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EXECUTIVE COUNCIL

MIA ARRA C. CAMACHO

Chairperson

MARIA KATHERINE C. DELOSENDO ALTHEA MAE C. APELIT JAMAELA CHERINA MARIE A. CALINISAN
Vice Chair for Academics Secretary Creative Director and Public Relations
Officer
IRAH BRIGETTE A. VALENZUELA THERESE ANN C. MIRANO
Vice Chair for Administration Treasurer PATRICIA ALLEN C. YUMA
Volunteer Core Head
MARICOR P. MARASIGAN MARIAN CLARESSE C. JAURIGUE
Operations and Logistics Head Auditor JESILENE MARRI Z. ELEGIDO
Ways and Means Officer

CIVIL LAW COMMISSION

ARBIE CAROLINE D.J. CASTILLO

Civil Law Commissioner

JETHOVIE ANDREI F. FERNANDEZ JENNYLOR B. CASTILLO-BALBONA LYNDY SAPIA-AN

Deputy Commissioner NICA CARLA C. MASCARIÑA Subject Head – Land Deed
Subject Heads – Wills and Registration
ANGELIQUE JAZMINE SANTOS Succession
MELVIN R. TABUYAN RODRIGO PADILLA JR.
MARK JOSE QUELNAN MARK JOSE QUELNAN
Subject Heads – Persons and Family
Subject Head – Special Contracts Subject Heads – Torts and Damages
Relations

RAIZA MORILLO
PRINCESS RAIHANAH MACAWADIB
JOANA PAULA BAUTISTA Subject Head – Credit Transaction
Subject Heads – Obligation and
Contracts/Quasi-Contracts MELVIN R. TABUYAN
Subject Head – Property

ALONA MAE AGUADA CAREN CHARLOTTE DIMAYUGA KRISTA LANE NOGPO

RHEENA MARI L. ALATA ADRIAN ESTEMBER JIE-ANN C. OBREGON-BALUT
RON LEMUEL ALDAVE JOANA MARIE GARCIA PRINCESS ALLIAH B. PASTORAL
RACHEL ALMARIO TRIZSA KATRINA GERMINA LHEA JANE PELAYO
GIL FLORENCE ALOJADO KRYSTAL FAITH GO COELI MAE PERALTA
PROLET ASILO SHAQUILE KUSAIN GUIAMAN KRISHEELA REENA M. PEREZ
HAZEL MAE BAGGAY JINAH RUTH JOMAO-AS MICHELLE ANNE PEREZ
JEHNNYLIE V. BERINGUEL CHRISTINE MAE LACSON JOSEPH RALUTA
PATRICIA BERMUDEZ ROSEL D. LAUZON IVY GRACEILLE REGIS
AIRA MYCAH C. BINUYA MAEVE M. LEAÑO JESSICA PEARL D. REYES
LESTER N. CAPONPON BERNARD MALLARI ALYANNA R. ROLLON
BOB CHAERVIN S. CASTRENCE JOEL MEDADO FATIMA SWEENEE S. SAJILI
STEPHANIE MARJORIE CHUNG MELCHOR MEDES JHEE F. SOLANGON
OWEN CUALES BENHUR MENDAZA GEORGE SORIANO
CARLA DARILAG WENCEL VINCENT MINDANAO ALYSSA SOSA
MICAH DE LEON CLYNE MUÑOZ MARIA JOLINA SURALVO
MARY ROSE C. DE MESA KIMBERLY NACION CHAYENNE O. SY
CRISHA MAE D.G. DE VERA DANICA JOY C. NAVIDAD CHRISTIAN JOSEF TENGSON
CHRISTINE JOY A. VALDEZ
BEATRICE WAGAN
Members

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 CENTER FOR LEGAL EDUCATION AND RESEARCH
ATTY. RODERICK M. VILLOSTAS
Director

ATTY. LESTER NAZARENE V. OPLE

ATTY. ANTONY J. PARREÑO
ATTY. REA MAY G. HERMOSURA
CLEAR Advisers

PHILIPPINE COPYRIGHT

This material is an intellectual creation of the Arellano Law Bar Operations Commission 2025. Any unauthorized reprint or reuse of this material is
prohibited. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including but not limited
to photocopy, recording, or by any information storage or retrieval system without the express written consent of both Arella no Law Bar Operations
Commission 2025 and the Arellano University School of Law.

ALL RIGHTS RESERVED ⓒ 2025

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 CIVIL LAW (20%)

I. PRELIMINARY TITLE
A. Effect and Application of Laws Page
3. Instances when laws are given retroactive effect by way of exception
1. Cabarios v. People, G.R. Nos. 228097-103 & 228139-41, 29 September 2021 7

III. FAMILY CODE

Executive Order No. 209
A. Marriage
3. Mixed Marriages and Foreign Divorce
a. See Republic v. Manalo, 831 Phil. 33 (2018)
2. In Re: Petition for Judicial Recognition of Divorce, etc., G.R. No. 227605, 5 7
December 2019

3. Tsutsumi v. Republic of the Philippines, G.R. No. 258130, 17 April 2023 8

4. Void Marriages
a. Different Grounds for Nullity
i. See also R.A. No. 11596 and Tan-Andal v. Andal, G.R. No. 196359,
May 11, 2021
4. Go v. Go, G.R. No. 258095, 07 December 2022 8

5. Fopalan v. Fopalan, G.R. No. 250287, 20 July 2022 9

6. Laroco v. Laroco, G.R. No. 253342, 22 June 2022 9

7. Republic of the Philippines v. Claur, G.R. No. 246868, 15 February 2022 10

8. Maristela-Cuan v. Cuan, G.R. No. 248518, 07 Decembr 2021 10

9. Espiritu v. Boac-Espiritu, G.R. No. 247583, 06 October 2021 11

10. Halog v. Halog, G.R. No. 231695, 06 October 2021 11

11. Estella v. Perez, G.R. No. 249250, 29 September 2021 12

12. Santos-Gantan v. Gantan, G.R. No. 225193, 14 October 2020 12

7. Property Relations Between the Spouses

c. Different Property Regimes
ii. Conjugal Partnership of Gains Regime
13. Cali Realty Corporation v. Enriquez, G.R. No. 257454, 26 July 2023 13

V. OBLIGATIONS AND CONTRACT

A. Obligations
3. Nature and Effects of Obligations
a. Breaches of Obligations
14. Alcado v. GSIS, G.R. No. 260428, 01 March 2023 13

b. Remedies for Breach of Obligations

15. Chanelay Development Corporation v. GSIS, G.R. No. 210423, 05 July 2021 13

5. Extinguishment
a. Payment
16. HSBC Staff Retirement Plan v. Spouses Galang, G.R. No. 199565, 30 June 2021 14

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B. Contracts
5. Defective Contracts
d. Void Contracts
17. Dela Cruz v. Dumasig, G.R. No. 261491, 04 December 2023 14

18. Spouses Viovicente v. Spouses Viovicente, G.R. No. 219074, 28 July 2020 15

VI. WILLS AND SUCCESSION

B. Different Kinds of Succession
1. Testamentary Succession
d. Kinds of Wills: Notarial and Holographic Wills
ii. Requisites of a valid Notarial Will
19. In the Matter of the Petition for the Probate of the Last Will and Testament of 15
Cecilia Esguerra Cosico, G.R. No. 246997, 05 May 2021

VII. SPECIAL CONTRACTS

A. Contract of Sale
1. Nature and Form
a. Contract of Sale v. Contract to Sell
20. Taok v. Conde, G.R. No. 254248, 06 November 2023 16

21. Fil-Estate Properties, Inc., v. Hermana Realty, Inc., G.R. No. 231936, 25 16
November 2020

4. Double Sale
22. Requina, Sr. v. V Erasmo, G.R. No. 221049, 07 December 2022 17

9. Equitable Mortgage
23. Dala v. Auticio, G.R. No. 205672, 22 June 2022 17

VIII. CREDIT TRANSACTIONS

C. Guaranty and Suretyship
24. Subic Bay Distribution, Inc. v. Western Guaranty Corp., G.R. No. 220613, 11 18
November 2021

D. Real Estate Mortgage

25. Development Bank of the Philippines v. Togle, G.R. No. 224138, 06 October 2021 18

26. Plana v. Chua, G.R. No. 250636, 10 January 2023 18

IX. PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

B. Ownership
5. Actions to Recover Ownership and Possession of Property
c. Accion Publiciana
27. Heirs of Eutiquio Elliot V. Corcuera, G.R. No. 233767, 27 August 2020 19

e. Quieting of Title
28. Tensuan, et. al. v. Heirs of Ma. Isabel M. Vasquez, G.R. No. 204992, 08 19
September 2020

9. Easements
c. Kinds of Easement
29. Spouses Castro v. Spouses Esperanza, G.R. No. 248763, 11 March 2020 20

XI. QUASI-DELICTS
E. Defenses
7. Prescription

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 30. FILCON Ready Mixed, Inc., et al. v. UCPB General Insurance Co., Inc., G.R. No. 20
229877, 15 July 2020

F. Medical Negligence and Malpractice

31. Quezon City Eye Center v. Philippine Health Insurance Corporation, G.R. Nos. 21
246710-15, 06 February 2023

XII. DAMAGES
B. Kinds
1. Actual and Compensatory Damages
32. Arcinue v. Baun, G.R. No. 211149, 28 November 2019 21

XIIII. LAND TITLES AND DEEDS

Presidential Decree No. 1529
A. Torrens System
33. Spouses Magalang v. Spouses Heretape, et. al., G.R. No. 199558, 14 August 22
2019

3. Innocent Purchaser for Value; Rights

34. AFP Retirement and Separation Benefits System (AFP-RSBS) v. Plastic King 23
Industrial Corp., G.R. No. 231395, 26 June 2023

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 I. PRELIMINARY TITLE

A. Effect and Application of Laws

3. Instances when laws are given retroactive effect by way of exception

1. CABARIOS V. PEOPLE, G.R. NOS. 228097-103 & 228139-41, 29 SEPTEMBER 2021

FACTS: Cabarios, a Board Member of Zamboanga Sibugay, was charged with five counts of Violation of Section
3(e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) and five counts of Malversation of Public
Funds through Falsification of Public Documents. After trial, the Sandiganbayan convicted him in 2016. Cabarios
elevated the case to the Supreme Court via Rule 45 of the Rules of Court, claiming that the Sandiganbayan
committed mistakes in appreciating the evidence presented. The Office of the Special Prosecutor (OSP) filed an
Opposition arguing that Rule 45 covers only questions of law, not of fact. In November 16, 2018, the 2018 Revised
Internal Rules of the Sandiganbayan took effect and under Section 1 of Rule XI thereof, the mode of appeal to
the Supreme Court in criminal cases decided by the Sandiganbayan in the exercise of its original jurisdiction is by
ordinary appeal.

ISSUE: Whether the 2018 Revised Internal Rules of the Sandiganbayan may be applied retroactively in this case
such that the petition of Cabarios to the Supreme Court may be treated as an ordinary appeal.

HELD: Yes. The general rule that statutes are prospective and not retroactive does not ordinarily apply to
procedural laws. It has been held that a retroactive law, in a legal sense, is one which takes away or impairs
vested rights acquired under laws or creates a new obligation and imposes a new duty, or attaches a new disability,
in respect of transactions or considerations already past. Hence, remedial statutes or statutes relating to remedies
or modes of procedure, which do not create new or take away vested rights but only operate in furtherance of the
remedy or confirmation of rights already existing, do not come within the legal conception of a retroactive law, or
the general rule against the retroactive operation of statutes.

III. FAMILY CODE

Executive Order No. 209

A. Marriage
3. Mixed Marriages and Foreign Divorce
a. See Republic v. Manalo, 831 Phil. 33 (2018)

2. IN RE: PETITION FOR JUDICIAL RECOGNITION OF DIVORCE, ETC., G.R. NO. 227605, 5 DECEMBER
2019

FACTS: Juliet Moraña (Filipino) and Minoru Takahashi (Japanese) got married in San Juan, Metro Manila.
Thereafter, they moved to live in Japan where they had two children. They later jointly applied for divorce at the
Office of the Mayor of Fukuyama City, Japan, which granted the divorce and issued a Divorce Report. Juliet filed
with the Regional Trial Court of Manila an action for recognition of the Divorce Report. The trial court dismissed
the petition for failure to present in evidence the Divorce Decree itself. It also noted that based on cross-
examination, Juliet herself was the one who secured the Divorce Decree which it ruled is not allowed under
Philippine laws.

ISSUE: Whether a foreign Divorce Decree can be recognized under Section 26 of the Family Code even when the
divorce was obtained by the Filipino spouse.

HELD: Yes. The Supreme Court in the case of Republic v. Manalo emphasized that even if it was the Filipino
spouse who initiated and obtained the divorce decree, the same may be recognized in the Philippines. The Supreme
Court ruled that paragraph 2 of Article 26 speaks of a divorce x x x validly obtained abroad by the alien spouse
capacitating him or her to remarry. Based on a clear and plain reading of the provision, it only requires that there
be a divorce validly obtained abroad. The letter of the law does not demand that the alien spouse should be the
one who initiated the proceeding wherein the divorce decree was granted. It does not distinguish whether the
Filipino spouse is the petitioner or the respondent in the foreign divorce proceeding. x x x Verily, therefore, even

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 though it was petitioner herself or jointly with her husband who applied for and obtained the divorce decree in
this case, the same may be recognized in our jurisdiction.

3. TSUTSUMI V. REPUBLIC OF THE PHILIPPINES, G.R. NO. 258130, 17 APRIL 2023

FACTS: Petitioner Regie David Tsutsumi, a Filipino, married Ayahiro Tsutsumi, a Japanese national, in a marriage
ceremony celebrated in Tarlac City, Philippines. After 21 years, they divorced because of irreconcilable differences.
On March 7, 2018, the Embassy of Japan issued a Divorce Certificate. Thereafter, Tsutsumi filed a Petition for
Recognition of Foreign Divorce before the RTC-Tarlac City and offered as one of the exhibits the Civil Code of
Japan and formally offered in evidence the Japanese law on divorce in its official English translation. The RTC
granted the petition but on appeal, the Court of Appeals reversed the ruling of RTC-Tarlac citing that petitioner
must plead and prove the relevant Japanese laws as a fact in this jurisdiction to pave the way for the application
of paragraph 2, Article 26 of the Family Code.

ISSUE: Whether the law of divorce in Japan has been sufficiently proven as a fact.

HELD: Yes. The English translation of the Japan Civil Code, insofar as the nature and legal effects of the divorce
agreement, is deemed sufficient. In Kondo v. Civil Registrar General, the Supreme Court emphasized that, time
and again it grants liberality in cases involving the recognition of foreign decrees to Filipinos in mixed marriages
and free them from a marriage in which they are the sole remaining party. After all, procedural rules are designed
to secure and not override substantial justice, especially here where what is involved is a matter affecting the lives
of families.

4. Void Marriages
a. Different Grounds for Nullity
i. See also R.A. No. 11596 and Tan-Andal v. Andal, G.R. No. 196359, May 11, 2021

4. GO V. GO, G.R. No. 258095, 7 December 2022

FACTS: Leilani and Hendrick were married on August 7, 1999, and had two children. Their relationship deteriorated
over the years leading to their separation in 2014. Not long after, Leilani filed the petition for nullity of their
marriage. Clinical Psychologist Nedy did a psychological evaluation of the couple. She based her evaluation on the
interviews of Leilani and Jennel, and the results of Leilani’s psychological tests. Hendrick ignored the invitations
for psychological testing and clinical interview. Based on a clinical perspective, it was found that Leilani was
suffering from Passive Aggressive Personality Disorder with features of Narcissistic Personality Disorder while
Hendrick was suffering from Avoidant Personality Disorder with features of Antisocial Personality Disorder. The
trial court granted the petition and declared as void ab initio the marriage of Leilani and Hendrick. However, the
CA did not give credence to the findings of the Clinical Psychologist pertaining to Hendrick’s dysfunctional
personality traits and behavioral aberrations.

ISSUE: Whether Hendrick’s personality disorder must first be shown to prove his psychological incapacity under
Article 36 of the Family Code.

HELD: No. The Supreme Court in Laroco v. Laroco, the Court ruled that personality disorders are no longer the
sole proof of psychological incapacity. Nonetheless, in the case of Tan-Andal v. Andal, the Supreme Court has
retained the rule that for mutual incompatibility and antagonism to constitute psychological incapacity, the
same must be characterized by the elements of gravity, juridical antecedence and incurability.

In this case, the marital relationship of Leilani and Hendrick has been wracked by mutual incompatibility and
antagonism revolving around the themes of general differences of interests and antagonistic feelings; loss of love;
hostility and resentment; distrust; the inability to live harmoniously together; lack of concern or indifference; lack
of common interests and goals; and zero probability of reconciliation between the spouses. These mutual
incompatibility and antagonism are the core manifestations of the re-tooled concept of psychological incapacity,
and if the elements of juridical antecedence, gravity, and incurability are also shown clearly and convincingly, then
we can already rule that the marriage is void under Article 36 of the Family Code. Inasmuch as the Constitution
regards marriage as an inviolable social institution and the foundation of the family, courts must not hesitate to
void marriages that are patently ill-equipped due to psychic causes inherent in the person of the spouses.

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5. FOPALAN V. FOPALAN, G.R. NO. 250287, 20 JULY 2022

FACTS: Zeth and Neil met in college at Arellano University. They married on August 7, 1995, due to social
pressures. On October 16, 1999, their son Matthew was born but was subsequently diagnosed with autism. Neil
became hostile and neglectful towards Matthew, further distancing himself from the child. Later, Zeth discovered
messages indicating Neil’s infidelity, including relationships with working students in their school. She also found
a photo of a naked teen girl in his phone. But her desire to preserve their marriage prevailed so she just ignored
these things and focused instead on taking care of Matthew. In one of their confrontations, Neil blamed Zeth and
threatened to commit suicide to manipulate her into staying. Zeth underwent a psychiatric evaluation by Dr. Nedy
Lorenzo Tayag, who diagnosed Neil with narcissistic and antisocial personality disorders.

ISSUE: Whether the marriage between Zeth and Neil is void ab initio on the ground of psychological incapacity
on the part of Neil.

HELD: Yes. Article 36 of the Family Code defines psychological incapacity as a personal condition that prevents a
spouse from complying with fundamental marital obligations toward a specific partner and that may have existed
at the time of marriage but became evident only through behavior after the marriage ceremony. Psychological
incapacity must be characterized by: (a) gravity, (b) juridical antecedence, and (c) incurability. In this case, the
Supreme Court found clear and convincing evidence that Neil was psychologically incapacitated in a legal sense,
preventing him from fulfilling his marital obligations. The Supreme Court added that psychological incapacity is no
longer understood as a mental or personality disorder. Viewed in its legal conceptualization, psychological
incapacity is now understood as a condition deeply embedded in one's "personality structure" that prevents them
from fulfilling the fundamental marital obligations. Whether a person may or may not be aware of it, the condition
already exists at the time or even before the solemnization of their marriage but has become manifest only
thereafter. The totality of the evidence adequately proved that respondent's personality structure rendered him
incapable of recognizing and fulfilling his duties as husband to petitioner and as father to his son Matthew.

6. LAROCO V. LAROCO, G.R. NO. 253342, 22 JUNE 2022

FACTS: Dionisio C. Laroco filed a petition for the declaration of nullity of his marriage to Aurora B. Laroco based
on psychological incapacity under Article 36 of the Family Code. Dionisio alleged that his wife is psychologically
incapacitated due to her unfaithfulness and financial mismanagement. He claimed that Aurora continued to date
other men, borrowed money without repayment, and mismanaged their family’s canteen business. Petitioner
consulted Dr. Clarette Rosario Dy, who diagnosed Dionisio with obsessive-compulsive personality disorder and
Aurora with histrionic personality disorder. Despite these findings and testimonies from his friend and nephew’s
wife supporting Dionisio’s claims, the RTC after trail, denied the petition. The RTC ruled that the gravity of the
disorders was not duly proven. There was no sufficient basis to conclude that petitioner's orderliness and
perfectionism can be equated with psychological incapacity. Neither was the gravity of his behavior in relation to
his failure to perform the essential marital obligations sufficiently described in Dr. Dy's report. Petitioner's
characterization of respondent as unfaithful, selfish, and irresponsible in managing the family canteen was not
sufficient to constitute psychological incapacity. At most, respondent's mismanagement of the family's finances
merely constituted difficulty, refusal, or neglect, during the marriage, in the handling of funds intended for the
family's financial support.

ISSUE: Whether the marriage between petitioner and respondent should be set aside for being a nullity on the
ground of psychological incapacity under Article 36 of the Family Code

HELD: Yes. For purposes of establishing psychological incapacity, mutual incompatibility and antagonism denote
a state of irremediable rift or discord produced by a reciprocal conflict of personalities. The condition envisioned
is by its nature bilateral. Once a marital relation of this character is established as a fact, there exists in
contemplation of law a state of actionable incompatibility and antagonism, though the effect of the mismatch may
be wholly unbearable to one spouse yet appear somewhat less harmful and disturbing to the other spouse. In the
case of Tan-Andal v. Andal, the Supreme Court clarified that the standard of proof in an Article 36 case is clear
and convincing evidence, not mere preponderant evidence. In this case, given the factual situation in this cases,
the Court found the existence and gravity of the mutual incompatibility and antagonism between Spouses Laroco.
This state of discord and disharmony between them has undermined the unity and harmony in their family.

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7. REPUBLIC OF THE PHILIPPINES V. CLAUR, G.R. NO. 246868, 15 FEBRUARY 2022

FACTS: Angelique Pearl and Mark got married on January 3, 2009. Their relationship turned worse after they
moved with Mark’s parents. In January 2012, Angelique was expecting to go out on a date with Mark to celebrate
their anniversary. Mark, however, came home late and drunk. Mark left and they have since been separated in
fact. In preparation for the filing of the case, Dr. Castillo-Carcereny examined Angelique and found out that she
has borderline personality disorder. However, Dr. Castillo-Carcereny he was unable to personally examine Mark
but merely based his diagnosis on information gathered from those who observed Mark’s coping mechanisms and
concluded that Mark is suffering from narcissistic personality disorder. After trial, the RTC of Paranaque granted
the petition and ruled that both parties are psychologically incapacitated to perform their respective marital
obligations. The Republic, through the OSG, went to the Supreme Court seeking the reversal of the decision of the
trial court and the Court of Appeals. It argued that Angelique Pearl failed to establish that her marriage to Mark is
void due to the psychological incapacity of her husband and even herself. For other than the self-serving
testimonies of Angelique Pearl and her biased witnesses, no other evidence was presented to substantiate the
finding of both the trial court and the appellate court that the parties were indeed psychologically incapacitated.

ISSUE: Whether Angelique and Mark’s marriage should be declared void ab initio on the ground that both of them
suffer from psychological incapacity.

HELD: Yes. Using the parameters set in the Tan-Andal v. Andal case, the gravity of their condition cannot be
categorized as mild characterological peculiarities, mood changes, and mere occasional emotional outbursts. Their
relationship evolved from “rocky”, to turbulent and eventually violent. Neither of them accorded the other the love
and respect that was due to a spouse or life partner. Their respective personality structures are “incurable” in the
legal sense. These conditions prevented them from fulfilling their marital obligations as outlined in the Family
Code, particularly the observance of mutual love, respect and fidelity, and rendering mutual help and support.
Their psychological incapacity has juridical antecedence since their personality structures were manifest even
before the celebration of their marriage. Ass observed by the Supreme Court, the respective personality structures
of Angelique Pearl and Mark were already present even before they got married. Their dysfunctional acts when
they were in a boyfriend – girlfriend relationship and even when they were already husband and wife have made
it impossible for either of them to understand and, more important, to comply with their essential marital
obligations.

8. MARISTELA-CUAN V. CUAN, G.R. NO. 248518, 7 DECEMBER 2021

FACTS: In 1997, Janice and Marcelino got married in the Quezon City Hall. For their wedding reception, they just
shared a meal at a restaurant and then parted ways. They went home to their respective houses. There was no
even a honeymoon. They never lived together as husband and wife and only saw each other after work and during
weekends. They went to motels for about five times but they never engaged in sex. Marcelino would attempt to
have sex with Janice but then, he would suddenly stop. Dr. Tayag concluded that the union of Janice and Marcelino
failed because both of them were suffering from personality disorders characterized as grave, chronic, incurable,
and marked by juridical antecedence which hindered them from performing their marital duties although Marcelino
did not appear for clinical examination. Janice then filed a petition to declare their marriage void on the ground of
psychological incapacity under Article 36 of the Family Code of both Janice and Marcelino. The RTC granted the
petition but was reversed by the Court of Appeals.

ISSUE: Whether Marcelino can be considered as psychologically incapacitated which would warrant the dissolution
of their marriage.

HELD: Yes. The Supreme Court ruled that there sufficient evidence to prove that Marcelino was psychologically
incapacitated to perform marital obligations. The fact alone that Dr. Tayag was not able to personally interview
and administer tests on Marcelino does not render her findings inadmissible. As stated in Tan-Andal v Andal, expert
opinion based on otherwise hearsay evidence could still be admitted if the facts are "of a type reasonably relied
upon by experts in the particular field in forming opinions or inferences upon a subject." Here, Dr. Tayag was
unable to personally interview and perform tests on Marcelino simply because the latter ignored her invitation for
psychological evaluation. Yet, Dr. Tayag still managed to draw a reasonable conclusion on Marcelino's condition
based on the information which Janice and Janette had given her. Based on the evidence on record, the Court
found that Marcelino failed to give mutual love, respect, and support to Janice. His personality disorder barred him

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 from performing even the most basic of marital obligations: to love, respect and live together with his wife. Verily,
Janice should be free from the shackles of marriage that actually exists in paper only.

9. ESPIRITU V. BOAC-ESPIRITU, G.R. NO. 247583, 6 OCTOBER 2021

FACTS: Rommel filed a petition for the declaration of nullity of his marriage to Shirley under Article 36 of the
Family Code. He claimed that Shirley exhibited signs of psychological incapacity in performing her marital
obligations, such as refusing to have sex with him, being hot-tempered and constantly nagging, and being overly
suspicious and jealous of his interactions with other women. He also alleged that she frequently checked his
clothes, cellphone, and ATM card for evidence of infidelity. Rommel presented evidence from a clinical psychologist,
Dr. Pacita Tudla, who diagnosed Shirley Ann with Histrionic Personality Disorder and Paranoid Personality Disorder.
The RTC denied the petition. The trial court held that the totality of evidence failed to prove respondent's
psychological incapacity. Dr. Tudla, the doctor who made the psychological evaluation merely based her
conclusions only from the information offered by petitioner and his collateral witnesses who knew nothing about
her childhood or what she was going through as they were simply the family's neighbor and petitioner's driver.
Their testimonies were unreliable and even self-serving, hence, devoid of any evidentiary weight.

ISSUE: Whether Shirley’s actions rose to the level of psychological incapacity which is basis to nullify her marriage
with Rommel.

HELD: No. There is no clear and convincing evidence for the requisite juridical antecedence, gravity, and
incurability of Shirley’s personality structure. As observed by the Court, petitioner still failed to provide a complete
picture of respondent's supposed psychological incapacity. The Court is faced with more questions than answers
on why respondent was acting the way she did: 1) what are those "trivial matters" that made her furious?; 2) why
would she regularly sniff his clothes, check his cellphone and ATM card?; 3) what made her believe that he had
extramarital affairs?; 4) why would she get jealous over his co-worker's wive?; 5) why did she ask him to move
out from their home?; 6) did their driver and neighbor actually understand the root cause of their so called "chaotic
relationship"? Clearly petitioner only offered general statements of respondent's supposed manifestations of
psychological incapacity. This assumed knowledge pertaining to respondent's acts, even if true, is incomplete to
establish petitioner's cause. The more likely inference is that Shirley was already fed up with her distrust of
Rommel. Rommel’s declarations that Shirley “never believed him,” “had no room for compromise” and “never
admitted her mistakes” are insufficient to establish a true and serious incapacity as contemplated under Article 36
of the Family Code. For being skeptical and uncompromising on one’s situation and on one’s spouse, though
unfortunate, are not signs of a genuinely serious psychic cause; more so, neither can falling out of love be so
labeled.

10. HALOG V. HALOG, G.R. NO. 231695, 6 OCTOBER 2021

FACTS: Ma. Virginia and Wilbur got married in 1993. While preparing for their wedding, Ma. Virginia discovered
that Wilbur was having an affair with another woman. The early stage of their marriage was attended by full of
arguments and quarrels. Wilbur would always tell her that he regretted marrying her and that he was not ready
for marriage. He would also engage in extra-marital affairs. When they encountered financial difficulties, Wilbur
became habitually irritable and more abusive, to the point that once he aimed his gun at her in the midst of their
heated argument. He would abuse her even in the presence of their three children. In 2005, Wilbur went to Qatar
for work. Eventually, Wilbur stopped showing concern for his family. In 2006, Ma. Virgina discovered that he had
been cohabiting with another woman whom he married in Doha, Qatar. She then filed a petition to declare their
marriage void based on Art. 36 of the Family Code. The RTC granted the petition on the ground of Wilbur's alleged
psychological incapacity. The RTC found that Wilbur failed to give his moral, emotional, and sexual commitment
to Ma. Virginia. He never compromised his personal preferences, never accepted responsibilities, nor yielded some
privacy and independence. Thus, he was unable to connect with Virginia in any meaningful way.

ISSUE: Whether the evidence on record sufficiently support the petition of Ma. Virginia for declaration of nullity
of her marriage with Wilbur on ground of psychological incapacity.

HELD: Yes. There is clear and convincing evidence that Wilbur is psychologically incapacitated from discharging
his duties as husband to Ma. Virginia and father to their three (3) children. His condition was present even before
he celebrated his marriage to Virginia, rendering their marital union void ab initio. Ma. Virginia and her witnesses

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 testified that Wilbur had invariably manifested his psychological incapacity in various ways: first, by subjecting his
wife to several counts of physical and verbal abuse; second, by neglecting and eventually abandoning his wife and
his children; and finally, by his repeated acts of infidelity toward his wife and their sacred vow of marriage. True,
physical and verbal abuse, neglect and abandonment of spouse and children, or acts of infidelity including adultery
or concubinage, each constitutes a ground for legal separation. But where each one of these grounds or a
combination thereof, at the same time, manifest psychological incapacity that had been existing even prior to
marriage, the court may void the marriage on ground of psychological incapacity under Article 36 of the Family
Code.

11. ESTELLA V. PEREZ, G.R. NO. 249250, 29 SEPTEMBER 2021.

FACTS: Jerik met Niña in 2006 while working at the same company. Niña discovered that she was pregnant but
was unsure if Jerik was the father. Despite his shock upon learning that Niña had an intimate relationship with
another man, Jerik continued the relationship, lived with her, and eventually married her in 2010, believing that
the baby might be his. After the marriage, Jerik noticed that Niña exhibited signs of psychological incapacity in
fulfilling her marital obligations. Jerik felt emotionally and mentally abused by his wife. In 2011, Niña moved out
of the house and never returned. Jerik filed for nullity of their marriage, citing psychological incapacity after
consulting with a clinical psychologist.

ISSUE: Whether Niña is psychologically incapacitated based on Article 36 of the Family Code.

HELD: Yes. Applying the doctrine in Tan-Andal v. Andal case: First (as to gravity), Niña exhibited impulsivity, a
high sense of abandonment, affective instability due to mood reactivity, inappropriate and intense anger, chronic
emptiness, a high sense of entitlement, and a lack of empathy, among other symptoms. Second (as to juridical
antecedence), Niña’s incapacity had been deeply rooted in her problematic childhood. Third, Niña’s condition is
“incurable” in the legal sense, as evidenced by her consistent failure to commit to her relationship with the Jerik.

12. SANTOS-GANTAN V. GANTAN, G.R. NO. 225193, 14 OCTOBER 2020

FACTS: Bernardine (petitioner), first met John-Ross (respondent) in 1999. They got civilly married twice in in
2002. Despite knowing respondent’s irresponsibility, short temperedness, and issues with alcohol and employment,
she hoped he would change after marriage. Their marriage was marred by physical abuse, emotional cruelty, and
infidelity. In 2006, respondent left to work in Korea and had an affair, leading to their separation. The petitioner
consulted a clinical psychologist, who diagnosed the respondent with “Axis II Antisocial Personality Disorder.”
Based on information from the petitioner and other witnesses, the psychologist concluded that the respondent’s
disorder rendered him psychologically incapacitated to perform his marital responsibilities. The trial court declared
the two marriages in 2002 as null and void ab initio based on Article 36 of the Family Code. The Court of Appeals
reversed the trial court’s decision due to the doctor’s failure to personally examine the respondent and his parents.

ISSUE: Whether the Court of Appeals’ reversal of the trial court’s decision, based on the doctor’s failure to
personally examine the respondent and his parents, is proper.

HELD: No. There is no requirement that the person to be declared psychologically incapacitated be personally
examined by a physician. The absence of such personal examination is not fatal, provided that the totality of
evidence sufficiently supports a finding of psychological incapacity. Consequently, petitioner bears the burden of
proving the gravity, juridical antecedence, and incurability of respondent spouse's psychological incapacity. The
non-examination of one of the parties will not automatically render as hearsay or invalidate the findings of the
examining psychiatrist or psychologist, since marriage, by its very definition, necessarily involves only two (2)
persons. As such, the totality of the behavior of one spouse during the cohabitation and marriage is generally and
genuinely witnessed mainly by the other. What is important, however, as stated in Marcos v. Marcos, is the
presence of evidence that can adequately establish the party's psychological condition. If the totality of evidence
presented is enough to sustain a finding of psychological incapacity, then actual medical examination of the person
concerned need not be resorted to

7. Property Relations Between the Spouses

c. Different Property Regimes
ii. Conjugal Partnership of Gains Regime

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13. CALI REALTY CORPORATION V. ENRIQUEZ, G.R. NO. 257454, 26 JULY 2023

FACTS: Camilo Sr. and Librada Enriquez were married in 1939 and had five children, one of whom is Paz. Librada
passed away in 1995. The same year, Cali Realty Corp (CRC) was organized, with Camilo Sr. and his children,
excluding Paz, as incorporators. Camilo Sr. then executed a deed of assignment transferring to CRC parcels of land
which he inherited from his parents. CRC maintained that the subject properties were exclusive properties of
Camilo, Sr., while Paz contended that the subject properties were conjugal in nature, and that she inherited her
share upon her mother’s death.

ISSUE: Whether the subject properties registered in the name of Camilo, Sr. are conjugal properties of Camilo
Sr. and Librada.

HELD: No. Before the presumption of conjugal nature of property can apply, it must first be established that the
property was in fact acquired during the marriage. Proof of acquisition during the coverture is a condition sine qua
non for the operation of the presumption in favor of conjugal partnership. The party who asserts this presumption
must first prove said time element. Paz has not established the condition sine qua non for the presumption of
conjugality of property to apply. She has not proven or even alleged when the properties were actually acquired.
Instead, she merely claimed that the date of registration of property is the same as the date of acquisition. Hence,
subject properties, registered in the name of Camilo, Sr, are paraphernal in nature.

V. OBLIGATIONS AND CONTRACTS

A. Obligations
3. Nature and Effects of Obligations
a. Breaches of Obligations

14. ALCADO V. GSIS, G.R. NO. 260428, 1 MARCH 2023

FACTS: Petitioner, a public school teacher, applied for and was granted several loans on various dates by the
GSIS. On August 19, 2015, the GSIS sent her a collection letter, informing her that she was among the active
members verified with past due accounts. A year later, she retired from the service, albeit her loan accounts
remained unpaid. Consequently, the same were subjected to interest on arrears at the rate of 12% per annum
compounded monthly and a penalty of 6% per annum compounded monthly. When her retirement claim was
consequently processed, her cash surrender value resulted in zero proceeds.

ISSUE: Whether petitioner’s loans have become due and demandable at the end of their respective terms, entitling
GSIS to impose interest on arrears and penalties on the unpaid balances.

HELD: No. Article 2209 of the Civil Code indeed allows creditors like GSIS to collect interest by way of damages,
such as interest on arrears and penalties, whenever the debtor defaults or incurs in delay in the payment of his or
her debt. However, default only begins from the moment the creditor demands the performance of the
obligation. Here, there is no showing that GSIS sent prior demands to pay, in whatever form, to petitioner each
time any of her accounts remained unpaid at the end of each loan term. Therefore, she cannot be considered in
default. GSIS consequently had no right to impose interest on arrears and penalties on petitioner’s unsettled
balances notwithstanding the expiration of the respective loan terms thereof. While there are exceptions to the
requirement of prior demand, none was established to apply here.

b. Remedies for Breach of Obligations

15. CHANELAY DEVELOPMENT CORPORATION V. GSIS, G.R. NO. 210423, 5 JULY 2021

FACTS: GSIS and CDC entered into a Joint Venture Agreement (JVA), which provides that CDC shall renovate the
Chanelay Towers and sell the unsold units at its own expense. It also provides that CDC would pay P180.3M to
GSIS regardless of actual sales receipt, plus 71% of the proceeds in the sale of units in the building. CDC requested
extension on its guaranteed payment of P180.3M due to ongoing renovations. GSIS granted several extensions
but CDC nevertheless failed to remit any payment. Thereafter, GSIS terminated the JVA in accordance with
paragraph 7.01 thereof, which states: “Should CDC . . . commit any breach of its obligations and commitments

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 under this [JVA], this [JVA] shall be deemed terminated.” This prompted CDC to file a complaint against GSIS but
the trial court dismissed the same and ordered CDC to pay GSIS the P180.3M.

ISSUE: Whether GSIS is entitled to the P180.3M after resorting to rescission of the JVA.

HELD: No. Rescission and specific performance are alternative remedies. Persons prejudiced may elect between
exacting fulfillment of the obligation (specific performance) and its resolution, but they are not entitled to pursue
both of these mutually exclusive, nay inconsistent remedies. GSIS chose rescission rather than specific
performance. It opted to invoke 7.01 of the JVA and terminated the agreement due to CDC’s countless violations
thereof rather than collect payment. Consequently, the P180.3M monetary award is no longer available to GSIS.
Such award could have only been given to GSIS had it chosen to continue with the JVA.

5. Extinguishment of Obligations
a. Payment

16. HSBC STAFF RETIREMENT PLAN V. SPOUSES GALANG, G.R. NO. 199565, 30 JUNE 2021

FACTS: Theresa Galang availed of a housing loan from HSBC-SRP, which was secured by a real estate mortgage
she and her husband executed on their property. Sometime in 1994, Spouses Galang failed to pay the monthly
amortization, but was eventually able to pay the arrears and the monthly amortizations until October 1996.
However, between 1995 and 1996, HSBC-SRP sent several separate Installment Overdue Reminders and demand
letters to them. The last demand letter was sent on July 19, 1996, for payment of the entire balance with threat
of foreclosure. In response, Ma. Theresa explained that her account was up-to-date. Despite this, HSBC-SRP sent
Spouses Galang another Installment Overdue Reminder on September 11, 1996 and extrajudicially foreclosed the
mortgage on October 10, 1996. When Spouses Galang sued HSBC-SRP for annulment of the sale, HSBC-SRP
argued that although Ma. Theresa resumed her amortization payments, the same were not enough to cover the
full outstanding balance of her loan that had already become due and demandable.

ISSUE: Whether HSBC was estopped from demanding full payment of the obligation from Spouses Galang and
from subsequently foreclosing the mortgage on their property.

HELD: Yes. Article 1235 of the Civil Code provides that when the creditor accepts performance, knowing its
incompleteness and irregularity without protest or objection, the obligation is deemed complied with. The final
Installment Due Reminder dated September 11, 1996 was sent two (2) months after the last demand letter was
sent by HSBC-SRP on July 19, 1996. By sending the Installment Due Reminder after accepting unconditionally
twenty-two (22) monthly amortizations and after the last demand, HSBC-SRP made Spouses Galang believe that
they were up-to-date with their account and that their default with HSBC-SRP had become immaterial. Indeed, to
rule otherwise would greatly prejudice Spouses Galang who, in good faith, believed that their payments had stalled
the foreclosure.

B. Contracts
5. Defective Contracts
d. Void Contracts

17. DELA CRUZ VS. DUMASIG, GR NO. 261491, 4 DECEMBER 2023

FACTS: Respondent Rosalinda and petitioner are children of Sps. Dela Cruz, who, in 1987, took out a loan from
Cooperative Rural Bank (CRB) secured by TCT No. EP-250 (subject property). After CRB foreclosed the mortgage,
Rosalinda paid the loan based on her parents promise that the property would be her inheritance. CRB returned
the title to Sps. Dela Cruz, who gave it to Rosalinda. Rosalinda and her parents then executed a Deed of Sale with
Assumption of Mortgage in 2003. In 2004, Sps. Dela Cruz remortgaged the property to Llanes for P350,000.
Rosalinda occupied the land for one cropping season only in 2004, then returned it to her parents, who remained
in possession until their deaths in 2007 and 2009. In 2011, Rosalinda mortgaged the property to Dumasig for
P700,000, using P100,000 to pay a loan to Saladaga and P500,000 to pay Llanes. Petitioners claim that in 2011,
they discovered Dumasig had taken possession of the land without their consent.

ISSUE: Whether the sale between Sps. Dela Cruz and Rosalinda, over the subject property, is valid.

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 HELD: No. The sale between Sps. Dela Cruz and Rosalinda was absolutely simulated or fictitious, and therefore
void. In absolute simulation, there is a colorable contract but it has no substance as the parties have no intent to
be bound by it. In this case, the following circumstances indicate that Sps. Dela Cruz never intended to sell the
subject property to Rosalinda:
(1) the money she used to pay the loan with CRB were proceeds of the loan from Saladaga, which she acquired
by using the subject property as collateral;
(2) Sps. Dela Cruz continued to possess the subject property and exercised rights of ownership over the same
even after the sale in 2003 until their respective deaths;
(3) in fact, they re-mortgaged the same to Llanes for P350,000.00 in 2004;
(4) Rosalinda, on the other hand, possessed the land for one cropping only and returned the same to Sps. Dela
Cruz immediately after;
(5) while still alive, Sps. Dela Cruz executed an Amended Waiver of Rights and Interest involving the subject
property in favor of Diego to form part of his share in the inheritance; and
(6) it was only after Sps. Dela Cruz’ death that Rosalinda took over the land and mortgaged the same to Dumasig.
Verily, Rosalinda’s failure to exercise any act of dominion over the property after the sale belies any intention to
be bound by the Deed of Sale between her and Sps. Dela Cruz.

18. SPOUSES VIOVICENTE V. SPOUSES VIOVICENTE, G.R. NO. 219074, 28 JULY 2020

FACTS: Teodorico and Dominga Viovicente owned a property in San Pedro, Laguna. They alleged that their son,
Danilo, forced them to sign a Deed of Absolute Sale in 1993, transferring the property to him and his wife Alice,
without receiving any payment. Danilo and Alice were able to transfer the property to their names and were issued
TCT-356656.

ISSUE: Whether the sale is void for want of consideration.

HELD: Yes. The elements of a valid contract of sale are: (1) consent or meeting of the minds; (2) determinate
subject matter; and (3) price certain in money or its equivalent. Absent any of the elements, the sale is fictitious
or otherwise void. Specifically, Article 1471 of the Civil Code decrees that if the price in a contract of sale is
simulated, the sale is void. Here, petitioners denied ever receiving a single centavo from respondents. In sum,
TCT No. 356656 is void because the Deed absolutely lacked consideration from respondents.

VI. WILLS AND SUCCESSION

B. Different Kinds of Succession
1. Testamentary Succession
d. Kinds of Wills: Notarial and Holographic Wills
ii. Requisites of a valid Notarial Will

19. IN THE MATTER OF THE PETITION FOR THE PROBATE OF THE LAST WILL AND TESTAMENT OF
CECILIA ESGUERRA COSICO, J, G.R. NO. 246997, 5 MAY 2021

FACTS: Cecilia, born with a physical disability, was left in the care of her maternal aunt, Mercedes. Due to Cecilia’s
physical condition, she never attended school nor learned how to read or write. Mercedes raised Cecilia, together
with Mercedes’s legally adopted daughter, Thelma. At the age of sixty-four (64), Cecilia sought the assistance of
Atty. Bueser for assistance to execute her last will and testament. The two talked inside the former’s bedroom.
Two days later, Atty. Bueser returned with the finished copy of her will. In the presence of three (3) individuals
who served as notarial witnesses, Atty. Bueser read the contents of the document to Cecilia and carefully explained
its effects and consequences. He asked her if she fully understood the contents and whether it reflected her
wishes. Cecilia confirmed and affixed her thumbmark to the will, all in the presence of Atty. Bueser and her notarial
witnesses. Atty Bueser then handed over the signed copy of the will to Cecilia. At the age of seventy-four (74),
Cecilia passed away. Following Cecilia’s death, Mercedes obtained a copy of the will, made photocopies, and
distributed one to her spouse and daughter, Thelma. After Mercedes’ death, Thelma filed a petition for probate of
Cecilia’s will and for her appointment as administrator of the latter’s estate. Cecilia’s half siblings from the same
father opposed the petition, claiming that the will was read only once by Atty. Bueser and lacked the second
reading requirement by one of her notarial witnesses, as required by Article 808.

ISSUE: Whether the will is void for not strictly complying with the requirements of Article 808 of the Civil Code.

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 HELD: No. Art. 808 of the Civil Code requires that the contents of the last will and testament be read to the
testator twice-once by one of the subscribing witnesses and again by the notary. While the law imposes preceding
requirements only when the testator is blind, in Alvarado v. Gaviola, application of Art. 808 was extended to cover
not just the blind but also illiterates. The case also recognizes an exception to the rule—substantial compliance.
Substantial compliance suffices where the purpose has been served. A review of the document, the testimonies of
the witnesses, and the record showed that the intention of the testator had been established and protected from
fraud or trickery. The Court refuses to entertain such a possibility of fraud because Atty. Bueser, aside from
observing all other formalities, handed the copies to the notarial witnesses for their signature, read and explain
the will to Cecilia along with the notarial witnesses which gave both Cecilia and themselves the opportunity to
object to any provision in the will. Art. 808 is meant to protect the testator from all kinds of fraud and trickery, but
it is not intended to be so rigid and inflexible as to destroy the testamentary privilege. The danger that Art. 808 is
designed to prevent is undoubtedly non-existent. Cecilia’s last will and testament had substantially complied with
its spirit for the purpose of admitting it to probate.

VII. SPECIAL CONTRACTS

A. Contract of Sale
1. Nature and Form
a. Contract of Sale vs. Contract to Sell

20. TAOK V. CONDE, G.R. NO. 254248, 6 NOVEMBER 2023

FACTS: Virgilio entered into an Agreement with Supremido and Raul (respondents), which provides:

I, VIRGILIO TAOK . . . sold a parcel of land worth ONE MILLION PESOS

only ([PHP] 1,000,000.00) to Supremido Conde/Raul Conde . . . The
remaining balance of EIGHT HUNDRED THIRTY-FIVE THOUSAND
PESOS ([PHP] 835,000.00) will be paid in the form of installment basis of
TWENTY THOUSAND PESOS ([PHP] 20,000.00) monthly through BANK
payments, until the above is paid fully. IN WITNESS WHEREOF, we have
here unto set our hand this 29th day of January, 2007.

Respondents did not make a single amortization payment. On July 7, 2009, Raul informed Virgilio that he was
ready to pay the entire balance amounting to P835,000. Virgilio did not accept the payment and demanded an
additional P400,000 to which respondents did not agree.

ISSUE #1: Whether the Agreement is a contract to sell.

HELD #1: No. The Agreement is not a contract to sell but a contract of sale. The full payment of the purchase
price is a positive suspensive condition in a contract to sell. Nowhere in the subject Agreement states that the
parties agreed or intended to condition the transfer of ownership upon full payment of the purchase price by the
buyer. Notably, the Agreement has all the three elements of a contract of sale: (1) consent or meeting of the
minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. In this case, the Supreme
Court also ruled that the remedy of rescission is unavailable in a contract to sell since it is impossible to rescind a
non-existing obligation.

ISSUE #2: Whether the Agreement may be the proper subject of rescission.
HELD #2: Yes. As a reciprocal contract, a contract of sale such as the subject Agreement may be the proper
subject of rescission under Article 1191 of the Civil Code. In case of the obligor’s failure to perform the obligation,
Article 1191 provides the injured party with two options: rescission (also known as resolution of the contract) or
fulfillment of the obligation, with damages in either case. Resolution is considered a principal action which is based
on substantial breach by a party. Unmistakably, respondents’ failure to pay the balance of the purchase price
amounting to PHP 835,000.00 or 83.5% of the total purchase price for more than two years and seven months
constitutes a substantial breach of the contract of sale.

21. FIL-ESTATE PROPERTIES, INC. V. HERMANA REALTY, INC., G.R. NO. 231936, 25 NOVEMBER 2020

FACTS: Fil-Estate Properties, Inc. (FEPI) and Hermana Realty, Inc. (HRI) executed a contract to sell over a
condominium unit. Following HRI’s full payment, FEPI executed an undated and unnotarized Deed of Absolute

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 Sale in favor of HRI, pending the latter’s transmittal of DST and other taxes on the sale, and the valuation cost for
real estate taxation purposes. HRI asserted that FEPI’s obligation to execute a notarized Deed of Absolute Sale
and deliver the owner’s duplicate copy of the Condominium Certificate of Title is completely independent of HRI’s
possible tax liabilities.

ISSUE: Whether HRI has the right to demand the execution of a notarized deed of absolute sale.

HELD: Yes. In a contract to sell, ownership is retained by the seller and is not to pass until the full payment of
the price. Consequently, once the buyer has paid the purchase price in full, the contract to sell is converted to an
absolute sale and the buyer has the right to demand the execution of a Deed of Absolute Sale in its favor. Here,
there is no question that HRI has paid in full the contract price. There is no question either that by operation of
law, HRI as the buyer has become rightfully entitled to the execution of a Deed of Absolute Sale in its favor.

4. Double Sale

22. REQUINA, SR. V ERASMO, G.R. NO. 221049, 7 DECEMBER 2022

FACTS: Florentino’s lot was rented by Atty. Parawan who constructed a house thereon. Thereafter, Atty. Parawan
sold the house to Dr. Hipolito who, in turn, sold it to petitioners under a Deed of Sale dated October 30, 1993.
In 1994, Florentino died intestate. Thus, his sole heir Rosalita subdivided his estate and executed an Affidavit of
Adjudication dated March 15, 1994 transferring the lot in favor of petitioners. They continued possession and
ownership over the house and lot until 2001 when a fire razed their house along with other houses in the vicinity.
After the fire, petitioners learned that Eleuteria presented a Deed of Sale dated 1989 to the Register of Deeds.
Euleteria claimed that in 1985, she purchased the lot from Spouses Florentino and Aurelia on installment.

ISSUE: Whether Euleteria, whose Deed of Sale has an earlier date than petitioners’ Affidavit of Adjudication, has
a better right of possession over the subject property.

HELD: No. ART. 1544 provides that “x xx Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription,
the ownership shall pertain to the person who in good faith was first in possession; and, in the absence thereof;
to the person who presents the oldest title, provided there is good faith.” In this case, if both sales are assumed
to be valid, applying Article 1544 of the Civil Code, the first buyer was Euleteria and the second buyer was
petitioners. It was the second buyer, the petitioners, who registered the land first in good faith. They are
considered in good faith since they were not aware that Florentino allegedly sold the land to Euleteria. There was
also no evidence presented by Euleteria that she took steps to gain possession of the land or inform occupants of
her purchase of the land.

9. Equitable Mortgage

23. DALA V. AUTICIO, G.R. NO. 205672, 22 JUNE 2022

FACTS: Dala (seller) and Auticio (buyer) executed a Deed of Sale under Pacto de Retro over a piece of land for
P32,000, allowing Dala a right to repurchase the property within a period of six months. The six-month redemption
period expired without Dala buying back the land. Thus, Auticio filed a petition to consolidate her ownership of
the land. Auticio countered that their true agreement was a loan. He borrowed P20,000.00 from Auticio at 10%
interest per month for six months and put up the land as a security. Dala continued to possess the land, paid the
realty taxes, and offered to pay the loan plus interest but Auticio refused his offer.

ISSUE: Whether the contract between Dala and Auticio is not a true sale but an equitable mortgage.

RULING: Yes. An equitable mortgage masquerading as a sale with pacto de retro is a contract which, though
lacking the formality, form, or words, or other requisites demanded by the statute, reveals the intention of the
parties to burden a piece or pieces of real property only to secure the payment of a debt. It has two (2) requisites:
(1) the parties enter into what appears to be a contract of sale; but (2) their intention is to secure an existing debt
by way of a mortgage. Here, though Dala and Auticio memorialized their transaction as a Deed of Sale under Pacto
de Retro, their intent was not to sell the land with right of repurchase, but simply to set it up as a security for
Dala’s debt of P32,000.

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 VIII. CREDIT TRANSACTIONS

C. Guaranty and Suretyship

24. SUBIC BAY DISTRIBUTION, INC. V. WESTERN GUARANTY CORP., G.R. NO. 220613, 11 NOVEMBER
2021

FACTS: Subic Bay Distribution, Inc. (SBDI), entered into a Distributor Agreement with Prime Asia Sales and
Services, Inc. (PASSI), for the sale of petroleum products. Under the agreement, PASSI obligated itself to post a
performance bond to secure its obligation. Hence, PASSI secured a performance bond from Western Guaranty
Corporation (WGC). When PASSI defaulted in its payments, SBDI sent a demand letter for payment of the total
outstanding obligation. PASSI, however, failed to settle its outstanding obligation. SBDI went after the performance
bond and sought payment from WGC. When SBDI filed a complaint for sum of money against WGC, WGC argued
that it is absolved from liability due to the purported violations/novations of the Distributor Agreement, as SBDI
allegedly unduly extended the credit term from 15 days to 30 days, as shown by the sales invoices, and the credit
limit, inordinately increased from P5 Million to P8.5 Million.

ISSUE #1: Whether WGC, as surety, is absolved from liability because of the changes in the principal contract.
HELD #1: No. Not all changes in the principal contract would work to absolve a surety from liability. This liability
is not extinguished when the modifications in the principal contract do not substantially or materially alter the
principal’s obligations. Verily, the touchstone for contrariety would be an irreconcilable incompatibility between the
old and new obligations. The Supreme Court observed no material alterations in this case.

ISSUE #2: Whether SBDI may not collect from WGC (surety) as it failed to include PASSI (principal) as party
defendant in the complaint.
HELD #2: No. A creditor’s right to proceed against the surety exists independently of his right to proceed against
the principal. Article 1216 of the Civil Code states that the creditor may proceed against any one of the solidary
debtors or some or all of them simultaneously. The rule, therefore, is that if the obligation is joint and several, the
creditor has the right to proceed even against the surety alone. WGC may, thus, be sued separately or together
with PASSI in view of the solidary nature of its liability.

D. Real Estate Mortgage

25. DEVELOPMENT BANK OF THE PHILIPPINES V. TOGLE, G.R. NO. 224138, 6 OCTOBER 2021
FACTS: DBP granted a P5M agricultural loan to Catherine, secured by her parents’ lots (the subject properties).
The loan agreement reads: “Use of Loan Proceeds: The borrowers shall use the loan proceeds exclusively for the
construction of poultry houses.” Catherine received the first drawdown of P3M. However, when she requested for
the release of an additional P500,000, DBP denied the request because they (respondents) allegedly failed to
comply with the loan specifications, i.e., they should have infused equity in proportion to the amount released by
DBP for the construction of twelve poultry houses which could house at least 60,000 broilers. This was the first
time they were informed of these alleged requirements. After due notice, DBP applied the acceleration clause and
declared them in default. Thereafter, DBP foreclosed the properties.

ISSUE: Whether the foreclosure proceedings was premature.

HELD: Yes. A mortgage, by its nature, is an accessory contract which may only be enforced when there has been
a breach of the principal obligation. On the other hand, in reciprocal obligations such as a loan, a party may only
be deemed in breach when the other has already fulfilled his or her obligation. DBP withheld the additional loan
proceeds of P500,000.00 without a valid reason. In other words, it failed to fulfill its obligation under the loan
agreement. Consequently, it cannot compel respondents to fulfill their end of the bargain, hold them in default
should they fail to comply, and foreclose their mortgaged property thereafter. In other words, the foreclosure
proceedings was premature and the resultant sale and transfer of the subject properties, void.

26. PLANA V. CHUA, G.R. No. 250636, 10 JANUARY 2023

FACTS: Merlinda and her late husband Nelson owned five lots. After Nelson died, she got married to Ramon, who
fraudulently made her sign a Deed of Definite Sale purportedly selling the five lots to him. Consequently, five new

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 titles were issued in the name of Ramon alone. Merlinda sued Ramon for recovery of the four lots which Ramon
sold to Serafin. The Supreme Court in Modina v. Court of Appeals declared as void the Deed of Definite Sale and
the subsequent sale of the four lots to Serafin. Meantime, Ramon mortgaged the 5th lot to Lourdes. The mortgage
was annotated on the back of the title of the 5 th lot (TCT No. T-86916). Thus, Merlinda filed a Complaint for
Reconveyance of the 5th lot against Ramon and Lourdes. Lourdes claimed she was an innocent mortgagee for
value and that by law, she was not required to go beyond the face of the title.

ISSUE #1: Whether Lourdes was a mortgagee in good faith.

HELD #1: Yes. Lourdes was a mortgagee in good faith. One who enters into a mortgage contract with a mortgagor
holding a certificate of title under his name over the property, is a mortgagee in good faith. For a mortgagee has
the right to rely in good faith on the certificate of title of the mortgagor of the property given as security and has
no obligation to undertake further investigation in the absence of any sign that might arouse suspicion.

ISSUE #2: Whether Merlinda, as the true owner, has a better right over Lourdes, who is a mortgagee in good
faith.
HELD #2: Yes. Where the true owner has not been found negligent or has not committed an act which could
have brought about the issuance of another title relied upon by the purchaser or mortgagee for value, then the
true innocent owner, whether still registered or deemed registered, has a better right over the mortgagee in good
faith. For “the law protects and prefers the lawful holder of registered title over the transferee of a vendor bereft
of any transmissible rights.” Here, insofar as the issuance of TCT No. T-86916 is concerned, Merlinda was not
shown to have directly or indirectly caused it through her fault or negligence. Nor was it shown that, in one way
or another, she led Lourdes, a mortgagee in good faith, to believe in, let alone, rely on the said title. It did not
matter that Merlinda had by then been eased out, or erased, as the lot’s registered owner due to the fraud
perpetrated on her by Ramon.

IX. PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

B. Ownership
5. Actions to Recover Ownership and Possession of Property
c. Accion Publiciana

27. HEIRS OF EUTIQUIO ELLIOT V. CORCUERA, G.R. NO. 233767, 27 AUGUST 2020

FACTS: Corcuera claimed that he was the registered owner of a parcel of land covered by OCT No. P-7061. He
alleged that sometime in the middle of 1994, the Heirs of Eutiquio Elliot entered the land without his consent,
planted their trees thereon, and started claiming they owned the lot. They were served with demands to vacate
the lot but they refused. He was, thus, compelled to file a Complaint for Recovery of Possession and Damages.
The trial court dismissed the complaint, holding that Corcuera was not even in possession of subject lot. It found
that the Heirs of Eutiquio Elliot had acquired ownership over the lot via prescription for they had proven their open,
continuous, and adverse possession of the lot since 1965. The lot had been declared alienable and disposable on
January 31, 1961.

ISSUE: Whether the Heirs of Eutiquio Elliot have a better right of possession over the subject lot.

HELD: Yes. Accion publiciana is an ordinary civil proceeding to determine the better right of possession of realty
independent of title. It refers to an ejectment suit filed after the expiration of one year from the accrual of the
cause of action or from the unlawful withholding of possession of the realty. It is an ordinary civil proceeding to
determine the better right of possession of realty independently of title. Here, the Heirs of Eutiquio Elliot have
been in open, continuous, exclusive and notorious possession of the lot for more than thirty (30) years. In short,
they had been in actual possession of said portion way before respondent laid claim on the whole of lot. Verily,
since respondent failed to prove his claim of de facto possession over the disputed lot, his complaint for recovery
of possession must fail.

e. Quieting of Title

28. TENSUAN, ET AL. V. HEIRS OF MA. ISABEL M. VASQUEZ, G.R. NO. 204992, 8 SEPTEMBER 2020

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 FACTS: Petitioners, surviving heirs of Fernando Tensuan, alleged that the latter was the registered owner of TCT
16532 issued on January 7, 1950. On the other hand, Ma. Isabel M. Vasquez was the owner of a parcel of land in
the Aguila Village. The Magdaong River served as the boundary between the Tensuan property and the Aguila
Village. Sometime in the 1990s, when Ma. Isabel commissioned the rip-rapping of the northern side of her property
pursuant to a special work order, the Magdaong River changed its course and augmented the original area of Ma.
Isabel’s property by 5,237.53 square meters. Subsequently, she was issued TCT 144017 covering this additional
area. But out of this new area, 1,680.92 square meters were actually a portion of Tensuan property and 3,556.62
square meters were actually a portion of the Magdaong River. Ma. Isabel subsequently caused the subdivision of
the entire 5,237.53 square meters. As a result, TCT 144017 produced seven (7) derivative TCTs.

ISSUE #1. Whether petitioner’s action for quieting of title has already prescribed.
HELD #1. No. If the plaintiff in an action for quieting of title is in possession of the property being litigated, such
action is imprescriptible. For one who is in actual possession of a land, claiming to be the owner thereof may wait
until his or her possession is disturbed or his or her title, attacked before taking steps to vindicate his or her right.
Undisturbed possession gives one a continuing right to seek the aid of the courts to ascertain the nature of the
adverse claim and its effects on his or her title. Here, petitioners were in possession of the property when the
complaint was filed. They need not set foot on every square inch of the property to be considered in possession
thereof, it being sufficient that their title to the property covers both the portion they are actually occupying and
the portion encroached upon by respondents.

ISSUE #2: Whether petitioners, being prior registrants, enjoy superior rights over respondent.
HELD #2: Yes. Under the Torrens system, 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. Otherwise stated, the
certificate of title is the best proof of ownership of a parcel of land. A decree of registration is binding and conclusive
upon all persons. . . Here, petitioners’ TCT No. 16532 was issued on January 7, 1950. As such, third persons were
already precluded from registering the same property covered by the title. As it was though, respondent Ma. Isabel
was issued TCT No. 144017 on November 25, 1986. Between the two (2) titles, the prior registrant is preferred.
For at the time respondent Ma. Isabel registered her alleged property, she was already charged with knowledge
that 1,680.92 square meters thereof already belonged to petitioners.

9. Easements
c. Kinds of Easement

29. SPS. CASTRO V. SPS. ESPERANZA, G.R. NO. 248763, 11 MARCH 2020

FACTS: Spouses Esperanza are owners of a parcel of land, the southwest part of it lies a “foot path,” a voluntary
easement that has its own title under the name of Spouses Castro. Spouses Esperanza use the foot path as an
ingress to and egress from the national highway. Spouses Castro then closed off the foot path, thereby preventing
them from using the same. Spouses Esperanza thus filed a mandatory injunction. In its defense, Spouses Castro
argued that the Spouses Esperanza’s property was bounded on the east by a dry creek which they had been using
as a way in and out of their property for a long time now.

ISSUE: Whether the foot path has lost its nature as a voluntary easement as the dry creek gives Spouses
Esperanza access to the national highway.

HELD: No. The opening of an adequate outlet to a highway can extinguish only legal or compulsory easements,
not voluntary easements. The fact that an easement by grant may have also qualified as an easement of necessity
does not detract from its permanency as a property right, which survives the termination of the necessity. Hence,
although the dry creek had been turned into a gravel road that gives access to the national highway, the foot path
has not lost its nature as a voluntary easement which benefits Spouses Esperanza and third persons.

XI. QUASI-DELICTS

E. Defenses
7. Prescription

30. FILCON READY MIXED, INC., ET AL. V. UCPB GENERAL INSURANCE CO., INC., INC, G.R. NO. 229877,
15 JULY 2020

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 FACTS: Gutang is the registered owner of a Honda Civic insured with UCPB. On November 16, 2007, the said
car figured in a vehicular accident involving three other vehicles, including a cement mixer owned by Filcon Ready
Mixed Inc. and driven by Vergara. The insured vehicle got damaged and Gutang brought it for repair. As Gutang’s
insurer, UCPB paid the total cost of repairs to Honda. Thereafter, Gutang executed a document captioned “Release
and Discharge” which effectively assigned to UCPB all his claims against Filcon Ready Mixed Inc. and Vergara. By
virtue of this legal subrogation, UCPB sent a demand letter dated September 1, 2011 to Filcon Ready Mixed Inc.
and Vergara, but they simply ignored it. Hence, UCPB filed an action for sum of money before the MeTC on
February 1, 2012.

ISSUE: Whether UCPB’s action for money claims was filed beyond the prescriptive period of four years.

RULING: No. The insurer, as the new creditor, remains bound by the limitations of the old creditor’s claims against
the debtor, which includes, among others, the aspect of prescription. The applicable prescriptive period is four
years pursuant to Article 1146 of the Civil Code, which provides that: “The following actions must be instituted
within four years: xxx (2) Upon a quasi-delict.” UCPB, therefore, had four years from November 16, 2007 when
the vehicular mishap took place or until November 16, 2011 within which to file its action for sum of money against
Vergara and his employer Filcon. Moreover, according to Article 1155 of the Civil Code: “The prescription of actions
is interrupted when they are filed before the court, when there is a written extrajudicial demand by the
creditors, and when there is any written acknowledgment of the debt by the debtor.” UCPB’s demand letter and
petitioners’ receipt thereof had the effect of interrupting the four-year prescriptive period and gave UCPB a whole
fresh period of four years from petitioners’ receipt of the demand letter within which to file the action for sum of
money. UCPB filed the action just within five months from September 1, 2011, the date when it sent the demand
letter to petitioners.

F. Medical Negligence and Malpractice

31. QUEZON CITY EYE CENTER V. PHILIPPINE HEALTH INSURANCE CORPORATION, G.R. NOS. 246710-
15, 6 FEBRUARY 2023

FACTS: PhilHealth issued Circular No. 17, directing the suspension of PhilHealth claims for cataract operations
performed during medical missions and through “other recruitment schemes for cataract surgeries.” Thereafter,
the President of the Philippine Academy of Ophthalmology received a letter-complaint from a group of doctors,
alleging that certain doctors violated said circular. Dr. Valdez and Dr. Yadao were named as among those involved
in the so-called “cataract sweeping” or recruitment activities. On the basis thereof, six administrative cases were
filed against Quezon City Eye Center where the two aforenamed doctors performed cataract surgeries on their
patients. PhilHealth invoked the “doctrine of apparent authority” for the purpose of making Quezon City Eye Center
liable with Drs. Valdez and Yadao.

ISSUE: Whether under the doctrine of apparent authority, Quezon City Eye Center is vicariously liable for Dr.
Valdez and Dr. Yadao’s negligent acts.

HELD: No. The doctrine of apparent authority is applied to determine the liability of a hospital in a medical
malpractice case against an independent contractor physician. Hence, the “doctrine of apparent authority” does
not apply where the cause of action as in this case is breach of petitioner’s warranties of accreditation under
PhilHealth rules and regulations and not medical malpractice arising from negligence or recklessness. And rightly
so, since medical malpractice is a form of negligence or recklessness which consists in the failure of a physician or
surgeon to apply to his practice that degree of care and skill that the profession generally and ordinarily employs
under similar conditions and circumstances.

XII. DAMAGES
B. Kinds
1. Actual and Compensatory Damages

32. ARCINUE V. BAUN, G.R. NO. 211149, 28 NOVEMBER 2019

FACTS: In 1990, AMA Computer Learning Center (ACLC) granted Arcinue a franchise to operate a computer
training school under ACLC’s name for ten years. Three years later, Arcinue still had not commenced operation

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 and sold his franchise to Alice Baun for P85,000 without ACLC’s prior approval. ACLC terminated Arcinue’s franchise
for his continuous failure to operate and for having assigned his franchise to Baun without its prior approval. On
September 11, 1997, Baun filed the complaint against Arcinue and ACLC for specific performance and damages.
Baun died and was survived by her siblings whom the trial court allowed to substitute as plaintiff. The trial court
dismissed the case against AMA and directed Arcinue to pay Bauan’s estate the sum of P85,000.00 as actual
damages, with legal interest at 6% per annum or a fraction thereof, from the time he unjustly received the said
amount from the plaintiff in 1993 until the same is paid in full.

ISSUE #1: Whether Buan is entitled to compensation for the use of her money.
HELD #1: Yes. Forbearance of money, good or credits 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. The compensation for the use of 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. Here, Buan
paid Arcinue P85,000.00 conditioned upon the supposed transfer of franchise rights to operate ACLC’s computer
school. The transfer, however, never took place albeit Arcinue retained Bauan’s payment. Bauan is thus entitled
not only to the return of the principal amount she paid, but also to compensation for the use of her money.

ISSUE #2: Whether the interest rate imposed on the monetary awards is proper.
HELD #2: No. In the absence of stipulated interest, in a loan or forbearance of money, goods, credits or
judgments, the rate of interest on the principal amount shall be the prevailing legal interest prescribed by the BSP,
which shall be computed from default, i.e., from extrajudicial or judicial demand in accordance with Article 1169
of the Civil Code, UNTIL FULL PAYMENT, without compounding any interest unless compounded interest is
expressly stipulated by law or regulation. In addition, interest due on the principal amount accruing as of judicial
demand shall SEPARATELY earn legal interest at the prevailing rate prescribed by the BSP, from the time of judicial
demand UNTIL FULL PAYMENT. Considering that Bauan filed the complaint against Arcinue on September 11,
1997, the legal interest rate of 12% per annum applies from judicial demand on September 11, 1997 until June
30, 2013. Beginning July 1, 2013, the effectivity of the BSP-Monetary Board Circular No. 799, the new legal interest
rate of 6% per annum must apply until full payment.

In sum, Arcinue must pay:

(a) P85,000.00 as actual damages, with legal interest at 12% per annum from judicial demand on September
11, 1997 until June 30, 2013 and 6% per annum from July 1, 2013 until full payment; and
(b) Legal interest on the interest due above at the rate of 12% per annum from judicial demand on September
11, 1997 up to June 30, 2013, and 6% per annum from July 1, 2013 until full payment.

XIII. LAND TITLES AND DEEDS

Presidential Decree No. 1529

A. Torrens System

33. SPS. MAGALANG V. SPS. HERETAPE, ET AL., G.R. NO. 199558, 14 AUGUST 2019

FACTS: Petitioners Spouses Kawasa Magalang et al. filed a complaint against respondents Spouses Lucibar
Heretape et al. in the RTC, claiming ownership of a 10-hectare land in Salabaca, Ampatuan, Cotabato. Petitioners
submitted as evidence official receipts for real property tax payments and Tax Declaration No. 608518 dated
September 16. On the other hand, respondents offered original certificates of title (OCT) to the lots in question as
documentary evidence.

ISSUE: Whether petitioners tax declarations and tax receipts may be considered evidence of ownership.

HELD: No. The Torrens title is conclusive evidence with respect to the ownership of the land described therein,
and other matters which can be litigated and decided in land registration proceedings. As such, the titleholder is
entitled to all the attributes of ownership of the property, including possession. Here, OCT (P-45002) Pls-9154,
OCT (P-45003) P-9155, and OCT (P-42941) P-3449 are conclusive evidence that Lucibar Heretape, Nestor
Heretape, and Roberto Landero, in whose names the lots are registered, are indeed the real owners thereof. In
contrast, petitioners’ single tax declarations and old tax receipts dated 1963 - 1967 are not considered evidence
of ownership, hence, the same cannot defeat respondents’ certificates of title to the lots in question.

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 3. Innocent Purchaser for Value; Rights

34. AFP RETIREMENT AND SEPARATION BENEFITS SYSTEM (AFP-RSBS) V. PLASTIC KING INDUSTRIAL
CORP, G.R. NO. 231395, 26 JUNE 2023

FACTS: Atty. Flaviano executed a “Transfer of Rights” in favor of Plastic King over the subject lots. Plastic King
demanded that Atty. Flaviano execute a deed of conveyance in its name but the latter refused. Instead, Atty.
Flaviano and AFP-RSBS executed a Contract to Sell, and eventually a Deed of Absolute Sale over the subject lots.
As soon as Plastic King learned of the ongoing transaction between the Flavianos and AFP-RSBS, Plastic King
immediately informed AFP-RSBS that the lots were already sold to them (Plastic King). In fact, the titles even bore
a notice of lis pendens. AFP-RSBS ignored the warning and still proceeded with the second sale. On the other
hand, Atty. Flaviano claimed that Plastic King already revoked the first sale pursuant to a Memorandum of
Revocation they executed with the agent of Plastic King, Evelyn, who was authorized under a General Power of
Attorney stating that Evelyn had the authority “to ask, demand, sue, and to take any and all lawful ways and
means for the recovery thereof (subject property) by suit, attachment, compromise, or otherwise, and to make,
sign, execute, and deliver contracts, documents, agreements, and other writings of whatever nature and kind,
with and all third persons, concerns, or entities, upon terms and conditions acceptable to my said attorney.”

ISSUE #1: Whether the new title issued in the name of AFP-RSBS is protected against collateral attacks.
HELD #1: No. Buyers in bad faith cannot invoke the rule against collateral attack based on the indefeasibility of
title as this defense does not extend to those who obtain titles with notices of flaws, much less, to those who hold
an invalid title such as here. In this case, AFP-RSBS was not an innocent second purchaser for value as it was
notified of the earlier sale to Plastic King even before it sought the registration of the subsequent sale in its own
name. The encumbrance pertaining to the first sale was carried over to the subsequent titles issued in the name
of AFP-RSBS.

ISSUE #2: Whether the revocation of the contract of sale made through agent Evelyn was valid.
HELD #2: No. The grant of authority in the General Power of Attorney appointing Evelyn as its attorney-in-fact:
refers to acts of administration, not acts of ownership. Article 1877 of the Civil Code states that, “an agency
couched in general terms comprises only acts of administration, even if the principal should state that he withholds
no power or that the agent may execute such acts as he may consider appropriate, or even though the agency
should authorize a general and unlimited management.” There was nothing in the aforesaid General Power of
Attorney authorizing the agent to revoke the sale made by the Flavianos in favor of Plastic King via the so-called
Memorandum of Revocation. The Memorandum of Revocation did not validly cancel the contract of sale between
the Flavianos and Plastic King as Evelyn was not authorized to do so in the first place. In accordance with Article
1910 of the Civil Code, the act of an agent beyond the scope of his or her authority does not bind the principal,
unless the principal ratifies them, expressly or impliedly. Here, no act of ratification was done by the principal
which in fact had promptly disowned it.

Hail to the Chiefs!

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