Dimas-San Juan v.

Belo

G.R. No. 243165

January 25, 2023

FACTS:

Petitioners Anita Dimas-San Juan, Reynan San Juan, Ryan San Juan, and Annalyn
San Juan obtained a loan from respondent Adoracion Z. Belo (Belo) in the amount of
P1,600,000.00. The Promissory Note stated that the sum of P1,600,000.00 is payable within six
months from 13 July 2010, without need of notice or demand, and with an interest rate of 4.75%
per month until full payment of the amount. To secure the loan, petitioners executed in favor of
Belo a Deed of Real Estate Mortgage 5 dated 13 July 2010 on their property covered by
Transfer Certificate of Title. As payment for the loan, petitioner Anita Dimas-San Juan issued in
favor of Belo a postdated check dated 6 March 2011 7 in the amount of P1,600,000.00 and two
additional postdated checks dated 12 December 2010 8 and 12 January 2011 9 for P76,000.00
each for the monthly interest. However, when the postdated checks were presented for payment
in March 2011, all the checks were dishonored for the reason "ACCOUNT CLOSED." Despite
the non-payment of the loan, Belo never initiated foreclosure proceedings over the mortgaged
property. Subsequently, Belo sent petitioners a notice to vacate the property and to surrender
possession thereof.

When petitioners refused to vacate the property, Belo filed on 06 February 2012 a Complaint for
Ejectment with Damages against petitioners. The complaint was filed before the Municipal Trial
Court (MTC) of Marilao, Bulacan and was docketed as Civil Case No.771. Petitioners filed
before the RTC of Malolos City a Complaint for "Annulment of Deed of Dacion En Pago Sale
against respondents Belo and the Register of Deeds. Petitioners alleged that Belo used the
dacion en pago sale, dated 11 October 2011, in the ejectment suit she filed against petitioners.
However, petitioners insisted that the dacion en pago sale is void since they already issued a
postdated check in the amount of P1,600,000.00 as full payment of the loan in accordance with
the Real Estate Mortgage Agreement dated 13 July 2010. Petitioners argued that under the
mortgage agreement, in case of default, mortgagee Belo may foreclose the property but that the
dacion en pago sale was never intended in the mortgage agreement. In the caes before the
Supreme Court, petitioners argue that they are entitled to the civil fruits of the property since
Belo is a possessor in bad faith because she was aware of the flaw in her title over the property
which was acquired through a dacion en pago sale.

ISSUE:

Whether or not the petitioners are entitled to the civil fruits of the subject property.
HELD:
No. Even if the Court considers the issue belatedly raised by petitioners, there is still
no merit in their claim that they are entitled to the civil fruits of the property since Belo cannot be
considered a possessor in bad faith. As argued by Belo, she obtained a title over the property
by virtue of the dacion en pago sale, which was declared valid by the RTC in its Decision dated
12 May 2017, albeit subsequently reversed by the CA. The Court also notes that in the
ejectment case filed by Belo against petitioners, the MTC's ruling in favor Belo was affirmed by
Branch 81, RTC of Malolos City. Moreover, in an Order 24 dated 27 June 2017, the RTC
(Branch 81) granted Belo's Motion for Execution of Judgment Pending Appeal, and ordered the
issuance of a writ of execution to implement the MTC Decision dated 26 October 2016 in the
ejectment case. Clearly, Belo's possession of the property was by virtue of the MTC and RTC
Decisions and Order, which negates petitioners' claim of possession in bad faith.

Singson v. Carpio
G.R. No. 238714 (August 30, 2023)

Facts:

The case revolves around a dispute over a 51.24-square meter parcel of land located at No. 22-
E Block 5, De los Santos Street, Magsaysay Village, Tondo, Manila, which includes a two-storey
residential house. The respondents, spouses Nar Christian Carpio and Cecilia Cao Carpio,
claimed ownership of the property through Transfer Certificate of Title (TCT) No. 286305, which
they acquired from Primitiva Cayanan Vda. De Caamic on February 16, 2007. They asserted
that they had been paying realty taxes on the property since the acquisition.

Prior to and after the sale, the petitioner, Annaliza C. Singson, and Enriquito C. Caamic (who
claimed to be Primitiva's son and heir) occupied the property. Following Primitiva's death on
July 21, 2007, Enriquito asserted his claim over the property, leading to a series of demands for
the petitioner and Enriquito to vacate the premises. When these demands were ignored, the
respondents filed a complaint for recovery of possession and ownership of the property, along
with claims for damages.

In her answer, the petitioner claimed to be Primitiva's grandniece and argued that the
transaction between Primitiva and the respondents was not a sale but an equitable mortgage,
asserting that Primitiva had no intention of relinquishing the property. The petitioner also alleged
that the transfer of the property to the respondents was fraudulent.

The Regional Trial Court (RTC) ruled in favor of the respondents, declaring them the lawful
owners of the property and ordering the petitioner to vacate. The RTC found that the document
titled "Bilihan ng Lupa" constituted a contract of sale with conventional redemption, which
allowed the respondents to register the title in their names. The petitioner appealed the
decision, arguing that the RTC erred in its interpretation of the "Bilihan ng Lupa."
The Court of Appeals (CA) affirmed the RTC's decision, stating that the "Bilihan ng Lupa" was
an equitable mortgage and that the right of redemption did not pass to the petitioner after
Primitiva's death. The petitioner subsequently filed a petition for review on certiorari to the
Supreme Court.

Legal Issues:

Whether the CA erred in affirming the RTC's ruling that the "Bilihan ng Lupa" was a perfected
contract of sale with conventional redemption.
Whether the respondents had established their ownership of the property and the right to
recover possession.
Whether the transfer of the property to the respondents constituted a pactum commissorium,
rendering the title void.
Arguments:

Petitioner’s Arguments:

The "Bilihan ng Lupa" should be interpreted as an equitable mortgage rather than a sale, as
Primitiva intended to retain ownership and merely sought financial assistance.
The respondents failed to prove their ownership and the validity of their title, as they did not
follow the proper procedure for foreclosure.
The transfer of the property constituted a pactum commissorium, which is prohibited under
Philippine law, thus rendering the title void.
Respondents’ Arguments:

The "Bilihan ng Lupa" was a valid contract of sale, and they had the right to register the title in
their names.
They had complied with all legal requirements to acquire the property and had been paying
taxes, which established their ownership.
The petitioner’s claims regarding the nature of the transaction were unfounded, and the Torrens
title issued in their favor was indefeasible.
Court’s Decision and Legal Reasoning:

The Supreme Court granted the petition, reversing the decisions of the CA and RTC. The Court
held that the respondents failed to prove their ownership of the property by preponderance of
evidence. The Court emphasized that the burden of proof lies with the party asserting
ownership, and the respondents did not adequately substantiate their claims.

The Court affirmed the CA's finding that the "Bilihan ng Lupa" was an equitable mortgage,
noting that the circumstances surrounding the transaction indicated that it was intended to
secure a loan rather than a sale. The Court reiterated that a deed of sale with a right to
repurchase is generally construed as an equitable mortgage, especially when the vendor
remains in possession of the property.
Furthermore, the Court ruled that the transfer of the property to the respondents constituted a
pactum commissorium, which is prohibited by law. The Court declared the title issued to the
respondents void and ordered the reinstatement of the title in the name of Primitiva, subject to
the respondents' right to foreclose the equitable mortgage.