Case Digest (G.R. No. 179518) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Bank of the Philippine Islands v. Sanchez, the Sanchezes—Vicente Victor C. Sanchez, heirs of Kenneth Nereo Sanchez represented by Felisa Garcia Yap, and heirs of Imelda C. Vda. de Sanchez—owned a 900-square-meter lot at No. 10 Panay Avenue, Quezon City, covered by Transfer Certificate of Title (TCT) No. 156254. In October 1988, Jesus V. Garcia, doing business as TransAmerican Sales and Exposition, Inc. (TSEI), negotiated an oral sale at ₱1.85 million, delivered ₱50,000 earnest money and received the duplicate TCT and related documents. He demolished the existing house and began townhouse construction without written title transfer or full payment. On December 8, 1988, the parties executed a written agreement providing for six post-dated checks totalling ₱1,850,000 and expressly allowing the Sanchezes to rescind if any check bounced. Four checks cleared, the last two for ₱400,000 each were dishonored. The Sanchezes rescinded, demanded return of the title and repossession, but ... Case Digest (G.R. No. 179518) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Property
- Vicente V. Sanchez, Kenneth Nereo Sanchez, and Imelda C. Vda. de Sanchez owned a 900-sqm lot at No. 10 Panay Avenue, Quezon City, registered as TCT No. 156254.
- Jesus V. Garcia, doing business under TransAmerican Sales & Exposition, Inc. (TSEI), offered in October 1988 to buy the lot for ₱1,800,000 with ₱50,000 earnest money.
- Oral and Written Agreements
- Third week of October 1988: Felisa Yap (widow of Kenneth) and Garcia agreed on a sale for ₱1,850,000; Garcia to handle reconstitution of title, extrajudicial settlement of estate, demolition of the old house, and sale of scrap materials.
- December 8, 1988: Parties executed a written Agreement providing payment by six post-dated checks totalling ₱1,850,000, and granting “First and Second Parties” the option to rescind upon dishonor of any check.
- Default and Rescission
- First four checks were honored; the last two (₱400,000 each) bounced for insufficient funds.
- January 10, 1989: Yap notified Garcia of rescission and demanded return of the original duplicate title and other documents; Garcia refused, claiming taxes were outstanding.
- Unauthorized Development and Regulatory Intervention
- Garcia seized possession without consent, demolished the existing house, advertised “TransAmerican Townhouse V”; HLURB issued cease-and-desist orders and fines; the Quezon City Building Official confirmed illegal construction.
- Between January and October 1989, intervenors—Caminas, Maniwang, Tulagan, Marquez, and Varied Traders Concept, Inc. (VTCI)—purchased townhouse units from TSEI, relying on TCT No. 383697 issued in TSEI’s name.
- Mortgage and Foreclosure
- Far East Bank & Trust Company (now BPI) granted TSEI a loan secured by a real‐estate mortgage on TCT 156254; upon default, it foreclosed and annotated TCT 383697.
- Trial and Appeal
- RTC (July 14, 2004) declared the extrajudicial rescission valid, ordered return of documents and possession, cancellation of TCT 383697, damages to the Sanchezes, and restitution to intervenors and BPI.
- CA (November 6, 2006) affirmed with modification: cancelled TCT 383697, reinstated TCT 156254, applied Art. 448 (Civil Code) for improvements, and allowed the Sanchezes to elect remedies under Arts. 449–450.
Issues:
- Was the rescission of the Agreement between the Sanchezes and TSEI/Garcia proper, and is it barred by subsequent transfers to third parties in good faith?
- Did the intervenors and BPI qualify as purchasers or mortgagees in good faith, or did they act in bad faith, affecting their protection and entitlements under Arts. 448–450 of the Civil Code?
- Did the CA err in ordering cancellation of TCT 383697 in what BPI calls a collateral attack without jurisdiction or prayer?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)