DAVID RAYMUNDO V. GALEN REALTY AND MINING CORPORATION Topic: Equitable Mortgage ROBERT DA JOSE, ET AL. V.

CELERINA ANGELES, ET AL. Topic: Damages; Loss of Earning Capacity AQUILES RIOSA v. TABACO LA SUERTE CORPORATION Topic: Sales; Land Titles and Deeds HEIRS OF FLORENTINO QUILO V. DEVELOPMENT BANK OF THE PHILIPPINES Topic: Agricultural Tenancy Relationship EDILBERTO VENTURA, JR. V. SPS. PAULINO AND EVANGELINE ABUDA Topic: Property Relations Between Common Law Spouses (ART 148, FC) CALIFORNIA CLOTHING INC. and MICHELLE S. YBAEZ V. SHIRLEY G. QUIONES Topic: Abuse of Rights Doctrine (Art 19, Civil Code)

Topic: Equitable Mortgage DAVID RAYMUNDO V. GALEN REALTY AND MINING CORPORATION G.R. No. 191594, October 16, 2013 Reyes, J FACTS: On September 9, 1987, Galen Realty sold (with right to repurchase) to David Raymundo a house and lot located in Urdaneta Village, Makati City, which was subsequently sold by the latter to Tensorex Corporation. In an action for Reconveyance with Damages filed by Galen Realty against Raymundo and Tensorex, the Makati RTC ruled that the said sale between Galen Realty and Raymundo was actually an equitable mortgage, and ordered Raymundo to reconvey the property upon payment by Galen Realty of P3,865,000.00 (plus legal interest), or if reconveyance is no longer feasible, for Raymundo and Tensorex to solidarily pay Galen Realty the fair market value of the subject property. On appeal, the CA upheld the decision of the RTC. After the CA decision became final and executory, and upon motion by Galen Realty, the RTC ordered the issuance of a writ of execution. On July 16, 2007, the sheriff issued a Notice of Sheriffs Sale of Real Estate Property at a public auction set on Augus t 8, 2007. Raymundo filed a motion objecting to the auction sale and expressing his willingness to reconvey the property upon payment in full by Galen Realty of its indebtedness. Galen Realty, in turn, filed an opposition claiming that reconveyance was no longer feasible as the property is heavily encumbered and title to the property is still in the name of Tensorex Corporation, which had already gone out of operations and whose responsible officers are no longer accessible. On August 6, 2007, the RTC ordered Raymundo to show proof how his willingness to reconvey the property can be realized, which shall consist primarily of a submission of the Transfer Certificate of Title covering the subject property duly registered in Raymundos name. Raymundo filed a comment contending that his obligation to reconvey is not yet due pending payment of Galens own obligation. On December 12, 2007, the RTC ruled that Raymundo failed to show proof that the title was already registered in his name, and lifted the suspension of the auction sale. As a result, the property was sold at a public auction on November 26, 2008 for P37,108,750.00, with Galen Realty as the highest bidder.

ISSUE: Whether or not the failure of Raymundo to prove his willingness to reconvey the property subject to equitable mortgage warrants the sale of said property by public auction HELD: NO. In an equitable mortgage, the real intention of the parties in entering a pacto de retro sale is to charge the real property as security for a debt. As such, the seller retains ownership of the property, despite the fact that the title to said property was transferred to the buyers name. It was wrong for the RTC to require Raymundo to show proof of his "willingness" to reconvey the property. It does not devolve upon Raymundo to determine whether he is willing to reconvey the property or not because it was not his to begin with. Likewise, it was also error on the part of the RTC in effectively accommodating the choice of Galen Realty by making the payment of the fair market value of the property the main obligation of Raymundo instead of it being the alternative. It is only when reconveyance is no longer feasible that Raymundo and Tensorex should pay Galen the fair market value of the property. In other words, it is when the property has passed on to an innocent purchaser for value and in good faith, has been dissipated, or has been subjected to an analogous circumstance which renders the return of the property impossible that Raymundo and/or Tensorex, is obliged to pay Galen the fair market value of the property. The dissolution of Tensorex is not a valid reason to avoid reconveyance inasmuch as the court may order the transfer of title to Galen by some other person appointed by the court in accordance with Section 10, Rule 39 of the Rules of Court. The "some other person appointed by the court" can be the Branch Clerk of Court, the Sheriff, or even the Register of Deeds, and their acts when done under such authority shall have the effect of having been done by Raymundo himself. Likewise, the existence of subsequent encumbrances on the property is also not a sufficient ground to insist on the payment of its fair market value. Whatever subsequent transactions Tensorex Corporations entered into are subject to the notice of lis pendens which serves as a constructive notice to purchasers or other persons subsequently dealing with the same property. Allowing Raymundo and/or Tensorex Corporation to keep the property and later levy upon the same virtually amount to a sale, contrary to the RTCs findings that it is an equitable mortgage. This is contrary to the same public policy which prohibits pactum commissorium.

Topic: Damages; Loss of Earning Capacity ROBERT DA JOSE, ET AL. V. CELERINA ANGELES, ET AL. G.R. No. 187899, October 23, 2013 Villarama, J. FACTS: On December 1, 2001, a vehicular accident occurred in Pulilan, Bulacan involving a Mitsubishi Lancer owned, and at that time driven, by Eduardo Angeles, husband and father of herein respondents; and a Nissan Patrol owned by petitioner Robert Da Jose, and at the time driven by petitioner Francisco Ocampo. As a result thereof, Eduardo suffered injuries and despite treatment at a hospital, he died on the same day due to Hemorrhagic Shock as a result of Blunt Traumatic Injury. A criminal complaint was for Reckless Imprudence Resulting in Homicide and Damage to Property was filed on December 3, 2001 against Francisco with the MTC of Pulilan. During the pendency of the said case, counsel for respondents sent a demand letter for the payment of P

5,000,000 representing damages and attorneys fees. Not having reached any settlement, respondents filed a Complaint for Damages based on Quasi-Delict against petitioners. Respondents allege that Eduardo, as a businessman, earned an average of P1,000,000 per annum. To prove said claim, the respondents presented, inter alia, cash vouchers from Glennis Laundry Haus, a business establishment in which Eduardo, during his lifetime, was a partowner. The vouchers represented a P20,000 fixed salary which Eduardo received from the business and were identified through the testimony of respondent Celine Angeles, daughter of Eduardo. However, during the cross-examination, Celine admitted that she had no hand in the preparation of the said documents. Petitioners contend that there can be no award of unrealized earnings because the alleged authors of said cash vouchers were not presented as witnesses. They stress that whether objected to or not, the cash vouchers are hearsay evidence which possess no probative value. Respondents on the other hand aver that personal knowledge of a document does not require direct participation for it is enough that the witness can convince the court of her awareness of the documents genuineness, due execution and authenticity. Thus, if not admitted or admissible as documentary proof, the document can be admissible as object evidence. The CA, contrary to the RTC decision, awarded P2,316,000 representing Eduardos lost earnings. ISSUE: WON an amount of P2,316,000 may be awarded as lost earnings based on cash vouchers identified by a witness who had no hand in its preparation HELD: NO. Under Article 2206 of the Civil Code, the heirs of the victim are entitled to indemnity for loss of earning capacity. Compensation of this nature is awarded not for loss of earnings, but for loss of capacity to earn money. The indemnification for loss of earning capacity partakes of the nature of actual damages which must be duly proven by competent proof and the best obtainable evidence thereof. Thus, as a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when (1) the deceased is self-employed and earning less than the minimum wage under current labor laws, in which case, judicial notice may be taken of the fact that in the deceaseds line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws. The case falls under the general rule rather than the exceptions. However, despite having presented documentary evidence, the respondents cannot rely upon such documents to support their claim for lost profits. Since the officers and/or employees who prepared, checked or approved the same were not presented on the witness stand, the vouchers had no probative value whether they are objected to or not in accordance with the hearsay rule.

Topic: Sales; Land Titles and Deeds AQUILES RIOSA v. TABACO LA SUERTE CORPORATION G.R. No. 203786, October 23, 2013 Mendoza, J. FACTS: Petitioner Riosa owned a parcel of land in Tabaco City, Albay, which he acquired through a deed of cession and quitclaim executed by his parents. He declared the property in his name and religiously paid the real estate tax for said property. He also averred that his daughter introduced improvements on the lot spending not less than P300,000. Subsequently, he obtained several loans from Sia Ko Pio, CEO of respondent corporation, in the total amount of P50,000. As security for said loans, Sia Ko Pio requested photocopies of the deed of cession and quitclaim; he later presented to Riosa a document purportedly a receipt for the loan. Without reading the document, Riosa signed the same. Subsequently, to his surprise, he discovered that the land was already registered in the name of the respondent corporation, and the later sent him a letter demanding that he vacate the land. It appears that the receipt he signed was actually a sales document. He then filed a complaint for Annulment/Declaration of Nullity of Deed of Absolute Sale and Transfer Certificate of Title, Reconveyance and Damages against the respondent corporation. In its Answer, the respondent corporation averred that they validly entered into a contract of sale, and to avoid the ire of Riosas father who originally owned the land, Riosa was allowed to remain in possession of the property subject to his obligation to vacate on demand. Respondent corporation further averred that it transacted with Riosa through its CEO, an officer of the corporation authorized to do so. Finally, the respondent corporation claims that the deed of sale was duly notarized by Judge Arsenio Base, MTC Presiding Judge of Tabaco City, acting as exofficio notary public. The RTC held annulled the sale on the ground of fraud, giving crederence to the testimony of Riosa that he was led to believe that he was merely signing a receipt for the loan and not a deed of sale. On appeal, the CA reversed the RTC decision, ruling that the payment of real estate tax is not conclusive proof of ownership. ISSUE: WON the petitioner sufficiently established the vitiation of his consent in the purported sale through fraud HELD: YES. The sufficient evidence adduced by Riosa to establish fraud, in light of the failure of the corporation to prove the existence of a valid contract of sale, tilts the preponderance of evidence in favour of Riosa. If Aquiles sold the property in favor of La Suerte, he would not have religiously and continuously paid the real property taxes. Also of note is the fact that his daughter spent 300,000.00 for the renovation of improvements. More important, La Suerte did not earlier ask him to transfer the possession thereof to the company. These uncontroverted attendant circumstances bolster Aquiles positive testimony that he did not sell the property. Sia Ko Pio cannot be deemed to be duly authorized to enter into the sales transaction in the corporations behalf. Under the Corporation Code, the power to purchase real property is vested in the board of directors or trustees. While a corporation may appoint agents to negotiate for the purchase of real property needed by the corporation, the final say will have to be with the board, whose approval will finalize the transaction. A corporation can only exercise its powers and transact its business through its board of directors and through its officers and agents when authorized by a board resolution or its by-laws.

Furthermore, The deed of sale was not duly notarized. Judge Base, who acted as ex-oficio notary public, is not allowed under the law to notarize documents not connected with the exercise of his official duties. Notaries public ex officio may be allowed to perform any act within the competency of a regular notary public provided that certification be made in the notarized documents attesting to the lack of any lawyer or notary public in such municipality or circuit. In this case, no such certification was attached to the deed of sale. Also, the Court takes note of Riosas averment that there were several lawyers commissioned as notary public in Tabaco City. With Judge Base not being authorized to notarize a deed of conveyance, the notarized document cannot be considered a valid registrable document in favor of respondent corporation.

Topic: Agricultural Tenancy HEIRS OF FLORENTINO QUILO V. DEVELOPMENT BANK OF THE PHILIPPINES G.R. No. 184369, October 23, 2013 Sereno, CJ. FACTS: Sometime in 1966, Florentino Quilo started planting vegetable crops on agricultural land owned by spouses Oliveros. The land was mortgaged by the spouses Oliveros to respondent bank as security for a loan, for which the spouses executed an affidavit of NonTenancy. The spouses failed to pay the debt when it fell due prompting the bank to foreclose the mortgage. The bank later sold the land to respondent spouses del Mindo for P34,000; the latter began to fence the subject land shortly thereafter. Upon learning about the sale, Florentino Quilo Complaint for Redemption with Damages against respondents. He alleged that as an agricultural tenant of the land, he had the preference and the priority to buy it. He presented as proof the testimony of one Rufino Bulatao, neighbor of spouses Oliveros, that the latter periodically received their share in Quilos harvest. Spouses del Mindo, on the other hand, presented the Affidavit of Non-tenancy executed by spouses Oliveros. ISSUE: WON Florentino Quilo sufficiently established the existence of a tenancy agreement between him and the agricultural landowners. HELD: NO. The self-serving assertion of Quilo that there exists a tenancy agreement between him and the spouses Oliveros is cannot be taken as proof of the existence of such an agreement. A tenancy relationship is a juridical tie that arises between a landowner and a tenant once they agree, expressly or impliedly, to undertake jointly the cultivation of a land belonging to the landowner, as a result of which relationship the tenant acquires the right to continue working on and cultivating the land. The relationship cannot be presumed. All the requisite conditions for its existence must be proven, to wit: (1) The parties are the landowner and the tenant; (2) The subject is agricultural land; (3) There is consent by the landowner; (4) The purpose is agricultural production; (5) There is personal cultivation; and (6) There is a sharing of harvests. Likewise, the testimony of the neighbor is not enough to establish the existence of a tenancy relationship. Quilo should have presented receipts or any other evidence to show that there was sharing of harvest and that there was an agreed system of sharing between him and the landowners. Mere occupation or cultivation of an agricultural land does not automatically convert the tiller into an agricultural tenant recognized under agrarian laws. Having failed to prove that the

landowners consented to a tenancy agreement, Quilo cannot be considered as an agricultural lessee with right of first refusal and redemption in case of sale of the land.

Topic: Abuse of Rights Doctrine CALIFORNIA CLOTHING INC. and MICHELLE S. YBAEZ V. SHIRLEY G. QUIONES G.R. No. 175822, October 23, 2013 Peralta, J. FACTS: Respondent Shirley g. Quiones, a Reservation Ticketing Agent of Cebu Pacific Air, went inside the Guess USA Boutique of Robinsons Department Store in Cebu City. She purchased an article of clothing worth P2,098.00; she paid in cash. Upon issuance of the sales receipt by the store, she left. As she was walking to the Mercury Drug Store branch of the mall, Guess store employees approached her and informed her that she failed to pay for the item she got. Respondent insisted that she paid and presented the sales receipt issued in her favor. She then suggested that they discuss the matter at the Cebu Pacific Office located at the basement of the mall. She then first went to Mercury Drug and then met the Guess employees as agreed upon. Initially, the discussion between the respondent and Guess employees was calm and civil. However, their discussion later turned into a heated argument which caused a commotion witnessed by respondents co-employees and customers of the Cebu Pacific Air office. According to respondent, the Guess employees even went as far as to search respondents wallet to check how much money she had, and to demand that she return the item she got from the store. Later that same day, the Guess employees sent a letter to the Director of the Cebu Pacific Branch which narrated the incident, but the latter refused to receive the same contending that the incident had nothing to do with the office since it occurred while the respondent was off duty. Another letter was sent by the Guess employees, this time to the Robinsons Mall management, asking the latter to conduct an investigation on the matter. Respondent did not receive a copy of the said damaging letter. The Guess employees, on the other hand, averred that they mistakenly issued the sales receipt to respondent due to a miscommunication between the cashier and the invoicer. They claimed that during the discussion, they asked the respondent to whom she gave the cash payment to which the latter replied that she did not remember. When they asked the respondent how much she paid, the latter replied that she gave them 2 pieces of P1,000 bill and 2 pcs of P100 peso bill. The Guess employees informed her that this was impossible since there were no such denominations in their cash fund at that moment. According to the Guess employees, the respondent was arrogant in answering their queries and refused their request that she return to the Guess boutique. Respondent filed a case for (moral) damages with the RTC against the guess employees, the store and its proprietor, claiming that the incident caused her physical anxiety, sleepless nights, mental anguish, fright, serious apprehension, besmirched reputation, moral shock and social humiliation. The RTC dismissed the complaint and held that the petitioners believed in good faith that the respondent failed to pay. The RTC likewise found no cause to award damages for the humiliation respondent suffered in the Cebu Pacific Office since it was the respondent herself who suggested that they discuss the matter in said place.

The CA, on the other hand, agreed with the RTC as to the argument but found that petitioners abused their rights in sending the letter to the respondents employer, who was not privy to the disputed transaction. ISSUE: WON the petitioners validly exercised their rights in verifying the payment of respondent HELD: NO. Although petitioners had the right to verify the transaction, the manner in which they conducted the same is clearly an abuse of such right. Incorporated into our civil law are not only principles of equity but also universal moral precepts which are designed to indicate certain norms that spring from the fountain of good conscience and which are meant to serve as guides for human conduct. First of these fundamental precepts is the principle commonly known as "abuse of rights" under Article 19 of the Civil Code. It provides that "Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due and observe honesty and good faith." x x x The elements of abuse of rights are as follows: (1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Initially, there was nothing wrong with petitioners asking respondent whether she paid or not. The Guess employees were able to talk to respondent at the Cebu Pacific Office. The confrontation started well, but it eventually turned sour when voices were raised by both parties. As aptly held by both the RTC and the CA, such was the natural consequence of two parties with conflicting views insisting on their respective beliefs. Considering, however, that respondent was in possession of the item purchased from the shop, together with the official receipt of payment issued by petitioners, the latter cannot insist that no such payment was made on the basis of a mere speculation. The exercise of a right must be in accordance with the purpose for which it was established and must not be excessive or unduly harsh. In this case, petitioners obviously abused their rights.

Topic: Property Relations Between Common Law Spouses (ART 148, FC) EDILBERTO VENTURA, JR. V. SPS. PAULINO AND EVANGELINE ABUDA G.R. No. 202932, October 23, 2013 Carpio, J. FACTS: Esteban Abletes and Soccoro Torres were married on June 9, 1980. They each had children from prior marriages: Esteban had a daughter, respondent Evangeline Abuda (Evangeline), and Socorro had a son, who was the father of petitioner Edilberto U. Ventura, Jr. (petitioner). Socorro had a prior subsisting marriage celebrated on April 18, 1982. On the other hand, Esteban was already a widower when he married Soccoro. Sometime in 1970, Esteban purchased a lot in Vitas, Tondo, Manila. The property was covered by a Transfer Certificate of Title dated December 11, 1980, issued to Esteban Abletes, married to Socorro Torres. Esteban also owned small business establishments in Delpan, Tondo, Manila, which was operated by Esteban and Evangeline since since 1978.

Esteban was diagnosed with colon cancer sometime in 1993. On September 6, 1997, he sold the said properties to the respondent spouses. Evangeline paid a lump sum amount of P50,000 for the Vitas property. For the Delpan property, Evangeline paid an initial payment of P200,000 and continued the amortization payments for the said property. Esteban died on September 11, 1997, while Soccoro died on July 31, 1999. Sometime in 2000, petitioner filed a petition for Annulment of Deeds of Sale before the Manila RTC, alleging that the sale of the properties was fraudulent because Estebans signature on the deeds of sale was forged. Respondents, on the other hand, contended that the bigamous marriage between Esteban and Soccoro was null and void and thus, neither Soccoro nor her heirs can claim any right or interest over the said properties. The RTC ruled that the marriage between Soccoro and Esteban was void ab initio, applying Art. 83 of the Civil Code (since the marriage was celebrated prior to the effectivity of the Family Code) As for the property regime, the RTC applied Art 144 in relation to Art 485 of the Civil Code. The RTC held that Socorro did not contribute funds for the acquisition of the properties and hence, cannot be considered as a co-owner thereof. On appeal, the CA sustained the RTC decision, but held that the RTC should have applied Art 148 of the Family Code, and not Articles 144 and 485 of the Civil Code. Petitioner contends that the Vitas property was Co-owned by Esteban and Soccoro as evidenced by the TCT which was issued in the name of Esteban Abletes, married to Socorro Torres. Petitioner further contends that the amount of Estebans actual contribution for the Delpan property was not sufficiently proven because some of the amortization payments were shouldered by Evangeline, and thus, it is legally presumed that Esteban and Socorro contributed equal shares for its acquisition. ISSUES: (1) WON the phrase married to Socorro Torres found in the TCT is sufficient proof that Socorro was a co-owner of the Vitas property (2) WON the amount of actual contribution of Esteban in the acquisition of the Delpan property was sufficiently established despite the fact that Evangeline shouldered some of the amortization payments of its purchase HELD: (1) NO. The phrase married to Socorro Torres is merely descriptive of Estebans civil status, and does not show that Socorro co-owned the property. The evidence on record also shows that Esteban acquired ownership over the Vitas property prior to his marriage to Socorro, even if the certificate of title was issued after the celebration of the marriage. Registration under the Torrens title system merely confirms, and does not vest title. Registration is not a mode of acquiring ownership. It is only a means of confirming the fact of its existence with notice to the world at large. Certificates of title are not a source of right. (2) YES. Both the RTC and the CA found that the Delpan property was acquired prior to the marriage of Esteban and Socorro. Furthermore, even if payment of the purchase price of the Delpan property was made by Evangeline, such payment was made on behalf of her father. Under Article 1238 of the Civil Code, payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a donation, which requires the debtor's consent. But the payment is in any case valid as to the creditor who has accepted it. Thus, it is clear that

Evangeline paid on behalf of her father, and the parties intended that the Delpan property would be owned by and registered under the name of Esteban.