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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
December-1995 Jurisprudence                 

  • G.R. Nos. 106949-50 December 1, 1995 - PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES v. COURT OF APPEALS, ET AL.

  • G.R. No. 109870 December 1, 1995 - EDILBERTO M. CUENCA v. COURT OF APPEALS, ET AL.

  • G.R. No. 115243 December 1, 1995 - GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) v. COURT OF APPEALS, ET AL.

  • G.R. No. 117577 December 1, 1995 - ALEJANDRO B. TY, ET AL. v. AURELIO C. TRAMPE, ET AL.

  • G.R. No. 118509 December 1, 1995 - LIMKETKAI SONS MILLING, INC. v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. RTJ-94-1167 December 4, 1995 - NASIB D. YASIN v. AUGUSTO N. FELIX

  • Adm. Matter No. MTJ-95-1028 December 4, 1995 - REYNATO MANLANGIT v. MELITO L. URGEL

  • G.R. No. 55134 December 4, 1995 - PEDRO PILAPIL, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 103567 December 4, 1995 - PEOPLE OF THE PHIL. v. FRANCISCO G. SALLE, JR., ET AL.

  • G.R. No. 104114 December 4, 1995 - LEE CHUY REALTY CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 107938 December 4, 1995 - PEOPLE OF THE PHIL. v. ABULKHAIR PATAMAMA

  • G.R. No. 108873 December 4, 1995 - PEOPLE OF THE PHIL. v. LAURENCE "LARRY" CAJILO, ET AL.

  • G.R. No. 120132 December 4, 1995 - CRISANTA GALAY, ET AL. v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. P-95-1163 December 6, 1995 - DANILO M. SY v. ISABELITA M. CRUZ

  • G.R. No. 80127 December 6, 1995 - ORIENTAL MEDIA, INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. 97401 December 6, 1995 - LUIS CASTRO, JR., ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 107729 December 6, 1995 - GEORGE D. JONES v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. Nos. 115908-09 December 6, 1995 - PEOPLE OF THE PHIL. v. DANNY GODOY

  • Adm. Matter No. 95-6-02-SB December 7, 1995 - IN RE: SANTOS GONZALES, JR.

  • G.R. No. 83812 December 7, 1995 - PEOPLE OF THE PHIL. v. ENRICO PERALTA, ET AL.

  • G.R. No. 109281 December 7, 1995 - PHIL. TELEGRAPH AND TELEPHONE CORP., ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 118114 December 7, 1995 - TEODORO ACAP v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 120865-71 December 7, 1995 - LAGUNA LAKE DEVELOPMENT AUTHORITY v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. P-951146 December 8, 1995 - ARTEMIO R. ALIVIA v. ELENA P. NIETO

  • G.R. No. 103301 December 8, 1995 - SERVICEWIDE SPECIALISTS INCORPORATED v. COURT OF APPEALS, ET AL.

  • G.R. No. 105720 December 8, 1995 - PEOPLE OF THE PHIL. v. FRANCISCO DELA CRUZ

  • G.R. No. 110801 December 8, 1995 - MARIKINA VALLEY DEVELOPMENT CORPORATION, ET AL. v. NAPOLEON R. FLOJO

  • G.R. Nos. 111962-72 December 8, 1995 - MAXIMINO B. GAMIDO v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. RTJ-92-876 December 11, 1995 - STATE PROSECUTORS v. MANUEL T. MURO

  • G.R. Nos. 84985-86 December 11, 1995 - FOREMOST INCORPORATED v. DEPARTMENT OF LABOR AND EMPLOYMENT, ET AL.

  • G.R. No. 112206 December 11, 1995 - GONZALO D. LABUDAHON, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 114001 December 11, 1995 - PEOPLE OF THE PHIL. v. ROLLY O. ALBERT

  • Adm. Matter No. RTJ-93-955 December 12, 1995 - LUCAS M. CASTAÑOS, ET AL. v. FRANCISCO H. ESCAÑO, JR.

  • G.R. No. 100643 December 12, 1995 - ADEZ REALTY, INCORPORATED v. HONORABLE COURT OF APPEALS, ET AL.

  • G.R. No. 105619 December 12, 1995 - MARIA ROSARIO DE SANTOS v. ADORACION G. ANGELES, ET AL.

  • G.R. No. 108072 December 12, 1995 - JUAN M. HAGAD v. MERCEDES GOZODADOLE, ET AL.

  • G.R. Nos. 112438-39 & 113394 December 12, 1995 - CHEMPHIL EXPORT & IMPORT CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 117487 December 12, 1995 - PEOPLE OF THE PHIL. v. ARNEL B. ALICANDO

  • G.R. No. 118701 December 12, 1995 - PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 114848 December 14, 1995 - ALEX A. FALGUERA v. CORNELIO L. LINSANGAN, ET AL.

  • G.R. No. 115156 December 14, 1995 - PEOPLE OF THE PHIL. v. GO SHIU LING, ET AL.

  • G.R. No. 93233 December 19, 1995 - JAO & COMPANY, INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. 107756 December 19, 1995 - PAULINO BALBALEC, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 107898 December 19, 1995 - MANUEL LIM, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 112592 December 19, 1995 - PRUDENTIAL BANK v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 114950 December 19, 1995 - RAFAEL G. SUNTAY v. COURT OF APPEALS, ET AL.

  • G.R. No. 115067 December 19, 1995 - PEOPLE OF THE PHIL. v. JOSE GOMEZ, ET AL.

  • G.R. No. 115213 December 19, 1995 - WILSON DIU, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 108142 December 26, 1995 - ARCHBUILD MASTERS AND CONSTRUCTION, INC., ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 108153 December 26, 1995 - JUAN P. VILLENO v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 108175 December 26, 1995 - PEOPLE OF THE PHIL. v. JHONIE POLANGCO, ET AL.

  • G.R. No. 109078 December 26, 1995 - WILSON P. YU v. COURT OF APPEALS, ET AL.

  • G.R. No. 111459 December 26, 1995 - ROGELIO M. BANAWA v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 114343 December 28, 1995 - ANGELO CAL v. COURT OF APPEALS, ET AL.

  • G.R. No. 116702 December 28, 1995 - MUNICIPALITY OF CANDIJAY, BOHOL v. COURT OF APPEALS, ET AL.

  • Adm. Matter No. P-88-269 December 29, 1995 - OSCAR ABETO v. MANUEL GARCESA

  • G.R. No. L-59255 December 29, 1995 - OLIVIA M. NAVOA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 73077 December 29, 1995 - ESCOLASTICA MONTESCLAROS SON, ET AL. v. CARMELINO SON, ET AL.

  • G.R. No. 95770 December 29, 1995 - ROEL EBRALINAG, ET AL. v. THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU, ET AL.

  • G.R. No. 100092 December 29, 1995 - CENTRAL AZUCARERA DE LA CARLOTA v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 100098 December 29, 1995 - EMERALD GARMENT MANUFACTURING CORP. v. COURT OF APPEALS, ET AL.

  • G.R. No. 103499 December 29, 1995 - PEOPLE OF THE PHIL. v. REY M. DENIEGA, ET AL.

  • G.R. No. 109232 December 29, 1995 - PEOPLE OF THE PHIL. v. ANG CHUN KIT

  • G.R. No. 109244 December 29, 1995 - JUAN PULIDO, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 109764 December 29, 1995 - PEOPLE OF THE PHIL. v. EDUARDO ASOY, ET AL.

  • G.R. No. 112982 December 29, 1995 - PEOPLE OF THE PHIL. v. GERUNDIO PRADO

  • G.R. No. 113212 December 29, 1995 - DEPARTMENT OF HEALTH, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 122338 December 29, 1995 - IN RE: WILFREDO SUMULONG TORRES v. DIRECTOR, BUREAU OF CORRECTIONS

  •  





     
     

    G.R. No. 97401   December 6, 1995 - LUIS CASTRO, JR., ET AL. v. COURT OF APPEALS, ET AL.

     
    PHILIPPINE SUPREME COURT DECISIONS

    THIRD DIVISION

    [G.R. No. 97401. December 6, 1995.]

    LUIS CASTRO, JR., MARISSA CASTRO, RAMON CASTRO, MARY ANN CASTRO, CATHERINE CASTRO and ANTONIO CASTRO, Petitioners, v. HON. COURT OF APPEALS and UNION BANK OF THE PHILIPPINES, Respondents.


    D E C I S I O N


    VITUG, J.:


    The instant petition for review on certiorari of the decision, 1 dated 11 October 1990, of the Court of Appeals is focused on the issue of whether or not a residential house, which was constructed by a lessee on a portion of the leased property therefore encumbered under a real estate mortgage by the lessor, can be rightly covered by a writ of possession following the foreclosure sale of the mortgaged land.

    The facts are not in any serious dispute.

    On 15 August 1974, Cabanatuan City Colleges obtained a loan from the Bancom Development Corporation. In order to secure the indebtedness, the college mortgaged to Bancom two parcels of land covered by TCT No. T-45816 and No. T-45817 located in Cabanatuan City. The parcels were both within the school site. While the mortgage was subsisting, the college board of directors agreed to lease to petitioners a 1,000-square-meter portion of the encumbered property on which the latter, eventually, built a residential house. Bancom, the mortgagee, was duly advised of the matter.

    The school defaulted in the due payment of the loan. In time, Bancom extrajudicially foreclosed on the mortgage, and the mortgaged property was sold at public auction on 22 August 1979 with Bancom coming out to be the only bidder. A certificate of sale was accordingly executed by the provincial sheriff in favor of Bancom. Subsequently, the latter assigned its credit to herein private respondent Union Bank of the Philippines.

    On 10 October 1984, following the expiration of the redemption period without the college having exercised its right of redemption, private respondent consolidated title to the property.

    On 08 May 1985, private respondent filed with the Regional Trial Court of Nueva Ecija, Branch XXVIII in Cabanatuan City, an ex-parte motion for the issuance of a writ of possession not only over the land and school buildings but also the residential house constructed by petitioners. 2

    On 10 May 1985, the lower court granted the motion and direct issuance of the corresponding writ.

    The ex-officio provincial sheriff, in implementing the writ, thereby also sought the vacation of the premises by petitioners. When the latter refused, private respondent filed an ex-parte motion for a special order directing the physical ouster of the occupants.

    On 23 May 1986, petitioners formally entered their appearance proceedings to oppose the ex-parte motion. Petitioners averred that, the owners of the residential house which they themselves had built foreclosed property with the prior knowledge of the mortgagee, they not be ousted simply on the basis of a petition for a writ of possession under Act No. 3135.

    On 27 May 1986, the lower court, 3 nevertheless, issued an order granting private respondent’s motion, and it directed Atty. Luis T. Castro representation of petitioners, to deliver "all the keys to all the room premises" found on the property foreclosed and authorized, in the event petitioners would refuse to surrender the keys, private respondent "to the premises in question and do what is best for the preservation properties belonging to the Cabanatuan City Colleges." 4

    Petitioners sought reconsideration of the order but the lower court denied the motion on 13 June 1986. 5 It ruled that the residential building was included in the writ of possession pursuant to Article 2127 of the Civil Code. Private respondent still sought clarification of the Order, praying that the court issue another order specifically mentioning the residential house to be among the property which the sheriff should deliver to it. 6 Although the court found no need to clarify its previous ruling, "in the interest of justice and to obviate any possible misunderstanding between the parties," however, it issued its order of 18 June 1986 stating:jgc:chanrobles.com.ph

    "WHEREFORE, the Ex-Officio Provincial Sheriff, Atty. Numeriano Y. Galang should implement the order of May 27, 1986 to include therein the residential house being the subject of dispute between the parties hereto there being no compelling reasons to exclude it.

    "SO ORDERED." 7

    Petitioners elevated the case to the Court of Appeals, assailing the orders of the court a quo of 27 May 1986, 13 June 1986 and 18 June 1986. On 11 October 1990, the appellate court rendered decision affirming the questioned orders. 8

    There is merit in the instant petition for review on certiorari.

    Shorn of unrelated matters, 9 the basic question raised in the petition relates to the proper application of Article 2127 of the Civil Code. The law reads:jgc:chanrobles.com.ph

    "Art. 2127. The mortgage extends to the natural accessions, to the improvements, growing fruits, and the rents or income not yet received when the obligation becomes due, and to the amount of the indemnity granted or owing to the proprietor from the insurers of the property mortgaged, or in virtue of expropriation for public use, with the declarations, amplifications and limitations established by law, whether the estate remains in the possession of the mortgagor, or passes into the hands of a third person."cralaw virtua1aw library

    This article extends the effects of the real estate mortgage to accessions and accessories found on the hypothecated property when the secured obligation becomes due. The law is predicated on an assumption that the ownership of such accessions and accessories also belongs to the mortgagor as the owner of the principal. 10 The provision 11 has thus been seen by the Court, in a long line of cases beginning in 1909 with Bischoff v. Pomar, 12 to mean that all improvements subsequently introduced or owned by the mortgagor on the encumbered property are deemed to form part of the mortgage. That the improvements are to be considered so incorporated only if so owned by the mortgagor is a rule that can hardly be debated since a contract of security, whether real or personal, needs as an indispensable element thereof the ownership by the pledgor or mortgagor of the property pledged or mortgaged. 13 The rationale should be clear enough — in the event of default on the secured obligation, the foreclosure sale of the property would naturally be the next step that can expectedly follow. A sale would result in the transmission of title to the buyer which is feasible only if the seller can be in a position to convey ownership of the thing sold (Article 1458, Civil Code). It is to say, in the instant case, that a foreclosure would be ineffective unless the mortgagor has title to the property to be foreclosed. 14

    It may not be amiss to state, in passing, that in respect of the lease on the foreclosed property, the buyer at the foreclosure sale merely succeeds to the rights and obligations of the pledgor-mortgagor subject, however, to the provisions of Article 1676 of the Civil Code, on its possible termination. 15

    WHEREFORE, the decision of the Court of Appeals is REVERSED and SET ASIDE, and a new one is entered declaring the residential house owned by petitioners to have been improperly included in the writ of possession issued by the court a quo. No costs.

    SO ORDERED.

    Feliciano, Romero, Melo and Panganiban, JJ., concur.

    Endnotes:



    1. Penned by Associate Justice Luis A. Javellana and concurred in by Associate Justices Celso L. Magsino and Filemon H. Mendoza.

    2. G.L.R.O. Cad. Rec. 79.

    3. Presided by Judge Quirino R. Sadang.

    4. Record, p. 116.

    5. Ibid., p. 137.

    6. Ibid., p. 146.

    7. Rollo, p. 56.

    8. The Decision also ruled on the private respondent’s motion to cite Atty. Luis Castro, Sr. and Luis Castro, Jr. in contempt of court for concealing from the Court of Appeals the fact that the Castros had filed an ejectment case against the private respondent in the Municipal Trial Court of Cabanatuan City where the Castros were able to secure a writ of preliminary injunction restoring Luis Castro, Jr. to the possession of the residential building. In denying the petition for contempt, the Court of Appeals held that the petition should be addressed to the cadastral court which issued the writ of possession because the issuance of the writ of preliminary injunction constituted interference with the former court’s proceedings.

    9. E.g., the dacion en pago executed in favor of the Central Bank by Bancom that cannot necessarily conclude the basic issues brought up in the petition at bench.

    10. "ART. 440. The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially."cralaw virtua1aw library

    11. Taken from Article 1877 of the old Civil Code.

    12. 12 Phil. 691. See also Cea v. Villanueva, 18 Phil. 538; Cu Unjieng v. Mabalacat Sugar Co., 58 Phil. 439; Berkenkotter v. Cu Unjieng, 61 Phil. 663.

    13 "ART. 2085. The following requisites are essential to the contracts of pledge and mortgage:

    "1. That they be constituted to secure the fulfillment of a principal obligation;

    "2. That the pledgor or mortgagor be the absolute owner of the thing pledge or mortgaged;

    "3. That the persons constituting the, pledge or mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for the purpose.

    "Third persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property." (Emphasis supplied.)

    14. Section 35, Rule 39, in relation to Section 6 of Act No. 3135, only allows the possession of a mortgaged property to be awarded to the purchaser in extrajudicial foreclosures if there is no third party actually holding the property adversely to the judgment debtor. See also IFC Service Leasing and Acceptance Corp. v. Nera, 19 SCRA 181; Roxas v. Buan, 167 SCRA 43.

    15. "Art. 1676. The purchaser of a piece of land which is under a lease that is not recorded in the Registry of Property may terminate the lease, save when there is a stipulation to the contrary in the contract of sale, or when the purchaser knows of the existence of the lease.

    "If the buyer makes use of this right, the lessee may demand that he be allowed to gather the fruits of the harvest which corresponds to the current agricultural year and that the vendor indemnify him for damages suffered.

    "If the sale is fictitious, for the purpose of extinguishing the lease, the supposed vendee cannot make use of the right granted in the first paragraph of this article. The sale is presumed to be fictitious if at the time of the supposed vendee demands the termination of the lease, the sale is not recorded in the Registry of Property."

    G.R. No. 97401   December 6, 1995 - LUIS CASTRO, JR., ET AL. v. COURT OF APPEALS, ET AL.


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