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Catholic Vicar Apostolic of the Mountain Province vs. Court of Appeals, Heirs of
Egmidio Octaviano and Juan Valdez
Facts:
The whole controversy started when the herein petitioner filed an application for
registration of lands 1, 2, 3 and 4 in La Trinidad, Benguet on September 5, 1962.
The heirs of Juan Valdez and the heirs of Egmidio Octaviano filed an opposition
on lots 2 and 3, respectively. On November 17, 1965, the land registration court
confirmed the registrable title of the petitioner. On May 9, 1977, the Court of
Appeals reversed the decision and dismissed the Vicars application. The heirs
filed a motion for reconsideration, praying that the lots be ordered registered
under their names. The Court of Appeals denied the motion for lack of sufficient
merit. Both parties then came before the Supreme Court. The Supreme Court, in a
minute resolution, denied both petitions. The heirs filed the instant cases for the
recovery and possession of the lots.
Respondents argue that the petitioner is barred from setting up the defense of
ownership or long and continuous possession by the prior judgment of the Court
of Appeals under the principle of res judicata. Petitioner contends that the
principle is not applicable because the dispositive portion of the judgment merely
dismissed the application for registration.
Issues:
(1) Whether the decision of the Court of Appeals constitute res judicata and
therefore bars the petitioner from alleging ownership over the lots
(2) Whether the petitioner has acquired the lots through acquisitive prescription
Held:
(1) The Court of Appeals did not positively declare private respondents as owners
of the land, neither was it declared that they were not owners of the land, but it
held that the predecessors of private respondents were possessors of Lots 2 and
3, with claim of ownership in good faith from 1906 to 1951. Petitioner was in
possession as borrower in commodatum up to 1951, when it repudiated the trust
by declaring the properties in its name for taxation purposes. When petitioner
applied for registration of Lots 2 and 3 in 1962, it had been in possession in
concept of owner only for eleven years. Ordinary acquisitive prescription requires
possession for ten years, but always with just title. Extraordinary acquisitive
prescription requires 30 years. On the above findings of facts supported by
evidence and evaluated by the Court of Appeals, affirmed by this Court, We see
no error in respondent appellate court's ruling that said findings are res judicata
between the parties. They can no longer be altered by presentation of evidence
because those issues were resolved with finality a long time ago. To ignore the
principle of res judicata would be to open the door to endless litigations by
continuous determination of issues without end.
(2) Private respondents were able to prove that their predecessors' house was
borrowed by petitioner Vicar after the church and the convent were destroyed.
They never asked for the return of the house, but when they allowed its free use,
they became bailors in commodatum and the petitioner the bailee. The bailees'
failure to return the subject matter of commodatum to the bailor did not mean
adverse possession on the part of the borrower. The bailee held in trust the
property subject matter of commodatum. The adverse claim of petitioner came
only in 1951 when it declared the lots for taxation purposes. The action of
petitioner Vicar by such adverse claim could not ripen into title by way of ordinary
acquisitive prescription because of the absence of just title.
Motion for Reconsideration
Issue:
Who is entitled to the possession and ownership of the land?
Held:
Pursuant to the said decision in CA-G.R. No. 38830-R, the two lots in question
remained part of the public lands. This is the only logical conclusion when the
appellate court found that neither the petitioner nor private respondents are
entitled to confirmation of imperfect title over said lots. Hence, the Court finds
the contention of petitioner to be well taken in that the trial court and the
appellate court have no lawful basis in ordering petitioner to return and surrender
possession of said lots to private respondents. Said property being a public land
its disposition is subject to the provision of the Public Land Act, as amended.
Article 555 of the Civil Code provides as follows:
Art. 555. A possessor may lose his possession:
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(4) By the possession of another, subject to the provisions of Article 537,
if the new possession has lasted longer than one year.But the real right of
possession is not lost till after the lapse of ten years.
It is clear that the real right of possession of private respondents over the
property was lost or no longer exists after the lapse of 10 years that petitioner
had been in adverse possession thereof. Thus, the action for recover of
possession of said property filed by private respondents against petitioner must
fail. The Court, therefore, finds that the trial court and the Court of Appeals erred
in declaring the private respondents to be entitled to the possession thereof.
Much less can they pretend to be owners thereof. Said lots are part of the public
domain.

Teofisto Guingona, Jr., Antonio Martin, and Teresita Santos vs. The City Fiscal of
Manila, Hon. Jose Flaminiano, Asst. City Fiscal Felizardo Lota and
Facts:
From March 1979 to March 1981, Clement David made several investments with
the National Savings and Loan Association. On March 21, 1981, the bank was
placed under receivership by the Bangko Sentral. Upon Davids request,
petitioners Guingona and Martin issued a joint promissory note, absorbing the
obligations of the bank. On July 17, 1981, they divided the indebtedness. David
filed a complaint for estafa and violation of Central Bank Circular No. 364 and
related regulations regarding foreign exchange transactions before the Office of
the City Fiscal of Manila. Petitioners filed the herein petition for prohibition and
injunction with a prayer for immediate issuance of restraining order and/or writ of
preliminary injunction to enjoin the public respondents to proceed with the
preliminary investigation on the ground that the petitioners obligation is civil in
nature.
Issue:
(1) Whether the contract between NSLA and David is a contract of depositor a
contract of loan, which answer determines whether the City Fiscal has the
jurisdiction to file a case for estafa
(2) Whether there was a violation of Central Bank Circular No. 364
Held:
(1) When private respondent David invested his money on nine. and savings
deposits with the aforesaid bank, the contract that was perfected was a contract
of simple loan or mutuum and not a contract of deposit. Hence, the relationship
between the private respondent and the Nation Savings and Loan Association is
that of creditor and debtor; consequently, the ownership of the amount
deposited was transmitted to the Bank upon the perfection of the contract and it
can make use of the amount deposited for its banking operations, such as to pay
interests on deposits and to pay withdrawals. While the Bank has the obligation
to return theamount deposited, it has, however, no obligation to return or deliver
the same money that was deposited. And, the failure of the Bank to return the
amount deposited will not constitute estafa through misappropriation punishable
under Article 315, par. l(b) of the Revised Penal Code, but it will only give rise to
civil liability over which the public respondents have no jurisdiction.
But even granting that the failure of the bank to pay the time and savings
deposits of private respondent David would constitute a violation of paragraph
1(b) of Article 315 of the Revised Penal Code, nevertheless any incipient criminal
liability was deemed avoided, because when the aforesaid bank was placed under
receivership by the Central Bank, petitioners Guingona and Martin assumed the
obligation of the bank to private respondent David, thereby resulting in the
novation of the original contractual obligation arising from deposit into a
contract of loan and converting the original trust relation between the bank and
private respondent David into an ordinary debtor-creditor relation between the
petitioners and private respondent. Consequently, the failure of the bank or
petitioners Guingona and Martin to pay the deposits of private respondent would
not constitute a breach of trust but would merely be a failure to pay the
obligation as a debtor. Moreover, while it is true that novation does not
extinguish criminal liability, it may however, prevent the rise of criminal liability as
long as it occurs prior to the filing of the criminal information in court. In the case
at bar, there is no dispute that petitioners Guingona and Martin executed a
promissory note on June 17, 1981 assuming the obligation of the bank to private
respondent David; while the criminal complaint for estafa was filed on December
23, 1981 with the Office of the City Fiscal. Hence, it is clear that novation occurred
long before the filing of the criminal complaint with the Office of the City Fiscal.
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Consequently, as aforestated, any incipient criminal liability would be avoided but
there will still be a civil liability on the part of petitioners Guingona and Martin to
pay the assumed obligation.
(2) Petitioner Guingona merely accommodated the request of the Nation Savings
and loan Association in order to clear the bank draft through his dollar account
because the bank did not have a dollar account. Immediately after the bank draft
was cleared, petitioner Guingona authorized Nation Savings and Loan
Association to withdraw the same in order to be utilized by the bank for its
operations. It is safe to assume that the U.S. dollars were converted first into
Philippine pesos before they were accepted and deposited in Nation Savings and
Loan Association, because the bank is presumed to have followed the ordinary
course of the business which is to accept deposits in Philippine currency only, and
that the transaction was regular and fair, in the absence of a clear and convincing
evidence to the contrary.
In conclusion, considering that the liability of the petitioners is purely civil in
nature and that there is no clear showing that they engaged in foreign exchange
transactions, We hold that the public respondents acted without jurisdiction
when they investigated the charges against the petitioners. Consequently, public
respondents should be restrained from further proceeding with the criminal case
for to allow the case to continue, even if the petitioners could have appealed to
the Ministry of Justice, would work great injustice to petitioners and would render
meaningless the proper administration of justice.


Republic of the Philippines vs. Jose Bagtas, Felicidad Bagtas, administratrix of the
intestate estate left by Jose Bagtas
Facts:
On May 8, 1948, Jose Bagtas borrowed from the Bureau of Animal Industry 3 bulls
for 1 year for breeding purposes, subject to breeding fee for 10% of the book
value of the bulls. Upon the expiration of the contract, Bagtas asked for a renewal
for another year. The renewal granted was only for 1 bull. Bagtas offered to buy
the bulls at book value less depreciation, but the Bureau told him that he should
either return the bulls or pay for their book value. Bagtas failed to pay the book
value, and so the Republic commenced an action with the CFI Manila to order the
return of the bulls of the payment of book value. Felicidad Bagtas, the surviving
spouse and administratrix of the decedents estate, stated that the 2 bulls have
already been returned in 1952, and that the remaining one died of gunshot
during a Huk raid. As regards the two bulls, is was proven that they were returned
and thus, there is no more obligation on the part of the appellant. As to the bull
not returned, Felicidad contends that the obligation is extinguished since the
contract is that of a commodatum and that the loss through fortuitous event
should be borne by the owner.
Issue:
Whether, depending on the nature of the contract, the respondent is liable for the
death of the bull
Held:
A contract of commodatum is essentially gratuitous. If the breeding fee be
considered a compensation, then the contract would be a lease of the bull. Under
article 1671 of the Civil Code the lessee would be subject to the responsibilities of
a possessor in bad faith, because she had continued possession of the bull after
the expiry of the contract. And even if the contract be commodatum, still the
appellant is liable, because article 1942 of the Civil Code provides that a bailee in
a contract of commodatum
. . . is liable for loss of the things, even if it should be through a fortuitous event:
(2) If he keeps it longer than the period stipulated . . .
(3) If the thing loaned has been delivered with appraisal of its value, unless there
is a stipulation exempting the bailee from responsibility in case of a fortuitous
event;
The loan of one bull was renewed for another period of one year to end on 8 May
1950. But the appellant kept and used the bull until November 1953 when during
a Huk raid it was killed by stray bullets. Furthermore, when lent and delivered to
the deceased husband of the appellant the bulls had each an appraised book
value. It was not stipulated that in case of loss of the bull due to fortuitous event
the late husband of the appellant would be exempt from liability.
Special proceedings for the administration and settlement of the estate of the
deceased Jose V. Bagtas having been instituted in the Court of First Instance of
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Rizal (Q-200), the money judgment rendered in favor of the appellee cannot be
enforced by means of a writ of execution but must be presented to the probate
court for payment by the appellant, the administratrix appointed by the court.

Palileo v. Cosio
G.R. No. L-7667, November 28, 1955
FACTS: Plaintiff obtained from defendant a loan in the sum of P12,000.
To secure the payment of the aforesaid loan, defendant required plaintiff to sign
a document known as Conditional Sale of Residential Building, purporting to
convey to defendant, with right to repurchase, a two-story building of strong
materials belonging to plaintiff. This document did not express the true intention
of the parties which was merely to place said property as security for the payment
of the loan.

After the execution of the aforesaid document, defendant insured the building
against fire for the sum of P15,000, the insurance policy having been issued in the
name of defendant. The building was partly destroyed by fire and, after proper
demand, defendant collected from the insurance company an indemnity of
P13,107.00. Plaintiff demanded from defendant that she be credited with the
necessary amount to pay her obligation out of the insurance proceeds but
defendant refused to do so.
ISSUE: WON a mortgagor is entitled to the insurance proceeds of the mortgaged
property independently insured by the mortgagee? What is the effect of the
insurance?
HELD: NO. The rule is that where a mortgagee, independently of the
mortgagor, insures the mortgaged property in his own name and for his own
interest, he is entitled to the insurance proceeds in case of loss, but in such case,
he is not allowed to retain his claim against the mortgagor, but is passed by
subrogation to the insurer to the extent of the money paid. (Vance on
Insurance, 2d ed., p. 654) Or, stated in another way, the mortgagee may insure
his interest in the property independently of the mortgagor. In that event,
upon the destruction of the property the insurance money paid to the
mortgagee will not inure to the benefit of the mortgagor, and the amount due
under the mortgage debt remains unchanged. The mortgagee, however, is not
allowed to retain his claim against the mortgagor, but it passes by subrogation
to the insurer, to the extent of the insurance money paid.