MARITO T. BERNALES, PETITIONER, V. NORTHWEST AIRLINES, RESPONDENT.

G.R. No. 182395, October 05, 2015

BRION, J.

FACTS
Spouses Julian and Guillerma Sambaan were the registered owner of a property located
in Bulua, Cagayan de oro City. The respondents and the petitioner Myrna Bernales are the
children of Julian and Guillerma. Myrna, who is the eldest of the siblings, is the present owner
and possessor of the property in question. Julian died in an ambush in 1975. Before he died, he
requested that the property in question be redeemed from Myrna and her husband Patricio
Bernales. Thus, in 1982 one of Julian’s siblings offered to redeem the property but the
petitioners refused because they were allegedly using the property as tethering place for their
cattle.

In January 1991, respondents received an information that the subject property was
already transferred to Myrna Bernales. The Deed of Absolute Sale dated December 7, 1970
bore the forged signatures of their parents, Julian and Guillerma. On April 1993, the
respondents, together with their mother Guillerma, filed a complaint for Annulment of Deed of
Absolute Sale and cancellation of TCT No. T-14204 alleging that their parent’s signatures were
forged. The trial court rendered a decision on August 2, 2001 cancelling the TCT and ordering
another title to be issued in the name of the late Julian Sambaan.

Petitioners went to the CA and appealed the decision. The CA affirmed the decision of
the lower court. A motion for reconsideration of the decision was, likewise, denied in 2004.
Hence, this petition for certiorari.

ISSUE

(1) Whether or not the Deed of Absolute Sale is authentic as to prove the ownership of the
petitioners over the subject property

RULING

(1) It is a question of fact rather than of law. Well-settled is the rule that the Supreme Court
is not a trier of facts. Factual findings of the lower courts are entitled to great weight and
respect on appeal, and in fact accorded finality when supported by substantial evidence on the
record. Substantial evidence is more than a mere scintilla of evidence. It is that amount of
relevant evidence that a reasonable mind might accept as adequate to support a conclusion,
even if other minds, equally reasonable, might conceivably opine otherwise. But to erase any
doubt on the correctness of the assailed ruling, we have carefully perused the records and,
nonetheless, arrived at the same conclusion. We find that there is substantial evidence on
record to support the Court of Appeals and trial court’s conclusion that the signatures of Julian
and Guillerma in the Deed of Absolute Sale were forged.
 Conclusions and findings of fact by the trial court are entitled to great weight on appeal
and should not be disturbed unless for strong and cogent reasons because the trial court is in a
better position to examine real evidence, as well as to observe the demeanor of the witnesses
while testifying in the case. The fact that the CA adopted the findings of fact of the trial court
makes the same binding upon this court.

Thus, we hold that with the presentation of the forged deed, even if accompanied by the
owner’s duplicate certificate of title, the registered owner did not thereby lose his title, and
neither does the assignee in the forged deed acquire any right or title to the said property.

ROWENA R. SALONTE, Petitioner, vs.COMMISSION ON AUDIT

G.R. No. 207348 August 19, 2014
VELASCO, JR.

FACTS

On April 26, 1989, the City of Mandaue and F.F. Cruz and Co., Inc. (F.F. Cruz) entered into a
Contract of Reclamation4 in which F.F. Cruz, in consideration of a defined land sharing formula
thus stipulated, agreed to undertake, at its own expense, the reclamation of 180 hectares, more
or less, of foreshore and submerged lands fromthe Cabahug Causeway in that city. The
timetables, i.e., commencement of the contract and project completion, are provided in
paragraphs 2 and 15 of the Contract.

Pursuant to the MOA, F.F. Cruz proceeded to construct the contemplated housing units
and other facilities which included a canteen and a septic tank.
Later developments saw the City of Mandaue undertaking the Metro Cebu Development Project
II (MCDP II), part of which required the widening of the Plaridel Extension Mandaue Causeway.
However, the structures and facilities built by F.F. Cruz subject of the MOA stood in the direct
path of the road widening project. Thus, the Department of Public Works and Highways (DPWH)
and Samuel B. Darza, MCDP II project director, entered into an Agreement to Demolish,
Remove and Reconstruct Improvement dated July 23, 19976 with F.F. Cruz whereby the latter
would demolish the improvements outside of the boundary of the road widening project and, in
return, receive the total amount of PhP 1,084,836.42 in compensation.
Accordingly, petitioner Rowena B.Rances (now Rowena RancesSolante), Human Resource
Management Officer III, prepared and, with the approval of Samuel B. Darza (Darza), then
issued Disbursement Voucher (DV) No. 102-07-88-97 dated July 24, 19977 for PhP
1,084,836.42 in favor of F.F. Cruz. In the voucher, Solante certified that the expense covered by
it was "necessary, lawful and incurred under my direct supervision."
Thereafter, Darza addressed a letter-complaint to the Office of the Ombudsman, Visayas,
inviting attention to several irregularities regarding the implementation of MCDP II. The letter
was referred to the COA which then issued Assignment Order for a team to audit the accounts
of MCDP II. Following an audit, the audit team issued Special Audit Office (SAO) Report No.
2000-28, par. 5.

Based on the above findings, the SAO audit team, through Rexy Ramos, issued the adverted
ND 2000-002-101-(97) disallowing the payment of PhP 1,084,836.42 to F.F. Cruz and naming
that company, Darza and Solante liable for the transaction. Therefrom, Solante sought
reconsideration, while F.F. Cruz appealed, but the motion for reconsideration and the appeal
were jointly denied in Legal and Adjudication Office (LAO) Local Decision No. 2004-040 dated
March 5, 2004, which F.F. Cruz in time appealed to COA Central.
In the meantime, the adverted letter-complaint of Darza was upgraded as an Ombudsman
case,would subsequently dismiss the same for lack of merit.
ISSUE

Who owns the demolished materials?

RULING

The petition is meritorious. The COA and its audit team obviously misread the relevant
stipulations of the MOA in relation to the provisions on project completion and
termination of contract of the Mandaue-F.F. Cruz reclamation contract.
Essentially, the COA is alleging that the Contract of Reclamation establishes an obligation on
the part of F.F. Cruz to finish the project within the allotted period of six (6) years from contract
execution in August 1989. Prescinding from this premise, the COA would conclude that after the
six (6)-year period, F.F. Cruz is automatically deemed to be in delay, the contract considered as
completed, and the ownership of the structures built in accordance with the MOA transferred to
the City of Mandaue.
COA’s basic position and the arguments holding it together is untenable.
On this point, the Civil Code provision on obligations with a period is relevant. Article 1193
thereof provides:
Article 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable
only when that day comes.
Obligations with a resolutory period take effect at once, but terminate upon arrival of the day
certain.
A day certain is understood to bethat which must necessarily come, although it may not be
known when.
If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it
shall be regulated by the rules of the preceding Section. (emphasis supplied)
A plain reading of the Contract ofReclamation reveals that the six (6)-year period provided for
projectcompletion, or, with like effect, termination of the contract was a mere estimateand
cannot be considered a period or a "day certain" inthe context of the aforequoted Art. 1193. To
be clear, par. 15 of the Contract of Reclamation states: "[T]he project is estimated to be
completed in six (6) years." As such, the lapse of six (6) years from the perfection of the contract
did not, by itself, make the obligation to finish the reclamation project demandable, such as to
put the obligor in a state of actionable delay for its inability to finish. Thus, F.F. Cruz cannot be
deemed to be in delay. Parenthetically, the Ombudsman, in a Resolution of June 29, 2006 in
OMB-V-C-03-0173-C, espoused a similar view in dismissing the complaint against Solante.
 OLONGAPO CITY v. SUBIC WATER

GR No. 171626, Aug 06, 2014

BRION, J.

FACTS

PD 198, as amended,[11] allows local water districts (LWDs) which have acquired an existing
water system of a local government unit (LGU) to enter into a contract to pay the concerned
LGU. In lieu of the LGU's share in the acquired water utility plant, it shall be paid by the LWD an
amount not exceeding three percent (3%) of the LWD's gross receipts from water sales in any
year.

On October 24, 1990, petitioner filed a complaint for sum of money and damages against
OCWD. Among others, petitioner alleged that OCWD failed to pay its electricity bills to
petitioner and remit its payment under the contract to pay, pursuant to OCWD's acquisition of
petitioner's water system.

In the interim, OCWD entered into a Joint Venture Agreement[16] (JVA) with Subic Bay
Metropolitan Authority (SBMA), Biwater International Limited (Biwater), and D.M. Consunji, Inc.
(DMCI) on November 24, 1996. Pursuant to this agreement, Subic Water a new corporate
entity was incorporated.
On November 24, 1996, Subic Water was granted the franchise to operate and to carry on the
business of providing water and sewerage services in the Subic Bay Free Port Zone, as well as
in Olongapo City. Hence, Subic Water took over OCWD's water operations in Olongapo
City.[19]

To finally settle their money claims against each other, petitioner and OCWD entered into a
compromise agreement on June 4, 1997. In this agreement, petitioner and OCWD offset their
respective claims and counterclaims. OCWD also undertook to pay to petitioner its net
obligation amounting to P135,909,467.09, to be amortized for a period of not exceeding twenty-
five (25) years at twenty-four percent (24%) per annum.

The compromise agreement also contained a provision regarding the

parties' request that Subic Water, Philippines, which took over the operations of the defendant
Olongapo City Water District be made the co-maker for OCWD's obligations. Mr. Noli Aldip,
then chairman of Subic Water, acted as its representative and signed the agreement on behalf
of Subic Water.

Subsequently, the parties submitted the compromise agreement to RTC Olongapo for approval.

Pursuant to the compromise agreement and in payment of OCWD's obligations to petitioner,

petitioner and OCWD executed a Deed of Assignment on November 24, 1997. OCWD
assigned all of its rights in the JVA in favor of the petitioner, including but not limited to the
assignment of its shares, lease payments, regulatory assistance fees and other receivables
arising out of or related to the Joint Venture Agreement and the Lease Agreement. On
December 15, 1998, OCWD was judicially dissolved.

On May 7, 1999, to enforce the compromise agreement, the petitioner filed a motion for the
issuance of a writ of execution[26] with the trial court. In its July 23, 1999 order, the trial court
granted the motion, but did not issue the corresponding writ of execution.

Almost four years later, on May 30, 2003, the petitioner, through its new counsel, filed a notice
of appearance with urgent motion/manifestation and prayed again for the issuance of a writ of
execution against OCWD. A certain Atty. Segundo Mangohig, claiming to be OCWD's former
counsel, filed a manifestation alleging that OCWD had already been dissolved and that Subic
Water is now the former OCWD.

ISSUE

Was there solidary liability in this case?

RULING

The petitioner also argued that Subic Water could be held solidarily liable under the writ of
execution since it was identified as OCWD's co-maker in the compromise agreement. The
petitioner's basis for this is the following provision of the agreement:
4. Both parties also request that Subic Water, Philippines which took over the
operations of the defendant Olongapo City Water District be made as co-maker for
the obligation herein above-cited.[59] [emphasis supplied]

As the rule stands, solidary liability is not presumed. This stems from Art. 1207 of the Civil Code,
which provides:
Art. 1207. x x xThere is a solidary liability only when the obligation expressly
so states, or when the law or the nature of the obligation requires solidarity.
[emphasis supplied]

In the present case, the joint and several liability of Subic Water and OCWD was nowhere clear
in the agreement. The agreement simply and plainly stated that petitioner and OCWD were
only requesting Subic Water to be a co-maker, in view of its assumption of OCWD's water
operations. No evidence was presented to show that such request was ever approved by Subic
Water's board of directors.

Under these circumstances, petitioner cannot proceed after Subic Water for OCWD's unpaid
obligations. The law explicitly states that solidary liability is not presumed and must be
expressly provided for. Not being a surety, Subic Water is not an insurer of OCWD's
obligations under the compromise agreement. At best, Subic Water was merely a guarantor
against whom petitioner can claim, provided it was first shown that: a) petitioner had already
proceeded after the properties of OCWD, the principal debtor; b) and despite this, the obligation
under the compromise agreement, remains to be not fully satisfied. But as will be discussed
next, Subic Water could not also be recognized as a guarantor of OCWD's obligations.