SPOUSES GODOFREDO & DOMINICA FLANCIA, vs.
CA & WILLIAM ONG GENATO
Petition for review under Rule 45 of the Rules of
Court, seeking to set aside CA decision
Action to declare null and void the mortgage executed
by Oakland Development Resources Corp. in favor of
Genato over the house and lot spouses Flancia
purchased from Oakland.
FACTS:
1. Plaintiffs allege that they purchased from defendant
corporation a parcel of land in QC
2. By virtue of the contract of sale, defendant
corporation authorized plaintiffs to transport all their
personal belongings to their house at the aforesaid lot
3. Spouses received a copy of the execution foreclosing
the mortgage issued by the RTC, ordering defendant
Sheriff Sula to sell at public auction several lots
formerly owned by defendant corporation including
subject lot of plaintiffs
4. Alleged mortgage of subject lot is null and void as it is
not authorized by plaintiffs pursuant to Art. 2085 of
the Civil Code which requires that the mortgagor must
be the absolute owner of the mortgaged property
5. Spouses advised defendants to exclude subject lot
from the auction sale but the latter refused
1. Genato, then filed his answer averring that Oakland
mortgaged to Genato 2 parcels of land covered as
security and guaranty for the payment of a loan in the
sum of P2M.
2. For non-payment of the loan of P2M defendant
Genato filed an action for foreclosure of real estate
mortgage against co-defendant corporation
decision FINAL ordered sheriff to cause sale at public
auction
3. that plaintiffs alleged Contract to Sell is neither a
mutual promise to buy and sell nor a Contract of
Sale.
4. Ownership is retained by the seller, regardless of
delivery and is not to pass until full payment of the
price
RTC DECISION 1 acting judge: In favor of defendants
RTC DECISION 2 presiding judge:
Declaring the subject mortgage and the foreclosure
proceedings held thereunder as null and void insofar
as they affect the superior right of the plaintiffs over the
subject lot
CA DECISION affirmed RTC 1
Art. 2085 CC, the essential requisites of a contract of
mortgage are:
a) that it be constituted to secure the fulfillment of a
principal obligation;
b) that the mortgagor be the absolute owner of the thing
mortgaged;
c) that the persons constituting the mortgage have the
free disposal of their property, and in the absence
thereof, that they be legally authorized for the
purpose.
All these requirements are present in this case.
RULING: affirm CA
ISSUE:
(1) WON the registered mortgage constituted over the
property was valid YES.
CONTRACT OF SALE VS CONTRACT TO SELL
- Contract of sale - title to the property passes to
the vendee upon the delivery of the thing sold;
vendor loses ownership over the property and
cannot recover it unless and until the contract is
resolved or rescinded
- Contract to sell - ownership is, by agreement,
reserved by the vendor and is not to pass to the
vendee until full payment of the purchase price;
title is retained by the vendor until full payment of
the price.
Aside from the fact that it was denominated as a
contract to sell, the intention of Oakland not to transfer
ownership to petitioners until full payment of the
purchase price was very clear
- Clearly, when the property was mortgaged to
Genato in May 1989, what was in effect between
Oakland and petitioners was a contract to sell,
not a contract of sale. Oakland retained absolute
ownership over the property.
- Because Oakland retained all the foregoing rights
as owner of the property, it was entitled
absolutely to mortgage it to Genato
- Ownership is the independent and general
power of a person over a thing for purposes
recognized by law and within the limits
established thereby.
(2) WON the registered mortgage was superior to the
contract to sell YES.
- State Investment House vs CA - clearly pertained
to a contract of sale, not to a contract to sell which
was what Oakland and petitioners had. In State
Investment House, ownership had passed
completely to the buyers and therefore, the
former owner no longer had any legal right to
mortgage the property, notwithstanding the fact
that the new owner-buyers had not registered the
sale. In the case before us, Oakland retained
absolute ownership over the property under the
contract to sell and therefore had every right to
mortgage it.
(3) WON the mortgagee was in good faith
- Only questions of law may be raised in a Rule 45 petition
VICTORIANO M. ENCARNACION vs. NIEVES AMIGO Material element that determines the proper action to be
filed for the recovery of the possession of the property in
Petition for review assails CA decision, ordering the this case is the length of time of dispossession
remand of Civil Case No. Br. 20-1194 to the RTC - From the date of the petitioner's dispossession in
1995 up to his filing of his complaint for ejectment
FACTS: in 2001, almost 6 years have elapsed. The
1. Encarnacion is the registered owner of 2 lots in length of time that the petitioner was
Isabela dispossessed of his property made his cause of
2. Said 2 lots originally form part of Lot No. 2121, a action beyond the ambit of an accion interdictal
single track of land owned by Rogelio Valiente who and effectively made it one for accion publiciana.
sold the same to Nicasio Mallapitan
3. Mallapitan sold the land to Magpantay. The respondent's actual entry on the land of the
4. After the death of the Magpantay, his widow, Anita petitioner was in 1985 but it was only on March 2, 2001
executed an Affidavit of Waiver waiving her right over or 16 years after, when petitioner filed his ejectment case.
the property in favor of her son-in-law, herein The respondent should have filed an accion publiciana
petitioner, Victoriano Encarnacion. case which is under the jurisdiction of the RTC.
5. Nieves Amigo allegedly entered the premises and
took possession of a portion of the property sometime
in 1985 without the permission of the then owner,
Victoriano Magpantay.
6. Encarnacion, through his lawyer sent a letter
demanding that the respondent vacate the subject
property.
- filed a complaint for ejectment, damages with
injunction and prayer for restraining order with the
MTC
7. Amigo alleged that he has been in actual possession
and occupation of a portion of the subject land since
1968 and that the issuance of Free Patent and titles
in the name of petitioner was tainted with
irregularities.

MTC DECISION: In favor of Encarnacion order to vacate

RTC DECISION: Dismiss case MTC no jurisdiction
CA DECISION: Remanded case to RTC

ISSUE:
Whether the CA erred in holding that the proper action in
this case is accion publiciana and not unlawful
detainer as determined by the allegations in the
complaint filed by petitioner.
- we find that the Court of Appeals committed no
reversible error in holding that the proper action
in this case is accion publiciana

RULING:
1. Accion interdictal, or an ejectment proceeding
which may be either that for forcible entry or unlawful
detainer, which is a summary action for recovery of
physical possession where the dispossession has not
lasted for more than one year, and should be brought
in the proper inferior court;
2. Accion publiciana or the plenary action for the
recovery of the real right of possession, which should
be brought in the proper RTC when the dispossession
has lasted for more than 1 year;
3. Accion reinvindicatoria, which is an action for the
recovery of ownership which must be brought in the
proper RTC