Easement; Right of way

SPOUSES MERCADER vs. SPOUSES BARDILAS

G.R. No. 163157, June 27, 2016

Q: A 3 meter-wide road right of way passed through a parcel of land. The lot was subdivided into Lot A
and Lot B. The right of way was annotated on both titles, although it is by technical description part of
Lot B. May the owners of Lot A extend their house to occupy a portion of the easement based on the
claim that since the easement is annotated on their title they are entitled to its use as much as the
owners of Lot B.

A: No. Easement or servitude, according to Valdez v. Tabisula, is "a real right constituted on another's
property, corporeal and immovable, by virtue of which the owner of the same has to abstain from doing
or to allow somebody else to do something on his property for the benefit of another thing or person."
"It exists only when the servient and dominant estates belong to two different owners. It gives the
holder of the easement an incorporeal interest on the land but grants no title thereto. Therefore, an
acknowledgment of the easement is an admission that the property belongs to another.

With the right of way rightfully belonging to them as the owners of the burdened property, the
Spouses Bardilas (Lot B) remained entitled to avail themselves of all the attributes of ownership under
the Civil Code, specifically: jus utendi, jus fruendi, jus abutendi, jus disponendi and jus vindicandi. Article
428 of the Civil Code recognizes that the owner has the right to enjoy and dispose of a thing, without
other limitations than those established by law.

As owners of the 3 square meter wide road in dispute, the Bardilas Spouses (owners of Lot B)
may rightfully compel the (Mercader Spouses) to pay them the value of the land upon which a portion of
their house encroaches, and in case the petitioners fail to pay, the appellants may remove or demolish
the encroaching portion of the (Mercader Spouses) house.

ASSET POOL A (SPV-AMC), INC., vs. CLARK DEVELOPMENT CORPORATION

G.R. No. 205915

A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced. According to Article 2029 of the Civil Code, the court
shall endeavor to persuade the parties in a civil case to agree upon some fair compromise. The
contracting parties may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided such stipulations, clauses, terms and conditions are not contrary to law, morals,
good customs, public order, or public policy. Once the parties have entered into a compromise, their
agreement has the effect and authority of res judicata, but there shall be no execution except in
compliance with a judicial compromise. Such means of dispute settlement is an accepted, even
desirable and encouraged, practice in courts of law and administrative tribunals.
RURAL BANK OF MALASIQUI, INC., vs ROMEO M. CERALDE and EDUARDO M. CERALDE, JR.
G.R. No. 162032

Q: Expropriation proceedings were commenced on certain parcels of land. Said lands were subsequently
mortgaged by the registered owners, then foreclosed and acquired by mortgagee bank. Who is entitled
to payment of the just compensation, the mortgagee-bank or the registered owners-mortgagors?

Ans: The registered owners (mortgagors). Section 80 of R.A. 3844 provides that the Land Bank of the
Philippines would pay the landowners the net value of the land minus the outstanding balance of the
obligations in favor of the lending institutions in the event of an existing lien or encumbrance on the
land in favor of private parties or institutions.

Q: What is the prescriptive period for bringing an action to annul the foreclosure of a mortgage?

Ans: 10 years from the time the right of action accrues.

The petitioner is correct about the erroneous reliance on Article 1142 of the Civil Code, a legal
provision on prescription that states: A mortgage action prescribes after ten years. The phrase
mortgage action used in Article 1142 refers to an action to foreclose a mortgage, and has nothing to
do with an action to annul the foreclosure of the mortgage, like this one.

This action to annul the foreclosure of the mortgage was not yet barred by prescription because
the applicable period of prescription was 10 years from the time the right of action accrued by virtue of
the action being upon a written contract (Article 1142). Indeed, the reckoning of the period of
prescription should start from July 12, 1983, when the foreclosure of the mortgage was made, indicating
that this action, being commenced on July 12, 1993, was not barred by prescription.

ABOBON vs ABOBON
G.R. No. 155830 (Aug 15, 2012)

A fundamental principle in land registration under the Torrens system is that a certificate of title
serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person
whose name appears therein. The certificate of title thus becomes the best proof of ownership of a
parcel of land; hence, anyone who deals with property registered under the Torrens system may rely on
the title and need not go beyond the title.

We rule for the respondents on the issue of the preferential right to the possession of the land
in question. Their having preferential right conformed to the age-old rule that whoever held a Torrens
title in his name is entitled to the possession of the land covered by the title. Indeed, possession, which
is the holding of a thing or the enjoyment of a right, was but an attribute of their registered ownership.

Rescission of a Conditional Sale

LINA CALILAP-ASMERON vs. DBP
G.R. No. 157330 (Nov. 23, 2011)

Q: Petitioner and Respondent entered into a deed of conditional sale, wherein petitioner sought to
repurchase 2 parcels of land which she mortgaged to and was foreclosed by the respondent. May
respondent bank rescind the deed of conditional sale if petitioner fails to pay the agreed quarterly
amortizations?

Ans: Yes. A contract is the law between the parties. Absent any allegation and proof that the contract is
contrary to law, morals, good customs, public order or public policy, it should be complied with in good
faith. As such, the petitioner, being one of the parties in the deed of conditional sale, could not be
allowed to conveniently renounce the stipulations that she had knowingly and freely agreed to.

Equitable Mortgage
HEIRS OF JOSE REYES, JR., vs. REYES
G.R. No. 158377

Facts: On July 19, 1955, Leoncia and her sons A, B, and C sold to Benedicto a parcel of land for P500
under a pacto de retro sale. The sellers failed to pay the re-purchase price. The property however
remained in the possession of Leoncia and her sons, and Benedicto never declared the property for
taxation under his name.

Q1: Is this a pacto de retro sale?

Ans: No. It is an equitable mortgage. There was no dispute that the purported vendors had continued in
the possession of the property even after the execution of the agreement and that the property had
remained declared for taxation purposes under Leoncias name, with the realty taxes due being paid by
Leoncia, despite the execution of the agreement. Such established circumstances are among the badges
of an equitable mortgage enumerated in Article 1602, paragraphs 2 and 5 of the Civil Code.

The existence of any one of the conditions enumerated under Article 1602 of the Civil Code, not a
concurrence of all or of a majority thereof, suffices to give rise to the presumption that the contract is
an equitable mortgage. Consequently, the contract between the vendors and vendees (Byer) was an
equitable mortgage.
Q2: 15 years after the purported pacto de retro sale and while his father was still alive, G, son of A and
Leoncias grandson repaid the purchase price and had the old tax declaration cancelled with a new one
issued in his name. Are Leoncias heirs now barred from claiming that the transaction was an equitable
mortgage and not a pacto de retro sale, since it is a written contract and 10 years have already elapsed?

Ans: No. The acceptance of the payments even beyond the 10year period of redemption estopped
the mortgagees heirs from insisting that the period to redeem the property had already expired.

MMDA vs TRACKWORKS RAIL TRANSIT ADVERTISING

G.R. No. 179554 (Dec 16, 2009)

Q: MRTC had an existing BLT contract with the government for the building of MRT3, under which MRTC
would build and own MRT3 for 25 years, upon expiration of which the ownership would transfer to the
Government. MRTC then entered into a contract with Trackworks for advertising services. The latter
installed commercial billboards, signages and other advertising media in the different parts of MRT3.
May the MMDA remove the billboards and signages pursuant to an MMDA regulation prohibiting the
installation of any kind of billboards, signs and posters in any part of the road, sidewalk, or center
island?

Ans: No. Trackworks derived its right to install its billboards, signages and other advertizing media in
the MRT3 from MRTCs authority under the BLT agreement to develop commercial premises in the
MRT3 structure or to obtain advertising income therefrom is no longer debatable. Under the BLT
agreement, indeed, MRTC owned the MRT3 for 25 years, upon the expiration of which MRTC
would transfer ownership of the MRT3 to the Government.

The prohibition against posting, installation and display of billboards, signages and other advertising
media applied only to public areas, but MRT3, being private property pursuant to the BLT agreement
between the Government and MRTC, was not one of the areas as to which the prohibition applied.

Psychological Incapacity
VALERIO E. KALAW vs. MA. ELENA FERNANDEZ
G.R. No. 166357 (Jan. 14, 2015)

Q: Valerio filed a petition for declaration of nullity of marriage against his spouse, Elena. He reasoned
that his wife was psychologically incapacitated to comply with the essential marital obligations of
marriage. He presented the testimonies of two supposed expert witnesses who concluded that his wife
was suffering from a psychological incapacity in the form of NPD (Narcissistic Personality Disorder). The
conclusions of the witnesses were premised on respondents constant mah-jong sessions wherein she
would even bring along her children. Would this constitute psychological incapacity?
Ans: Yes. The determinant should be her obvious failure to fully appreciate the duties and
responsibilities of parenthood at the time she made her marital vows. Had she fully appreciated such
duties and responsibilities, she would have known that bringing along her children of very tender ages
to her mah-jong sessions would expose them to a culture of gambling and other vices that would erode
moral fibre.

Q: In a petition for declaration of nullity of marriage based on psychological incapacity filed by the
husband against his wife, may the wife refute the charge and instead prove in the same action that it is
the husband who is incapacitated?

Ans: Yes. The Courts are justified in declaring a marriage null and void under Article 36 of the Family
Code regardless of whether it is the petitioner or the respondent who imputes the psychological
incapacity to the other as long as the imputation is fully substantiated with proof. Indeed Psychological
incapacity may exist in one party alone or in both of them, and if psychological incapacity of either or
both is established, the marriage has to be deemed null and void.

SPOUSES TUMBOKON vs. LEGASPI

G.R. No. 154746 (August 4, 2010)

Q: The tug of war between petitioners and respondents for the ownership of a parcel of land led to
herein petitioner filing a criminal case for qualified theft of coconuts from the subject land, against
respondents. The RTC rejected respondents defense of ownership over the land and declared them
guilty as charged. Petitioners then filed a civil case for recovery of ownership and possession of real
property against respondents. The petition was granted by the RTC but was then reversed by the CA.
Petitioner argues that the RTC ruling in the criminal case constituted res judicata on the issue of
ownership of the land involved in the civil case. Is petitioner correct?

Ans: No. The doctrine of res judicata has two aspects: the first, known as bar by prior judgment, or
estoppel by verdict, is the effect of a judgment as a bar to the prosecution of a second action upon the
same claim, demand, or cause of action the second, known as conclusiveness of judgment, also known
as the rule of auter action pendant, ordains that issues actually and directly resolved in a former suit
cannot again be raised in any future case between the same parties involving a different cause of action
and has the effect of preclusion of issues only.

Based on the foregoing standards, this action is not barred by the doctrine of res judicata.
First of all, bar by prior judgment, the first aspect of the doctrine, is not applicable, because the causes
of action in the civil and the criminal actions were different and distinct from each other. The civil action
is for the recovery of ownership of the land filed by the petitioners, while the criminal action was to
determine whether the act of the respondents of taking the coconut fruits from the trees growing
within the disputed land constituted the crime of qualified theft. In the former, the main issue is the
legal ownership of the land, but in the latter, the legal ownership of the land was not the main issue. The
issue of guilt or innocence was not dependent on the ownership of the land, inasmuch as a person could
be guilty of theft of the growing fruits even if he were the owner of the land.
COMSAVINGS BANK (NOW GSIS FAMILY BANK) vs. SPOUSES DANILO AND ESTRELA CAPISTRANO
G.R. No. 170942

Q: Spouses Capistrano entered into a construction agreement with GCB builders. In order to finance the
construction, spouses Capistrano availed themselves of a P300,000.00 loan from Comsavings Bank, a
National Home Mortgage Finance Corporation accredited originator, and executed a deed of assignment
in favour of GCB builders of the proceeds of the loan. Comsavings bank required the spouses to sign a
certificate of house completion and acceptance before approving the loan. The proceeds of the loan
were then released to GCB, but the latter defaulted in complying with its obligations. Subsequently, the
NHMFC advised the spouses that they should start paying their monthly amortizations. The spouses
protested the demand considering they had not signed any certification of completion and acceptance,
and even if there was such a certification, it would have been forged. The spouses then sued both GCB
and Comsavings bank for breach of contract and damages. Is Comsavings jointly liable with GCB for
actual, moral, and exemplary damages?

Ans: Yes. The liability of Comsavings Bank towards respondents was based on Article 20 and Article 1170
of the Civil Code.
There is no question that Comsavings Bank was grossly negligent in its dealings with
respondents because it did not comply with its legal obligation to exercise the required diligence and
integrity. As a banking institution serving as an originator under the UHLP and being the maker of the
certificate of acceptance/completion,25 it was fully aware that the purpose of the signed certificate was
to affirm that the house had been completely constructed according to the approved plans and
apecifications, and that respondents had thereby accepted the delivery of the complete house. Given
the purpose of the certificate, it should have desisted from presenting the certificate to respondents for
their signature without such conditions having been fulfilled.
TURNER vs. LORENZO SHIPPING
G.R. No. 157479

Q: The corporation decided to amend its articles of incorporation to remove the stockholders pre-
emptive rights to newly issued shares of stock. Feeling that the corporate move would be prejudicial to
their interest as stockholders, the petitioners voted against the amendment and demanded payment of
their shares. May dissenting stockholders demand the payment of the value of their shareholdings?

Ans: Yes. A stockholder who dissents from certain corporate actions has the right to demand payment of
the fair value of his or her shares. This right, known as the right of appraisal, is expressly recognized
in Section 81 of the Corporation Code.

Clearly, the right of appraisal may be exercised when there is a fundamental change in the
charter or articles of incorporation substantially prejudicing the rights of the stockholders. It does not
vest unless objectionable corporate action is taken. It serves the purpose of enabling the dissenting
stockholder to have his interests purchased and to retire from the corporation.

SPOUSES CELSO DICO, SR. AND ANGELES DICO vs. VIZCAYA MANAGEMENT CORPORATION,
G.R. No. 161211 July 17, 2013

Q: A husband was the registered owner of Lot 486 of the Cadiz Cadastre and resided therein since 1958.
On May 30, 1964, the wife filed an application for free patent covering Lot 29-B, adjoining Lot 486, and
the husband filed a same application for Lot 1412, also adjoining Lot 486. On November 10, 1956,
respondent was able to secure a TCT covering Lot 29-B. On May 12, 1986, the spouses filed an action for
reconveyance of the property. Are the spouses entitled to recover Lot 29-B?

Ans: No. Under Article 1456 of the Civil Code, the person obtaining property through mistake or
fraud is considered by force of law a trustee of an implied trust for the benefit of the person from whom
the property comes. Under Article 1144, Civil Code, an action upon an obligation created by law must be
brought within 10 years from the time the right of action accrues. Consequently, an action for
reconveyance based on implied or constructive trust prescribes in 10 years.

Here, the CA observed that even granting that fraud intervened in the issuance of the transfer
certificates of title, and even assuming that the Dicos had the personality to demand the reconveyance
of the affected property on the basis of implied or constructive trust, the filing of their complaint for
that purpose only on May 12, 1986 proved too late for them.

Verily, the reckoning point for purposes of the Dicos demand of reconveyance based on fraud
was their discovery of the fraud. Such discovery was properly pegged on the date of the registration of
the transfer certificates of title in the adverse parties names, because registration was a constructive
notice to the whole world.19 The long period of 29 years that had meanwhile lapsed from the issuance of
the pertinent transfer certificate of title on November 10, 1956 was way beyond the prescriptive period
of 10 years.

LAND BANK OF THE PHILIPPINES vs. HEIRS OF SORIANO

G.R. No. 178312

Q: Certain parcels of land belonging to respondents was sought to be expropriated by the Government.
The parties could not agree as to the valuation. The RTC ordered the LBP to pay P1,227,571.10 as just
compensation. The CA affirmed the RTC valuation. LBP appealed to the Supreme Court. What is the
effect a compromise agreement re-evaluating the costs of the parcels of land entered into by the parties
during the pendency of the appeal?

Ans: The Agreement was a compromise that the parties freely and voluntarily entered into for the
purpose of finally settling their dispute in this case. Under Art. 2028 of the Civil Code, a compromise is a
contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one
already commenced. Accordingly, a compromise is either judicial, if the objective is to put an end to a
pending litigation, or extrajudicial, if the objective is to avoid a litigation.

As a contract, a compromise is perfected by mutual consent. However, a judicial compromise, while

immediately binding between the parties upon its execution, is not executory until it is approved by the
court and reduced to a judgment. The validity of a compromise is dependent upon its compliance with
the requisites and principles of contracts dictated by law.

PHILIPPINE NATIONAL BANK (PNB) vs. SPOUSES MANALO

G.R. No. 174433

Q: The Spouses Manalo entered into All-Purpose Credit Facility with the PNB for P1,000,000.00 , the
interest rate to be "determined by the Bank to be its prime rate plus applicable spread, prevailing at the
current month." Is the stipulation valid?

Ans: No. The unilateral determination and imposition of the increased rates is violative of the principle
of mutuality of contracts under Article 1308 of the Civil Code, which provides that [t]he contract must
bind both contracting parties; its validity or compliance cannot be left to the will of one of them. A
perusal of the Promissory Note will readily show that the increase or decrease of interest rates hinges
solely on the discretion of petitioner. It does not require the conformity of the maker before a new
interest rate could be enforced. Any contract which appears to be heavily weighed in favor of one of the
parties so as to lead to an unconscionable result, thus partaking of the nature of a contract of adhesion,
is void. Any stipulation regarding the validity or compliance of the contract left solely to the will of one
of the parties is likewise invalid.