Facts:

The case involves Keppel Bank Philippines, Inc. as the petitioner and Philip Adao as the respondent. The events leading to the case began with a court-approved Compromise Agreement between Keppel Bank and Project Movers Realty and Development Corporation (PMRDC). Under this agreement, PMRDC, represented by its President Mario P. Villamor, assigned and conveyed twenty-five properties, including townhouses and condominium units, to Keppel Bank as partial settlement of a substantial debt amounting to two hundred million pesos (₱200,000,000). Following this, Keppel Bank obtained Condominium Certificates of Title for the properties. Upon inspection, the bank discovered that Philip Adao was occupying Unit 4 of the Luxor Villas Townhouse, one of the properties transferred. On February 18, 2000, Keppel Bank issued a written demand for Adao to vacate the unit within 30 days, which he refused, instead offering to purchase the unit. The parties could not reach an agreement, leading to a...

Facts:

Background of the Case: The case involves a dispute over the possession of Unit 4 of the Luxor Villas Townhouse. Petitioner Keppel Bank Philippines, Inc. (Keppel Bank) acquired the property through a court-approved Compromise Agreement with Project Movers Realty and Development Corporation (PMRDC). The agreement involved a dacion en pago, where PMRDC transferred 25 properties, including the contested unit, to Keppel Bank as partial settlement of a P200,000,000 debt.

Respondent's Occupation: Upon inspection, Keppel Bank discovered that respondent Philip Adao was occupying the unit. Adao claimed possession under a Contract to Sell dated February 7, 1995, between him and PMRDC. He alleged that he had paid P3 million and offered an additional P2.5 million to fully pay for the unit. However, Keppel Bank demanded that Adao vacate the property, leading to the filing of an ejectment case.

Lower Court Decisions: The Metropolitan Trial Court (MeTC) dismissed the ejectment case, ruling that Adao was the lawful possessor. The Regional Trial Court (RTC) and the Court of Appeals (CA) affirmed this decision, holding that Keppel Bank, as PMRDC's successor-in-interest, was bound by the Contract to Sell and could not file an ejectment case.

Issue:

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Ruling:

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Ratio:

1. Binding Effect of the Contract to Sell: The Supreme Court ruled that Keppel Bank, as a successor-in-interest, is bound by the Contract to Sell because it failed to exercise the required diligence in verifying the status of the property. Banks, being entities affected with public interest, must exercise higher standards of care.

2. Ejectment as a Proper Remedy: The Court emphasized that in a contract to sell, ownership is retained by the seller until full payment is made. Since Adao failed to prove full payment, Keppel Bank retained ownership and had the right to file an ejectment case to recover possession.

3. Burden of Proof: The Court held that Adao failed to substantiate his claim of full payment. His lone affidavit was deemed insufficient as substantial evidence. The burden of proving payment rests on the party claiming it, and Adao failed to meet this burden.

4. Provisional Determination of Ownership: The Court clarified that its ruling on ownership was only provisional, for the purpose of resolving the issue of possession. It does not bar or prejudice any future action involving title to the property.

Conclusion:

The Supreme Court granted Keppel Bank's petition, reversed the Court of Appeals' decision, and ordered Adao to vacate the property. The Court held that Keppel Bank, as the owner, had the right to recover possession through an ejectment case, and Adao's failure to prove full payment rendered his possession unlawful.