exam

1. State if the probate court has the power to determine :(a) the due execution of a holographic will (b) whether the testator is of sound mind (c) whether the last will is freely executed (d) whether the solemnities and formalities are observed (e) whether the property in question is part of the estate of the decedent or not.

ANSWER: Petitioner should realize that the allowance of her husband’s will is conclusive only as to its due execution.^[11] The authority of the probate court is limited to ascertaining whether the testator, being of sound mind, freely executed the will in accordance with the formalities prescribed by law.^[12] Thus, petitioner’s claim of title to the properties forming part of her husband’s estate should be settled in an ordinary action before the regular courts.

2. If a decedent is an inhabitant of the Philippines at the time of his death, what  court shall have jurisdiction of the probate of  his will? If he is an inhabitant of a foreign country, will your answer be the same?

ANSWER: If the decedent is an inhabitant of the Philippines at the time of his death, whether a citizen or an alien, his will shall be proved, or letters of administration granted, and his estate settled, in the Court of First Instance (now Regional Trial Court) in the province in which he resides at the time of his death, and if he is an inhabitant of a foreign country, the Court of First Instance (now Regional Trial Court) of any province in which he had estate.

3. On September 24, 1977, petitioner donated unto respondent a parcel of land at Canlubang, Calamba, Laguna with an area of 41,117 square meters and registered in its name under Transfer Certificate of Title (TCT) No. T-82803. The deed of donation which also bears the acceptance of the donee recites the considerations therefor and the conditions thereto attached, to wit:

xxxExcept with prior written consent of the Donor or its successor, the Donee shall not use the land except for the purpose as provided above in paragraph 1 hereof, nor sell or dispose the land for any reason whatsoever, nor convey any portion of the same except in lease for commercial use as provided above in paragraph 3 hereof, otherwise the said land with all real improvements thereon shall revert in trust to the Donor for prompt disposition in favor of some other charitable organization that Donor may deem best suited to the care of the aged.xxx

Thereafter, or sometime in 1980, the donee, for purposes of generating funds to build the perimeter fence on the donated property and the construction of a nucleus building for the aged and the infirm, leased a portion of the donated property to one Martin Gomez who planted said portion with sugar cane. There is no dispute that the lease agreement was entered into by the donee without the prior written consent of the donor, as required in the deed of donation. The lease to Gomez ended in 1985.

Question: Will   the subject deed of donation be adjudged revoked and void and the donee ordered to return and/or reconvey the property donated reason of said violation of the attached condition?

4. According to purpose or cause, state the four (4) kinds of donation and explain each.

Answer: Donations, according to its purpose or cause, may be categorized as: (1) pure or simple; (2) remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure or simple donation is one where the underlying cause is plain gratuity. This is donation in its truest form. On the other hand, a remuneratory or compensatory donation is one made for the purpose of rewarding the donee for past services, which services do not amount to a demandable debt. A conditional or modal donation is one where the donation is made in consideration of future services or where the donor imposes certain conditions, limitations or charges upon the donee, the value of which is inferior than that of the donation given. Finally, an onerous donation is that which imposes upon the donee a reciprocal obligation or, to be more precise, this is the kind of donation made for a valuable consideration, the cost of which is equal to or more than the thing donated.

5. Petitioner Jarco Marketing Corporation is the owner of Syvel's Department Store, Makati City. Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the store's branch manager, operations manager, and supervisor, respectively. Private respondents are spouses and the parents of Zhieneth Aguilar (ZHIENETH).

In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd floor of Syvel's Department Store, Makati City. CRISELDA was signing her credit card slip at the payment and verification counter when she felt a sudden gust of wind and heard a loud thud. She looked behind her. She then beheld her daughter ZHIENETH on the floor, her young body pinned by the bulk of the store's gift-wrapping counter/structure. ZHIENETH was crying and screaming for help. Although shocked, CRISELDA was quick to ask the assistance of the people around in lifting the counter and retrieving ZHIENETH from the floor.

Eventually, Zhieneth died.

Questions: (a) Is Jarco Marketing Corporation liable for the death of Zhieneth? (b) What principle of law is applicable in deciding this matter? Explain your answer.

6. The record discloses that the late Francisco Sanz was the former owner of a parcel of land containing 888 square meters, with the buildings and improvements thereon, situated in the poblacion of Romblon. He subdivided the lot into three and then sold each portion to different persons. One portion was purchased by Guillermo Tengtio who subsequently sold it to Vicente Uy Veza. Another portion, with the house of strong materials thereon, was sold in 1927 to Tan Yanon, respondent herein. This house has on its northeastern side, doors and windows overlooking the third-portion, which, together with the camarin and small building thereon, after passing through several hands, was finally acquired by Juan Gargantos, petitioner herein.

On April 23, 1955, Gargantos applied to the Municipal Mayor of Romblon for a permit to demolish the roofing of the old camarin. The permit having been granted, Gargantos tore down the roof of the camarin. On May 11,1955, Gargantos asked the Municipal Council of Romblon for another permit, this time in order to construct a combined residential house and warehouse on his lot .

Tan Yanon opposed approval of this application.

Because both the provincial fiscal and district engineer of Romblon recommended granting of the building permit to Gargantos, Tan Yanon filed against Gargantos an action to restrain him from constructing a building that would prevent plaintiff from receiving light and enjoying the view through the windows of his house, unless such building is erected at a distance of not less than three meters from the boundary line between the lots of plaintiff and defendant, and to enjoin the members of the Municipal Council of Romblon from issuing the corresponding building permit to defendants.

Question: Based on the above facts, did the property of Tan Yanon acquire the easement of light and view against the property of Gargantos? Explain.

7. (a) Mr. X delivered his piano for repair to Mr. Y. When the piano was already repaired, unknown to Mr. X, the latter sold the piano to Mr. Z, who paid  30k. Mr. Y left the place and  took away the said money. What kind of possession has Mr. Y, and what criminal case shall he be made liable of? (b) Miss Chua is a bank teller. Mr. Te is a depositor who handed P50k to Miss Chua so that the same can be deposited in his account. Miss Chua however took the  money and misappropriated the same. What kind of possession has Miss Chua, and what crime shall she be made liable of?

8. On 15 March 1978, Private Respondent Visitacion’s late mother Marciana Vda. De Coronado (Vda. De Coronado) and the Municipality of Nagcarlan, Laguna (represented by the then Municipal Mayor Crisostomo P. Manalang) entered into a lease contract whereby the Municipality allowed the use and enjoyment of property comprising of a lot and a store located at the corner of Coronado and E. Fernandez Sts. at Poblacion, Nagcarlan, Laguna, in favor of the respondent’s mother for a period of twenty (20) years beginning on 15 March 1978 until 15 March 1998, extendible for another 20 years.

The lease contract provided that the late Vda. De Coronado could build a firewall on her rented property which must be at least as high as the store; and in case of modification of the public market, she or her heir/s would be given preferential rights.

Visitacion took over the store when her mother died sometime in 1984.From then on up to January 1993, Visitacion secured the yearly Mayor’s permits.

Sometime in 1986, a fire razed the public market of Nagcarlan. Upon Visitacion’s request for inspection on 15 May 1986, District Engineer Marcelino B. Gorospe (Engineer Gorospe) of the then Ministry of Public Works and Highways,Regional Office No. IV-A, found that the store of Visitacion remained intact and stood strong. This finding of Engineer Gorospe was contested by the Municipality of Nagcarlan.

The store of Visitacion continued to operate after the fire until 15 October 1993.

On 1 September 1993, Visitacion received a letter from Mayor Comendador directing her to demolish her store within five (5) days from notice. Attached to the letter were copies of Sangguniang Bayan Resolution No. 156 dated 30 August 1993 and a Memorandum issued by Asst. Provincial Prosecutor Marianito Sasondoncillo of Laguna.

On 15 September 1993, Asst. Provincial Prosecutor Florencio Buyser sent a letter to Visitacion ordering her to vacate the portion of the public market she was occupying within 15 days from her receipt of the letter; else, a court action will be filed against her.

On 11 October 1993, the Sangguniang Bayan of Nagcarlan, Laguna issued Resolution No. 183 authorizing Mayor Comendador to demolish the store being occupied by Visitacion using legal means

On 15 October 1993, Mayor Comendador relying on the strength of Sangguniang Bayan Resolution Nos. 183 and 156 authorized the demolition of the store with Asilo and Angeles supervising the work.

Engineer Winston Cabrega (Engineer Cabrega), a licensed civil engineer, estimated the cost of the demolished property as amounting to P437,900.00^.

Questions: (1) Will you make the (a) municipality of Nagcarlan and/or (b) Mayor Comendador liable for damages in the case at  bar?

(2) What principle of law is applicable in this case?

(3) Does the  Sanggunian of Nagcarlan have the power to declare the structure of Visitacion as a nuisance per se? Explain.

9. In their Complaint, [respondents] claim that they are the owners of the various parcels of real property that form part of Lot No. 666, (plan II-5121 Amd.2) situated in Mandaue City, Cebu, which lot allegedly belonged originally to Claudio Ermac. Upon the latter's death, the said Lot No. 666 was inherited and partitioned by his children, namely, Esteban, Pedro and Balbina. Siblings Pedro and Balbina requested their brother Esteban to have their title over the property registered. Esteban, however, was unable to do so, and the task of registration fell to his son, Clemente. Clemente applied for registration of the title, but did so in his own name, and did not include his father's brother and sister, nor his cousins. Despite having registered the lot in his name, Clemente did not disturb or claim ownership over those portions occupied by his uncle, aunt and cousins even up to the time of his death. Among the occupants of Lot No. 666 are the [respondents] in this case.

[Respondents]-heirs of Vicente Ermac claim ownership over the portions of Lot No. 666 now occupied by them by right of succession as direct descendants of the original owner, Claudio Ermac. [Respondents] Luisa Del Castillo and Estaneslao Dionson allegedly derived their title by purchase from the children of Claudio Ermac. [Respondent] Vicente Dionson, on the other hand, bought his land from the heirs of Pedro Ermac, while [Respondents] Emigdio Bustillo and Liza Parajele derived their ownership from the Heirs of Balbina Ermac-Dabon. [respondents'] ownership and possession had been peaceful and undisturbed, until recently when the [petitioners]-heirs of Clemente Ermac filed an action for ejectment against them.

The filing of the said ejectment caused a cloud of doubt upon the [respondents'] ownership over their respective parcels of land, prompting them to file this action for quieting of title."

[Petitioners], on the other hand, denied the material allegations of the [respondents], and claimed that the [respondents] have no cause of action against them. It is essentially claimed that it was Clemente Ermac and not his grandfather Claudio Ermac who is the original claimant of dominion over Lot No. 666. During his lifetime, Clemente Ermac was in actual, peaceful, adverse and continuous possession in the concept of an owner of the entire Lot No. 666. With the help of his children, he cultivated the said lot, and planted corn, peanuts, cassava and fruit products. Clemente also effected the registration of the subject lot in his name. Upon Clemente's death, [petitioners] inherited Lot No. 666, and they constructed their residential houses thereon. [Petitioners] claim that [respondents'] recent occupation of some portions of Lot No. 666 was only tolerated by Clemente Ermac and the [petitioners]. [Petitioners] in fact had never surrendered ownership or possession of the property to the [respondents]. [Petitioners] also set up the defense of prescription and laches.

"After trial, the lower [court] rendered its [D]ecision, finding that the original owner of the lot in question was Claudio Ermac, and therefore, the property was inherited upon his death by his children Esteban, Balbina and Pedro. All the heirs of Claudio Ermac, therefore, should share in the ownership over Lot No. 666, by right of succession. The ruling [was] supported by the admissions of Irene[a] Seno, witness for the [petitioners] and daughter of Clemente Ermac, establishing facts which show that [petitioners] and their predecessor Clemente did not own the entire property, but that the other heirs of Claudio Ermac are entitled to two-thirds (2/3) of the lot. Since the entire lot is now registered in the name of Clemente Ermac, the shares belonging to the other heirs of Claudio Ermac, some of which have already been purchased by some of the [respondents], are being held in trust by the [petitioners] in favor of their actual occupants.

Questions:

 (1) Is the decision of the Court correct?

(2) On the basis of your reading of the Ermac case, what principle of law was used by the court in adjudicating the rights of the parties? Explain.

(3) Decide :

(a)  Whether or not O.C.T. No. RO-752 issued in the names of [Spouses] Clemente Ermac [and] Anunciacion Suyco is indefeasible and incontrovertible under the Torrens System

(b) Whether or not the alleged tax declarations and tax receipts are sufficient to defeat the title over the property in the names of petitioner's predecessors-in-interest [Spouses] Clemente Ermac and Anunciacion Suyco

(c) Whether or not laches ha[s] set in on the claims by the respondents on portions of Lot No. 666

9. In the early 1950s, Gancayco bought a parcel of land located at 746 Epifanio delos Santos Avenue (EDSA), Quezon City with an area of 375 square meters and covered by Transfer Certificate of Title (TCT) No. RT114558.

On 27 March 1956, the Quezon City Council issued Ordinance No. 2904, entitled "An Ordinance Requiring the Construction of Arcades, for Commercial Buildings to be Constructed in Zones Designated as Business Zones in the Zoning Plan of Quezon City, and Providing Penalties in Violation Thereof."

An arcade is defined as any portion of a building above the first floor projecting over the sidewalk beyond the first storey wall used as protection for pedestrians against rain or sun.

Ordinance No. 2904 required the relevant property owner to construct an arcade with a width of 4.50 meters and height of 5.00 meters along EDSA, from the north side of Santolan Road to one lot after Liberty Avenue, and from one lot before Central Boulevard to the Botocan transmission line.

Questions: (a) Is the ordinance constitutional?

(b) Gancayco did not construct an arcade, will you consider his building a nuisance for not complying with the ordinance?

10. The spouses Rufino Dulay, Sr. and Ignacia Vicente were the owners of a parcel of land located in Rizal, Santiago, Isabela, with an area of 29,002 square meters. The lot was covered by Original Certificate of Title No. P-6776.

On August 3, 1981, the spouses Dulay executed a deed of donation over a 10,000-square-meter portion of their property in favor of the Ministry of Education and Culture (now the Department of Education, Culture and Sports [DECS]).

The deed provided, among others:That for and in consideration of the benefits that may be derived from the use of the above described property which is intended for school purposes, the said DONORS do by these presents TRANSFER AND CONVEY by way of DONATION unto the DONEE, its successors and assigns, the above property to become effective upon the signing of this document.

The property was subdivided. On April 13, 1983, Transfer Certificate of Title (TCT) No. T-143337 covering the portion identified as Lot 8858-A was issued in the name of the Ministry of Education and Culture, represented by Laurencio C. Ramel, the Superintendent of Schools of Isabela.  However, the property was not used for school purposes and remained idle. Sometime in 1988, the DECS, through its Secretary, started construction of the Rizal National High School building on a parcel of land it acquired from Alejandro Feliciano. The school site was about 2 kilometers away from the land donated by the spouses Dulay. In a letter to the DECS Secretary dated August 19, 1994, the spouses Dulay requested that the property be returned to them considering that the land was never used since 1981, or a period of more than 13 years.

Questions: (a) Did the Department of Education comply with the condition imposed in the Deed of Donation?

(b) Shall the deed of donation be revoked?

 (c) Is the respondent’s right to have the revocation of the Deed of Donation barred already by prescription and laches?

“Hermojina Estores vs Spouses Arturo and Laura Sapangan, G.R. No. 175139, dated April 18, 2012,

Interest may be imposed even in the absence of stipulation in the contract.

We sustain the ruling of both the RTC and the CA that it is proper to impose interest notwithstanding the absence of stipulation in the contract. Article 2210 of the Civil Code expressly provides that "[i]nterest may, in the discretion of the court, be allowed upon damages awarded for breach of contract." In this case, there is no question that petitioner is legally obligated to return the P3.5 million because of her failure to fulfill the obligation under the Conditional Deed of Sale, despite demand. She has in fact admitted that the conditions were not fulfilled and that she was willing to return the full amount of P3.5 million but has not actually done so. Petitioner enjoyed the use of the money from the time it was given to her³⁰ until now. Thus, she is already in default of her obligation from the date of demand, i.e., on September 27, 2000.

The interest at the rate of 12% is applicable in the instant case.

Anent the interest rate, the general rule is that the applicable rate of interest "shall be computed in accordance with the stipulation of the parties."³¹ Absent any stipulation, the applicable rate of interest shall be 12% per annum "when the obligation arises out of a loan or a forbearance of money, goods or credits. In other cases, it shall be six percent (6%)."³² In this case, the parties did not stipulate as to the applicable rate of interest. The only question remaining therefore is whether the 6% as provided under Article 2209 of the Civil Code, or 12% under Central Bank Circular No. 416, is due.

The contract involved in this case is admittedly not a loan but a Conditional Deed of Sale. However, the contract provides that the seller (petitioner) must return the payment made by the buyer (respondent-spouses) if the conditions are not fulfilled. There is no question that they have in fact, not been fulfilled as the seller (petitioner) has admitted this. Notwithstanding demand by the buyer (respondent-spouses), the seller (petitioner) has failed to return the money and

should be considered in default from the time that demand was made on September 27, 2000.

Even if the transaction involved a Conditional Deed of Sale, can the stipulation governing the return of the money be considered as a forbearance of money which required payment of interest at the rate of 12%? We believe so.

In Crismina Garments, Inc. v. Court of Appeals,³³ "forbearance" was defined as a "contractual obligation of lender or creditor to refrain during a given period of time, from requiring the borrower or debtor to repay a loan or debt then due and payable." This definition describes a loan where a debtor is given a period within which to pay a loan or debt. In such case, "forbearance of money, goods or credits" will have no distinct definition from a loan. We believe however, that the phrase "forbearance of money, goods or credits" is meant to have a separate meaning from a loan, otherwise there would have been no need to add that phrase as a loan is already sufficiently defined in the Civil Code.³⁴ Forbearance of money, goods or credits should therefore refer to arrangements other than loan agreements, where a person acquiesces to the temporary use of his money, goods or credits pending happening of certain events or fulfillment of certain conditions. In this case, the respondent-spouses parted with their money even before the conditions were fulfilled. They have therefore allowed or granted forbearance to the seller (petitioner) to use their money pending fulfillment of the conditions. They were deprived of the use of their money for the period pending fulfillment of the conditions and when those conditions were breached, they are entitled not only to the return of the principal amount paid, but also to compensation for the use of their money. And the compensation for the use of their money, absent any stipulation, should be the same rate of legal interest applicable to a loan since the use or deprivation of funds is similar to a loan.

Petitioner’s unwarranted withholding of the money which rightfully pertains to respondent-spouses amounts to forbearance of money which can be considered as an involuntary loan. Thus, the applicable rate of interest is 12% per annum. In Eastern Shipping Lines, Inc. v. Court of Appeals,³⁵cited in Crismina Garments, Inc. v. Court of Appeals,³⁶ the Court suggested the following guidelines:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on ‘Damages’ of the Civil Code govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.³⁷

Eastern Shipping Lines, Inc. v. Court of Appeals³⁸and its predecessor case, Reformina v. Tongol³⁹ both involved torts cases and hence, there was no forbearance of money, goods, or credits. Further, the amount claimed (i.e., damages) could not be established with reasonable certainty at the time the claim was made. Hence, we arrived at a different ruling in those cases.

Since the date of demand which is September 27, 2000 was satisfactorily established during trial, then the interest rate of 12% should be reckoned from said date of demand until the principal amount and the interest thereon is fully satisfied.1âwphi1

The award of attorney’s fees is warranted.
Under Article 2208 of the Civil Code, attorney’s fees may be recovered:

x x x x

(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;

x x x x

(11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered.

In all cases, the attorney’s fees and expenses of litigation must be reasonable.

Considering the circumstances of the instant case, we find respondent-spouses entitled to recover attorney’s fees. There is no doubt that they were forced to litigate to protect their interest, i.e., to recover their money. However, we find the amount of P50,000.00 more appropriate in line with the policy enunciated in Article 2208 of the Civil Code that the award of attorney’s fees must always be reasonable.

WHEREFORE, the Petition for Review is DENIED. The May 12, 2006 Decision of the Court of Appeals in CA-G.R. CV No. 83123 is AFFIRMED with MODIFICATIONS that the rate of interest shall be twelve percent (12%) per annum, computed from September 27, 2000 until fully satisfied. The award of attorney’s fees is further reduced to P50,000.00.

sales problems

1.       A  contract of sale of real property, without consideration, and executed by a person of low intelligence is (a) void  (b) voidable (c) rescissible   (d) valid because  there is consent and sale is consensual.

2.       Which of the following is  NOT a characteristic of a contract of sale? (a) onerous (b) bilateral (c) cumulative  (d) nominate.

3.        When the object of the contract of sale is delivered and the price is paid, the contract is said to be (a) generated (b) negotiated (c) perfected (d) consummated.

4.      Which is a natural element of sale ? (a) consent or meeting of the minds (b) price certain in money (c) determinate subject matter (d) warranty against hidden defects.

5.       If during the 5-year period when a homestead cannot be sold, it is promised to be sold (in a compromise agreement),  this promise is  (a) valid when the sale is actually made after the 5-year period (b) void even if the sale is actually made after the 5-year period (c) valid if the sale is approved by the Secretary of Agriculture (d)  voidable when consent is finally given.

6.       Nemo dat quod none habet  literally means (a) one cannot sell what he does not possess (b) no one can dispose what he cannot own (c) no one can give more than what he has (d) no one can sell what he does not own.

7.       Maria owes me P200,000. If I accept Maria’s offer to take her car as payment, what contract is generated? (a) a contract of sale because it is as if she sold her car to me for P200,000 (b) a contract of barter or exchange (c) dacion en pago (d) a contract of cession since she ceded the car to me in payment of her obligation.

8.      Which of the following is considered as illicit per accidens? (a) sale of human flesh (b) sale of  land to a balikbayan (c) sale of shabu (d) sale of illegal lottery tickets.

9.       A mortgaged his land to B, but sold the land to C. Which of the following is true or valid? (a) A cannot sell the property since it is still mortgaged (b) A, being the owner, can sell the land to C, who after delivery became the owner, subject to B’s right of  redemption  (c) the land sold is always subject to B’s right to foreclose the mortgage upon the non-payment of the mortgage credit (d) the sale here is voidable.

10. Which of the following is NOT correct under the Maceda law? (a) in case where less than 2 years of installments were paid, the seller shall give the buyer the grace period of not less than 60 days (b) the buyer shall have the right to sell his rights or assign the same to another person  (c) the buyer shall have the right to pay in advance any installment (d) the law gives the buyer  if he has already paid at least two installments.

PART II. (10% each)Essay Type. Answer the following problems. Always explain your answer. A mere yes or no answer earns no points.

1. A parcel of land measuring 81,524 square meters (“Subject Land”) in Barrio Culis, Mabiga, Hermosa, Bataan is the subject of controversy in this case. The registered owners of the Subject Land were petitioner spouses, Godofredo Alfredo (“Godofredo”) and Carmen Limon Alfredo (“Carmen”).  The Subject Land is covered by Original Certificate of Title No. 284 (“OCT No. 284”) issued to Godofredo and Carmen under Homestead Patent No. V-69196.

On 7 March 1994, the private respondents, spouses Armando Borras (“Armando”) and Adelia Lobaton Borras (“Adelia”), filed a complaint for specific performance against Godofredo and Carmen before the Regional Trial Court of Bataan, Branch 4.  The case was docketed as Civil Case No. DH-256-94.

Armando and Adelia alleged in their complaint that Godofredo and Carmen mortgaged the Subject Land for P7,000.00 with the Development Bank of the Philippines (“DBP”).  To pay the debt, Carmen and Godofredo sold the Subject Land to Armando and Adelia for P15,000.00, the buyers to pay the DBP loan and its accumulated interest, and the balance to be paid in cash to the sellers.

Armando and Adelia gave Godofredo and Carmen the money to pay the loan to DBP which signed the release of mortgage and returned the owner’s duplicate copy of OCT No. 284 to Godofredo and Carmen.  Armando and Adelia subsequently paid the balance of the purchase price of the Subject Land for which Carmen issued a receipt dated 11 March 1970.  Godofredo and Carmen then delivered to Adelia the owner’s duplicate copy of OCT No. 284, with the document of cancellation of mortgage, official receipts of realty tax payments, and tax declaration in the name of Godofredo.  Godofredo and Carmen introduced Armando and Adelia, as the new owners of the Subject Land, to the Natanawans, the old tenants of the Subject Land.  Armando and Adelia then took possession of the Subject Land.

In January 1994, Armando and Adelia learned that hired persons had entered the Subject Land and were cutting trees under instructions of allegedly new owners of the Subject Land.  Subsequently, Armando and Adelia discovered that Godofredo and Carmen had re-sold portions of the Subject Land to several persons.

On 8 February 1994, Armando and Adelia filed an adverse claim with the Register of Deeds of Bataan.  Armando and Adelia discovered that Godofredo and Carmen had secured an owner’s duplicate copy of OCT No. 284 after filing a petition in court for the issuance of a new copy.  Godofredo and Carmen claimed in their petition that they lost their owner’s duplicate copy.  Armando and Adelia wrote Godofredo and Carmen complaining about their acts, but the latter did not reply. Thus, Armando and Adelia filed a complaint for specific performance.

On 28 March 1994, Armando and Adelia amended their complaint to include the following persons as additional defendants: the spouses Arnulfo Savellano and Editha B. Savellano, Danton D. Matawaran, the spouses Delfin F. Espiritu, Jr. and Estela S. Espiritu, and Elizabeth Tuazon (“Subsequent Buyers”).  The Subsequent Buyers, who are also petitioners in this case, purchased from Godofredo and Carmen the subdivided portions of the Subject Land.  The Register of Deeds of Bataan issued to the Subsequent Buyers transfer certificates of title to the lots they purchased.

In their answer, Godofredo and Carmen and the Subsequent Buyers  (collectively “petitioners”) argued that the action is unenforceable under the Statute of Frauds.  Petitioners pointed out that there is no written instrument evidencing the alleged contract of sale over the Subject Land in favor of Armando and Adelia.  Petitioners objected to whatever parole evidence Armando and Adelia introduced or offered on the alleged sale unless the same was in writing and subscribed by Godofredo. Petitioners asserted that the Subsequent Buyers were buyers in good faith and for value. As counterclaim, petitioners sought payment of attorney’s fees and incidental expenses.

Questions:

(1) Is there a perfected contract of sale between  the spouses “Armando and Adelia “ and the Spouses “ Godofredo and Carmen “? Explain.

(2) Whether the alleged sale of the Subject Land in favor of Armando and Adelia is valid and enforceable, where (a) it was orally entered into and not in writing; (b) Carmen did not obtain the consent and authority of her husband, Godofredo, who was the sole owner of the Subject Land in whose name the title thereto (OCT No. 284) was issued; and (c) it was entered into during the 25-year prohibitive period for alienating the Subject Land without the approval of the Secretary of Agriculture and Natural Resources.

(3)Whether the action to enforce the alleged oral contract of sale brought after 24 years from its alleged perfection had been barred by prescription and by laches.

(4)Whether the deeds of absolute sale and the transfer certificates of title over the portions of the Subject Land issued to the Subsequent Buyers, innocent purchasers in good faith and for value whose individual titles to their respective lots are absolute and indefeasible, are valid.

Answer:  (1) All the characteristics and elements of sale being present, thus the contract is perfected. (2) (a) enforceable, because the Statute of Frauds does not apply here, it being that the contract is already executed or consummated (b) valid, since the sale was entered before Aug. 3, 1988 (c) still enforceable, the consent of the Sec. is not really applicable in the case at bar. (3) Not barred by prescription or laches. Laches is a remedy in equity which is not applicable here, and the action has not prescribed yet (4) The indefeasibility of title as a principle applies only when there is no fraud involved.

(REFER to: Alfredo v. Borras (2003) below

2. What is the effect if at the time the contract of sale is perfected the object of the contract has been entirely lost? If part of it is only lost, what are the rights of the vendee?

Art. 1493. If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely lost, the contract shall be without any effect.

But if the thing should have been lost in part only, the vendee may choose between withdrawing from the contract and demanding the remaining part, paying its price in proportion to the total sum agreed upon. (1460a)

3.When is ownership of the thing sold transferred to the vendee? Can there be other stipulations possible?

Art. 1496. The ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee.

4.Art. 1465. Things subject to a resolutory condition may be the object of the contract of sale. Give at least two examples of things which are subject to a resolutory condition.

ANSWER: PACTO DE RETRO SALE; RESERVA TRUNCAL

5. Generally, when is the thing sold understood as “delivered”? What if the object of the sale is (a) movable  and (b) immovable?

Art. 1497. The thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee. (1462a)

Art. 1498. When the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept. (1463a)

Art. 1499. The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale, or if the latter already had it in his possession for any other reason. (1463a)

Art. 1500. There may also be tradition constitutum possessorium. (n)

Art. 1501. With respect to incorporeal property, the provisions of the first paragraph of article 1498 shall govern. In any other case wherein said provisions are not applicable, the placing of the titles of ownership in the possession of the vendee or the use by the vendee of his rights, with the vendor's consent, shall be understood as a delivery. (1464)