1st exam obli prescription

7/25/2019 1st Exam oBLI Prescription

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FACTS ISSUE/ RULING

BENTIR V. LEANDA April 12, 2000

On May 15, 1992, respondent Leyte Gulf Traders, Inc. (herein referred to as

respondent corporation) filed a complaint for reformation of instrument,

specific performance, annulment of conditional sale and damages with prayer

for writ of injunction against petitioners Yolanda Rosello-Bentir and the

spouses Samuel and Charito Pormida. Respondent corporation alleged that itentered into a contract of lease of a parcel of land with petitioner Bentir for a

period of twenty (20) years starting May 5, 1968. According to respondent

corporation, the lease was extended for another four (4) years or until May 31,

1992. On May 5, 1989, petitioner Bentir sold the leased premises to petitioner

spouses Samuel Pormada and Charito Pormada.

Respondent corporation questioned the sale alleging that it had a right of first

refusal. Rebuffed, it filed Civil Case No. 92-05-88 seeking the reformation of the

expired contract of lease on the ground that its lawyer inadvertently omitted

to incorporate in the contract of lease executed in 1968, the verbal agreement

or understanding between the parties that in the event petitioner Bentir leases

or sells the lot after the expiration of the lease, respondent corporation has the

right to equal the highest offer.

Issue:Whether the complaint for reformation filed by respondent Leyte Gulf

Traders, Inc. has prescribed

Whether it is entitled to the remedy of reformation sought

Held:

The remedy of reformation of an instrument is grounded on the principle ofequity where, in order to express the true intention of the contracting parties,

an instrument already executed is allowed by law to be reformed. The right of

reformation is necessarily an invasion or limitation of the parol evidence rule

since, when a writing is reformed, the result is that an oral agreement is by

court decree made legally effective. The remedy, being an extraordinary one,

must be subject to limitations as may be provided by law. Our law and

jurisprudence set such limitations, among which is laches.

A suit for reformation of an instrument may be barred by lapse of time. The

prescriptive period for actions based upon a written contract and for

reformation of an instrument is ten (10) years under Article 1144 of the Civil

Code. Prescription is intended to suppress stale and fraudulent claims arising

from transactions like the one at bar which facts had become so obscure from

the lapse of time or defective memory. In the case at bar, respondent

corporation had ten (10) years from 1968, the time when the contract of lease

was executed, to file an action for reformation. Sadly, it did so only on May 15,

1992 or twenty-four (24) years after the cause of action accrued, hence, its

cause of action has become stale, hence, time-barred.

The prescriptive period of ten (10) years provided for in Art. 1144 applies by

operation of law, not by the will of the parties. Therefore, the right of actionfor reformation accrued from the date of execution of the contract of lease in

1968.

The rationale of the doctrine is that it would be unjust and unequitable to allow

the enforcement of a written instrument which does not reflect or disclose the

real meeting of the minds of the parties. However, an action for reformation

must be brought within the period prescribed by law, otherwise, it will be

barred by the mere lapse of time.


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AINZA V. PADUA June 30, 2005

Concepcion Ainza alleged that respondent-spouses Eugenia and Antonio Padua

owned a 216.40 sq. m. lot with an unfinished residential house located in

Project 2, Quezon City. Sometime in April 1987, she bought 1/2 of an

undivided portion of the propertyfrom her daughter, Eugenia and the latters

husband, Antonio, for P100,000.00.

No Deed of Absolute Sale was executed, but cash payment was received by the

respondents, and ownership was transferred to Concepcion through physical

delivery to her attorney-in-fact and daughter, Natividad Tuliao (Natividad).

Concepcion authorized Natividad and the latters husband, Ceferino Tuliao

(Ceferino) to occupy the premises, and make improvements on the unfinished

building.

Thereafter, Concepcion alleged that without her consent, respondents caused

thesubdivision of the property into three portions and registered it in their

names. On the other hand, Antonio averred that he merely allowed Natividad

and Ceferino to occupy the premises temporarily. In 1994, they caused the

subdivision of the property and three (3) separate titles were issued.

Thereafter, Antonio requested Natividad to vacate the premises but the latter

refused, claiming that Concepcion owned the property. Antonio thus filed an

ejectment suit. Concepcion, represented by Natividad, also filed on May 4,

1999 acivil case for partition of real property and annulment of titles with

damages.

On January 9, 2001, the RTC rendered judgment in favor of Concepcion. The

CA reversed the decision of the RTC, and declared the sale null and void.Applying Article 124of the Family Code, the CA ruled that since the subject

property is conjugal, the written consent of Antonio must be obtained for the

sale to be valid. It also ordered the spouses Padua to return the amount of

P100,000.00 to petitioners plus interest.

ISSUE:Whether Antonio is barred from questioning the validity of the sale. YES.

HELD: In this case, there was a perfected contract of sale between Eugenia and

Concepcion. The contract of sale was consummated when both parties fully

complied with their respective obligations. Eugenia delivered the property to

Concepcion, who in turn, paid Eugenia the price of One Hundred Thousand

Pesos (P100,000.00), as evidenced by the receipt.

Theverbal contract of salebetween Eugenia and Concepcion did not violate

the provisions of the Statute of Frauds. When a verbal contract has been

completed, executed or partially consummated, as in this case, its

enforceability will not be barred by the Statute of Frauds, which applies only to

an executory agreement. Thus, where one party has performed his obligation,

oral evidence will be admitted to prove the agreement.

The contract of sale between Eugenia and Concepcion being an oral contract,

the action to annul the same must be commenced within six years from the

time the right of action accrued.Eugenia sold the property in April 1987 hence

Antonio should have asked the courts to annul the sale on or before April

1993.No action was commenced by Antonio to annul the sale, hence his right

to seek its annulment was extinguished by prescription.

Even assuming that the ten (10)-year prescriptive period under Art. 173 should

apply, Antonio is still barred from instituting an action to annul the sale

because since April 1987, more than ten (10) years had already lapsed without

any such action being filed.

In sum, the sale of the conjugal property by Eugenia without the consent of her

husband is voidable. It is binding unless annulled. Antonio failed to exercise hisright to ask for the annulment within the prescribed period, hence, he is now

barred from questioning the validity of the sale between his wife and

Concepcion. Petition is GRANTED.


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ABALOS V. HEIRS OF TORIO

On July 24, 1996, the heirs of Torio filed a Complaint for Recovery of Possession

and Damages with the MTC of Pangasinan against Jaime Abalos and the

spouses Salazar. Respondents contended that they are the heirs of Vicente

Torio who died intestate on the year 1973. They stated that Mr. Vicente

allowed Jaime and Spouses Salazar to stay on his land (2,950sq.m.) at

Pangasinan.

After the death of Vicente, the respondents still allowed petitioners to stay.

On1985, respondents requested Mr. Vicente and Salazar to vacate the subject

lot but the latter refused.

Respondents filed a complaint against petitioners. Jaime and the Spouses

Salazar filed their Answer with Counter claim and stated that respondents'

cause of action is barred by acquisitive prescription. They also alleged that

they are in actual, continuous and peaceful possession of the subject lot as

owners since time immemorial. They also said that they have been paying real

property taxes and have been introducing improvements on the said and.

On December10, 2003: MTC issued a Decision ordering herein petitioners to

vacate the subject lot and turnover said property to the heirs of Vicente Torio.

Jaime and the Spouses Salazar appealed the Decision of the MTC with the

RTC of Lingayen, Pangasinan. On June14, 2005: RTC ruled in favor of Jaime and

the Spouses Salazar, holding that they have acquired the subject property

through prescription. Accordingly, the RTC dismissed herein respondents'

complaint.

Heirs of Vicente Torio filed a petition for review with the CA assailing the

Decision of the RTC. On June30, 2006: CA granted the petition of the

respondents.

Issue:

Whether the petitioners became the owners of the subject property by virtue

of acquisitive prescription. NO

Held:

In the instant case, it is clear that during their possession of the property in

question, petitioners acknowledged ownership thereof by the immediate

predecessor-in-interest of respondents. This is clearly shown by the TaxDeclaration in the name of Jaime for the year 1984 wherein it contains a

statement admitting that Jaime's house was built on the land of Vicente,

respondents' immediate predecessor-in-interest.

Petitioners never disputed such an acknowledgment. Thus, having knowledge

that they nor their predecessors-in-interest are not the owners of the disputed

lot, petitioners' possession could not be deemed as possession in good faith

as to enable them to acquire the subject land by ordinary prescription.

In this respect, the Court agrees with the CA thatpetitioners possession of the

lot in question was by mere tolerance of respondents and their predecessors-

in-interest. Acts of possessory character executed due to license or by mere

tolerance of the owner are inadequate for purposes of acquisitive prescription.

Possession, to constitute the foundation of a prescriptive right, should be

adverse, if not, such possessory acts, no matter how long, do not start the

running of the period of prescription.

Moreover, the CA correctly held that even if the character of petitioners'

possession of the subject property had become adverse, still falls short of the

required period of thirty (30) years in cases of extraordinary acquisitiveprescription.

Records show that the earliest Tax Declaration in the name of petitioners was

in 1974. Reckoned from such date, the thirty-year period was completed in

2004. However, herein respondents' complaint was filed in1996, effectively

interrupting petitioners' possession upon service of summons on them.


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MERCADO V. ESPINOCILLA

Doroteo Espinocilla owned a parcel of land, Lot No. 552, with an area of 570

sq. m., located at Magsaysay Avenue, Zone 5, Bulan, Sorsogon. After he died,

his five children, Salvacion, Aspren, Isabel, Macario, and Dionisia divided Lot

No. 552 equally among themselves. Later, Dionisia died without issue ahead of

her four siblings, and Macario took possession of Dionisias share. In an

affidavit of transfer of real property dated November 1, 1948, Macarioclaimed that Dionisia had donated her share to him in May 1945.

Thereafter, on August 9, 1977, Macarioand his daughters sold 225 sq. m. to

his son Roger Espinocilla, husband of respondent Belen Espinocilla and father

of respondent Ferdinand Espinocilla.

On March 8, 1985, Roger Espinocilla sold 114 sq. m.to Caridad Atienza. Per

actual survey of Lot No. 552.

Petitioner Celerino Mercado sued the respondents to recover two portions:

an area of 28.58 sq. m. which he bought from Aspren

28.5 sq. m. which allegedly belonged to him but was occupied by

Macarios house.

His claim has since been modified to an alleged encroachment of only 39 sq.

m. that he claims must be returned to him. He avers that he is entitled to own

and possess 171 sq. m. of Lot No. 552 , having inherited 142.5 sq. m. from his

motherSalvacion and bought 28.5 sq. m. from his aunt Aspren.Since the area

he occupies is only 132 sq. m. he claims that respondents encroach on his share

by 39 sq. m.

Respondents claim that they rightfully possess the land they occupy by virtue

ofacquisitive prescriptionand that there is no basis for petitioners claim of

encroachment.

On May 15, 2006, the Regional Trial Court (RTC) ruled in favor of petitioner and

held that he is entitled to 171 sq. m. RTC also held that Macarios 1948 affidavit

is void and is an invalid repudiation of the shares of his sisters Salvacion,

ISSUE:Whether petitioners action to recover the subject portion is barred by

prescription. YES

HELD:

Petitioner himself admits the adverse nature of respondents possession with

his assertion that Macarios fraudulent acquisition of Dionisias share created

a constructive trust. Prescription may supervene even if the trustee does not

repudiate the relationship.

Respondents uninterrupted adverse possession for 55 years of 109 sq. m. of

Lot No. 552 was established. Macario occupied Dionisias share in 1945

although his claim that Dionisia donated it to him in 1945 was only made in a

1948 affidavit.

Macarios possession of Dionisias share was public and adverse since his

other co-owners, his three other sisters, also occupied portions of Lot No. 552.

The 1977 salemade by Macario and his two daughters in favor of his son Roger

confirms the adverse nature of Macarios possession because said sale of 225

sq. m. was an act of ownershipover Macarios original share and Dionisias

share.

It was only in the year 2000, upon receipt of the summons to answer

petitioners complaint, that respondents peaceful possession of the remaining

portion (109 sq. m.) was interrupted. By then, however, extraordinary

acquisitive prescription has already set in in favor of respondents.

An action for reconveyance based on an implied or constructive trust

prescribes in 10 years from the time the right of action accrues.

Petitioners action for recovery of possession having been filed 55 years after

Macario occupied Dionisias share, it is also barred by extinctive prescription.

The CA while condemning Macarios fraudulent act of depriving his three

sisters of their shares in Dionisias share, equally emphasized the fact that

Macarios sisters wasted their opportunity to question his acts.


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Aspren, and Isabel in Dionisias share. Accordingly, Macario cannot acquire

said shares by prescription.

On appeal, the CA reversed the RTC decision and dismissed petitioners

complaint on the ground that extraordinary acquisitive prescription has

already set in in favor of respondents. The CA found that Doroteos four

remaining children made an oral partition of Lot No. 552 after Dionisias death

in 1945. And since petitioners complaint was filed only on July 13, 2000, theCA concluded that prescription has set in.

VIRTUCIO V. ALEGARBES

Respondent Jose Alegarbes filed a homestead application for a 24-hectare

tract of unsurveyed land. His application was approvedon January 23, 1952.

In 1955, however, the land was subdividedinto three (3) lots -- Lot Nos. 138,

139 and 140, Pls-19 - as a consequence of a public land subdivision. Lot 139

was allocated to Ulpiano Custodio (Custodio) while Lot 140 was allocated to

petitioner Jesus Virtucio (Virtucio).

Alegarbes opposed the homestead applications filed by Custodio and Virtucio,

claiming that his approved application covered the whole area, including Lot

Nos. 139 and 140. On October 30, 1961, the Director of Lands rendered a

decision denying Alegarbes' protest and amending the latter's application to

exclude Lots 139 and 140. Only Lot 138 was given due course.

Alegarbes appealedto the Secretary of Agriculture and Natural Resources, who

dismissed the appeal. On appeal to the Office of the President, the latteraffirmed the dismissal order. Thus, an order of execution was issued by the

Lands Management Bureau of the DENR. It ordered Alegarbes and all those

acting in his behalf to vacate the subject lot, but he refused.

On September 26, 1997, Virtucio then filed a complaint for recovery of

possession and ownership before the RTC. The RTC ruled infavor of Virtucio.

The CAreversed the RTC and ruled that Alegarbes became ipso jure owner of

Lot 140 by virtue of acquisitive prescription.

ISSUE:Whether the period for acquisitive prescription was interrupted. NO

HELD:

Article 1155 of the New Civil Code refers to the interruption of prescription of

actions. Interruption of acquisitive prescription, on the other hand, is found in

Articles 1120-1125 of the same Code.

Thus, Virtucios reliance on Article 1155 for purposes of tolling the period of

acquisitive prescription is misplaced. The only kinds of interruption that

effectively toll the period of acquisitive prescription are natural and civil

interruption. Civil interruption takes place with the service of judicial summons

to the possessor. When no action is filed, then there is no occasion to issue a

judicial summons against the respondents. The period of acquisitive

prescription continues to run.

In this case, Virtucio claims that the protest filed by Alegarbes against his

homestead application interrupted the thirty (30)-year period of acquisitive

prescription. The law, as well as jurisprudence, however, dictates that only ajudicial summons can effectively toll the said period. Only in cases filed before

the courts may judicial summons be issued and, thus, interrupt possession.

Records show that it was only in 1997 when Virtucio filed a case before the

RTC.The CA was, therefore, correct in ruling that Alegarbes became ipso jure

owner of Lot 140 entitling him to retain possession of it because he was in

open, continuous and exclusive possession for over thirty (30) years of

alienable public land.


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Aggrieved, Virtucio filed this petition. He argues that the period of acquisitive

prescription was interrupted on October 30, 1961 when Alegarbes filed a

protest before the Director of Lands. Virtucio further claims that since 1954,

several extrajudicial demands were also made upon Alegarbes demanding that

he vacate said lot. Those demands constitute the "extrajudicial demand"

contemplated in Article 1155, thus, tolling the period of acquisitive

prescription.SOUTH CITY HOMES, INC. v. REPUBLIC OF THE PHILIPPINES and COURT OF

APPEALS

The subject of this dispute is a strip of land between two lots owned by the

petitioner. It has an area of613 square meters and is situated in Calabuso,

Bian, Laguna. It was discovered only in 1983after a survey conducted by the

Bureau of Lands and is now identified asLot No. 5005 of the Binan Estate.

The two lots bordering the subject property are Lot No. 2381, containing an

area of 36,672 square meters, and Lot No. 2386- A, containing an area of

32,011 square meters. Both are now registered in the name of the petitioner.

On August 27, 1981, Lot 2386-A was sold by the Garcias to the applicant South

City Homes, Inc.

Lot 2381 was on February 25, 1977 sold by Fidel M. Cabrera, Sr. to Koo Jun Eng

who in turn assigned the property to the petitioner in February of 1981.

It is the position of the petitioner that Lot No. 5005 should be registered in its

name for either of two reasons. The first is that the disputed strip of land really

formed part of Lots 2381 and 2386-A but was omitted therefrom only becauseof the inaccuracies of the old system of cadastral surveys . The second is that

it had acquired the property by prescription through uninterrupted

possession thereof in concept of owner, by itself and its predecessors-in-

interest, for more than forty years.

The Republic argues that the elongated piece of land between the two lots now

owned by the petitioner used to be a canal which could not have been

appropriated by the purchasers of the adjacent lots or their successors-in-

ISSUE:Whether or not the petitioner can acquire lot no 5005 by tacking his

possession to the previous owners of the two lots.

HELD: NO.

Its submission is that its possession of the lot dates back to "time immemorial,"

by which tired phrase it is intended to convey the idea that the start of such

possession can no longer be recollected. Indeed, it can be. The petitioner's

possession does not in fact go back to "time immemorial," but only to the

recent remembered past.

The petitioner presented only two witnesses whose testimony regarding its

supposed possession of Lot No. 5005 is essentially hearsay and inherently

inadequate.

The testimony falls short of establishing the manner and length of possession

required by law to vest prescriptive title in the petitioner to Lot No. 5005.

By the testimony of the two witnesses, the petitioner obviously meant to tack

the possession of the two lots by the previous owners to its own possession.

There was no need for this because the petitioner acquired ownership of LotNo. 2381 by assignment and Lot No. 2386-A by purchase; and such ownership

includes the right of possession. The petitioner is not claiming prescriptive

rights to these two lots, which had previously been registered in the name of

the transferors.

The lot it is claiming by prescription is Lot No. 5005, which it did not acquire

from the owner of the other two lots, or from any previous private registered

owner of the lot, as there was none.


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interest.Neither could it be deemed included in the lots now owned by the

petitioner because their respective technical descriptions indicate otherwise.

Prescription is also not applicable because the petitioner has not established

the requisite possession of the lot, as to manner and length, to justify judicial

confirmation of title in its name.

The petitionerinsists it is patrimonial property of the State, being part of the

so-called Friar Lands, while the Republic maintains it is part of the publicdomain and cannot therefore be acquired by a private corporation.

Lot No. 5005 was not part of either of the two lots. The simple reason is that

the possession of the said lot was not and could not have been transferred to

the petitioner when it acquired Lots Nos. 2381 and 2386-A because these two

lots did not include the third lot. Article 1138of the Civil Code provides that

(1) The present possessor may complete the period necessary for

prescription by tacking his possession to that of his grantor or predecessor- in

interest.

However, tacking of possession is allowed only when there is a privity of

contract or relationship between the previous and present possessors. In the

absence of such privity, the possession of the new occupant should be

counted only from the time it actually began and cannot be lengthened by

connecting it with the possession of the former possessors.

It should also be noted that, according toArticle 1135 of the Civil Code:

In case the adverse claimant possesses by mistake an area greater, or less, than

that expressed in his title, prescription shall be based on the possession.

This possession, following the above quoted rulings, should be limited only to

that of the successor-in-interest; and in the case of the herein petitioner, it

should begin from 1981 when it acquired the two adjacent lots and occupied

as well the lot in question thinking it to be part of the other two.

It follows that when the application for registration of the lot in the name of

the petitioner was filed in 1983, the applicant had been in possession of the

property for less than three years.This was far too short of the prescriptive

period required for acquisition of immovable property, which is ten yearsif thepossession is in good faith and thirty years if in bad faith, or if the land is public.

The Court finds it unnecessary to determine whether the land is patrimonial in

nature or part of the public domain.

SIMEON MIGUEL v. FLORENDO CATALINO

On January 22, 1962, appellants Simeon, Emilia and Marcelina Miguel, and

appellant Grace Ventura brought suit in the Court below against Florendo

Catalino for the recovery of the landsituated in the Barrio of San Pascual,

ISSUE: Whether the petitioners are barred from recovering the subject

property by virtue of laches. YES

RULING: The judgment in favor of defendant-appellee Florendo Catalino must

be sustained. For despite the invalidity of his sale to Catalino Agyapao, father


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Municipality of Tuba, Benguet, Mountain Province and contains an area of

39,446 square meters, more or less. Plaintiffs claiming to be the children and

heirs of the original registered owner, and averred that defendant, without

their knowledge or consent, had unlawfully taken possession of the land,

gathered its produce and unlawfully excluded plaintiffs therefrom.

Defendant answered pleading ownership and adverse possession for 30

years, and counterclaimed for attorney's fees.

After trial the Court dismissed the complaint, declared defendant to be the

rightful owner, and ordered the Register of Deeds to issue a transfer certificate

in lieu of the original.

Plaintiffs appealed directly to this Court, assailing the trial Court's findings of

fact and law.

The plaintiff-appellant Grace Ventura2is the only child of Bacaquio by his first

wife, Debsay, and the other plaintiffs-appellants, Simeon, Emilia and

Marcelina, all surnamed "Miguel", are his children by his third wife, Cosamang.

He begot no issue with his second wife, Dobaney. The three successive wives

have all died.

Bacaquio sold it to Catalino Agyapao, father of the defendant Florendo

Catalino, for P300.00 in 1928. No formal deed of sale was executed, but since

the sale in 1928, or for more than 30 years, vendee Catalino Agyapao and his

son, defendant-appellee Florendo Catalino, had been in possession of the land,

in the concept of owner, paying the taxes thereon and introducing

improvements.

On 1 February 1949, Grace Ventura, by herself alone, "sold" anew the same

land for P300.00 to defendant Florendo Catalino.

In 1961, Catalino Agyapao in turn sold the land to his son, the defendant

Florendo Catalino.

of defendant-appellee, the vendor Bacaquio suffered the latter to enter,

possess and enjoy the land in question without protest, from 1928 to 1943 ,

when the seller died; and the appellants, in turn, while succeeding the

deceased, also remained inactive, without taking any step to reivindicate the

lot from 1944 to 1962, when the present suit was commenced in court.

Even granting appellants' proposition that no prescription lies against their

father's recorded title, their passivity and inaction for more than 34 years(1928-1962) justifies the defendant-appellee in setting up the equitable

defense of laches in his own behalf.

As a result, the action of plaintiffs-appellants must be considered barred and

the Court below correctly so held.

Courts cannot look with favor at parties who, by their silence, delay and

inaction, knowingly induce another to spend time, effort and expense in

cultivating the land, paying taxes and making improvements thereon for 30

long years, only to spring from ambush and claim title when the possessor's

efforts and the rise of land values offer an opportunity to make easy profit at

his expense.

In the case at bar, Bacaquio sold the land in 1928 but the sale is void for lack

of the governor's approval. The vendor, and also his heirs after him, could have

instituted an action to annul the sale from that time, since they knew of the

invalidity of the sale, which is a matter of law; they did not have to wait for 34

years to institute suit. The defendant was made to feel secure in the belief that

no action would be filed against him by such passivity, and also because he

"bought" again the land in 1949 from Grace Ventura who alone tried to

question his ownership; so that the defendant will be plainly prejudiced in the

event the present action is not held to be barred.

Since the plaintiffs-appellants are barred from recovery, their divestiture of all

the elements of ownership in the land is complete; and the Court a quo was

justified in ordering that Bacaquio's original certificate be cancelled, and a new

transfer certificate in the name of Florendo Catalino be issued in lieu thereof

by the Register of Deeds.


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AGRA v. Philippine National Bank

On August 30, 1976, an action for collection of a sum of money was filed by the

PNB against Fil-Eastern Wood Industries, Inc. (principal debtor) and Petitioners

(sureties).

In its complaint, PNB alleged that on July 17, 1967 Fil-Eastern was granted a

loan in the amount of P2,500,000.00. To secure the payment of the said loanFil-Eastern as principal and sureties Ferreria, Atienza, Novales, Agra, and Gamo

executed a Surety Agreementwhereby the sureties, jointly and severally with

the principal, guaranteed to PNB prompt payment of the subject

obligations. Notwithstanding repeated demands, the Petitioners refused and

failed to pay their loans.

The Sureties claimed among others that:

a) They only signed the Surety Agreement with the understanding that

the same was a mere formality required of the officers of the

corporation.

b)

They did not benefit from the said loan.

c) The extension of time of payment of the loan, released the defendants

from any liability under the Surety Agreement.

d) The Surety Agreement is null and void from the beginning due to a

defect in the consent of the defendants; and

e) That the cause of action of the complainant is barred by laches and

estoppel in that PNB with full knowledge of the deteriorating

financial condition of Fil-Eastern did not take steps to collect from

said defendant corporation while still solvent.

ISSUE:Whether petitioners may invoke the defense of laches, considering that

PNBs claim had not yet prescribed. NO

HELD:The defense of laches applies independently of prescription. Laches is

different from the statute of limitations. Prescription is concerned with the fact

of delay, whereas laches is concerned with the effect of delay. Prescription is a

matter of time; laches is principally a question of inequity of permitting a claim

to be enforced, this inequity being founded on some change in the conditionof the property or the relation of the parties. Prescription is statutory; laches

is not. Laches applies in equity; whereas prescription applies at

law. Prescription is based on fixed time, laches is not.

True, prescription is different from laches, laches is principally a question of

equity. Necessarily, there is no absolute rule as to what constitutes laches or

staleness of demand; each case is to be determined according to its particular

circumstances. The question of laches is addressed to the sound discretion of

the court and since laches is an equitable doctrine, its application is controlled

by equitable considerations

.

Petitioners, however, failed to show that the collection suit against sureties

was inequitable.Remedies in equity address only situations tainted with

inequity, not those expressly governed by statutes. Indeed, the petitioners

failed to prove the presence of all the four established requisites of laches, viz:

(1) conduct on the part of the defendant or one under whom he claims, giving

rise to the situation of which complaint is made and for which the complainant

seeks a remedy;

(2) delay in asserting the complainants right, the complainant having had

knowledge or notice of defendants conduct and having been afforded an

opportunity to institute a suit;

(3) lack of knowledge or notice on the part of the defendant that thecomplainant would assert the right on which he bases his claim; and

(4) injury or prejudice to the defendant in the event relief is accorded to the

complainant, or the suit is not held barred.

First element (exists). Neither Fil-Eastern nor the sureties, herein petitioners,

paid the obligation under the Surety Agreement.

Second element (inexistent). Although the collection suit was filed more than

seven years after the obligation of the sureties became due, the lapse was


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within the prescriptive period for filing an action. In this light, we find

immaterial petitioners insistence that the cause of action accrued on

December 31, 1968, when the obligation became due, and not on August 30,

1976, when the judicial demand was made. In either case, both submissions

fell within the ten-year prescriptive period. In any event, the fact of delay,

standing alone, is insufficient to constitute laches.

Third element (inexistent). It is absurd to maintain that petitioners did notknow that PNB would assert its right under the Surety Agreement. It is

unnatural, for banks to condone debts without adequate recompense in some

other form. Petitioners have not given us reason why they assumed that PNB

would not enforce the Agreement against them.

Forth element (inexistent). The circumstances do not justify the application of

laches. Rather, they disclose petitioners failure to understand the language

and the nature of the Surety Arrangement. They cannot now argue that the

Surety Agreement was merely a formality, secondary to the assignment of 15

percent of the proceeds of the sale of Fil-Easterns logs to Iwai and Co.,

Ltd. Neither can they rely on PNBs failure to collect the assigned share in the

sale of the logs or to make a demand on petitioners until after Fil-Eastern had

become bankrupt.

Although the contract of a surety is in essence secondary only to a valid

principal obligation, his liability to the creditor or promisee of the principal is

said to be direct, primary, and absolute; in other words, he is directly

and equallybound with the principal. The surety therefore becomes liable for

the debt or duty of another although he possesses no direct or personal

interest over the obligations nor does he receive any benefit therefrom.

When petitioners signed as sureties, they expressly and unequivocally agreed

to the stipulation that the liability on this guaranty shall be solidary, direct and

immediate and not contingent upon the pursuit by the creditor,its successors,

indorsees or assigns, of whatever remedies it or they have against the principal

or the securities or liens it or they may possess.

If they had mistaken the import of the Surety Agreement, they could have

easily asked for its revocation.


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BANEZ JR V. CONCEPCION August 29, 2012

This case originated from a Civil Case No. 3287-V-90 entitled Leodegario B.

Ramos v. Rodrigo Gomez, a.k.a. Domingo Ng Lim.

On October 9, 1990, before the Valenzuela RTC could decide Civil Case No.

3287-V-90 on the merits, Ramos and Gomez entered into a compromise

agreement. The RTC approved their compromise agreement through itsdecision rendered on the same date.

The petitioner, being then the counsel of Ramosin Civil Case No. 3287-V-90,

assisted Ramos in entering into the compromise agreement "to finally

terminate this case.

One of the stipulations of the compromise agreement was for Ramos to

execute a deed of absolute sale in favor of Gomez respecting the parcel of land

with an area of 1,233 square meters.

Another stipulation was for thepetitioner to issue post-dated checks totaling

P 110,000.00 to guarantee the payment by Ramos of his monetary obligations

towards Gomez as stated in the compromise agreement broken down as

follows: (a) P 80,000.00 as Ramos loan obligation to Gomez; (b) P 20,000.00

for the use of the loan; and (c) P 10,000.00 as attorneys fees.

Of these amounts, only P 80,000.00 was ultimately paid to Gomez,because

the petitioners check dated April 23, 1991 for the balance of P 30,000.00 was

dishonored for insufficiency of funds.

Gomez meanwhile died on November 7, 1990. He was survived by his wifeTsui Yuk Ying and their minor children (collectively to be referred to as the

Estate of Gomez). The Estate of Gomez sued Ramos and the petitioner for

specific performance in the RTC in Caloocan City to recover the balance of P

30,000.00 (Civil Case No. C-15750).

Ramosfailed to cause the registration of the deed of absolute salepursuant

to the second paragraph of the compromise agreement of October 9, 1990

despite the Estate of Gomez having already complied with Gomezs

undertaking. Nor did Ramos deliver to the Estate of Gomez the owners

ISSUE:Whether the filing of the complaint for specific performance to recover

the 1,233 square meter lot has prescribed. NO

HELD:

Civil Case No. 722-M-2002 was really an action to revive the judgment by

compromise dated October 9, 1990 because the ultimate outcome would be

no other than to order the execution of the judgment by compromise.

The petitioners defense of prescription to bar Civil Case No. 722 -M-2002

presents another evidentiary concern. Article 1144 of the Civil Code requires,

indeed, that an action to revive a judgment must be brought before it is barred

by prescription, which was ten years from the accrual of the right of action.

It is clear, however, that such a defense could not be determined in the hearing

of the petitioners motion to dismiss considering that the complaint did not

show on its face that the period to bring the action to revive had already lapsed.

An allegation of prescription, as the Court put it in Pineda v. Heirs of Eliseo

Guevara, "can effectively be used in a motion to dismiss only when the

complaint on its face shows that indeed the action has already prescribed,

[o]therwise, the issue of prescription is one involving evidentiary matters

requiring a full blown trial on the merits and cannot be determined in a mere

motion to dismiss."

At any rate, the mere lapse of the period per se did not render the judgment

stale within the context of the law on prescription, for events that effectively

suspended the running of the period of limitation might have intervened. In

other words, the Estate of Gomez was not precluded from showing suchevents, if any.

Verily, the need to prove the existence or non-existence of significant matters,

like supervening events, in order to show either that Civil Case No. 722-M-2002

was barred by prescription or not was present and undeniable. Moreover, the

petitioner himself raised factual issues in his motion to dismiss, like his

averment of full payment or discharge of the obligation of Ramos and the

waiver or abandonment of rights under the compromise agreement. The proof


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duplicate copy of TCT No. T-10179 P(M) of the Registry of Deeds of

Meycauayan, Bulacan, as stipulated under the third paragraph of the

compromise agreement of October 9, 1990.Instead, Ramos and the petitioner

caused to be registered the 1,233 square meter portion in Ramoss name

under TCT No. T-13005-P(M) of the Registry of Deeds of Meycauayan, Bulacan.

On July 6, 1995, the Estate of Gomez brought a complaint for specific

performance against Ramos and the petitioner in the RTC in Valenzuela inorder to recover the 1,233 square meter lot. However, the Valenzuela RTC

dismissed the complaint on April 1, 1996 on the ground of improper venue and

recourse.

On appeal to CA, the RTC decision was affirmed.

On September 20, 2002, the Estate of Gomez commenced Civil Case No. 722-

M-2002 in the Valenzuela RTC, ostensibly to revive the judgment by

compromiserendered on October 9, 1990 in Civil Case No. 3287-V-90.

The petitioner was impleaded as a party-defendant because of his having

guaranteed the performance by Ramos of his obligation and for having

actively participated in the transaction.

On January 8, 2003, the petitioner moved for the dismissal of Civil Case No.

722-M-2002, alleging that the action was already barred by res judicata and

by prescription; that he was not a real party-in-interest; and that the amount

he had guaranteed with his personal check had already been paid by Ramos

with his own money.

On March 24, 2003, the RTC reversed its first ruling that the right of action hadalready prescribed due to more than 12 years having elapsed from the approval

of the compromise agreement on October 9, 1990, citing Article 1143 (3) of the

Civil Code (which provides a 10-year period within which a right of action based

upon a judgment must be brought from. It held that the filing of the complaint

for specific performance on July 6, 1995 in the Valenzuela RTC had

interrupted the prescriptive period pursuant to Article 1155 of the Civil Code.

thereon cannot be received in certiorari proceedings before the Court, but

should be established in the RTC.


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REPUBLIC V. ESPINOSA

Respondent Domingo Espinosa filed with the MTC of Consolacion, Cebu an

application for land registration covering a parcel of land with an area of 5,525

sq. ms. situated in Barangay Cabangahan, Consolacion, Cebu.

In support of his application Espinosa alleged that: (a) the property is alienable

and disposable; (b) he purchased the property from his mother, Isabel, on July4, 1970 and the latters other heirs had waived their rights thereto; and (c) he

and his predecessor-in-interest had been in possession of the property in the

concept of an owner for more than 30 years

Petitioner opposed Espinosas application, claiming that: (a) Section 48(b) of

Commonwealth Act No. 141 otherwise known as the "Public Land Act" had not

been complied with as Espinosas predecessor-in-interest possessed the

property only after June 12, 1945; and (b) the tax declarations do not prove

that his possession and that of his predecessor-in-interest are in the character

and for the length of time required by law

ISSUE: Whether Espinosas application has satisfied the legal requirements for

registration over the subject property which warrants the granting of the

decree of registration.

HELD: NO. Espinosa failed to comply with the other legal requirements for its

application for registration to be granted.

Applying Section 14(1) of P.O. No. 1529 and Section 48(b) of the PLA, albeit

improper, Espinosa failed to prove that: (a) Isabel's possession of the property

dated back to June 12, 1945 or earlier; and (b) the property is alienable and

disposable.

On the other hand, applying Section 14(2) of P.O. No. 1529, Espinosa failed to

prove that the property is patrimonial. As to whether Espinosa was able to

prove that his possession and occupation and that of Isabel were of the

character prescribed by law, the resolution of this issue has been rendered

unnecessary by the foregoing considerations

REMMAN ENTERPRISES V. REPUBLIC

The petitioner, through its authorized representative Ronnie P. Inocencio

(Inocencio), filed with the RTC on June 4, 1998 an application for registration

of the subject properties situated in Barangay Napindan, Taguig, Metro

Manila, with an area of 27,477 square meters, 23,179 sq m and 45,636 sq m.

The State, through the OSG, interposed its opposition to the application.

During the initial hearing of the case on May 4, 1999, the petitioner presented

and marked documentary evidenceto prove its compliance with jurisdictional

requirements.

Inocencio, the petitioner's sales manager, testified that the subject properties

were purchased on August 28, 1989 by the petitioner from sellers Magdalena

Samonte, Jaime Aldana and Virgilio Navarro. The properties were declared for

taxation purposes on August 9, 1989. After the sale, the petitioner occupied

the properties and planted thereon crops like rice, corn and vegetables.

ISSUE:

HELD:

Dismissal of petitioners application for original registration was proper

considering the latter's failure to sufficiently establish that the subject

properties were already declared alienable and disposable by the

government.

The present rule on the matter then requires that an application for original

registration be accompanied by: (1) CENRO or PENRO Certification; and (2) a

copy of the original classification approved by the DENR Secretary and certifiedas a true copy by the legal custodian of the official records, x x x. [20(Citations

omitted and emphasis in the original)

Given the foregoing, the dismissal of the petitioner's application for

registration was proper. Under pertinent laws and jurisprudence, the

petitioner had to sufficiently establish that: first, the subject properties form

part of the disposable and alienable lands of the public domain; second, the

applicant and his predecessors-in-interest have been in open, continuous,

exclusive, and notorious possession and occupation of the same; and third,the


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Serquina, a caretaker of the property, alleged that no person other than the

applicant and its predecessors-in-interest had claimed ownership or rights over

the subject properties.

On November 27, 2001, the RTC granted the petitioner's application.

Dissatisfied, the State appealed to the CA by alleging substantive and

procedural defects in the petitioner's application. It argued that the identity ofthe subject properties was not sufficiently established. The State further

claimed that the character and length of possession required by law in land

registration cases were not satisfied by the petitioner.

CA reversed the RTC decision. The CA explained that the survey plans and

technical descriptions submitted by the petitioner failed to establish the true

identity of the subject properties. The petitioner should have also submitted a

certification from the proper government office stating that the properties

were already declared alienable and disposable.

The CA further cited a failure to establish that the petitioner and its

predecessors-in-interest possessed the subject parcels of land under a bona

fide claim of ownership since June 12, 1945 or earlier.

possession is under a bona fide claim of ownership since June 12, 1945 or

earlier.23chanroblesvirtuallawlibrary

Without sufficient proof that the subject properties had been declared

alienable and disposable, the Court finds no reason to look further into the

petitioner's claim that the CA erred in finding that it failed to satisfy the nature

and length of possession that could qualify for land registration.

MANGASER V. UGAY December 3, 2014

On October 30, 2007, petitioner Anacleto Mangaser filed a complaint for

Forcible Entry with Damages against respondent Dionisio Ugay (respondent)

before the MTC of Caba, La Union.

In his complaint, petitioner alleged that he was the registered owner andpossessor of a parcel of land situated in Santiago Sur, Caba, La Union, with an

area of 10,632 square meters; that on October 31, 2006, petitioner, discovered

that respondent stealthy intruded and occupied a portion of his property by

constructing a residential house thereon without his knowledge and consent;

that he referred the matter to the Office of Lupong Tagapamayapa for

conciliation, but no settlement was reached, hence, a certification to file action

was issued by the Lupon; and that demand letters were sent to respondent but

he still refused to vacate the premises, thus, he was constrained to seek judicial

remedy.

ISSUE:Whether respondent acquired ownership of the subject property by

virtue of acquisitive prescription. NO

HELD:

In the case at bench, the Court finds that petitioner acquired possession of the

subject property by juridical act, specifically, through the issuance of a free

patent under Commonwealth Act No. 141 and its subsequent registration withthe Register of Deeds on March 18, 1987.

The issuance of an original certificate of title to the petitioner evidences

ownership and from it, a right to the possession of the property flows. Well-

entrenched is the rule that a person who has a Torrens title over the property

is entitled to the possession thereof.

Moreover, his claim of possession is coupled with tax declarations. While tax

declarations are not conclusive proof of possession of a parcel of land, they are


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Respondent denied the material allegations of the complaint.

He argued that:

he had been a resident of Samara, Aringay, La Union, since birth and

when he reached the age of reason,

that he introduced more improvements on the property by cultivating

the land, and in March 2006, he put up a "bahay kubo";

that in October 2006, he installed a fence made of "bolo" to secure

the property; that he knew the boundaries of petitioner's property because he knew

the extent of the "iron mining" activities done by a company on the

said property;

that petitioner was never in actual possession of the property

occupied by him, and it was only on October 31, 2006 when he

discovered the intrusion;

that it was not correct to say that he refused to vacate and surrender

the premises despite receipt of the demand letters because in his

letter-reply, he assured petitioner that he would voluntarily vacate the

premises if he would only be shown to have intruded into petitioner'stitled lot after the boundaries were pointed out to him;

and that instead of showing the boundaries to him, petitioner filed an

action for forcible entry before the MTC.

On April 26, 2011, the MTC ruled in favor of respondent. It stated that

petitioner failed to adduce any evidence to prove that the lot occupied by

respondent was within his lot titled under OCT No. RP-174 (13 789). It also

explained that petitioner failed to prove his prior physical possession of the

subject property.

The OCT No. RP-174(13789) registered under petitioner's name and the Tax

Declaration were not proof of actual possession of the property.

Aggrieved, petitioner appealed to the RTC of Bauang, La Union. The RTC

reversed the MTC decision and ruled in favor of petitioner. That possession of

the land did not only mean actual or physical possession but also included the

subject of the thing to the action of one's will or by the proper acts and legal

formalities established for acquiring such right.

The CA reversed and set aside the decision of the RTC. It emphasized that

petitioner must allege and prove that he was in prior physical possession of the

good indicia of possessionin the concept of an owner, for no one in his right

mind would be paying taxes for a property that is not in his actual or

constructive possession.

Against the Torrens title and tax declarations of petitioner, the bare allegations

of respondent that he had prior, actual, continuous, public, notorious,

exclusive and peaceful possession in the concept of an owner, has no leg to

stand on. Thus, by provisionally resolving the issue of ownership, the Court issatisfied that petitioner had prior possession of the subject property. When

petitioner discovered the stealthy intrusion of respondent over his registered

property, he immediately filed a complaint with the Lupong Tagapamayapa

and subsequently filed an action for forcible entry with the MTC. Instead of

taking the law into his own hands and forcefully expelling respondent from his

property, petitioner composed himself and followed the established legal

procedure to regain possession of his land.

Petitioner proved that he was deprived of possession of the property by

stealth.

The complaint was also filed on October 30, 2007, within the one year

reglementary period counted from the discovery of the stealthy entry by

respondent to the property on October 31, 2006.

For a forcible entry suit to prosper, the plaintiffs must allege and prove: (a) that

they have prior physical possession of the property; (b) that they were

deprived of possession either by force, intimidation, threat, strategy or stealth;

and, (c) that the action was filed within one (1) year from the time the owners

or legal possessors learned of their deprivation of the physical possession ofthe property.

As a rule, the word "possession" in forcible entry suits indeed refers to nothing

more than prior physical possession or possession de facto, not possession de

Jure or legal possession in the sense contemplated in civil law. Title is not the

issue, and the absence of it "is not a ground for the courts to withhold relief

from the parties in an ejectment case."


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property in dispute. The word "possession," as used in forcible entry and

unlawful detainer cases, meant nothing more than physical possession, not

legal possessionin the sense contemplated in civil law.

The CA wrote that petitioner was not in physical possession despite the

presentation of the OCT No. RP-174(13789) and his tax declarations. It

reiterated that when the law would speak of possession in forcible entry cases,

it is prior physical possession or possession de facto, as distinguished frompossession de Jure. What petitioner proved was legal possession, not his prior

physical possession.

Possession can be acquired by juridical acts. These are acts to which the law

gives the force of acts of possession. Examples of these are donations,

succession, execution and registration of public instruments, inscription of

possessory information titles and the like.33 The reason for this exceptional

rule is that possession in the eyes of the law does not mean that a man has

to have his feet on every square meter of ground before it can be said that

he is in possession.

1st exam obli prescription

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