TIMOTEO BACALSO and DIOSDADA BACALSO, Petitioners,

vs.
GREGORIA B. ACA-AC, EUTIQUIA B. AGUILA, JULIAN BACUS and EVELYN
SYCHANGCO, Respondents.
G.R. No. 172919 January 13, 2016
REYES, J.:
Facts:
The Bacus siblings were the registered owners of Lot No. 1809-G-2, which they inherited
from their mother, Matea. They executed a Deed of Absolute Sale conveying a portion of Lot
No. 1809-G-2 in favor of their cousin, Timoteo for and in consideration of the amount of
P8,000.00. Timoteo, together with his sisters filed a complaint for declaration of nullity of
documents, certificates of title, reconveyance of real property and damages against the Bacus
siblings, claiming that they are co-owners of the lot. The Bacus siblings denied the allegations
and claimed that the alleged sale of the lot did not push through because Timoteo failed to pay
the purchase price thereof.
Issue:
Whether or not the Deed of Absolute Sale dated October 15, 1987 is void for want of
consideration.
Ruling:
The Deed of Absolute sale is void. Under the Civil Code, a contract is a meeting of
minds, with respect to the other, to give something or to render some service. Article 1318
provides:
Art. 1318. There is no contract unless the following requisites concur:
(l) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
In this case, the disputed sale produces no effect and is considered void ab initio for failure to or
want of consideration since Timoteo failed to pay the consideration stipulated in the Deed of
Absolute Sale. The said sale could not be given effect. Article 1352 of the New Civil Code of the
Philippines is explicit in providing that contracts without cause produce no effect whatsoever. If
there is no cause, the contract is void. There being no price paid, there is no cause or
consideration; Hence, the contract is void as a sale. Consequently, in the case at bench,

Timoteo et al have not become absolute owners of the lot by virtue of the Deed of Sale thereof
which was executed.
It must be stressed that the present case is not merely a case of failure to pay the
purchase price, as Timoteo claims, which can only amount to a breach of obligation with
rescission as the proper remedy. What we have here is a purported contract that lacks a cause one of the three essential requisites of a valid contract. Failure to pay the consideration is
different from lack of consideration. The former results in a right to demand the fulfillment or
cancellation of the obligation under an existing valid contract while the latter prevents the
existence of a valid contract.
Fallo:
WHEREFORE, petition is DENIED and the Decision dated December 14, 2005 of the
Court of Appeals in CA-G.R. CV No. 67516 is AFFIRMED.

DRA. MERCEDES OLIVER, Petitioner,

vs.
PHILIPPINE SAVINGS BANK and LILIA CASTRO, Respondents.
G.R. No. 214567 April 4, 2016
MENDOZA, J.:
Facts:
Mercedes Oliver (Oliver) was a depositor Philippine Savings Bank (PSBank). Lilia Castro
(Castro) was the Acting Manager of PSBank San Pedro, Laguna. Castro convinced Oliver to
loan out her deposit as interim or bridge financing for the approved loans of bank borrowers who
were waiting for the actual release of their loan proceeds. Their arrangement went on smoothly
for months. Due to the frequency of bank transactions, Oliver even entrusted her passbook to
Castro. Castro then suddenly stopped rendering an accounting for Oliver. When her transaction
history register was shown to her, Oliver was surprised to discover that the amount estimated at
P4.5 million was entered into her account while a total of P7 million was withdrawn from her
account on the same day.
Oliver asserted that she neither applied for an additional loan of P4.5 million nor
authorized the withdrawal of P7 million. A final demand letter was sent to Oliver by PSBank,
requiring her to pay the unpaid loans. As a result, Oliver filed the subject complaint against
PSBank and Castro.

Issues:
(a) Whether or not fraud attended the processing and release of the loan of P4.5 million
as well as the withdrawal of P7 million pesos from Olivers account.
(b) Whether or not PSBank exercise the highest degree of diligence required of banking
institutions
Ruling:
(a) P7 million was improperly withdrawn. Castro, as an agent acted beyond her scope of
authority. Although it was proven that Oliver authorized the loans, in the aggregate amount of
P5,888,149.33, there was nothing in the records which proved that she also allowed the
withdrawal of P7 million from her bank account. Castros lack of authority to withdraw the P7

million on behalf of Oliver became more apparent when she altered the passbook to hide such
transaction. It must be remembered that Oliver entrusted her passbook to Castro. In the
transaction history register for her account, it was clear that there was a series of dealings from
December 17, 1998 to December 23, 1998. When compared with Olivers passbook, the latter
showed that the next transaction from December 16, 1998 was on December 28, 1998. It was
also obvious to the naked eye that the December 28, 1998 entry in the passbook was altered.
As aptly observed by the RTC, nowhere in the testimony of Castro could be gathered that she
made a detailed, plausible and acceptable explanation as to why she had to make numerous
corrections in the entries in the passbook. Even after the corrections allegedly done to reconcile
the records, the passbook and the transaction history register still contained different entries.
Curiously, though she asserts that Oliver obtained a loan of P4.5 million and authorized
the withdrawal of P7 million, Castro could not explain why these transactions were not reflected
in the passbook which was in her possession. Bearing in mind that the alleged unauthorized
withdrawal happened on December 21, 1998, while Castro was questionably withholding the
passbook, the Court is of the impression that she manipulated the entries therein to conceal the
P7 million withdrawal.
(b) Aside from Castro, PSBank must also be held liable because it failed to exercise
utmost diligence in the improper withdrawal of the P7 million from Olivers bank account.
In the case of banks, the degree of diligence required is more than that of a good father
of a family. Considering the fiduciary nature of their relationship with their depositors, banks are
duty bound to treat the accounts of their clients with the highest degree of care. The point is that
as a business affected with public interest and because of the nature of its functions, the bank is
under obligation to treat the accounts of its depositors with meticulous care, always having in
mind the fiduciary nature of their relationship.
In this case, there was a clear showing of PSBanks failure to exercise the degree of
diligence that it ought to have exercised in dealing with its clients. It could not prove that the
withdrawal of P7 million was duly authorized by Oliver. As a banking institution, PSBank was
expected to ensure that such substantial amount should only be transacted with the consent
and authority of Oliver. PSBank, however, reneged on its fiduciary duty by allowing an
encroachment upon its depositors account without the latters permission. Hence, PSBank
must be held liable for such improper transaction.
Fallo:
WHEREFORE, the petition is GRANTED. The October 25, 2013 Decision and the
September 12, 2014 Resolution of the Court of Appeals in CA-G.R. CV No. 95656 are
REVERSED and SET ASIDE. The July 22, 2010 Order of the Regional Trial Court, Branch 276,
Muntinlupa City in Civil Case No. 99-278 is hereby REINSTATED with the MODIFICATION that
the award of exemplary damages and attorney's fees be decreased to P50,000.00 each.

All awards shall earn interests at the rate of six percent (6%) per annum from the finality of this
decision.
SO ORDERED.

HELEN B. LUKBAN, Petitioner, v. OPTIMUM DEVELOPMENT BANK, Respondent.

G.R. No. 205785, January 20, 2016
CARPIO, J.:

Facts:
An auction sale of tax delinquent real properties which included the real property of
Melba T. Atienza was conducted. Petitioner Helen B. Lukban (Lukban) was the highest and
winning bidder of the property during the public auction. She paid the amount of P47,265.60
inclusive of penalties and publication fees. A Certificate of Sale of Delinquent Real Property to
Purchaser was issued to Lukban, acknowledging receipt of her payment. The trial court found
that there was a prior Notice of Levy in favor of Capitol Bank, denominated as Entry No.
285574/T-No. 234408 - Mortgage. Atty. Aleta I. Lopez (Atty. Lopez) appeared as counsel of
Rizal Commercial Banking Corporation (RCBC) and manifested that RCBC had acquired a
portion of the shares of Capitol Bank. Atty. Lopez informed the trial court that Capitol Bank
already changed its name to Optimum Development Bank (Optimum Bank).
Optimum Bank argued that it should have been notified of the delinquency sale because
as a person having legal interest in the property, it should have been given the right to redeem
the property under Section 261 of R.A. No. 7160.
Issue:
Whether or not Optimum Bank is entitled to the Notice of Sale so that it may exercise its
right to redeem the property
Ruling:

No. Section 260 of R.A. No. 7160 states:

Section 260. Advertisement and Sale.
Within thirty (30) days after the sale, the local treasurer or his deputy shall make a report of the
sale to the sanggunian concerned, and which shall form part of his records. The local treasurer
shall likewise prepare and deliver to the purchaser a certificate of sale which shall contain the
name of the purchaser, a description of the property sold, the amount of the delinquent tax, the
interest due thereon, the expenses of sale and a brief description of the proceedings: Provided,
however, That proceeds of the sale in excess of the delinquent tax, the interest due thereon,
and the expenses of sale shall be remitted to the owner of the real property or person having
legal interest therein.
Clearly, only the registered owner is entitled to the Notice of Sale.

Fallo:
WHEREFORE, we GRANT the petition. We SET ASIDE the 28 August 2012 Decision
and the 7 February 2013 Resolution of the Court of Appeals in CA-G.R. CV No. 95150 and
REINSTATE the trial court's 16 February 2010 Decision in LRC Case No. R-08-1010-MK.
SO ORDERED.

JOSE B. LURIZ, Petitioner, v. REPUBLIC OF THE PHILIPPINES, Respondents.

GR. No. 208948, February 24, 2016

PERLAS-BERNABE, J.:

Facts:
Luriz filed a petition for reconstitution of Transfer Certificate of Title (TCT) No. 1297 of
the Registry of Deeds of Quezon City (RD-QC). However, the original copy of TCT No. 1297
with the RD-QC was destroyed by the fire that gutted the Quezon City (QC) Hall.
The Republic of the Philippines (Republic) filed its Supplemental Opposition declaring
that it is the registered owner of the subject properties as evidenced, inter alia, by the following
documents: (a) Vesting Order No. P-89 dated April 9, 1947 of the Philippine, Alien Property
Administration of the United States of America (US) confiscating the same as properties
belonging to citizens of an enemy country, Japan; (b) Transfer Agreement dated May 7, 1953
between the President of the Philippines and the Attorney General of the US, transferring all of
the latter's right, title and interest to the subject properties to the Government of the Republic;
(c) Ledger Sheet of the Board of Liquidators describing the dealings in the said properties; (d)
Proclamation No. 438 issued on December 23, 1953 reserving the subject properties for
dormitory site purposes of the North General Hospital; and (e) Proclamation No. 732 issued on
February 28, 1961 revoking Proclamation No. 438 and reserving the subject properties, instead,
for dormitory site purposes of the National Orthopedic Hospital, now Philippine Orthopedic
Center(POC), which is presently in possession thereof.

Issue:
Whether or not the petition for reconstitution should be granted
Ruling:
No. The reconstitution of a certificate of title denotes restoration in the original form and
condition of a lost or destroyed instrument attesting the title of a person to a piece of land. It
partakes of a land registration proceeding. Thus, it must be granted only upon clear proof that
the title sought to be restored was indeed issued to the petitioner or his predecessor-in-interest,
and such title was in force at the time it was lost or destroyed.

In the present case, the reconstitution petition is anchored on a purported owner's duplicate
copy of TCT No. 1297 - a source for reconstitution of title under Section 3 (a)43 of Republic Act
No. (RA) 26.44 Based on the provisions of the said law, the following must be present for an
order of reconstitution to issue: (a) the certificate of title had been lost or destroyed; (b) the
documents presented by petitioner are sufficient and proper to warrant reconstitution of the lost
or destroyed certificate of title; (c) the petitioner is the registered owner of the property or had an
interest therein; (d) the certificate of title was in force at the time it was lost and destroyed; and
(e) the description, area, and boundaries of the property are substantially the same as those
contained in the lost or destroyed certificate of title.45 Particularly, when the reconstitution is
based on an extant owner's duplicate TCT, the main concern is the authenticity and
genuineness of the certificate.
Tested against the foregoing, the Court finds that Luriz was not able to prove that TCT
No. 1297 sought to be reconstituted was authentic, genuine, and in force at the time it was lost
and destroyed. Doubt was cast on the authenticity and genuineness of the questioned certificate
because save for the TCT number, the metes and bounds, and the OCT details, all the other
details of the properties (i.e., [a] the registered owner, [b] the respective areas of the subject
lots, and [c] the details of the entry in the registration book, such as the book and page number
where entered, as well as the date of entry) are materially different from the recitals in Exhibit A
of Vesting Order No. P-89. The evidentiary value of the said order and the corresponding exhibit
duly published in the Official Gazette which, as mentioned, are official records of a duty
especially enjoined by laws in force at the time of its issuance, must be sustained in the
absence of strong, complete and conclusive proof of its falsity or nullity, and must prevail over
the questioned certificate.

Fallo:
WHEREFORE, the petition is DENIED. The Decision dated May 15, 2013 and the
Resolution dated August 30, 2013 of the Court of Appeals in CA-G.R. CV No. 95148 dismissing
the petition for reconstitution filed by petitioner Jose B. Luriz are hereby AFFIRMED for the
afore-discussed reasons.
SO ORDERED.