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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
 

   
September-2001 Jurisprudence                 

  • G.R. No. 137538 September 3, 2001 - OFFICE OF THE OMBUDSMAN v. HON. FRANCISCO B. IBAY

  • A.M. No. MTJ-00-1249 September 4, 2001 - PHIL. GERIATRICS FOUNDATION, ET AL. v. LYDIA QUERUBIN LAYOSA

  • A.M. No. P-00-1373 September 4, 2001 - ELIZABETH A. TIONGCO v. ROGELIO S. MOLINA, ET AL.

  • A.M. No. P-01-1501 September 4, 2001 - JOSEPHINE D. SARMIENTO v. ALBERT S. SALAMAT

  • A.M. No. P-01-1502 September 4, 2001 - CRESENCIO N. BONGALOS v. JOSE R. MONUNGOLH and VICTORIA D. JAMITO

  • A.M. No. P-99-1357 September 4, 2001 - SHERWIN M. BALOLOY v. JOSE B. FLORES

  • A.M. No. RTJ-01-1651 September 4, 2001 - PROSECUTOR LEO C. TABAO v. JUDGE FRISCO T. LILAGAN

  • G.R. No. 125359 September 4, 2001 - ROBERTO S. BENEDICTO and HECTOR T. RIVERA v. THE COURT OF APPEALS

  • G.R. No. 126859 September 4, 2001 - YOUSEF AL-GHOUL, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 127181 September 4, 2001 - LAND BANK OF THE PHIL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 132709 September 4, 2001 - CAMILO L. SABIO, ET AL. v. INTERNATIONAL CORPORATE BANK, ET AL.

  • G.R. No. 134490 September 4, 2001 - PEOPLE OF THE PHILIPPINES v. JOEL BRAGAT

  • G.R. Nos. 135356-58 September 4, 2001 - PEOPLE OF THE PHIL. v. MELECIO SAGARINO

  • G.R. No. 138923 September 4, 2001 - PEOPLE OF THE PHIL. v. ANITA AYOLA, ET AL.

  • A.M. No. MTJ-01-1344 September 5, 2001 - LYDIO ARCILLA, ET AL. v. LUCIO PALAYPAYON, ET AL.

  • G.R. No. 128145 September 5, 2001 - J.C. LOPEZ & ASSOCIATES v. COMMISSION ON AUDIT, ET AL.

  • G.R. No. 133886 September 5, 2001 - PEOPLE OF THE PHILIPPINES v. OSCAR PARBA

  • G.R. No. 134101 September 5, 2001 - PEOPLE OF THE PHIL. v. FELINO O. LLANITA

  • G.R. No. 136054 September 5, 2001 - SEVERINA SAN MIGUEL v. COURT OF APPEALS, ET AL.

  • G.R. No. 132714 September 6, 2001 - PEOPLE OF THE PHIL. v. RENATO LALINGJAMAN

  • G.R. Nos. 139064-66 September 6, 2001 - PEOPLE OF THE PHIL. v. ALBERTO ARCE

  • G.R. No. 140529 September 6, 2001 - JOSE P. LOPEZ v. OFFICE OF THE OMBUDSMAN, ET AL.

  • G.R. No. 141400 September 6, 2001 - PEOPLE OF THE PHIL. v. EVANGELINE GANENAS

  • Admin. Case. No. 4863 September 7, 2001 - URBAN BANK v. ATTY. MAGDALENO M. PEÑA

  • G.R. No. 114858-59 September 7, 2001 - COLUMBUS PHILIPPINES BUS CORPORATION v. NATIONAL LABOR RELATIONS COMMISSION

  • G.R. No. 126352 September 7, 2001 - GSIS v. COURT OF APPEALS, ET AL.

  • G.R. No. 127261 September 7, 2001 - VISAYAN SURETY & INSURANCE CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 129644 September 7, 2001 - CHINA BANKING CORP. v. COURT OF APPEALS, ET AL.

  • G.R. No. 131805 September 7, 2001 - PEOPLE OF THE PHIL. v. GREGORIO HERMOSA, ET AL.

  • G.R. No. 132064 September 7, 2001 - PEOPLE OF THE PHIL. v. ISAGANI BAYENG, ET AL.

  • G.R. No. 132320 September 7, 2001 - PEOPLE OF THE PHIL. v. CONRADO OJERIO

  • G.R. Nos. 135402-03 September 7, 2001 - PEOPLE OF THE PHIL. v. IAN GONZAGA

  • G.R. No. 136779 September 7, 2001 - PEOPLE OF THE PHIL. v. ARNEL ASUNCION

  • G.R. No. 142065 September 7, 2001 - LENIDO LUMANOG v. HON. JAIME N. SALAZAR

  • G.R. No. 142875 September 7, 2001 - EDGAR AGUSTILO v. COURT OF APPEALS, ET AL.

  • G.R. No. 144877 September 7, 2001 - DEVELOPMENT BANK OF THE PHIL. v. VERONICA AGUIRRE, ET AL.

  • A.M. No. P-01-1506 September 10, 2001 - GEORGE S. BICBIC v. DHALIA E. BORROMEO

  • G.R. Nos. 104769 & 135016 September 10, 2001 - AFP MUTUAL BENEFIT ASSO. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118943 September 10, 2001 - MARIO HORNALES v. NLRC, ET AL.

  • G.R. No. 130362 September 10, 2001 - INT’L FLAVORS & FRAGRANCES (PHIL.) v. MERLIN J. ARGOS, ET AL.

  • G.R. No. 138485 September 10, 2001 - DR. v. COMMISSIONER OF INTERNAL REVENUE

  • G.R. No. 141970 September 10, 2001 - METROPOLITAN BANK v. FLORO T. ALEJO

  • G.R. No. 145588 September 10, 2001 - ESPERIDION LOPEZ, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 140398 September 11, 2001 - FRANCISCO DELA MERCED, ET AL. v. GSIS, ET AL.

  • G.R. No. 121877 September 12, 2001 - PEOPLE OF THE PHIL v. ERLINDA GONZALES

  • G.R. Nos. 138431-36 September 12, 2001 - PEOPLE OF THE PHIL. v. DIOSCORA M. ARABIA, ET AL.

  • G.R. No. 140903 September 12, 2001 - HENRY SY v. COMMISSION ON SETTLEMENT OF LAND PROBLEMS, ET AL.

  • A.M. No. 00-1-4-03-SC September 13, 2001 - RE: REQUEST FOR LIVE RADIO-TV COVERAGE OF THE TRIAL IN THE SANDIGANBAYAN OF THE PLUNDER CASES AGAINST FORMER PRESIDENT JOSEPH E. ESTRADA v. JOSEPH E. ESTRADA and INTEGRATED BAR OF THE PHILIPPINES

  • A.M. No. 00-4-188-RTC September 13, 2001 - REQUEST OF MR. OSCAR T. LLAMAS FOR RE-ASSIGNMENT OSCAR T. LLAMAS v. EMMANUEL LACANDOLA AND ET. AL.

  • G.R. No. 120009 September 13, 2001 - DOLE PHILIPPINES v. NATIONAL LABOR RELATIONS COMMISSION

  • G.R. No. 122095 September 13, 2001 - PEOPLE OF THE PHILIPPINES v. DOMINGO DAWISAN

  • G.R. No. 127913 September 13, 2001 - RCBC v. METRO CONTAINER CORP.

  • G.R. No. 132354 September 13, 2001 - PEOPLE OF THE PHIL. v. DEOMEDES IGLESIA

  • G.R. Nos. 136840-42 September 13, 2001 - PEOPLE OF THE PHIL. v. ROMEO NAVARETTE

  • G.R. No. 137250-51 September 13, 2001 - PABLO MARGAREJO v. HON. ADELARDO ESCOSES

  • G.R. No. 138972-73 September 13, 2001 - PEOPLE OF THE PHIL. v. EUGENIO B. MARQUEZ, ET AL.

  • G.R. No. 140512 September 13, 2001 - PEOPLE OF THE PHIL. v. PETER PELERAS, ET AL.

  • G.R. No. 142043 September 13, 2001 - PEOPLE OF THE PHIL. v. NELSON BITUON

  • G.R. No. 142430 September 13, 2001 - PEOPLE OF THE PHIL. v. RONNIE QUINICIO, ET AL.

  • G.R. No. 142444 September 13, 2001 - OFELIA D. ARTUZ v. COURT OF APPEALS, ET AL.

  • G.R. No. 142649 September 13, 2001 - ANTONIO C. SAN LUIS v. COURT OF APPEALS

  • G.R. No. 143702 September 13, 2001 - PEOPLE OF THE PHIL. v. ZALDY MENDOZA

  • G.R. No. 129212 September 14, 2001 - PEOPLE OF THE PHILIPPINES v. MARIO LACUESTA, ET AL.

  • A.M. No. RTJ-00-1575 September 17, 2001 - ISAGANI RIZON v. JUDGE OSCAR E. ZERNA

  • A.M. No. RTJ 99-1498 September 17, 2001 - VICENTE P. LIM v. JUDGE JACINTA B. TAMBAGO, ET AL.

  • G.R. No. 111584 September 17, 2001 - PRODUCERS BANK OF THE PHILIPPINES v. COURT OF APPEALS and SPOUSES SALVADOR Y. CHUA and EMILIA U. CHUA

  • G.R. No. 135644 September 17, 2001 - GOVERNMENT SERVICE INSURANCE SYSTEM v. SPOUSES GONZALO and MATILDE LABUNG-DEANG

  • G.R. No. 135912 September 17, 2001 - ODIN SECURITY AGENCY v. SANDIGANBAYAN, ET AL.

  • G.R. No. 138219 September 17, 2001 - GERARDO V. TAMBAOAN, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 138943-44 September 17, 2001 - PEOPLE OF THE PHIL. v. HENRY ALMAZAN

  • G.R. No. 141209 September 17, 2001 - ANTONIA HUFANA, ET AL. v. WILLIAM ONG GENATO

  • A. C. No. 5043 September 19, 2001 - ABEDIN L. OSOP v. ATTY. V. EMMANUEL C. FONTANILLA

  • G.R. No. 135936 September 19, 2001 - THE PEOPLE OF THE PHILIPPINES v. GUALBERTO MIRADOR alias "GOLING"

  • G.R. No. 144400 September 19, 2001 - DOMINGO O. IGNACIO v. COCA-COLA BOTTLERS PHILS.

  • A.M. No. MTJ-01-1369 September 20, 2001 - GUILLERMA D. CABAÑERO v. JUDGE ANTONIO K. CAÑON

  • A.M. No. MTJ-01-1371 September 20, 2001 - ATTY. NESCITO C. HILARIO v. JUDGE ROMEO A. QUILANTANG

  • A.M. No. RTJ-99-1472 September 20, 2001 - SPOUSES HERMINIO, ET Al. v. HON. DEMETRIO D. CALIMAG

  • A.M. No. P-01-1483 September 20, 2001 - EDNA FE F. AQUINO v. ISABELO LAVADIA

  • G.R. No. 116938 September 20, 2001 - LEONILA GARCIA-RUEDA v. REMEDIOS A. AMOR, ET AL.

  • G.R. No. 127405 September 20, 2001 - MARJORIE TOCAO and WILLIAM T. BELO v. COURT OF APPEALS and NENITA A. ANAY

  • G.R. No. 130399 September 20, 2001 - PUBLIC UTILITIES DEPARTMENT v. HON. TEOFISTO T. GUINGONA

  • G.R. Nos. 135068-72 September 20, 2001 - PEOPLE OF THE PHIL. v. MAXIMO RAMOS

  • G.R. No. 137674 September 20, 2001 - WILLIAM GO KIM HUY v. SANTIAGO GO KIM HUY, ET AL.

  • G.R. No. 139410 September 20, 2001 - PEOPLE OF THE PHILIPPINES v. SILVERIO AGUERO

  • G.R. No. 140898 September 20, 2001 - THE PEOPLE OF THE PHILIPPINES v. JOSE ISHIKAWA AMBA

  • A.M. No. P-99-1289 September 21, 2001 - JUDGE NAPOLEON S. DIAMANTE v. ANTHONY A. ALAMBRA

  • G.R. Nos. 119609-10 September 21, 2001 - PCGG v. HONORABLE SANDIGANBAYAN (Third Division), ET AL.

  • G.R. No. 128876 September 21, 2001 - PEOPLE OF THE PHILIPPINES v. MANOLITO FELIZAR y CAPULI

  • G.R. No. 132384 September 21, 2001 - PEOPLE OF THE PHILIPPINES v. MARLON GADIA

  • G.R. No. 134596 September 21, 2001 - RAYMUND ARDONIO v. THE PEOPLE OF THE PHILIPPINES

  • G.R. No. 142889 September 21, 2001 - EXECUTIVE LABOR ARBITER RICARDO N. OLAIREZ v. OMBUDSMAN ANIANO A. DESIERTO

  • G.R. No. 145416 September 21, 2001 - GOLDEN HORIZON REALTY CORPORATION v. SY CHUAN

  • A.M. No. 99-6-79-MTC September 24, 2001 - REPORT ON THE JUDICIAL AUDIT CONDUCTED IN THE MUNICIPAL TRIAL COURT

  • A.M. No. P-01-1512 September 24, 2001 - TERESITA H. ZIPAGAN v. JOVENCIO N. TATTAO

  • G.R. Nos. 132442-44 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. BERNARDINO ARANZADO

  • G.R. Nos. 135524-25 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. MANOLITO AGUSTIN

  • G.R. No. 141897 September 24, 2001 - METRO CONSTRUCTION v. CHATHAM PROPERTIES

  • G.R. No. 144404 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. LEODEGARIO BASCUGUIN Y AGQUIZ

  • G.R. Nos. 127759-60 September 25, 2001 - PEOPLE OF THE PHIL. v. PO3 NOEL FELICIANO

  • G.R. Nos. 134527-28 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. SERAPIO REY alias APIONG

  • G.R. Nos. 136867-68 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. RODRIGO GALVEZ y JEREZ

  • G.R. No. 137612 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. FRANCISCO ANTINERO BERIARMENTE

  • A.C. No. 4497 September 26, 2001 - MR. and MRS. VENUSTIANO G. SABURNIDO v. ATTY. FLORANTE E. MADROÑO

  • A.C. No. 4990 September 26, 2001 - ELENA ZARATE-BUSTAMANTE and LEONORA SAVET CATABIAN v. ATTY. FLORENTINO G. LIBATIQUE

  • G.R. No. 122824 September 26, 2001 - AURORA F. IGNACIO v. VALERIANO BASILIO,

  • G.R. No. 123058 September 26, 2001 - PEOPLE OF THE PHIL. v. ALFREDO NAPUD, JR.

  • G.R. No. 129107 September 26, 2001 - ALFONSO L. IRINGAN v. HON. COURT OF APPEALS , ET AL.

  • G.R. Nos. 129530-31 September 26, 2001 - PEOPLE OF THE PHILIPPINES v. WILFREDO OLARTE

  • G.R. Nos. 138308-10 September 26, 2001 - THE PEOPLE OF THE PHILIPPINES v. PABLO SANTOS

  • G.R. No. 142564 September 26, 2001 - PEOPLE OF THE PHILIPPINES v. HILGEM NERIO y GIGANTO

  • G.R. Nos. 143108-09 September 26, 2001 - REPUBLIC OF THE PHILIPPINES. v. COURT OF APPEALS

  • Adm. Case. No. 5505 September 27, 2001 - SEVERINO RAMOS v. ATTY. ELLIS JACOBA and ATTY. OLIVIA VELASCO JACOBA

  • G.R. No. 131864-65 September 27, 2001 - PEOPLE OF THE PHILIPPINES v. SHERJOHN ARONDAIN and JOSE PRECIOSO

  • G.R. Nos. 134963-64 September 27, 2001 - ALFREDO LONG and FELIX ALMERIA v. LYDIA BASA

  • G.R. No. 137676 September 27, 2001 - PEOPLE OF THE PHILIPPINES v. ATTY. ROBERTO DIONISIO

  • G.R. No. 144035 September 27, 2001 - PEOPLE OF THE PHIL. v. VICENTE M. BASQUEZ

  • A.M. No. P-00-1391 September 28, 2001 - LIBRADA D. TORRES v. NELSON C. CABESUELA

  • G.R. No. 122425 September 28, 2001 - FLORDELIZA H. CABUHAT v. THE HONORABLE COURT OF APPEALS

  • G.R. No. 124535 September 28, 2001 - THE RURAL BANK OF LIPA CITY, ET AL. v. HONORABLE COURT OF APPEALS, ET AL.

  • G.R. No. 125154 September 28, 2001 - DIGNA VERGEL v. COURT OF APPEALS and DOROTEA-TAMISIN GONZALES

  • G.R. No. 125442 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. FERNANDO ARELLANO y ROBLES

  • G.R. No. 127232 September 28, 2001 - GOLDENROD v. HONORABLE COURT OF APPEALS and PATHFINDER HOLDINGS (PHILIPPINES)

  • G.R. No. 127241 September 28, 2001 - LA CONSOLACION COLLEGE, ET AL. v. NLRC , ET AL.

  • G.R. No. 134128 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. GERARDO DE LAS ERAS y ZAFRA

  • G.R. No. 134928 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. FILOMENO BARNUEVO. ET AL.

  • G.R. Nos. 140789-92 September 28, 2001 - THE PEOPLE OF THE PHILIPPINES v. ALIPIO CARBONELL and DIONISIO CARBONELL

  • G.R. No. 145371 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. BEN AQUINO and ROMEO AQUINO

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    G.R. No. 140398   September 11, 2001 - FRANCISCO DELA MERCED, ET AL. v. GSIS, ET AL.

     
    PHILIPPINE SUPREME COURT DECISIONS

    FIRST DIVISION

    [G.R. No. 140398. September 11, 2001.]

    COL. FRANCISCO DELA MERCED, substituted by his heirs, namely, BLANQUITA E. DELA MERCED, LUIS CESAR DELA MERCED, BLANQUITA E. DELA MERCED (nee MACATANGAY) and MARIA OLIVIA M. PAREDES, Petitioners, v. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) and SPOUSES VICTOR and MILAGROS MANLONGAT, Respondents.

    D E C I S I O N


    YNARES-SANTIAGO, J.:


    This is a petition for review under Rule 45 of the Rules of Court, seeking to set aside the decision of the Court of Appeals dated May 21, 1999 in CA-G.R. CV No. 55034, 1 which reversed the decision of the Regional Trial Court of Pasig, Metro Manila, Branch 160, in Civil Cases Nos. 51410 and 51470. 2

    The antecedent facts, as culled from the records, are as follows:chanrob1es virtua1 1aw 1ibrary

    Governor Jose C. Zulueta and his wife Soledad Ramos were the owners of parcels of land consisting of 100,986 square meters, known as the Antonio Village Subdivision, Orambo, Pasig City. The parcels of land were registered in their names under Transfer Certificates of Title Nos. 26105, 3 37177 4 and 50256 5 of the Registry of Deeds of the Province of Rizal.

    On September 25, 1956, the Zuluetas obtained a loan of P520,000.00 from the Government Service Insurance System, as security for which they mortgaged the lands covered by TCT No. 26105. It was expressly stipulated in the mortgage deed that certain lots within TCT No. 26105 shall be excluded from the mortgage because they have been either previously sold to third parties or donated to the government.

    The Zulueta spouses obtained an additional loan from the GSIS on March 6, 1957 in the amount of P190,000.00, as security for which they mortgaged the land covered by TCT No. 50256. On April 4, 1957, the Zuluetas obtained another loan from GSIS this time in the amount of P1,000,000.00, which they secured by mortgaging parcels of land included in TCT Nos. 26105 and 37177.

    On September 3, 1957, the Zulueta spouses executed a contract to sell whereby they undertook to sell to Francisco dela Merced and Evarista Mendoza lots identified as Lots 6, 7, 8 and 10, Block 2 (formerly Block 4), Antonio Subdivision covered by TCT No. 26105. 6 On October 26, 1972, after full payment by Col. dela Merced of the purchase price, a Deed of Absolute Sale was executed by the Zuluetas in his favor.

    On October 15, 1957, another loan was extended by GSIS to the Zulueta spouses in the amount of P1,398,000.00, secured by a mortgage on the properties included in TCT Nos. 26105 and 50256.

    The Zuluetas defaulted in the payment of their loans. Thus, GSIS extrajudicially foreclosed the mortgages and, at the foreclosure sale held on August 16, 1974, GSIS was awarded the mortgaged properties as the highest bidder. Since the Zuluetas did not redeem the properties within the reglementary period, title to the properties was consolidated to GSIS.chanrob1es virtua1 1aw 1ibrary

    Later, on March 25, 1982, GSIS held a sale at public auction of its acquired assets. Elizabeth D. Manlongat and Ma. Therese D. Manlongat, the children of Victor and Milagros Manlongat, purchased Lot 6, Block 2 of Antonio Village. 7

    On August 22, 1984, a complaint for declaratory relief, injunction and damages, docketed as Civil Case No. 51410, was filed with the Regional Trial Court of Pasig, Branch 160, by Victor Lemonsito and several others, 8 against Benjamin Cabusao, in his capacity as In-Charge of the Municipal Task Force on Squatters of the Municipal Engineer’s Office of Pasig, spouses Domini and Olivia Suarez and spouses Victor and Milagros Manlongat. 9 Plaintiffs therein averred that they were owners of houses in various lots in Antonio Village, having constructed the same with the permission of the late Jose C. Zulueta before the same was foreclosed by GSIS; that defendants Suarez and Manlongat claimed to be vendees of lots in Antonio Village; and that defendant Cabusao was threatening to demolish plaintiffs’ houses on the alleged ground that they were squatters on the lots.

    On September 7, 1984, Col. dela Merced also instituted Civil Case No. 51470 with the Regional Trial Court of Pasig, Branch 154, against GSIS and the spouses Zulueta, praying, among others, that the foreclosure sale, insofar as his lots were concerned, be declared null and void. 10

    Meanwhile, Col. dela Merced filed a complaint-in-intervention in Civil Case No. 51410, 11 wherein he prayed that plaintiffs’ complaint be dismissed and defendants’ titles to lots 6, 7 and 8, Block 2 be declared null and void.

    The complaint in Civil Case No. 51410 was dismissed for failure of plaintiffs to prosecute, but the complaint-in-intervention of Col. dela Merced was allowed to proceed against defendants Suarez and Manlongat. 12

    On September 5, 1986, upon motion of plaintiff Col. dela Merced, the trial court ordered the consolidation of Civil Case No. 51470 with Civil Case No. 51410. 13

    On October 23, 1987, the Regional Trial Court of Pasig, Branch 160, rendered its decision, the dispositive portion of which reads:chanrob1es virtual 1aw library

    WHEREFORE, judgment is hereby rendered in Civil Case No. 51410:chanrob1es virtual 1aw library

    1. Declaring Lots 6, 7, 8 and 10 of Block 2, and Lot 8 of Block 8 which are the subject of the action, as the exclusive property of the intervenor. Consequently, the certificates of Title of the defendants covering said property lots are declared null and void; and in Civil Case No. 51470:chanrob1es virtual 1aw library

    1. Declaring the foreclosure proceedings conducted by defendant GSIS, insofar as they affected the lots in question, as null and void, including the consolidation of ownership thereof by the GSIS, and the sale of the lots to defendant Manlongat spouses;

    2. Declaring the certificates of title issued to GSIS covering the aforesaid lots, as well as those issued to defendant Manlongat spouses by virtue of the sale executed by the former in favor of the latter, as null and void; and directing the Office of the Register of Deeds of Pasig, Metro Manila, to issue a new one in the name of the plaintiff Francisco Mendoza dela Merced;chanrob1es virtua1 1aw 1ibrary

    3. Ordering the defendants, jointly and severally, to pay the plaintiff the sums of P100,000.00 as moral damages; P50,000.00 as exemplary damages; and P50,000.00 by way of attorney’s fees; plus costs.

    SO ORDERED. 14

    The GSIS and Manlongat spouses filed separate appeals. The Court of Appeals held that the trial court erred in declaring defendants as having waived their right to present evidence. Thus, on April 19, 1994, the Court of Appeals set aside the decision of the trial court and remanded the case to the lower court for the reception of evidence of defendants Manlongat and GSIS. 15

    In the meantime, on March 19, 1988, Col. dela Merced passed away and was substituted by his heirs.

    On December 27, 1996, the Regional Trial Court of Pasig, Branch 160, rendered a decision, the dispositive portion of which reads:chanrob1es virtual 1aw library

    WHEREFORE, judgment is hereby rendered:chanrob1es virtual 1aw library

    1. Declaring the foreclosure sale of Lot Nos. 6, 7, 8 and 10 of Block 2, and Lot 8 of Block 8 and certificate of Titles issued to GSIS covering the aforesaid lots as well as those issued to defendant Manlongat spouses as null and void;

    2. Declaring plaintiff-intervenor as the true and lawful owner of the aforesaid lots;

    3. Ordering the Register of Deeds of Pasig, Metro Manila to issue new titles in the name of plaintiff-intervenor or his substituted heirs namely Blanquita dela Merced-Macatangay, Blanquita Errea dela Merced, Luis dela Merced and Maria Olivia dela Merced Paredes;

    4. Ordering defendants GSIS and spouses Manlongat jointly and severally to pay attorney’s fees of P20,000.00 and to pay the costs.

    SO ORDERED. 16

    The trial court made the following findings:chanrob1es virtual 1aw library

    The mortgage contract signed by the Zulueta spouses of the property covered by TCT No. 26105 in favor of GSIS (Exh. "C-C-1" Merced) contained the following provisions:chanrob1es virtua1 1aw 1ibrary

    "Note:chanrob1es virtual 1aw library

    The following lots which form part of TCT No. 26105 are not covered by this mortgage contract due to sale to third parties and donation to government.

    1. Lots No. 1 to 13, Block No. 1 6,138 sq.m.

    2. Lots Nos. 1 to 11, Block No. 2 4,660 sq.m.

    3. Lot No. 15, Block No. 3 487 sq.m.

    4. Lot No. 17, Block No. 4 263 sq.m.

    5. Lot No. 1, Block No. 7 402 sq.m.

    6. Road Lots Nos. 1, 2, 3 & 4 22, 747 sq.m."cralaw virtua1aw library

    Evidently, lot numbers 1 to 11, Block 2 to include plaintiff-intervenor’s lots were excluded from the mortgage. In fact, in a letter dated October 1, 1956, defendant GSIS confirmed that portions of the subdivision such as lots Nos. 1 to 11, Block 2 . . . have already been sold . . . ." (Exh. "B-1" Merced) The intent of the parties was clear to exclude from the mortgage the properties claimed by plaintiff-intervenor, among others, where he introduced improvements since 1955. On October 26, 1972, the spouses Zulueta executed the corresponding deed of sale in favor of plaintiff-intervenor (Exh. "C")."cralaw virtua1aw library

    The contention of defendant GSIS and defendants Victor and Milagros Manlongat that Lot Nos. 6, 7, 8 & 10 are not the lots excluded from the mortgage by the spouses Zulueta to the GSIS cannot be given credence. Evidence reveal that lots 6, 7, 8 and 10, Block 2, with a total area of 1,405 square meters of the Antonio Village Subdivision were excluded from the September 25, 1956 mortgage contract executed by defendants in favor of GSIS. (Exh. "C", "C-1" Merced, 9-1-95) Defendant GSIS in fact had admitted in its answer, the letter to plaintiff acknowledging that there has been no problem with respect to Lot 8, Block 8 of the said property. Obviously, defendant recognized the ownership of intervenor of the mentioned lots. It is further to be noted that plan Pcs-5889 was not yet in existence when the mortgage was executed in 1956. Besides defendant GSIS had knowledge of the possession of intervenor. While the deed of sale between the Zuluetas and plaintiff-intervenor was never registered nor annotated in the title and executed only after one (1) year, defendant GSIS had knowledge of the possession of intervenor of the lots; that defendant GSIS was not acting in good faith when it accepted the mortgage of the questioned lots. Plaintiff-intervenor in 1957 built a house and introduced improvement and built a house of strong structure on lots 6 & 7 and with the other lots serving as backyard and for 28 years had paid dues on the lots. 17

    Respondents appealed the decision to the Court of Appeals, where the same was docketed as CA-G.R. CV No. 55034. On May 21, 1999, the Court of Appeals reversed the decision of the trial court. Petitioners filed a Motion for Reconsideration which was denied on October 4, 1999.

    Hence, the instant petition for review, raising the following assignments of error:chanrob1es virtua1 1aw 1ibrary

    FIRST ASSIGNMENT OF ERROR

    THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN TOTALLY DISREGARDING THE ADMISSION OF DEFENDANT GSIS THAT THE LOTS IN QUESTION WERE EXCLUDED FROM THE MORTGAGE

    SECOND ASSIGNMENT OF ERROR

    THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN NOT RULING THAT (A) PLAINTIFF HAS BEEN IN POSSESSION OF THE SUBJECT LOTS SINCE 1955 CONTINUOUSLY UNTIL THE PRESENT AND (B) GSIS HAD KNOWLEDGE OF PLAINTIFF’S POSSESSION

    THIRD ASSIGNMENT OF ERROR

    THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN ITS FAILURE TO APPRECIATE THE SIGNIFICANCE OF PLAINTIFF’S CONTINUOUS OPEN AND ADVERSE POSSESSION IN THE CONCEPT OF OWNER FOR 28 YEARS AND THE ACTUAL KNOWLEDGE OF GSIS OF SUCH POSSESSION

    FOURTH ASSIGNMENT OF ERROR

    THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN RULING THAT NO JUDGMENT CAN BE RENDERED AGAINST THE SPOUSES MANLONGAT WITHOUT VIOLATING THEIR RIGHT TO DUE PROCESS OF LAW 18

    In essence, petitioners allege that the foreclosure sale was null and void because the mortgage executed by the parties, insofar as the properties previously sold to petitioners were concerned, was also void from the beginning. Petitioners had been in continuous and open possession thereof before and during the time of the mortgage, more specifically, since 1955 continuously up to the present, and GSIS had knowledge thereof. Furthermore, respondent GSIS admitted that the lots in questions were excluded from the mortgage. Finally, under Presidential Decree No. 957, also known as "The Subdivision and Condominium Buyers’ Protective Decree," petitioners are entitled to the issuance of their corresponding title over the lots after having completed their payments to the subdivision owner. 19chanrob1es virtua1 1aw 1ibrary

    Petitioners aver that when the Zuluetas mortgaged their properties to GSIS on October 15, 1957, they were no longer the owners of the lots subject of this litigation, the same having been sold to Francisco dela Merced by virtue of the contract to sell executed on September 3, 1957. Hence, the mortgage was void from its inception and GSIS, as mortgagee, acquired no better right notwithstanding the registration of the mortgage. Petitioners also argued that GSIS was a mortgagee in bad faith as it had been negligent in ascertaining and investigating the condition of the subject lots mortgaged to it as well as the rights of petitioners who were already in possession thereof at the time of mortgage. Furthermore, petitioners cite the judicial admission of respondent GSIS in its answer before the trial court, wherein it recognized the rights of ownership of Francisco dela Merced over Lot 8, Block 8 and of Eva Mendoza dela Merced over Lot 10, Block 2 of TCT 26105.

    Respondent GSIS countered that it cannot be legally presumed to have acknowledged petitioners’ rights over Lot 8, Block 8 of TCT 26105. With regard to the possession of petitioners, respondent GSIS invoked the ruling of the Court of Appeals that the mere possession of petitioner cannot stand against the registered titles of GSIS and its buyers, Elizabeth and Ma. Therese Manlongat. Moreover, Lot 6, Block 2 (formerly Block 4) of the Antonio Village Subdivision was acquired by Elizabeth Manlongat in a public bidding, as a consequence of which TCT No. PT-94007 was issued to her. Respondent GSIS also maintained that the lots being claimed by petitioners were included in the real estate mortgage executed by the Zuluetas in favor of GSIS; and that the inclusion of the subject lots in the mortgage was confirmed by Manuel Ibabao, an employee of the Acquired Assets Department of GSIS.

    For their part, respondent spouses Manlongat alleged that since Francisco dela Merced never registered the contract to sell and deed of absolute sale with the Register of Deeds, the same cannot affect the rights of third persons such as their daughter, Elizabeth Manlongat, who dealt in good faith with GSIS as the prior registered owner.chanrob1es virtua1 1aw 1ibrary

    The petition is impressed with merit.

    Petitioners’ rights of ownership over the properties in dispute, albeit unregistered, are superior to the registered mortgage rights of GSIS over the same. The execution and validity of the contract to sell dated September 3, 1957 executed by the Zulueta spouses, as the former subdivision owner, in favor of Francisco dela Merced, are beyond cavil. There is also no dispute that the contract to sell was entered into by the parties before the third mortgage was constituted on October 15, 1957 by the Zuluetas in favor of GSIS on the property covered by TCT No. 26105, which included the subject lots. Francisco dela Merced was able to fully pay the purchase price to the vendor, who later executed a deed of absolute sale in his favor. However, the Zuluetas defaulted on their loans; hence, the mortgage was foreclosed and the properties were sold at public auction to GSIS as the highest bidder.

    In the case of State Investment House, Inc. v. Court of Appeals, 20 it was held that:chanrob1es virtual 1aw library

    STATE’s registered mortgage right over the property is inferior to that of respondents-spouses’ unregistered right. The unrecorded sale between respondents-spouses and SOLID is preferred for the reason that if the original owner (SOLID, in this case) had parted with his ownership of the thing sold then he no longer had ownership and free disposal of that thing so as to be able to mortgage it again. Registration of the mortgage is of no moment since it is understood to be without prejudice to the better right of third parties.

    In the same vein, therefore, the registered right of GSIS as mortgagee of the property is inferior to the unregistered right of Francisco dela Merced. The unrecorded sale between Francisco dela Merced as the vendee of the property and the Zuluetas, the original owners, is preferred for the same reason stated above.chanrob1es virtua1 1aw 1ibrary

    Respondents cannot even assert that as mortgagee of land registered under the Torrens system, GSIS was not required to do more than rely upon the certificate of title. As a general rule, where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. This rule, however, admits of an exception as where the purchaser or mortgagee has knowledge of a defect or lack of title in the vendor, or that he was aware of sufficient facts to induce a reasonably prudent man to inquire into the status of the property in litigation. 21

    In the case at bar, GSIS is admittedly a financing institution. In its answer to the complaint filed with the trial court, GSIS admitted knowledge that the spouses Jose C. Zulueta and Soledad B. Ramos owned the Antonio Subdivision when they mortgaged the same with GSIS. In Sunshine Finance and Investment Corp. v. Intermediate Appellate Court, 22 we held that when the purchaser or mortgagee is a financing institution, the general rule that a purchaser or mortgagee of land is not required to look further than what appears on the face of the title does not apply. Further:chanrob1es virtual 1aw library

    Nevertheless, we have to deviate from the general rule because of the failure of petitioner in this case to take the necessary precautions to ascertain if there was any flaw in the title of the Nolascos and to examine the condition of the property they sought to mortgage. The petitioner is an investment and financing corporation. We presume it is experienced in its business. Ascertainment of the status and condition of properties offered to it as security for the loans it extends must be a standard and indispensable part of its operations. Surely it cannot simply rely on an examination of a Torrens certificate to determine what the subject property looks like as its condition is not apparent in the document. The land might be in a depressed area. There might be squatters on it. It might be easily inundated. It might be an interior lot without convenient access. These and other similar factors determine the value of the property and so should be of practical concern to the petitioner. 23

    There is nothing in the records of this case to indicate that an ocular inspection report was conducted by GSIS, or whether it investigated, examined and assessed the subdivision lots when they were offered as security for the loans by the original owners. The only inventory made by GSIS based on its documentary evidence was prepared by its officers employed with the Acquired Assets Department, but that was after the foreclosure sale was already conducted and not before the mortgage was constituted over the property. The constructive knowledge of GSIS of the defect in the title of the subject property, or lack of such knowledge due to its negligence, takes the place of registration of the rights of petitioners.chanrob1es virtua1 1aw 1ibrary

    Likewise, in Philippine National Bank v. Office of the President, 24 we held that —

    As between these small lot buyers and the gigantic financial institutions which the developers deal with, it is obvious that the law — as an instrument of social justice — must favor the weak. Indeed, the petitioner Bank had at its disposal vast resources with which it could adequately protect its loan activities, and therefore is presumed to have conducted the usual "due diligence" checking and ascertained (whether thru ocular inspection or other modes of investigation) the actual status, condition, utilization and occupancy of the property offered as collateral. It could not have been unaware that the property had been built on by small lot buyers. On the other hand, private respondents obviously were powerless to discover the attempt of the land developer to hypothecate the property being sold to them. It was precisely in order to deal with this kind of situation that P.D. 957 was enacted, its very essence and intendment being to provide a protective mantle over helpless citizens who may fall prey to the razzmatazz of what P.D. 957 termed "unscrupulous subdivision and condominium sellers."25cralaw:red

    In the case at bar, GSIS admitted in its answer that it received a letter from Francisco dela Merced on August 27, 1981, stating that he had acquired the subject lots by virtue of a deed of absolute sale executed in his favor by the Zulueta spouses. 26 GSIS also admitted the fact that on October 17, 1980, its Deputy General Counsel wrote Francisco dela Merced stating that his claim of ownership over Block 8, Lot 8, of TCT No. 26105 had "no problem;" but his claim to Lots 6, 7, 10 and 11 of Block 2, of the same title, was "not very clear." 27 Clearly, therefore, GSIS had full knowledge of the claim of ownership of dela Merced over the aforementioned lots even before their sale at public auction to Elizabeth Manlongat.chanrob1es virtua1 1aw 1ibrary

    Coming now to the last issue — whether Elizabeth Manlongat, as purchaser of Lot 6, Block 2 at an auction sale conducted by GSIS, had a better right than petitioners — we must rule in the negative. It should be borne in mind that the title of Manlongat was derived through sale or transfer from GSIS, whose acquisition over the property proceeded from a foreclosure sale that was null and void. Nemo potest plus juris ad alium transferre quam ipse habet. No one can transfer a greater right to another than he himself has. 28 In other words, the subsequent certificates of title of GSIS and of Manlongat over the property are both void, because of the legal truism that the spring cannot rise higher than the source.

    Further, Manlongat cannot claim that she was a purchaser in good faith. The records categorically reflect that neither Manlongat nor her predecessor-in-interest, GSIS, possessed the property prior to or after the former bought the same at an auction sale. In fact, at the time the lots were sold to Manlongat, petitioners were not only in actual possession thereof, but their father, Francisco dela Merced, had already built a house thereon. Again, a cautious and prudent purchaser would usually make an ocular inspection of the premises, this being standard practice in the real estate industry. Should such prospective buyer find out that the land she intends to buy is being occupied by anybody other than the seller, who, in this case, was not in actual possession, it would then be incumbent upon her to verify the extent of the occupant’s possessory rights. The failure of a prospective buyer to take such precautionary steps would mean negligence on her part and would thereby preclude her from claiming or invoking the rights of a purchaser in good faith.

    WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals is REVERSED AND SET ASIDE. The decision of the Regional Trial Court of Pasig City, Branch 160, in Civil Cases Nos. 51410 and 51470, is REINSTATED. The foreclosure sale of Lot Nos. 6, 7, 8 and 10 of Block 2 and Lot 8 of Block 8 of the property originally covered by TCT 26105, and the subsequent certificates of titles issued to GSIS as well as TCT No. PT-94007 in the name of Elizabeth Manlongat, are declared NULL AND VOID. The Register of Deeds of Pasig City is ordered to CANCEL all present certificates of title in the name of GSIS and Elizabeth Manlongat covering the above-mentioned properties, and to ISSUE new certificates of title over the same in the name of petitioners as co-owners thereof. Respondents GSIS and spouses Victor and Milagros Manlongat are ORDERED to pay, jointly and severally, attorney’s fees in the increased amount of P50,000.00, and to pay the costs.cralaw : red

    SO ORDERED.

    Kapunan and Pardo, JJ., concur.

    Davide, Jr., C.J., except as to attorney’s fees. There should be no increase.

    Puno, J., on official leave.

    Endnotes:



    1. Rollo, pp. 36-45; penned by Associate Justices Hector L. Hofileña, concurred in by Associate Justices Omar U. Amin and Presbitero J. Velasco, Jr.

    2. Record, Civil Case No. 51410. pp. 646-660; penned by Judge Mariano M. Umali.

    3. Exh. "1" .

    4. Exh. "2" .

    5. Exh. "3" .

    6. Exh. "F" .

    7. Record, Civil Case No. 51410, p. 24-25.

    8. Juanito Pomperada, Avelino Villasanta, Neptale Cababahay, Lamberto Demos, Eduardo Infante, Gloria Lemonsito, Alfonso Billones, Jean Marie Gatungay, Alfredo Garcia, Anacleto Barcenas, Antonio Ayuben, Romeo Sesmundo, Marivic Ceniza, Oscar Calumpeta, Osmundo Ramos, Samuel Maiwat, Primo Calderon, Joselito Braga, Raymundo Menor, Mario Fernandez, Alicia Enaje, Aida Leque, Cristina Milo, Salvador Florencio, Ordel Tobola, Edna Gallo, Natividad Sebastian, Alejandro Laudencio and Alberto Bellera.

    9. Record, Civil Case No. 51410, pp. 1-5.

    10. Record, Civil Case No. 51470, pp. 1-6.

    11. Record, Civil Case No. 51410, pp. 99-102.

    12. Ibid., p. 130.

    13. Record, Civil Case No. 51470, p. 145.

    14. Record, Civil Case No. 51410, p. 361.

    15. Ibid., pp. 472-76; penned by Associate Justice Bernardo P. Pardo (now member of this Court), concurred in by Presiding Justice Vicente V. Mendoza (now member of this Court) and Associate Justice Justo P. Torres, Jr. (retired Justice of this Court).

    16. Ibid., p. 660.

    17. Ibid., pp. 657-658.

    18. Rollo, pp. 24-30.

    19. Ibid., pp. 178-79.

    20. 254 SCRA 368, 373 (1996).

    21. Ibid., at 373-74.

    22. 203 SCRA 210 [1991].

    23. Ibid., at 216.

    24. 252 SCRA 5 [1996].

    25. Ibid., at 10-11.

    26. Record, Civil Case No. 51470, p. 50.

    27. Ibid:, pp. 2, 50.

    28. Mathay v. Court of Appeals, 295 SCRA 556, 577 [1998].

    G.R. No. 140398   September 11, 2001 - FRANCISCO DELA MERCED, ET AL. v. GSIS, ET AL.


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