. Eleanor Tabuada fraudulently represented herself as the deceased Loreta Tabuada, the titleholder, when she executed the mortgage. This act clearly violated the requisites of Article 2085 of the Civil Code, as Eleanor Tabuada was neither the owner of the property nor legally authorized to mortgage it.

The Spouses Certeza argued that they were mortgagees in good faith, claiming they had no prior notice of Loreta Tabuada’s death and believed Eleanor Tabuada’s representation that she was Loreta Tabuada, the titleholder. However, the Supreme Court found this contention unpersuasive. The Court emphasized that the Spouses Certeza were aware of the familial relationship between the petitioners and Eleanor Tabuada and that both families resided on the property. This knowledge should have prompted them to exercise greater prudence and caution by inquiring into Eleanor Tabuada’s authority to mortgage the property. Failure to do so undermined their claim of being mortgagees in good faith.

The Court cited Embrado v. Court of Appeals, G.R. No. 51457, June 27, 1994, 233 SCRA 335, stating that individuals dealing with real property must not close their eyes to facts that should put a reasonable person on guard. Furthermore, the Court noted that the status of a mortgagee in good faith does not apply when the title is still in the name of the rightful owner and the mortgagor is a different person pretending to be the owner. In such cases, the mortgagee is not considered innocent, and the registered owner generally retains their title, as affirmed in Ereña v. Querrer-Kauffman, G.R. No. 165853, June 22, 2006, 492 SCRA 298, 320.

Finally, the Supreme Court addressed the RTC’s award of moral damages based on disrespect to the dead. The RTC reasoned that Eleanor Tabuada’s fraudulent impersonation of the late Loreta Tabuada constituted such disrespect. However, the Supreme Court disagreed, clarifying the scope of Article 309 of the Civil Code, which addresses disrespect to the dead. The Court noted that Article 309, situated under the title of Funerals, envisions acts of disrespect committed during the period of mourning or on the occasion of the funeral. Since Eleanor Tabuada’s actions did not occur within this context, they did not constitute disrespect to the dead as a basis for awarding moral damages.

FAQs

What was the key issue in this case?	The key issue was whether Sofia Tabuada sufficiently proved her legal relationship to the deceased Loreta Tabuada to nullify a mortgage on the property. The Court needed to decide if the evidence presented was sufficient to demonstrate the relationship between the parties.
What evidence did Sofia Tabuada present to prove her relationship?	Sofia Tabuada presented a death certificate, her testimony, and evidence of possession of the property. She also relied on the fact that the mortgagees were aware of her family’s residence on the land.
Why did the Court of Appeals initially rule against Sofia Tabuada?	The Court of Appeals questioned the authenticity of the death certificate and noted discrepancies in the name of the deceased. They believed that the evidence was insufficient to establish a legal relationship.
What did the Supreme Court say about the type of evidence needed to prove a legal relationship?	The Supreme Court clarified that while documentary evidence is preferred, object and testimonial evidence are also admissible. The court emphasized that a preponderance of evidence should be considered.
What is “preponderance of evidence”?	“Preponderance of evidence” means that the existence of a fact is more probable than its nonexistence. It requires a consideration of all the facts and circumstances presented in a case.
What makes a real estate mortgage valid under the Civil Code?	Under Article 2085 of the Civil Code, a valid mortgage requires that the mortgagor be the absolute owner of the property or legally authorized to mortgage it. Also, the mortgage must be constituted to secure the fulfillment of a principal obligation.
Why was the mortgage in this case deemed invalid?	The mortgage was deemed invalid because Eleanor Tabuada, who signed the mortgage, was not the owner of the property and was not authorized to mortgage it. She misrepresented herself as the deceased owner, Loreta Tabuada.
What is a “mortgagee in good faith”?	A “mortgagee in good faith” is someone who, without any knowledge of defect in the mortgagor’s title, enters into a mortgage contract. They are generally protected, but this status does not apply if they ignore facts that should put a reasonable person on guard.
Why weren’t the Spouses Certeza considered mortgagees in good faith?	The Spouses Certeza were aware that Sofia Tabuada and her family lived on the property and were related to Eleanor Tabuada. This knowledge should have prompted them to inquire further into Eleanor Tabuada’s authority to mortgage the property.
Why was the award of moral damages reversed?	The award of moral damages was reversed because the act of fraudulently representing the late Loreta Tabuada did not constitute disrespect to the dead under Article 309 of the Civil Code. This provision applies to acts committed during mourning or at the funeral.

In conclusion, this case reinforces the principle that establishing legal relationships relies on a holistic evaluation of evidence, not just documentary proof. It also serves as a reminder of the due diligence required in real estate transactions to ensure the validity of mortgages and protect property rights. The Supreme Court’s decision provides clarity on the type of evidence that can be used to prove a legal relationship, as well as the requisites for a valid mortgage and the responsibilities of mortgagees.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Sofia Tabuada, Novee Yap, Ma. Loreta Nadal, and Gladys Evidente v. Eleanor Tabuada, Julieta Trabuco, Laureta Redondo, and SPS. Bernan Certeza & Eleanor D. Certeza, G.R. No. 196510, September 12, 2018

September 12, 2018

Overlapping Land Titles: Prior Certificate Prevails in Philippine Law

In a dispute involving overlapping land titles, Philippine law dictates that the earlier title prevails, provided it can be definitively established. This principle was affirmed in a Supreme Court decision, emphasizing the importance of tracing the origins of land titles to ensure security of property rights. This ruling offers clarity to landowners facing uncertainty due to conflicting claims on their properties. It underscores the need for meticulous record-keeping and due diligence in real estate transactions.

Double Title Trouble: When Does the First One Win?

The case of Jose A. Bernas and The Wharton Resources Group (Philippines), Inc. v. The Estate of Felipe Yu Han Yat, along with a consolidated case, arose from conflicting claims over a parcel of land in Quezon City. Both petitioners, Bernas and Mejia, and respondent, Yu Han Yat, possessed Transfer Certificates of Title (TCTs) for the same property, leading to a legal battle to determine rightful ownership. The central legal question was which title should prevail when two certificates covered the same land.

The dispute began when Yu Han Yat sought to develop his property, but encountered resistance due to an overlapping title held by Esperanza Nava, from whom Bernas and Mejia derived their claims. Bernas and Mejia argued that their title was valid, citing a Land Registration Authority (LRA) resolution that upheld its registrability. However, Yu Han Yat contended that his title was superior due to its earlier issuance date and clear traceability to original land grants. The Regional Trial Court (RTC) initially ruled in favor of Bernas and Mejia, but the Court of Appeals (CA) reversed this decision, leading to the present appeal before the Supreme Court.

At the heart of the matter was the principle of indefeasibility of Torrens titles, which protects registered landowners from challenges to their ownership. However, this principle is not absolute. As the Supreme Court has stated, “A certificate of title cannot be subject to collateral attack and can be altered, modified, or cancelled only in a direct proceeding in accordance with law.” The Court had to determine whether Yu Han Yat’s action for quieting of title constituted a direct or collateral attack on the petitioners’ title.

The Supreme Court clarified that Yu Han Yat’s petition for quieting of title was indeed a direct attack on the petitioners’ title, as it specifically sought to annul TCT No. 336663. The Court cited Villarica Pawnshop v. Spouses Gernale, emphasizing that the underlying objectives in actions for quieting title and annulment of title are essentially the same—to adjudicate ownership and nullify opposing titles. Therefore, the legal battle was about establishing which party possessed a superior claim.

A key aspect of the case involved tracing the origins of the conflicting titles. Yu Han Yat meticulously traced his title back to Juan Porciuncula, with TCT No. T-10849 issued before 1930. This title was later subdivided, and the relevant portion eventually transferred to Yu Han Yat through a series of transactions. The Court found that Yu Han Yat presented compelling documentary and testimonial evidence to support this chain of ownership.

In contrast, Bernas and Mejia’s claim rested on TCT No. 336663, which had a later issuance date. They argued that Yu Han Yat’s title was flawed because it originated from a subdivision plan (Psd-2498) that incorrectly identified the property’s location as “Bayanbayanan, Mariquina.” However, the Court accepted the CA’s explanation that this was a typographical error, as Quezon City was not yet established when the survey was conducted in 1927.

The Supreme Court reiterated the established legal principle that “where there are two certificates of title covering the same land, the earlier in date must prevail.” Quoting Legarda vs. Saleeby, the Court emphasized that the vendee of land has no greater right, title, or interest than his vendor and acquires only the rights the vendor had. Therefore, even if Bernas and Mejia were considered innocent purchasers for value, they could not acquire a better right than their transferor, whose title was issued much later than Yu Han Yat’s predecessor.

The Court also addressed the applicability of the Friar Lands Act (Act No. 1120), as Piedad Estate was considered friar land. Petitioners argued that Yu Han Yat failed to prove valid alienation by the government, but the Court rejected this argument because the issue was not raised in the lower courts. New issues cannot be raised for the first time on appeal, as it would violate the principles of fair play and due process.

The CA had also taken judicial notice of a previous case where it invalidated TCT No. 56809, from which TCT No. 336663 originated. The Supreme Court agreed that this was an error, as the parties were not informed or given the opportunity to object. However, this error did not change the outcome, as the Court had already determined that Yu Han Yat held superior title based on the earlier issuance date and traceability of his title.

Finally, the Supreme Court addressed the CA’s award of damages to Yu Han Yat. The Court found no evidence of malice or bad faith on the part of the petitioners in pursuing their claim. In the absence of malice, damages are not warranted, as the right to litigate should not be penalized. Thus, the Court deleted the award of actual, moral, and exemplary damages, as well as attorney’s fees.

FAQs

What was the key issue in this case?	The key issue was determining which of two overlapping land titles should prevail, based on the principle of indefeasibility of Torrens titles and the establishment of superior title. The court examined the origins of each title to determine which had the earlier claim.
What is a Torrens title?	A Torrens title is a certificate of ownership issued by the government, intended to be indefeasible and binding upon the whole world. It aims to provide security and stability in land ownership.
What does “quieting of title” mean?	“Quieting of title” is a legal action to remove any cloud, doubt, or uncertainty over the title to real property. It seeks to ensure that the rightful owner can enjoy peaceful possession and ownership of their land.
What is the significance of the Friar Lands Act?	The Friar Lands Act (Act No. 1120) governs the sale and disposition of lands formerly owned by religious orders, ensuring that these lands are properly transferred to private individuals. Compliance with this act is crucial in establishing valid ownership over such lands.
What does it mean to have a “direct attack” on a title?	A direct attack on a title is a legal proceeding specifically instituted to challenge the validity of a certificate of title. This is the proper way to question the title’s legality, as opposed to a collateral attack, which is impermissible.
What is the effect of an earlier title date?	An earlier title date generally indicates a superior right of ownership, as it suggests a longer and more established claim to the land. In cases of overlapping titles, the earlier title often prevails, assuming its validity can be proven.
What is the role of the Land Registration Authority (LRA)?	The LRA is the government agency responsible for registering land titles and deeds, ensuring the integrity and accuracy of land records. It plays a crucial role in maintaining the Torrens system and resolving land disputes.
Are damages always awarded in land disputes?	No, damages are not always awarded in land disputes. They are typically granted only when there is evidence of malice or bad faith on the part of the losing party.
Can new issues be raised on appeal?	As a general rule, new issues cannot be raised for the first time on appeal. To do so is against procedural rules and due process.

This case underscores the importance of due diligence in land transactions and the principle that a prior title generally prevails in disputes over land ownership. The Supreme Court’s decision offers valuable guidance for landowners and legal professionals navigating complex property disputes in the Philippines.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: JOSE A. BERNAS VS THE ESTATE OF FELIPE YU HAN YAT, G.R. No. 195908, August 15, 2018

August 15, 2018

Construction Costs Defined: Input VAT and Ownership Shares in Realty Disputes

In a complex dispute over construction costs, the Philippine Supreme Court clarified how to calculate the “Actual Remaining Construction Cost” (ARCC) in a real estate project. The court definitively ruled that input Value Added Tax (VAT), which a company can offset against its output VAT, cannot be included as part of the ARCC when determining proportionate ownership of reserved units in a condominium project. This decision ensures fairness by preventing unjust enrichment and accurately reflects the actual expenditures in construction projects, impacting how developers and investors share assets in joint ventures.

When Hidden Costs Cloud Realty Deals: How to Calculate Fair Share?

This case, Malayan Insurance Company, Inc. vs. St. Francis Square Realty Corporation [G.R. Nos. 198920-21], revolves around a disagreement on the calculation of the ARCC in a joint venture to complete a condominium project. Malayan Insurance sought to include input VAT and other costs in the ARCC, which would increase their share of the reserved units. St. Francis Square Realty opposed this, arguing that input VAT should not be included because Malayan could offset it against their output VAT, leading to unjust enrichment if included in ARCC. The Construction Industry Arbitration Commission (CIAC) initially sided with Malayan, but the Court of Appeals (CA) and ultimately the Supreme Court (SC) reassessed the components of the ARCC to determine the rightful ownership shares.

At the heart of the legal matter lies the interpretation of the 2002 Memorandum of Agreement (MOA) between Malayan and St. Francis, specifically concerning the allocation of net saleable areas in their joint project. Section 4(a) of the MOA stipulates that each party is entitled to a portion of the net saleable area proportional to their contributions relative to the ‘actual construction cost.’ The dispute specifically arose over what constitutes ‘actual remaining construction cost’ (ARCC) in excess of the agreed Remaining Construction Cost (RCC) and how this excess should affect the allocation of reserved units as per Schedule 4 of the MOA.

The Supreme Court emphasized that findings of quasi-judicial bodies like the CIAC, which possess specialized expertise, are generally accorded respect and finality. However, this deference is not absolute. The Court clarified that factual findings of construction arbitrators may be reviewed under certain circumstances, including when the award was procured by corruption or fraud, when there was evident partiality or misconduct by the arbitrators, or when the arbitrators exceeded their powers. In this case, the Court found that the CIAC imperfectly executed its powers by failing to adequately explain why input VAT should be considered a direct construction cost, thus necessitating a review.

A critical aspect of the Court’s analysis was its clarification that whether input VAT is a direct construction cost is a question of law, not fact. For a question to be one of law, it must not involve examining the probative value of the evidence, but rather depends solely on what the law provides. In this context, the Court highlighted that VAT is an indirect and consumption tax, ultimately shouldered by the end-users of goods, properties, or services. The providers of these goods and services pass on the VAT liability, who in turn, may credit their own VAT liability from the VAT payments they receive from the final consumer.

For a VAT-registered purchaser like Malayan, the tax burden passed on by suppliers does not constitute cost but input tax which is creditable against his output tax liabilities. Conversely, it is only in the case of a non-VAT purchaser that VAT forms part of cost of the purchase price. The court referenced Sections 110 (A) of the National Internal Revenue Code, which states, “Any input tax evidenced by a VAT invoice or official receipt issued in accordance with Section 113 hereof on the following transactions shall be creditable against the output tax.” Additionally, the court cited the BIR Ruling No. DA-326-08, October 22, 2008, stating that a joint venture for construction projects is not a taxable corporation under Section 22(B) of the Tax Code.

The Supreme Court determined that because Malayan admitted to offsetting its input VAT against its output VAT liabilities, it could no longer claim that input VAT was an additional cost. Allowing Malayan to include its input VAT in the ARCC would constitute unjust enrichment at the expense of St. Francis. The Court emphasized that the burden of paying VAT was ultimately shouldered by the final consumers, and Malayan benefited from the crediting of input VAT against its output VAT liabilities. As stated in the ruling, “To allow Malayan to pass the burden of such indirect tax to buyers of the said units and slots, and to further claim that input VAT must still form part of the ARCC, would constitute unjust enrichment at the expense of St. Francis…”

The Court revisited the ARCC calculation, scrutinizing several disputed cost items. They disallowed unsubstantiated costs and clarified that only actual expenditures directly related to construction could be included. Key to this reevaluation was a detailed examination of Exhibit “R-48-series,” comprising over 2,230 pages of receipts, vouchers, and other documents. One significant adjustment was related to the award paid to Total Ventures, Inc. (TVI) as a result of TVI v. MICO (CIAC Case No. 27-2007). While the CA had previously included the entire award of P21,948,852.39, the Supreme Court modified this ruling, determining that only specific direct construction costs, including a portion of extended overhead expenses, should be included. This adjustment was based on the recognition that delays in project completion were attributable to both St. Francis and Malayan.

Ultimately, the Supreme Court revised the ownership shares in the reserved units, allocating 34% to Malayan and 66% to St. Francis. This was derived from a recalculation of the ARCC, which netted to P511,851,901.12 after the exclusion of input VAT and other unsubstantiated costs. The final ruling not only adjusted the proportionate ownership of the reserved units but also directed Malayan to deliver possession and transfer titles accordingly, to pay St. Francis its proportionate share of the income from the reserved units from the date of project completion, and to render a full accounting of all related expenses and income. This proportionate share comes with a legal interest of six percent (6%) per annum from finality of this Decision until fully paid.

FAQs

What was the key issue in this case?	The key issue was determining whether input VAT should be included in the Actual Remaining Construction Cost (ARCC) for calculating ownership shares in a real estate project.
What is input VAT and how does it work?	Input VAT is the value-added tax paid on goods and services purchased by a business; it can be credited against the business’s output VAT, which is the tax collected on its sales. This mechanism prevents the cascading of VAT.
Why did the Supreme Court exclude input VAT from the ARCC?	The Court excluded input VAT because Malayan Insurance could offset it against their output VAT, meaning they didn’t ultimately bear that cost; including it would result in unjust enrichment.
What is the significance of ARCC in this case?	ARCC, or Actual Remaining Construction Cost, was the primary factor in determining each party’s proportionate share of the reserved units in the condominium project. It defined the monetary value each party invested in the joint venture.
What other costs did Malayan Insurance try to include in the ARCC?	Malayan Insurance attempted to include interest expenses, change orders not due to reconfiguration, contingency costs, and costs incurred after the project’s completion date.
What was the final ownership split of the reserved units?	After the Supreme Court’s recalculations, Malayan Insurance was entitled to 34% ownership, and St. Francis Square Realty Corporation was entitled to 66% ownership.
What was the basis for the Supreme Court’s decision on the award to TVI?	The Court allowed only direct construction costs from the TVI award to be included in the ARCC, adjusting for the fact that delays in the project were attributable to both parties.
How does this ruling impact future real estate joint ventures?	This ruling sets a precedent for how construction costs are defined and calculated in real estate disputes, particularly concerning the inclusion of tax benefits like input VAT.

This Supreme Court decision provides crucial guidance on defining construction costs in joint real estate ventures, highlighting the importance of accurately accounting for expenses and preventing unjust enrichment. By excluding input VAT and carefully scrutinizing other cost items, the Court ensures fairness and clarity in determining ownership shares. The ruling underscores the need for developers and investors to have precise agreements on cost definitions and accounting practices.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: MALAYAN INSURANCE COMPANY, INC. VS. ST. FRANCIS SQUARE REALTY CORPORATION, G.R. Nos. 198920-21, July 23, 2018

July 23, 2018

Foreclosure Sales and Repurchase Rights: Understanding Bank Discretion in Asset Disposition

The Supreme Court ruled that after the redemption period expires following a foreclosure sale, a bank is not legally obligated to prioritize a former owner’s offer to repurchase the property. The bank has the discretion to dispose of the property as it sees fit, provided it complies with legal limitations. This decision clarifies the extent of a bank’s obligations in dealing with foreclosed assets and the rights of former owners seeking to reacquire their property.

Second Chance or Final Call? Examining Repurchase Rights After Foreclosure

This case revolves around the Spouses Bacani’s attempt to repurchase their foreclosed property from Philippine National Bank (PNB). After failing to pay their loan, PNB foreclosed on their property and subsequently acquired ownership. The Spouses Bacani sought to reacquire the property, relying on a PNB circular that gave priority to former owners in the disposition of acquired assets. The central legal question is whether this circular created an enforceable right for the Spouses Bacani to repurchase the property, even after the redemption period had expired and PNB had become the absolute owner.

The legal framework governing this situation is rooted in the principles of property law and contract law. Once the redemption period expires in a foreclosure sale, the buyer, in this case PNB, becomes the absolute owner of the property. As the Supreme Court articulated in Spouses Marquez v. Spouses Alindog:

It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is not redeemed during the period of one year after the registration of the sale. As such, he is entitled to the possession of the said property and can demand it at any time following the consolidation of ownership in his name and the issuance to him of a new transfer certificate of title.

This principle is enshrined in Article 428 of the Civil Code, which grants owners the right to dispose of their property without limitations, except those established by law. Therefore, PNB had the right to set the terms and conditions for the disposition of the subject property. The issue then turns to whether PNB’s internal circular created a legally binding obligation to prioritize the Spouses Bacani’s repurchase offer.

The Supreme Court clarified that PNB’s SEL Circular No. 8-7/89, which prioritized former owners in reacquiring foreclosed assets, was an internal policy and not a source of legally demandable rights. The Court emphasized that the Spouses Bacani’s offer was to repurchase, not redeem, the property, as the redemption period had already expired. The distinction is crucial. Redemption is a right granted by law, whereas repurchase is a matter of negotiation, with no legal obligation on the part of the purchaser to resell the property.

Furthermore, the Court highlighted that the PNB circular itself contained conditions that the Spouses Bacani failed to meet. Specifically, the selling price was to be based on the bank’s total claim or the fair market value, whichever was higher. In this case, the Spouses Bacani’s offers were consistently lower than both PNB’s claim and the fair market value of the property. As such, even if the circular were considered a binding obligation, the Spouses Bacani did not comply with its requirements.

The Court also addressed the lower courts’ reliance on the Spouses Bacani’s time deposit account as evidence of their intent and ability to repurchase the property. The Supreme Court clarified that a bank deposit creates a debtor-creditor relationship, obligating the bank to return the amount upon demand. The bank could not unilaterally apply the deposit towards the purchase price without a clear agreement or contract allowing it. This underscores the importance of a meeting of the minds in contract formation. As the court held, quoting Article 1326 of the Civil Code, “Advertisements for bidders are simply invitations to make proposals, and the advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears.”

The element of fraud, as alleged by the Spouses Bacani, was also examined. The Court reiterated that fraud must be proven by clear and convincing evidence, which the Spouses Bacani failed to provide. The publication of the Invitation to Bid did not obligate PNB to sell the property to the Spouses Bacani, as such advertisements are merely invitations to make proposals, not binding offers.

In conclusion, the Supreme Court reversed the Court of Appeals’ decision, holding that PNB was not obligated to prioritize the Spouses Bacani’s repurchase offer. The Court emphasized PNB’s right to dispose of its property as the absolute owner, subject only to legal limitations. The Spouses Bacani’s failure to redeem the property within the statutory period and their non-compliance with the conditions of PNB’s internal circular were fatal to their claim.

FAQs

What was the key issue in this case?	The key issue was whether PNB was legally obligated to prioritize the Spouses Bacani’s offer to repurchase their foreclosed property after the redemption period had expired, based on PNB’s internal circular.
What is the significance of the redemption period in foreclosure cases?	The redemption period is a statutory period during which the former owner can reclaim their property by paying the outstanding debt and associated costs. Once this period expires, the buyer at the foreclosure sale becomes the absolute owner.
What is the difference between redemption and repurchase?	Redemption is a right granted by law within a specific period, while repurchase is a negotiated transaction after the redemption period has expired, with no legal obligation on the part of the buyer to resell.
Are banks required to follow their internal policies regarding foreclosed assets?	While internal policies guide a bank’s operations, they do not necessarily create legally enforceable rights for third parties unless there is a contract or law that mandates such rights.
What conditions did PNB set for former owners to repurchase foreclosed properties?	PNB required that the selling price be based on the bank’s total claim or the fair market value, whichever was higher, and that other conditions related to payment terms and property use be met.
Does publishing an Invitation to Bid obligate the seller to accept any bid?	No, advertisements for bidders are simply invitations to make proposals, and the advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears.
What constitutes fraud in property disposition?	Fraud must be proven by clear and convincing evidence and involves intentional deception to deprive someone of their rights or property. Mere allegations or suspicions are insufficient.
What is the effect of consolidating title in favor of the buyer after foreclosure?	Consolidation of title vests absolute ownership in the buyer, giving them the right to possess, use, and dispose of the property as they see fit, subject to legal limitations.

This case provides valuable insights into the rights and obligations of banks and former owners in foreclosure situations. It clarifies that while banks may have internal policies favoring former owners, these policies do not create legally enforceable rights that override the bank’s right to dispose of its property as the absolute owner. The decision underscores the importance of understanding the distinction between redemption and repurchase and the need for clear and binding contracts in property transactions.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

June 20, 2018

Quieting of Title: Proving Ownership and the Best Evidence Rule in Philippine Land Disputes

In a dispute over land ownership, the Supreme Court affirmed the necessity of presenting original documents to substantiate claims of title. The Court emphasized that failing to present the best evidence, such as original deeds of sale, undermines the foundation of an action for quieting of title. This ruling underscores the importance of adhering to evidentiary rules to establish legal or equitable rights over property, providing clarity for property owners and potential buyers alike.

Unproven Sales: Can Claimed Landowners Quiet Title Without Original Deeds?

This case involves a parcel of land in Baguio City, where several individuals (petitioners) claimed ownership over portions of the property based on deeds of sale allegedly executed by Robert Carantes. After Angeline Loy foreclosed on a mortgage over the entire property, the petitioners filed a case to quiet their titles, arguing that Loy’s title cast a cloud over their ownership. The central legal question is whether the petitioners successfully proved their ownership claim in the absence of original deeds of sale and with inconsistencies in their evidence.

The Regional Trial Court (RTC) dismissed the petition, citing the petitioners’ failure to present the original copies of the deeds of sale. This decision was based on the **best evidence rule**, which mandates that the original document must be presented when the content of that document is the subject of inquiry. The RTC also noted that an affidavit presented by the petitioners was inadmissible because the affiant, Robert Carantes, was not presented to testify on it. The Court of Appeals (CA) affirmed the RTC’s decision, emphasizing that the burden of proof lies with the plaintiff to establish their case by a **preponderance of evidence**. The CA found that the petitioners’ evidence was unsatisfactory and inconclusive.

The Supreme Court (SC) reiterated the essential requisites for an action to quiet title to prosper, stating:

for an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.

Building on this, the SC pointed out that the petitioners’ failure to present the original deeds of sale was fatal to their case, as it left them unable to demonstrate their claimed right or title to the property. The Court further clarified the significance of “legal title” and “equitable title,”:

Legal title denotes registered ownership, while equitable title means beneficial ownership.

In analyzing the application of the best evidence rule, the Supreme Court referenced Section 3, Rule 130 of the Rules of Court, which states:

Sec. 3. Original document must be produced; exceptions. — When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice;
(c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and
(d) When the original is a public record in the custody of a public officer or is recorded in a public office.

The SC found that the petitioners did not demonstrate that their failure to present the original documents fell under any of these exceptions. The court also addressed the issue of possession, clarifying that mere possession of the property does not automatically equate to ownership. Possession could be based on various arrangements, such as lease or tolerance, and without sufficient proof of title, a case for quieting of title cannot succeed. Therefore, the Court affirmed the CA’s decision, denying the petition and upholding the necessity of proving ownership with competent evidence.

This case illustrates the critical importance of adhering to the best evidence rule in property disputes. Claimants must present original documents to substantiate their claims of ownership, and failure to do so can be detrimental to their case. The ruling also highlights that possession of the property alone is not sufficient to establish ownership; claimants must demonstrate a legal or equitable title to the property. It underscores that proving ownership requires competent evidence, such as original deeds of sale, to establish legal or equitable rights over the property.

FAQs

What is an action for quieting of title?	An action for quieting of title is a lawsuit filed to remove any cloud, doubt, or claim on the title to real property. It aims to ensure that the owner’s rights are clear and undisturbed.
What is the best evidence rule?	The best evidence rule requires that the original document be presented as evidence when the content of the document is at issue. This rule is intended to prevent fraud and ensure the accuracy of evidence presented in court.
What are the exceptions to the best evidence rule?	Exceptions include situations where the original document has been lost or destroyed, is in the possession of the opposing party, consists of numerous accounts, or is a public record. The party seeking to use a copy must demonstrate that the original is unavailable through no fault of their own.
What is legal title versus equitable title?	Legal title refers to registered ownership of the property, while equitable title refers to beneficial ownership. Equitable title means that a person has the right to obtain legal title, even if they do not currently hold it.
Why were the photocopied deeds of sale not admitted as evidence?	The photocopied deeds were not admitted because the petitioners failed to present the original copies and did not demonstrate that any exception to the best evidence rule applied. They needed to show why the originals were unavailable.
Why was Robert Carantes’ affidavit not considered?	The affidavit was not considered because Robert Carantes did not appear in court to testify and authenticate the contents of the affidavit. Affidavits are generally considered hearsay unless the affiant is presented as a witness.
Does possession of a property automatically mean ownership?	No, possession of a property does not automatically equate to ownership. Possession could be based on various arrangements, such as lease or tolerance, and without sufficient proof of title, a claim of ownership cannot be sustained.
What burden of proof is required in civil cases?	In civil cases, the burden of proof is preponderance of evidence, which means that the evidence presented by one party is more convincing than the evidence presented by the other party.

This case underscores the importance of meticulously preserving original documents related to property ownership and understanding the rules of evidence in legal proceedings. Failure to adhere to these principles can have significant consequences in disputes over land titles, potentially leading to the dismissal of a claim, even if there is an apparent belief that they were the rightful owners. For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: SPOUSES JAIME AND CATHERINE BASA, ET AL. VS. ANGELINE LOY VDA. DE SENLY LOY, ET AL., G.R. No. 204131, June 04, 2018

June 4, 2018

Adverse Claim vs. Lis Pendens: Protecting Property Rights in the Philippines

In the Philippines, property disputes often involve navigating the complexities of adverse claims and notices of lis pendens. The Supreme Court in Valderama v. Arguelles clarified that a notice of lis pendens does not automatically cancel a prior adverse claim on a property title. This means an individual’s property rights, protected by an adverse claim, are not swept aside simply because a lawsuit (lis pendens) is filed regarding the same property. The court emphasized that both mechanisms serve distinct protective functions and must be independently evaluated.

When Two Claims Collide: Can a Notice of Lis Pendens Nullify an Adverse Claim?

The case revolves around a property dispute where Lourdes Valderama (petitioner) contested the cancellation of an adverse claim on a land title, a claim initially filed by her sister, Conchita Amongo Francia. Sonia and Lorna Arguelles (respondents) sought to cancel the adverse claim after they had filed a complaint for recovery of ownership and physical possession of the property, which led to a notice of lis pendens being annotated on the title. The Regional Trial Court (RTC) initially ordered the cancellation of the adverse claim, a decision that the Court of Appeals (CA) upheld, leading to this appeal to the Supreme Court. At the heart of the legal issue is whether the subsequent filing of a notice of lis pendens effectively nullifies a pre-existing adverse claim on the same property title.

The Supreme Court began its analysis by distinguishing between an **adverse claim** and a **notice of lis pendens**, both of which are involuntary dealings recognized under Presidential Decree No. 1529 (P.D. 1529), also known as the Property Registration Decree. An adverse claim, under Section 70 of P.D. 1529, serves as a warning to third parties that someone is claiming an interest in the property that is adverse to the registered owner. The Court in Flor Martinez v. Ernesto G. Garcia and Edilberto M. Brua, emphasized that adverse claim is:

…a measure designed to protect the interest of a person over a piece of real property, where the registration of such interest or right is not otherwise provided for by the Land Registration Act or Act No. 496 (now P.D. No. 1529 or the Property Registration Decree), and serves a warning to third parties dealing with said property that someone is claiming an interest on the same or a better right than that of the registered owner thereof.

A notice of lis pendens, governed by Sections 76 and 77 of P.D. 1529, serves to inform potential buyers or encumbrancers that the property is involved in a court case that could affect its title or possession. It is a notice to the world that a specific property is subject to pending litigation.

The Court highlighted critical differences between the two, primarily that an adverse claim protects a claimant’s rights during a controversy, while a notice of lis pendens protects rights during an action or litigation. Furthermore, adverse claims require a court hearing to determine validity, whereas notices of lis pendens can be cancelled without such a hearing. The Supreme Court clarified that these distinctions are crucial in determining whether one can negate the other.

The respondents heavily relied on the ruling in Villaflor v. Juezan, where the Court appeared to suggest that a notice of lis pendens could supersede an adverse claim. However, the Supreme Court distinguished the facts of Villaflor, noting that in that case, the related civil case was already terminated and had attained finality. In contrast, in Valderama v. Arguelles, the civil case was still pending before the RTC, making the Villaflor precedent inapplicable. This distinction is vital because it underscores that the final resolution of the underlying dispute is a crucial factor.

The Supreme Court found more relevant guidance in the case of Ty Sin Tei v. Dy Piao, which presented a similar issue. In Ty Sin Tei, the Court held that instituting an action and annotating a notice of lis pendens does not invalidate a prior adverse claim on the same title. The Court in Ty Sin Tei emphasized the protective nature of both mechanisms and the right of a claimant to utilize both, stating:

…the action taken by the lower Court in ordering the cancellation of the adverse claim before its validity could he passed upon, is not sanctioned by law.

This earlier ruling emphasized that an adverse claim should only be cancelled after its validity has been properly adjudicated. The Court in Valderama v. Arguelles aligned itself with the principles articulated in Ty Sin Tei, reinforcing the idea that the two remedies are not mutually exclusive but rather complementary.

Building on this principle, the Supreme Court reasoned that an adverse claim constitutes a lien on the property, and its cancellation requires a substantive hearing to determine its validity. The court hearing the petition for cancellation of adverse claim cannot excuse itself from hearing the validity of the said adverse claim unless the subject controversy of the adverse claim is finally settled by another court in a related case. The court emphasized that unless the controversy is settled, the adverse claim remains a lien on the property.

The decision underscored the importance of upholding fair play and justice. It noted that allowing the outright cancellation of an adverse claim based solely on a subsequent notice of lis pendens could lead to unjust outcomes, potentially encouraging parties to avoid annotating a notice of lis pendens if an adverse claim is already in place. Such a scenario could leave the adverse claimant without adequate legal protection. Here’s a comparative table illustrating the key differences:

Feature	Adverse Claim	Notice of Lis Pendens
Purpose	Protects claimant’s rights during a controversy.	Protects claimant’s rights during an action/litigation.
Cancellation	Requires court hearing to determine validity.	Can be cancelled without a court hearing.
Nature	Constitutes a lien on the property.	A mere incident of an action; does not create a lien.

The Supreme Court concluded that the RTC had erred in ordering the cancellation of the petitioner’s adverse claim based merely on the subsequent annotation of a notice of lis pendens. The court reversed the CA’s decision and dismissed the petition for cancellation of the adverse claim.

FAQs

What was the key issue in this case?	The key issue was whether annotating a notice of lis pendens on a property title automatically cancels a prior adverse claim on the same title.
What is an adverse claim?	An adverse claim is a legal notice on a property title, warning third parties of someone claiming an interest or right that could supersede the registered owner’s.
What is a notice of lis pendens?	A notice of lis pendens is a notice that a lawsuit is pending that could affect the title to a piece of property.
Can a notice of lis pendens cancel an adverse claim?	No, according to this ruling, a notice of lis pendens does not automatically cancel a prior adverse claim; each serves a distinct legal purpose.
What did the Supreme Court decide in this case?	The Supreme Court ruled that the lower court erred in ordering the cancellation of the adverse claim based solely on the annotation of a notice of lis pendens.
What case did the court use to support its decision?	The court relied on the principles established in Ty Sin Tei v. Dy Piao, which held that both remedies are not contradictory and can be availed of simultaneously.
What happens if the lawsuit related to the lis pendens is dismissed?	If the related case is dismissed, the adverse claim remains valid until a court determines its validity through a proper hearing.
Why is it important to understand the difference between these two legal tools?	Understanding the difference is crucial for protecting property rights, as each tool serves a distinct purpose in safeguarding claims against a property.

This ruling provides clarity on the interplay between adverse claims and notices of lis pendens, emphasizing that both mechanisms have distinct roles in protecting property rights. It reinforces the principle that an adverse claim cannot be dismissed lightly and requires a proper judicial assessment of its validity. This decision helps ensure that individuals’ property rights are not easily undermined by the mere filing of a lawsuit.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Lourdes Valderama vs. Sonia Arguelles and Lorna Arguelles, G.R. No. 223660, April 02, 2018

April 2, 2018