CD: Catholic Vicar Apostolic v. CA

August 11, 2015 at 10:14 am (1988) (, , )

CATHOLIC VICAR APOSTOLIC v. CA
G.R. No. L-80294-95 September 21, 1988
Gancayco, J.

Doctrine:
The bailees’ failure to return the subject matter of commodatum to the bailor does not mean adverse possession on the part of the borrower. The bailee held in trust the property subject matter of commodatum.

Facts:
Catholic Vicar Apostolic of the Mountain Province (VICAR for brevity) filed an application for registration of title over Lots 1, 2, 3, and 4, said Lots being the sites of the Catholic Church building, convents, high school building, school gymnasium, school dormitories, social hall, stonewalls, etc. The Heirs of Juan Valdez and the Heirs of Egmidio Octaviano filed their Answer/Opposition on Lots Nos. 2 and 3, respectively, asserting ownership and title thereto since their predecessors’ house was borrowed by petitioner Vicar after the church and the convent were destroyed.. After trial on the merits, the land registration court promulgated its Decision confirming the registrable title of VICAR to Lots 1, 2, 3, and 4.

The Heirs of Juan Valdez appealed the decision of the land registration court to the then Court of Appeals, The Court of Appeals reversed the decision. Thereupon, the VICAR filed with the Supreme Court a petition for review on certiorari of the decision of the Court of Appeals dismissing his application for registration of Lots 2 and 3.

Issue:
Whether or not the failure to return the subject matter of commodatum constitutes an adverse possession on the part of the owner

Held:
No. The bailees’ failure to return the subject matter of commodatum to the bailor did not mean adverse possession on the part of the borrower. The bailee held in trust the property subject matter of commodatum.

Petitioner repudiated the trust by declaring the properties in its name for taxation purposes.

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CD: Duran v. Intermediate Appellate Court

November 8, 2010 at 5:02 pm (1985, Case Digests) (, , , )

DURAN v. INTERMEDIATE APPELLATE COURT
G.R. No. L-64159 September 10, 1985
Relova, J.

Doctrine:
The fraudulent and forged document of sale may become the root of a valid title if the certificate has already been transferred from the name of the true owner to the name indicated by the forger.

The mortgagee has the right to rely on what appears in the certificate of title and, in the absence of anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of the said certificate.

Good faith, while it is always to be presumed in the absence of proof to the contrary, requires a well-founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it.

Facts:
Petitioner Duran owned 2 parcels of land. She left the Philippines in June 1954 and returned in May 1966. On 1963, a Deed of Sale was made in favor of the petitioner’s mother. On December 1965, Duran’s mother mortgaged the same property to private respondent Erlinda Marcelo-Tiangco. When Duran came to know about the mortgage made by her mother, she wrote the Register of Deeds informing the latter that she had not given her mother any authority to sell or mortgage any of her properties in the Philippines. Meanwhile, foreclosure proceedings were initiated by Tiangco upon the failure of Duran’s mother to redeem the mortgaged properties.

Duran claims that the Deed of Sale is a forgery, saying that at the time of its execution in 1963 she was in the United States. Respondent Court ruled that there is a presumption of regularity in the case of a public document.

Issue:
Whether private respondent was a buyer in good faith and for value

Held:
Yes. Good faith consists in the possessor’s belief that the person from who he received the thing was the owner of the same and could convey his title (Arriola v. Gomez Dela Serna, 14 Phil. 627). Good faith, while it is always to be presumed in the absence of proof to the contrary, requires a well-founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it (Santiago v. Cruz, 19 Phil. 148).

The mortgagee has the right to rely on what appears in the certificate of title and, in the absence of anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of the said certificate. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefore and the law will in no way oblige him to go behind the certificate to determine the condition of the property. If the rule were otherwise, the efficacy and conclusiveness of the Torrens Certificate of Titles would be futile and nugatory. Thus the rule is simple: the fraudulent and forged document of sale may become the root of a valid title if the certificate has already been transferred from the name of the true owner to the name indicated by the forger.

While it is true that under Article 2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the property mortgaged, and while as between the daughter and her mother, it was the daughter who still owns the lots, STILL insofar as innocent third persons are concerned the owner was already the mother inasmuch as she had already become the registered owner.

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CD: Spouses Beltran v. Nieves

October 29, 2010 at 12:34 pm (2010, Case Digests) (, , , )

SPOUSES BELTRAN v. NIEVES
G.R. No. 175561 October 20, 2010
Carpio, J.

Doctrine:
– A certificate of title is conclusive evidence of ownership. Registered owners are entitled to the possession of the property covered by the title from the time such title was issued in their favor. No entitlement to possess the property is granted on the basis of an unregistered deed of sale.

– The tax declarations presented are not conclusive evidences of ownership, but are good indicators of possession in the concept of an owner.

– The only issue in an ejectment case is the physical possession of real property: possession de facto and not possession de jure. Prior physical possession is material only in forcible entry cases. In an ejectment suit, the question of ownership may be provisionally ruled upon only for the sole purpose of determining who is entitled to possession de facto.

– A person who occupies the land of another at the latter’s tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand. In case of failure, a summary action for ejectment is the proper remedy against them.

– Any question regarding the validity of a title can only be assailed in an action expressly instituted for that purpose. A certificate of title shall not be subject to collateral attack.

Facts:
Respondent Nieves is the registered owner of the subject parcel of land as well as the house thereon. Milagros Beltran is Nieves’ niece, being the daughter of Gaston, Nieves’ brother. In asserting their ownership and rightful occupation against Nieves, petitioners spouses Beltran claim that Nieves sold the land and house to Gaston. The deed of sale, which Nieves disclaims having signed, remains unregistered.

The MTC and, subsequently, the RTC respected the right of possession of the spouses Beltran. The CA reversed the decision.

Issues:
1. Whether or not an unregistered deed of sale is sufficient to grant ownership over the property
2. Whether or not title is material in ejectment suits

Held:
1. No. No entitlement to possess the property is granted on the basis of an unregistered deed of sale. A certificate of title is conclusive evidence of ownership. Registered owners are entitled to the possession of the property covered by the title from the time such title was issued in their favor [Spouses Apostol v. Court of Appeals, 476 Phil. 403 (2004)].

The tax declarations presented by the spouses Beltran are not conclusive evidences of ownership, but are good indicators of possession in the concept of an owner.

Whatever right of possession that the spouses Beltran may have over the subject property cannot prevail over that of Nieves for the simple reason that Nieves is the registered owner of the subject property and the alleged deed of sale remains unregistered.

2. No. The only issue in an ejectment case is the physical possession of real property: possession de facto and not possession de jure. In an ejectment suit, the question of ownership may be provisionally ruled upon only for the sole purpose of determining who is entitled to possession de facto [Umpoc v. Mercado, 490 Phil. 120,136 (2005)].

A person who occupies the land of another at the latter’s tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for ejectment is the proper remedy against them [Calubayan, et al. v. Pascual, 128 Phil. 160, 163 (1967)].

Although it is true that the spouses Beltran, and not Nieves, were in prior physical possession of the subject property, this argument cannot hold water as prior physical possession is material only in forcible entry cases (Spouses Apostol v. Court of Appeals, supra).

Any question regarding the validity of Nieves’ title can only be assailed in an action expressly instituted for that purpose. A certificate of title shall not be subject to collateral attack (Section 48, P.D. No. 1529).

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CD: Sibal v. Valdez

October 1, 2010 at 6:13 pm (1927, Case Digests) (, , , )

SIBAL v. VALDEZ
G.R. No. L-26278 August 4, 1927
Johnson, J.

Doctrine:
A crop raised on leased premises belongs to the lessee and in no sense forms part of the immovable.

“Ungathered products” have the nature of personal property. In other words, the phrase “personal property” should be understood to include “ungathered products.” Crops, whether growing or standing in the field ready to be harvested, are, when produced by annual cultivation, no part of the realty.

A valid sale may be made of a thing, which though not yet actually in existence, is reasonably certain to come into existence. A man may sell property of which he is potentially and not actually possessed.

Facts:
Plaintiff alleged that the defendant Vitaliano Mamawal, deputy sheriff of the Province of Tarlac, by virtue of a writ of execution issued by the Court of First Instance of Pampanga, attached and sold to the defendant Emiliano J. Valdez the sugar cane planted by the plaintiff and his tenants on seven parcels of land. Plaintiff offered to redeem said sugar cane and tendered to the defendant Valdez the amount sufficient to cover the price paid by the latter, the interest thereon and any assessments or taxes which he may have paid thereon after the purchase, and the interest corresponding thereto. However, Valdez refused to accept the money and to return the sugar cane to the plaintiff.

Meanwhile, defendant argued that the sugar cane was personal property hence not subject to redemption.

Issue:
1. Whether or not the sugar cane is to be classified as personal property
2. Whether or not future crops to be harvested can be considered a valid object of sale

Held:
1. No. A crop raised on leased premises in no sense forms part of the immovable. It belongs to the lessee, and may be sold by him, whether it be gathered or not, and it may be sold by his judgment creditors.

Ungathered products” have the nature of personal property. In other words, the phrase “personal property” should be understood to include “ungathered products.” Crops, whether growing or standing in the field ready to be harvested, are, when produced by annual cultivation, no part of the realty.

2. Yes. A valid sale may be made of a thing, which though not yet actually in existence, is reasonably certain to come into existence as the natural increment or usual incident of something already in existence, and then belonging to the vendor, and then title will vest in the buyer the moment the thing comes into existence (Emerson vs. European Railway Co., 67 Me., 387; Cutting vs. Packers Exchange, 21 Am. St. Rep., 63.).

A man may sell property of which he is potentially and not actually possessed.

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CD: Robles v. Hermanos

October 1, 2010 at 4:47 pm (1927, Case Digests) (, , )

ROBLES v. HERMANOS
G.R. No. L-26173 July 13, 1927
Street, J.

Doctrine:
The lessee may prove an independent verbal agreement on the part of the landlord to put the leased premises in a safe condition.

The appraised value of the property may be used to determine the price.

Facts:
A parcel of land was originally owned by the parents of the present plaintiff, Zacarias Robles. Upon the death of his father, plaintiff leased the parcel of land from the administrator with the stipulation that any permanent improvements necessary to the cultivation and exploitation of the hacienda should be made at the expense of the lessee without right to indemnity at the end of the term. As the place was in a run-down state, and it was foreseen that the lessee would be put to much expense in bringing the property to its productive capacity, the annual rent was fixed at the moderate amount of P2,000 per annum.

The plaintiff made various improvements and additions to the plant. The firm of Lizarraga Hermanos was well aware of the nature and extent of these improvements.

When the plaintiff’s mother died, defendant came forward with a proposal to buy the heirs’ portion of the property. In consideration that the plaintiff should shorten the term of his lease to the extent stated, the defendant agreed to pay him the value of all betterments that he had made on the land and furthermore to purchase from him all that belonged to him personally on the land. The plaintiff agreed to this.

On the ensuing instrument made, no reference was made to the surrender of the plaintiff’s rights as lessee, except in fixing the date when the lease should end; nor is anything said concerning the improvements which the plaintiff had placed. At the same time the promise of the defendant to compensate for him for the improvements was wanting. Accordingly, the representative of the defendant explained that this was unnecessary in view of the confidence existing between the parties.

On the part of the defendant it was claimed that the agreement with respect to compensating the plaintiff for improvements and other things was never in fact made.

Issue:
1. Whether or not the lessee may contest the validity of a written contract with oral evidence
2. Whether or not the appreciation value can be used to determine the price

Held:
1. Yes. In case of a written contract of lease, the lessee may prove an independent verbal agreement on the part of the landlord to put the leased premises in a safe condition. The verbal contract which the plaintiff has established in this case is therefore clearly independent of the main contract of conveyance, and evidence of such verbal contract is admissible under the doctrine above stated. In the case before us the written contract is complete in itself; the oral agreement is also complete in itself, and it is a collateral to the written contract, notwithstanding the fact that it deals with related matters.

2. Yes. The stipulation with respect to the appraisal of the property did not create a suspensive condition. The true sense of the contract evidently was that the defendant would take over the movables and the improvements at an appraised valuation, and the defendant obligated itself to promote the appraisal in good faith. As the defendant partially frustrated the appraisal, it violated a term of the contract and made itself liable for the true value of the things contracted about, as such value may be established in the usual course of proof. Furthermore, an unjust enrichment of the defendant would result from allowing it to appropriate the movables without compensating the plaintiff thereof.

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CD: Lichauco v. Olegario

October 1, 2010 at 10:06 am (1922, Case Digests) (, , )

LICHAUCO v. OLEGARIO
G.R. No. L-17709 June 20, 1922
Romualdez, J.

Doctrine:
An execution debtor has the perfect right to sell his right of redemption.

Facts:
A judgement was rendered against Olegario in a case, where he is also a defendant, wherein certain real properties of his are sold at a public auction in which he shall receive Php. 10,000, as offered, for these properties.

Gregorio Olegario sold to his cousin and brother-in-law Dalmacio Olegario, the other defendant in this case, his right of redemption over the aforesaid properties, executing the proper deed of sale, which was registered in the registry on the date of the conveyance. The plaintiff alleges that this sale is fictitious, — the result of a fraudulent conspiracy between the herein defendants.

Issue:
Whether or not an execution debtor has the authority to sell his right of redemption

Held:
Yes. An execution debtor has the perfect right to sell his right of redemption.

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CD: Yu Tek v. Gonzales

September 30, 2010 at 2:58 pm (1915, Case Digests) (, , )

YU TEK v. GONZALES
G.R. No. L-9935 February 1, 1915
Trent, J.

Doctrine:
There is a perfected sale with regard to the “thing” whenever the article of sale has been physically segregated from all other articles.

Facts:
Gonzalez received P3,000 from Yu Tek and Co. and in exchange, the former obligated himself to deliver 600 piculs of sugar of the first and second grade, according to the result of the polarization, within the period of three months. It was also stipulated that in case Gonzales fails to deliver, the contract will be rescinded he will be obligated to return the P3,000 received and also the sum of P1,200 by way of indemnity for loss and damages.

Plaintiff proved that no sugar had been delivered to him under the contract nor had he been able to recover the P3,000.

Gonzales assumed that the contract was limited to the sugar he might raise upon his own plantation; that the contract represented a perfected sale; and that by failure of his crop he was relieved from complying with his undertaking by loss of the thing due.

Issue:
Whether or not there was a perfected contract of sale

Held:
No. This court has consistently held that there is a perfected sale with regard to the “thing” whenever the article of sale has been physically segregated from all other articles.

In the case at bar, the undertaking of the defendant was to sell to the plaintiff 600 piculs of sugar of the first and second classes. Was this an agreement upon the “thing” which was the object of the contract? For the purpose of sale its bulk is weighed, the customary unit of weight being denominated a “picul.” Now, if called upon to designate the article sold, it is clear that the defendant could only say that it was “sugar.” He could only use this generic name for the thing sold. There was no “appropriation” of any particular lot of sugar. Neither party could point to any specific quantity of sugar and say: “This is the article which was the subject of our contract.”

We conclude that the contract in the case at bar was merely an executory agreement; a promise of sale and not a sale. There was no perfected sale.

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CD: Lutero v. Siuliong

September 30, 2010 at 2:04 pm (1930, Case Digests) (, , )

LUTERO v. SIULIONG
G.R. No. L-31125 January 21, 1930
Villa-real, J.

Doctrine:
Contracts of sale of agricultural products to be delivered in future, fixing a selling price, are not usurious or illegal, even when the market price of the products sold should turn out to be higher at the time of delivery.

Facts:
Plaintiff entered into a contract with defendant to sell the former’s future sugar crop harvest to the latter at a price depending on the class of the sugar. The defendant bound itself to pay an advance amount of Php. 3,000 and the remainder shall be paid from time to time. The contract also stated that should the plaintiff fail to deliver, he shall pay the amount of the undelivered portion to the defendant. The plaintiff also entered into a mortgage agreement to secure his performance in the contract.

Issue:
Whether or not future products are invalid subjects in a contract of sale

Held:
No. The contracts of sale of agricultural products to be delivered in future, fixing a selling price, are not usurious or illegal, even when the market price of the products sold should turn out to be higher at the time of delivery.

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CD: Dela Cruz v. Legaspi and Samperoy

September 29, 2010 at 11:10 am (1955, Case Digests) (, , )

DELA CRUZ v. LEGASPI AND SAMPEROY
G.R. No. L-8024 November 29, 1955
Bengzon, J.

Doctrine:
Subsequent non-payment of the price at the time agreed upon did not convert the contract into one without cause or consideration: a nudum pactum.

Facts:
Plaintiff sued defendant Legaspi to compel delivery of the parcel of land sold to plaintiff. The complaint alleged the defendant’s refusal to accept payment of the purchase price of P450 undue retention of the realty.

The defendants alleged that before the document of sale was made, the plaintiff agreed to pay the defendants the price right after the document is executed that very day but after the document was signed and ratified by the Notary Public and after the plaintiff has taken the original of the said document, the sad plaintiff refused to pay. They asserted that for lack of consideration and for deceit, the document of said should be annulled.

Issue:
Whether or not the contract of sale is void on the ground that it lacks consideration

Held:
No. It cannot be denied that when the document was signed the cause or consideration existed: P450. The document specifically said so. Subsequent non-payment of the price at the time agreed upon did not convert the contract into one without cause or consideration: a nudum pactum. (Levy vs. Johnson, 4 Phil. 650; Puato vs. Mendoza, 64 Phil, 457). The situation was rather one in which there is failure to pay the consideration, with its resultant consequences. In other words, when after the notarization of the contract, plaintiff failed to hand the money to defendants as he previously promised, there was default on his part at most, and defendants’ right was to demand interest — legal interest —.

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CD: Commissioner of Internal Revenue v. Constantino

September 29, 2010 at 10:44 am (1970, Case Digests) (, , )

CIR v. CONSTANTINO
G.R. No. L-25926 February 27, 1970
Reyes, J.B.L., J.

Doctrine:
The transfer of title or agreement to transfer it for a price paid or promised is the essence of sale. If such transfer puts the transferee in the attitude or position of an owner and makes him liable to the transferor as a debtor for the agreed price, and not merely as an agent who must account for the proceeds of a resale, the transaction is a sale; while the essence of an agency to sell is the delivery to an agent, not as his property, but as the property of the principal, who remains the owner and has the right to control sales, fix the price, and terms, demand and receive the proceeds less the agent’s commission upon sales made.

That the dealer issues his own sales invoice to the customer is neither a means of acquiring ownership nor is it proof of ownership.

Facts:
Petitioner Commissioner of Internal Revenue (CIR) assessed against and demanded from respondent Constantino the commercial broker’s percentage tax of 6% on his gross compensation for 1956, as dealer or distributor of the products of International Harvester, Macleod, Inc. (IHM).

Respondent is designated as the exclusive dealer of the products IHM within a prescribed territory. In classifying himself as an independent merchant instead of a commercial broker, respondent Constantino cites that he may buy IHM products for Resale to his customers; that he is granted trade discounts and a cash discount under certain conditions; that he may purchase service parts on open credit account or on a 30-day term; and that he sold service parts to his customers on cash basis. Constantino also cited the fact that his purchases are covered by IHM’s sales invoices, and when he re-sells he issues his own sales invoice.

Constantino protested the assessment on the ground that he is not a commercial broker. On his protest being overruled, he filed a petition for review with the Court of Tax Appeals, which, after trial, found for him. Upon his reversal by the tax court, the CIR interposed the present appeal.

Issue:
Whether or not the relationship between the respondent and IHM is that of a vendor and a vendee

Held:
No. A casual examination of respondent’s evidence may give the impression that this relationship with the company is that of vendor and vendee, but a closer look into the actual legal effect of the terms and conditions embodied, rather than the names of the contracts used or the terminologies employed, in the chain of documents shows that the relation between the company and the respondent is one of principal and agent.

Respondent failed to state or notice, however, the condition in his agreement with IHM, which is in small print, that the title of the goods delivered under this order shall remain in IHM until the full purchase price shall have been paid in cash or acceptable security. That the dealer should issue his own sales invoice to the customer is neither a means of acquiring ownership nor is it proof of ownership.

Since the company retained ownership of the goods, even as it delivered possession unto the dealer for resale to customers, the price and terms of which were subject to the company’s control, the relationship between the company and the dealer is one of agency, tested under the following criterion:

The difficulty in distinguishing between contracts of sale and the creation of an agency to sell has led to the establishment of rules by the application of which this difficulty may be solved. The decisions say the transfer of title or agreement to transfer it for a price paid or promised is the essence of sale. If such transfer puts the transferee in the attitude or position of an owner and makes him liable to the transferor as a debtor for the agreed price, and not merely as an agent who must account for the proceeds of a resale, the transaction is a sale; while the essence of an agency to sell is the delivery to an agent, not as his property, but as the property of the principal, who remains the owner and has the right to control sales, fix the price, and terms, demand and receive the proceeds less the agent’s commission upon sales made (Salisbury v. Brooks, 94 SE 117, 118-119).

The control by the company of the resale made, or agreed upon to be made, by the dealer is so pervasive as to exclude the idea of the latter being an independent merchant. As respondent is not an independent merchant, but an agent, the discount of 16% that he receives is not a “trade discount” but a compensation or profit for selling or bringing about sales or purchases of merchandise for the company.

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