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Civil Law Case Digests

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TABLE OF CONTENTS
Page
PERSONS AND FAMILY RELATIONS
Republic of the Philippines vs. Miller Omandam Unabia
G.R. No. 213346, February 27, 2019 (First Divison, Del Castillo, J.)
PROPERTY
I. Possession
Ma. Antonette Lozano vs. Jocelyn K. Fernandez
G.R. No. 212979, February 18, 2019 (Second Division, Reyes, Jr., J)
II. Donation
Socorro Clemente vs. Republic of the Philippines
G.R. No. 220008, February 20, 2019 (Second Division, Carpio, J.)
OBLIGATIONS and CONTRACTS
I. Obligations
B. Sources of Obligations
1. Law
Bangko Sentral ng Pilipnas and Philippine National Bank, petitioners
vs. Spouses Juanito and Victoria Ldesma
G.R. No. 211176, February 6, 2019
and
Philippine National Bank vs. Spouses Juanito and Victoria Ledesma
G.R. No. 211583, February 6, 2019
(Third Division, Leonen, J.)
D. Kinds of Civil Obligations
3. As to Rights and Obligations of Multiple Parties
B. Solidary
G. Modes Of Extinguishment
1. Payment or Performance
Special Form of Payment
Desiderio Dalisay Investments, Inc., petitioner, vs. Social Security
System, respondent
G.R. No. 231053 (April 4, 2018, Velasco, Jr., J)
6. Novation
Food Fest Land, Inc. and Joyfoods Corp. vs. Romualdo Siapno, et. al.
G.R. No. 226088, February 27, 2019 (Third Division, Peralta, J.)
II. Contracts
E. Essential Elements
1. Consent of the Contracting parties
Coca-Cola Bottlers Phils. Inc. vs. Spouses Ffren and Lolita Soriano
G.R. No. 211232, April 11, 2018 (First Division, Tijam, J.)
Philippine National Bank vs. Antonio Bacani, et. al
G.R. No. 194983, June 20, 2018 (Second Division, Reyes, Jr, J.)
B. Fundamental Principles
5. Relativity of Contracts
Excellent Essentials International Corp. vs. Extra Excel International
G.R. No. 192797, April 18, 2018 (Third Division, Martires, J.)
F. Form of Contracts
2. Special Form
A. Validity
Norma Diampoc vs. Jessie Buenaventura and the Registry of Deeds of
Taguig City
G.R. No. 200383, April 11, 2018 (First Division, Del Castillo, J.)
G. Reformation of Contracts
1
3
5
7
9
11
13
15
17
19
21
Makati Tuscany Condominium Corp vs. Multi-Realty Development Corp.
G.R. No. 185530, April 18, 2018 (First Division, Leonen, J.)
23
I. Kinds of Contracts as to Validity
3. Void
Heirs of Tomas Arao, et. al. vs. Heirs of Pedro Eclipse, et. al.
G.R. No. 211425, November 19, 2018 (Third Division, Reyes, Jr., J.)
Asian Transmission Corporation, petitioner, v. Commissioner of
Internal Revenue, respondent.
G.R. no. 230861 (September 19, 2018, Bersamin, J.)
Heirs of Mariano vs. City of Naga
G.R. No. 197743, March 12, 2018 (First Division, Tijam, J.)
Raymond A. Son, et. al. vs. University of Sto. Tomas, et. al.
G.R. No. 211273, April 18, 2018 (First Division, Del Castillo, J.)
SALES
A. In General
Kinds of Sale
Royal Plains View Inc./or Renato Padillo vs. Nestor Mejia
G.R. No. 230832, November 12, 2018 (Third Division, Reyes, Jr., J.)
B. Elements of a Contract of Sale
Essential Elements
Christopher R. Santos vs. Atty. Joseph A. Arojado
A.C. No. 8502, June 27, 2018 (First Division, Del Castillo, J.)
25
27
29
31
33
35
D. Rights and Obligations of the Vendor
To transfer ownership
Spouses Lucia and Cresente Orozco, Substituted by their Heirs vs. Florante
Lozano, Substituted by his Heirs
G.R. No. 222616, April 3, 2019 (Second Division, Carpio, J.)
Nicomedes Augusto, Gomercindo Jimenez, Marcelino Paquibot, and
Roberta Silawan, petitioners vs. Antonio Carlota Dy and Mario Dy,
respondents
G.R. No. 218732, Feb. 13, 2019 (Second Division, Reyes, Jr., J.)
CREDIT TRANSACTIONS
II. Loans
F. Rights and Obligations of Bailor and Bailee in Mutuum
To Pay Interest
Republic of the Philippines Represented by Department of Public
Works and Highways vs. Macabagdal, et. al.
G.R. No. 227215, January 10, 2018 (Second Division, Perlas-Bernabe, J.)
TORTS AND DAMAGES
IV. Liability for Torts
B. Kinds of Damages
2. Actual or Compensatory
City of Bacolod, et. al. vs. Phuture Visions Co., Inc.
G.R. No. 190289, January 17, 2018 (Third Division, Velasco, Jr, J.).
Teresa Yamauchi vs. Romeo Suniga
G.R. No. 199513, April 18, 2018 (Third Division, Martires)
2. Moral Damages
Eden Etino vs. People of the Philippines
G.R. No. 206632, February 14, 2018 (First Division, Del Castillo, J.)
Marilou Punongbayan-Visitacion vs. People of the Philippines and
Carmelita Punongbayan
G.R. No. 194214, January 10, 2018 (First Division, Martires, J.)
37
39
41
43
45
47
49
FIRST DIVISION
REPUBLIC OF THE PHILIPPINES vs. MILLER OMANDAM UNABIA
G.R. No. 213346, February 27, 2019
Ponente: Justice Mariano Del Castillo
Nature of the Action:
Petition for Review on Certiorari questioning the Decision of the CA, affirming
that of the RTC, granting the Petition for Correction of Entries in his birth certificate
filed by Miller Omandam Unabia.
Facts:
In 2009, Miller Omandam Unabia filed a Petition for Correction of Entries in his
birth certificate. He alleged, inter alia, that the first name in his birth certificate reflects
“Mellie” instead of “Miller”, the sex indicate “female” instead of “male”, that middle
name is written as “Umandam” instead of “Omandam”, and the last name states “Onabia”
instead of “Unabia”.
During the trial, Unabia presented his baptismal certificate, school records,
parents’ birth certificates, police clearance, voter’s identification, and a medical
certificate to prove that he was born male, that his name was indeed Miller, and the
purported errors in his middle and last names. According to Him, he was known as Miller
all his life and he was just apprised of the mistakes when he secured a copy of his birth
certificate from the National Statistics Office.
To support the claim for change of entry as to gender, Unbia presented a Medical
Certificate which was supposedly issued by a government physician. The certificate
stated that respondent was "phenotypically male"; however, the physician was not
presented in court to testify on his findings and identify the document.
The RTC, satisfied with the pieces of evidence presented, granted the petition. On
appeal to the CA by the Republic of the Philippines, the decision of the second level
court was affirmed.
In this appeal to the Supreme Court, the Republic asserts that the non-presentation
of the physician as witness was fatal to Unabia’s cause. The Republic posits that under
RA9048, there must be a certification that the applicant did not undergo sex reassignment
or sex transplant. Unabia’s medical certificate did not have such certification.
Issues:
1. Was the non-presentation of the physician fatal to Unabia’s petition?
2. Should the medical certificate include a certification that Unabia did not
undergo any sex reassignment or transplant?
Page 1
Ruling:
WHEREFORE, the Petition is DENIED. The June 27, 2014 Decision of the Court
of Appeals in CA-G.R. CV No. 02755-MIN is AFFIRMED in toto.
The non-presentation of the doctor did not affect the cause of Unabia. Note in this
case that the Physician who executed the medical certificate is a government doctor,
performing his duties as a public officer. Thus, the medical certificate in this case,
executed under the seal of a government hospital, is a public document. The said Medical
Certificate is a public document, the same having been issued by a public officer in the
performance of official duty; as such, it constitutes prima facie evidence of the facts
therein stated. Under Section 23, Rule 132 of the Rules of Court, Documents consisting
of entries in public records made in the performance of a duty by a public officer
are prima facie evidence of the facts therein stated. All other public documents are
evidence, even against a third person, of the fact which gave rise to their execution and of
the date of the latter. A public document is self-authenticating and requires no further
authentication in order to be presented as evidence in court.
The certification that the applicant did not undergo sex reassignment or
transplant is no longer required with the certification the doctor that Unabia is
"phenotypically male",
meaning
that
his
entire physical,
physiological,
and biochemical makeup - as determined both genetically and environmentally - is male,
which thus presupposes that he did not undergo sex reassignment. In other words, as
determined genetically and environmentally, from conception to birth, respondent's entire
being, from the physical, to the physiological, to the biochemical - meaning that all the
chemical processes and substances occurring within respondent - was undoubtedly
male. He was conceived and born male, he looks male, and he functions biologically as a
male.
Page 2
SECOND DIVISION
MA. ANTONETTE LOZANO vs. JOCELYN K. FERNANDEZ
G.R. No. 212979, February 18, 2019
Ponente: Justice Jose C. Reyes, Jr.
Nature of the Action:
Petition for review on certiorari under Rule 45 of the Rules of Court seeking to
reverse and set aside the Decision and Resolution of the CA which affirmed the RTC’s
Decision. The latter decision reversed and set aside the dismissal by the MCTC of the
Unlawful Detainer case filed by Ma. Antonette Lozano against Jocelyn Fernandez.
Facts:
Ma. Antonette Lozano owned a parcel of land since 1996. Sometime on
December of 2006, she executed a Waiver and Transfer of Possessory Rights in favor of
Jocelyn Fernandez over the property. After the execution of such waiver, Lozano still
continued to have possession over the piece of land. In 2009, or more than three years
after the execution of the waiver, Fernandez sent a demand letter to Lozano for the latter
to vacate the property. For failure to accede to her demand, Fernandez instituted an action
for Unlawful Detainer in the MCTC.
For her part, Lozano countered that she did not sign a waiver. Lozano claimed
that the real contract between her and Fernandez was a loan with mortgage as evidenced
by the fact that she remained in possession of the property even after the execution of the
said Waiver and that she had issued checks in payment of the loan. She pointed out that
Fernandez was engaged in the business of lending imposing unconscionable interest and
was in the practice of securing collateral from the lendee.
The MCTC dismissed the action for Unlawful detainer. It ruled that Fernandez'
cause of action had prescribed as the complaint was filed after one year from the time the
possession became unlawful. It added that Fernandez failed to prove that she tolerated
Lozano's possession over the property.
In overturning the MCTC, the RTC ruled that Lozano’s possession over the
subject land was merely tolerated by Fernandez. Thus, the reckoning period within which
to compute prescription was from date of last demand, not when the possession became
unlawful. Hence, when Fernandez instituted the action after it sent demand letter to
Lozano was well within the prescriptive period.
On appeal to the CA, the decision of the RTC was affirmed.
Issues:
1. Can Fernandez’ inaction for three years to recover possession after the
execution of the waiver be considered as tolerance?
Page 3
2. Who is the proper possessor of the property?
Ruling:
WHEREFORE, the petition is GRANTED. The February 16, 2011 Decision in
Civil Case No. 7238 of the Municipal Trial Court in Cities, Branch 2, Olongapo City is
REINSTATED.
In an action for unlawful detainer based on tolerance, the acts of tolerance must
be proved. Bare allegations of tolerance are insufficient and there must be acts indicative
of tolerance. For there to be tolerance, complainants in an unlawful detainer must prove
that they had consented to the possession over the property through positive acts. After
all, tolerance signifies permission and not merely silence or inaction as silence or inaction
is negligence and not tolerance. In the present case, Fernandez' alleged tolerance was
premised on the fact that she did not do anything after the Waiver was executed.
However, her inaction is insufficient to establish tolerance as it indicates negligence,
rather than tolerance, on her part. Inaction should not be confused with tolerance as the
latter transcends silence and connotes permission to possess the property subject of an
unlawful detainer case. Thus, even assuming the Waiver was valid and binding, its
execution and Fernandez's subsequent failure to assert her possessory rights do not
warrant the conclusion that she tolerated Lozano's continued possession of the property in
question, absent any other act signifying consent. Fernandez cannot simply claim that she
had tolerated Lozano's possession because she did not do anything after the execution of
the Waiver as silence does not equate to tolerance or permission. In short, the execution
of the Waiver alone is not tantamount to the tolerance contemplated in unlawful detainer
cases. The absence of an overt act indicative of tolerance or permission on the part of the
plaintiff is fatal for a case for unlawful detainer.
Page 4
SECOND DIVISION
SOCORRO CLEMENTE vs. REPUBLIC OF THE PHILIPPINES
G.R. No. 220008, February 20, 2019
Ponente: Justice Antonio Carpio
Nature of the Action:
Petition for Review on Certiorari assailing the Decision of the CA which affirmed
the Decision of the RTC denying the action for Revocation of Donation, Reconveyance
and Recovery of Possession filed by Socorro Clemente against the Republic of the
Philippines.
Facts:
On March 16, 1963, siblings Amado, Ramon, and Milagros, all surnamed Clemente,
donated more than one hectare land to the Republic of the Philippines. Said donation was
reflected in a Deed of Donation signed by all of them and accepted by the Republic through the
Department of Public Works and Highways (DPWH). Said deed provide in part that the donors
voluntarily and unconditionally donate the property to the done Republic of the Philippines for
the construction and maintenance of a hospital site. There was, however, no time allotted.
In 2003, Socorro Clemente, sole heir of Amado, wrote to the DPWH inquiring as to the
status of the construction of the hospital. It turns out that after 40 years, only the foundations of
the hospital were made. In response to the letter, the DPWH wrote that they have no budget for
the project and the same will not be constructed anymore.
In 2004, Socorro instituted in the RTC an action for Revocation of Donation,
Reconveyance and Recovery of Possession alleging that the Republic of the Philippines failed to
comply with the condition imposed on the Deed of Donation, which was to use the property
"solely for hospital site only and for no other else.
The RTC denied the complaint. It said that the complaint is premature as the parties in
the Deed clearly intended a period. Thus, by virtue of Art. 1197 of the New Civil Code, the courts
may fix the period for the obligor to perform his end of the bargain. However, since Socorro
failed to pray for the fixing of the period, the same is dismissible.
On appeal to the CA, the decision of the RTC was affirmed. Hence, this present recourse
at bench.
Issues:
Can the donation be revoked without the fixing of the period for the donor to
comply?
Ruling:
WHEREFORE, the petition is GRANTED. The 17 October 2014 Decision and
the 14 August 2015 Resolution of the Court of Appeals in CAG.R. CV No. 91522 are
hereby REVERSED and SET ASIDE. The Regional Trial Court of Mauban, Quezon,
Branch 64, is ORDERED to cause the cancellation by the Register of Deeds of Quezon of
Page 5
TCT No. T- 517 45 and the issuance, in lieu thereof, of the corresponding certificate of
title in the name of the heirs of Amado A. Clemente, Dr. Vicente A. Clemente, Judge
Ramon A. Clemente, and Milagros A. Clemente.
The nature of the donation made by the Clemente Siblings is a donation subject to
a condition - the condition being the construction of a government hospital and the use of
the Subject Property solely for hospital purposes. Upon the non-fulfillment of the
condition, the donation may be revoked and all the rights already acquired by the donee
shall be deemed lost and extinguished. This is a resolutory condition because it is
demandable at once by the donee but the non-fulfillment of the condition gives the donor
the right to revoke the donation.
In this case, upon the execution of the Deed of Donation and the acceptance of
such donation in the same instrument, ownership was transferred to the Republic, as
evidenced by the new certificate of title issued in the name of the Province of Quezon.
Because the condition in the Deed of Donation is a resolutory condition, until the
donation is revoked, it remains valid. However, for the donation to remain valid, the
donee must comply with its obligation to construct a government hospital and use the
Subject Property as a hospital site. The failure to do so gives the donor the right to revoke
the donation under Article 764 of the New Civil Code. When the parties provided in the
Deed of Donation that the donee should construct a government hospital, their intention
was to have such hospital built and completed, and to have a functioning hospital on the
Subject Property.
Based on the Deed of Donation, however, it is apparent that a period was indeed
intended by the parties. By agreeing to the conditions in the Deed of Donation, the donee
agreed, and it bound itself to construct a government hospital and to use the Subject
Property solely for hospital purposes. The construction of the said hospital could not have
been intended by the parties to be in a state of limbo as it can be deduced that the parties
intended that the hospital should be built within a reasonable period, although the Deed
of Donation failed to fix a period for such construction. Indeed, Art. 1197 of the New
Civil Code Applies. While ideally, a period to comply with the condition should have
been fixed by the Court, we find that this will be an exercise in futility because of the fact
that it has been more than 50 years since the Deed of Donation has been executed; and
thus, the reasonable time contemplated by the parties within which to comply with the
condition has already lapsed. Further, in 2003, Socorro already wrote to DPWH asking
for updates on the construction of the government hospital. However, the DPWH
informed her that there were no plans to build any hospital on the Subject Property. Thus,
it is clear that the donee no longer has the intention of fulfilling its obligation under the
Deed of Donation. It has now become evident that the donee will no longer comply with
the condition to construct a hospital
Page 6
THIRD DIVISION
BANGKO SENTRAL NG PILIPNAS AND PHILIPPINE NATIONAL BANK,
Petitioners vs. SPOUSES JUANITO AND VICTORIA LEDESMA
G.R. No. 211176, Feb. 6, 2019
and
PHILIPPINE NATIONAL BANK vs. SPOUSES JUANITO AND VICTORIA
LEDESMA
G.R. No. 211583, Feb. 6, 2019
Ponente: Justice Marvic Leonen
Nature of the Action:
These are consolidated appeals on the Decision of the CA, reversing the Decision
of the RTC dismissing the complaint for Sum of Money filed by Spouses Ledesma
against BSP and PNB.
Facts:
Spouses Juanito and Victoria Ledesma were engaged in sugar farming in Negros
Occidental. They have sugar productions in the years 1974 to 1975 and 1984 to 1985.
Within this period, they were among those who suffered losses in sugar farming
operations due to the actions of government-owned and controlled agencies. Among
these agencies were the Bangko Sentral ng Pilipinas (BSP) and the Philippine National
Bank (PNB). This was due to the a loan obtained by the spouses from the PNB which
they paid in excess. PNB admitted that the overpayment amounted to some P353,529.67,
which the Commission on Audit (COA) certified.
To recover this overpayment, the spouses instituted in the RTC an action for Sum
of Money against the PNB and the BSP. The Ledesma Spouses argued that under
Republic Act No. 7202, the Bangko Sentral ng Pilipinas and the Presidential Commission
on Good Government should compensate them for their losses and refund the excess
payment from the sugar restitution fund.
The trial court dismissed the complaint for prematurity and lack of cause of
action. The RTC held that there was still no fund set up, and thus, no obligation arose
from the provisions of RA 7202.
On appeal to the CA, the decision was reversed. The appellate court ratiocinated
that RA7202 mandated the BSP to promulgate the Implementing Rules and Regulations
for the compensation of aggrieved sugar farmers. Thus, its obligation existing, it must
perform its obligation under the law. On the other hand, RA 7202 mandated the lending
banks to condone interests more than the 12% threshold. When the loan was recomputed,
it was found out that the spouses overpaid, such fact was even acknowledged by PNB.
With these, the CA found BSP and PNB liable under the law.
Page 7
Both BSP and PNB filed their respective Petitions for Review on Certiorari
which were later on consolidated.
Issues:
Are BSP and PNB liable to the Spouses Ledesma under RA 7202?
Ruling:
WHEREFORE, the Petitions for Review on Certiorari are GRANTED. The Court of
Appeals May 29, 2013 Decision and January 29, 2014 Resolution in CA-G.R. CV No. 02904 are
REVERSED AND SET ASIDE. The November 17, 2008 Decision of the Regional Trial Court
Branch 46, Bacolod City in Civil Case No. 01-11591 for Sum of Money/Refund of Excess
Payments is AFFIRMED.
Both the BSP and the PNB cannot be held liable for the simple reason that the Sugar
Restitution Fund has not been set up. The money to be used to compensate these sugar producers
should come from the sugar restitution fund. Without the fund, there is no restitution to speak of
at all. The fact that the COA acknowledged that the spouses are entitled to the benefits of
RA7202 and that they indeed have overpaid, does not give rise to the liability of BSP. The duty of
BSP under the law is to promulgate the Implementing Rules and Regulations of RA7202, which
BSP did. It is also mandated to accept and process applications for restitutions of sugar farmers.
However, the funds shall be sourced from the fund, which is unfortunately after 20 years, is still
non-existent. The BSP is not obliged by law to pay the sugar farmers using its own money. It
cannot give what it does not have. Thus, the obligation of BSP to pay the farmers did not arise for
failure of the government to set up the Restitution fund.
On the other hand, PNB’s role was merely that of a lending bank. Under Republic Act
No. 7202 and its Implementing Rules and Regulations, lending banks are not obligated to
compensate sugar producers for their losses. Restitution falls under the Bangko Sentral ng
Pilipinas, upon the establishment of a sugar restitution fund.
Page 8
SECOND DIVISION
KEIHIN-EVERETT FORWARDING CO., INC., petitioner vs. TOKIO MARINE
MALAYAN INSURANCE CO., INC. and SUNFREIGHT FORWARDERS &
CUSTOMS BROKERAGE, INC., respondents
G.R. No. 212107, Jan. 28, 2019
Ponente: Justice Jose Reyes, Jr.
Nature of the Action:
This is an appeal filed by Everett challenging the Decision of the CA, affirming
that of the RTC, holding it liable for Damages to Tokio Marine.
Facts:
Honda Trading Philippines ordered some 80 bundles of Aluminum Alloy Ingots
from PT Molten Indonesia. Honda insured the entire shipment with Tokio Marine &
Nichido Fire Insurance Co., Inc. (TMNFIC). Honda Trading also engaged the services of
Keihin-Everett (Everett) to clear and withdraw the cargo from the pier and to transport
and deliver the same to its warehouse in Laguna. Meanwhile, Everett had an
Accreditation Agreement with Sunfreight Forwarders whereby the latter undertook to
render common carrier services for the former and to transport inland goods within the
Philippines. Upon safe arrival in the Port of Manila, the shipment was caused to be
released from the pier by Everett and turned over to Sunfreight for delivery to Honda
Trading. The cargoes were loaded on board two trucks. En route to the Honda’s
warehouse, the one of the trucks carrying the containers was hijacked. The total cost of
the loss was P2, 121,917 .04. Tokio Marine paid Honda the entire amount under the
insurance policy. Tokio Marine subsequently filed a case for Damages in the RTC against
Everett as Tokio Marine claimed that it had been subrogated to all the rights and causes
of action of Honda.
In response, Everett impleaded Sunfreight and imputed upon the latter the sole
liability as Sunfreight has the custody of the goods while in transit. For its part,
Sunfreight maintained that it cannot be held liable as it was not privy to the contract
between Honda (subrogated by Tokio Marine) and Everett. In the event that it is liable, it
cannot exceed P500,000 fixed in the accreditation agreement.
The RTC granted the complaint and held Sunfreight solidarily liable with Everett
to pay Tokio Marine. Everett was given a right of reimbursement against Sunfreight in
the event Everett pays to Tokio Marine.
On appeal to the CA, the Decision was modified insofar as that solidary liability
between Everett and Sunfreight was deleted. It held that since Sunfreight does not have
contractual relations with Hinda, it cannot be held solidarily liable under the contract.
But, Everett has right of reimbursement against Sunfreight for whatever amount it was
held liable to Tokio Marine.
Dissatisfied, Everett filed this Appeal by Certiorari.
Page 9
Issues:
Should Sunfreight be held solidarily liable with Everett?
Ruling:
WHEREFORE, the Decision dated April 8, 2014 of the Court of Appeals in CAG.R,No. CV No. 98672 is AFFIRMED.
The liability of Everett and Sunfreight are not solidary. There is solidary liability
only when the obligation expressly so states, when the law so provides, or when the
nature of the obligation so requires. Thus, under Article 2194 of the Civil Code, liability
of two or more persons is solidary in quasi-delicts. But in this case, Everett's liability to
Honda Trading (to which Tokio Marine had been subrogated as an insurer) stemmed not
from quasi-delict, but from its breach of contract of carriage. Sunfreight was only
impleaded in the case when Everett filed a third-party complaint against it. As mentioned
earlier, there was no direct contractual relationship between Sunfreight and Honda.
Accordingly, there was no basis to directly hold Sunfreight liable to Honda for breach of
contract. If at all, Honda can hold Sunfreight for quasi-delict, which is not the action filed
in the instant case.
However, the liablity is not solely imputable to Everett. Everett has a right to be
reimbursed based on its Accreditation Agreement with Sunfreight. By accrediting
Sunfreight to render common carrier services to it, Everett in effect entered into a
contract of carriage with a fellow common carrier, Sunfreight. It is undisputed that the
cargoes were lost when they were in the custody of Sunfreight. Hence, under Article
1735 of the Civil Code, the presumption of fault on the part of Sunfreight (as common
carrier) arose. Since Sunfreight failed to prove that it observed extraordinary diligence in
the performance of its obligation to Everett, it is liable to the latter for breach of contract.
Consequently, Everett is entitled to be reimbursed by Sunfreight due to the latter's own
breach occasioned by the loss and damage to the cargoes under its care and custody.
Page 10
THIRD DIVISION
DESIDERIO DALISAY INVESTMENTS, INC., Petitioner, vs.
SOCIAL SECURITY SYSTEM, Respondent.
G.R. No. 231053, April 4, 2018
Ponente: Justice Presbitero Velasco, Jr.
Nature of the Action:
This is an appeal on the Decision of the CA reversing the Grant by the RTC of an action
for Quieting of Title with Recovery of Property and Damages filed by Desiderio Dalisay
Investments, Inc. against Social Security System.
Facts:
Desiderio Dalisay was the CEO of Desiderio Dalisay Investments, Inc. (DDII. Sometime
in 1976, the Social Security System (SSS) filed before the Social Security Commission a claim
for the unpaid remittances of DDII amounting to P3.5 Million. To settle this obligation and to
avoid an impending criminal prosecution, DDII offered to SSS its parcel of land located in
Davao. This offer was made through DDI’s counsel, Atty. Honesto Cabaroguis. Negotiations
ensued between SSS and DDII, the latter through Atty. Cabaroguis.
The land was valued at P2 Million and was offered to SSS in satisfaction of DDII’s
obligations. Atty. Cabaroguis assured SSS that DDII will immediately vacate the property and
deliver the land with a building free from encumbrances upon acceptance. After a meeting with
the SSS Committee on Buildings and Atty. Cabaroguis, the former wrote the latter of the
acceptance of the property in satisfaction of DDII’s unpaid debts.
The letter stated that SSS is accepting the subject property in the amount of P2 Million which
shall be applied to the arrears in premium contributions and the excess shall be applied to salary
and educational loan. Further, the letter expressed that the criminal case then pending in the office
of the public prosecutor shall not be withdrawn and it will be the outlook of DDII to make
arrangements with the concerned office.
In 1982, SSS took possession of the subject land and building. In 1999, DDII wrote SSS
on its intent to settle the obligation previously paid through the subject property and for its return.
In response, SSS demanded for the delivery of title as previously agreed upon by the parties.
In 2002, DDII filed for Quieting of Title with Recovery of Property with Damages
against SSS in the RTC. The said court granted the complaint by reason that no dacion en pago
was perfected between the parties as the acceptance made by SSS was conditional.
On appeal to the CA, the decision of the lower court was reversed. The CA stated that the
when the offer was made and the corresponding acceptance was communicated, coupled by the
delivery of the property. Dacion en pago clearly took place.
DDII now takes the matter to the high court on appeal by certiorari.
Issue:
Was there a perfected dation en pago between SSS and DDII?
Page 11
Ruling:
WHEREFORE, the instant petition is DENIED. The assailed August 12, 2016 Decision
and March 10, 2017 Resolution of the Court of Appeals in CA-G.R. CV No. 03233-MIN are
hereby AFFIRMED. The complaint for quieting of title, recovery of possession and damages,
docketed as Civil Case No. 29,353-02, is DISMISSED for lack of merit.
Petitioner Desiderio Dalisay Investments, Inc. is hereby ordered to:
Execute the Deed of Sale over the properties in favor of respondent Social Security
System, consistent with the terms and conditions of the dacion en pago agreed upon by the parties
as embodied in SSC Resolution No. 849 - s. 82 within ten (10) days from finality of this
Decision; and surrender the Owner's Duplicate of Transfer Certificate of Title Nos. T-18203, T18204, T-255986, and T-255985, as well as the Tax Declarations over said properties to
respondent Social Security System within ten (10) days from finality of this Decision.
Should petitioner Desiderio Dalisay Investments, Inc. refuse to execute said Deed of
Sale, the Clerk of Court shall execute such in favor of respondent Social Security System.
The Register of Deeds of Davao City is directed to cancel the subject titles and issue new
ones in the name of respondent Social Security System.
Respondent Social Security System is ordered to re-compute petitioner's obligations
accordingly, reckoned from June 17, 1982, the date when respondent communicated its
acceptance of the offer.
In dacion en pago, property is alienated to the creditor in satisfaction of a debt in money.
The debtor delivers and transmits to the creditor the former's ownership over a thing as an
accepted equivalent of the payment or performance of an outstanding debt. In such cases, Article
1245 provides that the law on sales shall apply, since the undertaking really partakes—in one
sense—of the nature of sale; that is, the creditor is really buying the thing or property of the
debtor, the payment for which is to be charged against the debtor's obligation.
Here, the acts of the parties before, during and after the transaction prove that the
payment via dacion was perfected. First, Atty. Cabaroguis offered to SSS the property in
question. For the satisfaction of its obligation. In response to the offer, SSS reduced the obligation
from the original P3.5 Million to P2 Million. The acceptance cannot be considered as conditional
as the parties had nothing else to do to vest SSS the ownership of the property. The acceptance
does not partake of a counter offer which needed acceptance by DDII. Second, upon acceptance,
all the elements of sale were present. There was meeting of the minds between the parties as to
the object, which was the subject property, and with the price, which was the value of the object.
Lastly, the contract was consummated which began when the parties perform their respective
undertakings under the contract of sale, culminating in the extinguishment thereof. Note that in
here, DDII transferred the possession to SSS. This acts mean only one thing: that by virtue of the
dacion en pago, DDII transferred the ownership of the property to SSS.
Page 12
THIRD DIVISION
FOOD FEST LAND, INC. AND JOYFOODS CORP. vs. ROMUALDO SIAPNO, et. al.
G.R. No. 226088, February 27, 2019
Ponente: Justice Diosdado Peralta
Nature of the Action:
Appeal by Certiorari challenging the Decision of the CA, which affirms the
Decision of the RTC granting the action for Sum of Money for the recovery of the
deficiency in the rentals filed by Romualdo, Teodoro, and Felipe, all surnamed Siapno
against Food Fest Land, Inc.
Facts:
Food Fest, Inc. is local corporation in Dagupan City. For its intent to put up a fast food
restaurant, it entered into a contract of lease with Romualdo, Teodoro, and Felipe, all surnamed
Siapno, over a parcel of land to be used as its site. The contract was fixed at five years with a
monthly rent of P43, 901.00, with a 10% increase on the second year and the succeeding ones.
The contract likewise contain a no-waiver clause which contains that no waiver by the parties of
any of their rights under the Contract shall be deemed to have been made unless expressed in
writing and signed by the party concerned.
For the first to fifth years, Food Fest religiously paid its obligations under the contract.
However, Food Fest failed to pay the 10% increases from the sixth to the 10th years. On the 11th
and 12th years, the parties operated on a P90,000.00 monthly rental. During the effectivity of the
contract, Food Fest assigned all its rights and obligations to Tucky Foods, who in turn, assigned
all rights and obligations to Joy Foods. After the assignment, the Siapnos accepted paymenta
from Joy Foods. Due to financial reverses, Food Fest notified the Siapnos that it is preterminating the lease contract.
The Siapnos filed an action for sum of money for the recovery of the deficiency in
the rentals from the sixth year to the 12th years. Food Fest contends that it cannot be held
liable because it has already assigned all its rights and obligations to Tucky Foods, did
the same to Joy Foods. Thus, according to Food Fest, Joy Foods is the only one liable.
Both the RTC and the CA rejected Food Fest’s defense. Food Fest now questions
the rulings of the trial and the appellate courts.
Issues:
Is Food Fest liable to pay the deficiencies in the rental despite its assignment of
all rights and obligations to a third person?
Ruling:
WHEREFORE, premises considered, the instant: appeal is DENIED. the Decision
dated January 6, 2016 and the Resolution dated July 22, 2016 of the Court of Appeals in CA-G.R.
CV No. 101302 are AFFIRMED.
Page 13
Novation of an obligation by substituting the person of the debtor, as the term
suggests, entails the replacement of the debtor by a third person. When validly made, it
releases the debtor from the obligation which is then assumed by the third person as the
new debtor. To validly effect such kind of novation, however, it is not enough for the
debtor to merely assign his debt to a third person, or for the latter to assume the debt of
the former; the consent of the creditor to the substitution of the debtor is essential and
must be had. This is clear for the provisions of Art. 1293 of the New Civil Code.
Here, the settled facts do not show that Siapnos had expressly consented in
writing to the substitution of Food Fest by Joy foods. Their consent to such substitution
has to be in writing, in light of the non-waiver clause of the Contract of Lease. As can be
recalled, the non-waiver clause of the Contract of Lease required the parties thereto to
express any waiver of their rights under said contract in writing lest their waiver be
considered null.
Yet, even if the non-waiver clause is set aside, Food Fest and Joy foods' claim of
novation is still doomed to fail. This is so because the consent of the Siapnos to the
substitution of Food Fest, just the same, cannot be deduced or implied from any of the
established acts of the former. Indeed, under the settled facts, the Sianpos did nothing in
the way of releasing Food Fest from its obligations other than, perhaps, its acceptance of
rental payments from Joy Foods.
Siapno’s consent to the substitution of Food Fest by Joy foods, however, cannot
be presumed from the sole fact that they accepted payments from Joy foods. It is well
settled that mere acceptance by a creditor of payments from a third person for the benefit
of the debtor, sans any agreement that the original debtor will also be released from his
obligation, does not result in novation but merely the addition of debtors.
The well-settled rule is that novation is never presumed. Novation will not be
allowed unless it is clearly shown by express agreement, or by acts of equal import. Thus,
to effect an objective novation, it is imperative that the new obligation expressly declare
that the old obligation is thereby extinguished, or that the new obligation be on every
point incompatible with the new one. In the same vein, to effect a subjective novation by
a change in the person of the debtor it is necessary that the old debtor be released
expressly from the obligation, and the third person or new debtor assumes his place in the
relation. There is no novation without such release as the third person who has assumed
the debtor's obligation becomes merely a co-debtor or surety.
Page 14
FIRST DIVISION
COCA-COLA BOTTLERS PHILS. INC. vs. SPOUSES EFREN AND LOLITA
SORIANO
G.R. No. 211232, April 11, 2018
Ponente: Justice Noel Tijam
Nature of the Action:
This petition for review on certiorari under Rule 45 of the Rules of Court seeks to
reverse and set aside the Decision and Resolution of the CA, affirming the Decision of
the RTC, Tuguegarao, Cagayan, granting the action for Annulment of Sheriff’s Sale
filed by the spouses Soriano against Coca-Cola.
Facts:
Spouses Soriano are engaged in selling Coca-cola products in Tuguegarao City,
Cagayan. Sometime in 1999, Coke’s manager, Cipriano, told the spouses that Coke, as
supplier, needs security for the continuation of their business. Thus, the spouses signed a
document which appeared to be a real estate mortgage deed and they surrendered two
titles to Cipriano. The latter told them that it is just for formality and the deed will not be
notarized. After sometime, the spouses told Cipriano that they will not be continuing their
business anymore due to advanced age. They demanded for the return of the titles, but to
no avail. When the spouses were contemplating to file for issuance of new titles, they
learned that the subject lands were already foreclosed by Coke.
The spouses filed for annulment of sheriff’s sale alleging that they did not sign
any mortgage deed and they were not notified of the sale. Claiming there was fraud on
the part of Cipriano in obtaining their signatures in the deed, they pray that the deed be
nullified. The RTC granted the complaint. It nullified the real estate mortgage deed and
the foreclosure proceedings. On appeal, the CA upheld the invalidity of the deed for
failure to satisfy the required form. Thus, Coke elevated the present controversy to the
high court.
Issues:
Did Cipriano employ fraud in the obtaining the signatures of the spouses in the
real estate mortgage deed?
Ruling:
WHEREFORE, premises considered, the petition is GRANTED. The Decisions
of the Regional Trial Court dated February 9, 2011 and the Court of Appeals dated June
18, 2013 are REVERSED and SET ASIDE. The complaint filed by the respondents
Spouses Efren and Lolita Soriano is hereby DISMISSED for lack of merit.
Page 15
Under Art. 1344 of the New Civil Code, fraud, as a ground for annulment of a
contract, should be serious and should not have been employed by both parties.
Meanwhile, Art. 1338 provides that there is fraud when through insidious words or
machinations of one of the contracting parties, the other is induced to enter into a
contract, without them, he would not have agreed to.
Here, there was no allegation of forgery in the signatures. The spouses readily
admitted that they signed the deed, only that Cipriano made them to believe that the same
will not be notarized. Coupled by the fact of the surrender of the two titles, the claim of
fraud is not convincing. Other than bare allegations, the spouses’ claim of fraud is not
supported by preponderance of evidence.
Likewise, the failure to comply with the formalities of law does not render the
deed invalid. The formal requisites are necessary in its registrability. Without such
registration, it cannot bind third persons. Nevertheless, the deed is with force and effect
as between the parties.
Page 16
SECOND DIVISION
PHILIPPINE NATIONAL BANK vs. ANTONIO BACANI, et. Al
G.R. No. 194983, June 20, 2018
Ponente: Justice Jose C. Reyes, Jr.
Nature of the Action:
This is a petition for review on certiorari challenging the Decision Resolution of
the CA. In these issuances, the CA affirmed the trial court's decision, granting the action
for Annulment of Sale and Renato’s title over the property, with Damages filed by
Spouses Bacani against the Philippine National Bank (PNB).
Facts:
On July 6, 1980, the spouses Bacani obtained a loan from the Philippine National
Bank (PNB) a loan amounting to P80,000.00 secured by a real estate mortgage. In 1986,
PNB extrajudicially foreclosed the mortgage as the obligation still remained unsatisfied.
PNB was awarded with the property as the highest bidder. As souses Bacani failed to
redeem the property within the redemption period, their title was cancelled and a new one
was issued in the name of PNB.
Come 1989, PNB issued a circular to all its branches giving preference to former
owners in the redemption of foreclosed properties, provided that their offers are
acceptable to PNB. By virtue of such circular, spouses Bacani initiated the re-acquisition
of their property. They sent letters to PNB making their offers up to the amount of
P300,000.00 consisting of P200,000.00 in cash and P100,000.00 in installment basis.
PNB declined the offer stating that the market value of the property was at P494,000.00.
Subsequently, PNB sent an invitation to bid to the spouses to be conducted on
February 18, 1997. However, PNB already sold the property on January 30, 1997 to
Renato at P1.5 million. Demands were made by the buyer against spouses Bacani and the
occupants of the property to vacate the same. This prompted the Bacanis to file an action
for Annulment of Sale and Renato’s title over the property, with Damages.
The spouses Bacani posit that the circular PNB issued was binding to it and it
cannot unilaterally withdraw or modify such policy as they have already relied on to it.
Selling the property to another person despite the invitation to bid constitutes bad faith
which justified annulment of sale and of title by the buyer. Lastly, the spouses aver that
their dollar account in PNB signify their capability to pay and is a clear manifestation of
their earnest desire to reacquire the property.
The RTC granted the petition on the ground that the sale was made fraudulently
and in bad faith. The sale and title in the name of Renato were annulled. PNB as well as
Renato were ordered to pay damages. The CA affirmed the ruling.
Page 17
Issues:
1. Is PNB circular binding upon it to sell the property only to its former owners?
2. Did the dollar deposit account make an option contract between the parties?
3. Should the court annul the sale between PNB and Renato for fraud and evident
bad faith?
Ruling:
WHEREFORE, the present petition is GRANTED. The Decision dated
September 30, 2010 and Resolution dated January 5, 2011 of the Court of Appeals in
CA-G.R. CV No. 2923 are REVERSED and SET ASIDE. The complaint for the
annulment of sale and title is DISMISSED. No costs.
On the first issue, the high court held that the PNB circular is merely an internal
matter of the bank. It cannot be a source of right enforceable under the law who claim
under it. At most, the circular gave only a preference to the spouses, as former owners, to
re-acquire the property by complying with the criteria stated therein, that is to pay the
proper price. With that, the bank, as the absolute owner, is not compelled to accept any
offer from them simply by virtue of their status as former owners, especially here that the
spouses failed to meet the first requirement which is the offer of the proper price.
Considering that the reacquisition of the property necessitates a contract, consent of both
parties are required. As the bank did not accept the offer, no consent was obtained.
Hence, there was meeting of the minds between the parties and no contract was perfected.
Anent the second issue, the Supreme Court held that the same did not make an
option contract between the parties. A bank deposit is a contract of mutuum. The bank, as
debtor, has the obligation to pay the depositor, as creditor, on demand. By its very nature,
the PNB cannot assume that the spouses intended the dollar deposit as consideration
because once they withdraw the money, PNB has the obligation to pay it at once. Without
any express declaration that such is intended as consideration, the bank has no right to
withhold it for that purpose. Ergo, no option contract was perfected.
Lastly, on the ultimate issue of nullity of sale between PNB and Renato, the same
is ruled in the negative. PNB being the absolute owner of the property, has all the rights
to alienate it and dispose it according to its will. The publication of invitation to bid does
not bind the advertiser to accept the highest or lowest bidder, unless the contrary appears.
Here, the invitation to bid was not binding to the PNB. It merely stood as notice to the
interested party so they can make their offer. Neither the invitation constitute as an offer,
the acceptance by the other party compels PNB to sell only to them. PNB, being the
absolute owner, has the right to dispose of its property in any manner it may deem proper,
provided that it is not contrary to law.
Page 18
THIRD DIVISION
EXCELLENT ESSENTIALS INTERNATIONAL CORP. vs. EXTRA EXCEL
INTERNATIONAL
G.R. No. 192797, April 18, 2018
Ponente: Justice Samuel Martires
Nature of the Action:
Petition for review on certiorari assailing the Decision of the CA reversing the
RTC by ordering petitioner Excellent Essentials International Corporation (Excellent
Essentials) to pay respondent Extra Excel International Philippines, Inc. (Excel
Philippines) damages, attorney's fees, and costs of suit.
Facts:
In August of 1996, Excel Philippines entered into an agreement with Excel
International as exclusive distributor of the latter’s products in the Philippines. The
agreement between them stipulates that the exclusive distributorship shall be irrevocable,
regardless of change in the management of the foreign corporation.
Over the next four years, Excel International experienced some intra-corporate
conflicts. Stewart later on emerged as the new president of the foreign company. She then
revoked unilaterally the agreement between Excel International and Excel Philippines.
Excel International appointed Excel Essentials as its new exclusive agent in the
Philippines.
Despite the termination, Excel Philippines did not cease from selling the products
claiming that the agreement they have earlier created was irrevocable. Thus, Excel
International and Excel Essentials filed for injunction and damages against Excel
Philippines. In turn, Excel Philippines set up a counter claim for damages.
During the pendency of the case, Excel Philippines and Excel International
entered into a compromise agreement. The case between the two was dismissed. By
virtue of the decision of a foreign court that the revocation made by Stewart was null, the
issue on who had the exclusive right to distribute became moot. The lone issue left at
bench was the prayer for damages. The RTC dismissed both claims of the contending
parties.
On appeal to the CA, the decision of the RTC was reversed. Excel Essentials was
ordered to pay damages to Excel Philippines. Perforce, Excel Essentials appealed to the
Supreme Court.
Issues:
Is Excel Essentials liable for Damages to Excel Philippines despite the absence of
any contractual relationship between them?
Page 19
Ruling:
WHEREFORE, premises considered, we DENY the petition. The 28 June 2010
Decision of the Court of Appeals in CA-G.R. CV No. 88388 is AFFIRMED with the
following MODIFICATIONS: (1) the award for temperate damages is deleted and, in
lieu thereof, Excellent Essentials International Corporation is ordered to pay Extra Excel
International Philippines, Inc. P50,000,000.00 as nominal damages; and (2) the total
amount adjudged shall earn an interest rate of six percent (6%) per annum on the balance
and interest due from the date of finality of this decision until fully paid.
As a general rule, only parties to a contract may be held liable for breach under
the principle of relativity of contracts. By way of exception, under Art. 1314 of the New
Civil Code, a third person who induces another to violate his contract shall be liable to
damages to the other contracting party. Said provision has three elements, viz: 1)
existence of a valid contract; 2) knowledge of the third person of the existence of the
contract; and 3) interference of the third person is without legal justification or excuse.
All three elements are present in this case. The agreement between Excel
Philippines and Excel International was a valid and binding contract. This contract was
also very well known to Excel Essentials. It turns out, Excel Essentials was formed by
some of the incorporators of Excel Philippines. These incorporators were even still
working in Excel Philippines the time that Excel Essentials was being formed. They
pirated employees and supervisors of Excel Philippines. The officers of Excel Essentials
colluded with Stewart in revoking the exclusive distributorship agreement with Excel
Philippines and for it to be appointed as the new exclusive agent. These acts of Excel
Essentials are clear manifestations that they knew of the existence of the valid contract
existing between Excel Philippines and Excel International, and that it was in bad faith in
interfering with the business of the Excel Philippines. With all the elements of the above
provision present, it leads to the sole conclusion that Excel Essentials, though not privy to
the agreement, is liable for damages to Excel Philippines.
Page 20
FIRST DIVISION
NORMA DIAMPOC vs. JESSIE BUENAVENTURA AND THE REGISTRY OF
DEEDS OF TAGUIG
G.R. No. 200383, April 11, 2018
Ponente: Justice Mariano Del Castillo
Nature of the Action:
This Petition for Review on Certiorari seeks to set aside the Decision and
Resolution of the CA which affirmed the Decision of the RTC of Pasig City dismissing
the action for Annulment of Deed of Sale and Recovery of Title filed by Norma
Diampoc against Jessie Buenaventura.
Facts:
Sometime in 2004, Jessie Buenaventura was acquiring a loan from the bank
amounting to P1 Million. He asked the spouses Norma and Wilbur Diampoc to lend her
the title to the spouses’ property to be used as a collateral. This was with the promise that
Buenaventura would give the spouses P300,000.00 as payment for lending the title.
Subsequently, Buenaventura obtained the title. One day, Buenaventura went to
the Norma and made her sign a folded paper. Thus, she was not able to read the contents
thereof. Buenaventura also made Wilbur sign a paper, but the latter was not able to read
the same as it was dark at that time.
Later on, the spouses learned that what they signed was a deed of sale to their
house and lot. They filed several criminal cases such as estafa and grave coercion against
Buenaventura in the Prosecutor’s Office but all were dismissed. Diampocs aver that they
did not know what they signed, neither did they appear in the notary public. Alleging
fraud, the spouses filed for Annulment of Deed of Sale and Recovery of Title.
For her part, Buenaventura countered that there was a sale which transpired
between her and the Diampocs. She allegedly gave P200,000.00 to Norma before they
went to the notary public
The RTC dismissed the complaint. The deed of sale, being a public document, it
is prima facie evidence of the facts stated therein. The plaintiffs spouses failed to
discharge their burden to overturn this presumption.
On appeal to the CA, the decision of the RTC was affirmed. It ratiocinated that
the spouses, being literate, could have known that they were signing above the printed
word vendor. Also, the defect in the notary does not affect the validity of the instrument.
Hence, the spouses filed an appeal.
Page 21
Issues:
1. Should the contract of sale be annulled on the ground of fraud?
2. Does the defect in the notary render the instrument void?
Ruling:
WHEREFORE, the Petition is DENIED. The February 21, 2011 Decision and
May 6, 2011 Resolution of the Court of Appeals in CA-G.R. CV No. 92453 are
AFFIRMED in toto.
On the first issue, the court held that fraud was not present as the spouses
themselves signed the deed. They ae educated individuals who could have protected their
rights by simply reading the paper they were asked to sign. The circumstances
surrounding this case did not prevent the spouses to discover the true nature of the
document. By simply exercising the slightest diligence of reading, then they could not
have been deprived of their property. The rule is that one who signs a contract is
presumed to know its contents. Here, the spouses’ admission that they indeed signed the
document is fatal to their cause.
Anent the issue of defect in notary, the same also does not avoid the instrument.
Under Art. 1358 of the New Civil Code, the sale of real property must appear in a public
instrument, but the formalities required therein is not essential for the validity of the
contract. It is simply for greater efficacy and convenience, or to bind third persons, and is
merely a coercive means granted to contracting parties to enable them to reciprocally
compel the observance of the prescribed form. Consequently, the conveyance of real
property is binding as between the parties.
In this case, the defect in the notary affects only the character of the instrument.
The notary being defective, then the instrument loses its character as a public instrument.
In proving the same, the elements of proving a private instrument must be satisfied. But it
does not affect the validity of the instrument which is binding between the parties.
Page 22
FIRST DIVISION
MAKATI TUSCANY CONDOMINIUM CORP vs. MULTI-REALTY
DEVELOPMENT CORP
G.R. No. 185530, April 18, 2018
Ponente: Justice Marvic Leonen
Nature of the Action:
Petition for Review on Certiorari assailing the Decision of the CA, reversing the
RTC Decision dismissing the action for Reformation of Contract with Damages filed
by the Multi-Realty Incorporated (MDC) against Makati Tuscany (MATUSCO).
Facts:
By virtue of RA 4726 or the Condominium Act, Multi-Realty Incorporated
(MDC) Makati Tuscany (MATUSCO) to hold over title and manage its condominium,
the Makati Tuscany. To enable it to perform its function, MDC and MATUSCO executed
a Master Deed and a Deed of Assignment transferring to MATUSCO the common areas,
including the 98 parking lots. Despite the deeds, MDC exercised ownership over the
parking lots such that it sold some of it in several occasions to unit owners.
Subsequently, MDC filed a complaint against MATUSCO for reformation of
contract with damages. MDC alleged that the deed did not reflect the true intent of the
parties. Considering that it was new to the industry and Makati Tuscany was its first
condominium, it is inexperienced in handling these matters. MDC asserted that the true
intent of the parties was not to include the 98 parking lots to be transferred to
MATUSCO.
For its part, MATUSCO averred that the deeds were prepared by MDC itself.
Thus, it was very unlikely that it would commit a mistake in preparing it. It likewise
stated that the MDC is estopped from impugning the content of the contract as it
recognized its existence and did not object to it for more than 10 years.
Affirming the defense of MATUSCO, the RTC denied the complaint. On appeal
to the CA, the decision was reversed and set aside. CA gave more credence into the
position of MDC that the instrument did not contain the intent of the parties. Thus,
MATUSCO elevated this case on appeal by certiorari.
Issue:
Is the reformation of instrument proper?
Ruling:
WHEREFORE, premises considered, the Petition for Review on Certiorari
is DENIED. The Court of Appeals April 28, 2008 Amended Decision and December 4,
2008 Resolution in CA-G.R. CV No. 44696 are AFFIRMED.
Page 23
Reformation has the following elements: 1) there was a meeting of the minds in a
contract; 2) the instrument does not reflect the true intent of the parties; and 3) the failure
to reflect such intent is due to mistake, fraud, inequitable conduct or accident. However,
what is more difficult to ascertain is the real intent of the parties. How is the real intent
determined? Intent, being a state of mind is determined by the acts before, during or after
the execution of the instrument.
In this case, it is evident that the MDC exercised dominion over the 98 parking
lots even after the execution of the deed. In fact, for two instances, MDC even sold some
of the lots to unit owners without any opposition from MATUSCO. These acts of the
parties are indicative of their true intent that the 98 parking lots are not included in the
Deed of Transfer.
Moreover, the mistake in the instrument is apparent. The court here gave more
weight in the position of the MDC that it was new to the industry. Its inexperience in
these situations made it vulnerable to mistakes. Considering their true intent, it leads only
to the lone conclusion that the inclusion of the parking lots in the instrument is only by
mistake.
Page 24
THIRD DIVISION
HEIRS OF TOMAS ARAO, et. al. vs. HEIRS OF PEDRO ECLIPSE, et. al.
G.R. No. 211425, November 19, 2018
Ponente: Justice Jose Reyes, Jr.
Nature of the Action:
Petition for Review on Certiorari assailing the Decision and the Resolution of the CA
which reversed and set aside the Decision of the RTC of Tuguegarao City, Cagayan dismissing
the complaint for Declaration of Nullity of a Deed of Absolute Sale and Reconveyance,
Recovery of Ownership and Possession with Damages filed by the heirs of Eclipse against the
Heirs of Tomas Arao.
Facts:
The heirs of Pedro Eclipse were the occupants of some 5,000 square meter land in
Tuguegarao City, Cagayan, originally owned by spouses Policarpio and Cecilia Eclipse. In 1994,
said heirs learned that the land they were occupying was subject of a deed of sale purportedly
entered into by Policarpio and Cecilia in favor of Tomas Arao.
The heirs of Eclipse filed an action for nullity of sale, reconveyance, and damages. The
heirs of Eclipse impugn the validity of the deed of sale considering that the same was executed in
1969 where both the spouses Eclipse were already deceased. Thus, the deed was a forgery and an
absolute nullity.
For their part, the heirs of Tomas Arao did not deny that the 1969 deed was a forgery.
However, they presented another deed of sale executed in 1940. In that deed of sale, the children
of Pedro Eclipse sold to Paulino Arao the subject land. Paulino Arao, having no other heir when
he died, the land passed by operation of law to his brother Tomas Arao. And in 1977, Tomas
Arao, sold to his children via another deed of sale the property in question.
The RTC dismissed the complaint. The trial court said that the 1969 deed of sale was a
nullity and thus cannot be source of any right or title. However, considering that more than 30
years have passed since its registration, the heirs of Eclipse are barred by laches to recover
ownership of the property.
Undaunted, the heirs of Eclipse appealed to the CA. On petition for review, the CA
reversed the ruling of the RTC that laches had set in. In void contracts, the action is
imprescriptible and actions cannot be barred by laches. It ordered the heirs of Arao to transfer the
ownership to the heirs of Eclipse.
The heirs of Arao are now on appeal by certiorari.
Issues:
1. Are the heirs of Eclipse barred by laches?
2. Who is the rightful owner of the property?
Page 25
Ruling:
WHEREFORE, the petition is PARTLY GRANTED. The assailed Decision dated
June 7, 2013 of the Court of Appeals, in CA-G.R. CV No. 93660, is AFFIRMED with
MODIFICATION, to read as follows:
1. Declaring as NULL and VOID the Deed of Absolute Sale dated September 5,
1969 for being fictitious, inexistent and without any legal force and effect.
2. Consequently, Transfer Certificates of Title No. T-13798 and T-39071 are
likewise declared NULL and VOID for being issued based on the aforesaid
forged and fictitious Deed of Sale dated September 5, 1969.
3. Declaring as VALID the Deed of Sale dated June 25, 1940.
4. Declaring petitioners to be the LAWFUL owners and possessors of the subject
Lot No. 1667 by virtue of the valid Deed of Sale dated June 25, 1940.
5. Directing the parties to EXECUTE pertinent documents required by law to effect
the issuance of a new Transfer Certificate of Title in favor of petitioners, heirs of
Tomas Arao represented by Proceso Arao, Eulalia Arao-Maggay, Gabriel Arao
and Felipa A. Delelis.
On the issue of laches, the heirs of Eclipse cannot be barred by laches because the
action is based on the 1969 deed of sale. This instrument, admittedly a forgery, is a void
contract. Under Art. 1410 of the New Civil Code, an action to declare the inexistence of a
void contract does not prescribe. When this 1969 deed was executed, both spousesvendors were already deceased. If any once of the parties was already dead at the time of
the execution of the contract, such contract is simulated and false, and therefore, null and
void. With this, the heirs of Eclipse cannot be barred by laches.
Anent the second issue, the heirs of Arao are rightful owners of the subject land.
Their right is traced back to the 1940 deed of sale where the Eclipse spouses sold their
property to Paulino. Its non-registration is of no consequence to its validity. The
registration is merely a confirmation of title of the buyer and serves as a notice to all
persons of his ownership. The heirs of Eclipse failed to present evidence to impugn the
validity of the 1940 deed of sale. Considering further that such deed was notarized, the
presumption of regularity of public documents apply and the 1940 deed is presumed to be
valid.
Lastly, the heirs of Arao being declared as the rightful owners, need to execute
documents for the issuance of title in their name.
Page 26
THIRD DIVISION
ASIAN TRANSMISSION CORPORATION, Petitioner, v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
G.R. No. 230861, September 19, 2018
Ponente: Justice Lucas Bersamin
Nature of the Action:
This is an appeal on the Decision of the Court of Tax Appeals En Banc reversing the
Decision of one of its Divisions granting the Petition for Certiorari disputing the Tax
Assessments made by the Bureau of Internal Revenue.
Facts:
In August of 2004, Asian Transmission Corporation (ATC) received a letter from the
Commission of Internal Revenue (CIR) authorizing and audit team to look into the books of
ATC. After the audit, ATC received a Preliminary Assessment Notice from CIR. Consequently,
on various dates, ATC, through its Vice President, executed several documents denominated as
"Waiver of the Defense of Prescription Under the Statute of Limitations of the National Internal
Revenue Code" (Waiver). The waivers covered the period of 2005 to 2008. In July, 2008, ATC
received a Formal Letter of Demand from CIR for deficiency in the total amount of some P76
Million. Not agreeing thereto, ATC filed a dispute on the assessment. In 2009, ATC received
from CIR a Final Decision on Disputed Assessment which found ATC deficient for the above
amount. This prompted ATC to file a Petition for Review (with Application for Preliminary
Injunction and Temporary Restraining Order) with the Court of Tax Appeals (CTA).
The CTA Division granted the petition on the ground that the waivers were invalid.
According to it, the waivers were not complaint with the prevailing Regulation Memorandum
Orders (ROM) issued by the Bureau of Internal Revenue. This defects in the waiver were caused
by the BIR as the notary was made by one of its employees despite not being authorized, and that
the date of acceptance and taxes covered were not duly dated.
On appeal by the CIR to the CTA en banc, the decision o the division was reversed.
Upholding the validity of the waivers, the CTA en banc ruled that ATC cannot escape liability
considering also what it did not have clean hands in coming to court.
ATC now assails the decision of the CTA en banc.
Issues:
Are the waivers valid?
Ruling:
WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the
decision promulgated on August 9, 2016 by the Court of Tax Appeals En Banc in CTA EB No.
1289 (CTA Case No. 8476); and ORDERS the petitioner to pay the costs of suit.
Page 27
As a general rule, waivers which do not comply with prevailing RMOs are invalid and
ineffective to extend the prescriptive period to assess the deficiency taxes. However, due to
peculiar circumstances of this case, this comes in to the exception rather than the general rule.
First, the parties in this case are in pari delicto. In pari delicto connotes that the two
parties to a controversy are equally culpable or guilty and they shall have no action against each
other. However, although the parties are in pari delicto, the Court may interfere and grant relief at
the suit of one of them, where public policy requires its intervention, even though the result may
be that a benefit will be derived by one party who is in equal guilt with the other.
Here, to uphold the validity of the Waivers would be consistent with the public policy
embodied in the principle that taxes are the lifeblood of the government, and their prompt and
certain availability is an imperious need. Taxes are the nation's lifeblood through which
government agencies continue to operate and which the State discharges its functions for the
welfare of its constituents. As between the parties, it would be more equitable if petitioner's
lapses were allowed to pass and consequently uphold the Waivers in order to support this
principle and public policy.
Second, the Court has repeatedly pronounced that parties must come to court with clean
hands. Parties who do not come to court with clean hands cannot be allowed to benefit from their
own wrongdoing. Following the foregoing principle, ATC should not be allowed to benefit from
the flaws in its own Waivers and successfully insist on their invalidity in order to evade its
responsibility to pay taxes.
Third, ATC is estopped from questioning the validity of its Waivers. While it is true that
the Court has repeatedly held that the doctrine of estoppel must be sparingly applied as an
exception to the statute of limitations for assessment of taxes, the Court finds that the application
of the doctrine is justified in this case. Verily, the application of estoppel in this case would
promote the administration of the law, prevent injustice and avert the accomplishment of a wrong
and undue advantage. ATC executed five Waivers and delivered them to BIR, one after the other.
It allowed BIR to rely on them and did not raise any objection against their validity until
petitioner assessed taxes and penalties against it. Moreover, the application of estoppel is
necessary to prevent the undue injury that the government would suffer because of the
cancellation of petitioner's assessment of respondent's tax liabilities.
Finally, the Court cannot tolerate this highly suspicious situation. In this case, the
taxpayer, on the one hand, after voluntarily executing waivers, insisted on their invalidity by
raising the very same defects it caused. On the other hand, the BIR miserably failed to exact from
respondent compliance with its rules. The BIR's negligence in the performance of its duties was
so gross that it amounted to malice and bad faith. Moreover, the BIR was so lax such that it
seemed that it consented to the mistakes in the Waivers. Such a situation is dangerous and open to
abuse by unscrupulous taxpayers who intend to escape their responsibility to pay taxes by mere
expedient of hiding behind technicalities.
Page 28
FIRST DIVISION
HEIRS OF MARIANO vs. CITY OF NAGA
G.R. No. 197743, March 12, 2018
Ponente: Justice Noel Tijam
Nature of the Action:
This is a Petition for Review on Certiorari, assailing the Amended
Decision rendered by the CA which reconsidered its earlier Decision, annulling the
Decision of the RTC of Naga City, and reinstating the Decision of the MTC Naga City
dismissing the Unlawful Detainer case instituted by the Heirs of Mariano against the
City of Naga.
Facts:
Sometime in July of 1954, the officers of City Heights Subdivision in Naga City
wrote the mayor of said city offering some two hectares of its land for the construction of
the city hall. In response thereto, by virtue of a city council resolution, the mayor asked
the subdivision officers to increase the allocation to five hectares. After some
negotiations, the parties agreed to a five-hectare land to be donated by the subdivision. It
was also agreed that the subdivision shall also build the city hall building. A deed of
donation was later on executed between the officers of the subdivision and the city
mayor. By virtue of this deed, some government offices like the Bureau of fire, Land
Transportation Office, and other offices entered into the property and constructed their
respective offices.
However, a controversy arose between the Bureau of Public Works (BPW) and
the City of Naga as to who has the authority to bid for the construction of the city hall
building. The issue was resolved with finality in a suit where the BPW was declared to
have such power. The construction in the subdivision did not materialize.
In 1997, heirs of Mariano, the subdivision owner, demanded from the city the
return of the land. Invoking the Deed of Donation, the city did not comply with such
demand. Thus, the heirs filed for an Unlawful Detainer Case in the MTC of Naga.
The MTC dismissed the complaint on the ground that it had no jurisdiction over
the case as the issue involves question of ownership. The MTC, nevertheless, gave
weight to the deed of donation.
On appeal to the second level court, the decision was reversed. The RTC
ratiocinated that the MTC could resolve the issue of ownership provisionally as an
incident of possession, without prejudice to the filing of a proper action to determine
ownership. It likewise ruled that the non-construction of the city hall in the property
Page 29
released the donors form the obligation under the deed. Lastly, the defect in the deed
rendered it void.
The CA reversed the decision of the RTC and reinstated that of the MTC. Thus,
the present appeal at bench.
Issue:
1. Is the deed of donation void?
Ruling:
WHEREFORE, the petition is GRANTED. The Court of Appeals' Amended
Decision dated July 20, 2011 is SET ASIDE. The Decision dated June 20, 2005 of the
Regional Trial Court, Branch 26 of Naga City in Civil Case No. RTC 2005-0030
is REINSTATED with MODIFICATION in that: (a) petitioners shall be paid only half
of the adjudged monthly rental of P2,500,000; and (b) the award of attorney's fees is
reduced to P75,000.
In resolving the validity of the deed of donation, the high court treated such deed
as a contract1. Generally, contracts are valid and obligatory, provided that the essential
requisites for their validity are present. However, when the law requires specific form to
be present, such requirements must be present. Their absence renders the contract void
and of no effect. As a deed of donation of a real property is a solemn contract, it must
conform to the requisites in Art. 749 of the New Civil Code that the deed must be in a
public instrument. Same goes with the acceptance which may or may not be contained in
the same instrument.
The deed in this case does not follow the requisites under Art. 749 as the
acceptance by the city mayor was made on the same instrument four days after the deed
was notarized. Thus, the notarial lawyer could acknowledged the deed and could not have
ascertained the voluntariness of the execution of the deed. In effect, it is as if the
acceptance is not notarized.
The court likewise ruled that the donor in the deed is the owner of the property,
but the officers of the subdivision. Not being the owner of the property, the officers could
not have donated the land in question as it is only the owner could have signed the deed.
For the above reasons, the contract is void. Void contracts may not be invoked as
a valid action or defense in any court proceeding, including an ejectment suit.
1
As per Atty. Uribe, a donation is NOT a contract
Page 30
FIRST DIVISION
RAYMOND A. SON, et. al. vs. UNIVERSITY OF STO. TOMAS, et. al.
G.R. No. 211273, April 18, 2018
Ponente: Justice Mariano Del Castillo
Nature of the Action:
This Petition for Review on Certiorari seeks to set aside the Decision of the CA
setting aside the Decision and Resolution of the National Labor Relations Commission
(NLRC) affirming that of the Labor Arbiter (LA), ruling in favor of Raymond A. Son,
Raymond Antiola and Wilfredo Pollarco for a case of Illegal Dismissal with claim for
Reinstatement, Payment of Backwages and Damages, and Unfair Labor Practice
(ULP) against UST.
Facts:
By virtue of Commission on Higher Education (CHED) Memorandum NO. 40-08
issued in 2008, University of Sto. Tomas (UST) required all its faculty members teaching
undergraduate courses to complete master’s degrees. This directive from UST was also in
consonance with the Collective Bargaining Agreement (CBA) provision that faculty
members must complete master’s degrees within six semesters from firing. However, if
such members continue to be hired after the probationary period of six months despite
non-completion of master’s degree, they shall be considered as tenured and shall acquire
permanent status.
Raymond Son, Raymond Antiola and Wilfredo Pollarco were professors in
University of Sto. Tomas hired from 2004 to 2005. There is no question that these three
faculty members did not finish their master’s degrees within the period stipulated in the
CBA. However, they were employed continuously by UST after the probationary period
despite that fact.
In 2010, the CHED Chairman issued a letter to all schools for the strict
implementation of Memorandum No. 40-08. Heeding thereto, UST management
dismissed from service Son, Antiola, and Pollarco. Claiming illegal dismissal and Unfair
Labor Practice (ULP) for violation of the CBA, the three professors filed with the Labor
Arbiter (LA) a case for illegal dismissal with claim for reinstatement, payment of
backwages and damages, and ULP. The LA granted the complaint and the reliefs prayed
for. On appeal to the National Labor Relations Commission (NLRC), the decision of LA
was affirmed. Upon challenge of the NLRC decision to the CA, the decision was
reversed. The CA anchored its reversal on 1992 CHED Circular mandating all schools to
employ faculty members with master’s degrees.
Ergo, this present appeal.
Page 31
Issues:
1. Is the CBA provision granting permanent status to professors despite noncompletion of master’s degree valid?
2. Is there illegal dismissal and ULP in this case?
Ruling:
WHEREFORE, the Petition is DENIED. The September 27, 2013 Decision and
January 29, 2014 Resolution of the Court of Appeals (CA) in CAG.R. SP No. 128666
are AFFIRMED in toto.
A CBA is indeed a contract between the employer and the union. Just like any
other contract, the parties are allowed to stipulate according to their will. However, this
freedom or liberty to contract is far from being limitless as it should not be contrary to
law, morals, good customs public policy or public order. Thus, when a contract or
stipulation therein violates any of the foregoing, the same is void and without legal effect.
The CHED Circular issued in 1992, issued by an administrative agency by virtue
of law, has the force and effect of a law. Thus, when UST and its employees union
created the CBA in 2006, this circular is deemed to have been integrated therein. The
parties to the CBA could not have validly stipulated that professors who are continuously
employed after the probationary period shall attain permanent status despite noncompletion of master’s degree because it is simply contrary to the circular issued. For
being contrary to law, the CBA provision is void and without any legal effect.
With all the above discussion, UST was justified in dismissing the three
professors. There being lawful cause in terminating the employees, UST is not guilty of
illegal dismissal. By virtue of the 1992 circular, the three professors did not attain
permanent status. Under the Labor Code, probationary employment maybe terminated if
the employees failed to meet the requirements of their position. Hence, no backwages or
damages maybe awarded. The issue on ULP was already answered in the negative as
UST did not violate the CBA provision.
Page 32
THIRD DIVISION
ROYAL PLAINS VIEW INC./OR RENATO PADILLO vs. NESTOR MEJIA
G.R. No. 230832, November 12, 2018
Ponente: Justice Jose Reyes, Jr.
Nature of the Action:
Appeal by Certiorari assailing the Decision of the CA, reversing the Decision of the RTC
which dismissed the action for Declaration of Nullity of Rescission of Conditional Sale filed by
Renato Padillo, representing Royal Plains View Inc., against Nestor Mejia.
Facts:
Renato Padillo, for and in behalf of Royal Plains View Inc. entered into an agreement
denominated as Conditional Contract of Sale with Nestor Mejia. The contract covers some 23.3
hectares of land owned by the latter, to be used by the former in its subdivision plan. They agreed
to the purchase price of P8 Million, P500,000.00 of which was paid in cash as down payment,
and the remaining to be pain on installment basis for three years.
Thereafter, two TCTs were issued covering the subject property. One TCT was delivered
to Padillo while the other was in the possession of Mejia.
In 2005, the previous deed was cancelled and the parties entered into a new deed of
conditional sale acknowledging the payment of P1.9 Million and the balance to be paid on
installment for 40 months. The parties also had a gentlemen’s agreement that the lot covered by
the title held by Mejia will be divided into two, with both of them taking each portion.
Subsequently, Padillo asked for the title which was in Mejia’s possession. It turned out
that Mejia sold the entire property covered by the two TCT’s to another buyer at P12 Million.
In February of 2010, Padillo received a communication from Mejia denominated as
Rescission of Deed of Conditional Sale. Mejia anchored such rescission on the non-payment of
the balance of the purchase price. This prompted Padillo to file with the RTC an action for
declaration of nullity of rescission of conditional sale.
The RTC dismissed the action on the basis of fraud on both parties. The RTC concluded
that the contract entered into was made to deprive the heirs of the original owners of the land of
their property. Coming to the court with unclean hands, Padillo is not entitled to relief.
On appeal to the CA, the appellate court reversed the decision of the RTC. The CA ruled
that the parties entered into a contract to sell and not a contract of sale. The CA applied the
provisions of RA 6552 (Maceda Law) in giving Padillo a grace period within which to pay the
balance. The rescission being invalid, Padillo did not lose such grace period.
Issues:
1. What was the contract entered into by the parties?
2. Was the rescission valid?
Page 33
Ruling:
WHEREFORE, the instant petition is PARTLY GRANTED. Accordingly, the
appealed Decision dated May 26, 2016 of the Court of Appeals-Cagayan de Oro City in CA-GR.
CV No. 03284-MIN is MODIFIED as follows:
The Complaint for the Nullification of the document denominated as Rescission of the Deed of
Conditional Sale is GRANTED.
1. The Deed of Conditional Sale between the parties is declared VALID and
SUBSISTING, and the parties are enjoined to comply with the other stipulations
embodied therein.
2. Petitioners Royal Plains View, Inc. and/or Renato Padillo are ORDERED to
PAY respondent Nestor Mejia in the amount of P4,432,500.00 as remaining balance of
the agreed purchase price within sixty (60) days from finality of this Decision.
3. Upon full payment of the purchase price, respondent Nestor Mejia shall EXECUTE the
corresponding Deed of Absolute Sale over the property covered by TCT No. T-225549.
4. In case of failure of petitioners to pay the sum as herein adjudged, the Deed of
Conditional Sale is deemed cancelled and the payments they had already paid will be
considered rentals for the use of the property.
No pronouncement as to costs.
Anent the first issue, the court held that the contract which the parties executed is one to
sell and not of conditional sale. A contract to sell, the ownership is reserved in the seller and is
not to pass until the full payment of the purchase price. On the other hand, in a contract of sale,
the ownership is transferred to the buyer regardless if the amount was fully paid or not. In the first
case, non-payment of the price is a negative resolutory condition. The obligation to deliver on the
part of the seller does not arise until after the payment of the purchase price. In the second, the
obligation exists and is subsisting until the contract of sale is annulled.
From the terms of the contract, it was apparent that Mejia reserved the ownership of the
property until after the payment of the purchase price. In fact, Mejia was only going to execute a
deed of absolute sale until after Padillo has paid the price in full. The name given by the party to
their contract is not controlling but their stipulations therein.
The above conclusion leads to the next summation that the rescission is not valid. The
action for rescission, as made in this case, does not apply to a contract to sell. The reason is that
the seller has yet no obligation to deliver the property as the condition, which is for the buyer to
pay the entire amount, has not been fulfilled. Thus, there is no reciprocal obligation that exists
and rescission is not available. However, the seller is not precluded from cancelling the contract
to sell. In doing so, the seller must notify the buyer of the cancellation, or at least the intention to
cancel so that the buyer maybe able to interpose his objection, or to question such unilateral
cancellation on the proper forum. In this case, no notice was made to Padillo. The rescission
being a nullity, does not affect the existence of the contract to sell. Perforce, the obligations and
rights therein subsists.
Page 34
FIRST DIVISION
CHRISTOPHER R. SANTOS vs. ATTY. JOSEPH A. AROJADO
A.C. No. 8502, June 27, 2018
Ponente: Justice Mariano Del Castillo.
Nature of the Action:
Disbarment case filed by Christopher Santos for Violation of Art. 1491 of the
New Civil Code for acquiring interest in the property subject of litigation.
Facts:
Herein complainant Christopher Santos was the respondent in an ejectment suit
filed by one Lilia Rodriguez. Atty. Joseph Arojado was the counsel for therein plaintiff.
During the pendency of that ejectment case in the Supreme Court, Atty. Arojado’s son,
Julius, bought from Rodriguez a portion of the property subject of the ejectment case.
Thereafter, alleging violation of Art. 1491 of the New Civil Code, Santos filed a
disbarment complaint against Atty. Arojado for acquiring interest in the property subject
of litigation.
For his part, Atty. Arojado defended that the proscription under Art. 1491 does
not apply to relatives of the officers prohibited to acquire the property in litigation.
The Integrated Bar of the Philippines submitted its report and recommendation to
absolve Atty. Arojado.
Issue:
Does the prohibition in Art. 1491 apply to the relatives of the officers prohibited
to acquire the property subject of litigation?
Ruling:
WHEREFORE, the present administrative case is DISMISSED for lack of me
Art. 1491, specifically the fifth item, prohibits the 1) justices; 2) judges; 3)
prosecuting attorneys; 4) clerks of court; 5) other officers and employees connected with
the administration of justice; and 6) lawyers. Applying the doctrine of expressio unius est
exclusion alterius, which means that the express mention of one person, thing or act, or
consequence, excludes all others. Here, the list of the prohibited persons are only those
mentioned in the law, and cannot extend to their relatives.
Page 35
Moreover, Santos failed to prove that Atty. Arojado abused the fiduciary
relationship between the latter and the client. There was no evidence presented that it was
Atty. Arojado who initiated the sale or that he mediated to perfect such transaction.
Lastly, Julius is of legal age, a registered nurse, and a businessman. He has the
capacity to buy the property for himself and by himself. Without any evidence that Atty.
Arojado used his son in order to gain interest in the subject property, it cannot be
assumed that the sale is a circumvention of the above law.
Page 36
SECOND DIVISION
SPOUSES LUCIA AND CRESENTE OROZCO, SUBSTITUTED BY THEIR HEIRS vs.
FLORANTE LOZANO, SUBSTITUTED BY HIS HEIRS
G.R. No. 222616, April 3, 2019
Ponente: Justice Antonio Carpio
Nature of the Action:
This is an appeal on the Decision of the CA, affirming in toto the Decision of the RTC.
The latter Decision reversed the MCTC Decision granting the complaint for Recovery of
Possession and Damages with Application for Writ of Preliminary Injunction filed by
Cresente Orozco against Florante Lozano.
Facts:
Spouses Orozco acquired a parcel of land designated as Lot No. 3780. By the time of
acquisition, the spouses did not know the exact area of the land and Cresented Orozco measured
the same only using a rope. On September 4, 1980, the spouses Orozco sold half of their parcel of
land to Florante Lozano. The two parcels of land were subsequently identified as Lot No. 3780-A
and Lot No. 3780-B, the former owned by Lozano, and the latter by the spouses Orozco. By their
contract, both of the parcels cover an equal size of 285 square meters, or a total of 570 square
meters. Thereafter, Lozano built structures not only on his own lot, but also some parts covering
the other. Spouses Orozco did not prevent Lozano from building the boarding house because they
thought that the said boarding house was constructed within Lot No. 3780-A. Later on, the
spouses were surprised that Lozano was asking them to sign a piece of paper purportedly an
acknowledgment receipt for the sale of another 62 square meters in Lot No. 3780-B. The spouses
deny that there was an agreement for the sale of another portion of land. They dispute the
authenticity of the signatures in the acknowledgment receipt. The spouses likewise allege that
Lozano encroached on their property as the structures were built within Lot NO. 3780-B.
For his part, Lozano asserts that there was another contract whereby the spouses accepted
another P700.00 for another 62 square meters of land covered by Lot No. 3780-B, as evidenced
by an acknowledgment receipt signed by the spouses themselves. According to Lozano, the
purchase price totals P1,000.00 and he only lacks P300.00 for the whole purchase price. Anent
the issue of encroachment, it turns out that the total area of the original Lot No. 3780 was 651
square meters and not 570 square meters. Thus, by acquiring half of the land, his total area is
325.5 square meters and not 285 square meters. The boarding house that he built was well within
the 325.5 marker.
After 18 years, or on September 2, 1998, the spouses Orozco filed a complaint for
Recovery of Possession and Damages with Application for Writ of Preliminary Injunction with
the MCTC. Said first level court, ruling that there was no perfected contract of sale as to the
additional 62 square meters, the complaint was granted.
On appeal to the RTC, the decision appealed from was reversed. In doing so, the second
level court ruled that there was a perfected contract as evidenced by the acknowledgment receipt.
As the spouses failed to disprove the forgery of their signatures in such acknowledgment receipt,
there was valid contract, and thus, transfer of ownership was likewise valid.
Page 37
On petition for review to the CA, the decision of the RTC was affirmed in toto. Perforce,
this present petition for review on certiorari.
Issues:
1. Did Lozano encroach Lot No. 3780-B?
2. Was there a perfected contract of sale covering the additional 62 square meters of Lot
No. 3780-B?
Ruling:
WHEREFORE, the petition is DENIED. We AFFIRM the 18 September 2015 Decision
and the 8 December 2015 Resolution of the Court of Appeals, Cagayan de Oro City in CA-G.R.
SP No. 05171-MIN.
In the said Deed of Sale, Spouses Orozco agreed to sell to Lozano "one-half portion of
Lot No. 3780." Lozano, in turn, agreed to pay Spouses Orozco a lump sum of P5,000.00 for onehalf portion of Lot No. 3780 which was described in the Deed of Sale with specific boundaries.
Article 1542 of the Civil Code applies in the present case. It is clear that Spouses Orozco were
divesting of and ceding to Lozano one-half of Lot No. 3780 for a lump sum payment of
P5,000.00. Hence, by virtue of the Deed of Sale, the title of ownership over half of 651 square
meters of Lot No. 3780 or 325.5 square meters was validly transferred to Lozano. Spouses
Orozco cannot invoke the lack of knowledge of the true area of Lot No. 3780 because Spouses
Orozco purchased Lot No. 3780 using the stated boundaries of Lot No. 3780 as reference without
securing the assistance of a geodetic engineer to measure the exact land area. In a contract of sale
of real estate contained in a land mass under Article 1542, the specific boundaries stated in the
contract must control over any statement with respect to the area contained in the said boundaries.
Where both the area and the boundaries of the immovable are declared, the area covered within
the boundaries prevails over the stated area in the deed of sale. In case of conflict between the
area and boundaries, it is the latter which should prevail. under Article 1542, what is controlling
is the entire land included within the boundaries, regardless of whether the real area should be
greater or smaller than that recited in the deed of sale. Notably, the Deed of Sale validly
transferred the title of ownership over half of Lot No. 3780 or 325 .5 square meters from Spouses
Orozco to Lozano.
On the issue of the subsequent sale, there was a perfected contract of sale for the 62
square meter portion of Lot No. 3780-B from Spouses Orozco to Lozano. There was a meeting of
the minds between Spouses Orozco and Lozano when the latter offered to purchase for
P.1,000.00 an additional 62 square meters of Lot No. 3780-B from Spouses Orozco to extend the
boundary of his property. Lozano's offer was accepted by Spouses Orozco and the initial payment
of P400.00 was made by Lozano as evidenced by the handwritten acknowledgment receipt dated
24 April 1981 signed by Orozco. Subsequently, another payment of P300.00 by Lozano was
made to Lucia Orozco, totaling the payment of Lozano to P700.00, leaving a remaining unpaid
balance of P300.00. As a rule, forgery cannot be presumed and must be proved by clear, positive,
and convincing evidence. The burden of proof lies on the party alleging forgery. One who alleges
forgery has the burden to establish his case by a preponderance of evidence. This, Orozcos failed
to establish.
Page 38
SECOND DIVISION
NICOMEDES AUGUSTO, GOMERCINDO JIMENEZ, MARCELINO
PAQUIBOT, and ROBERTA SILAWAN, Petitioners vs. ANTONIO CARLOTA
DY and MARIO DY, Respondents
G.R. No. 218732, Feb. 13, 2019
Ponente: Justice Jose Reyes, Jr.
Nature of the Action:
This is an appeal on the Decision of the CA, affirming the Decision of the RTC granting
the complaint for Annulment of Deed of Self Adjudication with Annulment of Resulting Titles,
and Repartition filed by Antonio and Mario Dy against Roberta Silawan Nicomedes Augusto,
Gomercindo Jimenez and Marcelino Paquibot.
Facts:
On June 7, 2001, Roberta Silawan executed a document denominated as Extrajudicial
Settlement by Sole and Only Heir with Confirmation of the Deed of Absolute Sale. In said deed,
Roberta declared that she is the sole heir of deceased spouses Sixto and Marcosa Silawan, and by
virtue thereof, she adjudicates for herself the parcel of land left by her parents. It was undisputed
that Sixto died in 1968, while Marcosa died in 1932. The land subject of this case is a conjugal
property. Roberta likewise confirmed in said deed the sale of portions of the said property made
by his father to Nicomedes Augusto, Gmercindo Jimenez and Marcelino Paquibot from 1967 up
to 1981.
Aggrieved by the said self-adjudication, Antonio and Mario, both surnamed Dy, disputed
the deed. According to them, they acquired two separate portions of the land from their
predecessors in interest, the latter acquired the same portion of the land by way of sale from Sixto
Silawan in 1965. The case was filed in the RTC for the Annulment of Deed of Self Adjudication
with Annulment of Resulting Titles, and Repartition.
The trial court granted the complaint. It ruled that the Extrajudicial Settlement by Sole
and Only Heir with confirmation of the Deed of Absolute Sale is null and void and the
cancellation of the resulting titles. It also decreed for the repartition of the lot in question.
The appeal made by Roberta to the CA resulted in the affirmance of the earlier RTC
decision. The CA reasoned that Roberta cannot unilaterally rescind the sale executed by her
father. The sale was made way back in 1965 and it can be safely presumed that proprietary rights
had already been acquired by the buyers in interim.
Hence, this present recourse at bench.
Issues:
1. Is the Extrajudicial Settlement by Sole and Only Heir with Confirmation of the Deed
of Absolute Sale valid?
2. Can Sixto Silawan sell the entire property upon death of his wife, Marcosa?
Page 39
Ruling:
Considering the foregoing disquisitions, the instant petition is PARTLY GRANTED.
Hence, the appealed Decision dated November 20, 2014 of the Court of Appeals-Cebu City in
CA-G.R. CEB C.V. No. 04753 insofar as it affirmed the RTC, is MODIFIED as follows:
1. The Deed of Absolute Sale dated February 16, 197 8 executed by Nicolas Aying, married to
Maura Augusto in favor of Gomercindo Jimenez to the extent of 1,331. 75 square meters of
Lot No. 4277 is declared VALID;
2. The Deed of Absolute Sale dated November 25, 1989 executed by Filomeno Augusto in favor
of Antonio Carlota Dy involving 2,363.5 square meters of Lot No. 4277 is declared VALID;
3. The Deed of Absolute Sale dated October 10, 1989 executed by Filomeno Augusto in favor
of Nicomedes Augusto involving 300 square meters of Lot No. 4277 is declared VALID;
4. The Deed of Absolute Sale dated July14, 1987 executed by Mariano Silawan in favor of
Marcelino Paquibot is declared VOID;
5. The Deed of Absolute Sale dated May 23, 1994 executed by Rodulfo Augusto in favor of
Mario Dy is declared VOID; and
6. The Extrajudicial Settlement by Sole and Only Heir executed by Roberta Silawan insofar as
the 1,331.75 square meters representing one-fourth of her undivided share in Lot No. 4277 is
declared VALID. The Confirmation of Sale embodied in the said document is STRUCK
DOWN.
After the death of Marcosa (one of the registered owners), the subject property became
co-owned by Sixto and Roberta. In other words, before actual partition, co-ownership between
Sixto and Roberta was formed over the subject property. Thus, each co-owner of property which
is held pro indiviso exercises his rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interests of his co-owners. Hence, all
dispositions made by Sixto over the said lot is valid only up to three-fourths of the property which
corresponds to his share. As Roberta is entitled to the remaining one-fourth, the same could not
have been validly sold by Sixto. Therefore, when Sixto sold the entire property, this is only valid
as to his share and that of her daughter, Roberta, remained unaffected.
Anent the validity of the deed, it was equally erroneous for Roberta to adjudicate to
herself the entire property and make selective confirmation of the Deeds of Absolute Sale
executed by her father. As earlier discussed, Roberta is only entitled to one-fourth of the subject
property, which is her undivided share in the estate of her mother (Marcosa) who had long passed
away in the 1930s. Roberta can no longer lay claim on the three-fourths undivided share of her
father (Sixto) to the subject property at the time of his death. Sixto, during his lifetime, had
already sold his undivided share in the subject property, hence, Roberta could no longer inherit it,
making the "Extrajudicial Settlement by Sole and Only Heir" executed by Roberta void insofar as
she adjudicated unto herself the entire subject property, to the prejudice of those persons who
have already acquired proprietary rights over their respective shares.
Page 40
SECOND DIVISION
REPUBLIC OF THE PHILIPPINES REP BY DPWH vs. MACABAGDAL, et. al.
G.R. No. 227215, January 10, 2018
Ponente: Justice Estela Perlas-Bernabe
Nature of the Action:
Appeal on the Decision of the CA which affirmed that of the RTC imposing legal
interest on the unpaid balance of the just compensation in an action for Expropriation at
the rate of twelve percent (12%) per annum (p.a.) computed from the time of the taking
of the property until full payment.
Facts:
In 2008, the Republic of the Philippines, through the DPWH filed for an
expropriation proceedings over a property owned by Macabagdal. The latter did not
oppose the suit but merely asserted the proper payment of just compensation. On May 5,
2008, the RTC issued a writ of Possession in favor the Republic. Thus, DPWH entered
the land subject of expropriation. After trial, the RTC granted the expropriation and
ordered the republic to pay Macabagdal P9,000.00 per square meter an interest of 12%
per annum.
Contending the price of just compensation to be paid and that per prevailing
Central Bank issuances, the legal rate is fixed as 6% per annum, the Republic elevated
the case to the CA. The appellate court denied the appeal insofar as the price per square
meter. However, the CA did not rule on the interest rate.
Ergo, the present controversy.
Issue:
What is the proper interest rate?
Ruling:
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated
September 13, 2016 of the Court of Appeals (CA) in CA-G.R. CV No. 1044 73 is hereby
AFFIRMED with the MODIFICATION imposing legal interest at the rate of twelve
percent (12%) per annum (p.a.) on the unpaid balance of the just compensation, as
determined by the Regional Trial Court of Valenzuela City, Branch 172, reckoned from
the date of the taking on May 5, 2008 to June 30, 2013 and, thereafter, at six percent (6%)
p.a. until full payment. The rest of the CA Decision stands.
The delay in payment of just compensation amounts to an effective forbearance of
money, entitling the land owner to the interest in the difference in the amount between
Page 41
the final amount as adjudged by the court and the initial payment made by the
government. However, the interest rate must be computed only from the date that the
government entered the property and not from the date of filing of the complaint, nor
from the render of judgment. In this case, the writ of possession was issued on May 5,
2018. Considering that the Central bank Circular modifying the rate of interest took effect
on July 1, 2018 reducing the rate to 6%, from then on, interest must only be at a
prevailing rate.
Page 42
THIRD DIVISION
CITY OF BACOLOD, et. al. vs. PHUTURE VISIONS CO., INC.
G.R. No. 190289, January 17, 2018
Ponente: Justice Presbitero Velasco, Jr.
Nature of the Action:
Subject of this appeal is the Decision of the CA which modified the Decision of
the RTC. The RTC Decision denied the action for Mandamus with Damages filed by
Phuture Visions Co. Inc. against the City of Bacolod. Meanwhile, the CA Decision
dismissed the mandamus case for being moot. However, the case was remanded to the
RTC for determination of damages.
Facts:
After Phuture Co. Inc. amended its Articles of Incorporation to include operation of
Bingo, it applied, and was subsequently issued, a provisional permit by the Philippine Gaming
Corporation (PAGCOR), subject to submission of additional requirements. Thereafter, it rented a
space in SM Bacolod to set up its Bingo outlet. It was given a slot at SM Bacolod where the
Bingo outlet was fully set up. To comply with the requirements, Phuture applied a business
permit with the Office of the City Mayor of Bacolod on February 19, 2007. It was issued a claim
stub that the permit will be picked up on March 16, 2007.
On March 2, 2007, before the issuance of the Mayor’s permit, Phuture commenced its
operation. To its surprise, in the early morning of March 3, 2007, the elements of City Legal
Office padlocked the outlet. There was a posting at the door of the outlet a closure order dated
March 2, 2007 that the operation was illegal for failure to obtain a mayor’s permit.
Phuture filed with the RTC an action for mandamus with damages. Phuture alleged that
the closure of business was tainted with malice and bad faith as PAGCOR has already given them
permit. Likewise, They have already submitted their application for the issuance of the mayor’s
permit. Claiming that the issuance of the permit is merely ministerial and the city has no authority
to shut down its operations, Phuture prayed for the issuance of the permit, removing of the
padlock, and payment of damages.
During the hearing on March 7, 2007, the city legal officer tried to hand the permit issued
by the office of the city mayor, which Phuture’s counsel declined. The permit issued was for
professional services and not for bingo operations. The city legal counsel averred that the
application submitted by Phuture was merely for a renewal of its existing permit and not for
gambling. Thus, the closure of the bingo outlet was legal as it did not have any permit. They were
merely acting under the mandate of a local ordinance.
The RTC ruled in favor of the City of Bacolod. Reasoning that the city had the
authority to close a gambling house without a permit under its police power, the closure
is only proper. No damages maybe awarded under the circumstances.
Page 43
Phuture seasonably filed an appeal to the CA, which modified the order of the
RTC. The CA dismissed the mandamus case for being moot as Phuture will be applying
new permit for the new year. However, the case was remanded to the RTC for
determination of damages.
The City of Bacolod challenges the remand of the case to the RTC.
Issue:
Is the City of Bacolod liable for damages?
Ruling:
WHEREFORE, the petition is hereby GRANTED. The Decision dated February 27,
2009 and the Resolution dated October 27, 2009 of the Court of Appeals in CA-G.R. SP No.
03322 are hereby ANNULLED and SET ASIDE. The Decision dated March 20, 2007 of the
Regional Trial Court of Bacolod City, Branch 49 is hereby REINSTATED.
There are two grounds why the City of Bacolod is not liable for damages: 1) it is immune
from suit; and 2) under the principle of damnum absque injuria. The same shall be discussed
hereunder in seriatim.
As a rule, the state is immune from suit, including its officers in the conduct of their
official duties. In other words, no case against the state may prosper. This immunity is also
extended to municipal corporations which are agents of the national government. By way of
exception, the state maybe sued expressly or impliedly. Thus, when there is a general or special
law permitting case against the state, then, a case may prosper against it. Likewise, when the state
is exercising a proprietary function, it impliedly gives its consent to be sued.
None of the above exceptions is obtaining in this case. The issuance of permit of a
gambling establishment is a regulatory power vested to the municpal corporations by the Local
Government Code. Being a regulatory power, it belongs to the police power of the state, and not
in its proprietary function. Therefore, when the city padlocked the bingo house as it had no
permit, it is enforcing a regulatory measure by virtue of police power delegated unto it. It cannot
be sued for exercising police power.
Considering the above discourse, the city is acting within its authority. The damage
suffered by Phuture cannot be attributed to the city under the principle of damnum absque injuria.
In order that the law will give redress for an act causing damage, that act must not only be hurtful,
but also wrongful. Here, Phuture has no legal right to operate the bingo operations at the outset. It
follows that its closure is just proper.
Page 44
THIRD DIVISION
TERESA YAMAUCHI vs. ROMEO SUNIGA
G.R. No. 199513, April 18, 2018
Ponente: Justice Samuel Martires
Nature of the Action:
Challenged in this Petition for Review on Certiorari is the Decision of the CA
modifying the award of damages by the RTC. The latter Decision granted Teresa
Yamauchi’s action for Rescission of Contract and Payment of Damages against
Romeo Suniga.
Facts:
Sometime in September of 2000, Teresa Yamauchi consulted the husband of her cousin,
Romeo Suniga, for the renovation of her house. Believing that Suniga was a licensed architect,
Yamauchi agreed to the statement of estimated cost given by Suniga to her. The renovation of the
house started shortly thereafter. Yamauchi initially gave Suniga P300,000.00 out of the more than
P900,000.00 estimated cost. Then, Yamauchi followed it with another P100,000.00.
In March 2001, Yamauchi inquired to Suniga as to when the project will be completed. In
turn, Suniga asked that additional funds be given. Yamauchi asked Suniga to advance the funds
and that the former shall just pay the latter. Suniga replied that he had no money and his own
house was under construction. Sunoga told Yamauchi that he will just resume the project after the
construction of his own house and that funds should be available by that time. Before the
suspension of the renovation, the completion was at 47.2%.
In the interim, Yamauchi consulted an engineer neighbor. The latter advised her that the
cost she has already spent could already build one house. Thus, Yamauchi sent a letter to Suniga
terminating the contract and demanding the payment of P400,000.00. In turn, Suniga countered
that the stoppage of the project was due to unavailability of funds and that Yamauchi still owes
Suniga as Suniga advanced some of the costs.
Yamauchi filed a complaint in the RTC for Rescission of Contract and Payment of
Damages. The trial court adjudged Suniga liable for breach and ordered him to pay P400,000.00
as actual damages, P50,000.00 for exemplary damages, another P50,000.00 for morala damages,
and P30,000.00 for attorney’s fees.
When the case was brought to CA, said appellate court reduced the award of damages to
P60,580.00. The court held that Yamauchi benefitted from the renovation and compelling Suniga
to pay the whole P400,000.00 would result to unjust enrichment of Yamauchi. There being no
proof of fraud on the part of Suniga, the award of other damages was deleted.
All told, Yamauchi now files the present appeal.
Issues:
How much is Yamauchi entitled for damages?
Page 45
Ruling:
WHEREFORE, premises considered, the instant petition is PARTIALLY
GRANTED. The Decision of the Court of Appeals dated 12 April 2011 in CA-G.R. CV
No. 91381 is hereby MODIFIED. Romeo F. Suñiga is ordered to pay Teresa Gutierrez
Yamauchi the following:
(1) P500,000.00, as temperate damages;
(2) P50,000.00, as moral damages;
(3) P50,000.00, as exemplary damages; and
(4) Ten percent (10%) of the total amount awarded, as attorney's fees
In addition, the total amount adjudged shall earn an interest rate of six percent
(6%) per annum on the balance and interest due from the finality of this decision until
fully paid.
Actual of compensatory damages are those which the injured party is entitled
to recover for the wrong done and injuries received when none were intended. Since it is
intended to compensate for pecuniary loss, two elements must be proven, to wit: 1) the
fact of injury or loss; and 2) the actual amount of loss with reasonable degree of certainty
premised upon competent proof and the best evidence available.
Here, Yamauchi was able to prove that after nine months of the renovation,
the project ran at only 47.2% of completion. However, the partial renovation rendered the
house inhabitable to the point that as if it has no value. The house was broken, no doors,
no ceiling, and some of the installations were different from the specifications.
Yamaguchi did not gain anything from the renovation, contrary to the unjust enrichment
theory of the CA. The problem here, however, is that, the actual loss suffered by
Yamauchi cannot be ascertained. Yamauchi did not present any evidence as to the value
of the house before and after the renovation. The amount of renovation which may have
benefited Yamauchi are also not determined which may be deducted from the total
award. Be that as it may, Yamauchi is entitled to temperate damages. This kind of
damages maybe awarded when loss was duly proven but the amount cannot be
determined with certainty. In this case, considering the circumstances surrounding the
case, the temperate damages is P500.00.00.
Anent the award of damages, Yamauchi was also able to prove that Suniga
acted with fraud ad bad faith. Yamauchi entered in the contract believing that Suniga was
a licensed architect. It turns out that he is not. Also, after nine months of the project,
completing only 47.2%, Suniga was not only negligent but was also in bad faith in the
performance of his contractual obligation.
Page 46
FIRST DIVISION
EDEN ETINO vs. PEOPLE OF THE PHILIPPINES
G.R. No. 206632, February 14, 2018
Ponente: Justice Mariano Del Castillo
Nature of the Action:
This is an appeal on the conviction of Eden Etino of the crime of Frustrated
Homicide with an award of P25,000.00 as Moral Damages.
Facts:
On November 5, 2001, Eden Etino shot Jessierel Leyble multiple times using an
unlicensed firearm. Leyble was immediately brought to the hospital and was given
medical attention which prevented his death. Subsequently, an information for frustrated
homicide in the RTC of Iloilo. During tiral, Etino was not able to present the receipts or
any evidence to prove that he spent for his medication. What was presented was only his
medical certificate. After the trial of the case, Etino was found guilty of the crime
charged. However, the RTC did not award any damages to the victim as the latter failed
to adduced evidence to prove damages.
On appeal to the CA, the conviction was affirmed. The CA awarded P25,000.00
as moral damages and P10,000.00 as temperate damages to the victim.
Issues:
Was the award of damages proper?
Ruling:
WHEREFORE, we DENY the Petition for Review on Certiorari. The August
29, 2012 Decision and the March 11, 2013 Resolution of the Court of Appeals in CAG.R. CR No. 00896 are AFFIRMED with MODIFICATION in that, petitioner Eden
Etino is found guilty beyond reasonable doubt of the crime of SERIOUS PHYSICAL
INJURIES and is sentenced to suffer the indeterminate penalty of imprisonment of four
(4) months of arresto mayor, as minimum, to one (1) year and eight (8) months of prision
correccional, as maximum.
The award of damages was proper. The appeal, however in terms of criminal
aspect was modified. For failure of the prosecution to prove intent to kill, the accused
was convicted of less serious physical injuries.
Under Art. 2219 of the New Civil Code, moral damages may be awarded in
criminal cases resulting in physical injuries, as in this case. Although the victim did not
testify on the moral damages that he suffered, his medical certificate constitutes sufficient
Page 47
basis to award moral damages, since ordinary human experience and commons ense
dictate that such would inflicted upon him would naturally cause physical suffering,
fright, serious anxiety, moral shock, and similar injury.
Lastly, the victim is likewise entitled to temperate damages as it is clear from the
recrods that the victim received medical treatment, and was in fact, confined for twenty
days, although no documentary evidence was presented to prove the its cost.
Page 48
FIRST DIVISION
MARILOU PUNONGBAYAN-VISITACION vs. PEOPLE OF THE PHILIPPINES AND
PUNONGBAYAN
G.R. No. 194214, January 10, 2018
Ponente: Justice Samuel Martires
Nature of the Action:
Challenged in this appeal is the conviction of Marilou Punongbayan-Visitacion of
the crime of Libel and an award of P3 Million as Moral Damages.
Facts:
Marilou Punongbayan-Visitacion was the corporate secretary and assistant
treasurer of St. Peter’s College in Iligan City. It turns out that there was some contention
as to the presidency of the school board. On July 26, 1999, Visitacion wrote the sitting
president, Carmelita Punongbayan imputing upon the latter some malicious imputations
that Carmelita has committed acts of falsification and misrepresentations in the bank. By
virtue of the letter, an information for libel was filed against Visitacion in the RTC of
Iligan.
After trial, the RTC convicted Visitacion of Libel. She was sentenced to
imprisonment of one year and to pay Carmelita P3 Million as moral damages.
Instead of taking the regular course of action of appeal, Visitacion filed a special
civil action for certiorari with the CA. Visitacion challenged the judgment of the RTC in
convicting her. She also challenged the sentence of imprisonment as according to her, as
per current Supreme Court circulars, the preferred penalty is fine. Lastly, she averred that
the award of moral damages is excessive. The CA denied the petition.
Visitacion now challenges the denial of the CA of her petition for certiorari.
Issues:
Is the award of moral damages amounting to P3 Million excessive?
Ruling:
WHEREFORE, the petition is GRANTED. The 12 May 2003 Judgment of the
Regional Trial Court, Branch 5, Iligan City, in Criminal Case No. 7939 is AFFIRMED
with MODIFICATION. Petitioner Marilou Punongbayan-Visitacion is sentenced to pay a
fine in the amount of Six Thousand Pesos (₱6,000.00), with subsidiary imprisonment in
case of insolvency, and to pay private respondent Carmelita P. Punongbayan ₱500,000.00
as moral damages.
Page 49
In taking cognizance of the present action despite availing of the wrong remedy in
the CA, the Supreme Court relaxed the rules in this case as broader interest of justice is
required. Indeed, under prevailing circulars, fine is given preference in imposing
penalties in libel cases. Thus, the sentence was reduced to fine only.
On the award of damages, indeed, moral damages is the amount awarded to a
person who suffered physical suffering, mental anguish, fright, anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. It is
given to ease the victim’s grief and suffering and should reasonably approximate the
extent of the hurt caused and the gravity of the wrong done. While there is no hard and
fast rule in determining the fair and reasonable amount, the same should not be palpably
and scandalously excessive. Moral damages is not intended to impose penalty on the
wrongdoer, neither to enrich the claimant at the expense of the wrongdoer. Here,
Carmelita is a high ranking official of the school. The accusations were not only made
known to Carmelita but to many others, including the bank with whom the school
transacts with. With the reputation of Carmelita being besmirched, and her feeling
wounded, and considering all other circumstances in this case, the award of P5 Million is
shocking and excessive. Thus, the award is reduced to P500,000.00.
Page 50
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