Villanueva v. Domingo, G.R. No. 144274, September 20, 2004

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Villanueva v. Domingo

G.R. No. 144274, September 20, 2004

THIRD DIVISION, CORONA J. 

 

Registered owner rule; Liability of Registered Owner of Motor Vehicles 

We have consistently ruled that the registered owner of any vehicle is directly and primarily responsible to the public and third persons while it is being operated.

 

Priscilla R. Domingo was the registered owner of a silver Mitsubishi Lancer (Plate No. NDW 781), which was involved in a vehicular collision along South Superhighway while being driven by her son Leandro Luis R. Domingo. The other vehicle involved was a green Mitsubishi Lancer (Plate No. PHK 201), driven by Renato Ocfemia, who was drunk and unlicensed at the time. This vehicle was registered in the name of petitioner Nostradamus Villanueva, who claimed he had already swapped it with another vehicle and that the actual owner at the time was Albert Jaucian of Auto Palace Car Exchange. Villanueva contended that he was no longer liable since he no longer had possession or control of the vehicle, and Ocfemia was not his employee. The trial court and the Court of Appeals both found Villanueva liable, prompting the petition before the Supreme Court.

 

Whether the registered owner of a motor vehicle can be held liable for damages resulting from an accident even if the vehicle was already transferred to another person and operated without the registered owner's knowledge or consent.

Yes. The Supreme Court affirmed the ruling of the Court of Appeals and held that the registered owner is directly and primarily liable for damages caused by the operation of the vehicle, regardless of actual ownership or driver authorization. The Supreme Court have consistently ruled that the registered owner of any vehicle is directly and primarily responsible to the public and third persons while it is being operated. 

To allow a registered owner to escape liability by claiming that the driver was not authorized by the new (actual) owner results in the public detriment the law seeks to avoid. The main purpose of vehicle registration is the easy identification of the owner who can be held responsible for any accident, damage or injury caused by the vehicle... The protection that the law aims to extend... would become illusory were the registered owner given the opportunity to escape liability by disproving his ownership.

 

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Bank of the Philippine Islands v. LCL Capital, Inc. [G.R. Nos. 243396 & 243409, September 14, 2021]

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Bank of the Philippine Islands v. LCL Capital, Inc.

G.R. Nos. 243396 & 243409, [September 14, 2021]

FIRST DIVISION, LOPEZ, M.V

 

Foreclosure; Redemption price; Interest

 

Section 78 of the General Banking Act governs redemption price computation in cases where the mortgagee is a bank, which states that redemption price should include the principal loan amount, the stipulated interest rate, and foreclosure expenses.

 

 

In 1997, LCL Capital obtained a loan from Far East Bank & Trust Co. (FEBTC) secured by a real estate mortgage on two condominium units, with a 17% annual interest. When LCL failed to repay the loan, BPI, which had absorbed FEBTC, foreclosed on the properties and acquired them at a public auction. LCL contested the foreclosure, claiming it was premature and filed a case. The later court ruled that the consolidation of ownership by BPI was void, ordering the restoration of LCL's certificates of title, subject to the right of redemption. 

The parties now in disarray as to the proper computation of redemption price, particularly the interest rate to be applied (17% stipulated by the mortgage vs. 6% imposed by the court), the inclusion of real estate taxes in the redemption price. 

 

What should be the correct calculation of the redemption price in cases where the mortgagee is a bank? 

The Supreme Court ruled that in cases involving banking institutions like BPI, the computation of the redemption price should be based on Section 78 of the General Banking Act, and not the Rules of Court. As part of the redemption price, said law is explicit that the principal obligation shall earn interest at the rate specified in the mortgage contract. Thus, the Court affirms the imposition of interest rate at 17% per annum which the parties specified in the contract of loan and the mortgage deed.

Therefore, the redemption price shall consists of the principal obligation (P3,000,000.00) with the stipulated 17% interest rate, including foreclosure expenses, but excluding real estate taxes. Such real estate taxes must be paid by the party having actual possession and should not be included in the redemption price. The case was remanded to the trial court for an accurate computation of the redemption price based on these principles.

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RAMA V. SPOUSES NOGRA [G.R. No. 219556, September 14, 2021]

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RAMA V. SPOUSES NOGRA

 G.R. No. 219556 [September 14, 2021]

FIRST DIVISION, LOPEZ, M.V

 

Right of Redemption; 30-day written notice requirement 

The written notice of sale is mandatory. For the right of legal pre-emption or redemption to be exercised, written notice by the seller is indispensable for the 30-day redemption period to commence.

 

The case involves a disputed property, an undivided portion of Lot No. 6034-C-2-H-4, registered under the Heirs of Felix Rama. Ricardo Rama sold his one-fourth undivided share to Spouses Nogra in 2001, but other co-owners, including Hermelina Rama, claim they were not aware of this sale until 2007 when it was revealed during barangay conciliation proceedings. Ricardo admitted the sale, but the copy of the Deed of Absolute Sale was only given to Rama on September 26, 2007. Rama attempted to redeem the property, but her offer was rejected by Spouses Nogra claiming that the right to redeem had lapsed. 

Rama filed a Complaint for Annulment of Sale, Redemption, and Other Reliefs in 2007 and consigned the redemption price on October 16, 2007, asserting that a written notice was essential for the redemption period to start under Article 1623 of the New Civil Code.

 

Whether Hermelina validly exercised her redemption right by the filing of the complaint before the RTC on October 16, 2007.

 

YES. The 30-day written notice requirement under Article 1623 of the New Civil Code is mandatory for the commencement of the redemption period. The Court has upheld the principle that even if a co-owner has actual knowledge of the sale, the written notice is still indispensable. In this case, there is no evidence of sufficient knowledge of the sale before Hermelina's receipt of the Deed of Absolute Sale on September 26, 2007. Hermelina's exercise of her redemption right by filing the complaint on October 16, 2007, and consigning the redemption price on October 26, 2007, falls within the 30-day period under Article 1623.

 

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National Power Corp. v. Benguet Electric Cooperative, Inc. [G.R. No. 218378 (Resolution), June 14, 2021]

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National Power Corp. v. Benguet Electric Cooperative, Inc.

G.R. No. 218378 (Resolution), [June 14, 2021]

SECOND DIVISION, LOPEZ, M.V

 

Unjust Enrichment; Contractual Liability 

The principle of unjust enrichment under Article 22 of the Civil Code is not a catch-all provision that can be conveniently invoked when a party has suffered a loss. Unjust enrichment doesn't apply when a contract governs the relationship between parties.

 

The National Power Corporation (NPC) sought to recover underbilled power charges from Benguet Electric Cooperative, Inc. (BENECO) for a period spanning May 2000 to February 2004. The underbilling arose due to NPC's failure to use the correct Current Transformer Ratio (CTR) setting, resulting in a wrong billing multiplier for calculating electricity consumption. BENECO discovered the error in 2004 and informed NPC. NPC argued that BENECO should pay the underbilled amount to avoid unjust enrichment. But BENECO refused to pay the underbilling, arguing that NPC's negligence was the cause and that NPC's claims were waived under their Transition Contract. 

 

Is BENECO liable to pay the underbilled amount claimed by NPC under the principle of unjust enrichment. 

NO. BENECO’s liability to pay underbilled amount is based on contract and not from unjust enrichment doctrine. The Court found that the principle of unjust enrichment does not apply because a contract existed between the parties, and the claim must be based on the contract's provisions. The Transition Contract allowed NPC to correct erroneous billings within 90 days, and BENECO is liable only for the underbilling related to corrected billings within that period. 

While NPC attempted to shift blame to BENECO for not promptly detecting the error, the Court found NPC solely responsible for the error due to its negligence in maintaining accurate billing systems. The Court also affirmed BENECO's entitlement to a 3% prompt payment discount on current bills, as it had been promptly paying its current obligations. The Court emphasized the importance of diligence in public service and remanded the case to determine the exact underbilling amount during the relevant period.

 

 

 

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Jimenez v. Jimenez, Jr. [G.R. No. 228011, February 10, 2021]

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Jimenez v. Jimenez, Jr.

G.R. No. 228011, February 10, 2021

SECOND DIVISION, LOPEZ, M.V

 

Mortgagee in good faith; Purchaser in good faith; Notice of Lis Pendens

The protection granted to mortgagees in good faith extends even if they have knowledge of adverse claims or ongoing litigation related to the property. And the foreclosure sale retroacts to the mortgage's registration date, making the sale superior to the subsequent adverse claim.

 

Corona F. Jimenez owned a property covered by TCT No. RT-122097. Her children discovered a Deed of Donation allegedly forged in favor of Damian F. Jimenez, Jr. This deed led to the issuance of a new title, TCT No. N-217728, in Damian's name. Damian then mortgaged the property to Arturo S. Calubad and Antonio Keh for a P7,000,000.00 loan. The mortgage was registered. The Jimenez siblings, however, filed a case to annul the forged Deed of Donation and the new title along with the mortgage.

Despite their efforts, the foreclosure auction proceeded, and Calubad and Keh emerged as the highest bidders, leading to the issuance of new titles in their names. The RTC and CA both ruled that the Deed of Donation was forged but upheld Calubad and Keh's rights as innocent mortgagees for value and good faith. Danilo, one of the Jimenez siblings, appealed, arguing that Calubad and Keh were not purchasers in good faith because they were aware of the adverse claim before the public auction.

 

Whether the highest bidders could be considered mortgagees in good faith despite having notice of an adverse claim.

 

YES. The mortgagee in good faith is based on the rule that all persons dealing with property covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title. SC clarified that even if a mortgagee has notice of an adverse claim, their rights can still be protected if they satisfy the requirements of being mortgagees in good faith. 

In this case, Calubad and Keh met the requisites of being mortgagees in good faith. They relied on the title's face value, conducted an ocular inspection that confirms Damian’s possession and occupation, found nothing on TCT No. N-217728 that would have notified them of Damian's invalid title or reason to inquire further into Damian's title's status. 

The adverse claim could not affect the rights of the mortgagee. The Court emphasized that the foreclosure sale retroacts to the date of the mortgage's registration, making it prior in time to any subsequent liens or claims. The fact that the adverse claim was recorded after the mortgage did not affect the rights of Calubad and Keh as innocent mortgagees. Thus, their rights as innocent mortgagees were upheld.

 

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Quiambao v. China Banking Corp. [G.R. No. 238462, May 12, 2021]

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Quiambao v. China Banking Corp.

G.R. No. 238462, May 12, 2021

SECOND DIVISION, LOPEZ, M.

 

Obligations and Contracts; Foreclosure; Blanket Mortgage Clause; Contract of Adhesion 

Under the concept of contracts of adhesion, contracts are interpreted strictly against the drafting party, especially when there's ambiguity. The presence of a "blanket mortgage clause" does not automatically guarantee that all subsequent obligations will be covered; the wording must be explicit.

 

Elena R. Quiambao obtained a loan from China Banking Corporation, secured by a Real Estate Mortgage (REM) over her property. The REM contained a "blanket mortgage clause" stating that it would secure current and future debts. Later, the bank initiated a foreclosure for unpaid loans under eight promissory notes (PNs). Elena challenged the foreclosure, claiming that the REM only covered the initial loan, and not the subsequent loans. She also claimed she signed blank documents without understanding, and the foreclosure was invalid.

  

Whether the blanket mortgage clause in the REM secured the subsequent loans, allowing for their valid foreclosure.

  

NO. The Supreme Court ruled in favor of Quiambao. It highlighted that contracts of adhesion, where one party has more power, should be interpreted against the drafting party. While blanket mortgage clauses, also known as dragnet clauses, can encompass both existing and future debts, the clause's specific language must be examined meticulously to determine its scope. The Court found that the language of the clause did not unequivocally cover the subsequent loans linked to the eight PN.

At the trial, it was established that Elena and Daniel signed the amendments to the REM in blank. It was China Banking Corporation which drafted and prepared the standard forms on which Elena and Daniel merely affixed their signatures. Corollarily, any ambiguity in the provisions of these documents must be interpreted against China Banking Corporation, the party who prepared the contracts. Moreover, Elena's limited education and the complex nature of the transactions were considered.

Therefore, the bank cannot validly foreclose a mortgage based on non-payment of unsecured PNs. As such, the foreclosure proceedings are void.

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