Case Brief: Prudential Bank vs. Panis

PRUDENTIAL BANK, petitioner,
HONORABLE DOMINGO D. PANIS, Presiding Judge of Branch III, Court of First Instance of Zambales and Olongapo City; FERNANDO MAGCALE & TEODULA BALUYUT-MAGCALE, respondents.
G.R. No. L-50008 August 31, 1987

Spouses Magcale secured a loan from Prudential Bank. As security, respondent’s spouses executed a real estate mortgage, their residential building as security. Since the respondents was not able to fulfil their obligation, the security was extrajudiciaily foreclosed and was eventually sold in a public auction. Hence this case, to assail the validity of the mortgage and to recover the foreclosed land.
Whether or not a real estate mortgage can be instituted on the building of a land belonging to another
While it is true that a mortgage of land necessarily includes in the absence of  stipulation  of  the  improvements  thereon,  buildings,  still  a  building  in itself may be mortgaged by itself apart from the land on which it is built.  Such a mortgage would still be considered as a REM for the building would still be considered as immovable property even if dealt with separately and apart from the land.  The original mortgage on the building and right to occupancy of the land was  executed  before  the  issuance  of  the  sales  patent  and  before  the government  was  divested  of  title  to  the  land.    Under  the  foregoing,  it  is evident  that  the  mortgage  executed  by  private  respondent  on  his  own building was a valid mortgage.


Case Brief: Leung Yee vs. Frank Strong

LEUNG YEE, plaintiff-appellant,
G.R. No. L-11658 February 15, 1918

Leung Yee’s company bought cleaning equipment from the defendant machinery company. As payment, it executed a chattel mortgage in favour of the defendant on its building in which the machinery was installed. This mortgage made no reference as to the land from where the property was located. Since the plaintiff’s company, was not able to pay, the building together with the equipment attached to it was foreclosed and the respondent was able to possess the property. Hence, this action by the plaintiff to recover possession of the building.

Issue: Whether or not the building can be classified as a real property, so as to subject it to a real estate mortgage

The disputed building was considered by the court as Real property.
The mere fact that the parties seem to have dealt with it separately and apart from the land would change its character as real property. Hence, such mortgage would still be a real estate mortgage for the building that served as a security and the executed chattel mortgage and its consequences cannot be said to have any legal effect.

Case Brief: Villaflor vs. CA

VICENTE VILLAFLOR, substituted by his heirs, petitioner,
G.R. No. 95694 October 9, 1997


The Petitioner bought a large tract of land containing one hundred forty (140) hectares to four (4) different owners in 1940. The land was part of the public domain, but the petitioners predecessor in interest over which he acquired the property, have been in open, exclusive and notorious possession of the same for sometime. After acquisition, petitioner asserts exclusive rights thereof for more than fifty (50) years.

In 1946, petitioner entered into a lease agreement with respondent Nasipit Lumber Co.Inc. However, an “Agreement for the Relinquishment of Rights” was entered into by both parties in 1950. The respondent having complied all the requirements agreed upon, assumed ownership and possession of the property since then. Respondent corporation likewise filed a sales application in 1950 over the property to bolster his claim which the Bureau of Land otherwise granted on the same year as proof of an “Order of Award” issued.

In 1974 or twenty four (24) years had passed, when petitioner, questioned and made several collateral and extraneous claims against the respondent. However, the Bureau of Lands dismissed the claim, arguing that petitioner no longer has any substantial rights to question the validity of acquisition of the respondent and the subsequent issuance of free patent by the Bureau of Lands. Unperturbed, petitioner filed a motion for reconsideration at the Ministry of Natural Resources which likewise dismissed the petition.

On July 6, 1978, petitioner filed a complaint in the trial court for “Declaration of Nullity of Contract ( Deed of Relinquishment of Rights), Recovery of Possession (of two parcels of land subject of the contract), and Damages” at about the same time that he appealed the decision of the Minister of Natural Resources to the Office of the President. On January 28, 1983, petitioner died. Petitioner’s heir substituted in his behalf to pursue the claim. The trial court in Butuan City who initially take cognizance of the case ordered the case dismissed, on the grounds that: (1) petitioner admitted the due execution and genuineness of the contract and was estopped from proving its nullity, (2) the verbal lease agreements were unenforceable under Article 1403 (2) (e) of the Civil Code, and (3) his causes of action were barred by extinctive prescription and/or laches.

The heirs appealed to the CA which likewise rendered judgment of dismissal by upholding the lower court’s ruling.


Whether or not the sale is valid.


No. The provision of the law is specific that public lands can only be acquired in the manner provided for therein and not otherwise(Sec. 11, CA. No. 141, as amended). In his sales application, petitioner expressly admitted that said property was public land. This is formidable evidence as it amounts to an admission against interest. The records show that Villaflor had applied for the purchase of lands in question with this Office (Sales Application V-807) on 2 December 1948. There is a condition in the sales application to the effect that he recognizes that the land covered by the same is of public domain and any and all rights he may have with respect thereto by virtue of continuous occupation and cultivation are relinquished to the Government of which Villaflor is very much aware. It also appears that Villaflor had paid for the publication fees appurtenant to the sale of the land. He participated in the public auction where he was declared the successful bidder. He had fully paid the purchase price thereof. It would be a height of absurdity for Villaflor to be buying that which is owned by him if his claim of private ownership thereof is to be believed. The area in dispute is not the private property of the petitioner.

It is a basic assumption of public policy that lands of whatever classification belong to the state. Unless alienated in accordance with law, it retains its rights over the same as dominus. No public land can be acquired by private persons without any grant, express or implied from the government. It is indispensable then that there be showing of title from the state or any other mode of acquisition recognized by law. Such sales applicant manifestly acknowledged that he does not own the land and that the same is a public land under the administration of the Bureau of Lands, to which the application was submitted, all of its acts prior thereof, including its real estate tax declarations, characterized its possessions of the land as that of a “sales applicant”. And consequently, as one who expects to buy it, but has not as yet done so, and is not, therefore, its owner.

The rule on the interpretation of contracts (Article 1371) is used in affirming, not negating, their validity. Article 1373,which is a conjunct of Article 1371, provides that, if the instrument is susceptible of two or more interpretations, the interpretation which will make it valid and effectual should be adopted. In this light, it is not difficult to understand that the legal basis urged by petitioner does not support his allegation that the contracts to sell and the deed of relinquishment are simulated and fictitious. Simulation occurs when an apparent contract is a declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce, for the purpose of deception, the appearance of a juridical act which does not exist or is different from that which was really executed. Such an intention is not apparent in the agreements. The intent to sell, on the other hand, is as clear as daylight. The fact, that the agreement to sell (7 December 1948) did not absolutely transfer ownership of the land to private respondent, does not how that the agreement was simulated. Petitioner‟s delivery of the Certificate of Ownership and execution of the deed of absolute sale were suspensive conditions, which gave rise to a corresponding obligation on the part of the private respondent, i.e., the payment of the last installment of the consideration mentioned in the Agreement. Such conditions did not affect the perfection of the contract or prove simulation Nonpayment, at most, gives the vendor only the right to sue for collection. Generally, in a contract of sale, payment of the price is a resolutory condition and the remedy of the seller is to exact fulfillment or, in case of a substantial breach, to rescind the contract under Article 1191 of the Civil Code. However, failure to pay is not even a breach, but merely an event which prevents the vendor‟s obligation to convey title from acquiring binding force.

The requirements for a sales application under the Public Land Act are: (1) the possession of the qualifications required by said Act (under Section 29) and (2) the lack of the disqualifications mentioned therein (under Sections 121, 122,and 123). Section 121 of the Act pertains to acquisitions of public land by a corporation from a grantee: The private respondent, not the petitioner, was the direct grantee of the disputed land. Sections 122 and 123 disqualify corporations, which are not authorized by their charter, from acquiring public land; the records do not show that private respondent was not so authorized under its charter.

Case Brief: Tanchoco vs. Aquino

G.R. No. L-30670 September 15, 1987

HON. FLORENDO P. AQUINO, as Judge of the Court of First Instance of Nueva Ecija, Branch I, VICENTA TECSON VDA. DE LAJOM, JOSE T. LAJOM, RAFAEL VIOLA and THE PROVINCIAL SHERIFF OF NUEVA ECIJA, respondents.



The petitioners purchased a property subject to an existing notice of lis pendens. Respondents allege that the transfer of title should still be rendered null on the grounds of the pending case where the property is the subject matter. Petitioners on the otherhand alleged that they should still be considered as buyers in good faith and that the sale executed by them should be made valid.



Whether or not respondents Aquino were buyers on good faith even if they bought a property which was a subject of pending litigation.



One who buys land where there is a pending notice of lis pendens cannot invoke the right of a purchaser in good faith; neither can he have acquired better rights than those of his predecessor in interest.

The said portions of land were respectively declared for taxation purposes in the names of the petitioners, and they have been paying the realty taxes due thereon to the government. The possession of the said property was delivered to the petitioners and they have exercised all the rights of ownership over the same. As such registered owners of the respective portions of lot sold to them, the petitioners have acquired real rights over the said property, and they cannot now be deprived of the said property or their rights therein without due notice to them and without affording them the opportunity to be heard in a proper action or suit brought for the purpose. To deprive them of their said property or their rights therein without the required notice and without affording them the opportunity to be heard as what happened in this case, is a clear violation of the Constitutional guaranty that no person shall be deprived of his property without due process of law.



Case Brief: Duran vs. IAC

G.R. No. L-64159 September 10, 1985

CIRCE S. DURAN and ANTERO S. GASPAR, petitioners,



Duran owned parcels of land which she had purchased. When she left the country, a deed of sale over the two lots was made in favor of her mother, who mortgaged the same to Tiangco. When Duran found out, she notified the Register of Deeds.

She did not get any answer however, prompting her to return to the Philippines. Her mother failed to redeem the mortgaged properties, which were foreclosed and sold in an auction in favor of respondent Tiangco. She alleged that the sale made by her mother is invalid.



Whether or not respondent Tiangco is a buyer in good faith even without Duran’s consent.



Yes. Tiangco is a buyer in good faith. Good faith requires a well-founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it. In the case at bar, private respondents, in good faith relied on the certificate of title in the name of Duran’s mother. A fraudulent or forged document of sale may become the root of a valid title if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger.

An innocent purchaser for value relying on a Torrens title issued is protected. A mortgagee has the right to rely on what appears in the certificate of title and, in the absence of anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate.

Case Brief: Dela Rosa vs. Carlos

G.R. No. 147549             October 23, 2003




Dela Rosa filed a complaint for forcible entry, alleging that they are the owners of a house and lot in Bulacan by virtue of a Deed of Absolute Sale executed between Dela Rosa and Carlos. They also asserted that they renovated the house and occupied it from 1996 to present, and that they built a fence to separate the property from the road.

Subsequently however, Carlos built a house of strong materials on a vacant lot of the property through stealth and without their knowledge and consent. On the other hand, respondents averred that they had been occupying the lot in the concept of a co- owner since birth.



Whether or not Dela Rosa were in possession of property notwithstanding their absence from the same.



Yes, Dela Rosa were in possession of property. In a forcible entry case, the principal issue for resolution is mere physical or material possession (possession de facto) and not juridical possession (possession de jure) nor ownership of the property involved.

In the case at bar, Dela Rosa continued visiting the property even if they resided in Manila, and that constitutes maintenance of possession. Improving the house were also acts of dominion indicating possession

Case Brief: Drilon vs. Gaurana

G.R. No. L-35482 April 30, 1987

MANUEL DRILON, petitioner,


LUIS GAURANA and Honorable VALERIO ROVIRA, as Judge of the Court of First Instance of Iloilo, Branch IV, respondents.



A parcel of agricultural land in Iloilo is covered by Free Patent No. 455943 in the name of Manuel Drilon, who was then issued Original Certificate of Title by the Register of Deeds.

In 1970, respondent Gaurana filed a case for annulment of free patent involving the same land, alleging that he purchased the land from Evangeline Gaurana, wife of the respondent. Gaurana filed another case for “Forcible Entry” in the same land, alleging that Drilon “by means of stealth, force, and strategy,” took possession of the south-east portion of the same land.

Drilon’s motion focused on two grounds: lack of jurisdiction, since the cause of action of respondent Luis Gaumna was one for recovery of ownership and possession of real property and not merely one of “forcible entry;” and (b) pendency of another action for the same cause. Both motions were dismissed, as “plaintiff did not split his cause of action and the alleged act of dispossession occurred subsequent to the filing of the complaint, and therefore, the only issue before him was the question of de facto possession.” Drilon was then declared in default by the court, and was ejected from the property.

Drilon then filed a motion, praying that the court had no jurisdiction to try the case of forcible entry), which was denied as well. Hence, the appeal.



Whether or not the lower court erred in holding that there was no splitting of a single cause of action.

Whether or not the lower court was correct in dismissing the motions due to the pendency of another action between the same parties.



It is true that a party may not institute more than one suit for a single cause of action (Rule 2, Sec. 3, Revised Rules of Court) and if two or more complaints are brought for different parts of a single cause of action, the firing of the first may be pleaded in abatement of the other (Rule 2, Sec. 4. Revised Rules of Court). However, a forcible entry or unlawful detainer action has an entirely different subject from that of an action for reconveyance of title. What is involved in a forcible entry case is merely the issue of material possession or possession de facto; whereas in an action for reconveyance, ownership is the issue. So much so that the pendency of an action for reconveyance of title over the same property does not divest the city or municipal court of its jurisdiction to try the forcible entry or unlawful detainer case, nor preclude or bar execution of judgment in the ejectment case where the only issue involved is material possession or possession de facto.

It must be stated that the purpose of an action of forcible entry and detainer is that, regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by strong hand, violence or terror. In affording this remedy of restitution the object of the statute is to prevent breaches of the peace and criminal disorder which would ensue from the withdrawal of the remedy, and the reasonable hope such withdrawal would create that some advantage must accrue to those persons who, believing themselves entitled to the possession of property, resort to force to gain possession rather than to some appropriate action in the courts to assert their claims. This is the philosophy at the foundation of all these actions of forcible entry and detainer which are designed to compel the party out of possession to respect and resort to the law alone to obtain what he claims is his.

With respect to the second assignment of error, while there may be Identity of parties and subject matter in the forcible entry case and Civil Case No. 8323, for annulment of free patent and/or reconveyance, the rights asserted and the relief prayed for in the said cases are not the same. In the former case, the legal right claimed is possession, while in the latter case, the legal right asserted is ownership. SC cannot assent to the proposition that the motion to dismiss the forcible entry case in view of the pendency of an action for quieting of title and recovery of possession of the same parcel of land since the causes of action in the two cases are distinct from each other.