METROHEIGHTS SUBDIVISION HOMEOWNERS ASSOCIATION, INC.

,
PETITIONER, V. CMS CONSTRUCTION AND DEVELOPMENT CORPORATION,
TOMASITO T. CRUZ, TITA F. CRUZ, SIMONETTE F. CRUZ, ANGEL T. CRUZ,
ERNESTO T. CRUZ AND METROPOLITAN WATERWORKS AND SEWERAGE
SYSTEM (MWSS), RESPONDENTS.

G.R. No. 209359, October 17, 2018

Third Division
PERALTA, J.

Topic: Obligations and Contracts RE: Abuse of Right

Facts:

In 1992, the petitioner Metroheights Subdivision Homeowners Association

(“petitioner MSHA”), Inc. filed with the Regional Trial Court (RTC) of Quezon City a
complaint for damages with prayer for a temporary restraining order and/or writ of
preliminary injunction and writ of preliminary mandatory injunction against the
respondents CMS Construction and Development Corporation (“CMS Construction”),
Tomasito Cruz, Tita Cruz, Simonette Cruz, Angel Cruz, Ernesto Cruz (“the Cruzes”),
and Metropolitan Waterworks and Sewerage System (“MWSS”).

The petitioner MSHA alleged the following:

1. The respondent CMS Construction made diggings and excavations, and started
to lay water pipes in the petitioner's neighboring subdivision (“rehabilitation
project”) and that in the process, the respondent CMS Construction, with the
knowledge and consent of respondent MWSS but without the petitioner MSHA’s
knowledge and consent, unilaterally cut-off and disconnected the latter's new
and separate water service connection;
2. Because of the disconnection, the petitioner MSHA had no water for three (3)
days;
3. The petitioner's polyvinyl chloride (PVC) pipes and radius elbow were stolen by
the respondent CMS Construction's workers; and
4. Despite petitioner's verbal and written demands, respondents have failed to
restore petitioner's water line connection in its original state and to return the
missing PVC pipes and radius elbow.

The respondent MWSS and the respondent CMS Construction filed their respective
Answers. The respondent MWSS that the prayers should not be granted because
these will affect the rehabilitation project necessary for the improvement of the water
pressure of eight (8) subdivisions in Quezon City including the petitioner MSHA. The
respondent CMS Construction, moreover, claimed that the officers and engineers of
the petitioner MSHA were previously consulted on the rehabilitation project.

The RTC ruled in favor of the petitioner MSHA. The RTC found respondents liable
for damages on the basis of abuse of right under Article 19 of the New Civil Code,
giving credence to petitioner's claim that there was no notice to it prior to the
implementation of respondents' project. The CA reversed the RTC and found that
there was no abuse of right committed by the respondents, as the project was not
undertaken without notice to petitioner.

The petitioner MSHA's motion for reconsideration was denied by the CA in a

Resolution. Hence, this petition for review on certiorari filed by petitioner MSHA.

Issue:

Whether all the respondents are liable for damages on the basis of abuse of
right under Article 19 of the New Civil Code (NO. The respondents MWSS and CMS
Construction should be held liable for damages to petitioner but not the Cruzes who
are the directors and stockholders of respondent CMS Construction)

Held:

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision

dated October 10, 2012 and the Resolution dated September 30, 2013 of the
Court of Appeals in CA-G.R. CV No. 89085 are hereby REVERSEDand SET
ASIDE. The Decisions, dated March 30, 1999 and May 18, 2006, of the Regional
Trial Court, Branch 77, of Quezon City are
hereby AFFIRMED with MODIFICATION.

Ratio:

The respondents MWSS and CMS Construction should be held liable for
damages to petitioner but not the Cruzes who are the directors and
stockholders of respondent CMS Construction.

As to the liability of the respondents MWSS and CMS Construction

The respondent MWSS and the respondent CMS Construction' act of cutting off
the petitioner MSHA' water service connection without prior notice was arbitrary,
injurious and prejudicial to the latter, justifying the award of damages under Article
19 of the New Civil Code. When a right is exercised in a manner which discards these
norms (set under Art. 19) resulting in damage to another, a legal wrong is committed
for which actor can be held accountable. In this case, the respondent MWSS and the
respondent CMS Construction' failed to act with justice and to give the petitioner
MSHA what is due to it, when the former unceremoniously cut off the latter’s water
service connection. And while the respondent MWSS had indeed sent the necessary
notice to the petitioner MSHA, this notice was only a few hours before the actual
disconnection.

The CA also erred in finding that the respondents MWSS and CMS Construction'
actions were merely consequential to the exercise of their rights and obligations to
manage and maintain the water supply system. "Having the right should not be
confused with the manner by which such right is to be exercised." Article 19 of the
New Civil Code sets the standard in the exercise of one's rights and in the
performance of one's duties, i.e., he must act with justice, give everyone his due,
and observe honesty and good faith. "The exercise of a right ends when the right
disappears, and it disappears when it is abused, especially to the prejudice of others.
The mask of a right without the spirit of justice which gives it life is repugnant to the
modem concept of social law." Here it was established, as shown by the above
discussions, that respondents indeed abused their right.

As to the liability of the directors and stockholders of respondent CMS

Construction.

The directors (the Cruzes) and stockholders of the respondent CMS

Construction are not liable because the petitioner MSHA failed to show that the Cruzes
committed any of those above-quoted acts to make them personally liable pursuant
to the Section 31 of the Corporation Code, viz:

Sec. 31. Liability of directors, trustees or officers. — Directors or

trustees who willfully and knowingly vote for or assent to patently
unlawful acts of the corporation or who are guilty of gross negligence or
bad faith in directing the affairs of the corporation or acquire any
personal or pecuniary interest in conflict with their duty as such directors
or trustees shall be liable jointly and severally for all damages resulting
therefrom suffered by the corporation, its stockholders or members and
other persons.
SPOUSES RODOLFO CRUZ AND LOTA SANTOS-CRUZ, Petitioners, v. HEIRS OF
ALEJANDRO SO HIONG (DECEASED), SUBSTITUTED BY HIS HEIRS, GLORIA
SO HIONG OLIVEROS, ALEJANDRO L. SO HIONG, JR., FLOCY SO HIONG
VELARDE AND BEATRIZ DOMINGUEZ, Respondents.

G.R. No. 228641, November 05, 2018

THIRD DIVISION
PERALTA, J.

Topic: Land, Titles, and Deeds | Obligations and Contracts RE: Fraud

Facts:

Siblings Alejandro So Hiong (“respondent Alejandro”) and Conchita So Hiong

(“Conchita”) were the former co-owners of a parcel of land in Pampanga (“subject
property”). The the respondent Alejandro, who was substituted by his heirs upon his
death, filed a Complaint for Annulment of Transfer Certificate of Title, Reconveyance,
and Damages against the petitioner spouses Rodolfo Cruz and Lota Santos-Cruz
(“Petitioner Spouses Cruz) before the Regional Trial Court (RTC) of Guagua,
Pampanga.

The respondent Alejandro’s allegations in the Complaint are as follows:

1. Before the respondent Alejandro and his family left for Manila in 1972, he left
the owner's duplicate copy of TCT of the subject property to the Petitioner
Spouses Cruz for safekeeping;
2. In 2007, Sometime after, however, the respondent Alejandro discovered that
the subject property’s original title (TCT No. 356877-R ) reflected that he
allegedly sold the subject property to the Petitioner Spouses Cruz

The Petitioner Spouses Cruz filed their Answer and alleged that (1) the respondent
Alejandro and Conchita freely and voluntarily sold the subject property to them, and
(2) the respondent Alejandro’s Complaint was already barred by laches, as 34 years
have passed since he left for Manila until his purported discovery of the sale; and
within this period, Alejandro did not do anything to protect his title and rights over
the subject property.

In 2015, the RTC dismissed the respondent Alejandro’s Complaint because the
respondent Alejandro’s action had already prescribed and is barred by laches; and
the respondent Alejandro failed in showing “fraud” imputable to the Petitioner
Spouses Cruz.

In 2016, however, the Court of Appeals (“CA”) reversed and set aside the ruling
of the RTC because of the following reasons:

1. The burden of proof is not with the respondent Alejandro but with the Petitioner
Spouses Cruz since the latter only alleged an affirmative defense;
 2. The Petitioner Spouses Cruz failed to present the Deed of Sale which they must
present in view of the settled doctrine that a certificate of title is not equivalent
title, and the Deed of Sale being the foundation of their affirmative defense;
and
3. The respondent Alejandro's action has not yet prescribed because the right to
file an action for reconveyance on the ground that the certificate of title was
obtained by means of a fictitious deed of sale is virtually an action for the
declaration of its nullity, which does not prescribe

Aggrieved by the CA's denial of their Motion for Reconsideration, the Spouses Cruz
filed the instant petition in 2017.

Issues:

1. Whether the burden of proof is with the respondent Alejandro (YES);

2. Whether the non-presentment of the Deed of Sale makes the Petitioner
Spouses Cruz’s Defense weak (NO);
3. Whether the respondent Alelejandro’s action has already prescribed (NO).

Ruling:

WHEREFORE, premises considered, the instant petition is GRANTED. The

assailed Decision dated May 23, 2016 and the Resolution dated December 7, 2016 of
the Court of Appeals in CA-G.R. CV No. 105749 are REVERSED and SET ASIDE. The
Decision dated September 15,2015 of the Regional Trial Court is REINSTATED. SO
ORDERED.

Ratio:

The Burden of Proof is with the respondent Alejandro and the non-
presentment of the Deed of Sale does not make the Petitioner Spouses
Cruz’s Defense weak

In this case, respondent Alejandro merely made a “self-serving claim” of

fraud. Fraud must be proven clearly and convincingly, and the burden of proof lies
on the party alleging the fraud, who, in this case, is the respondent Alejandro. The
TCT No. 356877-R issued in Petitioner Spouses Cruz’ favor enjoys the legal
presumption of regularity in its issuance and respondent Alejandro failed to overcome
such presumption. The mere fact that copies of the deed of sale can no longer be
produced does not defeat the legal presumption that the title of the petitioner
Spouses Cruz was regularly issued, especially in view of the certification of the
Register of Deeds that proper procedure was observed.

Action has not yet prescribed and assuming arguendo that it has, it will still
not matter in this case
 The respondent Alejandro’s actions (i.e. filing of the Complaint) and inactions
(i.e. not doing anything for 34 years; and renting a house in Pampanga since 2002
but filing the complaint only in 2007) run contrary to his claims of ownership thereon
especially in light of the fact that ever since 1974, the family of the Spouses Cruz
had already been occupying the same to the exclusion of respondent Alejandro and
his heirs.

Moreover, regardless of whether the action of respondent Alejandro for

reconveyance has already prescribed or not, his failure to prove his allegations of
fraud therein effectively prevents him from disturbing the title of the spouses in the
absence of any showing that said title was fraudulently issued, or that its issuance
was not done in accordance with the procedure laid down by law.
REYNALDO E. ORLINA, PETITIONER, VS. CYNTHIA VENTURA,
REPRESENTED BY HER SONS ELVIC JHON HERRERA AND ERIC VON
HERRERA, RESPONDENTS.

G.R. No. 227033, December 3, 2018

Third Division
Tijam J.

Topic: Land, Titles, and Deeds

Facts:

The respondent Cynthia Ventura (“respondent Ventura”) owned a land in Quezon City
(“subject property”). The respondent Ventura did not pay the realty tax for the
subject property; thus, the local government unit of Quezon City sold the subject
property on auction. The petitioner Orlina was the highest bidder and the
corresponding Certificate of Sale, Final Bill of Sale, and Transfer Certificate of Title
(TCT No. 004-2012010324) was issued.

The respondent Ventura filed an omnibus motion seeking a reconsideration of the

RTC's Decision. She argued that the RTC did not acquire jurisdiction over her person,
thus, depriving her of her right to due process. The RTC issued a Decision dated May
14, 2012 denying the said omnibus motion.

The CA annulled the RTC Decision. It held that there was no proof that the respondent
Ventura was served with notices of the proceedings before the trial court.; thus, the
RTC did not acquire jurisdiction over her person. As such, the CA also ordered the
Register of Deeds of Quezon City to cancel the TCT No. 004-2012010324 and
reinstate TCT No. 272336 in the name of respondent Ventura.

Issue:

1. WHETHER OR NOT THE PETITION IS A COLLATERAL ATTACK ON THE

CERTIFICATE OF TITLE OF THE HEREIN [PETITIONER].

Held:

WHEREFORE, premises considered, the instant petition is DENIED. The

assailed Decision dated October 26, 2015 and Resolution dated September 14, 2016
of the Court of Appeals in CA-G.R. SP No. 133837
are AFFIRMED with MODIFICATION. The Regional Trial Court of Quezon City,
Branch 215, is DIRECTED to CONDUCT further proceedings with dispatch on the
Petition for the Approval of the Final Bill of Sale, Cancellation of the Original and
Duplicate Copy of TCT No. 272336, and Issuance of a New Certificate of Title.
Ratio:

Indeed, the instant petition involving the approval of final bill of sale is
tantamount to a collateral attack on Orlina's title. It is well settled, however, that a
judgment or decision rendered without due process is void ab initio and may be
attacked at any time directly or collaterally by means of a separate action, or by
resisting such decision in any action or proceeding where it is invoked for such
judgment or decision is regarded as a "lawless thing which can be treated as an
outlaw and slain at sight, or ignored wherever it exhibits its head."

As the CA noted, the action filed by Orlina is a petition seeking the cancellation
of Ventura's title and the issuance of a new one under his name, brought under the
auspices of Sections 75 and 108 of Presidential Decree (P.D.) No. 1529; otherwise
known as the Property Registration Decree, which is evidently an action in rem. While
jurisdiction over the parties in an action in rem is not a prerequisite to confer
jurisdiction on the court, it is nonetheless required to satisfy the requirements of due
process.

In view thereof, the Court find that the CA aptly held that the order of the RTC
of general default, allowing Orlina to adduce evidence ex parte, is void for violating
Ventura's right to due process. Similarly, the May 14, 2012 Decision of said trial
court, which granted Orlina's petition for approval of deed of sale and the transfer of
the titles in his name, and all subsequent orders issued pursuant to the said
judgment, e.g., issuance of the new TCT No. 004-201201324 in the name of the
petitioner Orlina.are also null and void,