Ayson Vs Sps Paragas And Pvb Vs Monillas

Ayson vs Spouses Paragas Ynares-Santiago – 2008 Topic: Possession and Ownership; Equitable Mortgage; Facts The controversy commenced with the filing of an ejectment complaint by petitioner Ayson against respondent-spouses Paragas on the basis that petitioner is the registered owner of the property being occupied by the respondent-spouses who, according to petitioner, are just occupying the said land through the latter’s tolerance without rent. MTCC decided in favor of petitioner. RTC affirmed the MTCC Decision. During the pendency of the appeal with the RTC, respondent-spouses filed against petitioner a complaint for declaration of nullity of Deed of Sale, in effect questioning OWNERSHIP. Respondent Felix Paragas (husband) alleged that Ayson’s father made him sign a Deed of Absolute Sale over Maxima’s (wife) property under threat that Felix will be incarcerated. RTC rendered its decision in favor of respondent-spouses declaring the Deed of Absolute Sale as an equitable mortgage. Issue 1 WON the decision of the court in the ejectment case where ownership was raised as defense by the Spouses Paragas, is conclusive on the issue of ownerhip such that the complaint for declaration of nullity of Deed of Sale by the respondent-spouses is barred.

The Civil Code enumerates the cases in which a contract, purporting to be a sale, is considered only as a contract of loan secured by a mortgage as per Article 1604 in relation Article 1602. In this case, the evidence before the RTC had established that the possession of the subject property remained with respondent-spouses despite the execution of the Deed of Absolute Sale. Issue 3 WON the Deed of Absolute Sale was executed through fraud, making the said contract merely voidable, and the action to annul voidable contracts based on fraud prescribed in four (4) years from the discovery of fraud. Decision 3 and Ratio 3 An equitable mortgage is a voidable contract. As such, it may be annulled within four (4) years from the time the cause of action accrues. This case, however, not only involves a contract resulting from fraud, but covers a transaction ridden with threat, intimidation, and continuing undue influence which started when petitioner’s father Thus, the four-year period should start from the time the defect in the consent ceases. Philippine Veterans Bank vs Monillas Nachura – 2008 Topic: Effects of Prior Registration of Mortgage shall Prevail over the Belated Annotation of a Lis Pendens.

Decision 1 No. Action by the respondent-spouse is not barred. Ratio 1 It must be remembered that in ejectment suits the issue to be resolved is merely the physical possession over the property, i.e., possession de facto and not possession de jure, independent of any claim of ownership set forth by the party-litigants. Should the defendant in an ejectment case raise the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. The judgment rendered in such an action shall be conclusive only with respect to physical possession and shall in no wise bind the title to the realty or constitute a binding and conclusive adjudication of the merits on the issue of ownership. Therefore, such judgment shall not bar an action between the same parties respecting the title or ownership over the property, which action was precisely resorted to by respondent-spouses in this case. Issue 2 WON the Deed of Absolute Sale is an equitable mortgage.

Benjamin Monillas executed a deed of sale of his share over the property to his brother, Ireneo. Ireneo then caused the transfer of the title in his name. Ireneo mortgaged twenty-two (22) lots to petitioner Philippine Veterans Bank (PVB). Benjamin Monillas filed for the nullification of the deed of sale and for the recovery of the property, which the RTC decided on his favor; hence, he filed for the declaration of the nullity of the titles issued in PVB's name. He caused the annotation of notices of lis pendens relating to the said case on the titles of the lots. While the case remained pending, PVB foreclosed the mortgage, PVB was the highest bidder Benjamin Monillas, The RTC ruled against PVB. The RTC rationalized that while the annotation of the notices of lis pendens succeeded the registration of the mortgage, still the effect of the notices was that PVB acquired knowledge of an impediment against its interest, and as a matter of fact, PVB ignored the notices and slept on its rights, as it did not intervene in the said civil case. Issue WON the prior registered mortgage and the already concluded foreclosure proceedings should prevail over the subsequent annotation of the notices of lis pendens on the lot titles. Decision

Decision 2 Yes. It is an equitable mortgage; hence, the property is still under the ownership of the spouses.

Prior registered mortgage of PVB and the foreclosure proceedings already conducted prevail over Benjamin Monilla's subsequent annotation of the notices of lis pendens on the titles to the property.

Ratio 2

Ratio

A prior registration of a lien creates a preference; hence, the subsequent annotation of an adverse claim cannot defeat the rights of the mortgagee, or the purchaser at the auction sale whose rights were derived from a prior mortgage validly registered. A contrary rule will make a prior registration of a mortgage or any lien nugatory or meaningless.