RODOLFO LAYGO and WILLIE LAYGO, Petitioners, vs.

MUNICIPAL MAYOR
OF SOLANO, NUEVA VIZCAYA, Respondent
G.R. No. 188448 (January 11, 2017)
Third Division

Justice Jardeleza

I. NATURE OF THE ACTION: Petition for Mandamus

II. FACTS:

After being asked to vacate the stalls, Aniza Bandrang informed then
Mayor Santiago O. Dickson and the Sangguniang Bayan of the illegal sublease
she entered into with Rodolfo and Willie Laygo over 4 public market stalls which
the latter leased from the Municipality. Bandrang requested for the cancellation of
the lease contract between the Municipality and the Laygos.
The Sanggunian informed Mayor Dickson that Resolution No. 183-2004
authorizes the Mayor to enforce the provision against subleasing of stalls. In
response, Mayor Dickson averred that the stalls were constructed under a Build-
Operate-Transfer (BOT) scheme, which meant that the petitioners had the right
to keep their stalls until the agreement was satisfied.

Eventually, Bandrang filed a Petition for Mandamus alleging that despite

already being aware of the violations, Mayor Dickson still refused to enforce the
provisions of the lease contracts against subleasing. Hence, such inaction
constitutes as an unlawful neglect in the performance of his public duty. In his
Answer, Mayor Dickson claimed that under the principle of in pari delicto,
Bandrang had no right to seek remedy with the court as she was guilty herself in
leasing the market stalls. He likewise asserted that the subject of
the mandamus was not proper as it entailed an act which was purely
discretionary on his part. On the other hand, the Laygos maintained that the
prohibition on subleasing would not apply because the contract between the
Municipality and their mother, Clarita, was one under a BOT scheme. RTC ruled
in favor of Bandrang, which CA affirmed.

III. ISSUE: Whether or not the contract of the Laygos with the municipality is one
of lease.

IV. RULING:

Yes. Although the contract of the Municipality with Clarita, was converted
into a BOT agreement for a time due to the fire that razed the public market, she
re-occupied the stalls under a lease contract with the Municipality. In fact, in his
2007 Notice, the Municipal Treasurer reminded the Laygos of their delinquent
stall rentals. If the stalls were still under a BOT scheme, the Municipal Treasurer
could not have assessed petitioners of any delinquency.

However, Mandamus is not proper because the privilege of operating a

market stall is under the discretionary power of the government. Mandamus is
applicable when the act sought for is mandated by the law to be done by the
person, corporation or government agency. As it was, Mayor Dickson did act on
the matter before him. He exercised his discretion by choosing not to cancel the
contract on the ground of pari delicto. The complaint does not even allege that in
deciding this way, Mayor Dickson committed grave abuse of discretion, manifest
injustice, or palpable excess of authority.
 PRUDENTIAL BANK (now BANK OF THE PHILIPPINE
ISLANDS), Petitioner vs. RONALD RAPANOT and HOUSING & LAND USE
REGULATORY BOARD, Respondents
G.R. No. 191636 (January 16, 2017)
First Division

Justice Caguioa

I. NATURE OF THE ACTION: Cancellation of Mortgage

II. FACTS:

Golden Dragon is the developer of Wack-Wack Twin Towers Condominium

wherein Ronald Rapanot paid a reservation fee for Unit 2308-B2. Prudential
Bank extended a loan to Golden Dragon secured by a Mortgage Agreement over
several condominium units including that of Rapanot’s. Subsequently, Rapanot
and Golden Dragon entered into a Contract to Sell and Rapanot completed
payment of the full purchase price. Golden Dragon then executed a Deed of
Absolute Sale in favor of Rapanot.

Thereafter, Rapanot made several verbal demands for the delivery of his
unit. Thus, Golden Dragon requested the bank for a substitution of collateral,
replacing Unit 2308-B2 with another unit. However, the Bank denied Golden
Dragon's request due to the latter's unpaid accounts. For non-compliance,
Rapanot filed a Complaint with HLURB. The Bank argued that as a mortgagee in
good faith and for value, it must be accorded protection and should not be held
liable. Still, HLURB ruled that the mortgage over Unit 2308-B2 is null and void.
The Office of the President and the CA affirmed HLURB’s decision.

III. ISSUE: Whether or not the Bank is a mortgagee in good faith.

IV. RULING:

No. Under Section 18 of PD 957, no mortgage on any condominium unit

may be constituted by a developer without prior written approval of the National
Housing Authority, now HLURB. PD 957 further requires developers to notify
buyers of the loan value of their corresponding mortgaged properties before the
proceeds of the secured loan are released. Thus, the Mortgage Agreement
cannot have the effect of curtailing Rapanot's right as buyer of Unit 2308-B2,
precisely because of the Bank's failure to comply with PD 957.

Moreover, the Bank cannot be considered a mortgagee in good faith. It

failed to ascertain whether Golden Dragon secured HLURB's prior written
approval as required by PD 957 before it accepted Golden Dragon's properties
as collateral. It also failed to ascertain whether any of the properties offered as
collateral already had corresponding buyers at the time the Mortgage Agreement
was executed.

The highest degree of diligence is expected, and high standards of

integrity and performance are even required, of banking institutions. The Bank
should not have relied only on the representation of the mortgagor that the latter
had secured all requisite permits and should have required the submission of
documents and verified their authenticity through its own independent effort.
Having been negligent in finding out what respondent's rights were over the lot,
petitioner must be deemed to possess constructive knowledge of those rights.
 MAERSK FILIPINAS CREWING, INC., and MAERSK CO. IOM
LTD., Petitioners vs. JOSELITO R. RAMOS, Respondent
G.R. No. 184256 (January 18, 2017)
First Division

Chief Justice Serreno

I. NATURE OF THE ACTION: Complaint for total permanent disability, illness

allowance, moral and exemplary damages and attorney's fees with the NLRC.

II. FACTS:

Maersk employed Joselito Ramos as able-seaman of M/V NKOSSA II.

While on board the vessel, Ramos’ left eye was hit by a screw, thus he was
repatriated to Manila and was referred to the company-designated physician for a
check-up. Ramos was examined by Dr. Anthony Martin S. Dolor at the Medical
Center Manila and was diagnosed with "corneal scar and cystic macula, left,
post-traumatic." Then, he underwent a "repair of corneal perforation and removal
of foreign body to anterior chamber, left eye." Thereafter, he underwent several
examinations and consultations with several doctors.

Since Ramos’ demand for disability benefits was rejected by Maersk, he

then filed with the NLRC a complaint for total permanent disability, illness
allowance, moral and exemplary damages and attorney's fees. Meanwhile, in his
medical report Dr. Dolor stated that although Ramos’ left eye cannot be improved
by medical treatment, he can return to duty and is still fit to work.

Subsequently, the Labor Arbiter rendered a Decision dismissing the

Complaint for being prematurely filed. On appeal, NLRC set aside the decision of
the Labor Arbiter and ordered Maersk to pay Ramos disability compensation
benefit, moral and exemplary damages and attorney's fees. The CA affirmed all
the findings of the NLRC but deleted the award of moral and exemplary
damages, because there was no "sufficient factual legal basis for the awards."

III. ISSUE: Whether or not Ramos suffers from permanent partial disability and is
entitled to disability compensation and attorney’s fees.

IV. RULING:

Yes. Under Section 2, Rule VII of the Amended Rules on Employees'

Compensation, “a disability is partial and permanent if as a result of the injury or
sickness the employee suffers a permanent partial loss of the use of any part of
his body.” In this case, while Maersk's own company-designated physician
certified that Ramos was still fit to work, the former admitted that the latter’s left
eye could no longer be improved by medical treatment. Hence, he is entitled to
disability compensation.

With respect to the award of attorney's fees, SC ruled in the

affirmative pursuant to Article 2208(2) of the Civil Code, which justifies the award
of attorney's fees in actions for indemnity under workmen's compensation and
employer liability laws.
 RUTCHER T. DAGASDAS, Petitioner vs. GRAND PLACEMENT
AND GENERAL SERVICES, Respondent
G.R. No. 205727 (January 18, 2017)
First Division

Justice Del Castillo

I. NATURE OF THE ACTION: Illegal Dismissal

II. FACTS:

Rutcher Dagasdas was hired as Network Technician by Grand Placement

(GP) for Saudi Arabia. His employment contract was duly approved by the
POEA. Upon his arrival in Saudi, he signed a new employment contract which
stipulated his position as Superintendent; placed him under a 3-month
probationary period; and that the new contract shall cancel all prior contracts.
Dagasdas started working and was given tasks suited for a Mechanical Engineer.
He raised his concern to his supervisor, however, before his case was
investigated, his employment was severed.

After repatriation, Dagasdas filed a case for illegal dismissal against GP.
The Labor Arbiter dismissed the case, ruling that when Dagasdas signed the new
contract in Saudi, he accepted its stipulations. NLRC reversed, but CA reinstated
the ruling of the Labor Arbiter.

III. ISSUE: Whether or not the new contract signed in Saudi superseded the
original contract.

IV. RULING:

No. The new contract, which served as basis for dismissing

Dagasdas, is void. Under the Labor Code, unless the employment contract of
an OFW is processed through the POEA, the same does not bind the concerned
OFW, as the state has no means of determining the suitability of foreign laws to
our overseas workers.

The new contract also breached Dagasdas original contract as it was

entered into even before the expiration of the latter. Therefore, it cannot
supersede the original contract; its terms and conditions are void.
ILOILO JAR CORPORATION, Petitioner vs. COMGLASCO CORPORATION /
AGUILA GLASS, Respondent
G.R. No. 219509 (January 18, 2017)
Second Division

Justice Mendoza

I. NATURE OF THE ACTION: Breach of Contract and Damages

II. FACTS:

Iloilo Jar Corporation (IJC), as lessor, and Comglasco, as lessee, entered

into a lease contract over a portion of a warehouse for 3 years. After a year,
Comglasco requested pre-termination of the lease, but was rejected as such pre-
termination was not stipulated in the contract. Despite denial, Comglasco
removed all its stocks and equipment, as notwithstanding several demands, no
longer paid rentals.

IJC filed an action for Breach of Contract and Damages. Comglasco

argued that under Art. 1267 of the Civil Code, it was released from its
obligation under the lease contract, viz:

“Art. 1267 - When the services has become difficult as to be manifestly

beyond the contemplation of the parties, the obligor may also be released
therefrom, in whole or in part.”

It explained that the consideration had become so difficult due to the

global and regional economic crisis.

III. ISSUE: Whether or not Comglasco may be relieved from its obligation
because of financial difficulties.

IV. RULING:

No. Art. 1267 applies only to “obligations to do” and not to “obligations to
give”. The obligation to pay rentals or deliver the thing in a contract of lease falls
within the prestation “to give”. A financial problem is not an absolute change of
circumstances that equity demands assistance for the debtor. Financial struggles
due to economic crisis is not enough reason for the courts to grant reprieve from
contractual obligations.
 SPRING HOMES SUBDIVISION CO., INC., SPOUSES PEDRO L. LUMBRES
and REBECCA T. ROARING, Petitioners vs. SPOUSES PEDRO TABLADA,
JR. and ZENAIDA TABLADA, Respondents
G.R. No. 200009 (January 23, 2017)
Second Division

Justice Peralta

I. NATURE OF THE ACTION: Nullification of Title, Reconveyance and Damages

II. FACTS:

Spouses Pedro and Rebecca Lumbres entered into a Joint Venture

Agreement with Spring Homes Subdivision for the development of several
parcels of land. Spring Homes then entered into a Contract to Sell with Spouses
Pedro and Zenaida Tablada for the sale of a parcel of land. Spouses Lumbres
filed a complaint for Sum of Money against Spring Homes for its alleged failure to
comply with the terms of the Joint Venture Agreement. Unaware of the pending
action, Spouses Tablada began constructing their house and occupied the same.
Afterward, Spring Homes executed a Deed of Absolute Sale in favor of the
Spouses Tablada, who paid Php 179,500 (more than the stated price of Php
157,500) as total purchase price. The title over the subject property, however,
remained with Spring Homes for its failure to cause the cancellation of the TCT
and the issuance of a new one.

Subsequently, Spouses Tablada discovered that the subject property was

mortgaged as a security for a loan with Premiere Development Bank, with Spring
Homes as mortgagor. Meanwhile, Spouses Lumbres and Spring Homes entered
into a Compromise Agreement as to the Sum of Money case, wherein Spring
Homes conveyed the subject property, as well as several others, to the Spouses
Lumbres. By virtue of said agreement, Spouses Lumbres were authorized to
collect Spring Homes' account receivables arising from the conditional sales of
several properties, as well as to cancel said sales in the event of default in the
payment. In the exercise of such power, Spouses Lumbres sent demand letters
to Spouses Tablada for the payment of an alleged outstanding balance of the
purchase price amounting to Php 230,000.00. When no payment was received,
Spouses Lumbres caused the cancellation of the Contract to Sell previously
executed by Spring Homes in favor of Spouses Tablada. Thereafter, Spouses
Lumbres and Spring Homes executed a Deed of Absolute Sale over the subject
property, and as a result, a new title was issued in the name of the Spouses
Lumbres.

Consequently, Spouses Tablada filed a complaint for Nullification of Title,

Reconveyance and Damages against Spring Homes and Spouses Lumbres
praying for the nullification of the second Deed of Absolute Sale executed in favor
of the Spouses Lumbres, as well as the title issued as a consequence thereof.
RTC rendered its Decision dismissing Spouses Tablada's action. CA reversed the
RTC Decision finding that at the time when Spouses Tablada entered into a
contract of sale with Spring Homes, the title over the subject property was
already registered in the name of Spring Homes. Thus, the Deed of Absolute
Sale between them was valid and with sufficient consideration.

III. ISSUE: Whether or not the second Deed of Sale between Spouses Lumbres
and Spring Homes is null and void.
IV: RULING:

Yes. The issue involves what appears to be a double sale. Spring Homes
executed a Deed of Absolute Sale in favor of Spouses Tablada in 1996. Then, in
2000, Spouses Lumbres and Spring Homes executed a Deed of Absolute Sale
over the same property. Spouses Lumbres argued that out of the Php 409,500
purchase price, Spouses Tablada merely paid Php 179,500, but the Court
disagrees. If the total selling price was indeed Php 409,500, said amount should
have appeared as the consideration in the 1996 deed of absolute sale. However,
only Php 157,500 was stated.

Moreover, under Art. 1544 of the Civil Code: “If the same thing should
have been sold to different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good faith, if it should be
movable property.” Here, the first buyers, Spouses Tablada, were able to take
said property into possession but failed to register the same because of Spring
Homes' unjustified failure to deliver the owner's copy of the title. But while
Spouses Lumbres successfully caused the transfer of the title in their names, the
same was done in bad faith. At the time of the execution of their Compromise
Agreement, they were indisputably and reasonably informed that the subject lot
was previously sold to Spouses Tablada. They were also already aware that
Spouses Tablada had constructed a house and were in physical possession
thereof.

Knowledge gained by the second buyer of the first sale defeats his rights
even if he is first to register the second sale, since such knowledge taints his
prior registration with bad faith. In order for Spouses Lumbres to obtain priority
over Spouses Tablada, the law requires a continuing good faith and innocence or
lack of knowledge of the first sale that would enable their contract to ripen into full
ownership through prior registration. Clearly, Spouses Lumbres were in bad faith
the moment they entered into the second Deed of Absolute Sale and thereafter
registered the subject property in their names. Therefore, the Court cannot
consider them as the true and valid owners of the disputed property and permit
them to retain title thereto.
KABISIG REAL WEALTH DEV., INC. and FERNANDO C. TIO, Petitioners vs.
YOUNG BUILDERS CORPORATION, Respondent
G.R. No. 212375 (January 25, 2017)
Second Division

Justice Peralta

I. NATURE OF THE ACTION: Collection of Sum of Money

II. FACTS:

Kabisig Real Wealth Dev., Inc. through Ferdinand Tio, contracted the
services of Young Builders to supply labor, tools, equipment, and materials for
the renovation of its building. Young Builders finished the work and billed Kabisig
for Php 4,123,320.95. However, despite numerous demands, Kabisig failed to
pay. It contended that no written contract was ever entered into between the
parties, and it was never informed of the estimated cost of the renovation. Thus,
Young Builders filed an action for Collection of Sum of Money.

RTC ruled in favor of Young Builders. CA affirmed with modification,

deleting the award for actual damages and ordered payment of Php 2,400,000 as
temperate damages.

III. ISSUES:

1. Whether or not there was a perfected contract between the parties.

2. Whether or not Young Builders is entitled only to temperate damages, and
not to actual damages as claimed.

IV: RULING:

1. Yes. Under the Civil Code, a contract is a meeting of minds, with respect to
the other, to give something or to render some service. Article 1318 reads:
“There is no contract unless the following requisites (essential elements)
concur: (1) Consent o f the contracting parties; (2) Object certain which is the
subject matter o f the contract; and (3) Cause of the obligation which is
established. By law, a contract of sale, is perfected at the moment there is a
meeting of the minds upon the thing that is the object of the contract and
upon the price. Indeed, it is a consensual contract which is perfected by mere
consent.

Kabisig's claim as to the absence of a written contract does not hold

water. Art. 1356 of the Civil Code provides: “Contracts shall be obligatory in
whatever form they may have been entered into, provided all the essential
requisites for their validity are present.” Also, the Court notes that neither
Kabisig nor Tio had objected to the renovation work, until it was already time
to settle the bill.

2. Yes. CA aptly reduced the amount of damages awarded by the RTC. Under
Art. 2199 of the Civil Code, actual or compensatory damages are those
awarded in satisfaction of, or in recompense for, loss or injury sustained. For
an injured party to recover actual damages, however, he is required to prove
the actual amount of loss with reasonable degree of certainty premised upon
competent proof and on the best evidence available.
 Here, evidence reveals that Young Builders failed to submit any
competent proof of the specific amount of actual damages being claimed. The
documents submitted by Young Builders either do not bear the name of
Kabisig or Tio, their conformity, or signature, or do not indicate in any way that
the amount reflected on its face actually refers to the renovation project.

Notwithstanding the absence of sufficient proof, Young Builders still

deserves to be recompensed for actually completing the work. In the absence
of competent proof on the amount of actual damages, the courts allow the
party to receive temperate damages. Temperate or moderate damages,
which are more than nominal but less than compensatory damages, may be
recovered when the court finds that some pecuniary loss has been suffered
but its amount cannot, from the nature of the case, be proved with certainty.
The principle of quantum meruit justifies the payment o f the reasonable value
of the services rendered and should apply in the absence of an express
agreement on the fees.
 DELFIN C. GONZALEZ, JR., Petitioner vs. MAGDALENO M. PEÑA,
ALABANG COUNTRY CLUB, INC., and MS. ARSENIA VERA, Respondents
G.R. No. 214303 (January 30, 2017)
First Division

Chief Justice Serreno

I. NATURE OF THE ACTION: Restitution of Shares

II. FACTS:

RTC Baguio City adjudged Delfin Gonzales, Jr. liable to Magdaleno M.

Peña for the payment of the agency's fees and damages amounting to Php
28.5M. Gonzales appealed the Decision, while Peña moved for execution
pending appeal. The grant of that motion resulted in the sale to Peña of
Gonzales’ ACCI shares, which the latter was able to sell and transfer to Arsenia
Vera. Eventually, Supreme Court issued a Decision which vacated with finality
the Decision of RTC Baguio City. Considering that said Decision was completely
vacated and declared null and void, Supreme Court held that the concomitant
execution pending appeal was likewise null and without effect.

Thus, petitioner was entitled to the full restoration of their ownership and
possession of all properties that were executed pending appeal, such as the
subject shares. RTC refused to restore the actual ownership of the respective
club shares on the pretext that such restitution is impossible as these had
already been transferred to third parties.

III. ISSUE: Whether or not RTC should restore Gonzales the shares illegally
obtained by Peña.

IV: RULING:

Yes. Void transactions do not produce any legal or binding effect, and any
contract directly resulting from that illegality is likewise void and inexistent.
Therefore, Peña could not have been a valid transferee of the property. As a
consequence, his successor-in-interest, Vera, could not have validly acquired
those shares. Neither was RTC correct in its characterization of the actual
restitution of the ACCI shares to petitioner as "impossible." For the obligation to
be considered impossible under Article 1266 of the Civil Code, its physical or
legal impossibility must first be proven.

Here, RTC did not make any finding on whether or not it was physically
impossible to effect the actual restitution of the property. On the other hand,
petitioner correctly points out that since the shares are movable by nature, the
same can be transferred back to Gonzalez, Jr. by recording the transaction in the
stock and transfer book of the club.

As regards legal impossibility, the RTC appears to have jumped to the

conclusion that because of the perfected sale of the shares to Vera, petitioner
can no longer claim actual restitution of the property.
 UNITED ALLOY PHILIPPINES, SPOUSES DAVID and LUTEN
CHUA, Petitioners vs. UNITED COCONUT PLANTERS BANK, Respondent
G.R. No. 175949 (January 30, 2017)
Second Division

Justice Peralta

I. NATURE OF THE ACTION: Sum of Money with Prayer for Preliminary

Attachment

II. FACTS:

United Alloy Philippines (UNIALLOY) was granted a credit accommodation

by UCPB as evidenced by a Credit Agreement. Part of UNIALLOY's obligation
was secured by a Surety Agreement executed by UNIALLOY’s Chairman, Jakob
Van Der Sluis, President, David Chua and his spouse (Spouses Chua), and one
Yang Kim Eng (Yang). Six Promissory Notes, were later executed by UNIALLOY
in UCPB's favor.

UNIALLOY failed to pay its loan obligations. As a result, UCPB filed an

action for Sum of Money with Prayer for Preliminary Attachment with RTC Makati.
Consequently, UCPB also unilaterally rescinded its lease-purchase contract with
UNIALLOY. On the other hand, UNIALLOY filed against UCPB, UCPB Vice-
President Robert Chua and Van Der Sluis a complaint for Annulment and/or
Reformation of Contract with Damages with RTC CDO. UNIALLOY contended
that Van Der Sluis, in cahoots with UCPB Vice-President Robert Chua,
committed fraud, manipulation and misrepresentation to obtain the subject loan
for their own benefit. UCPB filed a Motion to Dismiss UNIALLOY's complaint on
the grounds of improper venue, forum shopping, litis pendentia, and harassment
suit, which was granted.

Thereafter, RTC CDO issued an Order of Execution directing UNIALLOY

to turn over to UCPB the property subject of their lease-purchase agreement.
UNIALLOY then filed a petition for certiorari and mandamus with CA questioning
said Orders, but was dismissed. Subsequently, RTC Makati rendered judgment in
the collection case in favor of UCPB, which CA affirmed.

III. ISSUE: Whether or not UNIAALOY, et. al. are liable to pay UCPB.

IV: RULING:

Yes. Petitioners do not deny their liability under the Surety Agreement. Art.
1159 of the Civil Code expressly provides that "obligations arising from
contracts have the force of law between the contracting parties and should
be complied with in good faith." The RTC as well as CA found nothing which
would justify or excuse petitioners from non-compliance with their obligations
under the contract they have entered into. Thus, it becomes apparent that
petitioners are merely attempting to evade or, at least, delay the inevitable
performance of their obligation to pay under the Surety Agreement and the
subject promissory notes which were executed in UCPB’s favor.