8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

G.R. No. 205487. November 12, 2014.*

 
ORION SAVINGS BANK, petitioner, vs. SHIGEKANE
SUZUKI, respondent.

Remedial Law; Civil Procedure; Appeals; Petition for Review

on Certiorari; In a Rule 45 petition, the latitude of judicial review
generally excludes a factual and evidentiary reevaluation, and the
Supreme Court (SC) ordinarily abides by the uniform factual
conclusions of the trial court and the appellate court.—In a Rule
45 petition, the latitude of judicial review generally excludes a
factual and evidentiary reevaluation, and the Court ordinarily
abides by the uniform factual conclusions of the trial court and
the appellate court. In the present case, while the courts below
both arrived at the same conclusion, there appears to be an
incongruence in their factual findings and the legal principle they
applied to the attendant factual circumstances. Thus, we are
compelled to examine certain factual

_______________

*  SECOND DIVISION.

346

346 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

issues in the exercise of our sound discretion to correct any

mistaken inference that may have been made.
Civil Law; Conflict of Laws; Lex Loci Rei Sitae; All matters
concerning the title and disposition of real property are determined
by what is known as the lex loci rei sitae, which can alone
prescribe the mode by which a title can pass from one person to
another, or by which an interest therein can be gained or lost.—It
is a universal principle that real or immovable property is
exclusively subject to the laws of the country or state where it is
located. The reason is found in the very nature of immovable
property — its immobility. Immovables are part of the country
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 1/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

and so closely connected to it that all rights over them have their
natural center of gravity there. Thus, all matters concerning the
title and disposition of real property are determined by what is
known as the lex loci rei sitae, which can alone prescribe the mode
by which a title can pass from one person to another, or by which
an interest therein can be gained or lost. This general principle
includes all rules governing the descent, alienation and transfer
of immovable property and the validity, effect and construction of
wills and other conveyances. This principle even governs the
capacity of the person making a deed relating to immovable
property, no matter what its nature may be. Thus, an instrument
will be ineffective to transfer title to land if the person making it
is incapacitated by the lex loci rei sitae, even though under the
law of his domicile and by the law of the place where the
instrument is actually made, his capacity is undoubted.
Same; Same; National Law; Property Relations; Property
relations between spouses are governed principally by the national
law of the spouses.—Property relations between spouses are
governed principally by the national law of the spouses. However,
the party invoking the application of a foreign law has the burden
of proving the foreign law. The foreign law is a question of fact to
be properly pleaded and proved as the judge cannot take judicial
notice of a foreign law. He is presumed to know only domestic or
the law of the forum.
Remedial Law; Evidence; Proof of Foreign Laws; To prove a
foreign law, the party invoking it must present a copy thereof and
comply with Sections 24 and 25 of Rule 132 of the Revised Rules of
Court.—To prove a foreign law, the party invoking it must present
a copy thereof and comply with Sections 24 and 25 of Rule 132 of
the

347

VOL. 740, NOVEMBER 12, 2014 347

Orion Savings Bank vs. Suzuki

Revised Rules of Court which reads: SEC. 24. Proof of official

record.—The record of public documents referred to in paragraph
(a) of Section 19, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested
by the officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. If
the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation,
consul general, consul, vice consul, or consular agent or by any
officer in the foreign service of the Philippines stationed in the
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 2/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

foreign country in which the record is kept, and authenticated

by the seal of his office. (Emphasis supplied) SEC. 25. What
attestation of copy must state.—Whenever a copy of a document or
record is attested for the purpose of the evidence, the attestation
must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting officer,
if there be any, or if he be the clerk of a court having a seal, under
the seal of such court.
Civil Law; Conflict of Laws; Doctrine of Processual
Presumption; The International Law doctrine of presumed-identity
approach or processual presumption comes into play, i.e., where a
foreign law is not pleaded or, even if pleaded, is not proven, the
presumption is that foreign law is the same as Philippine Law.—
Accordingly, the International Law doctrine of presumed-identity
approach or processual presumption comes into play, i.e., where a
foreign law is not pleaded or, even if pleaded, is not proven, the
presumption is that foreign law is the same as Philippine Law.
Under Philippine Law, the phrase “Yung Sam Kang ‘married to’
Hyun Sook Jung” is merely descriptive of the civil status of Kang.
In other words, the import from the certificates of title is that
Kang is the owner of the properties as they are registered in his
name alone, and that he is married to Hyun Sook Jung. We are
not unmindful that in numerous cases we have held that
registration of the property in the name of only one spouse does
not negate the possibility of it being conjugal or community
property. In those cases, however, there was proof that the
properties, though registered in the name of only one spouse, were
indeed either conjugal or community properties. Accordingly, we
see no reason to declare as invalid Kang’s conveyance in favor of
Suzuki for the supposed lack of spousal consent.

348

348 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

Remedial Law; Evidence; Public Documents; Public

instruments are evidence of the facts that gave rise to their
execution and are to be considered as containing all the terms of
the agreement.—Public instruments are evidence of the facts that
gave rise to their execution and are to be considered as containing
all the terms of the agreement. While a notarized document
enjoys this presumption, “the fact that a deed is notarized is not a
guarantee of the validity of its contents.” The presumption of
regularity of notarized documents is not absolute and may be
rebutted by clear and convincing evidence to the contrary. In the
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 3/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

present case, the presumption cannot apply because the

regularity in the execution of the Dacion en Pago and the loan
documents was challenged in the proceedings below where their
prima facie validity was overthrown by the highly questionable
circumstances surrounding their execution.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
  Law Offices of NCFM and Associates for petitioner.
  Ongkiko, Manhit, Custodio & Acorda for respondent.

 
BRION, J.:
 
Before us is the Petition for Review on Certiorari1 filed
by petitioner Orion Savings Bank (Orion) under Rule 45 of
the Rules of Court, assailing the decision2 dated August 23,
2012 and the resolution3 dated January 25, 2013 of the
Court of Appeals (CA) in C.A.-G.R. CV No. 94104.
 
The Factual Antecedents
 
In the first week of August 2003, respondent Shigekane
Suzuki (Suzuki), a Japanese national, met with Ms. Helen

_______________

1  Rollo, pp. 8-31.

2   Id., at pp. 35-51; penned by Associate Justice Agnes Reyes-Carpio,
with Associate Justices Rosalinda Asuncion-Vicente and Priscilla J.
Baltazar-Padilla, concurring.
3  Id., at pp. 53-55.

349

VOL. 740, NOVEMBER 12, 2014 349

Orion Savings Bank vs. Suzuki

Soneja (Soneja) to inquire about a condominium unit

and a parking slot at Cityland Pioneer, Mandaluyong City,
allegedly owned by Yung Sam Kang (Kang), a Korean
national and a Special Resident Retiree’s Visa (SRRV)
holder.
At the meeting, Soneja informed Suzuki that Unit No.
536 [covered by Condominium Certificate of Title (CCT)
No. 18186]4 and Parking Slot No. 42 [covered by CCT No.
9118]5 were for sale for P3,000,000.00. Soneja likewise
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 4/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

assured Suzuki that the titles to the unit and the parking
slot were clean. After a brief negotiation, the parties agreed
to reduce the price to P2,800,000.00.
On August 5, 2003, Suzuki issued Kang a Bank of the
Philippine Island (BPI) Check No. 833496 for One Hundred
Thousand Pesos (P100,000.00) as reservation fee.7 On
August 21, 2003, Suzuki issued Kang another check, BPI
Check No. 83350,8 this time for P2,700,000.00 representing
the remaining balance of the purchase price. Suzuki and
Kang then executed a Deed of Absolute Sale dated August
26, 20039 covering Unit No. 536 and Parking Slot No. 42.
Soon after, Suzuki took possession of the condominium unit
and parking lot, and commenced the renovation of the
interior of the condominium unit.
Kang thereafter made several representations with
Suzuki to deliver the titles to the properties, which were
then allegedly in possession of Alexander Perez (Perez,
Orion’s Loans Officer) for safekeeping. Despite several
verbal demands, Kang failed to deliver the documents.
Suzuki later on learned that Kang had left the country,
prompting Suzuki to verify the status of the properties
with the Mandaluyong City Registry of Deeds.

_______________

4  Records, Vol. I, pp. 257-258.

5  Id., at pp. 259-260.
6  Id., at p. 250.
7  Id., at p. 251.
8  Id., at p. 252.
9  Id., at pp. 253-254.

350

350 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

Before long, Suzuki learned that CCT No. 9118

representing the title to the Parking Slot No. 42 contained
no annotations although it remained under the name of
Cityland Pioneer. This notwithstanding, Cityland Pioneer,
through Assistant Vice President Rosario D. Perez,
certified that Kang had fully paid the purchase price of
Unit. No. 53610 and Parking Slot No. 42.11
CCT No. 18186 representing the title to the
condominium unit had no existing encumbrance, except for
an annotation under Entry No. 73321/C-10186 which
provided that any conveyance or encumbrance of CCT No.
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 5/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

18186 shall be subject to approval by the Philippine

Retirement Authority (PRA). Although CCT No. 18186
contained Entry No. 66432/C-10186 dated February 2, 1999
representing a mortgage in favor of Orion for a
P1,000,000.00 loan, that annotation was subsequently
cancelled on June 16, 2000 by Entry No. 73232/T. No.
10186. Despite the cancellation of the mortgage to
Orion, the titles to the properties remained in possession
of Perez.
To protect his interests, Suzuki then executed an
Affidavit of Adverse Claim12 dated September 8, 2003, with
the Registry of Deeds of Mandaluyong City, annotated as
Entry No. 3292/C-No. 18186 in CCT No. 18186. Suzuki
then demanded the delivery of the titles.13 Orion, (through
Perez), however, refused to surrender the titles, and cited
the need to consult Orion’s legal counsel as its reason.
On October 14, 2003, Suzuki received a letter from
Orion’s counsel dated October 9, 2003, stating that Kang
obtained another loan in the amount of P1,800,000.00.
When Kang failed to pay, he executed a Dacion en Pago
dated February 2,

_______________

10  Id., at p. 270.
11  Id., at p. 271.
12  Id., at p. 262.
13  Id., at pp. 263-264.

351

VOL. 740, NOVEMBER 12, 2014 351

Orion Savings Bank vs. Suzuki

2003, in favor of Orion covering Unit No. 536. Orion,

however, did not register the Dacion en Pago, until October
15, 2003.
On October 28, 2003, Suzuki executed an Affidavit of
Adverse Claim over Parking Slot No. 42 (covered by CCT
No. 9118) and this was annotated as Entry No. 4712/C-No.
9118 in the parking lot’s title.
On January 27, 2004, Suzuki filed a complaint for
specific performance and damages against Kang and Orion.
At the pretrial, the parties made the following admissions
and stipulations:
1. That as of August 26, 2003, Kang was the registered
owner of Unit No. 536 and Parking Slot No. 42;

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 6/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

2. That the mortgage in favor of Orion supposedly

executed by Kang, with Entry No. 66432/C-10186 dated
February 2, 1999, was subsequently cancelled by Entry No.
73232/T No. 10186 dated June 16, 2000;
3. That the alleged Dacion en Pago was never annotated
in CCT Nos. 18186 and 9118;
4. That Orion only paid the appropriate capital gains tax
and the documentary stamp tax for the alleged Dacion en
Pago on October 15, 2003;
5. That Parking Slot No. 42, covered by CCT No. 9118,
was never mortgaged to Orion; and
6. That when Suzuki bought the properties, he went to
Orion to obtain possession of the titles.
 
The RTC’s Ruling
 
In its decision14 dated June 29, 2009, the Regional Trial
Court (RTC), Branch 213, Mandaluyong City ruled in favor
of Suzuki and ordered Orion to deliver the CCT Nos. 18186
and 9118 to Suzuki.

_______________

14  Id., at pp. 92-135.

352

352 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

The court found that Suzuki was an innocent purchaser

for value whose rights over the properties prevailed over
Orion’s. The RTC further noted that Suzuki exerted efforts
to verify the status of the properties but he did not find any
existing encumbrance in the titles. Although Orion claims
to have purchased the property by way of a Dacion en Pago,
Suzuki only learned about it two (2) months after he
bought the properties because Orion never bothered to
register or annotate the Dacion en Pago in CCT Nos. 18186
and 9116.
The RTC further ordered Orion and Kang to jointly and
severally pay Suzuki moral damages, exemplary damages,
attorney’s fees, appearance fees, expenses for litigation and
cost of suit. Orion timely appealed the RTC decision with
the CA.
 
The CA’s Ruling
 
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 7/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

On August 23, 2012, the CA partially granted Orion’s

appeal and sustained the RTC insofar as it upheld Suzuki’s
right over the properties. The CA further noted that Entry
No. 73321/C-10186 pertaining to the withdrawal of
investment of an SRRV only serves as a warning to an
SRRV holder about the implications of a conveyance of a
property investment. It deviated from the RTC ruling,
however, by deleting the award for moral damages,
exemplary damages, attorney’s fees, expenses for litigation
and cost of suit.
Orion sought a reconsideration of the CA decision but
the CA denied the motion in its January 25, 2013
resolution. Orion then filed a petition for review on
certiorari under Rule 45 with this Court.
 
The Petition and Comment
 
Orion’s petition is based on the following grounds/argu-
ments:15

_______________

15  Id., at pp. 8-31.

353

VOL. 740, NOVEMBER 12, 2014 353

Orion Savings Bank vs. Suzuki

1. The Deed of Sale executed by Kang in favor of Suzuki

is null and void. Under Korean law, any conveyance of a
conjugal property should be made with the consent of both
spouses;
2. Suzuki is not a buyer in good faith for he failed to
check the owner’s duplicate copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No.
73321/C-10186, which prohibits any conveyance or
encumbrance of the property investment, defeats the
alleged claim of good faith by Suzuki; and
4. Orion should not be faulted for exercising due
diligence.
In his Comment,16 Suzuki asserts that the issue on
spousal consent was belatedly raised on appeal. Moreover,
proof of acquisition during the marital coverture is a
condition sine qua non for the operation of the presumption
of conjugal ownership.17 Suzuki additionally maintains
that he is a purchaser in good faith, and is thus entitled to
the protection of the law.
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 8/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

 
The Court’s Ruling
 
We deny the petition for lack of merit.
 
The Court may inquire into conclusions of fact when
the inference made is manifestly mistaken
 
In a Rule 45 petition, the latitude of judicial review
generally excludes a factual and evidentiary reevaluation,
and the Court ordinarily abides by the uniform factual
conclusions of

_______________

16  Id., at pp. 65-89.

17  Id.

354

354 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

the trial court and the appellate court.18 In the present

case, while the courts below both arrived at the same
conclusion, there appears to be an incongruence in their
factual findings and the legal principle they applied to the
attendant factual circumstances. Thus, we are compelled to
examine certain factual issues in the exercise of our sound
discretion to correct any mistaken inference that may have
been made.19
 
Philippine Law governs
the transfer of real property
 
Orion believes that the CA erred in not ruling on the
issue of spousal consent. We cannot uphold this position,
however, because the issue of spousal consent was only
raised on appeal to the CA. It is a well-settled principle
that points of law,

_______________

18  Century Iron Works, Inc. v. Banas, G.R. No. 184116, June 19, 2013,
699 SCRA 157, 166.
19  Luna v. Linatoc, 74 Phil. 15 (1942). See also New City Builders, Inc.
v. NLRC, 499 Phil. 207, 212-213; 460 SCRA 220, 227 (2005), citing Insular
Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, April
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 9/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

28, 2004, 401 SCRA 79, the Supreme Court recognized several exceptions
to this rule, to wit: “(1) when the findings are grounded entirely on
speculation, surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse
of discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in making its
findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to the trial court; (8) when the
findings are conclusions without citation of specific evidence on which they
are based; (9) when the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the respondent; (10)
when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record; and (11) when the
Court of Appeals manifestly overlooked certain relevant facts not disputed
by the parties, which, if properly considered, would justify a different
conclusion.”

355

VOL. 740, NOVEMBER 12, 2014 355

Orion Savings Bank vs. Suzuki

theories, issues, and arguments not brought to the

attention of the trial court cannot be raised for the first
time on appeal and considered by a reviewing court.20 To
consider these belated arguments would violate basic
principles of fair play, justice, and due process.
Having said these, we shall nonetheless discuss the
issues Orion belatedly raised, if only to put an end to
lingering doubts on the correctness of the denial of
the present petition.
It is a universal principle that real or immovable
property is exclusively subject to the laws of the country or
state where it is located.21 The reason is found in the very
nature of immovable property — its immobility.
Immovables are part of the country and so closely
connected to it that all rights over them have their natural
center of gravity there.22
Thus, all matters concerning the title and disposition of
real property are determined by what is known as the lex
loci rei sitae, which can alone prescribe the mode by which
a title can pass from one person to another, or by which an
interest therein can be gained or lost.23 This general
principle includes all rules governing the descent,
alienation and transfer of immovable property and the
validity, effect and construction of wills and other
conveyances.24
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 10/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

This principle even governs the capacity of the person

making a deed relating to immovable property, no matter
what its nature may be. Thus, an instrument will be
ineffective to transfer title to land if the person making it is
incapacitated by the lex loci rei sitae, even though under
the law of his

_______________

20  Nuñez v. SLTEAS Phoenix Solutions, Inc., G.R. No. 180542, April

12, 2010, 618 SCRA 134, 145.
21  Agpalo, Ruben E., Conflict of Laws, p. 182, 2004 ed.
22   Salonga, Jovito R., Private International Law, p. 132, 1995 ed.,
citing Wolff, p. 515.
23  Agpalo, Ruben E., supra, at p. 183.
24  Id.

356

356 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

domicile and by the law of the place where the

instrument is actually made, his capacity is undoubted.25
On the other hand, property relations between spouses
are governed principally by the national law of the
spouses.26 However, the party invoking the application of a
foreign law has the burden of proving the foreign law. The
foreign law is a question of fact to be properly pleaded and
proved as the judge cannot take judicial notice of a foreign
law.27 He is presumed to know only domestic or the law of
the forum.28
To prove a foreign law, the party invoking it must
present a copy thereof and comply with Sections 24 and 25
of Rule 132 of the Revised Rules of Court which reads:

SEC. 24. Proof of official record.—The record of public

documents referred to in paragraph (a) of Section 19, when
admissible for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the officer having the
legal custody of the record, or by his deputy, and accompanied, if
the record is not kept in the Philippines, with a certificate that
such officer has the custody. If the office in which the record is
kept is in a

_______________

25  Id.

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 11/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

26  Family Code of the Philippines, Art. 80. In the absence of a contrary

stipulation in a marriage settlement, the property relations of the spouses
shall be governed by Philippine laws, regardless of the place of the
celebration of the marriage and their residence. This rule shall not apply:
(1) Where both spouses are aliens;
(2) With respect to the extrinsic validity of contracts affecting
property not situated in the Philippines and executed in the country
where the property is located; and
(3) With respect to the extrinsic validity of contracts entered into in
the Philippines but affecting property situated in a foreign country whose
laws require different formalities for its extrinsic validity.
27  ATCI Overseas Corporation v. Echin, G.R. No. 178551, October 11,
2010, 632 SCRA 528, 534.
28  Id.

357

VOL. 740, NOVEMBER 12, 2014 357

Orion Savings Bank vs. Suzuki

foreign country, the certificate may be made by a secretary of the

embassy or legation, consul general, consul, vice consul, or
consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the record is
kept, and authenticated by the seal of his office. (Emphasis
supplied)
SEC. 25. What attestation of copy must state.—Whenever a
copy of a document or record is attested for the purpose of the
evidence, the attestation must state, in substance, that the copy is
a correct copy of the original, or a specific part thereof, as the case
may be. The attestation must be under the official seal of the
attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.

 
Accordingly, matters concerning the title and
disposition of real property shall be governed by
Philippine law while issues pertaining to the conjugal
nature of the property shall be governed by South Korean
law, provided it is proven as a fact.
In the present case, Orion, unfortunately failed to prove
the South Korean law on the conjugal ownership of
property. It merely attached a “Certification from the
Embassy of the Republic of Korea”29 to prove the existence
of Korean Law. This certification, does not qualify as
sufficient proof of the conjugal nature of the property for

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 12/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

there is no showing that it was properly

authenticated by the seal of his office, as required
under Section 24 of Rule 132.30
Accordingly, the International Law doctrine of
presumed-identity approach or processual presumption
comes into play, i.e., where a foreign law is not pleaded or,
even if pleaded, is not proven, the presumption is that
foreign law is the same as Philippine Law.31

_______________

29  Rollo, pp. 57-58.

30  Id.
31  Supra note 26.

358

358 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

Under Philippine Law, the phrase “Yung Sam Kang

‘married to’ Hyun Sook Jung” is merely descriptive of the
civil status of Kang.32 In other words, the import from the
certificates of title is that Kang is the owner of the
properties as they are registered in his name alone, and
that he is married to Hyun Sook Jung.
We are not unmindful that in numerous cases we have
held that registration of the property in the name of only
one spouse does not negate the possibility of it being
conjugal or community property.33 In those cases, however,
there was proof that the properties, though registered in
the name of only one spouse, were indeed either conjugal or
community properties.34 Accordingly, we see no reason to
declare as invalid Kang’s conveyance in favor of Suzuki for
the supposed lack of spousal consent.
 
The petitioner failed to adduce sufficient evidence to
prove the due execution of the Dacion en Pago
 
Article 1544 of the New Civil Code of the Philippines
provides that:

ART. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should
be movable property.
Should it be immovable property, the ownership shall belong to
the person acquiring it who in good faith first recorded it in the

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 13/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

Registry of Property.

_______________

32   Stuart v. Yatco, 114 Phil. 1083, 1084-1085; 4 SCRA 1143, 1145

(1962); Magallon v. Montejo, 230 Phil. 366, 377; 146 SCRA 282, 292
(1986).
33  Bucoy v. Paulino, 131 Phil. 790; 23 SCRA 248 (1968).
34  See Mendoza v. Reyes, 209 Phil. 120; 124 SCRA 154 (1983).

359

VOL. 740, NOVEMBER 12, 2014 359

Orion Savings Bank vs. Suzuki

Should there be no inscription, the ownership shall pertain to the

person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title,
provided there is good faith.

 
The application of Article 1544 of the New Civil Code
presupposes the existence of two or more duly executed
contracts of sale. In the present case, the Deed of Sale
dated August 26, 200335 between Suzuki and Kang was
admitted by Orion36 and was properly identified by
Suzuki’s witness Ms. Mary Jane Samin (Samin).37
It is not disputed, too, that the Deed of Sale dated
August 26, 2003 was consummated. In a contract of sale,
the seller obligates himself to transfer the ownership of the
determinate thing sold, and to deliver the same to the
buyer, who obligates himself to pay a price certain to the
seller.38 The execution of the notarized deed of sale and the
actual transfer of possession amounted to delivery that
produced the legal effect of transferring ownership to
Suzuki.39
On the other hand, although Orion claims priority in
right under the principle of prius tempore, potior jure (i.e.,
first in time, stronger in right), it failed to prove the
existence and due execution of the Dacion en Pago in its
favor.
At the outset, Orion offered the Dacion en Pago as
Exhibit “5” with submarkings “5-a” to “5-c” to prove the
existence of the February 6, 2003 transaction in its Formal
Offer dated July 20, 2008. Orion likewise offered in
evidence the supposed promissory note dated September 4,
2002 as Exhibit “12” to prove the existence of the additional

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 14/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

P800,000.00 loan. The RTC, however, denied the admission

of Exhibits “5” and “12,”

_______________

35  Records, Vol. I, pp. 213-214.

36  Id., at p. 291.
37  TSN, February 28, 2005, pp. 29-36.
38  New Civil Code, Article 1458.
39  Id., Article 1496 in relation to Article 1498.

360

360 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

among others, in its order dated August 19, 2008 “since

the same [were] not identified in court by any witness.”40
Despite the exclusion of its most critical documentary
evidence, Orion failed to make a tender of excluded
evidence, as provided under Section 40, Rule 132 of the
Rules of Court. For this reason alone, we are prevented
from seriously considering Exhibit “5” and its submarkings
and Exhibit “12” in the present petition.
Moreover, even if we consider Exhibit “5” and its
submarkings and Exhibit “12” in the present petition, the
copious inconsistencies and contradictions in the
testimonial and documentary evidence of Orion, militate
against the conclusion that the Dacion en Pago was duly
executed.
First, there appears to be no due and demandable
obligation when the Dacion en Pago was executed, contrary
to the allegations of Orion. Orion’s witness Perez tried to
impress upon the RTC that Kang was in default in his
P1,800,000.00 loan. During his direct examination, he
stated:

ATTY. CRUZAT:
Q: Okay, so this loan of P1.8 million, what happened to this
loan, Mr. Witness?
A: Well it became past due, there has been delayed interest
payment by Mr. Kang and...
Q: So what did you do after there were defaults[?]
A: We have to secure the money or the investment of the bank
through loans and we have executed a dacion en pago because Mr.
Kang said he has no money. So we just execute[d] the dacion
en pago rather than going through the Foreclosure
proceedings.

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 15/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

x x x x

_______________

40  Records, Vol. II, p. 395.

361

VOL. 740, NOVEMBER 12, 2014 361

Orion Savings Bank vs. Suzuki

Q: Can you tell the court when was this executed?

A: February 6, 2003, your Honor.41

 
A reading of the supposed promissory note, however,
shows that there was no default to speak of when the
supposed Dacion en Pago was executed.
Based on the promissory note, Kang’s loan obligation
would mature only on August 27, 2003. Neither can
Orion claim that Kang had been in default in his
installment payments because the wordings of the
promissory note provide that “[t]he principal of this
loan and its interest and other charges shall be paid
by me/us in accordance hereunder: SINGLE
PAYMENT LOANS.”42 There was thus no due and
demandable loan obligation when the alleged Dacion
en Pago was executed.
Second, Perez, the supposed person who prepared the
Dacion en Pago, appears to only have a vague idea of the
transaction he supposedly prepared. During his cross-
examination, he testified:

ATTY. DE CASTRO:
Q: And were you the one who prepared this [dacion en pago]
Mr. witness?
A: Yes, sir. I personally prepared this.
x x x x
Q: So this 1.8 million pesos is already inclusive of all the
penalties, interest and surcharge due from Mr. Yung Sam Kang?
A: It’s just the principal, sir.

_______________

41  TSN, June 1, 2007, pp. 32-33, emphasis supplied.

42   Records, Vol. II, p. 369. In fact, so important was the single
payment arrangement that Orion only allowed installment payments
upon additional payment of Two Percent (2.00%) per annum service fee

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 16/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

and a written notice to Orion of not less than thirty (30) days prior to the
proposed payment.

362

362 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

Q: So you did not state the interest [and] penalties?

A: In the [dacion en pago], we do not include interest, sir. We
may actually include that but....
Q: Can you read the Second Whereas Clause, Mr. Witness?
A: Whereas the first party failed to pay the said loan to
the second party and as of February 10, 2003, the
outstanding obligation which is due and demandable
principal and interest and other charges included amounts
to P1,800,000.00 pesos, sir.
x x x x
Q: You are now changing your answer[.] [I]t now includes
interest and other charges, based on this document?
A: Yes, based on that document, sir.43

 
Third, the Dacion en Pago, mentioned that the
P1,800,000.00 loan was secured by a real estate mortgage.
However, no document was ever presented to prove this
real estate mortgage aside from it being mentioned in the
Dacion en Pago itself.

ATTY. DE CASTRO:
Q: Would you know if there is any other document like a
supplement to that Credit Line Agreement referring to this 1.8-
million-peso loan by Mr. Yung Sam Kang which says that there
was a subsequent collateralization or security given by Mr. Yung
[Sam] Kang for the loan?
x x x x
A: The [dacion en pago], sir.44

_______________

43  TSN, December 17, 2007, pp. 29-32, emphasis supplied.

44  Id., at p. 22.

363

VOL. 740, NOVEMBER 12, 2014 363

Orion Savings Bank vs. Suzuki

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 17/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

Fourth, the Dacion en Pago was first mentioned only

two (2) months after Suzuki and Samin demanded the
delivery of the titles sometime in August 2003, and after
Suzuki caused the annotation of his affidavit of adverse
claim. Records show that it was only on October 9,
2003, when Orion, through its counsel, Cristobal
Balbin Mapile & Associates first spoke of the Dacion
en Pago.45 Not even Perez mentioned any Dacion en Pago
on October 1, 2003, when he personally received a letter
demanding the delivery of the titles. Instead, Perez refused
to accept the letter and opted to first consult with his
lawyer.46
Notably, even the October 9, 2003 letter contained
material inconsistencies in its recital of facts surrounding
the execution of the Dacion en Pago. In particular, it
mentioned that “on [September 4, 2002], after paying the
original loan, [Kang] applied and was granted a new
Credit Line Facility by [Orion] x  x  x for ONE MILLION
EIGHT HUNDRED THOUSAND PESOS (P1,800,000.00).”
Perez, however, testified that there was “no cash
movement” in the original P1,000,000.00 loan. In his
testimony, he said:

COURT:
x x x x
Q: Would you remember what was the subject matter of that
real estate mortgage for that first P1,000,000.00 loan?
A: It’s a condominium Unit in Cityland, sir.
x x x x
Q: Would you recall if there was any payment by Mr.
Yung Sam Kang of this P1,000,000.00 loan?
A: None sir.

_______________

45  Records, Vol. II, pp. 371-372.

46  Records, Vol. I, pp. 263-267.

364

364 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

Q: No payments?
A: None sir.
Q: And from 1999 to 2002, there was no payment, either
by way of payment to the principal, by way of payment of

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 18/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

interest, there was no payment by Mr. Yung Sam Kang of

this loan?
A: Literally, there was no actual cash movement, sir.
Q: There was no actual cash?
A: Yes, sir.
Q: And yet despite no payment, the bank Orion Savings Bank
still extended an P800,000.00 additional right?
A: Yes, sir.47

 
Fifth, it is undisputed that notwithstanding the
supposed execution of the Dacion en Pago on February 2,
2003, Kang remained in possession of the condominium
unit. In fact, nothing in the records shows that Orion even
bothered to take possession of the property even six (6)
months after the supposed date of execution of the Dacion
en Pago. Kang was even able to transfer possession of the
condominium unit to Suzuki, who then made immediate
improvements thereon. If Orion really purchased the
condominium unit on February 2, 2003 and claimed to be
its true owner, why did it not assert its ownership
immediately after the alleged sale took place? Why did it
have to assert its ownership only after Suzuki demanded
the delivery of the titles? These gaps have remained
unanswered and unfilled.
In Suntay v. CA,48 we held that the most prominent
index of simulation is the complete absence of an attempt
on the part of the vendee to assert his rights of ownership
over the property in question. After the sale, the vendee
should have

_______________

47  TSN, December 17, 2007, pp. 14-16, emphasis supplied.

48  321 Phil. 809, 831-832; 251 SCRA 430, 450 (1995).

365

VOL. 740, NOVEMBER 12, 2014 365

Orion Savings Bank vs. Suzuki

entered the land and occupied the premises. The

absence of any attempt on the part of Orion to assert
its right of dominion over the property allegedly sold
to it is a clear badge of fraud. That notwithstanding
the execution of the Dacion en Pago, Kang remained
in possession of the disputed condominium unit —
from the time of the execution of the Dacion en Pago
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 19/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

until the property’s subsequent transfer to Suzuki —

unmistakably strengthens the fictitious nature of the
Dacion en Pago.
These circumstances, aside from the glaring
inconsistencies in the documents and testimony of Orion’s
witness, indubitably prove the spurious nature of the
Dacion en Pago.
 
The fact that the Dacion en Pago
is a notarized document does not support the
conclusion that the sale it embodies is a true con-
veyance
 
Public instruments are evidence of the facts that gave
rise to their execution and are to be considered as
containing all the terms of the agreement.49 While a
notarized document enjoys this presumption, “the fact that
a deed is notarized is not a guarantee of the validity of its
contents.”50 The presumption of regularity of notarized
documents is not absolute and may be rebutted by clear
and convincing evidence to the contrary.51

_______________

49  Bough v. Cantiveros, 40 Phil. 209, 215 (1919).

50   Nazareno v. Court of Appeals, 397 Phil. 707, 725; 343 SCRA 637,
652 (2000); San Juan v. Offril, G.R. No. 154609, April 24, 2009, 586 SCRA
439, 445-446.
51  Lazaro v. Agustin, G.R. No. 152364, April 15, 2010, 618 SCRA 298,
309; Potenciano v. Reynoso, 449 Phil. 396, 406; 401 SCRA 391, 398 (2003).

366

366 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

In the present case, the presumption cannot apply

because the regularity in the execution of the Dacion en
Pago and the loan documents was challenged in the
proceedings below where their prima facie validity was
overthrown by the highly questionable circumstances
surrounding their execution.52
 
Effect of the PRA restriction on the validity of
Suzuki’s title to the property
 
Orion argues that the PRA restriction in CCT No. 18186
affects the conveyance to Suzuki. In particular, Orion
www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 20/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

assails the status of Suzuki as a purchaser in good faith in

view of the express PRA restriction contained in CCT No.
18186.53
We reject this suggested approach outright because, to
our mind, the PRA restriction cannot affect the conveyance
in favor of Suzuki. On this particular point, we concur with
the following findings of the CA:

x x x the annotation merely serves as a warning to the owner

who holds a Special Resident Retiree’s Visa (SRRV) that he shall
lose his visa if he disposes his property which serves as his
investment in order to qualify for such status. Section 14 of the
Implementing Investment Guidelines under Rule VIII-A of the
Rules and

_______________

52  San Juan v. Offril, supra note 50.

53  Entry No. 73321/C-10186-RESTRICTIONS: IN an instrument duly
subscribed and sworn to, VERNETTE UMALI-PACO, CESO II, Phil.
Retirement Authority, states that the property described herein is subject
to the following restriction: “The sale, transfer, or encumbrance of this
property is subject to the approval of the Philippine Retirement Authority,
the owner named herein being a holder of Special Resident Retiree’s Visa
(SRRV), and is therefore, subject to the provision of Executive Order No.
1037 and it’s implementing Rules and Regulations.” (Doc. No. 68, p. 14,
Bk. XIV, S. of 2000 of Not. Pub. For Mand. City, Eddie Fernandez, dated
June 23, 2000.) Date of Inscription-June 23, 2000-1:33 p.m.

367

VOL. 740, NOVEMBER 12, 2014 367

Orion Savings Bank vs. Suzuki

Regulations Implementing Executive Order No. 1037, Creating the

Philippine Retirement Park System Providing Funds Therefor and
For Other Purpose (otherwise known as the Philippine Retirement
Authority) states:
Section 14. Should the retiree-investor withdraw his
investment from the Philippines, or transfer the same to another
domestic enterprise, or sell, convey or transfer his condominium
unit or units to another person, natural or juridical without the
prior approval of the Authority, the Special Resident Retiree’s
Visa issued to him, and/or unmarried minor child or children[,]
may be cancelled or revoked by the Philippine Government,
through the appropriate government department or agency, upon
recommendation of the Authority.54

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 21/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

Moreover, Orion should not be allowed to successfully

assail the good faith of Suzuki on the basis of the PRA
restriction. Orion knew of the PRA restriction when it
transacted with Kang. Incidentally, Orion admitted
accommodating Kang’s request to cancel the
mortgage annotation despite the lack of payment to
circumvent the PRA restriction. Orion, thus, is
estopped from impugning the validity of the conveyance in
favor of Suzuki on the basis of the PRA restriction that
Orion itself ignored and “attempted” to circumvent.
With the conclusion that Orion failed to prove the
authenticity of the Dacion en Pago, we see no reason for the
application of the rules on double sale under Article 1544 of
the New Civil Code. Suzuki, moreover, successfully
adduced sufficient evidence to establish the validity of
conveyance in his favor.
WHEREFORE, premises considered, we DENY the
petition for lack of merit. Costs against petitioner Orion
Savings Bank.

_______________

54  Rollo, p. 47.

368

368 SUPREME COURT REPORTS ANNOTATED

Orion Savings Bank vs. Suzuki

SO ORDERED.

Carpio (Chairperson), Del Castillo, Mendoza and

Leonen, JJ., concur.

Petition denied.

Notes.—To prove a foreign law, the party invoking it

must present a copy thereof and comply with Sections 24
and 25 of Rule 132 of the Revised Rules of Court.
(Sobejana-Condon vs. Commission on Elections, 678 SCRA
267 [2012])
The words “married to” preceding the name of a spouse
are merely descriptive of the civil status of the registered
owner. Such words do not prove co-ownership. (Go-
Bangayan vs. Bangayan, Jr., 700 SCRA 702 [2013])
——o0o——

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 22/23
8/8/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 740

© Copyright 2019 Central Book Supply, Inc. All rights reserved.

www.central.com.ph/sfsreader/session/0000016c6f41db2845a48e2c003600fb002c009e/t/?o=False 23/23