Ayson vs Spouses Paragas
Ynares-Santiago – 2008
Topic: Possession and Ownership; Equitable
Mortgage;
Facts
The controversy commenced with the filing of an
ejectment complaint by petitioner Ayson against
respondent-spouses Paragas on the basis that
petitioner is the registered owner of the property
being occupied by the respondent-spouses who,
according to petitioner, are just occupying the said
land through the latter’s tolerance without rent.
MTCC decided in favor of petitioner. RTC affirmed
the MTCC Decision. During the pendency of the
appeal with the RTC, respondent-spouses filed
against petitioner a complaint for declaration of nullity
of Deed of Sale, in effect questioning OWNERSHIP.
Respondent Felix Paragas (husband) alleged that
Ayson’s father made him sign a Deed of Absolute
Sale over Maxima’s (wife) property under threat that
Felix will be incarcerated. RTC rendered its decision
in favor of respondent-spouses declaring the Deed of
Absolute Sale as an equitable mortgage.
Issue 1
WON the decision of the court in the ejectment case
where ownership was raised as defense by the
Spouses Paragas, is conclusive on the issue of
ownerhip such that the complaint for declaration of
nullity of Deed of Sale by the respondent-spouses is
barred.
Decision 1
No. Action by the respondent-spouse is not barred.
Ratio 1
It must be remembered that in ejectment suits the
issue to be resolved is merely the physical
possession over the property, i.e., possession de
facto and not possession de jure, independent of any
claim of ownership set forth by the party-litigants.
Should the defendant in an ejectment case raise the
defense of ownership in his pleadings and the
question of possession cannot be resolved without
deciding the issue of ownership, the issue of
ownership shall be resolved only to determine the
issue of possession. The judgment rendered in such
an action shall be conclusive only with respect to
physical possession and shall in no wise bind the title
to the realty or constitute a binding and conclusive
adjudication of the merits on the issue of ownership.
Therefore, such judgment shall not bar an action
between the same parties respecting the title or
ownership over the property, which action was
precisely resorted to by respondent-spouses in this
case.
Issue 2
WON the Deed of Absolute Sale is an equitable
mortgage.
Decision 2
Yes. It is an equitable mortgage; hence, the property
is still under the ownership of the spouses.
Ratio 2
The Civil Code enumerates the cases in which a
contract, purporting to be a sale, is considered only
as a contract of loan secured by a mortgage as per
Article 1604 in relation Article 1602. In this case, the
evidence before the RTC had established that the
possession of the subject property remained with
respondent-spouses despite the execution of the
Deed of Absolute Sale.
Issue 3
WON the Deed of Absolute Sale was executed
through fraud, making the said contract merely
voidable, and the action to annul voidable contracts
based on fraud prescribed in four (4) years from the
discovery of fraud.
Decision 3 and Ratio 3
An equitable mortgage is a voidable contract. As
such, it may be annulled within four (4) years from
the time the cause of action accrues. This case,
however, not only involves a contract resulting from
fraud, but covers a transaction ridden with threat,
intimidation, and continuing undue influence which
started when petitioner’s father Thus, the four-year
period should start from the time the defect in the
consent ceases.
Philippine Veterans Bank vs Monillas
Nachura – 2008
Topic: Effects of Prior Registration of Mortgage
shall Prevail over the Belated Annotation of a Lis
Pendens.
Benjamin Monillas executed a deed of sale of his
share over the property to his brother, Ireneo. Ireneo
then caused the transfer of the title in his name.
Ireneo mortgaged twenty-two (22) lots to petitioner
Philippine Veterans Bank (PVB). Benjamin Monillas
filed for the nullification of the deed of sale and for
the recovery of the property, which the RTC decided
on his favor; hence, he filed for the declaration of the
nullity of the titles issued in PVB's name. He caused
the annotation of notices of lis pendens relating to
the said case on the titles of the lots. While the case
remained pending, PVB foreclosed the mortgage,
PVB was the highest bidder Benjamin Monillas,
The RTC ruled against PVB. The RTC rationalized
that while the annotation of the notices of lis pendens
succeeded the registration of the mortgage, still the
effect of the notices was that PVB acquired
knowledge of an impediment against its interest, and
as a matter of fact, PVB ignored the notices and slept
on its rights, as it did not intervene in the said civil
case.
Issue
WON the prior registered mortgage and the already
concluded foreclosure proceedings should prevail
over the subsequent annotation of the notices of lis
pendens on the lot titles.
Decision
Prior registered mortgage of PVB and the foreclosure
proceedings already conducted prevail over
Benjamin Monilla's subsequent annotation of the
notices of lis pendens on the titles to the property.
Ratio
A prior registration of a lien creates a preference;
hence, the subsequent annotation of an adverse
claim cannot defeat the rights of the mortgagee, or
the purchaser at the auction sale whose rights were
derived from a prior mortgage validly registered. A
contrary rule will make a prior registration of a
mortgage or any lien nugatory or meaningless.