1/16/24, 9:19 PM [ G.R. No. 199582.

July 07, 2020 ]

876 Phil. 364 ← click for PDF copy

EN BANC
[ G.R. No. 199582. July 07, 2020 ]
JULIE PARCON-SONG, PETITIONER, VS. LILIA B. PARCON, JOINED
BY HER HUSBAND JOAQUIN A. PARCON, MAYBANK PHILIPPINES,
INC. (FORMERLY PNB REPUBLIC BANK), AND THE REGISTER OF
DEEDS OF QUEZON CITY, RESPONDENTS.
DECISION

LEONEN, J.:

This Court resolves a Petition for Review on Certiorari[1] assailing the Decision[2] and
Resolution[3] of the Court of Appeals, which affirmed the Regional Trial Court Decision[4]
dismissing Julie Parcon-Song's (Julie) Complaint for annulment of title, reconveyance of
transfer certificate of title, annulment of mortgage and foreclosure proceedings, and declaration
of family home.[5]

Julie is the daughter of Spouses Joaquin and Lilia Parcon (the Parcon Spouses).[6] In 1995, the
Parcon Spouses obtained two loans from Maybank Philippines, Inc. (Maybank).[7] As security,
they executed a real estate mortgage over a parcel of land covered by Transfer Certificate of
Title No. 107064, registered in the name of Lilia Parcon.[8] The real estate mortgage was
annotated on the title.[9]

In 2001, when the Parcon Spouses defaulted on their loans, Maybank foreclosed the mortgage.
In the foreclosure proceedings, Maybank emerged as the highest bidder, and thus, was issued a
certificate of sale.[10] The certificate of sale was registered with the Register of Deeds.[11]

On March 4, 2003, Julie filed a Complaint praying that the following be declared void: (1)
Transfer Certificate of Title No. 107064; (2) the real estate mortgage dated November 28, 1995
in favor of Maybank; and (3) the foreclosure proceedings. She likewise sought that the property
be reconveyed to her as its true and lawful owner. Julie also prayed for a declaration of family
home and that Maybank be ordered to pay damages.[12]

Julie asserted that she had purchased the property from PACE Realty Investment, Inc. in August
1983, paying it in full. By way of trust, she used her mother's name to acquire the property.[13]
Thus, in 1994, the title was registered in Lilia Parcon's name.[14]

Julie claimed that since then, Lilia Parcon has claimed ownership over the property. She
contended that her parents merely ignored her repeated demands to reconvey the property. She
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also alleged that the property was mortgaged in favor of Maybank without her consent.[15]

The Parcon Spouses did not file an answer, and thus, were declared in default[16]

For its part, Maybank argued in its Answer that it was a mortgagee in good faith and for value. It
alleged that it verified the property with the Register of Deeds of Quezon City, and it found no
defect or anything suspicious about the genuineness and execution of the title. By way of
counterclaim, it also sought damages and attorney's fees.[17]

Initially, the Regional Trial Court dismissed the case after Julie had failed to prosecute. On
reconsideration, however, it eventually allowed her to present evidence. Yet, Julie was still
unable to continue her direct testimony and conduct cross-examination as her counsels failed to
appear. Thus, the trial court deemed her to have waived her right to formally offer her evidence.
[18]

In the trial proceedings, Julie moved for the judicial admission that Maybank is a foreign
corporation, disqualified under the Constitution to own private lands. The Regional Trial Court
took judicial notice of Maybank's Articles of Incorporation and General Information Sheet.[19]

Eventually, the Regional Trial Court, in its July 14, 2008 Decision,[20] dismissed Julie's
Complaint. It found that the mortgage was valid and that there was no implied or express trust
on the property.[21] It ruled that since the title was not annotated, Maybank cannot be affected by
any interest Julie had over the property.[22]

The trial court further found that the foreclosure proceedings were valid, barring Julie from
seeking the sale's cancellation.[23] Additionally, it ruled that the evidence showing that Maybank
was a Malaysian-owned foreign corporation had no relevance to the validity of the sale.[24]
The Court of Appeals, in its August 17, 2011 Decision,[25] affirmed the Regional Trial Court
Decision.

The Court of Appeals found that the title to the property was clean, not forged or fake, with no
registered liens and encumbrances, and registered in the mortgagor's name, Lilia Parcon.[26]
Thus, it ruled, Maybank could very well rely on the title as a mortgagee in good faith, and did
not need to further investigate.[27]

The Court of Appeals also ruled that the extrajudicial sale was valid as the applicable law, Act
No. 3135, only required that the mortgage be registered. It explained that while a family home is
generally exempt from execution, but if it was mortgaged to secure a debt, then it may be
subject to execution, forced sale, or attachment.[28]

Finally, the Court of Appeals found that Maybank, a foreign bank, was still given a license to
operate in the Philippines, which satisfied the requirement to protect Philippine equity. It cited
Section 8 of Republic Act No. 7721, which accorded foreign banks equal treatment as domestic

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banks, in ruling that Maybank had the right to acquire the mortgaged property in foreclosure
proceedings.[29]

In its November 28, 2011 Resolution,[30] the Court of Appeals denied the Motion for
Reconsideration. Thus, Julie filed this Petition.[31]

Petitioner argues that the real estate mortgage is void as she is the property's real owner. She
claims that she paid for it with her own money and her parents were only holding the property in
trust for her—facts that her parents supposedly did not dispute.[32]

Petitioner also claims that respondent Maybank is not a mortgagee in good faith.[33] She posits
that had the bank investigated, it would have discovered that she, not her parents, had been in
open and adverse possession of the property. Instead, the bank only relied on the title, which she
says is a sign of bad faith.[34]

Petitioner also contends that as a foreign corporation, respondent Maybank is prohibited under
Article XII, Section 3 of the 1987 Constitution from owning real property in the Philippines.[33]
She further questions the bank's mode of entry as a foreign bank in the Philippine banking
system, saying it did not comply with Section 2 of Republic Act No. 7721.[36] As such, the equal
treatment accorded to Philippine banks and foreign banks under Section 8 does not apply.[37]

In its Comment,[38] respondent Maybank asserts that it is a mortgagee in good faith as it had
inspected the property. Petitioner allegedly failed to prove that it did not do so.[39]

Respondent Maybank also claims that it is a foreign bank authorized to operate in the
Philippines under Section 2(i) of Republic Act No. 7721.[40] It further claims that its operations
were justified by Section 73 of Republic Act No. 8791.[41] It asserts that it was granted a license
by the Monetary Board to operate as a foreign bank, and is thus accorded equal treatment as
domestic banks. As such, it can foreclose and acquire mortgaged properties.[42] It notes that its
ownership of the mortgaged property is only temporary, as it is required to dispose of its
foreclosed asset within five years after its acquisition.[43]

Since this case raised the issue of the constitutionality of the property acquisition, it was referred
to the Court En Banc.[44] In an August 8, 2017 Resolution, the Court En Banc accepted the case
and directed the Office of the Solicitor General to comment.[45]

In its Comment,[46] the Office of the Solicitor General posits that the respondent Maybank's
foreclosure of the mortgage and acquisition of the property did not violate the Constitution.[47]

SECTION 2. Modes of Entry. — The Monetary Board may authorize foreign banks to operate in
the Philippine banking system through any of the following modes of entry: (i) by acquiring,
purchasing or owning up to sixty percent (60%) of the voting stock of an existing bank; (ii) by
investing in up to sixty percent (60%) of the voting stock of a new banking subsidiary
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incorporated under the laws of the Philippines; or (iii) by establishing branches with full
banking authority: Provided, That a foreign bank may avail itself of only one (1) mode of entry:
Provided, further, That a foreign bank or a Philippine corporation may own up to a sixty percent
(60%) of the voting stock of only one (1) domestic bank or new banking subsidiary.

It notes that the foreign bank may operate in the Philippines.[48] It adds that the bank had
entered the Philippine banking system by purchasing Philippine National Bank-Republic Bank
from the Philippine government,[49] which meant it has the same functions, privileges, and
limitations as all Philippine banks.[50]

The Office of the Solicitor General adds that Republic Act No. 10641 has allowed foreign banks
to bid and take part in foreclosure sales of real property mortgaged to them and to possess it
within five years.[51]

The Office of the Solicitor further notes that the constitutional prohibition on alien ownership of
lands does not apply in this case, as respondent Maybank did not become the absolute owner of
the property.[52] Unlike a domestic bank,[53] a foreign bank does not acquire the property as an
absolute owner, but only as a possessor with a "special right and duty to sell"[54] the property to
a qualified Philippine national within five years. Even if no redemption is made within a year of
registration of the certificate of sale, a foreign bank still cannot encumber, transform, or destroy
the property it acquired in a foreclosure sale.[55]

The Office of the Solicitor General maintains that the national patrimony remains preserved,
because Republic Act Nos. 4882 and 10641 prohibit title transfers to foreign banks and require
them to sell the foreclosed property to qualified Philippine nationals.[56]

On June 5, 2018, this Court ordered the Monetary Board of the Bangko Sentral ng Pilipinas
(Bangko Sentral) and the Bankers Association of the Philippines (the Bankers Association) to
each comment on whether the foreclosure and acquisition of respondent Maybank's properties, a
fully-owned foreign corporation, is allowed under the Constitution.[57]

Bangko Sentral maintains that foreign banks are authorized to foreclose mortgages on real
property, but are not allowed to acquire or own real properties.[58] It explains that engaging in
banking business is distinct from owning or acquiring land in the Philippines. The business of
foreign banks in the Philippines is governed by Republic Act No. 7721, as amended by
Republic Act No. 10641, while owning or acquiring land is regulated under the Public Land Act
and the 1987 Constitution.[59]

Citing the Senate and House's bicameral conference on the bill that soon became the General
Banking Law, Bangko Sentral distinguishes the policy on foreign ownership of land from that of
banks. It explains that the prohibition on land ownership is stricter because unlike land, the
foreign ownership of a bank is still limited by its engaging of business in Philippine money.[60]
It likewise asserts that the liberalization of entry of foreign banks is not meant to allow foreign
ownership of land.[61]

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Bangko Sentral also states that Republic Act No. 7721, as amended by Republic Act No. 10641,
is constitutional. It explains that the law, as affirmed in special laws and rules, only allows
foreign banks to foreclose real estate mortgages and possess foreclosed land,[62] but not to
consolidate title over the properties.[63]

For its part, the Bankers Association maintains that respondent Maybank's foreclosure, bid,
certificate of sale, and possession of the property are not void.[64] It contends that foreign banks
are not prohibited from participating in foreclosure proceedings and possessing land, as long as
they hold the title within the limits allowed under banking laws.[65] In any case, it adds, the
matter is addressed if the land is subsequently transferred to a Philippine national.[66]

The Bankers Association also points out that since the foreclosure happened before Republic Act
No. 10641 was passed, the original Republic Act No. 7721 applies in this case.[67]

On Republic Act No. 7721, the Bankers Association elaborates that the law provides equal
treatment to foreign banks and grants them functions and privileges similar to domestic banks,
including the right to extrajudicially foreclose a security under a valid loan agreement.[68]

The Bankers Association points out that the loan business component, a core function of banks,
will be rendered ineffective if banks are prevented from enforcing their rights as secured
creditors. Likewise, to deny foreclosure and acquisition rights to foreign banks will
disincentivize their entry, which is contrary to the policy behind Republic Act No. 7721.[69] It
likewise asserts that it will also benefit the economy, particularly small and medium enterprises,
if more lending and borrowing is encouraged.[70] Furthermore, to disallow foreign banks from
doing so may let unscrupulous persons to take advantage of this prohibition by borrowing from
foreign banks, defaulting, and defeating enforcement proceedings with impunity.[71]

The Bankers Association also adds that under Section 6 of Republic Act No. 10641, foreign
banks may bid and take part in foreclosure sales of land mortgaged to them and to conditionally
possess the property.[72] Thus, while land ownership is still limited to Philippine nationals, the
law is not unduly restrictive on the operations of foreign banks.[73]

Finally, the Bankers Association contends that the five-year period allowing foreign banks to
possess the property is the same period allowed under the General Banking Law for all banks to
dispose of foreclosed real properties. It surmises that this general rule is the reason why
Republic Act No. 7721 was silent on such power of foreign banks.[74] In any case, it points out
that this power has been made explicit in Republic Act No. 10641.[75]

For this Court's resolution are the following issues:

First, whether or not respondents Joaquin and Lilia Parcon are holding the property in trust for
petitioner Julie Parcon-Song;

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Second, whether or not respondent Maybank Philippines, Inc. is a mortgagee in good faith;

Third, whether or not respondent Maybank Philippines, Inc. is a foreign bank authorized by the
Monetary Board to operate in the Philippine banking system; and Finally, whether or not
respondent Maybank Philippines, Inc.'s foreclosure and acquisition of the properties are
authorized under the Constitution despite it being a fully-owned foreign corporation.

This Court will no longer rule on the first and third issues.

Both the existence of the trust and respondent Maybank's authority to operate in the Philippines
as a foreign bank are questions of fact. These are not proper to raise in a Rule 45 petition, which
generally only entertains questions of law.[76]

This Court's jurisdiction is limited to errors of law. It is not our function to examine the evidence
all over again. If the lower courts' findings are not shown to be unsupported by evidence or
based on a gross misapprehension of facts, their factual conclusions shall be respected.[77]

Here, both lower courts found that respondent Maybank is a foreign bank authorized by the
Monetary Board to operate in the Philippine banking system.[78] The Regional Trial Court
further ruled that no trust existed between petitioner and her parents.[79] The Court of Appeals
also noted that the title was clean, registered in the name of Lilia Parcon, and had no annotations
of liens, encumbrances, or adverse claims.[80]

There is no evidence that these findings were unsupported or manifestly erroneous. Petitioner
contested these findings, yet she did not present any proof to establish her allegations.[81] It is a
basic evidentiary rule that "[t]he party who alleges a fact has the burden of proving it."[82] Bare
allegations warrant no merit.[83] In Republic v. Estate of Hans Menzi:[84]

It is procedurally required for each party in a case to prove his own affirmative
allegations by the degree of evidence required by law. In civil cases such as this one,
the degree of evidence required of a party in order to support his claim is
preponderance of evidence, or that evidence adduced by one party which is more
conclusive and credible than that of the other party. It is therefore incumbent upon
the plaintiff who is claiming a right to prove his case. Corollarily, the defendant must
likewise prove its own allegations to buttress its claim that it is not liable.

The party who alleges a fact has the burden of proving it. The burden of proof may be on the
plaintiff or the defendant. It is on the defendant if he alleges an affirmative defense which is not
a denial of an essential ingredient in the plaintiffs cause of action, but is one which, if
established, will be a good defense - i.e., an "avoidance" of the claim.83 (Citations omitted)

Thus, this Court affirms the lower courts' findings as to the absence of the trust and the authority
of respondent Maybank to operate as a foreign bank in the Philippines.

II

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Likewise, the real estate mortgage is valid.

Under the doctrine of mortgagee in good faith, a mortgage is deemed valid if the mortgagee
relied in good faith on what appears on the face of the certificate of title. This is so even if the
mortgagor fraudulently acquired the title to the property.[86] In Cabuhat v. Court of Appeals:[87]

However, it is well-settled that even if the procurement of a certificate of title was

tainted with fraud and misrepresentation, such defective title may be the source of a
completely legal and valid title in the hands of an innocent purchaser for value. . . .

Just as an innocent purchaser for value may rely on what appears in the certificate of
title, a mortgagee has the right to rely on what appears in the title presented to him,
and in the absence of anything to excite suspicion, he is under no obligation to look
beyond the certificate and investigate the title of the mortgagor appearing on the face
of the said certificate. Furthermore, it is a well-entrenched legal principle that when
an innocent mortgagee who relies upon the correctness of a certificate of title
consequently acquires rights over the mortgaged property, the courts cannot
disregard such rights.[88] (Citations omitted)

Generally, if the certificate of title indicates nothing that will raise concern, and the mortgagee is
unaware of any defect in the title or any other problematic circumstance surrounding the
property, the mortgagee is not required to further investigate.[89]

The rationale for this doctrine is the public's interest in sustaining the certificate of title's
indefeasibility "as evidence of the lawflil ownership of the land or of any encumbrance"[90] on
it. In Andres v. Philippine National Bank:[91]

The doctrine protecting mortgagees and innocent purchasers in good faith emanates
from the social interest embedded in the legal concept granting indefeasibility of
titles. The burden of discovery of invalid transactions relating to the property
covered by a title appearing regular on its face is shifted from the third party relying
on the title to the co-owners or the predecessors of the title holder. Between the third
party and the co-owners, it will be the latter that will be more intimately
knowledgeable about the status of the property and its history. The costs of discovery
of the basis of invalidity, thus, are better borne by them because it would naturally be
lower. A reverse presumption will only increase costs for the economy, delay
transactions, and, thus, achieve a less optimal welfare level for the entire society.[92]
(Citation omitted)

However, when the mortgagee is a bank, a higher standard is imposed before it is considered a
mortgagee in good faith. Banks cannot simply rely on the title alone, but must further investigate
the property to ensure the genuineness of the title.[93] In Land Bank of the Philippines v. Belle
Corporation:[94]

When the purchaser or the mortgagee is a bank, the rule on innocent purchasers or
mortgagees for value is applied more strictly. Being in the business of extending
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loans secured by real estate mortgage, banks are presumed to be familiar with the
rules on land registration. Since the banking business is impressed with public
interest, they are expected to be more cautious, to exercise a higher degree of
diligence, care and prudence, than private individuals in their dealings, even those
involving registered lands. Banks may not simply rely on the face of the certificate of
title. Hence, they cannot assume that, simply because the title offered as security is
on its face free of any encumbrances or lien, they are relieved of the responsibility of
taking further steps to verify the title and inspect the properties to be mortgaged. As
expected, the ascertainment of the status or condition of a property offered to it as
security for a loan must be a standard and indispensable part of a bank's operations.
It is of judicial notice that the standard practice for banks before approving a loan is
to send its representatives to the property offered as collateral to assess its actual
condition, verify the genuineness of the title, and investigate who is/are its real
owner/s and actual possessors.[95] (Citations omitted)

Likewise, in Andres:

The general rule allows every person dealing with registered land to rely on the face
of the title when determining its absolute owner.

...

However, the banking industry belongs to a different category than private

individuals. Banks are considered businesses impressed with public interest,
requiring "high standards of integrity and performance." Consequently, banks must
exercise greater care, prudence, and due diligence in their property dealings. The
standard operating practice for banks when acting on a loan application is "to
conduct an ocular inspection of the property offered for mortgage and to verify the
genuineness of the title to determine the real owner(s) thereof."[96] (Citations
omitted)
Thus, a bank is a mortgagee in good faith if it inspected and investigated the property in
accordance with the standards imposed on banks.

However, this Court rules that a bank should not necessarily be made liable if it did not
investigate or inspect the property. If the circumstances reveal that an investigation would still
not yield a discovery of any anomaly, or anything that would arouse suspicion, the bank should
not be liable.

Here, both lower courts consistently held that Transfer Certificate of Title No. 107064 was
clean. It was registered in the name of respondent Lilia Parcon and bore no annotations
evidencing any trust, lien, or encumbrance on the property. The title was not forged or fake.
There is likewise no showing that respondent Maybank was aware of any defect or any other
conflicting right on the title when the property was mortgaged to it.[97]

There is no factual finding on whether respondent Maybank actually inspected the property. The
Court of Appeals simply ruled that the inspection is not necessary and respondent Maybank's
reliance on the clean title was sufficient.[98] Similarly, the Regional Trial Court found that it

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cannot be prejudiced by rights over the property not duly annotated in the title.[99]

Regardless, the circumstances show that had respondent Maybank conducted an investigation, it
would still not have discovered any issue on the mortgaged property.

Petitioner has the burden to prove that she is in actual possession of the property—a burden she
failed to discharge.

By her account, petitioner allegedly purchased the property from PACE Realty Investment, Inc.
using her own money, but used her mother's name to acquire it.[100] Thus, in 1994, the title was
registered in respondent Lilia Parcon's name.[101] Petitioner admitted that she let her parents and
siblings occupy the property and gave them financial support.[102]

Clearly, the ones in actual possession of the property were the Parcon Spouses and petitioner's
siblings.[103] Thus, had respondent Maybank investigated the property, it would still not have
found any issue.

Petitioner had had several chances to substantiate her claims. The Regional Trial Court had
initially dismissed the case because of her failure to prosecute. When she moved for
reconsideration, the trial court reinstated the case and allowed her to present her evidence.
Nonetheless, she was unable to continue her direct testimony and did not conduct a cross-
examination because her counsels failed to appear. Thus, the trial court deemed her to have
waived her right to formally offer her evidence.

Without clear and convincing evidence that petitioner's claims are facts, respondent Maybank
remains a mortgagee in good faith. Hence, this Court affirms the lower courts' finding that the
mortgage is valid.

III

Petitioner questions the constitutionality of respondent Maybank's foreclosure and acquisition of

the mortgaged property, arguing that it violates the prohibition on alien ownership of real
property under Article XII, Section 3 of the 1987 Constitution.[104]

We decline to rule on the constitutionality of the foreclosure. This case may be resolved on the
basis of a statute.

III (A)

Respondent Maybank's acquisition of the property is void. At the time of the foreclosure sale,
the governing law provided that foreign banks may not participate in the foreclosure and
acquisition of mortgaged properties.

As a foreign bank, respondent Maybank is authorized to operate in the Philippine banking

system, with the same rights and privileges as Philippine banks.[105] Under Republic Act No.
8791, or the General Banking Law, the entry of foreign banks is governed by Republic Act No.

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7721, or the Foreign Bank Liberalization Act.[106]

Enacted in 1994, [107] the underlying policy of the Foreign Bank Liberalization Act is to develop
a more "stable, competitive, efficient, and dynamic banking and financial system"[108] by
encouraging greater foreign participation. It allowed foreign banks to operate in the Philippine
banking system through any of the following modes of entry:

(i) by acquiring, purchasing or owning up to sixty percent (60%) of the voting stock
of an existing bank; (ii) by investing in up to sixty percent (60%) of the voting stock
of a new banking subsidiary incorporated under the laws of the Philippines; or (iii)
by establishing branches with full banking authority[.][109]

Under this provision, a foreign bank may own up to 60% of the voting stock of only one
domestic bank or new banking subsidiary.[110]

Nonetheless, the law maintained the State policy to keep the financial system "effectively
controlled by Filipinos."[111] It mandated the Monetary Board to always ensure that "the control
of seventy percent (70%) of the resources or assets of the entire banking system is held by
domestic banks which are at least majority-owned by Filipinos[.]"[112]

Prior to its amendment in 2014, the Foreign Bank Liberalization Act was silent on whether
foreign banks can foreclose mortgages and acquire mortgaged properties.

Generally, for matters not covered by the Foreign Bank Liberalization Act, the provisions of the
General Banking Law applied to foreign banks."[113] The General Banking Law allowed banks
to foreclose real estate mortgages and to acquire real properties mortgaged to it in good faith.
Its Section 52 provides:

SECTION 52. Acquisition of Real Estate by Way of Satisfaction of Claims. —

Notwithstanding the limitations of the preceding Section, a bank may acquire,
hold or convey real property under the following circumstances:

52.1. Such as shall be mortgaged to it in good faith by way of security for debts;

....

Any real property acquired or held under the circumstances enumerated in the above
paragraph shall be disposed of by the bank within a period of five (5) years or as may
be prescribed by the Monetary Board: Provided, however, That the bank may, after
said period, continue to hold the property for its own use, subject to the limitations of
the preceding Section. (25a) (Emphasis supplied)

However, a more specific rule is found in Republic Act No. 4882, which amended Republic Act
No. 133. It states:

SECTION 1. Any provision of law to the contrary notwithstanding, private real property may be
mortgaged in favor of any individual, corporation, or association, but the mortgage or his
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successor in interest, if disqualified to acquire or hold lands of the public domain in the
Philippines, shall not take possession of the mortgaged property during the existence of the
mortgage and shall not take possession of mortgaged property except after default and for the
sole purpose of foreclosure, receivership, enforcement or other proceedings and in no case for a
period of more than five years from actual possession and shall not bid or take part in any sale of
such real property in case of foreclosure: Provided, That said mortgagee or successor in interest
may take possession of said property after default in accordance with the prescribed judicial
procedures for foreclosure and receivership and in no case exceeding five years from actual
possession.[114] (Emphasis supplied)

Thus, a mortgagee who is prohibited from acquiring public lands may possess the property for
five years after default and for the purpose of foreclosure. However, it may not bid or take part
in any foreclosure sale of the real property.

In 2014, Congress enacted Republic Act No. 10641 to amend the Foreign Bank Liberalization
Act. The amendment allowed the full entry of foreign banks in the Philippines,[115] though it
maintained the State policy to keep the financial system effectively controlled by Filipinos.[116]
Notably, it gave authorized foreign banks the same functions, privileges, and limitations as
domestic banks of the same category. Likewise, any right, privilege, or incentive granted to
foreign banks is extended to Philippine banks.[117] Thus, a new provision on foreclosure
proceedings was added:

SEC. 9. Participation in Foreclosure Proceedings. — Foreign banks which are

authorized to do banking business in the Philippines through any of the modes of
entry under Section 2 hereof shall be allowed to bid and take part in foreclosure sales
of real property mortgaged to them, as well as to avail of enforcement and other
proceedings, and accordingly take possession of the mortgaged property, for a period
not exceeding five (5) years from actual possession: Provided, That in no event shall
title to the property be transferred to such foreign bank. In case said bank is the
winning bidder, it shall, during the said five (5)-year period, transfer its rights to a
qualified Philippine national, without prejudice to a borrower's rights under
applicable laws. Should the bank fail to transfer such property within the five (5)-
year period, it shall be penalized one half (1/2) of one percent (1%) per annum of the
price at which the property was foreclosed until it is able to transfer the property to a
qualified Philippine national.[118]

Thus, a foreign bank can now participate in foreclosure sales of real property mortgaged to it,
and even possess it. There are limitations, namely: (a) the possession must be limited to five
years; (b) the property title shall not be transferred to it; and (c) within the five-year period, it
must transfer its rights to a qualified Philippine national. In case a foreign bank fails to transfer
the property, it will be liable to pay half of 1% per annum of the foreclosure price until it
transfers the property.

Clearly, under Republic Act No. 10641, foreign banks may now foreclose and acquire
mortgaged properties.

However, Republic Act No. 10641, which was enacted in 2014, does not apply in this case.

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Here, the loans were obtained and the real estate mortgage was executed and annotated on the
title in 1995.[119] The default on the loans, the foreclosure of the mortgage, and the property
acquisition took place in 2001.[120]

The law then in place was Republic Act No. 4882. Consequently, respondent Maybank was still
a mortgagee disqualified to acquire lands in the Philippines. It may possess the mortgaged
property after default and solely for foreclosure, but it cannot bid or take part in any foreclosure
sale.

Thus, the sale to respondent Maybank is invalid.

III (B)

Evidently, this case could be resolved without tackling whether a foreign bank's participation in
a foreclosure sale of real property is constitutionally allowed. This Court shall follow the
dictates of the constitutional policy of avoidance.

Before this Court may determine the constitutionality of a government act, the requisites for
judicial review must be satisfied. In In Re: Save the Supreme Court Judicial Independence and
Fiscal Autonomy Movement:[121]

The power of judicial review, like all powers granted by the Constitution, is subject to certain
limitations. Petitioner must comply with all the requisites for judicial review before this court
may take cognizance of the case. The requisites are:

(1) there must be an actual case or controversy calling for the exercise of judicial
power;

(2) the person challenging the act must have the standing to question the validity of
the subject act or issuance; otherwise stated, he must have a personal and substantial
interest in the case such that he has sustained, or will sustain, direct injury as a result
of its enforcement;

(3) the question of constitutionality must be raised at the earliest opportunity; and

(4) the issue of constitutionality must be the very lis mota of the case.[122] (Citation
omitted)

The fourth requisite is relevant here. Courts are obligated to presume that the acts of Congress
are valid, unless the contrary is clearly shown. Thus, courts avoid resolving the constitutionality
of a law if the case can be ruled on other grounds.[123] The question of constitutionality will
only be passed upon if it is indispensable to the resolution of the case,[124] but it cannot be
raised collaterally.[125] This Court ruled:

Judicial review of official acts on the ground of unconstitutionality may be sought or availed of
through any of the actions cognizable by courts of justice, not necessarily in a suit for
declaratory relief. . . . The constitutional issue, however, (a) must be properly raised and
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presented in the case, and (b) its resolution is necessary to a determination of the case, i.e., the
issue of constitutionality must be the very Us mota presented.[126](Citation omitted)

These principles were further discussed in Ty v. Trampe:[127]

Having already definitively disposed of the case through the resolution of the foregoing two
issues, we find no more need to pass upon the third. It is axiomatic that the constitutionality of a
law, regulation, ordinance or act will not be resolved by courts if the controversy can be, as in
this case it has been, settled on other grounds. In the recent case of Macasiano vs. National
Housing Authority, this Court declared:

"It is a rule firmly entrenched in our jurisprudence that the constitutionality of an act
of the legislature will not be determined by the courts unless that question is properly
raised and presented in appropriate cases and is necessary to a determination of the
case, i.e., the issue of constitutionality must be the very lis mota presented. To
reiterate, the essential requisites for a successful judicial inquiry into the
constitutionality of a law are: (a) the existence of an actual case or controversy
involving a conflict of legal rights susceptible of judicial determination, (b) the
constitutional question must be raised by a proper party, (c) the constitutional
question must be raised at the earliest opportunity, and (d) the resolution of the
constitutional question must be necessary to the decision of the case." (Italics
supplied)

The aforequoted decision in Macasiano merely reiterated the ruling in Laurel vs. Garcia, where
this Court held:

"The Court does not ordinarily pass upon constitutional questions unless these questions are
properly raised in appropriate cases and their resolution is necessary for the determination of the
case[.] The Court will not pass upon a constitutional question although properly presented by the
record if the case can be disposed of on some other found such as the application of a statute
or general law[.]"[128] (Emphasis in the original, citations omitted)

In Spouses Mirasol v. Court of Appeals,[129] this Court explained that the presumption of
constitutionality is anchored on the doctrine of separation of powers. Courts should not assume
that legislative and executive acts were done without thoughtful consideration:

As regards the second issue, petitioners contend that P.D. No. 579 and its implementing
issuances are void for violating the due process clause and the prohibition against the taking of
private property without just compensation. Petitioners now ask this Court to exercise its power
of judicial review.

Jurisprudence has laid down the following requisites for the exercise of this power: First, there
must be before the Court an actual case calling for the exercise of judicial review. Second, the
question before the Court must be ripe for adjudication. Third, the person challenging the
validity of the act must have standing to challenge. Fourth, the question of constitutionality must
have been raised at the earliest opportunity, and lastly, the issue of constitutionality must be the
very lis mota of the case.

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As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be
settled on other grounds. The policy of the courts is to avoid ruling on constitutional questions
and to presume that the acts of the political departments are valid, absent a clear and
unmistakable showing to the contrary. To doubt is to sustain. This presumption is based on the
doctrine of separation of powers. This means that the measure had first been carefully studied by
the legislative and executive departments and found to be in accord with the Constitution before
it was finally enacted and approved.

The present case was instituted primarily for accounting and specific performance. The Court of
Appeals correctly ruled that PNB's obligation to render an accounting is an issue, which can be
determined, without having to rule on the constitutionality of P.D. No. 579. In fact there is
nothing in P.D. No. 579, which is applicable to PNB's intransigence in refusing to give an
accounting. The governing law should be the law on agency, it being undisputed that PNB acted
as petitioners' agent. In other words, the requisite that the constitutionality of the law in question
be the very lis mota of the case is absent. Thus we cannot rule on the constitutionality of P.D.
No. 579.[130] (Citations omitted)

In this case, the applicable law that governed the sale is not Republic Act No. 10641. The
foreclosure took place in 2001, prior to the enactment of Republic Act No. 10641 in 2014.
Republic Act No. 10641 is not in question; thus, its constitutionality cannot be addressed.

Moreover, this case was filed for annulment of title, reconveyance of the transfer certificate of
title, annulment of mortgage and foreclosure proceedings, and declaration of family home. All
the issues may be resolved without determining the constitutionality of Republic Act No. 10641.
The judicial review requirement that a constitutional issue seasonably raised should be the lis
mota of the case is rooted in two constitutional principles: first, the principle of deference; and
second, the principle of reasonable caution in striking down an act by a co-equal political branch
of government.

Article VIII, Section 1 of the Constitution, which specifies that courts may act on any grave
abuse of discretion by any government branch or instrumentality, does not license this Court to
issue advisory opinions. Apart from an actual case or controversy, this Court must be satisfied
that the reliefs prayed for require the resolution of a constitutional issue.

There are exceptions, namely: (a) when a facial review of the statute is allowed, as in cases of
actual or clearly imminent violation of the sovereign rights to free expression and its cognate
rights; or (b) when there is a clear and convincing showing that a fundamental constitutional
right has been actually violated in the application of a statute, which are of transcendental
interest. The violation must be so demonstrably and urgently egregious that it outweighs a
reasonable policy of deference in such specific instance. The facts constituting that violation
must either be uncontested or established on trial. The basis for ruling on the constitutional issue
must also be clearly alleged and traversed by the parties. Otherwise, this Court will not take
cognizance of the constitutional issue, let alone rule on it.

This case is no exception. We decline to resolve the constitutionality of Section 9 of Republic

Act No. 10641 as it is not the very lis mota of the case. The relief can be granted simply by
examining the applicable statute. Besides, there was no constitutional violation so urgently
egregious that it should outweigh our reasonable policy of deference to the two other
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constitutional branches of government.

WHEREFORE, this Court PARTIALLY GRANTS the Petition. The August 17, 2011
Decision and November 28, 2011 Resolution of the Court of Appeals in CA-G.R. CV No. 93681
is MODIFIED. Transfer Certificate of Title No. 107064 in the name of respondent Lilia Parcon
and the real estate mortgage dated November 28, 1995 in favor of respondent May bank
Philippines, Inc. are deemed VALID. Petitioner Julie Parcon-Song's prayer to transfer the
property to her as its true and lawful owner is DENIED. However, the foreclosure sale of the
property in favor of respondent Maybank Philippines, Inc. is declared VOID, without prejudice
to another foreclosure sale under Republic Act No. 10641 if warranted.

SO ORDERED.

Peralta, (Chief Justice), Perlas-Bernabe, Leonen, Caguioa, Reyes, J., Jr., Carandang, Lazaro-
Javier, Inting, Zalameda, Lopez, Delos Santos, and Gaerlan, JJ. concur.
Gesmundo, J., on official leave.
Hernando, J., see concurring opinion.

[1] Rollo, pp. 8-36. Filed under Rule 45 of the Rules of Court.

[2] Id. at 37—47. The August 7, 2011 Decision was penned by Associate Justice Remedios A.
Salazar-Femando and concurred in by Associate Justices Celia C. Librea-Leagogo and Michael
P. Elbinias of the Second Division, Court of Appeals, Manila.

[3]Id. at 48-9. The November 28, 2011 Resolution was penned by Associate Justice Remedios
A. Salazar-Fernando and concurred in by Associate Justices Stephen C. Cruz and Elihu A.
Ybañez of the Special Former Second Division, Court of Appeals, Manila.

[4]
Id. at 76-89. The Decision was penned by Judge Thelma A. Ponferrada of the Regional Trial
Court of Quezon City, Branch 104.

[5] Id. at 76.

[6] Id. at 38.

[7] Id. at 38 and 40.

[8] Id. at 40.

[9] Id. at 86.

[10] Id. at 39 and 41.

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[11] Id. at 41.

[12] Id. at 38-39.

[13] Id. at 38.

[14] Id. at 39.

[15] Id. at 39.

[16] Id.

[17] Id. at 40.

[18] Id. at 81-83.

[19] Id. at 87.

[20] Id. at 76.

[21] Id. at 86.

[22] Id. at 87.

[23] Id. at 88.

[24] Id. at 87.

[25] Id. at 37-47.

[26] Id. at 44.

[27] Id. at 45.

[28] Id. at 46 citing FAMILY CODE, art. 155.

[29] Id. at 45.

[30] Id. at 48-49.

[31] Id. at 8-36.

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[32] Id. at 28.

[33] Id. at 29.

[34] Id. at 32.

[35] Id. at 19 and 22.

[36] Id. at 25-26. Republic Act No. 7721 (1994), sec. 2 provides:

[37] Id. at 27.

[38] Id. at 116-117.

[39] Id. at 116-117.

[40] Id. at 106 and 113.

[41] Id. at 106 and 113, Comment.

[42] Id. at 113-114.

[43] Id. at 115-116.

[44] Id. at 154, Resolution dated August 2, 2017.

[45] Id. at 156.

[46] Id. at 167-183.

[47] Id. at 169, OSG Comment.

[52] Id. at 175.

[53] Id. at 176.

[54] Id.

[55] Id.

[56] Id.

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[57] Id. at 184.

[58] Id. at 244, BSP Comment.

[48] Id. at 171.

[49]Id. at 171 citing Republic Act No. 8791 (2000), sec. 73 amending Republic Act No. 7721
(1994), sec 2.

[50] Id. at 171 citing Republic Act No. 7721 (1994), sec. 8.

[51]possession of mortgaged property except upon default and only for the sole purpose of
foreclosure. See also Republic Act No. 10641 (2013), sec. 9; BSP Circular No. 858, series of
2014; and of the Manual of Regulations for Banks, Subsection X311.4.

[69] Id. at 254-255.

[70] Id. at 256.

[71] Id. at 259.

[72]Id. at 255-256 citing cites the Bangko Sentral's "Frequently Asked Questions" on
Amendments to Relevant Provisions of the Manual of Regulations for Banks implementing
Republic Act No. 10641.

[73] Id. at 257.

[74] Id. at 258.

[75] Id. at 259.

[76] RULES OF COURT, Rule 45, sec. 1.

[77]Fangonil-Herrera v. Fangonil, 558 Phil 235, 256-257 (2007) [Per J. Chico-Nazario. Third
Division] citing Philippine Airlines, Inc. v. Court of Appeals, 341 Phil. 624 (1997) [Per J.
Regalado, Second Division].

[78] Rollo, pp. 45 and 87.

[79] Id. at 86.

[80] Id. at 44.

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[81] Id. at 28.

[82] Republic v. Estate of Hans Menzi, 512 Phil. 425, 457 (2005) [Per J. Tinga, En Banc].

[83] Id.

[84] 512 Phil. 425 (2005) [Per J. Tinga, En Banc].

[85] Id. at 456-457.

[86] See Claudia v. Spouses Saraza, 767 Phil. 857 (2015) [Per J. Mendoza, Second Division].

[87] 418 Phil. 451 (2001) [Per J.Ynares-Santiago, First Division],

[88] Id. at 456.

[89] See Claudia v. Spouses Saraza, 161 Phil. 857 (2015) [Per J. Mendoza, Second Division].

[90]Id. at 867 citing Cavite Development Bank v. Lim, 381 Phil. 355 (2000) [Per J. Mendoza,
Second Division].

[91] 745 Phil. 459 (2014) [Per J. Leonen, Second Division].

[92] Id. at 473.

[93] Land Bank of the Phils, v. Belle Corp., 768 Phil. 368 (2015) [Per J. Peralta, Third
Division].

[94] 768 Phil. 368 (2015) [Per J. Peralta, Third Division].

[95] Id. at 385-386.

[96]Andres v. Philippine National Bank, 745 Phil. 459, 474-475 (2014) [Per J. Leonen, Second
Division].

[97] Rollo, p. 44.

[98] Id.

[99] Id. at 87.

[100] Id. at 38.

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[101] Id. at 39.

[102] Id. at 76.

[103] Id. at 76-77.

[104] Id. at 19 and 22.

[105] Republic Act No. 7721 (1994), sees. 2 and 8, as amended by Republic Act No. 10641

[106] Republic Act No. 8791 (2000), sec. 72.

[107]An Act Liberalizing the Entry of Scope of Operations of Foreign Banks in the Philippines
and For Other Purposes.

[108] Republic Act No. 7721 (1994), sec. 1.

[109] Republic Act No. 7721 (1994), sec. 2.

[110] Republic Act No. 7721 (1994), sec. 2.

[111] Republic Act No. 7721 (1994), sec. 1.

[112] Republic Act No. 7721 (1994), sec. 3.

[113] Republic Act No. 8791 (2000), sec. 77 provides:

SECTION 77. Laws Applicable. — In all matters not specifically covered by special provisions
applicable only to a foreign bank or its branches and other offices in the Philippines, any foreign
bank licensed to do business in the Philippines shall be bound by the provisions of this Act, all
other laws, rules and regulations applicable to banks organized under the laws of the Philippines
of the same class, except those that provide for the creation, formation, organization or
dissolution of corporations or for the fixing of the relations, liabilities, responsibilities, or duties
of stockholders, members, directors or officers of corporations to each other or to the
corporation.

[114] Republic Act No. 4882(1967), sec. 1, amending Republic Act No. 133(1947).

[115] Section 1 of Republic Act No. 10641 allowed foreign banks to enter the banking system: "
(i) by acquiring, purchasing or owning up to one hundred percent (100%) of the voting stock of
an existing bank; (ii) by investing in up to one hundred percent (100%) of the voting stock of a
new banking subsidiary incorporated under the laws of the Philippines; or (iii) by establishing
branches with full banking authority"

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[116]Sections 2 and 3 of Republic Act No. 10641 provide that the financial system will still be
effectively controlled by Filipinos by: (ii) refining the guidelines before a foreign bank may be
allowed to operate; and (ii) mandating that the Monetary Board ensure at all times that the
control of 60% of the resources or assets of the entire banking system is held by domestic banks
which are at least majority-owned by Filipinos.

[117] Republic Act No. 10641 (2014), sec. 5 provides:

SECTION 8. Equal Treatment. —Foreign banks authorized to operate under Section

2 of this Act, shall perform the same functions, enjoy the same privileges, and be
subject to the same limitations imposed upon a Philippine bank of the same category.
. ..

Any right, privilege or incentive granted to foreign banks or their subsidiaries or

affiliates under this Act, shall be equally enjoyed by and extended under the same
conditions to Philippine banks.

[118] Republic Act No. 10641 (2014), sec. 6.

[119] Rollo, p. 40.

[120] Id. at 39 and 41.

[121] 751 Phil. 30 (2015) [Per J. Leonen, En Banc].

[122] Id. at 36.

[123] Planters Products, Inc. v. Fertiphil Corp., 572 Phil. 270 [Per J. Reyes, R.T., Third
Division] citing Lim v. Pacquing, 310 Phil. 722 (1995) [Per J. Padilla, En Banc].

[124]Tarrosa v. Gabriel C. Singson, 302 Phil. 588 (1994) [Per J. Quiason, En Banc] citing
Fernandez v. Torres, 289 Phil. 972 (1992) [Per J. Feliciano, En Banc].

[125] Laude v. Ginez-Jabalde, 111 Phil. 490 (2015) [Per J. Leonen, En Banc].

[126]
Planters Products, Inc. v. Fertiphil Corporation, 572 Phil. 270, 291 (2008) [Per J. R. T.
Reyes, Third Division].

[127] 321 Phil. 81 (1995) [Per J. Panganiban, En Banc],

[128] Id. at 103.

[129] 403 Phil. 760 (2001) [Per J. Quisumbing, Second Division].

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[130] Id. at 773-774.

C ONCURRING OPINION

HERNANDO, J.:

I fully concur in the disquisitions of the ponencia of Our esteemed colleague, Mr. Justice Marvic
Mario Victor F. Leonen. I hasten to add, however, a brief discussion as to why the sale of the
subject real property to Maybank is void ab initio.

Maybank harked upon Republic Act No. 10641 (RA 10641), or An Act Allowing the Entry of
Foreign Banks in the Philippines, Amending for the Purpose Republic Act No. 7721. RA 10641
allowed foreign banks to foreclose and acquire mortgaged real properties in the Philippines.
Section 6 thereof states:

Section 6. A new provision in Section 9 is hereby inserted in the same Act, in lieu of the original
provisions of Section 9 repealed by Section 11 of Republic Act No. 10000. Section 9 shall now
read as follows:

"SEC. 9. Participation in Foreclosure Proceedings.—Foreign banks which are

authorized to do banking business in the Philippines through any of the modes of
entry under Section 2 hereof shall be allowed to bid and take part in foreclosure
sales of real property mortgaged to them, as well as to avail of enforcement and
other proceedings, and accordingly take possession of the mortgaged property,
for a period not exceeding five (5) years from actual possession: Provided, That
in no event shall title to the property be transferred to such foreign bank. In case
said bank is the winning bidder, it shall, during the said five (5)-year period, transfer
its rights to a qualified Philippine national, without prejudice to a borrower's rights
under applicable laws. Should the bank fail to transfer such property within the five
(5)-year period, it shall be penalized one half (1/2) of one percent (1%) per annum of
the price at which the property was foreclosed until it is able to transfer the property
to a qualified Philippine national." (Emphasis supplied.)

RA 10641 was enacted in 2014. Established facts, however, show that Maybank acquired the
subject real property by bidding and taking part in its foreclosure sale in 2001. Thus, Maybank's
insistence on RA 10641 is fruitless. The prevailing law that must be applied at the time of the
sale is Republic Act No. 133, or An Act to Authorize the Mortgage of Private Real Property in
Favor of Any Individual, Corporation, or Association Subject to Certain Conditions. Its Section
1, as amended by Republic Act No. 4882,[1] provides:

Section 1. Section one Republic Act Numbered One hundred thirty-three as heretofore amended
by Republic Act Numbered Forty-three hundred eighty-one, is hereby further amended to read
as follows:
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"Sec. 1. Any provision of law to the contrary notwithstanding, private real property
may be mortgaged in favor of any individual, corporation, or association, but the
mortgagee or his successor in interest, if disqualified to acquire or hold lands of
the public domain in the Philippines, shall not take possession of the mortgaged
property during the existence of the mortgage and shall not take possession of
mortgaged property except after default and for the sole purpose of foreclosure,
receivership, enforcement or other proceedings and in no case for a period of
more than five years from actual possession and shall not bid or take part in any
sale of such real property in case of foreclosure: Provided, That said mortgagee or
successor in interest may take possession of said property after default in accordance
with the prescribed judicial procedures for foreclosure and receivership and in no
case exceeding five years from actual possession." (Emphasis and underscoring
supplied.)

Section 7, Article XII of the 1987 Constitution declares that private lands are transferrable only
to individuals or entities qualified to hold or acquire lands of the public domain:

SECTION 7. Save in cases of hereditary succession, no private lands shall be transferred or

conveyed except to individuals, corporations, or associations qualified to acquire or hold lands
of the public domain.

It is long-settled that only Filipinos, whether individuals or corporate entities, may own
Philippine lands.2 As the basic exception to its general rule, Section 7 itself recognizes transfers
to foreigners by way of hereditary successions.

Maybank, admittedly a foreign corporation 98%-owned by a Malaysian entity, obtained the

subject real property in a foreclosure sale. Not being Filipino, it cannot acquire lands located in
the Philippines, and any transfer to its name other than by hereditary succession of such lands,
including the subject real property, is void.

Transactions made in violation of the Constitution, like this one in present consideration, are
void.

Also, contracts that trample upon public interest are contrary to public policy.3 Public biddings
are imbued with public interest. Power Sector Assets and Liabilities and Management
Corporation v. Pozzolanic Philippines Incorporated[4] explains:

By its very nature, public bidding aims to protect public interest by giving the public
the best possible advantages through open competition. Thus, competition must be
legitimate, fair and honest. In the field of government contract law, competition
requires not only bidding upon a common standard, a common basis, upon the same
thing, the same subject matter, and the same undertaking, but also that it be
legitimate, fair and honest and not designed to injure or defraud the
government. An essential element of a publicly bidded contract is that "all bidders
must be on equal footing, not simply in terms of application of the procedural rules
and regulations imposed by the relevant government agency, but more importantly,
on the contract bidded upon.[5] (Emphasis supplied and citations omitted.)

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Maybank disregarded the rules of public bidding by taking part therein despite its
disqualification. It even emerged as the highest bidder. Necessarily, Maybank gained an undue
advantage over all other foreign corporations who may have been interested in the subject
property, and even colored the foreclosure proceedings with an anomalous tinge of favoritism.
The resultant sale to a non-Filipino entity like Maybank from the said public bidding
contravenes public policy and therefore void.

Agreements that violate the Constitution and public policy are inexistent and void from the
beginning.

The Civil Code declares so, viz.:

ART. 1409. The following contracts are inexistent and void from the beginning:

(1) Those whose cause, object or purpose is contrary to law, morals,

good customs, public order or public policy;

xxxx

These contracts cannot be ratified. Neither can the right to set up the defense of
illegality be waived. (Emphasis supplied.)

Withal, the sale of the subject real property to Maybank is void ab initio.

IN VIEW OF THE FOREGOING, I vote to GRANT the Petition in part, in consonance

further with the reasons and dispositions of the ponencia.

(Sgd.) RAMON PAUL L. HERNANDO

Associate Justice

[1] An Act to Amend Section One of Republic Act Numbered One Hundred Thirty-Three,
Entitled "An Act to Authorize the Mortgage of Private Real Property in Favor of Any Individual,
Corporation, or Association Subject to Certain Conditions", as Amended by Republic Act
Numbered Forty-Three Hundred Eighty-One; approved June 17, 1967 and published October
30, 1967.

[2]Per Krivenko v. Register of Deeds, 79 Phil. 461 (1947); Borromeo v. Descallar, 599 Phil. 332
(2009); Fremel v. Katito, 453 Phil. 885 (2003); and Halili v. Court of Appeals, 350 Phil. 906
(1998).

[3]Per Power Sector Assets and Liabilities and Management Corporation v. Pozzolanic
Philippines
Incorporated, 671 Phil. 731; citing Ongsiako v. Gamboa, 86 Phil. 50 (1950).

[4] Id.

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[5] Id. at 753-754.

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