#22 HEIRS OF POLICRONIO M. URETA vs. HEIRS OF LIBERATO M.

URETA

Facts: Alfonso was financially well-off during his lifetime. He has 14 children. He owned several fishpens, a
fishpond, a sari-sari store, a passenger jeep, and was engaged in the buying and selling of copra. In order to reduce
inheritance tax Alfonso made it appear that he sold some of his lands to his chil-dren. Accordingly, Alfonso
executed four (4) Deeds of Sale covering several parcels of land in favor of Policronio, Liberato, Prudencia, and his
common-law wife, Valeriana Dela Cruz. The Deed of Sale executed on October 25, 1969, in favor of Policronio,
covered six parcels of land, which are the properties in dispute in this case. Since the sales were only made for
taxation pur-poses and no monetary consideration was given, Alfonso continued to own, possess and enjoy the lands
and their produce. On April 19, 1989, Alfonso's heirs executed a Deed of ExtraJudicial Partition, which included all
the lands that were covered by the four (4) deeds of sale that were previously executed by Alfonso for taxation
purposes. Conrado, Policronio's eldest son, representing the Heirs of Policronio, signed the Deed of Extra-Judicial
Partition in behalf of his co-heirs. After their father's death, the Heirs of Policronio found tax declarations in his
name covering the six parcels of land. On June 15, 1995, they obtained a copy of the Deed of Sale executed on
October 25, 1969 by Alfonso in favor of Policronio. Believing that the six parcels of land belonged to their late
father, and as such, excluded from the Deed of Extra Judicial Partition, the Heirs of Policronio sought to amicably
settle the matter with the Heirs of Alfonso. Earnest efforts proving futile, the Heirs of Policronio filed a Complaint
for Declaration of Ownership, Recovery of Possession, Annulment of Documents, Partition, and Dam-ages against
the Heirs of Alfonso before the RTC on November 17, 1995

Issue:

1. Whether or not the Deed of Sale was valid;

2. Whether or not the Deed of Extra-Judicial Partition was valid

Ruling:

The Deed of Sale was void because it is simulated as the parties did not intend to be legally bound by it. As such, it
produced no legal effects and did not alter the juridical situation of the parties. It is only made to avoid tax purposes.
The CA also noted that Alfonso continued to exercise all the rights of an owner even after the execution of the Deed
of Sale, as it was undisputed that he remained in possession of the subject parcels of land and enjoyed their produce
until his death. Two veritable legal presumptions bear on the validity of the Deed of Sale: (1) that there was
sufficient consideration for the contract; and (2) that it was the result of a fair and regular private transaction. If
shown to hold, these presumptions infer prima facie the transaction's validity, except that it must yield to the
evidence adduced. 2) It has been held in several cases that partition among heirs is not legally deemed a conveyance
of real property resulting in change of ownership. It is not a transfer of property from one to the other, but rather, it
is a confirmation or ratification of title or right of property that an heir is renouncing in favor of another heir who
accepts and receives the inheritance. It is merely a designation and segregation of that part which belongs to each
heir. The Deed of Extra-Judicial Partition cannot, therefore, be considered as an act of strict dominion. Hence, a
special power of attorney is not necessary. In fact, as between the parties, even an oral partition by the heirs is valid
if no creditors are affected. The requirement of a written memorandum under the statute of frauds does not apply to
partitions effected by the heirs where no creditors are involved considering that such transaction is not a conveyance
of property resulting in change of ownership but merely a designation and segregation of that part which belongs to
each heir.
#23. LILLIAN N. MERCADO, CYNTHIA M. FEKARIS, and JULIAN MERCADO, JR., represented by their Attorney-In-
Fact, ALFREDO M. PEREZ, Petitioners, vs. ALLIED BANKING CORPOR ATION, Respondent. G.R. No. 171460 July 24,
2007

Facts:

Perla executed a Special Power of Attorney (SPA) in favor of her husband, Julian D. Mercado (Julian) over several
pieces of real property registered under her name, authorizing the later to perform the following acts: 1. To act in my
behalf, to sell, alienate, mortgage, lease and deal otherwise over the different parcels of land described hereinafter x
x x 2. To sign for and in my behalf any act of strict do-minion or ownership any sale, disposition, mortgage, lease or
any other transactions including quit-claims, waiver and relinquishment of rights x x x 3. To exercise any or all acts
of strict dominion or ownership over the above-mentioned properties, rights and interest therein. On the strength of
the aforesaid SPA, Julian obtained a loan from the respondent. Still using the subject property as security, Julian
obtained an additional loan from the respondent. It appears, however, that there was no property identified in the
SPA and registered with the Registry of Deeds. What was identified in the SPA instead was the property different
from the one used as security for loan. Julian defaulted on the payment of his loan obligations. Thus, respondent
initiated extrajudicial foreclosure proceedings over the subject property which was subsequently sold at public
auction wherein the respondent was declared as the highest bidder. Petitioners initiated an action for the annulment
of REM constituted over the subject property on the ground that the same was not covered by the SPA and that the
said SPA, at the time the loan obligations were contracted, no longer had force and effect since it was previously
revoked by Perla. In the absence of authority to do so, the REM constituted by Julian over the subject property was
null and void; thus, petitioners likewise p rayed that the subsequent extra-judicial foreclosure proceedings and the
auction sale of the subject property be also nullified.

Issues:

(1) Whether or not there was a valid mortgage constituted over subject property.

(2) Whether or not there was a valid revocation of SPA.

(3) Construction of powers of attorney.

Ruling s:

(1) In the case at bar, it was Julian who obtained the loan obligations from respondent which he secured with
the mortgage of the subject property. The property mortgaged was owned by his wife, Perla, considered a
third party to the loan obligations between Julian and respondent. It was, thus, a situation recognized by the
last paragraph of Article 2085 of the Civil Code that third persons who are not parties to the principal
obligation may secure the latter by pledging or mortgaging their own property. There is no question
therefore that Julian was vested with the power to mortgage the pieces of property identified in the SPA,
 however, the subject property was not among those enumerated therein. Julian was not conferred by Perla
with the authority to mort-gage the subject property under the terms of the SPA, the real estate mortgages
Julian executed over the said property are there-fore unenforceable. (2) The said SPA was revoked by
virtue of a public instrument executed by Perla. To address respondent’s assertion that the said revocation
was unenforceable against it as a third party to the SPA and as one who relied on the same in good faith,
the rule is that an agency is extinguished, among others, by its revocation (Article 1999, New Civil Code of
the Philippines). The principal may revoke the agency at will, and compel the agent to return the document
evidencing the agency. Such revocation may be ex-press or implied (Article 1920, supra). (3) Rule of strict
construction- where the terms of the con-tract are clear as to leave no room for interpretation, resort to
circumstantial evidence to ascertain the true intent of the parties, is not countenanced. The law is that if the
terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal
meaning of its stipulation shall control. The clear terms of the contract should never be the subject matter of
interpretation. Equally relevant is the rule that a power of attorney must be strictly construed and pursued.
The instrument will be held to grant only those powers which are specified therein, an d the agent may
neither go beyond nor deviate from the power of attorney. Where powers and duties are specified and
defined in an instrument, all such powers an d duties are limited and are confined to those which are
specified and defined, and all other powers and duties are excluded. Qualification of the rule- this is but in
accord with the disinclination of courts to enlarge the authority granted beyond the powers expressly given
and those which incidentally flow or derive therefrom as being usual and reasonably necessary and proper
for the performance of such express powers.

#24 Sps. Torcuator v. Sps. Bernabe G.R. No. 134219, 8 June 2005
Facts:

The subject of this action is Lot 17, Block 5 of the Ayala Alabang Village, Muntinlupa, Metro Manila, The
lower court found that the above parcel of land was purchased by the Salvadors, from the developers of Ayala
Alabang subject to Conditions. The Salvadors sold the parcel of land to the Defendant. The Defendant, on the
other hand, without making any improvement, contracted to sell the parcel of land to the Plaintiff who thereafter
had the plans of their house prepared and offered to pay the Bernabes for the land upon delivery of the sale
contract. For one reason or another, the deed of sale was never consummated nor was payment on the said sale
ever effected. Subsequently, the Defendant sold the subject land to another. As a result, the Torcuators
commenced the instant action against the Bernabes and Salvadors for Specific Performance or Rescission with
Damages.

Issue:

Whether the Contract entered by the parties was a Contract to Sell?

Held:

Yes, The differences between a contract to sell and a contract of sale is that in a contract of sale, title passes to
the buyer upon delivery of the thing sold, while in a contract to sell, ownership is reserved in the seller and is
not to pass until the full payment of the purchase price is made. In the first case, non-payment of the price is a
negative resolutory condition; in the second case, full payment is a positive suspensive condition. Being
contraries, their effect in law cannot be identical. In the first case, the vendor has lost and cannot recover the
ownership of the land sold until and unless the contract of sale is itself resolved and set aside. In the second
case, however, the title remains in the vendor if the vendee does not comply with the condition precedent of
making payment at the time specified in the contract.

#25. GENARO CORDIAL, vs. DAVID MIRANDA December 14, 2000

348 SCRA 258

FACTS:

David Miranda, a businessman from Angeles City, was engaged in rattan business. Gener Buelva was the
supplier of David but the former met an accident and died. Genero Cordial and Miranda met through Buelva’s
widow, Cecil-la. They agreed that Cordial will be his supplier of rattan poles. Cordial shipped rattan poles as to
the agreed number of pieces and sizes however Miranda refused to pay the cost of the rattan poles delivered.
Miranda alleged that there exist no privacy of contract between Miranda and Cordial. Cordial filed a complaint
against Miranda. The RTC rendered its decision in favor of the petitioner. The CA reversed the decision of the
RTC.

ISSUE:

Whether or not Statute of Frauds applies in this case.

RULING:

No, the CA and respondent Miranda stress the absence of a “written memorandum of the alleged contract
between the parties”. Respondent implicitly argues that the alleged contract is unenforceable under the Statute
of Frauds however, the statute of frauds applies only to executor and not to completed, executed, or partially
executed contracts. Thus, were one party has performed one’s obligation, oral evidence will be admitted to
prove the agreement. In the present case, it has already been established that petitioner had delivered the rattan
poles to respondent. The contract was partially executed; the Statute of Frauds does not apply.

#26. THE MUNICIPALITY OF HAGONOY BULACAN vs. HON. SIMEON P. DUMDUM

G.R. No. 168289, March 22, 2010

FACTS:
The case stems from a Complaint filed by herein private respondent Emily Rose Go Ko Lim Chao against
herein petitioners, the Municipality of Hagonoy, Bulacan and its chief executive, Felix V. Ople (Ople) for
collection of a sum of money and damages. It was alleged that sometime in the middle of the year 2000,
respondent, doing business as KD Surplus and as such engaged in buying and selling surplus trucks, heavy
equipment, machinery, spare parts and related supplies, was contacted by petitioner Ople. Respondent had
entered into an agreement with petitioner municipality through Ople for the delivery of motor vehicles, which
supposedly were needed to carry out certain developmental undertakings in the municipality. Respondent
claimed that because of Ople’s earnest representation that funds had already been allocated for the project, she
agreed to deliver from her principal place of business in Cebu City twenty-one motor vehicles whose value
totaled P5,820,000.00. To prove this, she attached to the complaint copies of the bills of lading showing that the
items were consigned, delivered to and received by petitioner municipality on different dates. However, despite
having made several deliveries, Ople allegedly did not heed respondent’s claim for payment. As of the filing of
the complaint, the total obligation of petitioner had already totaled P10,026,060.13 exclusive of penalties and
dam-ages. Thus, respondent prayed for full payment of the said amount, with interest at not less than 2% per
month, plus P500,000.00 as dam-ages for business losses, P500,000.00 as exemplary damages, attorney’s fees
of P100,000.00 and the costs of the suit. Then, the trial court issued an Order granting respondent’s prayer for a
writ of preliminary attachment conditioned upon the posting of a bond equivalent to the amount of the claim.
On March 20, 2003, the trial court issued the Writ of Preliminary Attachment directing the sheri ff "to attach the
estate, real and personal properties" of petitioners. Petitioners also filed a Motion to Dissolve and/or Discharge
the Writ of Preliminary Attachment already issued, invoking immunity of the state from suit, unenforceability
of the contract, and failure to substantiate the allegation of fraud. The Court however denied such Motion.

ISSUE:

Whether or not the Writ of Preliminary Attachment must be discharged

RULING:

Yes. The general rule spelled out in Section 3, Article XVI of the Constitution is that the state and its political
subdivisions may not be sued without their consent. Otherwise put, they are open to suit but only when they
consent to it. Consent is implied when the government enters into a business contract, as it then descends to the
level of the other contracting party; or it may be embodied in a general or special law such as that found in
Book I, Title I, Chapter 2, Section 22 of the Local Government Code of 1991, which vests local government
units with certain corporate powers —one of them is the power to sue and be sued. Be that as it may, a
difference lies between suability and liability. The suability of the state is conceded and by which liability is
ascertained judicially, the state is at liberty to determine for itself whether to satisfy the judgment or not.
Execution may not issue upon such judgment, because statutes waiving non-suability do not authorize the
seizure of property to satisfy judgments recovered from the action. These statutes only convey an implication
that the legislature will recognize such judgment as final and make provisions for its full satisfaction. Thus,
where consent to be sued is given by general or special law, the implication thereof is limited only to the
resultant verdict on the action before execution of the judgment. The universal rule that where the State gives its
consent to be sued by private parties either by general or special law, it may limit claimant’s action "only up to
the completion of proceedings anterior to the stage of execution" and that the power of the Courts ends when
the judgment is rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of
public funds must be covered by the corresponding appropriations as required by law. The functions and public
services rendered by the State cannot be al-lowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects. With this in mind, the Court holds that the writ of preliminary
attachment must be dissolved and, indeed, it must not have been issued in the very first place. While there is
merit in private respondent’s position that she, by affidavit, was able to substantiate the allegation of fraud in
the same way that the fraud attributable to petitioners was sufficiently alleged in the com-plaint and, hence, the
issuance of the writ would have been justified. Still, the writ of attachment in this case would only prove to be
useless and un-necessary under the premises, since the property of the municipality may not, in the event that
respondent’s claim is validated, be subjected to writs of execution and garnishment — unless, of course, there
has been a corresponding appropriation provided by law