2019
1. MALABANAN V. MALABANAN GR. NO. 187225
MARCH 6, 2019, | J. LEONEN
FACTS: Melinda Malabanan (Melinda) is the widow of Jose
Malabanan (Jose) In a December 18, 1984 Deed of Absolute
Sale, they acquired a 310-square meter lot, a portion of a
2,000-square meter land registered under Maria Cristina
Rodriguez (Rodriguez). Subsequently, on February 21,
1985, Transfer Certificate of Title No. T-188590 was issued
to Jose, married to Melinda covering the disputed property.
The spouses built a house on the lot which the family had
possessed since 1984. On October 13, 1984, Melinda left
the Philippines to work in Libya. Unfortunately, Jose was
murdered on June 12, 1985, prompting her to return home
on June 25, 1985. She then returned to Libya on August 19,
1985, and only came home on November 8, 1990. Later on,
Melinda discovered that Transfer Certificate of Title No. T188590 had long been canceled through a string of
transactions, and that the property was registered under the
name of Spouses Dominador III and Guia Montano (the
Montano Spouses). When Melinda's mother-in-law, Adelfina
Mendoza (Adelfina) died, her family executed an
Extrajudicial Settlement of her estate. The property, then
covered by Transfer Certificate of Title No. T-198039, was
adjudicated to Ramon Malabanan (Ramon), who was Jose's
brother. June 1, 1994, Melinda filed before the Regional Trial
Court a Complaint about Annulment of Title with Damages
against Spouses Ramon and Prescila Malabanan (the
Malabanan Spouses) and Francisco Malabanan (Francisco).
On June 17, 1994, Ramon sold the property to the Montano
Spouses, with whom Transfer Certificate of Title No. T467540 was issued. Melinda later filed an Amended
Complaint to implement the Montano Spouses. She argued
that the Special Power of Attorney was void as her signature
in it was forged, and that she and Jose remained the real
owners of the property. Further, she averred that she spent
her earnings as an overseas worker in Libya to remodel their
family home, all of which Francisco and the Malabanan
Spouses had fully known. She prayed for the nullification of
the documents, which she claimed to have been illegally
executed to dispossess her of her property. Francisco and
the Malabanan Spouses, in their Amended Answer with
Counterclaim, countered that Francisco and Adelfina bought
the property for their son, Jose, and Melinda as an advance
on Jose's legitime.Francisco, they added, paid for the
construction of the house on the property. They contended
that Melinda consented when Francisco reacquired the
property upon his son's death. He sold the property to his
brother-in-law, Benjamin Lopez (Lopez) because he was
short on cash; he later bought it back with his hard-earned
money. Francisco and the Malabanan Spouses further
claimed that the Extrajudicial Settlement of Adelfina's estate
was legally executed. Melinda and her children, they argued,
were excluded because they had already received their
share of inheritance from Adelfina. The Regional Trial Court
ruled in favor of Melinda. It found that she has proved her
ownership over the property, which was fraudulently
transferred through Francisco's clever scheme.
ISSUE: Whether or not the property formerly covered by
Transfer Certificate of Title No. T-188590 was conjugal,
and thus rendered its sale without the wife's consent void.
HELD: On one hand, the petitioner's claim rests on the
Deed of Absolute Sale her husband Jose executed with
Rodriguez, as well as the Transfer Certificate of Title No.
T-188590 issued during their marriage. On the other hand,
respondent Francisco maintained that he paid for the land
and the house construction on the property. The Court of
Appeals' finding that the property was exclusively owned
by Jose was premised on: (1) the Deed of Conditional Sale
between Jose and Rodriguez, which do not appear on
record; and (2) Jose's statement in the Special Power of
Attorney. The circumstances here transpired prior to the
effectivity of the Family Code on August 3, 1988. Thus,
petitioner and Jose's marriage and property relations are
governed by the Civil Code. Under the Civil Code, property
acquired during marriage is presumed to be conjugal.
There is no need to prove that the money used to
purchase a property came from the conjugal fund. What
must be established is that the property was acquired
during marriage. Only through "clear, categorical, and
convincing" proof to the contrary will it be considered the
paraphernal property of one (1) of the spouses. Here, the
pieces of evidence presented by respondents, who had
the burden of proving that the property was not conjugal
were insufficient to overturn this presumption. To recall, on
September 20, 1984, Jose executed a Deed of Conditional
Sale with Rodriguez, where respondent Francisco's down
payment was allegedly reflected. The following month, on
October 13, 1984, Melinda left for Libya. On December 18,
1984, the Deed of Absolute Sale between Jose and
Rodriguez was executed The house underwent
construction while Melinda was in Libya, and before Jose's
death on June 12, 1985. These events refute Francisco's
claim that the petitioner and Jose had no means to
purchase the lot as they were jobless. The petitioner was
then working in Libya, presumably earning income when
the Deed of Absolute Sale was executed and the house
was constructed. These circumstances sufficiently show
that the property was, indeed, conjugal. While respondent
Francisco did not waiver in his claim that he and Adelfina
bought the lot for the petitioner and Jose, we sustain the
trial court in deeming this as self-serving. It does not
escape this Court that respondent Francisco's
characterization of the property changed throughout the
trial and on appeal. A certificate of title accumulates in one
document a precise and correct statement of the exact
status of the fee held by its owner. The certificate, in the
absence of fraud, is the evidence of title and shows exactly
the real interest of its owner. The title once registered, with
very few exceptions, should not thereafter be impugned,
altered, changed, modified, enlarged, or diminished,
except in some direct proceeding permitted by law.
Otherwise, all security in registered titles would be lost.
The certificate of title is the best evidence of ownership of
a property. Respondents neither alleged fraud nor assailed
the issuance of the title in Jose's favor. This certificate of
title, when taken with the Deed of Absolute Sale between
Jose and Rodriguez, as well as the tax declarations in
petitioner's name, weigh more heavily than the
respondents' bare claims in establishing petitioner and
Jose's ownership of the property. Respondent Francisco, on
the contrary, failed to present any evidence to prove that he
paid for the kind and the construction of the house on the
property The Court ruled in a number of cases that the sale
of conjugal property by a spouse without the other's consent
is void. All subsequent transferees of the conjugal property
acquire no rights whatsoever from the conjugal property's
unauthorized sale. A contract conveying conjugal properties
entered into by the husband without the wife's consent may
be annulled entirely. Here, Jose had no right to either
unilaterally dispose of the conjugal property or grant
respondent Francisco this authority through the supposed
Special Power of Attorney. In his attempt to disavow
knowledge of or participation in the petitioner's forged
signature in the Special Power of Attorney, respondent
Francisco claimed that Jose handed him the document with
the petitioner's signature affixed in it. However, he was
resolute in his account that the petitioner was in Libya when
the house was being constructed.In the absence of a
satisfactory explanation, one found in possession of and who
used a forged document is the forger of said document. If a
person had in his possession a falsified document and he
made use of it, taking advantage of it and profiting thereby,
the clear presumption is that he is the material author of the
falsification. Here, it was through the Special Power of
Attorney, where the petitioner's signature was forged, that
respondent Fernando was able to sell the property to his
brother-in-law. A presumption that he was the author of the
falsification arose. Without contrary evidence, which he did
not even attempt to adduce, the presumption stands. This
Court cannot allow respondent Fernando, the presumed
perpetrator of the forgery in the Special Power of Attorney, to
benefit from his nefarious acts. Finally, we agree with the
trial court's finding that the Montano Spouses were not
buyers in good faith. A person is a buyer in good faith or an
"innocent purchaser for value, when he or she purchases
and pays the fair price for a property, absent any notice that
another has a right over it. If the property is covered by a
certificate of title, the buyer may rely on it and is not obliged
to go beyond its four (4) corners. Sigaya v. Mayuga,
however, provides for situations where this rule does not
apply: This rule shall not apply when the party has actual
knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry or when the
purchaser has knowledge of a defect or the lack of title in his
vendor or of sufficient facts to induce a reasonably prudent
man to inquire into the status of the title of the property in
litigation. To justify good faith in merely relying on the
certificate of title, the following must be present: First, the
seller is the registered owner of the land; second, the latter is
in possession thereof; and third, at the time of the sale, the
buyer was not aware of any claim or interest of some other
person in the property, or of any defect or restriction in the
title of the seller or in his capacity to convey title to the
property. Here, the land has always been possessed by the
petitioner, and not respondent Ramon Malabanan who sold
it. Respondent Dominador should have inquired about this
before he purchased the property. Verifying the status of the
property would not have been difficult for a seasoned
businessman like him, who incidentally lives in the same
neighborhood where the property is located. The Petition
for Review for Certiorari was granted.
2. YULO V. BPI G.R. NO. 217044, JANUARY 16,
2019, LEONEN, J.
FACTS: The Bank of the Philippine Islands (BPI) issued
Rainier Yulo a pre-approved credit card. His wife, Juliet,
was also given a credit card as an extension of his
account. Rainier and Juliet (the Yulo Spouses) used their
respective credit cards by regularly charging goods and
services on them. The Yulo Spouses regularly settled their
accounts with the BPI at first, but started to be delinquent
with their payments by July 2008. On November 11, 2008,
BPI sent Spouses Yulo a Demand Letterfor the immediate
payment of their outstanding balance. On February 12,
2009, the BPI sent another Demand Letter. The letters
went unheeded so BPI filed a Complaint before the MTC
for a sum of money against the Yulo Spouses.
In their Answer, the Yulo Spouses admitted that they used
the credit cards issued by the BPI but claimed that the BPI
did not fully disclose to them the Terms and Conditions on
their use of the issued credit cards. The MTC, ruled in
favor of BPI and ordered the Spouses Yulo to pay the
bank the sum of P229,378.68 and awarded the amount of
P15,000.00 in favor of the bank by way of attorney’s fees.
The Yulo Spouses filed an Appeal, but it was dismissed by
the RTC, which affirmed the MTC Decision.
The RTC declared that when it comes to pre-approved
credit cards, like those issued to the Yulo Spouses, the
credit card provider had the burden of proving that the
credit card recipient agreed to be bound by the Terms and
Conditions governing the use of the credit card. It noted
that BPI presented as evidence the Delivery Receipt for
the credit card packet, which was signed by Rainier Yulo’s
authorized representative, Jessica Baitan (Baitan). It held
that the BPI successfully discharged its burden, as the
signed Delivery Receipt and Rainier’s use of credit card
were proofs that Rainier Yulo agreed to be bound by its
Terms and Conditions. The Yulo Spouses then filed a
Petition for Review before the CA.The CA denied the
Petition and affirmed the RTC Decision. The Yulo Spouses
then elevated the case to the Supreme Court. In their
Petition for Review on Certiorari,the Yulo Spouses contend
that BPI failed to prove their liability. They claim that the
only valid proofs that they availed of BPI’s credit line were
the transaction slips they signed after purchasing goods or
services with their credit cards. They also assert that BPI
failed to substantiate its claim that Rainier Yulo consented
to the Terms and Conditions. The Yulo Spouses also claim
that BPI failed to prove that it ascertained the authority of
Baitan, Rainier’s purported authorized representative,
before handing her the credit card packet. BPI, on the
other hand, maintains that when the Yulo Spouses used
their credit cards, they bound themselves to its Terms and
Conditions in the credit card packet’s Delivery Receipt.
ISSUE/S: A. Whether BPI sufficiently proved that Baitan
was authorized by Rainier Yulo to act on his behalf.
A.1. What are the essential elements of agency?
B. Whether the Yulo Spouses are liable to pay the penalties
and interests provided in the Terms and Conditions of his
pre-approved credit card
C. Whether the award of P15,000.00 as attorney’s fees in
favor of BPI by the MTC is proper.
HELD: A. The RTC found that the credit card packet from
BPI, which contained Rainier Yulo’s pre-approved credit card
and a copy of its Terms and Conditions, was duly delivered
to him through his authorized representative, Baitan, as
shown in the Delivery Receipt. This was affirmed by the CA,
which stated, “The BPI credit card issued to Rainier Yulo
was received by his authorized representative, a certain
Jessica Baitan, as evidenced by a Delivery Receipt.” The
RTC and CA are wrong. While the Delivery Receipt showed
that Baitan received the credit card packet for Rainier Yulo, it
failed to indicate Baitan’s relationship with him. BPI failed to
substantiate its claim that Rainier Yulo authorized Baitan to
act on his behalf and receive his pre-approved credit card.
The only evidence presented was the check mark in the box
beside “Authorized Representative” in the Delivery Receipt.
This self-serving evidence is obviously insufficient to sustain
BPI’s claim.
A contract of agency is created when a person acts for or on
behalf of a principal, with the latter’s consent or authority.
Unless required by law, an agency does not require a
particular form, and may be expressed or implied from the
acts or silence of the principal.
The essential elements of agency are: (1) there is consent,
express or implied, of the patties to establish the
relationship; (2) the object is the execution of a juridical act
in relation to a third person; (3) the agents (sic) acts as a
representative and not for himself; and (4) the agent acts
within the scope of his authority. BPI fell short in establishing
an agency relationship between Rainier and Baitan, as the
evidence presented did not support its claim that Rainier
authorized Baitan to act on his behalf. Without proof that
Rainier read and agreed to the Terms and Conditions of his
pre-approved credit card, he cannot be bound by it
B. When a credit card provider issues a credit card to a preapproved or pre-screened client, the usual screening
processes “such as the filing of an application form and
submission of other relevant documents prior to the issuance
of a credit card, are dispensed with and the credit card is
issued outright.” As the recipient of an unsolicited credit
card, the pre-screened client can then choose to either
accept or reject it.
As a pre-screened client, Rainier did not submit or sign any
application form as a condition for the issuance of a credit
card in his account. Unlike a credit card issued through an
application form, with the applicant explicitly consenting to
the Terms and Conditions on credit accommodation use, a
pre-screened credit card holder’s consent is not immediately
apparent. Under Payment of Charges in the Terms and
Conditions, the Spouses Yulo would be furnished monthly
Statements of Account and would have a 20-day period from
the statement date to settle their outstanding balance, or the
minimum required payment. However, with BPI’s failure to
prove Rainier Yulo’s conformity and acceptance of the
Terms and Conditions, the Spouses Yulo cannot be bound
by its provisions. Nonetheless, spouses Yulo admitted to
receiving the Statements of Account from BPI, and was
aware of the interest rate charges imposed by it. This case
thus falls squarely within Alcaraz v. Court of
Appeals(2006) and Ledda v. Bank of the Philippine Islands
(2012), where the credit card provider also failed to prove
the pre-screened client’s consent to the credit card’s terms
and conditions. Alcaraz ruled that when the credit card
provider failed to prove its client’s consent, even if the
latter did not deny availing of the credit card by charging
purchases on it, the credit card client may only be charged
with legal interest: Xxx the petitioner should not be
condemned to pay the interests and charges provided in
the Terms and Conditions on the mere claim of the private
respondent without any proof of the former’s conformity
and acceptance of the stipulations contained therein. Even
if we are to accept the private respondent’s averment that
the stipulation quoted earlier is printed at the back of each
and every credit card issued by private respondent
Equitable, such stipulation is not sufficient to bind the
petitioner to the Terms and Conditions without a clear
showing that the petitioner was aware of and consented to
the provisions of this document. This, the private
respondent failed to do.
It is, however, undeniable that petitioner Alcaraz
accumulated unpaid obligations both in his peso and dollar
accounts through the use of the credit card issued to him
by private respondent Equitable. As such, petitioner
Alcaraz is liable for the payment thereof. Since the
provisions of the Terms and Conditions are inapplicable to
petitioner Alcaraz, the legal interest on obligations
consisting of loan or forbearance of money shall apply.
The records reveal that as of the July 9, 2008 Statement of
Account, the Spouses Yulo had an outstanding balance of
P229,378.68. However, since they did not consent to the
Terms and Conditions governing their credit card, there is
a need to modify the outstanding balance by removing the
interests, penalties, and other charges imposed before and
on the July 9, 2008 Statement of Account.
A careful review of the Statements of Account from March
2008 to July 2008shows that BPI charged penalties and
interests in the amount of P9,321.17 on Rainier Yulo’s
account. Thus, the finance charges, penalties, and
interests amounting to P9,321.17 should be deducted from
the outstanding balance of P229,378.68, leaving a new
outstanding balance of P220,057.51. This outstanding
balance shall then be subjected to 12% legal interest from
November 11, 2008, the date of respondent’s first
extrajudicial demand until June 30, 2013, and six percent
(6%) legal interest from July 1, 2013, until fully paid [Nacar
v. Gallery Frames (2013)].
C. The award of P15,000.00 as attorney’s fees is deleted
for lack of basis. It is well established that the trial court
“must state the factual, legal, or equitable justification for
the award of attorney’s fees” in the body of its decision
[Ledda v. Bank of the Philippine Islands (2012)]. The
Metropolitan Trial Court failed to state the
justification for its award of attorney’s fees
favor; instead, it merely declared that
P15,000.00 as attorney’s fees was just
Hence, it must be deleted.
factual or legal
in respondent’s
the award of
and equitable.
3. JAKA INVESTMENT CORP. V. URDANETA
VILLAGE ASSOCIATION, INC. G.R. NO. 204187
AND 206606 | APRIL 1, 2019 | LEONEN, J.
N/A
4. PRUDENCIO DE GUZMAN Y JUMAQUIO V.
PEOPLE OF THE PHILIPPINES G.R. NO. 234742,
AUGUST 07, 2019
FACTS: On April 8, 1994, Prudencio De Guzman
(Prudencio) and Arlene De Guzman (Arlene) were married
before Branch 106 of the Regional Trial Court of Quezon
City. Their marriage was solemnized by Judge Julieto P.
Tabiolo, with Marriage License No. 1031606 issued on April
6, 1994. In 2007, Prudencio abandoned his wife and
children. In December 2009, a friend informed Arlene that
Prudencio contracted a second marriage with a certain Jean
Basan (Basan) on December 17, 2009 at the Immaculate
Church in Las Pinas City. On January 8, 2010, Arlene went
to the Immaculate Church and confirmed that Prudencio had
indeed married Basan. Arlene secured a copy of Prudencio
and Basan's marriage contract at the City Civil Registrar's
Office. Arlene then filed before the Office of the City
Prosecutor a Complaint against Prudencio for bigamy under
Article 349 of the Revised Penal Code. The Information
read: That sometime in the month of December, 2009 in the
City of Las Piñas, Philippines and within the jurisdiction of
the Honorable Court, the above named accused, being then
legally married to one Arlene de Guzman y de Jesus which
marriage is still existing and has not been legally dissolved,
did then and there wil[l]fully, unlawfully and feloniously
contract a second marriage with one Jean Basan y Hubilla,
which second marriage has all the essential and formal
requisites for validity. In his defense, Prudencio argued that
his marriage with Arlene was void because the copy of their
Marriage Contract, which was secured from the National
Statistics Office, did not bear the solemnizing officer's
signature. The trial court concluded that Prudencio could not
unilaterally declare that his marriage with Arlene was void as
only courts have the power to do so. The trial court convicted
Prudencio of bigamy.
for Prudencio to assume that his previous marriage with
Arlene has been voided.
Moreover, Prudencio claims that the prosecution's failure
to offer a copy of the marriage license is fatal to its case.
This contention lacks merit. As the Court of Appeals noted,
"[t]he presentation of the marriage license is not a sine qua
non requirement to establish the existence of marriage as
the certified true copy of the [M]arriage [Certificate is
sufficient for such purpose." Prudencio also claims that the
absence of the solemnizing officer's signature in the
Marriage Certificate renders the marriage void. It is worth
noting that based on the trial court's findings, the
discrepancy was merely inadvertent since a copy of the
Marriage Certificate under the Local Civil Registry had
been signed. The trial court explained: The marriage
contract between the accused and the complainant that
was presented by the prosecution bears the signature of
the solemnizing officer (Exhibit "C"). Upon the other hand,
the NSO copy of the marriage contract secured by the
accused does not have the signature of the solemnizing
officer but after careful scrutiny, it is shown that the two (2)
marriage contracts contain the same details of the civil
wedding ceremony between the accused and the
complainant. Even the signatures of the parties and their
witnesses have a striking resemblance to the naked eye.
The only logical explanation for this is that the duplicate
original that must have been forwarded by the local civil
registry to the NSO was not signed by the solemnizing
officer but the other duplicate original on file with the local
civil registry is duly signed. Lastly, Prudencio's argument
that the case should be dismissed due to Arlene's Affidavit
of Desistance is unavailing. Affidavits of desistance that
were executed after judgments of conviction had been
promulgated by trial courts are generally received with
extensive caution. Arlene's Affidavit of Desistance provides
that she filed the Complaint due to a misunderstanding,
which both she and Prudencio had agreed to reconcile.
This Affidavit of Desistance cannot prove the nonexistence
of all the elements of bigamy. Moreover, the Affidavit of
Desistance was executed 13 months after the accused's
conviction in the trial court. As the Court of Appeals held,
an afterthought merits no probative value.
5. IN THE MATTER OF PETITION FOR WRIT OF
AMPARO OF VIVIAN A. SANCHEZ VS. PSUPT.
MARC ANTHONY D. DARROCA, ET. AL G.R.
NO. 242257 | OCTOBER 15, 2019 | LEONEN J.
N/A
ISSUE: Whether or not the Court of Appeals erred in
affirming Prudencio De Guzman y Jumaquio's guilt for the
crime of bigamy.
HELD: No. SC agreed with the ruling of the CA Prudencio
cannot claim to have been in good faith in assuming that
there was no legal impediment for him to remarry based
merely on the National Statistics Office's issuance of a
Certificate of No Marriage Record. Based on Prudencio and
Arlene's Marriage Certificate, along with the photos of the
wedding ceremony, they were married on April 8, 1994.
Thus, the Certificate of No Marriage Record is not enough
6. ARREZA V. TOYO G.R. NO. 213198 | JULY 1,
2019 | LEONEN
FACTS: On April 1, 1991, Genevieve, a Filipino citizen,
and Tetsushi Toyo (Tetsushi), a Japanese citizen, were
married in Quezon City. They bore a child whom they
named Keiichi Toyo. After 19 years of marriage, the two
Fled a Notification of Divorce by Agreement, which the
Mayor of Konohana-ku, Osaka City, Japan received on
February 4, 2011. It was later recorded in Tetsushi's family
register as certified by the Mayor of Toyonaka City, Osaka
Fu. On May 24, 2012, Genevieve Fled before the Regional
Trial Court a Petition for judicial recognition of foreign
divorce and declaration of capacity to remarry. She
submitted the following pieces of evidence:
1. Copy of Divorce Certificate
2. Tetsushi’s Family Register
3. Certificate of Acceptance of the Notification of
Divorce
4. English Translation of the Civil Code of Japan
RTC: denied Genevieve’s Petition. It decreed that while the
pieces of evidence presented by Genevieve proved that their
divorce agreement was accepted by the local government of
Japan, she nevertheless failed to prove the copy of Japan's
law (it was not duly authenticated by the Philippine Consul in
Japan, the Japanese Consul in Manila or the Department of
Foreign Affairs).
ISSUE: Whether or not the Regional Trial Court erred in
denying the petition for judicial recognition of foreign divorce
and declaration of capacity to remarry filed by petitioner
Genevieve Rosal Arreza a.k.a. Genevieve Arreza Toyo. [NO]
HELD: 1. When a Filipino and an alien get married, and the
alien spouse later acquires a valid divorce abroad, the
Filipino spouse shall have the capacity to remarry provided
that the divorce obtained by the foreign spouse enables him
or her to remarry. Article 26 of the Family Code, as
amended, provides Article 26. All marriages solemnized
outside the Philippines in accordance with the laws in force
in the country where they were solemnized and valid there
as such shall also be valid in this country, except those
prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and
38. Where a marriage between a Filipino citizen and a
foreigner is validly celebrated and a divorce is thereafter
validly obtained abroad by the alien spouse capacitating him
or her to remarry, the Filipino spouse shall have the capacity
to remarry under Philippine law. (Emphasis supplied)
1.
Philippine courts are given the authority "to
extend the effect of a foreign divorce decree to a
Filipino spouse without undergoing trial to determine
the validity of the dissolution of the marriage.
2.
It bestowed upon the Filipino spouse a
substantive right to have his or her marriage
considered dissolved, granting him or her the
capacity to remarry.
3.
Nonetheless, settled is the rule that in
actions involving the recognition of a foreign divorce
judgment, it is indispensable that the petitioner prove
not only the foreign judgment granting the divorce,
but also the alien spouse's national law. This rule is
rooted in the fundamental theory that Philippine
courts do not take judicial notice of foreign
judgments and laws.
4.
In this case, The English translation
submitted by petitioner was published by EibunHoreiSha, Inc., 54 a private company in Japan
engaged in publishing English translation of
Japanese laws, which came to be known as the
EHS Law Bulletin Series. 55 However, these
translations are "not advertised as a source of
official translations of Japanese laws;" rather, it is in
the KANPŌ or the Official Gazette where all official
laws and regulations are published, albeit in
Japanese. Accordingly, the English translation
submitted by petitioner is not an official publication
exempted from the requirement of authentication.
7. BNL MANAGEMENT CORPORATION V. UY
G.R. NO. 210297 | APRIL 03, 2019 | LEONEN, J.
FACTS: BNL Management owned six (6) condominium
units at the Imperial Bayfront Tower Condominium, A.
Mabini Street, Malate, Manila (Imperial Bayfront). These
units were leased to its clients under separate contracts of
lease. BNL Management also held exclusive rights to three
(3) parking spaces of Imperial Bayfront. BNL Management,
through David, wrote a letter to the building administrator
of Imperial Bayfront, acknowledging receipt of the
November billing statement containing the following
demands: (1) the general cleanliness and maintenance of
common areas; (2) security; (3) building insurance; (4)
encroachment on two (2) of the parking spaces; and (5)
the annotation of the parking spaces on the mother title. In
a follow-up letter BNL Management, through counsel,
declared that it would withhold paying monthly dues and
instead deposit them and its arrears in a bank as escrow,
which could be withdrawn by the Imperial Bayfront Tower
Condominium Association (the Association) only after it
has complied with the demands in the letter. In response,
Building Administrator Erma Abella explained that the
failure to annotate ownership of the parking spaces was
due to BNL Management not submitting the necessary
documents to the Association. It added that the
maintenance issues were due to lack of funds as a result
of BNL Management's nonpayment of association dues.
BNL Management requested that it be removed from the
Association's list of delinquent members. BNL
Management received a letter from Sevilla containing a
breakdown of its arrears in the payment of association
dues from November 1996 to June 1999. Still, BNL
Management did not pay the arrears. Thus, the
Association's Board of Directors resolved to disconnect the
lighting facilities in the six (6) units owned by BNL
Management. Since the Association refused to restore its
electricity and water, BNL Management and David filed
before the Regional Trial Court a Complaint against Uy, et
al. for damages. BNL Management and David argue that
respondents showed bad faith in deliberately cutting off the
utility services from the units despite knowing that they
were not the validly-elected officers of the Association.
ISSUE: Are petitioners BNL Management Corporation and
its president, Romeo David, entitled to damages for the
disconnection of water and electricity utilities from the units
they own at
HELD: No, the petitioners are not entitled to damages.
Here, respondents were not found to have committed any
culpable act or omission that would warrant an award of
moral damages for petitioner David. Clearly, the injury he
allegedly sustained was caused by his own failure, as
president of petitioner BNL Management, to resolve the
corporation's nonpayment of dues. For its part, petitioner
BNL Management, being a corporation, is not entitled to
moral damages. In Noell Whessoe, Inc. v. Independent
Testing Consultants, Inc.:
A corporation is not a natural person. It is a creation of legal
fiction and "has no feelings, no emotions, no senses." A
corporation is incapable of fright, anxiety, shock, humiliation,
and physical or mental suffering. "Mental suffering can be
experienced only by one having a nervous system and it
flows from real ills, sorrows, and griefs of life." A corporation,
not having a nervous system or a human body, does not
experience
physical
suffering,
mental
anguish,
embarrassment, or wounded feelings. Thus, a corporation
cannot be awarded moral damages. In the 1968 case of
Mambulao Lumber v. Philippine National Bank, this Court
stated, in passing, "[a] corporation may have a good
reputation which, if besmirched, may also be a ground for
the award of moral damages." There is no standing doctrine
that corporations are, as a matter of right, entitled to moral
damages. The existing rule is that moral damages are not
awarded to a corporation since it is incapable of feelings or
mental anguish. Exceptions, if any, only apply pro hac vice.
In the case, there is no showing here that an exception
should apply pro hac vice in favor of petitioner BNL
Management.
8. MILLER V. MILLER Y ESPENIDA G.R. NO. 200344
| AUGUST 28, 2019 | LEONEN, J.
FACTS: John Miller (John) and Beatriz Marcaida were
legally married. They bore four (4) children, namely: (1)
Glenn M. Miller (Glenn); (2) Charles Miller; (3) Betty Miller
(Betty); and (4) and John Miller, Jr. After John's death, Joan
Miller (Joan), through her mother Lennie Espenida (Lennie),
filed before the Regional Trial Court a Petition for Partition
and Accounting of John's estate with a prayer for preliminary
attachment, receivership, support, and damages. Alleging
that she is John's illegitimate child with Lennie, Joan
presented her Certificate of Live Birth which showed John to
be her registered father.
Glenn filed a separate Petition praying that Joan's Certificate
of Live Birth be canceled. With it, he also prayed that the
Local Civil Registrar of Gubat, Sorsogon be directed to
replace Joan's surname, Miller, with Espenida, and that Joan
use Espenida instead of Miller in all official documents.
Glenn claimed that John did not acknowledge Joan as a
natural child, pointing out that John's signature was not in
her birth certificate. It was also not shown that John knew
and consented that his name would be indicated in the
certificate.Joan countered that from 1978 until John's death
in 1990, her mother Lennie and John had an amorous
relationship, out of which she was born on June 25, 1982.
While she admitted that John did not sign her birth
certificate, he "openly and continuously recognized [her] as
[his] child during his lifetime. She narrated that she grew up
in his ranch and went to John Miller Primary School with
John financing her studies. John also mentioned her name in
his July 5, 1984 letter to Lennie. Moreover, in his holographic
will, he gave Joan a 1/8 share of his estate. Further, in a
February 14, 1987 document, he assigned Betty to act as
Joan's guardian and her inheritance's administrator until she
attains the age of majority. Also, by his bidding, Betty
obtained an educational plan for her. Glenn, however,
countered that the authenticity of the July 5, 1984 and
February 14, 1987 documents and the July 1985
holographic will was not proven. Since Joan failed to prove
that John wrote and signed these documents, Glenn
claimed that they failed to establish Joan's filiation. Before
the trial court, Glenn presented Apulio Ferreras who
brought Joan's birth record. It was revealed that Joan had
two (2) existing birth certificates. The first, dated June 30,
1982 and registered as Local Civil Registrar No. 760,
indicated Johnlyn Espenida Miller as the child and John
Manares Miller as the father. The second, dated July 20,
1982 and registered as Local Civil Registrar No. 825,
pertained to Joan Espenida Miller as the child and John
(Manyares) Miller as the father. Neither certificate bore a
name or signature on the space provided for the parent's
Affidavit of Acknowledgment. Further, the July 20, 1982
birth certificate was the document submitted to the then
National Census and Statistics Office. He later found out
the existence of her two (2) birth certificates, none of which
bore his father's signature acknowledging Joan as his
child. Hence, he wanted Joan to stop using the surname
Miller. They alleged that, despite John's failure to
acknowledge Joan in the birth certificate, their evidencethe letters, the holographic will, and the document
assigning Betty as Joan's guardian-preponderantly prove
that he acknowledged Joan as his illegitimate child. The
Regional Trial Court issued a Judgment in favor of Joan.
Glenn appealed the case before the Court of Appeals. The
Court of Appeals promulgated a Decision, denying Glenn's
appeaL Evelyn L. Miller, Jennifer Ann L. Miller, Leslie Ann
L. Miller, Rachel Ann L. Miller, and Valerie Ann L. Miller,
who substituted Glenn as his surviving legal heirs, filed
before this Court a Petition for Review on Certiorari
ISSUE: Whether or not the Court of Appeals erred in
affirming the Regional Trial Court Judgment allowing
private respondent Joan Miller y Espenida to continue
using the surname Miller
HELD: This Court stresses that Glenn's initiatory pleading
before the Regional Trial Court of Masbate City is a
Petition for Correction of Entries in the Certificate of Live
Birth of Joan Miller y Espenida. This type of petition is
governed by Rule 108 of the Rules of Court. Here,
petitioners sought the correction of the private
respondent's surname in her birth certificate registered as
Local Civil Registrar No. 825. They want her to use her
mother's surname, Espenida, instead of Miller, claiming
that she was not an acknowledged illegitimate child of
John. What petitioners seek is not a mere clerical change.
It is not a simple matter of correcting a single letter in
private respondent's surname due to a misspelling. Rather,
private respondent's filiation will be gravely affected, as
changing her surname from Miller to Espenida will also
change her status. This will affect not only her identity, but
her successional rights as well. Certainly, this change is
substantial.In Braza v. The City Civil Registrar of
Himamaylan City, Negros Occidental,
this Court
emphasized that "legitimacy and filiation can be
questioned only in a direct action seasonably filed by the
proper party, and not through collateral attack" Moreover,
impugning the legitimacy of a child is governed by Article
171 of the Family Code, not Rule 108 of the Rules of Court.
WHEREFORE, the Petition for Review on Certiorari is
PARTIALLY GRANTED. The Court of Appeals' June 30,
2011 Decision and February 3, 2012 Resolution in CA-G.R.
CV No. 84826 are AFFIRMED. However, the declarations of
the Court of Appeals and the Regional Trial Court as to the
legitimacy and filiation of private respondent Joan Miller y
Espenida are NULLIFIED and SET ASIDE. The Regional
Trial Court's other pronouncements in its November 26,
2004 Judgment are also NULLIFIED and SET ASIDE.
9. FALCIS III V. CIVIL REGISTRAR GENERAL (2019)
G.R. NO. 217910 | SEPTEMBER 3, 2019
FACTS: On May 18, 2015, Jesus Nicardo M. Falcis III
(Falcis) filed pro se before this Court a Petition for Certiorari
and Prohibition under Rule 65 of the 1997 Rules of Civil
Procedure. His Petition sought to “declare article 1 and 2 of
the Family Code as unconstitutional and, as a consequence,
nullify Articles 46(4) and 55(6) of the Family Code.” Falcis
claims that a resort to Rule 65 was appropriate, citing
Magallona v. Executive Secretary, Araullo v. Executive
Secretary, and the separate opinion of now-retired Associate
Justice Arturo D. Brion (Associate Justice Brion) in Araullo.
Again citing Associate Justice Brion’s separate opinion, he
claims that this Court should follow a “‘fresh’ approach to this
Court’s judicial power” and find that his Petition pertains to a
constitutional case attended by grave abuse of discretion.
He also asserts that the mere passage of the Family Code,
with its Articles 1 and 2, was a prima facie case of grave
abuse of discretion, and that the issues he raised were of
such transcendental importance as to warrant the setting
aside of procedural niceties.
ISSUE/S: 1. Whether or not the mere passage of the Family
Code creates an actual case or controversy reviewable by
this Court;
2. Whether or not the self-identification of petitioner Jesus
Nicardo M. Falcis III as a member of the LGBTQI+
community gives him standing to challenge the Family Code;
3. Whether or not the Petition-in-Intervention cures the
procedural defects of the Petition;
4. Whether or not the application of the doctrine of
transcendental importance is warranted;
5. Whether or not the right to marry and the right to choose
whom to marry are cognates of the right to life and liberty;
HELD: 1. No. Parties coming to court must show that the
assailed act had a direct adverse effect on them. In Lozano
v. Nograles: An aspect of the “case-or-controversy”
requirement is the requisite of “ripeness”. In the United
States, courts are centrally concerned with whether a case
involves uncertain contingent future events that may not
occur as anticipated, or indeed may not occur at all. Another
approach is the evaluation of the twofold aspect of ripeness:
first, the fitness of the issues for judicial decision; and
second, the hardship to the parties entailed by withholding
court consideration. In our jurisdiction, the issue of ripeness
is generally treated in terms of actual injury to the plaintiff.
Hence, a question is ripe for adjudication when the act being
challenged has had a direct adverse effect on the
individual challenging it. An alternative road to review
similarly taken would be to determine whether an action
has already been accomplished or performed by a branch
of government before the courts may step in. (Emphasis
supplied, citations omitted)
2. No. Legal standing or locus standi is the “right of
appearance in a court of justice on a given question.” To
possess legal standing, parties must show “a personal and
substantial interest in the case such that [they have]
sustained or will sustain direct injury as a result of the
governmental act that is being challenged.” The
requirement of direct injury guarantees that the party who
brings suit has such personal stake in the outcome of the
controversy and, in effect, assures “that concrete
adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult
constitutional questions.”
The requirements of legal standing and the recently
discussed actual case and controversy are both “built on
the principle of separation of powers, sparing as it does
unnecessary interference or invalidation by the judicial
branch of the actions rendered by its co-equal branches of
government.” In addition, economic reasons justify the
rule.
Thus: A lesser but not insignificant reason for screening
the standing of persons who desire to litigate constitutional
issues is economic in character. Given the sparseness of
our resources, the capacity of courts to render efficient
judicial service to our people is severely limited. For courts
to indiscriminately open their doors to all types of suits and
suitors is for them to unduly overburden their dockets, and
ultimately render themselves ineffective dispensers of
justice. To be sure, this is an evil that clearly confronts our
judiciary today.
Standing in private suits requires that actions be
prosecuted or defended in the name of the real party-ininterest, interest being “material interest or an interest in
issue to be affected by the decree or judgment of the
case[,] [ not just] mere curiosity about the question
involved.” Whether a suit is public or private, the parties
must have “a present substantial interest,” not a “mere
expectancy or a future, contingent, subordinate, or
consequential interest.” Those who bring the suit must
possess their own right to the relief sought.
Petitioner’s supposed “personal stake in the outcome of
this case” is not the direct injury contemplated by
jurisprudence as that which would endow him with
standing. Mere assertions of a “law’s normative impact”;
“impairment” of his “ability to find and enter into long-term
monogamous same-sex relationships”; as well as injury to
his “plans to settle down and have a companion for life in
his beloved country”; or influence over his “decision to stay
or migrate to a more LGBT friendly country” cannot be
recognized by this as sufficient interest. Petitioner’s desire
“to find and enter into long-term monogamous same-sex
relationships” and “to settle down and have a companion
for life in his beloved country” does not constitute legally
demandable rights that require judicial enforcement. This
Court will not wittingly indulge petitioner in blaming the
Family Code for his admitted inability to find a partner.
Petitioner presents no proof at all of the immediate,
inextricable danger that the Family Code poses to him. His
assertions of injury cannot, without sufficient proof, be
directly linked to the imputed cause, the existence of the
Family Code. His fixation on how the Family Code is the
definitive cause of his inability to find a partner is plainly non
sequitur.
Similarly, anticipation of harm is not equivalent to direct
injury. Petitioner fails to show how the Family Code is the
proximate cause of his alleged deprivations. His mere
allegation that this injury comes from “the law’s normative
impact” is insufficient to establish the connection between
the Family Code and his alleged injury.
3. No. Intervention requires: (1) a movant’s legal interest in
the matter being litigated; (2) a showing that the intervention
will not delay the proceedings; and (3) a claim by the
intervenor that is incapable of being properly decided in a
separate proceeding. Here, while petitioners-intervenors
have legal interest in the issues, their claims are more
adequately decided in a separate proceeding, seeking relief
independently from the Petition.
The Petition-in-Intervention suffers from confusion as to its
real purpose. A discerning reading of it reveals that the
ultimate remedy to what petitioners-intervenors have averred
is a directive that marriage licenses be issued to them. Yet, it
does not actually ask for this: its prayer does not seek this,
and it does not identify itself as a petition for mandamus ( or
an action for mandatory injunction). Rather, it couches itself
as a petition of the same nature and seeking the same relief
as the original Petition. It takes pains to make itself appear
inextricable from the original Petition, at the expense of
specifying what would make it viable.
4. No. The Diocese of Bacolod recognized transcendental
importance as an exception to the doctrine of hierarchy of
courts. In cases of transcendental importance, imminent and
clear threats to constitutional rights warrant a direct resort to
this Court. This was clarified in Gios-Samar. There, this
Court emphasized that transcendental importance-originally
cited to relax rules on legal standing and not as an exception
to the doctrine of hierarchy of courts-applies only to cases
with purely legal issues. We explained that the decisive
factor in whether this Court should permit the invocation of
transcendental importance is not merely the presence of
“special and important reasons[,]” but the nature of the
question presented by the parties. This Court declared that
there must be no disputed facts, and the issues raised
should only be questions of law:
[W]hen a question before the Court involves determination of
a factual issue indispensable to the resolution of the legal
issue, the Court will refuse to resolve the question
regardless of the allegation or invocation of compelling
reasons, such as the transcendental or paramount
importance of the case. Such questions must first be brought
before the proper trial courts or the CA, both of which are
specially equipped to try and resolve factual questions.
5. Yes. Consequently, the task of devising an arrangement
where same-sex relations will earn state recognition is
better left to Congress in order that it may thresh out the
many issues that may arise:
Marriage is a legal relationship, entered into through a
legal framework, and enforceable according to legal rules.
Law stands at its very core. Due to this inherent
“legalness” of marriage, the constitutional right to marry
cannot be secured simply by removing legal barriers to
something that exists outside of the law. Rather, the law
itself must create the “thing” to which one has a right. As a
result, the right to marry necessarily imposes an
affirmative obligation on the state to establish this legal
framework. (Emphasis supplied)
In truth, the question before this Court is a matter of what
marriage seeks to acknowledge. Not all intimate
relationships are the same and, therefore, fit into the rights
and duties afforded by our laws to marital relationships.
For this Court to instantly sanction same-sex marriage
inevitably confines a class of persons to the rather
restrictive nature of our current marriage laws. The most
injurious thing we can do at this point is to constrain the
relationships of those persons who did not even take part
or join in this Petition to what our laws may forbiddingly
define as the norm. Ironically, to do so would engender the
opposite of loving freely, which petitioner himself
consistently raised: The worst thing we do in a human
relationship is to regard the commitment of the other
formulaic. That is, that it is shaped alone by legal duty or
what those who are dominant in government regard as
romantic. In truth, each commitment is unique, borne of its
own personal history, ennobled by the sacrifices it has
gone through, and defined by the intimacy which only the
autonomy of the parties creates. In other words, words that
describe when we love or are loved will always be different
for each couple. It is that which we should understand:
intimacies that form the core of our beings should be as
free as possible, bound not by social expectations but by
the care and love each person can bring. Allowing samesex marriage based on this Petition alone can delay other
more inclusive and egalitarian arrangements that the State
can acknowledge. Many identities comprise the LGBTQI+
community. Prematurely adjudicating issues in a judicial
forum despite a bare absence of facts is presumptuous. It
may unwittingly diminish the LGBTQI+ community’s
capacity to create a strong movement that ensures lasting
recognition, as well as public understanding, of SOGIESC.
The evolution of the social concept of family reveals that
heteronormativity in marriage is not a static
anthropological fact. The perceived complementarity of the
sexes is problematized by the changing roles undertaken
by men and women, especially under the present
economic conditions. To continue to ground the family as a
social institution on the concept of the complementarity of
the sexes is to perpetuate the discrimination faced by
couples, whether opposite-sex or same-sex, who do not fit
into that mold. It renders invisible the lived realities of
families headed by single parents, families formed by
sterile couples, families formed by couples who preferred
not to have children, among many other family
organizations. Furthermore, it reinforces certain gender
stereotypes within the family.
2018
1. AMOGUIS V. BALLADO G.R. NO. 189625 |
AUGUST 20, 2018 | LEONEN, J.
FACTS: On November 24, 1969, spouses Francisco Ballado
and Concepcion Ballado entered into two contracts to sell
with owner and developer St. Joseph Realty, Ltd. to buy
installment parcels of land, designated as Lot Nos. 1 and 2.
The Ballado Spouses amortized until 1979 when
CrisantoPinili, St. Joseph Realty's collector, refused to
receive their payments because of a small house they had
erected therein in violation of the rules of the subdivision.
Francisco informed St. Joseph Realty that the small house
had already been taken down, but Pinili still did not come to
collect. On February 17, 1987, the Ballado Spouses
discovered that St. Joseph Realty rescinded their contracts.
Meanwhile, St. Joseph Realty sold Lot Nos. 1 and 2 to
Epifanio Amoguis,father of Gregorio Amoguis and Tito
Amoguis (collectively, the Amoguis Brothers).After making
payments, the Amoguis Brothers then occupied the lots.
Francisco confronted the Amoguis Brothers when he saw
that the barbed fences, which he had installed around the
lots, were taken down. Epifanio told him that he bought the
lots from St. Joseph Realty. The Ballado Spouses filed a
Complaint for damages, injunction with writ of preliminary
injunction, mandatory injunction, cancellation and annulment
of titles, and attorney's fees. St. Joseph Realty filed its
Answer. It was its affirmative defense that the Regional Trial
Court had no jurisdiction to hear the case, and that
jurisdiction was properly vested in the Human Settlements
Regulatory Commission. The Regional Trial Court ruled in
favor of the Ballado Spouses, and against St. Joseph Realty
and the Amoguis Brothers. The Court of Appeals rendered
its Decision, affirming the Regional Trial Court. Though not
raised, the Court of Appeals discussed at the outset the
issue of jurisdiction.
The Court of Appeals ruled that since neither St. Joseph
Realty nor the Amoguis Brothers raised the issue of
jurisdiction before the Regional Trial Court, they must be
considered estopped from raising it on appeal.
ISSUE: Whether or not the Regional Trial Court's lack of
jurisdiction was lost by waiver or estoppel (YES)
HELD: Petitioners are already estopped from questioning
the jurisdiction of the Regional Trial Court. Laches had
already set in. Presidential Decree No. 957 instituted the
National Housing Authority as the administrative body with
exclusive jurisdiction to regulate the trade and business of
subdivision and condominium developments. Presidential
Decree No. 1344 was later enacted to add to the National
Housing Authority's jurisdiction. Section 1 of Presidential
Decree No. 1344 gave authority to the National Housing
Authority to hear and decide cases: …C. Cases involving
specific performance of contractual and statutory obligations
filed by buyers of subdivision lot or condominium units
against the owner, developer, dealer, broker or salesman.
Presidential Decree No. 957 was approved on July 12, 1976,
11 years before the Ballado Spouses filed their complaint.
This means that the law mandating the jurisdiction of the
National Housing Authority, which later on became the
House and Land Use Regulatory Board, had long been in
effect when petitioners filed their Answer and participated
in trial court proceedings. It behooved them to raise the
issue of jurisdiction then, especially since St. Joseph
Realty, their co-respondent, raised it in its Answer albeit
superficially and without any discussion. The Ballado
Spouses' rights and interests lie not just as buyers of any
property, but buyers of subdivision lots from a subdivision
developer. From the circumstances between St. Joseph
Realty and the Ballado Spouses, there is no doubt that the
then National Housing Authority had jurisdiction to
determine the parties' obligations under the contracts to
sell and the damages that may have arisen from their
breach. The Ballado Spouses' Complaint should have
been filed before it. However, this Court has discussed
with great nuance the legal principle enunciated in Tijam
vs Sibonghanoy.
In estoppel by laches, a claimant has a right that he or she
could otherwise exercise if not for his or her delay in
asserting it. This delay in the exercise of the right unjustly
misleads the court and the opposing party of its waiver.
Thus, to claim it belatedly given the specific circumstances
of the case would be unjust. Calimlim v. Hon. Ramirez
unequivocally ruled that it is only when the exceptional
instances in Tijam are present should estoppel by laches
apply over delayed claims. Calimlim clarified the additional
requirement that for estoppel by laches to be appreciated
against a claim for jurisdiction, there must be an ostensible
showing that the claimant had "knowledge or
consciousness of the facts upon which it is based."
Figueroa v. People of the Philippines framed the
exceptional character of Tijam: The Court, thus, wavered
on when to apply the exceptional circumstance in
Sibonghanoy and on when to apply the general rule
enunciated as early as in De La Santa and expounded at
length in Calimlim. The general rule should, however, be,
as it has always been, that the issue of jurisdiction may be
raised at any stage of the proceedings, even on appeal,
and is not lost by waiver or by estoppel. Estoppel by
laches, to bar a litigant from asserting the court's absence
or lack of jurisdiction, only supervenes in exceptional
cases similar to the factual milieu of Tijam v. Sibonghanoy.
Indeed, the fact that a person attempts to invoke
unauthorized jurisdiction of a court does not estop him
from thereafter challenging its jurisdiction over the subject
matter, since such jurisdiction must arise by law and not
by mere consent of the parties. This is especially true
where the person seeking to invoke
2. IMPERIAL V. HEIRS OF BAYADAN | G.R. NO.
197626 | OCTOBER 03, 2018 | LEONEN, J.
N/A
3. CEZAR YATCO REAL ESTATE SERVICES, INC.
V. BEL-AIR VILLAGE ASSOCIATION, INC. G.R.
NO. 211780 | NOVEMBER 21, 2018, | J.
LEONEN
FACTS: Sometime in the 1950s, Makati Development
Corporation developed Bel-Air Village, a residential
subdivision in Makati City, and sold lots to interested buyers.
The contracts of sale between Makati Development
Corporation and the lot buyers in Bel-Air Village were
subjected to specific conditions and easements embodied in
the Deed Restrictions, which had a lifetime of 50 years, or
from January 15, 1957 to January 15, 2007. Sometime in
1998, the Association created the 2007 Committee to assess
and propose amendments to the Deed Restrictions, in
anticipation of its impending expiration. The 2007 Committee
circulated questionnaires among the homeowners and held
meetings to gather input on the proposed amendments. In
October 2006, in a special board meeting, the Association
passed a board resolution calling for the Deed Restrictions'
amendment.12 The first of the 10 proposed amendments
suggested extending the Deed Restrictions' term to August
23, 2032. On December 12, 2006, 718 members out of a
total of 934 members in good standing and eligible to vote,
attended the special membership meeting. Of the votes cast,
72% chose to extend the period of the Deed Restrictions,
3% rejected the extension, and 25% abstained. On February
8, 2007, Cezar Yatco Real Estate Services, GRD Property
Resources, Masterman Land Corporation (Masterman),
Gamaliel, Lourdes, Sofia Limjap (Sofia), and Pijuan
(collectively, the complainants), who had all voted against
the Deed Restrictions' extension, filed a Verified
Complaint16 before the Housing and Land Use Regulatory
Board. Thus, the complainants contended that the
Association's resolution extending the Deed Restrictions'
effectivity was illegally and arbitrarily approved. They also
averred that no quorum was reached in the December 12,
2006 special membership meeting. In its May 21, 2008
Decision,23 the Housing and Land Use Regulatory Board
Expanded National Capital Region Field Office (Regional
Field Office) declared the extension of the Deed Restrictions
as null and void. In its December 29, 2009 Decision,36 the
Office of the President reversed the Board of
Commissioners' December 9, 2008 Decision and January
28, 2009 Resolution, and reinstated the Regional Field
Office May 21, 2008 Decision. It held that the Term of
Restrictions of the Deed Restrictions may not be increased,
as the 50- year term was not one of the restrictions that may
be amended by a majority vote The Association moved for
reconsideration, which was granted by the Office of the
President in its May 19, 2011 Resolution. Hence, this
petition.
ISSUE: Whether or not private respondent Bel-Air Village
Association, Inc.'s members can, by majority vote, extend
the Deed Restrictions' term of effectivity
HELD: The cardinal rule in the interpretation of contracts is
embodied in the first paragraph of Article 1370 of the Civil
Code: "[i]f the terms of a contract are clear and leave no
doubt upon the intention of the contracting parties, the literal
meaning of its stipulations shall control." This provision is
akin to the "plain meaning rule" applied by Pennsylvania
courts, which assumes that the intent of the parties to an
instrument is "embodied in the writing itself, and when the
words are clear and unambiguous the intent is to be
discovered only from the express language of the
agreement." It also resembles the "four comers" rule, a
principle which allows courts in some cases to search
beneath the semantic surface for clues to meaning. A
court's purpose in examining a contract is to interpret the
intent of the contracting parties, as objectively manifested
by them. The process of interpreting a contract requires
the court to make a preliminary inquiry as to whether the
contract before it is ambiguous. As held in Abad, courts
must first determine whether or not a stipulation in a
contract is ambiguous or susceptible of multiple
interpretations. Absent any ambiguity, or when the terms
of the contract are found to clearly reflect the intentions of
the contracting parties, the stipulation will be interpreted as
it is written, and will be treated as the binding law between
the contracting parties. The proviso clearly states that [the
Association] is empowered under a specific provision in
the Deed Restrictions to amend or abolish particular
restrictions or parts thereof by majority rule. Note that the
term of restrictions is an integral part of the Deed.
Necessarily, when Article VI states that the restrictions
may be amended, the amendment can go as far as
amending the entire Deed Restrictions including the term
or duration of the restrictions, which is part and parcel of
the Deed. The import of Article VI is so clear that it
precludes the Court from giving a different interpretation.
In many instances, the Supreme Court underscored that,
as a rule, if the statute is clear, plain and free from
ambiguity, it must be given its literal meaning and applied
without interpretation.
4. NOELL WHESSOE, INC. V. INDEPENDENT
TESTING CONSULTANTS, INC.
FACTS: Petrotech, a subcontractor of Liquigaz, engaged
the services of Independent Testing Consultants to
conduct non-destructive testing on Liquigaz’s piping
systems and liquefied petroleum gas storage tanks.
Independent Testing Consultants conducted the agreed
tests. It later billed Petrotech, on separate invoices, the
amounts of P474,617.22 and P588,848.48 for its services.
However, despite demand, Petrotech refused to pay.
Independent Testing Consultants filed a Complaint for
collection of sum of money with damages against
Petrotech, Liquigaz, and Noell Whessoe for P1,063,465.70
plus legal interest. It joined Noell Whessoe as a defendant,
alleging that it was Liquigaz’s contractor that
subcontracted Petrotech. In its Answer, Liquigaz argued
that Independent Testing Consultants had no cause of
action against it since there were no contractual relations
between them and that any contract that Independent
Testing Consultants had was with its subcontractors. Noell
Whessoe, on the other hand, denied that it was Liquigaz’s
contractor and that its basic role was merely to supervise
the construction of its gas plants. It argued that any privity
of contract was only with Petrotech. Thus, it asserted that
Petrotech alone should be liable to Independent Testing
Consultants. Noell Whessoe later submitted a Formal
Offer of Documentary Exhibits showing that Liquigaz
engaged Whessoe Projects Limited (Whessoe UK), a
limited company organized under the laws of the United
Kingdom, for the construction of its storage facilities.
Whessoe UK, in turn, engaged Noell Whessoe, a separate
and distinct entity, to be the construction manager for the
Mariveles Terminal Expansion Project. The documents
further stated that Whessoe UK had already paid in full its
contractual obligations to Petrotech.
ISSUE: Whether or not Noell Whessoe is solidarily liable
with Liquigaz and Petrotech.
HELD: No. Article 1729 of the Civil Code provides:
Article 1729. Those who put their labor upon or furnish
materials for a piece of work undertaken by the contractor
have an action against the owner up to the amount owing
from the latter to the contractor at the time the claim is made.
However, the following shall not prejudice the laborers,
employees and furnishers of materials:
1. Payments made by the owner to the contractor before
they are due;
2. Renunciation by the contractor of any amount due him
from the owner.
This article is subject to the provisions of special laws.
In JL Investment and Development, Inc. v. Tendon
Philippines, Inc., this Court explained that Article 1729 of the
Civil Code is an exception to the general rule on the privity of
contracts: This provision imposes a direct liability on an
owner of a piece of work in favor of suppliers of materials
(and laborers) hired by the contractor “up to the amount
owing from the [owner] to the contractor at the time the claim
is made.” Thus, to this extent, the owner’s liability is solidary
with the contractor, if both are sued together. By creating a
constructive vinculum between suppliers of materials (and
laborers), on the one hand, and the owner of a piece of
work, on the other hand, as an exception to the rule on
privity of contracts, Article 1729 protects suppliers of
materials (and laborers) from unscrupulous contractors and
possible connivance between owners and contractors. As
the Court of Appeals correctly ruled, the supplier’s cause of
action under this provision, reckoned from the time of judicial
or extra-judicial demand, subsists so long as any amount
remains owing from the owner to the contractor. Only full
payment of the agreed contract price serves as a defense
against the supplier’s claim.
Article 1729 talks of three (3) different parties: the owner, the
contractor, and the supplier. In certain situations, the
supplier may also be referred to as a subcontractor to
provide materials or services. There are also situations
where, as in this case, the subcontractor further
subcontracts some materials and services to another
subcontractor. This sub-subcontractor would be considered
the supplier of materials and services. In this case, the
owner is Liquigaz, the contractor is petitioner, the
subcontractor is Petrotech, and the supplier/subsubcontractor
is
respondent
Independent
Testing
Consultants.
Considering that the rationale behind the provision is to
protect suppliers from possible connivance between the
owners and the contractors, there would be no reason to
apply the same rationale when it was the subcontractor that
hired the supplier. The liability will extend from the owner to
the contractor to the subcontractor.
Under Article 1729, respondent Independent Testing
Consultants had a cause of action against Liquigaz and
petitioner, even if its contract was only with Petrotech. The
Regional Trial Court and the Court of Appeals, therefore,
did not err in concluding that petitioner was solidarily liable
with Liquigaz and Petrotech for unpaid fees to respondent
Independent Testing Consultants. Article 1729 creates a
solidary liability between the owner, the contractor, and the
subcontractor. A solidary obligation is “one in which each
debtor is liable for the entire obligation, and each creditor
is entitled to demand the whole obligation.” Respondent
Independent Testing Consultants may demand payment
for all of its unpaid fees from Liquigaz, petitioner, or
Petrotech, even if its contract was only with the latter.
However, Article 1729, while serving as an exception to
the general rule on the privity of contracts, likewise
provides for an exception to this exception. The contractor
is solidarily liable with the owner and subcontractor for any
liabilities against a supplier despite the absence of contract
between the contractor and the supplier, except when the
subcontractor has already been fully paid for its services.
Since Whessoe UK and petitioner should be considered
the same entity for the purposes of the Mariveles Terminal
Expansion Project, Whessoe UK’s full payment to
Petrotech would serve as a valid defense against
petitioner’s solidary liability. Thus, petitioner still cannot be
held solidarily liable with Liquigaz and Petrotech for any
remaining receivables from respondent Independent
Testing Consultants. Any remaining obligations to it should
be solidarily borne by the owner, Liquigaz, and the
subcontractor, Petrotech.
5. RACHO V. SEILCHI TANAKA G.R. NO. 199515 |
JUNE 25, 2018 | LEONEN, J.
FACTS: Racho and Seiichi Tanaka (Tanaka) were married
on April 20, 2001. They lived together for nine (9) years in
Saitama Prefecture, Japan and did not have any children.
Racho alleged that on December 16, 2009, Tanaka filed
for divorce and the divorce was granted. She secured a
Divorce Certificate issued by Consul Kenichiro Takayama
(Consul Takayama) of the Japanese Consulate in the
Philippines and had it authenticated. She filed the Divorce
Certificate with the Philippine Consulate General in Tokyo,
Japan, where she was informed that by reason of certain
administrative changes, she was required to return to the
Philippines to report the documents for registration and to
file the appropriate case for judicial recognition of divorce.
She tried to have the Divorce Certificate registered with
the Civil Registry of Manila but was refused by the City
Registrar since there was no court order recognizing it.
She filed a Petition for Judicial Determination and
Declaration of Capacity to Marry. The RTC rendered a
Decision, finding that Racho failed to prove that Tanaka
legally obtained a divorce. It stated that while she was able
to prove Tanaka's national law. Petitioner argues that
under the Civil Code of Japan, a divorce by agreement
becomes effective upon notification, whether oral or
written, by both parties and by two (2) or more witnesses.
She contends that the Divorce Certificate stating
"Acceptance Certification of Notification of Divorce issued
by the Mayor of Fukaya City, Saitama Pref., Japan" is
sufficient to prove that she and her husband have divorced
by agreement and have already effected notification of the
divorce. The Office of the Solicitor General (OSG) posits that
a divorce by agreement is not the divorce contemplated in
Article 26 of the Family Code. Considering that Article 26
states that divorce must be "validly obtained abroad by the
alien spouse," OSG posits that only the foreign spouse may
initiate
divorce proceedings.
ISSUE/S: 1. Whether or not the Certificate of Acceptance of
the Report of Divorce is sufficient to prove the fact that a
divorce between petitioner Rhodora Ilumin Racho and
respondent Seiichi Tanaka was validly obtained
by the latter according to his national law.
2. Whether or not the divorce obtained by the parties was
valid
HELD: 1. YES. Under Rule 132, Section 24 of the Rules of
Court, the admissibility of official records that are kept in a
foreign country requires that it must be accompanied by a
certificate from a secretary of an embassy or legation, consul
general, consul, vice consul, consular agent or any officer of
the foreign service of the Philippines stationed in that foreign
country. The Certificate of Acceptance of the Report of
Divorce was accompanied by an Authentication issued by
Consul Bryan Dexter B. Lao of the Embassy of the
Philippines in Tokyo, Japan, certifying that Kazutoyo Oyabe,
Consular Service Division, Ministry of Foreign Affairs, Japan
was an official in and for Japan. The Authentication further
certified that he was authorized to sign the Certificate of
Acceptance of the Report of Divorce and that his signature in
it was genuine. Applying Rule 132, Section 24, the
Certificate of Acceptance of the Report of Divorce is
admissible as evidence of the fact of divorce between
petitioner and respondent.
The Regional Trial Court established that according to the
national law of Japan, a divorce by agreement "becomes
effective by notification." Considering that the Certificate of
Acceptance of the Report of Divorce was duly authenticated,
the divorce between petitioner and respondent was validly
obtained according to respondent's national law.
2. YES. Considering that Article 26 states that divorce must
be "validly obtained abroad by the alien spouse," the Office
of the Solicitor General posits that only the foreign spouse
may initiate divorce proceedings. The national law of Japan
does not prohibit the Filipino spouse from initiating or
participating in the divorce proceedings. It would be
inherently unjust for a Filipino woman to be prohibited by her
own national laws from something that a foreign law may
allow. Parenthetically, the prohibition on Filipinos from
participating in divorce proceedings will not be protecting our
own nationals. The Solicitor General's narrow interpretation
of Article 26 disregards any agency on the part of the Filipino
spouse. It presumes that the Filipino spouse is incapable of
agreeing to the dissolution of the marital bond. It perpetuates
the notion that all divorce proceedings are protracted
litigations fraught with bitterness and drama. Some
marriages can end amicably, without the parties harboring
any ill will against each other. The parties could forgo
costly court proceedings and opt for, if the national law of
the foreign spouse allows it, a more convenient out-ofcourt divorce process.
This ensures amity between the former spouses, a friendly
atmosphere for the children and extended families, and
less financial burden for the family. It is unfortunate that
legislation from the past appears to be more progressive
than current enactments. Our laws should never be
intended to put Filipinos at a disadvantage. Considering
that the Constitution guarantees fundamental equality, this
Court should not tolerate an unfeeling and callous
interpretation of laws. To rule that the foreign spouse may
remarry, while the Filipino may not, only contributes to the
patriarchy. This interpretation encourages unequal
partnerships and perpetuates abuse of intimate
relationships. To insist, as the Office of the Solicitor
General does, that under our laws, petitioner is still
married to respondent despite the latter's newfound
companionship with another cannot be just. Justice is
better served if she is not discriminated against in her own
country.86 As much as petitioner is free to seek fulfillment
in the love and devotion of another, so should she be free
to pledge her commitment within the institution of
marriage. WHEREFORE, the Petition is GRANTED. The
Regional Trial Court June 2, 2011 Decision and October 3,
2011 Order in SP. Proc. No. 10-0032 are REVERSED and
SET ASIDE. By virtue of Article 26, second paragraph of
the Family Code and the Certificate of Acceptance of the
Report of Divorce dated December 16, 2009, petitioner
Rhodora Ilumin Racho is declared capacitated to remarry.
6. BELLNA CANCIO AND JEREMY PAMPOLLNA
V. PERFORMANCE FOREIGN EXCHANGE
CORPORATION G.R. NO. 182307, JUNE 06,
2018
FACTS: Performance Forex is a corporation operating as
a financial broker/agent between market participants in
foreign exchange transactions. Cancio and Pampolina,
petitioners, accepted Ronald Hipol’s invitation to open a
joint account with Performance Forex wherein they
deposited the required margin account deposit of
US$100,000. The parties, among others, executed an
agreement for appointment of an agent Hipol on behalf of
Cancio and Pampolina. The trust/trading facilities
agreement between Performance Forex, Cancio and
Pampolina provided that the former shall not be
responsible for any actions or any warranties or
representations Hipol may have made. Later, Hipol
confessed to Cancio that he made unauthorized
transactions using the joint account. Upon conferring with
Performance Forex officers, the latter confirmed that there
were also previous unauthorized transactions made by
Hipol under other accounts, they offered US$5,000.00 to
settle the matter but the petitioners rejected the offer. A
complaint for damages was filed against Performance
Forex and Hipol before the RTC wherein the trial court
ruled that the respondent and Hipol are solidarily liable to
Cancio and Pampolina for damages. RTC held that
Performance Forex should have disclosed to Cancio and
Pampolina that Hipol made similar unauthorized activities in
the past and that innocent third persons should not be
prejudiced due to Performance Forex’s failure to adopt the
necessary measures to prevent unauthorized trading by its
agents. On appeal before the CA, the decision was reversed
and it held that Performance Forex acted only on whatever
their clients or their representatives would order. It also
noted that Hipol being an independent broker, respondents’
non disclosure of Hipol’s prior unauthorized transactions was
irrelevant and that he was not his employee.
ISSUE: Whether the respondent should be held solidarily
liable with Hipol.
HELD: No. Petitioners conferred trading authority to Hipol.
Respondent was not obligated to question whether Hipol
exceeded that authority whenever he made purchase orders.
Respondent was likewise not privy on how petitioners
instructed Hipol to carry out their orders. Under Article 1900
of the Civil Code: “So far as third persons are concerned, an
act is deemed to have been performed within the scope of
the agent’s authority, if such act is within the terms of the
power of attorney, as written, even if the agent has
in fact exceeded the limits of his authority according to an
understanding between the principal and the agent. Before a
claimant can be entitled to damages, the claimant should
satisfactorily show the existence of the factual basis of
damages and its causal connection to defendant’s acts. The
acts of petitioners’ agent, Hipol, were the direct cause of
their injury. WHEREFORE, the petition is DENIED.
7. GALINDEZ V. FIRMALAN G.R. NO. 187186 1
JUNE 6, 2018 I LEONEN, J.
FACTS: On May 16, 1949, Salvacion Firmalan (Firmalan)
filed an application with the Bureau of Lands for a 150-parcel
of land in Barrio Capaclan, Romblon, Romblon. On April 25,
1967, or almost 18 years after filing her first application,
Firmalan filed another application. Her second application
was for Lot No. 915 Cad-311-D in Romblon Cadastre and
was docketed as MSA No. (V-6) 23. Lot No. 915 had an area
of 325 land including the 150-mlot subject of Firmalan's first
application.The Acting District Land Officer recommended
the approval of Firmalan's second application. Alicia filed a
protest to Firmalan's second application. She claimed that
from November 1951, she and her family had been in
constant possession of a portion of the 325-mlot covered by
Firmalan's second application. She also claimed that she
had built a house and planted coconut trees on the lot which
Firmalan applied for. On July 11, 1978, Land Inspector
Mabini Fabreo (Inspector Fabreo) reported to the Director of
Lands that after conducting an ocular inspection and
investigation, he discovered that the lot covered by
Firmalan's second application was occupied by Felipe Gaa,
Sr. (Gaa) and Elmer Galindez (Elmer), son of Alicia, not
Firmalan. On March 11, 1985, Supervising Land Examiner
Dionico F. Gabay (Examiner Gabay) of the Bureau of Lands
opined that between Firmalan and Alicia, Firmalan had the
superior right over the lot in question because she was the
rightful applicant, while Alicia obtained possession of the lot
through trickery and willful defiance of the law. On August
27, 1990, the Department of Environment and Natural
Resources Regional Executive Director (the Regional
Executive Director) concluded that Firmalan filed her
miscellaneous sales application over the disputed portion
of Lot No. 915 earlier than Alicia. The Regional Executive
Director upheld Firmalan's right to acquire the portion of
Lot No. 915, reasoning out that Firmalan's first application
on May 16, 1949 was given due course even if records
showed that no subsequent actions were taken. Alicia
moved for the reconsideration of the Regional Executive
Director's August 27, 1990 Order, but her motion was
denied in the subsequent Regional Executive Director's
November 15, 1991 Order. Alicia then appealed her case
before the Department of Environment. and Natural
Resources, but on June 29, 1998,the Department of
Environment and Natural Resources Secretary affirmed
the Regional Executive Director's Orders. Alicia moved for
the reconsideration of this Decision, but on March 28,
2005,the Department of Environment and Natural
Resources Secretary denied her motion. On April 19,
2005,Alicia appealed the Department of Environment and
Natural Resources' decisions before the Office of the
President. On January 31, 2006, the Office of the
President denied the appeal and affirmed the Department
of Environment and Natural Resources' decisions. Alicia
moved for the reconsideration of the Office of the
President's January 31, 2006 Decision, but on June 1,
2006,the Office of the President denied her motion for
reconsideration. Alicia filed an appeal before the Court of
Appeals. On November 27, 2008, the Court of Appeals
denied her appeal and upheld the decision of the Office of
the President.
ISSUE: Whether or not the Court of Appeals erred for
upholding the ruling of the Office of the President when it
supposedly showed bias and was unsubstantiated by
evidence (NO)
HELD: In Solid Homes v. Payawal,this Court explained
that administrative agencies are considered specialists in
the fields assigned to them; hence, they can resolve
problems in their respective fields "with more expertise and
dispatch than can be expected from the legislature or the
courts of justice."Thus, this Court has consistently
accorded respect and even finality to the findings of fact of
administrative bodies, in recognition of their expertise and
technical knowledge over matters falling within their
jurisdiction.
Moreover, Rule 43, Section 10 of the Rules of Civil
Procedure provides that findings of fact of a quasi judicial
agency, when supported by substantial evidence, shall be
binding on the Court of Appeals. Consequently, the Court
of Appeals did not err in upholding the findings of fact of
the Department of Environment and Natural Resources
and of the Office of the President.
8. REPUBLIC V. MALIJAN-JAVLER G.R. NO.
214367 1 APRIL 04, 2018 I LEONEN, J.
FACTS: This case involves Respondents Laureana and
Iden's application for registration of land title over a parcel
situated in Barangay Tranca, Talisay, Batangas filed in
June 2009 before the Municipal Circuit Trial Court of
Talisay-Laurel, Batangas. The land, regarded as Lot No.
1591, Cad. 729, Talisay Cadastre, had an area of 9,629
square meters. On September 10, 2009, Republic of the
Philippines (Republic) filed an Opposition to the application
on the ground that: (1) the respondents failed to comply with
the possession and occupation requirement of the law; (2)
the tax declarations relied upon by appellees do not
constitute competent and sufficient evidence of a bona fide
acquisition of the land; and (3) the parcel of land applied for
is a land of public domain and, as such, not subject to
private appropriation. An initial hearing was scheduled and
since nobody appeared to oppose Laureana and Iden's
application, the trial court issued an Order of General Default
against the whole world except the Republic. After the
hearing, the trial court rendered a Decision granting
Laureana and Iden's application for registration of title. It
held that they were able to establish that the property was
alienable and disposable since September 10, 1997 and that
the respondents and their predecessors-in-interest had been
in open, continuous, exclusive, and notorious possession of
the subject property, in the concept of an owner, even prior
to 12 June 1945 The Republic elevated the case to the Court
of Appeals. It averred that there should be: (1) a CENRO or
PENRO Certification; and (2) a copy of the original
classification approved by the DENR Secretary and certified
as a true copy by the legal custodian of the official records
attached to the application for title registration. It added that
Laureana and Iden failed to attach the second requirement.
But the Republic’s appeal was dismissed.
ISSUE: Whether the Repondents’ application for registration
of property should be approved. (NO)
HELD: Land registration is governed by Section 14 of
Presidential Decree No. 1529 or the Property Registration
Decree. Applicants whose circumstances fall under Section
14(1) need to establish only the following: First, that the
subject land forms part of the disposable and alienable lands
of the public domain; second, that the applicant and his
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of the
[land]; and third, that it is under a bonafide claim ownership
since June 12, 1945, or earlier. It is well-settled that a
CENRO or PENRO certification is not enough to establish
that a land is alienable and disposable. It should be
"accompanied by an official publication of the DENR
Secretary's issuance declaring the land alienable and
disposable." In Republic v. T.A.N. Properties: [I]t is not
enough for the PENRO or CENRO to certify that a land is
alienable and disposable. The applicant for land registration
must prove that the DENR Secretary had approved the land
classification and released the land of the public domain as
alienable and disposable, and that the land subject of the
application for registration falls within the approved area per
verification through survey by the PENRO or CENRO. In
addition, the applicant for land registration must present a
copy of the original classification approved by the DENR
Secretary and certified as a true copy by the legal custodian
of the official records. These facts must be established to
prove that the land is alienable and disposable. In this case,
although respondents were able to present a CENRO
certification, a DENR-CENRO report with the testimony of
the DENR officer who made the report, and the survey
plan showing that the property is already considered
alienable and disposable, these pieces of evidence are still
not sufficient to prove that the land sought to be registered
is alienable and disposable. Absent the DENR Secretary's
issuance declaring the land alienable and disposable, the
land remains part of the public domain.
9. METRO RALL TRANSIT DEVELOPMENT
CORPORATION
V.
GAMMON
PHILIPPINES,INC.GR. NO. 200401 I JANUARY
17, 2018 I LEONEN
FACTS: MRTDC was awarded a government contract by
way of a Build Lease and Transfer Agreement to
undertake the MRT 3 North Triangle Development Project.
Among the major components of the Project was the
construction of a four level podium structure.
MRTDC, through its Project Manager, Parsons Inter Pro
Joint Venture, give notice to the Gammon, of the award to
it of the contract for the construction of the podium
superstructure. Shortly thereafter, MRTDC sent a letter to
Gammon, notifying the latter of the suspension of all the
undertakings because of the currency crisis at that time.
According to Gammon, however, it proceeded to de-water
and clean up the Project site. On the other hand, MRTDC
claims that before any construction activity could proceed,
it formally served Gammon a notice confirming the
"temporary suspension of all requirements under the terms
of the contract until such time as clarification of scope has
been received from the owner. The only exception to this
suspension is the re-design of the projects floor slabs and
the site de-watering and clean up. As a result of its
analysis of the impact of the currency crisis, MRTDC
decided to downsize the podium structure to two levels.
Gammon then submitted a proposal reducing the contract
price. This proposal was accepted by MRTDC. Gammon
qualifiedly accepted the offer but manifested its willingness
to consider revisions to the terms and conditions of the
NOA/NTP. MRTDC notified Gammon that it was awarding
the contract to Filsystems since Gammon did not accept
the terms and conditions of the NOA/NTP. Consequently,
Gammon sought reimbursement of the direct and indirect
costs it incurred in relation to the Project. MRTDC signified
its willingness to reimburse Gammon but rejected the
latter’s computation and instead offered a fixed cap of five
percent of Gammon’s total claims. Dissatisfied with this
figure, Gammon filed its claim with the CIAC invoking the
arbitration clause of the General Conditions of Contract
which provides that the arbitration of all disputes, claims or
questions under the contract shall be in accordance with
CIAC rules.
ISSUE: Whether the CIAC decision over the case cannot
be disturb by the court.
HELD: As a rule, findings of fact of administrative
agencies and quasi-judicial bodies, which have acquired
expertise because their jurisdiction is confined to specific
matters, are generally accorded not only respect, but also
finality, especially when affirmed by the Court of Appeals. In
particular, factual findings of construction arbitrators are final
and conclusive and not reviewable by this Court on appeal.
This rule, however, admits of certain exceptions.
In David v. Construction Industry and Arbitration
Commission, we ruled that, as exceptions, factual findings of
construction arbitrators may be reviewed by this Court when
the petitioner proves affirmatively that: (1) the award was
procured by corruption, fraud or other undue means; (2)
there was evident partiality or corruption of the arbitrators or
of any of them; (3) the arbitrators were guilty of misconduct
in refusing to hear evidence pertinent and material to the
controversy; (4) one or more of the arbitrators were
disqualified to act as such under Section nine of Republic
Act No. 876 and willfully refrained from disclosing such
disqualifications or of any other misbehavior by which the
rights of any party have been materially prejudiced; or (5) the
arbitrators exceeded their powers, or so imperfectly
executed them, that a mutual, final and definite award upon
the subject matter submitted to them was not made.
Other recognized exceptions are as follows: (1) when there
is a very clear showing of grave abuse of discretion resulting
in lack or loss of jurisdiction as when a party was deprived of
a fair opportunity to present its position before the Arbitral
Tribunal or when an award is obtained through fraud or the
corruption of arbitrators, (2) when the findings of the Court of
Appeals are contrary to those of the CIAC, and (3) when a
party is deprived of administrative due process. However,
petitioner failed to prove that any of these exceptions are
present in the case at bar. Thus, this Court will no longer
disturb CIAC's factual findings, which were affirmed by the
Court of Appeals.
10. REPUBLIC V. GALLO (2018) G.R.NO. 207074 I
JANUARY 17, 2018
FACTS: Gallo has never been known as "Michael Soriano
Gallo." She has always been female. Her parents, married
on May 23, 1981, have never changed their names. For her,
in her petition before the Regional Trial Court, her Certificate
of Live Birth contained errors, which should be corrected.
For her, she was not changing the name that was given to
her; she was merely correcting its entry. To accurately reflect
these facts in her documents, Gallo prayed before the
Regional Trial Court of Ilagan City, Isabela in for the
correction of her name from "Michael" to "Michelle" and of
her biological sex from "Male" to "Female" under Rule 108 of
the Rules of Court. In addition, Gallo asked for the inclusion
of her middle name, "Soriano"; her mother's middle name,
"Angangan"; her father's middle name, "Balingao"; and her
parent's marriage date, May 23, 1981, in her Certificate of
Live Birth, as these were not recorded. As proof, she
attached to her petition copies of her diploma, voter's
certification, official transcript of records, medical certificate,
mother's birth certificate, and parents' marriage certificate.
The RTC having found Gallo's petition sufficient in form and
substance and ordered the publication of the Notice of
Hearing once a week for three (3) consecutive weeks in a
newspaper of general circulation in the Province of Isabela.
The RTC granted her petition however the OSG appealed
alleging that Gallo did not comply with the jurisdictional
requirements under Rule 103 because the title of her Petition
and the published Order did not state her official name,
"Michael Gallo." Furthermore, the published Order was
also defective for not stating the cause of the change of
name. The Court of Appeals denied the OSG’s appeal and
found that Gallo availed of the proper remedy under Rule
108 as the corrections sought were clerical, harmless, and
innocuous.
ISSUES: 1. Whether or not the Republic of the Philippines
raised a question of fact in alleging that the change sought
by Michelle Soriano Gallo is substantive and not a mere
correction of error; and
2. Whether or not Michelle Soriano Gallo failed to exhaust
administrative remedies and observe the doctrine of
primary jurisdiction.
HELD: 1. NO. In the case at bar, petitioner raises an issue
which requires an evaluation of evidence as determining
whether or not the change sought is a typographical error
or a substantive change requires looking into the party's
records, supporting documents, testimonies, and other
evidence. Republic Act No. 10172/9048 defines a clerical
or typographical error as a recorded mistake, "which is
visible to the eyes or obvious to the understanding." Thus:
"Clerical or typographical error" refers to a mistake
committed in the performance of clerical work in writing,
copying, transcribing or typing an entry in the civil register
that is harmless and innocuous, such as misspelled name
or misspelled place of birth, mistake in the entry of day and
month in the date of birth or the sex of the person or the
like, which is visible to the eyes or obvious to the
understanding, and can be corrected or changed only by
reference to other existing record or records: Provided,
however, That no correction must involve the change of
nationality, age, or status of the petitioner. By qualifying
the definition of a clerical, typographical error as a mistake
"visible to the eyes or obvious to the understanding," the
law recognizes that there is a factual determination made
after reference to and evaluation of existing documents
presented. Thus, corrections may be made even though
the error is not typographical if it is "obvious to the
understanding," even if there is no proof that the name or
circumstance in the birth certificate was ever used. The
Court agrees with the Regional Trial Court's determination,
concurred in by the Court of Appeals, that this case
involves the correction of a mere error.
2. Under the doctrine of exhaustion of administrative
remedies, a party must first avail of all administrative
processes available before seeking the courts'
intervention. The administrative officer concerned must be
given every opportunity to decide on the matter within his
or her jurisdiction. Failing to exhaust administrative
remedies affects the party's cause of action as these
remedies refer to a precedent condition which must be
complied with prior to filing a case in court. Thus, the
doctrine of primary administrative jurisdiction refers to the
competence of a court to take cognizance of a case at first
instance. Unlike the doctrine of exhaustion of
administrative remedies, it cannot be waived. However, for
reasons of equity, in cases where jurisdiction is lacking,
this Court has ruled that failure to raise the issue of noncompliance with the doctrine of primary administrative
jurisdiction at an opportune time may bar a subsequent filing
of a motion to dismiss based on that ground by way of
laches.
11. LAND BANK OF THE PHILIPPINES V MANZANO
G.R.NO.188243 JANUARY 24, 2018 I LEONEN, J.
after the lapse of a specified period for any reason so that
we have the legal right to forfeit your P78,000 on account
of your failure to pursue the purchase of the property you
are leasing. However, as a consideration to you, we
undertake to return to you the said amount after we have
sold the property and received the purchase price from the
prospective buyer.”
N/A
12. RACELLS V. SPS. JAVIER G.R. NO. 189609 1
JANUARY 29, 2018 I LEONEN, J.
FACTS: In August 2001, Spouses Javier offered to purchase
the Marikina property from Racelis. However, they could not
afford to pay the price of P3,500,000.00. They offered
instead to lease the property while they raise enough money.
Racelis hesitated at first but she eventually agreed.
Sometime in July 2002, Racelis inquired whether the
Spouses Javier were still interested to purchase the
property. The Spouses Javier reassured her of their
commitment and even promised to pay P100,000.00 to buy
them more time within which to pay the purchase price. On
July 26, 2002, the Spouses Javier tendered the sum of
P65,000.00 representing “initial payment or goodwill money.”
On several occasions, they tendered small sums of money
to complete the promised P100,000.00, but by the end of
2003, they only delivered a total of P78,000.00. Meanwhile,
they continued to lease the property. They consistently paid
rent but started to fall behind by February 2004.
Racelis filed a complaint for ejectment against the Spouses
Javier. In her Complaint, Racelis alleged that she agreed to
lease the property to the Spouses Javier based on the
understanding that they would eventually purchase it.
Racelis also claimed that they failed to pay rent from March
2004 to September 2004 and the balance of P7,000.00 for
the month of February, or a total of P84,000.00. Racelis
prayed that the Spouses Javier be ordered to: (1) vacate the
leased premises; (2) pay accrued rent; and (3) pay moral
and exemplary damages, and attorney’s fees. In their
Answer, the Spouses Javier averred that they never agreed
to purchase the property from Racelis because they found a
more affordable property at Greenheights Subdivision in
Marikina City. They claimed that the amount of P78,000.00
was actually advanced rent. During trial, the Spouses Javier
vacated the property and moved to their new residence at
Greenheights Subdivision on September 26, 2004. The MTC
then determined that the only issue left to be resolved was
the amount of damages in the form of unpaid rentals to
which Racelis was entitled. On August 19, 2005, the MTC
rendered a Decision dismissing the complaint ruling that (1)
the Spouses Javier were entitled to suspend the payment of
rent under Article 1658 of the Civil Code due to Racelis’ act
of disconnecting electric service over the property; (2) the
Spouses Javier’s obligation had been extinguished. Their
advanced rent and deposit were sufficient to cover their
unpaid rent; (3) did not characterize the P78,000.00 as
advanced rent but as earnest money, accordingly, Racelis
was ordered to return the P78,000.00 due to her waiver in
the Letter dated March 4, 2004, which states as follows: “It is
a common practice that earnest money will be forfeited in
favor of the seller if the buyer fails to consummate [the] sale
ISSUE/S: 1. Whether or not respondents Spouses Germil
and Rebecca Javier can invoke their right to suspend the
payment of rent under Article 1658 of the Civil Code.
2. Whether or not the P78,000.00 initial payment can be
used to offset Spouses Germil and Rebecca Javier’s
accrued rent.
HELD: 1. No. Article 1658 of the Civil Code allows a
lessee to postpone the payment of rent if the lessor fails to
either (1) “make the necessary repairs” on the property or
(2) “maintain the lessee in peaceful and adequate
enjoyment of the property leased.” This provision
implements the obligation imposed on lessors under
Article 1654(3) of the Civil Code. The failure to maintain
the lessee in the peaceful and adequate enjoyment of the
property leased does not contemplate all acts of
disturbance. Lessees may suspend the payment of rent
under Article 1658 of the Civil Code only if their legal
possession is disrupted.
In this case, the disconnection of electrical service over the
leased premises on May 14, 2004 was not just an act of
physical disturbance but one that is meant to remove
respondents from the leased premises and disturb their
legal possession as lessees. Ordinarily, this would have
entitled respondents to invoke the right accorded by Article
1658 of the Civil Code. However, this rule will not apply in
the present case because the lease had already expired
when the petitioner requested for the temporary
disconnection of electrical service. Petitioner demanded
respondents to vacate the premises by May 30, 2004.
Instead of surrendering the premises to petitioner,
respondents unlawfully withheld possession of the
property. Respondents continued to stay in the premises
until they moved to their new residence on September 26,
2004. At that point, the petitioner was no longer obligated
to maintain respondents in the “peaceful and adequate
enjoyment of the lease for the entire duration of the
contract.” Therefore, respondents cannot use the
disconnection of electrical service as justification to
suspend the payment of rent. Assuming that respondents
were entitled to invoke their right under Article 1658 of the
Civil Code, this does exonerate them from their obligation
under Article 1657 of the civil Code “to pay the price of the
lease according to the terms stipulated.” Lessees who
exercise their right under Article 1658 of the Civil Code are
not freed from the obligations imposed by law or contract.
Moreover, respondents’ obligation to pay rent was not
extinguished when they transferred to their new residence.
Respondents are liable for a reasonable amount of rent for
the use and continued occupation of the property upon the
expiration of the lease. To hold otherwise would unjustly
enrich respondents at petitioner’s expense.
2. No. Under Article 1482 of the Civil Code, whenever
earnest money is given in a contract of sale, it shall be
considered as “proof of the perfection of the contract.”
However, this is a disputable presumption, which prevails in
the absence of contrary evidence. The delivery of earnest
money is not conclusive proof that a contract of sale exists.
The existence of a contract of sale depends upon the
concurrence of the following elements: (1) consent or
meeting of the minds; (2) a determinate subject matter; and
(3) price certain in money or its equivalent. The defining
characteristic of a contract of sale is the seller’s obligation to
transfer ownership of and deliver the subject matter of the
contract. Without this essential feature, a contract cannot be
regarded as a sale although it may have been denominated
as such. In a contract of sale, title to the property passes to
the buyer upon delivery of the thing sold. In contrast, in a
contract to sell, ownership does not pass to the prospective
buyer until full payment of the purchase price. The title of the
property remains with the prospective seller. In a contract of
sale, the non-payment of the purchase price is a resolutory
condition that entitles the seller to rescind the sale. In a
contract to sell, the payment of the purchase price is a
positive suspensive condition that gives rise to the
prospective seller’s obligation to convey title. However, nonpayment is not a breach of contract but “an event that
prevents the obligation of the vendor to convey title from
becoming effective.” The contract would be deemed
terminated or cancelled, and the parties stand “as if the
conditional obligation had never existed.”
Based on the evidence on record, petitioner and
respondents executed a contract to sell, not a contract of
sale. Petitioner reserved ownership of the property and
deferred the execution of a deed of sale until receipt of the
full purchase price. In this case, since respondents failed to
deliver the purchase price at the end of 2003, the contract to
sell was deemed cancelled. The contract’s cancellation
entitles the petitioner to retain the earnest money given by
respondents.
Earnest money, under Article 1482 of the Civil Code, is
ordinarily given in a perfected contract of sale. However,
earnest money may also be given in a contract to sell. In a
contract to sell, earnest money is generally intended to
compensate the seller for the opportunity cost of not looking
for any other buyers. It is a show of commitment on the part
of the party who intimates his or her willingness to go
through with the sale after a specified period or upon
compliance with the conditions stated in the contract to sell.
Opportunity cost is defined as “the cost of the foregone
alternative.” In a potential sale, the seller reserves the
property for a potential buyer and foregoes the alternative of
searching for other offers. This Court in Philippine National
Bank v. Court of Appeals, construed earnest money given in
a contract to sell as “consideration for [seller’s] promise to
reserve the subject property for [the buyer].” The seller, “in
excluding all other prospective buyers from bidding for the
subject property … [has given] up what may have been more
lucrative offers or better deals.” Earnest money, therefore, is
paid for the seller’s benefit. It is part of the purchase price
while at the same time proof of commitment by the potential
buyer. Absent proof of a clear agreement to the contrary, it is
intended to be forfeited if the sale does not happen without
the seller’s fault. The potential buyer bears the burden of
proving that the earnest money was intended other than as
part of the purchase price and to be forfeited if the sale
does not occur without the fault of the seller.
Respondents were unable to discharge this burden. There
is no unjust enrichment on the part of the seller should the
initial payment be deemed forfeited. After all, the owner
could have found other offers or a better deal. The earnest
money given by respondents is the cost of holding this
search in abeyance. This Court notes that respondents
were even unable to meet their own promise to pay the full
amount of the earnest money. Of the P100,000.00 that
respondents committed to pay, only P78,000.00 was
received in irregular tranches. To rule that the partial
earnest money should even be returned is both inequitable
and would have dire repercussions as a precedent.
Although the petitioner offered to return the earnest money
to respondents, it was conditioned upon the sale of the
property to another buyer. Petitioner cannot be said to
have expressly waived her right to retain the earnest
money. Petitioner’s offer was even rejected by
respondents, who proposed that the earnest money be
applied instead to their unpaid rent. Therefore,
respondents’ unpaid rent amounting to P84,000.00 cannot
be offset by the earnest money.
13. KAWAYAN HIIIS CORPORATION V. COURT OF
APPEALS G.R. NO. 203090 I SEPTEMBER 5,
2018 | LEONEN, J.
FACTS: Kawayan Hills is a domestic corporation dealing
with real estate. It is in possession of a 1,461-squaremeter parcel of land identified as Cad. Lot No. 2512 (Lot
No. 2512), located in Barangay No. 22, Nagbacalan,
Paoay, Ilocos Norte. All other lots surrounding Lot No.
2512 have been titled in Kawayan Hills' name.
On August 7, 2001, Kawayan Hills, through its President,
Pastor Laya, filed an application for confirmation and
registration of Lot No. 2512's title in its name before the
Municipal Circuit Trial Court of Paoay-Currimao.
The Municipal Circuit Trial Court ruled in favor of Kawayan
Hills, confirmed its title over Lot No. 2512, and ordered Lot
No. 2512's registration in Kawayan Hills' name. The CA
reversed, ruling:
“Well[-]settled is the rule that tax declarations are not
conclusive evidence of ownership or of the right to
possess land when not supported by any other evidence.
The fact that the disputed property may have been
declared for taxation purposes in the name of the applicant
for registration or of their predecessors-in-interest does not
necessarily prove ownership. They are merely indicia of a
claim of ownership.”
ISSUE: Whether or not the CA erred in its dismissive
consideration of tax declarations dating back to 1931
HELD: YES. The payment of real property taxes since as far
back as 1931 by Kawayan Hills' predecessor-in interest,
Andres, should not be dismissed so easily. To the contrary,
coupled with evidence of continuous possession, it is a
strong indicator of possession in the concept of owner.
The Court of Appeals' reduction of the resolution of
petitioner's application to the expedient aphorism that tax
declarations do not absolutely establish ownership fails to
account for composite and uncontroverted aspects of
petitioner's claim. In addition to Andres' declaration of Lot
No. 2512 for the payment of real property taxes for almost a
decade and a half ahead of the June 12, 1945 threshold,
and his and his successors-in- interest's unfailing diligence in
paying real property taxes, there are more details that attest
to possession in the concept of owner.
Since the start of Andres' documented possession in 1931,
no one has come forward to contest his and his successorsin-interest's possession as owners. It was only on
September 4, 2001, about a month after the petitioner's filing
of its application, that the Republic came forward to contest
the confirmation and registration of title in his name. By then,
title to every single lot surrounding Lot No. 2512 had been
issued in petitioner's name. Throughout the intervening time,
Andres and his successors-in- interest tilled Lot No. 2512.
Andres' grandson, Eufemiano, testified for petitioner before
the Municipal Circuit Trial Court. He unequivocally declared
that Andres had been occupying Lot No. 2512 since World
War II. He affirmed that he had witnessed his grandfather
harvesting fruits. The Municipal Circuit Trial Court
categorically stated that Lot No. 2512 had been used by
Andres and his children "for agricultural production since
1942."
14. REPUBLIC V. HEIRS OF IGNACIO DAQUER G.R.
NO. 193657 1 SEPTEMBER 4, 2018 | J. LEONEN
FACTS: On October 22, 1933, Ignacio Daquer (Daquer),
applied for a homestead patent grant over Lot No. H-19731,
situated at Brgy. Corong-Corong, Centro, Bacuit, Palawan.
THE APPLICATION WAS LODGED BEFORE Bureau of
Lands (now Land Management Bureau) seeking 9 hectares
of land for his "exclusive personal use and benefit." On
September 3, 1936 such application was approved by the
Director of Bureau of Lands and issued him Homestead
Patent No. V- 67820, covering an area of 65,273 square
meters. Thereafter, Homestead Patent No. V-67820 was
transmitted to the Registrar of Deeds of Palawan for
registration.15 After registration, Original Certificate of Title
(OCT) No. G-3287 was issued in Daquer's name.
On April 3, 1969, Daquer passed away. He was survived by
his children, who were his legal heirs.
Department Secretary and the Undersecretary for Legal
Affairs of the Department of Agriculture and Natural
Resources instructed the Community Environment and
Natural Resource Office (CENRO) "to submit an inventory of
suspected spurious titles cases which may fall within
timberland and classified public forest."
Upon investigation, Lilang discovered that the land
covered by Homestead Application No. 197317 and OCT
No. G-3287 (Ignacio Daquer’s Lot) fell within the zone of
unclassified public forest. Relative to this, Lilang and
Senior Forest Management Specialist Chief Leonardo
Publico issued a Certification dated July 10, 2000,
confirming that Lot No. H-19731 was "still within the
Unclassified Zone".
Consequently, the Republic of the Philippines (the
Republic) filed a Complaint for Cancellation of Free Patent,
Original Certificate of Title and Reversion of land to public
domain on April 1, 2003. It argued that Lot No. H-19731
could not have been validly registered because it fell within
the forest or timberland zone. It claimed that until and
unless these lands were reclassified and considered
disposable and alienable, occupying them in the concept
of an owner, no matter how long, could not ripen into
ownership.
Republic presented Land Management Officer Lilang as
witness and testified that Lot No. H-19731 fell within the
unclassified public forest, all lands not within the tract of
areas classified as alienable and disposable, as shown in
the classification map, were regarded as unclassified
public forest. Thus, since Lot No. H-19731 fell outside the
alienable and disposable area, it should be considered as
part of the unclassified public forest. Heirs of Daquer, on
the other hand, presented Porcepina as witness.
Porcepina testified that she was residing at Lot No. H19731 and that she had custody of OCT No. G-3287. She
paid the taxes over the land after the death of her brother,
Francisco Daquer.
RTC denied the Republic's petition for cancellation and
reversion for lack of merit.
RTC relied heavily on the presumption of regularity of
official functions when the Undersecretary of the
Department of Agriculture and Natural Resources granted
the homestead patent. It ruled that it would not award a
homestead patent over forest land but only over public
agricultural land.
RTC likewise noted that under the land classification map,
areas falling outside the alienable and disposable area
were not considered as unclassified public forest, but only
unclassified land, it ruled that unclassified lands, such as
Lot No. H-19731, are presumed to be agricultural lands.
Finally, RTC held that even assuming that subject lot was
previously considered as unclassified land, the issuance of
Homestead Patent could only mean that the land at that
point in time had already been expressly classified as
alienable or disposable land of public domain.
Republic appealed before the CA. According to the
Republic, public lands may only be classified by the
Executive Department through the Office of the President.
The Director of the Lands Management Bureau (then
Bureau of Lands] is devoid of jurisdiction over public
forests or any land not capable of registration. When he (or
she] is misled into issuing patents over such lands, the
patents and the corresponding certificates of title are
immediately infected with jurisdictional flaw which warrants
the institution of suit to revert land to the State
CA affirmed the Decision of RTC.
ISSUE: Whether the mere issuance of a homestead patent
could classify an otherwise unclassified public land into an
alienable and disposable agricultural land of the public
domain.
HELD: A homestead patent is a gratuitous grant from the
government "designed to distribute disposable agricultural
lots of the State to land-destitute citizens for their home and
cultivation."
Only lands of the public domain which have been classified
as public agricultural lands may be disposed of through
homestead settlement.
The Public Land Act vested the exclusive prerogative to
classify lands of the public domain to the Executive
Department, specifically with the Governor-General, now the
President. Thus, until and unless lands of the public domain
have been classified as public agricultural lands, they are
inalienable and not capable of private appropriation.
it must be emphasized that in classifying lands of the public
domain as alienable and disposable, there must be a
positive act from the government declaring them as open for
alienation and disposition.
A positive act declaring land as alienable and disposable is
required. In keeping with the presumption of State
ownership, the Court has time and again emphasized that
there must be a positive act of the government, such as an
official proclamation, declassifying inalienable public land
into disposable land for agricultural or other purposes. . . .
A positive act is an act which clearly and positively manifests
the intention to declassify lands of the public domain into
alienable and disposable.
"Any person seeking relief under ... the Public Land Act
admits that the property being applied for is public land."57
"The burden of proof in overcoming the presumption of State
ownership of the lands of the public domain is on the person
applying for registration (or claiming ownership), who must
prove that the land subject of the application is alienable or
disposable."58
As aptly argued by petitioner, an act of the government may
only be considered as "express or positive if [it] is exercised
directly for the very purpose of lifting land from public
ownership." In this case, the records are bereft of any
evidence showing that the land has been classified as
alienable and disposable. Respondents presented no proof
to show that a law or official proclamation had been issued
declaring the land covered by Homestead Patent No. V67820 to be alienable and disposable. Having failed to
overcome the burden of proving that the land covered by
Homestead Patent No. V-67820 is alienable and
disposable, the presumption that it is an inalienable land of
the public domain remains.
Even if the property falls within the unclassified zone, this
Court, in Heirs of the late Spouses Palanca v. Republic,79
ruled that unclassified lands, until released and rendered
open to disposition, shall be considered as inalienable
lands of the public domain, thus:
In the absence of the classification as mineral or timber
land, the land remains unclassified land until released and
rendered open to disposition. When the property is still
unclassified, whatever possession applicants may have
had, and however long, still cannot ripen into private
ownership. This is because, pursuant to Constitutional
precepts, all lands of the public domain belong to the
State, and the State is the source of any asserted right to
ownership in such lands and is charged with the
conservation of such patrimony. Thus, the Court has
emphasized the need to show in registration proceedings
that the government, through a positive act, has
declassified inalienable public land into disposable land for
agricultural or other purposes.
As a rule, a certificate of title issued pursuant to a
homestead patent partakes the nature of a certificate of
title issued through a judicial proceeding and becomes
incontrovertible upon the expiration of one (1) year. Thus,
in Wee v. Mardo:
[O]nce a patent is registered and the corresponding
certificate of title is issued, the land ceases to be part of
public domain and becomes private property over which
the Director of Lands has neither control nor jurisdiction. A
public land patent, when registered in the corresponding
Register of Deeds, is a veritable Torrens title, and
becomes as indefeasible upon the expiration of one (1)
year from the date of issuance thereof. Said title, like one
issued pursuant to a judicial decree, is subject to review
within one (1) year from the date of the issuance of the
patent.
However, In Republic v. Ramos, this Court held that
despite the registration of the land and the issuance of a
Torrens title, the State may still file an action for reversion
of a homestead land that was granted in violation of the
law. The action is not barred by the statute of limitations,
especially against the State.
Torrens' system was not established as a means for the
acquisition of title to private land. It is intended merely to
confirm and register the title which one may already have
on the land. Where the applicant possesses no title or
ownership over the parcel of land, he cannot acquire one
under the Torrens system of registration . . .
Lot No. H-19731, the land covered by Homestead Patent
No. V-67820, is still part of the inalienable lands of the
public domain there being no positive act declassifying it.
Consequently, OCT No. G-3287, issued pursuant to
Homestead Patent No. V-67820, is null and void. Thus, the
State is not estopped from instituting an action for the
reversion of Lot No. H-19731 into the lands of the public
domain. Lands of the public domain can only be classified as
alienable and disposable through a positive act of the
government. The State cannot be estopped by the omission,
mistake, or error of its officials or agents. It may revert the
land at any time, where the concession or disposition is void
ab initio
15. EVERSLEY CHILDS SANITARIUM V. SPOUSES
BARBARONA
FACTS: Eversley has occupied a portion of a parcel of land
denominated as Lot No. 1936 in Jagobiao, Mandaue City,
Cebu since 1930.
Spouses Anastacio and Perla Barbarona (the Spouses
Barbarona) allege that they are the owners of Lot No. 1936
by virtue of Transfer Certificate of Title (TCT) No. 53698.
They claim that they have acquired the property from the
Spouses Tarcelo B. Gonzales and Cirila Alba (the Spouses
Gonzales), whose ownership was covered by Original
Certificate of Title (OCT) No. R0-824. On May 6, 2005, the
Spouses Barbarona filed a Complaint for Ejectment before
the Municipal Trial Court in Cities of Mandaue City against
the occupants of Lot No. 1936, namely, Eversley, Jagobiao
National High School, the Bureau of Food and Drugs, and
some residents (collectively, the occupants). The MTC ruled
in favor of the respondent spouses. The occupants appealed
to the Regional Trial Court. The Regional Trial Court
affirmed into the Decision of the Municipal Trial Court in
Cities. Meanwhile, the Court of Appeals in another case
rendered a Decision, cancelling OCT No. R0-824 and its
derivative titles, including that of the respondent spouses, for
lack of notice to the owners of the adjoining properties and
its occupants. Eversley filed a Petition for Review with the
Court of Appeals, arguing that the Regional Trial Court erred
in not recognizing that the subsequent invalidation of the
Spouses Barbarona's certificate of title was prejudicial to
their cause of action. But the CA denied the same.
ISSUE: Whether the subsequent nullification of the TCT of
the respondent spouses had the effect of invalidating their
right of possession over the disputed property. (YES)
HELD: In this instance, respondents anchor their right of
possession over the disputed property on TCT No. 53698
issued in their names. It is true that a registered owner has a
right of possession over the property as this is one of the
attributes of ownership. Here, respondents alleged that their
right of ownership was derived from their predecessors-in
interest, the Spouses Gonzales, whose Decree No. 699021
was issued on March 29, 1939. The Register of Deeds
certified that there was no original certificate of title or
owner's duplicate issued over the property, or if there was, it
may have been lost or destroyed during the Second World
War. The heirs of the Spouses Gonzales subsequently
executed a Deed of Full Renunciation of Rights,
Conveyance of Full Ownership and Full Waiver of Title and
Interest on March 24, 2004 in respondents' favor. Thus,
respondent Anastacio Barbarona succeeded in having
Decree No. 699021 reconstituted on July 27, 2004 and
having TCT No. 53698 issued in respondents' names on
February 7, 2005.
During the interim, the Republic of the Philippines,
represented by the Office of the Solicitor General, filed a
Petition for Annulment of Judgment before the Court of
Appeals to assail the reconstitution of Decree No. 699021,
docketed as CA-G.R. SP No. 01503. On February 19,
2007, the Court of Appeals in that case found that the trial
court reconstituted the title without having issued the
required notice and initial hearing to the actual occupants,
rendering all proceedings void. Petitioner, a public hospital
operating as a leprosarium dedicated to treating persons
suffering from Hansen's disease has been occupying the
property since May 30, 1930. Proclamation No. 507 was
issued on October 21, 1932, "which reserved certain
parcels of land in Jagobiao, Mandaue City, Cebu as an
additional leprosarium site for the Eversley Childs
Treatment Station." Petitioner's possession of the property,
therefore, pre-dates that of respondents' predecessors-ininterest, whose Decree No. 699021 was issued in 1939. It
is true that defects in TCT No. 53698 or even Decree No.
699021 will not affect the fact of ownership, considering
that a certificate of title does not vest ownership. The
Torrens system "simply recognizes and documents
ownership and provides for the consequences of issuing
paper titles." Without TCT No. 53698, however,
respondents have no other proof on which to anchor their
claim. The Deed of Full Renunciation of Rights,
Conveyance of Full Ownership and Full Waiver of Title and
Interest executed in their favor by the heirs of the Spouses
Gonzales is insufficient to prove conveyance of property
since no evidence was introduced to prove that ownership
over the property was validly transferred to the Spouses
Gonzales' heirs upon their death. Moreover, Proclamation
No. 507, series of 1932, reserved portions of the property
specifically for petitioner's use as a leprosarium. Even
assuming that Decree No. 699021 is eventually held as a
valid Torrens title, a title under the Torrens system is
always issued subject to the annotated liens or
encumbrances, or what the law warrants or reserves.
Portions occupied by petitioner, having been reserved by
law, cannot be affected by the issuance of a Torrens title.
Petitioners cannot be considered as one occupying under
mere tolerance of the registered owner since its
occupation was by virtue of law. Petitioner's right of
possession, therefore, shall remain unencumbered subject
to the final disposition on the issue of the property's
ownership.
2017
1. TAAR V. LAWAN G.R.NO.190922 1 OCTOBER
11 , 2017| LEONEN, J
FACTS: The present case involves two (2) free patent
applications over a 71,014 square-meter parcel of land (the
Property) located in Barangay Parsolingan, Genova, Tarlac.
Narcisa Taar (Narcisa), Alipio Duenas (Alipio), Fortunata
Duena (Fortunata), and Pantaleon Taar (Pantaleon)
inherited two (2) vast tracts of land situated in Tarlac. One
(1) parcel of land was adjudicated exclusively in favor of
Pantaleon while the other parcel of land was given to
Pantaleon, Narcisa, Alipio, and Fortunata.
Narcisa sold her share to Spouses Primitivo T. Adaoag and
Pilar Tandoc (the Adaoag Spouses) and Spouses Ignacio
Gragasin and Genoveva Adaoag (the Gragasin Spouses).
Later, Pantaleon, and others executed an agreement to
partition the second parcel of land. This agreement was
approved by the Court of First Instance of Tarlac Pantaleon,
Alipio, and Fortunata were the predecessors-in-interest of
Francisca, Joaquina, Lucia, and Oscar L. Galo. Based on
the February 18, 1948 Decision, petitioners prepared a
subdivision plan over the Property in 2000. The subdivision
plan, denominated as Subdivision Plan No. Ccs-03-000964D, was approved on February 6, 2001.
Petitioners then applied for free patents over the Property.
Sometime 2001, Claudio, Marcelino, Artemio, Augusto, and
Adolfo (herein private respondents) filed a verified protest
alleging that their predecessors-in interest had been in
"actual, physical, exclusive, and notorious possession and
occupation of the land since 1948.
Petitioners countered that private respondents occupied the
property as tenants.
ISSUES: 1. Whether or not the Court of Appeals erred in
dismissing the petition for certiorari filed by Francisca Taar,
Joaquina Taar, Lucia Taar, and the Heirs of Oscar L. Galo.
2. Whether or not the free patents and certificates of title
issued in favor of Claudio Lawan, Marcelino L. Galo,
Artemio Abarquez, Augusto B. Lawan, and Adolfo L. Galo
are valid and were secured through fraud and
misrepresentation.
3. Whether or not free patents and certificates of title issued
in favor of respondents are valid and were secured through
fraud and misrepresentation.
HELD: 1. A petition for certiorari under Rule 65 of the Rules
of Court is an extraordinary remedy. Its scope of review is
narrow, limited only to errors of jurisdiction. Errors of
judgment can only be reviewed through an appeal.
applications filed on the ground of fraud and
misrepresentation. Only extrinsic fraud may be raised as
a ground to "review or reopen a decree of registration.
2. ORIENT FREIGHT INTERNATIONAL, INC. V.
KEIHIN- EVERETT FORWARDING COMPANY,
INC. G.R. NO. 191937, AUGUST 09, 2017
FACTS: On October 16, 2001, Keihin-Everett entered
into a Trucking Service Agreement with Matsushita.
Under the Trucking Service Agreement, Keihin-Everett
would provide services for Matsushita's trucking
requirements. These services were subcontracted by
Keihin-Everett to Orient Freight, through their own
Trucking Service Agreement executed on the same day.
When the Trucking Service Agreement between KeihinEverett and Matsushita expired on December 31, 2001,
Keihin-Everett executed an In-House Brokerage Service
Agreement for Matsushita's Philippine Economic Zone
Authority export operations. Keihin-Everett continued to
retain the services of Orient Freight, which sub-contracted
its work to Schmitz Transport and Brokerage Corporation.
In April 2002, Matsushita called Keihin-Everett about a
column in the issue of the tabloid newspaper Tempo. This
news narrated the April 17, 2002 interception by
Caloocan City police of a stolen truck filled with shipment
of video monitors and CCTV systems owned by
Matsushita
When contacted by Keihin-Everett about this news, Orient
Freight stated that the tabloid report had blown the
incident out of proportion. They claimed that the incident
simply involved the breakdown and towing of tKeihinEverett independently investigated the incident. During its
investigation, it obtained a police report from the
Caloocan City Police Station. The report stated, among
others, that at around 2:00 p.m. on April 17, 2002,
somewhere in Plaza Dilao, Paco Street, Manila, Cudas
told Aquino to report engine trouble to Orient Freight.
After Aquino made the phone call, he informed Orient
Freight that the truck had gone missing. When the truck
was intercepted by the police along C3 Road near the
corner of Dagat-Dagatan Avenue in Caloocan City,
Cudas escaped and became the subject of a manhunt.
The truck was promptly released and did not miss the
closing time of the vessel intended for the shipment.
2. As to the second issue: RES JUDICATA states that a
final judgment or decree rendered on the merits by a court
of competent jurisdiction is conclusive of the rights of the
parties or their privies, in all other subsequent actions or
suits and on all points and matters determined in the first
suit.
Matsushita terminated its In-House Brokerage Service
Agreement with Keihin-Everett, effective July 1, 2002.
Matsushita cited loss of confidence for terminating the
contract, stating that Keihin-Everett's way of handling the
April 17, 2002 incident and its nondisclosure of this
incident's relevant facts "amounted to fraud and signified
an utter disregard of the rule of law. Keihin-Everett sent a
letter to Orient Freight, demanding P2,500,000.00 as
indemnity for lost income. It argued that Orient Freight's
mishandling of the situation caused the termination of
Keihin-Everett's contract with Matsushita.
3. As to the third issue: Lastly, Section 91 of the Public
Land Act provides the automatic cancellation of the
When Orient Freight refused to pay, Keihin-Everett filed a
complaint dated October 24, 2002 for damages. In its
complaint, Keihin-Everett alleged that Orient Freight's
"misrepresentation, malice, negligence and fraud" caused
the termination of its In-House Brokerage Service
Agreement with Matsushita. Keihin-Everett prayed for
compensation for lost income, with legal interest, exemplary
damages, attorney's fees, litigation expenses, and the costs
of the suit. The RTC rendered a Decision in favor of KeihinEverett. It found that Orient Freight was "negligent in failing
to properly investigate the incident and make a factual
report to Keihin [-Everett] and Matsushita. Orient Freight
appealed the said Decision to the Court of Appeals. The
Court of Appeals issued its Decision affirming the trial
court's decision.
ISSUE: Whether or not Article 2176 is applicable in this
case.
HELD: Negligence may either result in culpa aquiliana or
culpa contractual. Culpa aquiliana is the "the wrongful or
negligent act or omission which creates a vinculum juris
and gives rise to an obligation between two persons not
formally bound by any other obligation," and is governed by
Article 2176 of the Civil Code:
Article 2176. Whoever by act or omission causes damage
to another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of
this Chapter. Actions based on contractual negligence and
actions based on quasi-delicts differ in terms of conditions,
defenses, and proof. They generally cannot co-exist. Once
a breach of contract is proved, the defendant is presumed
negligent and must prove not being at fault. In a quasidelict, however, the complaining party has the burden of
proving the other party's negligence. However, there are
instances when Article 2176 may apply even when there is
a pre-existing contractual relation. A party may still commit
a tort or quasi-delict against another, despite the existence
of a contract between them.
Here, the petitioner denies that it was obliged to disclose
the facts regarding the hijacking incident since this was not
among the provisions of its Trucking Service Agreement
with respondent. There being no contractual obligation, the
respondent had no cause of action against the petitioner.
The obligation to report what happened during the hijacking
incident, admittedly, does not appear on the plain text of the
Trucking Service Agreement. Petitioner argues that it is
nowhere in the agreement. Respondent does not dispute
this claim. Neither the Regional Trial Court nor the Court of
Appeals relied on the provisions of the Trucking Service
Agreement to arrive at their respective conclusions. Breach
of the Trucking Service Agreement was neither alleged nor
proved.
While petitioner and respondent were contractually bound
under the Trucking Service Agreement and the events at
the crux of this controversy occurred during the
performance of this contract, it is apparent that the duty to
investigate and report arose subsequent to the Trucking
Service Agreement. When the respondent discovered the
news report on the hijacking incident, it contacted the
petitioner, requesting information on the incident.
Respondent then requested petitioner to investigate and
report on the veracity of the news report. Pursuant to
respondent's request, petitioner met with respondent and
Matsushita on April 20, 2002 and issued a letter dated
April 22, 2002, addressed to Matsushita.Respondent's
claim was based on petitioner's negligent conduct when it
was required to investigate and report on the incident.
Both the Regional Trial Court and Court of Appeals erred
in finding petitioner's negligence of its obligation to report
to be an action based on a quasi-delict Petitioner's
negligence did not create the vinculum juris or legal
relationship with the respondent, which would have
otherwise given rise to a quasi-delict. Petitioner's duty to
respondent existed prior to its negligent act. When the
respondent contacted the petitioner regarding the news
report and asked it to investigate the incident, the
petitioner's obligation was created. Thereafter, the
petitioner was alleged to have performed its obligation
negligently, causing damage to the respondent.
The doctrine "the act that breaks the contract may also be
a tort," on which the lower courts relied, is inapplicable
here. Petitioner's negligence, arising as it does from its
performance of its obligation to respondent, is dependent
on this obligation. Neither do the facts show that Article
21 of the Civil Code applies, there being no finding that
the petitioner's act was a conscious one to cause harm,
or be of such a degree as to approximate fraud or bad
faith.
Consequently, Articles 1170, 1172, and 1173 of the Civil
Code on negligence in the performance of an obligation
should apply. WHEREFORE, the petition is DENIED.
The January 21, 2010 Decision and April 21, 2010
Resolution of the Court of Appeals in CA-G.R. CV No.
91889 are AFFIRMED.
3. MERCURY DRUG CORP V. SPS. HUANG
G.R.NO.197654 I AUGUST 30, 2017 | LEONEN,
J.
FACTS: Petitioner Mercury Drug Corporation (Mercury
Drug) is the registered owner of a six-wheeler truck with. It
has in its employee petitioner Rolando J. del Rosario as
driver. Respondent spouses Richard and Carmen Huang
are the parents of respondent Stephen Huang and own the
red 1991 Toyota Corolla GLI Sedan.
These two vehicles figured in a road accident on
December 20, 1996 at around 10:30 p.m. within the
municipality of Taguig, Metro Manila. Both were traversing
the C-5 Highway, north bound, coming from the general
direction of Alabang going to Pasig City. The car was on
the left innermost lane while the truck was on the next lane
to its right. When the truck suddenly swerved to its left and
slammed into the front right side of the car. The collision
hurled the car over the island where it hit a lamppost, spun
around and landed on the opposite lane.
At the time of the accident, petitioner Del Rosario only had a
Traffic Violation Receipt (TVR). His driver’s license had been
confiscated because he had been previously apprehended
for reckless driving.
The car, valued at P300,000.00, was a total wreck.
Respondent Stephen Huang sustained massive injuries to
his spinal cord, head, face, and lung. Despite a series of
operations, respondent Stephen Huang is paralyzed for life
from his chest down and requires continuous medical and
rehabilitation treatment. Respondents fault petitioner Del
Rosario for committing gross negligence and reckless
imprudence while driving, and petitioner Mercury Drug for
failing to exercise the diligence of a good father of a family in
the selection and supervision of its driver.
In contrast, petitioners allege that the immediate and
proximate cause of the accident was respondent Stephen
Huang’s recklessness. According to petitioner Del Rosario,
he was driving on the left innermost lane when the car
bumped the truck’s front right tire.
The trial court found for petitioners and held PLDT and Del
Rosario jointly and severally liable for actual, compensatory,
moral and exemplary damages, attorney’s fees, and litigation
expenses.
ISSUE: Whether or not the presumption of negligence was
properly rebutted by Mercury Drug
HELD: We now come to the liability of petitioner Mercury
Drug as employer of Del Rosario. Articles 2176 and 2180 of
the Civil Code provide:
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this
Chapter.
Art. 2180. The obligation imposed by article 2176 is
demandable not only for one’s own acts or omissions, but
also for those of persons for whom one is responsible.
The owners and managers of an establishment or enterprise
are likewise responsible for damages caused by their
employees in the service of the branches in which the latter
are employed or on the occasion of their functions.
The liability of the employer under Art. 2180 of the Civil Code
is direct or immediate. It is not conditioned on a prior
recourse against the negligent employee, or a prior showing
of insolvency of such employee. It is also joint and solidary
with the employee.
To be relieved of liability, petitioner Mercury Drug should
show that it exercised the diligence of a good father of a
family, both in the selection of the employee and in the
supervision of the performance of his duties. Thus, in the
selection of its prospective employees, the employer is
required to examine them as to their qualifications,
experience, and service records. With respect to the
supervision of its employees, the employer should formulate
standard
operating
procedures,
monitor
their
implementation, and impose disciplinary measures for their
breach. To establish compliance with these requirements,
employers must submit concrete proof, including
documentary evidence.
In the instant case, petitioner Mercury Drug presented
testimonial evidence on its hiring procedure. According to
Mrs. Merlie Caamic, the Recruitment and Training
Manager of petitioner Mercury Drug, applicants are
required to take theoretical and actual driving tests, and
psychological examination. In the case of petitioner Del
Rosario, however, Mrs. Caamic admitted that he took the
driving tests and psychological examination when he
applied for the position of Delivery Man, but not when he
applied for the position of Truck Man. Mrs. Caamic also
admitted that petitioner Del Rosario used a Galant which is
a light vehicle, instead of a truck during the driving tests.
Further, no tests were conducted on the motor skills
development, perceptual speed, visual attention, depth
visualization, eye and hand coordination and steadiness of
petitioner Del Rosario. No NBI and police clearances were
also presented. Lastly, petitioner Del Rosario attended
only three driving seminars – on June 30, 2001, February
5, 2000 and July 7, 1984. In effect, the only seminar he
attended before the accident which occurred in 1996 was
held twelve years ago in 1984.
It also appears that petitioner Mercury Drug does not
provide for a back-up driver for long trips. At the time of the
accident, petitioner Del Rosario has been out on the road
for more than thirteen hours, without any alternate. Mrs.
Caamic testified that she does not know of any company
policy requiring back-up drivers for long trips.
Petitioner Mercury Drug likewise failed to show that it
exercised due diligence on the supervision and discipline
over its employees. In fact, on the day of the accident,
petitioner Del Rosario was driving without a license. He
was holding a TVR for reckless driving. He testified that he
reported the incident to his superior, but nothing was done
about it. He was not suspended or reprimanded.15 No
disciplinary action whatsoever was taken against petitioner
Del Rosario. We therefore affirm the finding that petitioner
Mercury Drug has failed to discharge its burden of proving
that it exercised due diligence in the selection and
supervision of its employee, petitioner Del Rosario.
4. TEAM IMAGE ENTERTAINMENT, INC. V.
SOLAR TEAM ENTERTAINMENT, INC. G.R. NO.
191652 1 SEPT. 13, 2017 I LEONEN, J.
FACTS: Solar Team owned movies, films, telenovelas,
television series, programs, and coverage specials in
several television stations. It derived profits by selling
advertising spots. In April 1996, Solar Team entered into
an agreement with Team Image, which agreed to act as
Solar Team's exclusive marketing agent. According to
Solar Team, Team Image breached their agreement. Now,
Solar Team demanded that Team Image render an
accounting of all its transactions and that it remits all the
proceeds of the said sale.
Team Image refused to render an accounting. Solar Team
filed a Complaint for Accounting and Damages against Team
Image before the Regional Trial Court of Makati. RTC
ordered Team Image to render an accounting of all its
transactions and collections.
A year after, Solar Team and Team Image entered into a
Compromise Agreement. For purposes of accounting and
auditing, the parties hired SyCip Gorres Velayo and
Company as auditor.
Under their agreement, the parties must submit a
certification of the existence of those receivables. The
parties likewise agreed to waive all their claims against each
other and to cause the provisional dismissal of all the
criminal and civil actions that they had filed against each
other. Further, the parties agreed to the immediate issuance
of a writ of execution and payment of liquidated damages in
case of breach of the Compromise Agreement. The trial
court approved and rendered judgment based on the
Compromise Agreement in its decision.
The parties
allegedly breached and violated the Compromise
Agreement.
subject lot and it was conveyed to Alejandra. Alejandra
sold the land Deen, who in turn sold it to Atty. Deen. Upon
Atty. Deen's death, an extrajudicial settlement of estate,
which did not include subject lot, was executed by his
heirs. Later they executed an Additional ExtraJudicial
Settlement with Absolute Deed of Sale, which sold the
land to Norberto who took possession of and built a house
on it. Norberto died without a will and was succeeded by
Lolita.
Josefina, who represented the Heirs Pedro, filed a
complaint for Clarification of Ownership of the subject lot
against Lolita. Later, Lolita sought to register her portion in
subject lot but was denied by the Register of Deeds, citing
the need for a court order. Lolita then learned that TCT No.
T-96676 had been partially cancelled and TCT Nos. T100181, T-100182, T-100183, and T-100185 had been
issued in the name of the Heirs of Pedro Bas, represented
by Josefina. Lolita filed a complaint before the Regional
Trial Court of Cebu City for the cancellation of the titles.
ISSUE: Does the petitioner should first be declared an heir
of Norberto in order to proceed with this case?
ISSUE: Whether or not compensation must take place.
HELD: Yes. Team Image violated paragraphs 6 and 7 of the
Compromise Agreement by failing to pay its monetary
obligations under these paragraphs. For these violations,
Team Image must pay Solar Team P2,000,000.00 in
liquidated damages. As for Solar Team, it violated paragraph
22 the Compromise Agreement for failure to withdraw the
complaint-in-intervention it had earlier filed against Team
Image. Hence, Solar Team must pay Team Image
P2,000,000.00 in liquidated damages.
Articles 1279 and 1281 of the Civil Code provide:
Article 1279. In order that compensation may be proper, it is
necessary: (1) That each one of the obligors be bound
principally, and that he be at the same time a principal
creditor of the other; (2) That both debts consist in a sum of
money, or if the things due are consumable, they be of the
same kind, and also of the same quality if the latter has been
stated; (3) That the two debts be due; (4) That they be
liquidated and demandable; (5) That over neither of them
there be any retention or controversy, commenced by third
persons and communicated in due time to the debtor.
Article 1281. Compensation may be total or partial. When
the two debts are of the same amount, there is a total
compensation.
Considering that the parties are equally liable to each other
in the amount of P2,000,000.00, this Court confirms that the
amounts are set off by operation of law.
5. CAPABLANCA V. HEIRS OF Bas GR No. 224144
1 June 28, 2017 I LEONEN
FACTS: Andres Bas and Pedro Bas acquired Lot 2535, and
Patent No. 1724 was issued in their names on May 12,
1937. In 1939, he sold this to Faustina. After the death of
Faustina, her heirs executed a notarized Extra-Judicial
Declaration of Heirs and Deed of Absolute Sale of the
HELD: According to Art. 777 of the New Civil Code, the
rights to the succession are transmitted from the moment
of the death of the decedent.
Furthermore, the Court ruled in Bordalba v. Court of
Appeals that no judicial declaration of heirship is
necessary in order that an heir may assert his or her right
to the property of the deceased.
The dispute in this case is not about the heirship of
petitioner to Norberto but the validity of the sale of the
property from Pedro to Faustina, from which followed a
series of transfer transactions that culminated in the sale
of the property to Norberto. For with Pedro's sale of the
property, it follows that there would be no more ownership
or right to property that would have been transmitted to his
heirs. Petitioner is pursuing Norberto's right of ownership
over the property which was passed to her upon the
latter's death. Petitioner does not claim any filiation with
Pedro or seek to establish her right as his heir as against
the respondents. Rather, the petitioner seeks to enforce
her right over the property which has been allegedly
violated by the fraudulent acts of respondents.
Hence, the petitioner does not need to first be declared an
heir of Norberto in order to proceed with this case.
6. TORREON
V.
APARRA,
JR.
(2017)
G.R.NO.188493 1 DECEMBER 13, 2017
FACTS: On November 1, 1989, Vivian's husband, Rodolfo
Torreon (Rodolfo), and daughters, Monalisa Torreon
(Monalisa) and Johanna Ava Torreon (Johanna), arrived
with Felomina Abellana (Abellana) at the municipal wharf
of Jetafe, Bohol. They came from Cebu City aboard M/B
Island Traders, a motor boat owned and operated by
Carmelo Simolde (Simolde). After they disembarked from
the motor boat, they looked for a vehicle that would
transport them from the wharf to the poblacion of Jetafe. A
cargo truck entered the wharf and their fellow passengers
boarded it. Abellana, Rodolfo, and his daughters chose not
to board the already- overcrowded truck. Instead, they
waited for a different vehicle to bring them to the poblacion.
However, they were informed that only the cargo truck,
which was also owned and operated by Simolde, would
enter the wharf.
Approximately 10 minutes later, the same cargo truck
returned to the wharf. Again, fellow passengers from M/B
Island Traders started embarking it. This time, Rodolfo,
Monalisa, Johanna, and Abellana also boarded it. Abellana
was seated in front, while Rodolfo and his daughters were
with the rest of the passengers at the back of the truck.
Because there were no proper seats at the back of the truck,
the 30 or more passengers were either standing or sitting on
their bags. While passengers were getting on the truck,
Simolde called Felix Caballes (Caballes), the official truck
driver. Caballes approached Simolde but left the engine
running. While Simolde and Caballes were talking, Generoso
Aparra, Jr. (Aparra), Simolde's chief diesel mechanic, started
driving the truck. Upon seeing the truck move, Caballes
rushed to the truck and sat beside Aparra. However, instead
of taking control of the vehicle, Caballes allowed Aparra to
drive.
Shortly thereafter, Aparra maneuvered the truck to the right
side of the road to avoid hitting a parked bicycle. But as he
turned, Aparra had to swerve to the left to avoid hitting
Marcelo Subiano, who was allegedly standing on the side of
the road. Because the road was only four (4) meters and 24
inches wide, rough, and full of potholes, Aparra lost control
of the truck and they fell off the wharf. Consequently,
Rodolfo and Monalisa died while Johanna and Abellana
were injured. On April 3, 1990, Vivian and Abellana filed a
criminal complaint for Reckless Imprudence resulting to
Double Homicide, Multiple Serious Physical Injuries and
Damage to Property against Aparra and Caballes.
On January 4, 1991, Vivian and Abellana filed a separate
complaint for damages against Simolde, Caballes, and
Aparra. Regional Trial Court: Caballes and Aparra
committed acts constituting a quasi-delict. Since these acts
were the proximate cause of the deaths of Rodolfo and
Monalisa and the injuries sustained by Abellana and
Johanna, Simolde, Caballes, and Aparra were held liable for
damages.
Court of Appeals: Simolde is solidarity liable with Caballes
and Aparra. According to the Court of Appeals, Caballes and
Aparra were clearly negligent in transporting the passengers.
Given that the road was narrow and fall of potholes, it was
apparent that an experienced driver was needed to safely
navigate the vehicle out of the wharf. In allowing Aparra to
drive the truck despite having only a student driver's permit,
Caballes risked the lives of the passengers on board the
truck. The Court of Appeals also held Simolde solidarity
liable with his employees for failing to exercise due diligence
in supervising them. However, the Court of Appeals deleted
the award of actual damages for Rodolfo's loss of earning
capacity. According to the Court of Appeals, documentary
evidence should be presented to substantiate a claim for
loss of earning capacity.
Petitioner Vivian argues that the Court of Appeals gravely
erred in deleting the compensatory damages awarded for
Rodolfo's loss of earning capacity. She posits that
Abellana's testimony is enough to prove Rodolfo's income.
As Rodolfo's employer, Abellana had direct and personal
knowledge of the compensation that he was receiving prior
to his death; thus, she is qualified to testify on his income.
Petitioner Vivian cites Philippine Airlines, Inc. v. Court of
Appeals to point out that the Court of Appeals gravely
erred in concluding that Abellana's testimony, without any
documentary evidence, did not suffice to claim damages
for lack of earning capacity. Based on Abellana's
testimony, Rodolfo had an estimated gross monthly
income of P15,000.00 or an annual gross income of
P195,000.00. Using the formula laid down in Negros
Navigation Co., Inc. v. Court of Appeals, Rodolfo's lost
earnings would amount to P2,079,675.00.
ISSUE: Whether or not actual damages for loss of earning
capacity should be awarded to petitioner Vivian B.
Torreon.
HELD: YES. Instead of helping his defense, Simolde's
testimony proves his failure to supervise his employees.
Simolde should have been more diligent in ensuring that
his employees acted within the parameters of their jobs.
He should have taken steps to ensure that his instructions
were followed. His failure to control the behavior of his
employees makes him liable for the consequences of their
actions. Thus, Simolde is solidarity liable with Caballes
and Aparra for the payment of the damages granted by
law. The Civil Code holds Simolde liable for the damages
that his actions have caused. Article 2206 specifically
applies when a death occurs as a result of a crime or a
quasi-delict: Article 2206. The amount of damages for
death caused by a crime or quasi-delict shall be at least
Three thousand pesos, even though there may have been
mitigating circumstances. In addition: (1) The defendant
shall be liable for the loss of the earning capacity of the
deceased, and the indemnity shall be paid to the heirs of
the latter; such indemnity shall in every case be assessed
and awarded by the court, unless the deceased on
account of permanent physical disability not caused by the
defendant, had no earning capacity at the time of his
death; Civil or death indemnity is mandatory and granted
to the heirs of the victim without need of proof other than
the commission of the crime.
Initially fixed by the Civil Code at P3,000.00, the amount of
the indemnity is currently fixed at P50,000.00. Thus,
respondents are liable to pay Rodolfo's heirs P50,000.00.
They are liable to pay another P50,000.00 to answer for
the death of Monalisa. In Pestaño v. Spouses Sumayang,
this Court applied Article 2206 of the Civil Code and
awarded compensation for the deceased's lost earning
capacity in addition to the award of civil indemnity. The
indemnity for the deceased's lost earning capacity is
meant to compensate the heirs for the income they would
have received had the deceased continued to live. It is
well-settled in jurisprudence that the factors that should be
taken into account in determining the compensable amount
of lost earnings are: (1) the number of years for which the
victim would otherwise have lived; and (2) the rate of loss
sustained by the heirs of the deceased. Jurisprudence
provides that the first factor, i.e., life expectancy, is
computed by applying the formula (2/3 x [80 - age at death])
adopted in the American Expectancy Table of Mortality or
the Actuarial Combined Experience Table of Mortality. As to
the second factor, it is computed by multiplying the life
expectancy by the net earnings of the deceased, i.e., the
total earnings less expenses necessary in the creation of
such earnings or income and less living and other incidental
expenses. The net earning is ordinarily computed at fifty
percent (50%) of the gross earnings. Thus, the formula used
by this Court in computing loss of earning capacity is: Net
Earning Capacity = [2/3 x (80 - age at time of death) x (gross
annual income - reasonable and necessary living
expenses)].[64] (Emphasis supplied, citations omitted). It has
been consistently held that earning capacity, as an element
of damages to one's estate for his death by wrongful act, is
necessarily his net earning capacity or his capacity to
acquire money, "less the necessary expense for his own
living." Stated otherwise, the amount recoverable is not loss
of the entire earning, but rather the loss of that portion of the
earnings which the beneficiary would have received. In other
words, only net earnings, not gross earning, are to be
considered that is, the total of the earnings less expenses
necessary in creation of such earnings or income and less
living and other incidental expenses. The formula provided in
these cases is presumptive, i.e., it should be applied in the
absence of proof in terms of statistics and actuarial
presented by the plaintiff. The Court of Appeals deleted the
award of actual damages granted to the petitioner for
Rodolfo's lost earnings. According to the Court of Appeals,
documentary evidence should be presented to substantiate
a claim for the deceased's lost income. The Court disagrees.
In civil cases, Vivian is only required to establish her claim
by a preponderance of evidence. Allowing testimonial
evidence to prove loss of earning capacity is consistent with
the nature of civil actions
7. CHIQUITA BRANDS, INC. V. OMELIo G.R. No.
189102 1 June 7, 2017 | LEONEN, J.
FACTS: In Aug 1993, thousands of banana plantation
workers instituted a class suit in the US for damages against
11 foreign corporations, Chiquita brands being one of those
11 companies. The claimants claimed to have been exposed
to dibromochloropropane (DBCP) while working in the
plantation. As a result, these workers suffered serious and
permanent injuries to their reproductive system.
However US courts dismissed the complaint based on forum
non conveniens. In May 1996, the claimants filed a
complaint on the same 11 corporations in the RTC of
Panabo City, Davao. Before pre-trial the petitioner and the
claimants entered into a compromise agreement with the
claimants. The agreement states that; the petitioner shall be
released from all or their obligation after they deposited an
escrow amount in favor of the claimant which would be
administered by a third person/ mediator.
The RTC of Panabo approved the compromised
agreement and dismissed the petition of the claimant.
After dismissal of the civil claim the claimants moved for
the execution of the compromise agreement. The
petitioner opposed the execution on the ground of
mootness; they argued that they had already complied
with their obligation by depositing the settlement amount
into an escrow account.
However, RTC of Panabo granted the motion for execution
because there was no proof that they had fulfilled their
obligation.
In May 2003 petitioner filed a motion to suspend the
execution and be allowed to present evidence on their
behalf. During the hearing of the case, the claimants
picketed outside the courtroom and accused the RTC
judge of Panabo as a corrupt official who delayed the
execution. Petitioner requested for change of venue and
was granted.
The case was transferred and now under the jurisdiction of
the RTC of Davao City. In July 2009, the RTC of Davao
city through Judge Omelio ordered the execution of the
compromised agreement.
Aggrieved by the RTC’s decision, the petitioner filed for a
petition for certiorari even without a prior appeal to the CA.
Petitioner alleges that the respondent Judge committed
grave abuse of discretion in issuing the writ of execution
and ordering them to directly pay each of the claimants
contrary to the compromise agreement between petitioner
and claimant.
ISSUES: 1. Whether or not the hierarchy of courts was
violated when the petitioner filed for certiorari without
appealing first to the CA.
2. Judge Omelio committed grave abuse of discretion.
HELD: 1. No. Under the principle of hierarchy or courts,
direct recourse to the SC is improper because SC is a
court of last resort and must remain to be so in order for it
to satisfactorily perform its constitutional functions.
Nonetheless, the invocation of the SC’s original jurisdiction
to issue writs of certiorari has been allowed in certain
instances on the ground of special and important reasons
clearly stated in the petition, such as,
1. When dictated by public welfare and
advancement of public policy,
2. When demanded by broader interest of justice,
3. Where the challenged orders were patent
nullities or
4. When analogous exceptional and compelling
circumstances called for and justified the
immediate and direct handling of the case. In the
case at hand, it was clearly stated that the case is
in need of a broader interest of justice, as it may
prejudice any or both parties when delayed.
2. Yes. Courts can neither amend nor modify the terms
and conditions of a compromise validly entered into by the
parties. A writ of execution that varies the respective
obligation of the parties under a judicially approved
compromise settlement is void. Hence Judge Omelio
committed grave abuse of discretion.
Contract bet. PH Ports Authority and Asian Terminals..
Asian Terminals added that its liability, if any, should not
exceed Php5,000 pursuant to Sec. 7 of the Management
Contract
8. CASCAYAN V. SPS. GUMALLAOI G.R. NO.
211947 I JULY 3, 2017 I LEONEN, J.
CA dismissed the case saying the claim has been
prescribed. RTC failed to discuss who is responsible for
the damaged coils.
FACTS: The Heirs of Cayetano Cascayan, co-owners of a
lot through a free patent application, filed a civil complaint
with the Regional Trial Court for vacation of possession,
recovery of possession, demolition of structures, and
payment of damages, against their neighbours, the Spouses
Gumallaoi, who allegedly ignored repeated notices given to
them by the Heirs that the Spouses had repeatedly
encroached on the lot of the Heirs after the construction and
renovation of the Spouses’ residential house.
The Spouses filed a counterclaim with the RTC to have the
FPA of the Heirs be declared null and void, with payment of
damages, and contended that they were the true owners of
both lots, and that the Heirs had acquired the FPA, through
manipulation, deception, and fraud.
The RTC ruled in favor of the Spouses, and this was later
affirmed on appeal by the Court of Appeals. Meanwhile, the
Heirs filed a Motion for New Trial on grounds of “mistake”
with the RTC, but this was denied. The RTC and the CA
both ruled that the collective evidence presented by both of
the parties proved the claims of the Spouses, as the
evidence of the Heirs was full of inconsistencies. The Heirs
filed a Petition for Certiorari under Rule 45 with the Supreme
Court, claiming that it was already proven that they owned
their own lot, as shown through their tax declarations.
ISSUE: Did the CA properly appreciate the evidence?
HELD: Yes, it did. As a general rule, the findings of fact of
the CA bind the Supreme Court, and the CA had already
thoroughly examined the evidence and found it lacking in
probative value. The only evidence presented were only tax
declarations, and the assertions of the Heirs explaining the
inconsistencies were just mere factual allegations, and they
were neither well-substantiated or adequately-discussed
facts to compel the SC to review the CA’s appreciation of the
evidence.
9. ORIENTAL ASSURANCE CORPORATION V. ONG
G.R. NO. 189524 1 OCTOBER 11, 2017 I LEONEN,
J.
FACTS: JEA Steel Industries, Inc. imported from South
Korea 72 steel sheets in coils that were transported to
Manila on board M/V Dooyang Glory. The 72 coils were
discharged and stored in Pier 9 in custody of arrestre
contractor, Asian Terminals. 11 of these coils were found to
be in damaged condition, dented or their normal round
shape deformed when delivered to JEA Steel’s plant. JEA
claimed with Oriental for the value of 11 damaged coils
pursuant to Marine Insurance Policy.. Oriental now filed a
complaint. Asian Terminals further argued that Oriental’s
claim was barred for the latter’s failure to file a notice of
claim within the 15-day period provided in the Management
ISSUES: 1. Whether ot not the CA gravely erred in
passing upon the issue of prescription even though it was
not an assigned error in the appeal
2. Whether ot not the claim against Asian Terminals inc is
barred by prescription
3. Whether ot not Manuel Ong is not liable for the damage
of the cargo
HELD: Petition Granted - Asian Terminals is ordered to
pay Oriental Assurance.
Even not assigned error, the SC can resolve based on
Matters not specifically assigned as errors
on appeal but raised in the trial court and are
matters of record having some bearing on the
issue submitted which the parties failed to raise or
which the lower court ignored
Matters not assigned as errors on appeal
but closely related to an error assigned
Based on the Section 7 – the consignee had 45 to 60 days
from the date of the goods within which to submit a formal
claim to the arrestre operator
This Court finds that whether the consignee files a claim
letter or requests for a certificate of loss or bad order
examination, the effect would be the same, in that either
would afford the arrastre contractor knowledge that the
shipment has been damaged and an opportunity to
examine the nature and extent of the injury. Under the
Management Contract, the 30-day period is considered
reasonable for the contractor to make an investigation of a
claim. Hence, the consignee's claim letter is regarded as
substantial compliance with the condition precedent set
forth in the Management Contract to hold the arrastre
operator liable. The surveyor prepared and submitted to
Asian Terminals a Final Report dated June 29, 2002.
Although its representative was not present during the
inspections, the fact that Asian Terminals requested for the
cargo survey shows that it had knowledge of the damage
of the shipment while in its possession and that the survey
was sought specifically to ascertain the nature and extent
of the damage. Thus, the respondent cannot escape
liability for the damaged coils, simply by its own act of not
sending a representative, after it had contracted for the
survey of the shipment. There was no proof of Ong's bad
faith. Mere allegation cannot take the place of evidence.
Besides, Ong's assertion that the loading of the cargo on
the trucks was undertaken by Asian Terminals and the
unloading of the same cargo was undertaken by the
consignee at its warehouse remains unrebutted. In fact,
Asian Terminals caused the inspection of the shipment
before they were loaded on Ong's trucks on June 17,
2002. Moreover, at the consignee's warehouse, the
inspection was done in the presence of the consignee's
authorized representative. Thus, Ong is not obliged to inform
the consignee or Asian Terminals about the damaged coils
as they would have presumably known about them
10. PAVLOW V. MENDENILLA G.R.NO.181489
APRIL 19, 2017 IJ. LEONEN
1
N/A
11. SPS. ABOLTLZ V. SPS. PO
FACTS: This case involves a parcel of land located in
Cabancalan, Mandaue City, initially registered as Original
Certificate of Title No. 0-887, and titled under the name of
Roberto Aboitiz (Roberto). The land is referred to as Lot No.
2835. This parcel of land originally belonged to the late
Mariano Seno. On July 31, 1973, Mariano executed a Deed
of Absolute Sale in favor of his son, Ciriaco Seno (Ciriaco),
over a 1.0120-hectare land in Cebu covered by Tax
Declaration No. 43358. This property included two (2) lots:
Lot No. 2807 and the land subject of this case, Lot No.
2835. In 1990, Peter Po (Peter) discovered that Ciriaco
"had executed a quitclaim dated August 7, 1989 renouncing
[his] interest over Lot [No.] 2807 in favor of [petitioner]
Roberto." In the quitclaim, Ciriaco stated that he was "the
declared owner of Lot [Nos.] 2835 and 2807." The Spouses
Po confronted Ciriaco. By way of remedy, Ciriaco and the
Spouses Po executed a Memorandum of Agreement dated
June 28, 1990 in which Ciriaco agreed to pay Peter the
difference between the amount paid by the Spouses Po as
consideration for the entire property and the value of the
land the Spouses Po were left with after the quitclaim. In its
Decision dated October 28, 1993, the trial court granted the
issuance of Original Certificate of Title No. 0-887 in the
name of Roberto. The lot was immediately subdivided with
portions sold to Ernesto and Jose. The trial court ruled in
favor of the Spouses Po in its Decision dated November 23,
2009. The Spouses Aboitiz appealed to the Court of
Appeals. The Court of Appeals, in its Decision dated
October 31, 2012, partially affirmed the trial court decision,
declaring the Spouses Po as the rightful owner of the land.
However, it ruled that the titles issued to respondents Jose,
Ernesto, and Isabel should be respected. The Court of
Appeals discussed the inapplicability of the rules on double
sale and the doctrine of buyer in good faith since the land
was not yet registered when it was sold to the Spouses Po.
However, it ruled in favor of the Spouses Po on the premise
that registered property may be reconveyed to the "rightful
or legal owner or to the one with a better right if the title
[was] wrongfully or erroneously registered in another
person's name." The Court of Appeals held that the
Mariano Heirs were no longer the owners of the lot at the
time they sold it to Roberto in 1990 because Mariano,
during his lifetime, already sold this to Ciriaco in 1973.
However, the Court of Appeals ruled that the certificates of
title of Jose, Ernesto, and Isabel were valid as they were
innocent buyers in good faith. The Spouses Aboitiz thus
filed their Petition for Review, which was docketed as G.R.
No. 208450. They argue that the Decision of Branch 55,
Regional Trial Court of Mandaue City granting the
complaint of the Spouses Po is void for lack of jurisdiction
over the matter. They claim that a branch of the Regional
Trial Court has no jurisdiction to nullify a final and
executory decision of a co-equal branch; it is the Court of
Appeals that has this jurisdiction. The Spouses Po also
filed a Petition for Review, which was docketed as G.R.
No. 208497. They claim that respondents Jose, Ernesto,
and Isabel are not "innocent purchasers for value." They
allegedly knew of the defective title of Roberto because
his tax declaration had the following annotation: "This tax
declaration is also declared in the name of Mrs.
VICTORIA LEE PO, married to PETER PO under tax dec.
No. 0634-A so that one may be considered a duplicate to
the other.
ISSUES: 1. Whether or not the Regional Trial Court has
jurisdiction over the Spouses Peter and Victoria Po's
complaint;
2. Whether the action is barred by prescription;
3. Whether the doctrines of estoppel and laches apply;
4. Whether the land registration court's finding that
Ciriaco Seno only held the property in trust for the
Mariano Heirs is binding as res judicata in this case;
5. Whether the Deed of Absolute Sale between Ciriaco
Seno and the Spouses Peter and Victoria Po should be
considered as evidence of their entitlement to the
property;
6. Whether the Mariano Heirs, as sellers in a deed of
conveyance of realty, are indispensable parties; and
7. Whether the respondents Jose Maria Moraza, Ernesto
Aboitiz, and Isabel Aboitiz are innocent purchasers in
good faith.
HELD: 1. Except for actions falling within the jurisdiction
of the Municipal Trial Courts, the Regional Trial Courts
have exclusive original jurisdiction over actions involving
"title to, or possession of, real property." Section 19 of
Batas Pambansa Blg. 129 provides: Section 19.
Jurisdiction in Civil Cases. - Regional Trial Courts shall
exercise exclusive original jurisdiction: (2) In all civil
actions which involve the title to, or possession of, real
property, or any interest therein, except actions for
forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred
upon Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts. The Spouses Aboitiz
claim that it is the Court of Appeals that has jurisdiction
over the annulment of Regional Trial Court judgments.
The jurisdiction of the Court of Appeals is provided in
Section 9 of Batas Pambansa Blg. 129: Section 9.
Jurisdiction. - The Intermediate Appellate Court shall
exercise: (2) Exclusive original jurisdiction over actions for
annulment of judgments of Regional Trial Courts. While
the Court of Appeals has jurisdiction to annul judgments
of the Regional Trial Courts, the case at bar is not for the
annulment of a judgment of a Regional Trial Court. It is
for reconveyance and the annulment of title. Considering
the Spouses Aboitiz's fraudulent registration without the
Spouses Po's knowledge and the latter's assertion of their
ownership of the land, their right to recover the property
and to cancel the Spouses Aboitiz's title, the action is for
reconveyance and annulment of title and not for
annulment of judgment. Thus, the Regional Trial Court has
jurisdiction to hear this case.
2. "An action for reconveyance prescribes in ten [10] years
from the issuance of the Torrens title over the property."
The basis for this is Section 53, Paragraph 3 of Presidential
Decree No. 1529 in relation to Articles 1456 and 1144(2) of
the Civil Code. Under Presidential Decree No. 1529
(Property Registration Decree), the owner of a property
may avail of legal remedies against a registration procured
by fraud: SECTION 53. Presentation of Owner's Duplicate
Upon Entry of New Certificate. – In all cases of registration
procured by fraud, the owner may pursue all his legal and
equitable remedies against the parties to such fraud without
prejudice, however, to the rights of any innocent holder for
value of a certificate of title ... CIVIL CODE, Art. 1456
provides: Article 1456. If property is acquired through
mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the
person from whom the property comes. CIVIL CODE, Art.
1144(2) provides: Article 1144. The following actions must
be brought within ten years from the time the right of action
accrues: (2) Upon an obligation created by law. In an action
for reconveyance, the right of action accrues from the time
the property is registered. An action for reconveyance and
annulment of title does not seek to question the contract
which allowed the adverse party to obtain the title to t h e
property. What is put on issue in an action for
reconveyance and cancellation of title is the ownership of
the property and its registration. It does not question any
fraudulent contract. Should that be the case, the applicable
provisions are Articles 1390 and 1391 of the Civil Code.
Thus, an action for reconveyance and cancellation of title
prescribes in 10 years from the time of the issuance of the
Torrens title over the property. Considering that the
Spouses Po's complaint was filed on November 19, 1996,
less than three (3) years from the issuance of the Torrens
title over the property on April 6, 1994, it is well within the
10-year prescriptive period imposed on an action for
reconveyance.
3. There is laches when a party was negligent or has failed
"to assert a right within a reasonable time," thus giving rise
to the presumption that he or she has abandoned it. Laches
has set in when it is already inequitable or unfair to allow
the party to assert the right. The elements of laches were
enumerated in Ignacio v. Basilio: There is laches when: (1)
the conduct of the defendant or one under whom he claims,
gave rise to the situation complained of; (2) there was delay
in asserting a right after knowledge of the defendant's
conduct and after an opportunity to sue; (3) defendant had
no knowledge or notice that the complainant would assert
his right; (4) there is injury or prejudice to the defendant in
the event relief is accorded to the complainant. "Laches is
different from prescription." Prescription deals with delay
itself and thus is an issue of how much time has passed.
The time period when prescription is deemed to have set in
is fixed by law. Laches, on the other hand, concerns itself
with the effect of delay and not the period of time that has
lapsed. When they discovered that the property was
registered in the name of the Spouses Aboitiz in 1993, the
Spouses Po then filed the instant complaint to recover the
property sold to them by Ciriaco, alleging that it was done
without their knowledge, through evident bad faith and
fraud. The Spouses Po filed this case in less than three
(3) years from the time of registration. Based on these
circumstances, the elements of laches are clearly lacking
in this case. There was no delay in asserting their right
over the property, and the Spouses Aboitiz had
knowledge that the Spouses Po would assert their right.
Thus, it cannot be said that they are barred by laches.
4. This Court rules that this cannot be binding in this
action for reconveyance. Res judicata embraces two (2)
concepts: (i) bar by prior judgment and (ii) conclusiveness
of judgment, respectively covered under Rule 39, Section
47 of the Rules of Court, paragraphs (b) and (c): Section
47. Effect of judgments or final orders. - The effect of a
judgment or final order rendered by a court of the
Philippines, having jurisdiction to pronounce the judgment
or final order, may be as follows: (b) In other cases, the
judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could
have been raised in relation thereto, conclusive between
the parties and their successors in interest by title
subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the
same title and in the same capacity; and (c) In any other
litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a
former judgment or final order which appears upon its
face to have been so adjudged, or which was actually and
necessarily included therein or necessary Thereto. An
exception to this rule is if the party claiming ownership
has already had the opportunity to prove his or her claim
in the land registration case. In such a case, res judicata
will then apply. When an issue of ownership has been
raised in the land registration proceedings where the
adverse party was given full opportunity to present his or
her claim, the findings in the land registration case will
constitute a bar from any other claim of the adverse party
on the property. However, this is not the circumstance in
the case at bar. The Spouses Po were not able to prove
their claim in the registration proceedings. Thus, res
judicata cannot apply to their action for reconveyance.
5. The Spouses Aboitiz posit that the Deed of Absolute
Sale between Ciriaco and the Spouses Po is fake and
fraudulent. 181 They argue that this is evidenced by
certifications of the document's non-existence in the
notarial books and the Spouses Po's failure to enforce
their rights over the property until 18 years later. They
also claim that the Deed of Absolute Sale is inadmissible
as no documentary stamp was paid and affixed. The
Spouses Aboitiz failed to prove that these exceptions
exist in the case at bar. The Regional Trial Court lent
credence to documents presented by the Spouses Po,
Peter's testimony about Mariano's sale of the property to
Ciriaco, Ciriaco's sale of the property to the Spouses Po,
and the issuance of a Tax Declaration in the name of
Victoria. The Regional Trial Court thus held: In this case,
the Court believes that defendant Roberto Aboitiz is
aware of the proprietary rights of the plaintiffs considering
the land was already declared for taxation purposes in
plaintiffs' names after the tax declaration of said land, first in
the name of Mariano Seno was cancelled and another one
issued in the name of Ciriaco Seno when the latter bought
the said land from his father Mariano Seno, and after the
said tax declaration in the name of Ciriaco Seno was
cancelled and another one issued in the name of plaintiffs
herein. So, defendant Roberto Aboitiz purchased the
subject land from the Heirs of Mariano Seno who are no
longer the owners thereof and the tax declaration of subject
land was no longer in the name of Mariano Seno nor in the
name of Heirs of Mariano Seno. The City Assessor of
Mandaue City even issued a Certification (Exh. X) to the
effect that Tax Declaration No. 0634-A in the name of Mrs.
Victoria Lee Po married to Peter Po was issued prior to the
issuance of T.D. No. 1100 in the name of Roberto Aboitiz
married to Maria Cristina Cabarruz. Buyers of any untitled
parcel of land for that matter, to protect their interest, will
first verify from the Assessor's Office that status of said land
whether it has clean title or not. The Spouses Aboitiz failed
to present clear and convincing evidence to overturn the
presumption. The notarized Deed of Absolute Sale between
Ciriaco and the Spouses Po is, thus, presumed regular and
authentic. Consequently, this Court can affirm the finding
that the property was sold to Ciriaco in 1973, and that
Ciriaco, as the owner of the property, had the right to sell it
to the Spouses Po. Hence, the lot did not form part of the
estate of Mariano, and the Mariano Heirs did not have the
capacity to sell the property to the Spouses Aboitiz later on.
6. The Mariano Heirs are not indispensable parties. Rule 3,
Section 7 of the Revised Rules of Court provides: Section
7. Compulsory Joinder of Indispensable Parties. - Parties in
interest without whom no final determination can be had of
an action shall be joined either as plaintiffs or defendants.
An indispensable party is the party whose legal presence in
the proceeding is so necessary that "the action cannot be
finally determined" without him or her because his or her
interest in the matter and in the relief "are so bound up with
that of the other parties. The Mariano Heirs, as the alleged
sellers of the property, are not indispensable parties. They
are at best necessary parties, which are covered by Rule 3,
Section 8 of the Rules of Court: Section 8. Necessary Party.
- A necessary party is one who is not indispensable but who
ought to be joined as a party if complete relief is to be
accorded as to those already parties, or for a complete
determination or settlement of the claim subject of the
action. It is clear that the Mariano Heirs are not
indispensable parties. They have already sold all their
interests in the property to the Spouses Aboitiz. They will no
longer be affected, benefited, or injured by any ruling of this
Court on the matter, whether it grants or denies the
complaint for reconveyance. The ruling of this Court as to
whether the Spouses Po are entitled to reconveyance will
not affect their rights. Their interest has, thus, become
separable from that of Jose, Ernesto, and Isabel. Thus, the
Court of Appeals correctly ruled that the Mariano Heirs are
not indispensable parties.
7. An innocent purchaser for value refers to the buyer of the
property who pays for its full and fair price without or before
notice of another person's right or interest in it. He or she
buys the property believing that "the seller is the owner and
could transfer the title to the property." If a property is
registered, the buyer of a parcel of land is not obliged to
look beyond the transfer certificate of title to be
considered a purchaser in good faith for value. Section 44
of Presidential Decree No. 1529 states: Section 44.
Statutory liens affecting title. - Every registered owner
receiving a certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of
registered land taking a certificate of title for value and in
good faith, shall hold the same free from all
encumbrances except those noted in said certificate and
any of the following encumbrances which may be
subsisting, namely: First. Liens, claims or rights arising or
existing under the laws and Constitution of the Philippines
which are not by law required to appear on record in the
Registry of Deeds in order to be valid against subsequent
purchasers or encumbrances of record. Second. Unpaid
real estate taxes levied and assessed within two years
immediately preceding the acquisition of any right over
the land by an innocent purchaser for value, without
prejudice to the right of the government to collect taxes
payable before that period from the delinquent taxpayer
alone. Third. Any public highway or private way
established or recognized by law, or any government
irrigation canal or lateral thereof, if the certificate of title
does not state that the boundaries of such highway or
irrigation canal or lateral thereof have been determined.
Fourth. Any disposition of the property or limitation on the
use thereof by virtue of, or pursuant to, Presidential
Decree No. 27 or any other law or regulations on agrarian
reform. In Leong v. See: The Torrens system was
adopted to "obviate possible conflicts of title by giving the
public the right to rely upon the face of the Torrens
certificate and to dispense, as a rule, with the necessity of
inquiring further." One need not inquire beyond the four
comers of the certificate of title when dealing with
registered property... The protection of innocent
purchasers in good faith for value grounds on the social
interest embedded in the legal concept granting
indefeasibility of titles. Between the third party and the
owner, the latter would be more familiar with the history
and status of the titled property. Consequently, an owner
would incur less costs to discover alleged invalidities
relating to the property compared to a third party. Such
costs are, thus, better borne by the owner to mitigate
costs for the economy, lessen delays in transactions, and
achieve a less optimal welfare level for the entire society.
Thus, respondents were not obliged to look beyond the
title before they purchased the property. They may rely
solely on the face of the title. The only exception to the
rule is when the purchaser has actual knowledge of any
defect or other circumstance that would cause "a
reasonably cautious man" to inquire into the title of the
seller. If there is anything which arouses suspicion, the
vendee is obliged to investigate beyond the face of the
title. Otherwise, the vendee cannot be deemed a
purchaser in good faith entitled to protection under the
law.
12. International Exchange Bank v. Sps. Briones
G.R. No. 205657
FACTS: Spouses Briones took out a loan of P3.7M from
iBank (now Union Bank) to purchase a BMW Z4
Roadster. They executed a promissory note that required
them to take out an insurance policy on the car and to
give iBank, as attomey-infact, irrevocable authority to file
an insurance claim in case of loss or damage to the
vehicle. The BMW was carnapped so the spouses
declared the loss to iBank, which instructed them to
continue paying the next three monthly installments "as a
sign of good faith,” a directive they complied with. After
they finished paying the 3 installments, iBank demanded
full payment of the lost vehicle. The spouses submitted a
notice of claim with their insurance company which was
denied due to a delay in the reporting of the lost vehicle.
iBank filed a complaint for replevin or sum of money
against the spouses alleging default in paying the
monthly amortizations of the mortgaged vehicle
ISSUE: W/N Spouses Briones are liable to iBank for the
monthly amortizations of the BMW.
HELD: NO. Under the promissory note, Spouses Briones
appointed iBank as their attorney-in-fact (agent),
authorizing it to file a claim with the insurance company if
the mortgaged vehicle was lost or damaged. iBank was
also authorized to collect the insurance proceeds as the
beneficiary of the insurance policy.
As the agent, petitioner was mandated to look after the
interests of the Spouses Briones by collecting the insurance
proceeds. However, instead of going after the insurance
proceeds, as expected of it as the agent, petitioner opted to
claim the full amount from the Spouses Briones,
disregarding the established principal-agency relationship,
and putting its own interests before those of its principal.
The insurance policy was valid when the vehicle was lost,
and that the insurance claim was only denied because of
the belated filing.
Having been negligent in its duties as the duly constituted
agent, petitioner must be held liable for the denial of the
insurance claim suffered by the Spouses Briones because
of non-performance of its obligation as the agent, and
because it prioritized its interests over that of its principal.
Petitioner's bad faith was evident when it advised the
Spouses Briones to continue paying three (3) monthly
installments after the loss, purportedly to show their good
faith.
If petitioner was indeed acting in good faith, it could have
timely informed the Spouses Briones that it was terminating
the agency and its right to file an insurance claim, and could
have advised them to facilitate the insurance proceeds
themselves. This would have allowed the spouses to collect
from their insurer and pay the amortizations on the BMW.
Petitioner's failure to do so only compounds its negligence
and underscores its bad faith. Thus, it will be inequitable
now to compel the Spouses Briones to pay the full amount
of the lost property.
13. Heirs of Salas v. Cabungcal, G.R. No. 191545
FACTS: Petitioners are the heirs of the registered owner
of a vast tract of land, while respondents are agrarian
reform beneficiaries under the CARP. Pursuant to the
approved town plan (Town Plan/Zoning Ordinance), the
subject land was reclassified as farmlot subdivision for
cultivation, livestock production, or agro-forestry. While
portion of the land was sold, more than half remained
unsold. Hence, petitioner heirs assailed the inclusion of
their landholdings from CARP.
ISSUE: Whether the reclassification of petitioners'
agricultural land as a farmlot subdivision exempts the
Estate of Salas from the coverage of the CARP.
HELD: NO, the Comprehensive Agrarian Reform Law
covers all agricultural lands, save for those not used or
suitable for agricultural activities.
The reclassification of Salas' landholding into a farmlot
subdivision, although effected before Republic Act No.
6657, has not changed the nature of these agricultural
lands, the legal relationships existing over such lands, or
the agricultural usability of the lands. Thus, these lots
were properly subjected to compulsory coverage under
the Comprehensive Agrarian Reform Law.
This case involves a land that was reclassified as a
"farmlot subdivision," intended for "intensive agricultural
activities." Likewise, located away from the city center,
the farmlot subdivision has not been developed into an
urban zone. When Salas' agricultural land was
reclassified as a farmlot subdivision, the applicable law
was Republic Act No. 3844, as amended.
Section 166 (1) of Republic Act No. 3844 defined an
agricultural land as "land devoted to any growth, including
but not limited to crop lands[.]" The law neither made
reference to a "farmlot subdivision," nor did it exclude a
farmlot from the definition of an agricultural land.
Not being excluded, Salas' landholdings were thus
contemplated in the definition of an agricultural land
under Republic Act No. 3844. Likewise, Republic Act No.
6657 does not exclude a farmlot subdivision from the
definition of an
agricultural land. Section 3(c) of Republic Act No. 6657
states that agricultural lands refer to "land devoted to
agricultural activity . . . and not classified as mineral,
forest, residential, commercial, or industrial land." Section
76 expressly provides that any other definition
inconsistent with Republic Act No. 6657 has been
repealed by this law.
Agricultural lands consist of lands:
(1) Devoted to agricultural activity, as defined in Republic
Act No. 6657;
(2) Not classified as mineral or forest by the Department
of Environment and Natural Resources; and
(3) Prior to June 15, 1988, not classified for residential,
commercial, or industrial use under a local government
town plan and zoning ordinance, as approved by the
BLURB (or its predecessors, the National Coordinating
Council and the Human Settlements Regulatory
Commission).
Salas' farmlot subdivision fulfills these elements.
For the first element, the lots are devoted to agricultural
activity. Agricultural activity refers to the "cultivation of the
soil, planting of crops, growing of fruit trees, raising of
livestock, poultry or fish, including the harvesting of such
farm products, and other farm activities and practices
performed by a farmer in conjunction with such farming
operations done by persons whether natural or juridical."
Petitioners never denied the continued existence of
agricultural activity within these lots.
For the second element, it is undisputed that the lots have
not been declared as mineral or forest lands by the
Department of Environment and Natural Resources. No
application has been filed to declare the landholdings as
mineral or forest lands, and neither has the Department of
Environment and Natural Resources ever declared the
properties as such.
As to the third element, the lands were not classified by the
Lipa City Town Plan/Zoning Ordinance as commercial,
residential, or industrial lands prior to June 15, 1988.
Rather, the reclassification, which was approved by
HLURB's predecessor agency, was that of a "farmlot
subdivision."
14. Tani-De La Fuente v. De La Fuente, G.R. No.
188400
FACTS: On June 21, 1984, Maria Teresa Tani and Rodolfo
De la Fuente Jr. got married in Mandaluyong City after
being in a relationship for five (5) years. They had two
children. While they were still sweethearts, Maria Teresa
already noticed that Rodolfo was an introvert and was
prone to jealousy. His attitude worsened as they went on
with their marital life. His jealousy became so severe that
he even poked a gun to his 15 year old cousin and he
treated Maria Teresa like a sex slave who made the latter
feel maltreated and molested. Sometime in 1986, the
couple quarreled because Rodolfo suspected that Maria
Teresa was having an affair. In the heat of their quarrel,
Rodolfo poked a gun at Maria Teresa's head. She left and
never saw Rodolfo again after that, and supported their
children by herself.
On June 3, 1999, Maria Teresa filed a petition for
declaration of nullity of marriage on the ground of
psychological incapacity before the Regional Trial Court of
Quezon City. As support to her petitions, clinical
psychologist, Dr. Arnulfo V. Lopez was presented as an
expert witness. However, Rodolfo did not file any
responsive pleading. The trial court eventually deemed his
non-appearance as a waiver of his right to present
evidence.
Before the promulgation of its decision, on June 26, 2002,
the trial court directed the Office of the Solicitor General to
submit its comment on Maria Teresa's formal offer of
evidence. The Office of the Solicitor General was also
directed to submit its certification. The Office of the
Solicitor General, however, failed to comply with the trial
court's orders; thus, the case was submitted for decision
without the certification and comment from the Office of
the Solicitor General. On August 14, 2002, the trial court
promulgated its decision granting the petition for
declaration of nullity of marriage.
On August 20, 2002, the Office of the Solicitor General
filed a motion for reconsideration. The Office of the
Solicitor General explained that it was unable to submit
the required certification because it had no copies of the
transcripts of stenographic notes. It was also unable to
inform the trial court of its lack of transcripts due to the
volume of cases it was handling On September 13 2002,
the trial court denied the motion for reconsideration..
The Office of the Solicitor General filed an appeal before
the Court of Appeals. It argued that the trial court erred a)
in deciding the case without the required certification from
the Office of the Solicitor General, 58 and b) in giving
credence to Dr. Lopez's conclusion of Rodolfo's severe
personality disorder. It held that Dr. Lopez's finding was
based on insufficient data and did not follow the
standards set forth in the Molina case. Still, Rodolfo did
not file any responsive pleading. The Court of Appeals
reversed the decision of the RTC. In its resolution dated
May 25, 2009, CA denied the motion for reconsideration
filed by Maria Teresa. On July 24, 2009, Maria Teresa
filed a Petition for Review on Certiorari. This time Rodolfo
filed a Comment 70 stating that he was not opposing
Maria Teresa's Petition since "[h]e firmly believes that
there is in fact no more sense in adjudging him and
petitioner as married."
ISSUE: Whether or not the Court of Appeals erred in
denying the petition for Declaration of Nullity of Marriage.
HELD: Yes, the Court of Appeals erred in denying the
petition for Declaration of Nullity of Marriage.
Contrary to the ruling of the Court of Appeals, we find that
there was sufficient compliance with Molina to warrant the
nullity of petitioner's marriage with respondent. Petitioner
was able to discharge the burden of proof that respondent
suffered from psychological incapacity. The Court of
Appeals is mistaken when it chided the lower court for
giving undue weight to the testimony of Dr. Lopez since
he had no chance to personally conduct a thorough study
and analysis of respondent's mental and psychological
condition.
Camacho-Reyes v. Reyes states that the nonexamination of one of the parties will not automatically
render as hearsay or invalidate the findings of the
examining psychiatrist or psychologist, since "marriage,
by its very definition, necessarily involves only two
persons. The totality of the behavior of one spouse during
the cohabitation and marriage is generally and genuinely
witnessed mainly by the other.
Article 68 of the Family Code obligates the husband and
wife "to live together, observe mutual love, respect and
fidelity, and render mutual help and support." In this case,
petitioner and respondent may have lived together, but the
facts narrated by petitioner show that respondent failed to,
or could not, comply with the obligations expected of him as
a husband. He was even apathetic that petitioner filed a
petition for declaration of nullity of their marriage.
The incurability and severity of respondent's psychological
incapacity were likewise discussed by Dr. Lopez. He
vouched that a person with paranoid personality disorder
would refuse to admit that there was something wrong and
that there was a need for treatment. This was corroborated
by petitioner when she stated that respondent repeatedly
refused treatment. Petitioner consulted a lawyer, a priest,
and a doctor, and suggested couples counseling to
respondent; however, respondent refused all of her
attempts at seeking professional help. Respondent also
refused to be examined by Dr. Lopez.
Dr. Lopez concluded that because of respondent's
personality disorder, he is incapacitated to perform his
marital obligations of giving love, respect, and support to
the petitioner. He recommends that the marriage be
annulled. Respondent's repeated behavior of psychological
abuse by intimidating, stalking, and isolating his wife from
her family and friends, as well as his increasing acts of
physical violence, are proof of his depravity, and utter lack
of comprehension of what marriage and partnership entail.
It would be of utmost cruelty for this Court to decree that
petitioner should remain married to respondent. After she
had exerted efforts to save their marriage and their family,
respondent simply refused to believe that there was
anything wrong in their marriage. This shows that
respondent truly could not comprehend and perform his
marital obligations. This fact is persuasive enough for this
Court to believe that respondent's mental illness is
incurable.
Garcia, as evidenced by a Certificate of Live Birth dated
July 19, 1950; and petitioner Ara is recorded as a son of
spouses Jose Ara and Maria Flores, evidenced by his
Certificate of Live Birth.
Petitioners, together with Ramon and herein respondent
Rossi, verbally sought partition of the properties left by
the deceased Josefa, which were in the possession of
respondent Pizarr. Plaintiffs a quo filed a Complaint for
judicial partition of properties left by the deceased Josefa,
before the Regional Trial Court. In her Answer,
respondent Pizarro averred that, to her knowledge, she
was the only legitimate and only child of Josefa. She
denied that any of the plaintiffs a quo were her siblings,
for lack of knowledge or information to form a belief on
that matter. Further, the late Josefa left other properties
mostly in the possession of plaintiffs a quo, which were
omitted in the properties to be partitioned by the trial court
in Special Civil Action No. 337-03, enumerated in her
counterclaim.
ISSUE: Whether or not the respondents can be
considered legitimate children of Josefa A. Ara and are
entitled of partition of the properties left by the deceased
Josefa
HELD: No. The law is very clear. If filiation is sought to be
proved under the second paragraph of Article 172 of the
Family Code, the action must be brought during the
lifetime of the alleged parent. It is evident that appellants
Romeo F. Ara and William Garcia can no longer be
allowed at this time to introduce evidence of their open
and continuous possession of the status of an illegitimate
child or prove their alleged filiation through any of the
means allowed by the Rules of Court or special laws. The
simple reason is that Josefa Ara is already dead and can
no longer be heard on the claim of her alleged sons'
illegitimate filiation.
16. JOSEPH HARRY WALTER POOLE-BLUNDEN
v. UNION BANK OF THE PHILIPPINES, GR No.
205838
15. Ara v. Pizarro, G.R. No. 187273
FACTS: Romeo F. Ara and William A. Garcia (petitioners),
and Dra. Fely S. Pizarro and Henry A. Rossi (respondents)
all claimed to be children of the late Josefa A. Ara, who died
on November 18, 2002. Petitioners assert that Fely S.
Pizarro was born to Josefa and her then husband, Vicente
Salgado, who died during World War II. At some point
toward the end of the war, Josefa met and lived with an
American soldier by the name of Darwin Gray. Romeo F.
Ara was born from this relationship. Josefa later met a
certain Alfredo Garcia, and, from this relationship, gave
birth to sons Ramon Garcia and William A. Garcia. Josefa
and Alfredo married on January 24, 1952.8 After Alfredo
passed away, Josefa met an Italian missionary named
Frank Rossi, who allegedly fathered Henry Rossi.
Respondent Pizarro claims that, to her knowledge, she is
the only child of Josefa. Further, petitioner Garcia is
recorded as a son of a certain Carmen Bucarin and Pedro
FACTS: Poole-Blunden came across an advertisement
placed by Union Bank in the Manila Bulletin for the public
auction of the subject condominium unit, "Unit" which was
advertised to have an area of 95 square meters. Thinking
that it was sufficient and spacious enough for his
residential needs, Poole-Blunden decided to register for
the sale and bid on the unit. Poole-Blunden placed his bid
and won the unit. He entered into a Contract to Sell with
UnionBank. After occupying it, he noticed apparent
problems in its dimensions. He took rough measurements
of the Unit, which indicated that its floor area was just
about 70 square meters, not 95 square meters, as
advertised by UnionBank.
Poole-Blunden wrote to UnionBank, informing it of the
discrepancy. He asked for a rescission of the Contract to
Sell, along with a refund of the amounts he had paid, in
the event that it was conclusively established that the
area of the unit was less than 95 square meters. He filed
a Complaint for Rescission of Contract and Damages
before RTC which dismissed Poole-Blunden's complaint for
lack of merit. On appeal, the Court of Appeals affirmed the
ruling of the Regional Trial Court. It noted that the sale was
made on an "as-is-where-is" basis as indicated in Section
12 of the Contract to Sell. Thus, Poole-Blunden supposedly
waived any errors in the bounds or description of the unit.
Poole-Blunden charges UnionBank with fraud in failing to
disclose to him that the advertised 95 square meters was
inclusive of common areas. With the vitiation of his consent
as to the object of the sale, he asserts that the Contract to
Sell may be voided. He insists that UnionBank is liable for
breach of warranty despite the "as-is-where-is" clause in
the Contract to Sell. Finally, he assails the Court of Appeals'
application of Article 1542 of the Civil Code.
ISSUE: Whether or not respondent Union Bank of the
Philippines committed such a degree of fraud as would
entitle petitioner Joseph Harry Walter Poole-Blunden to the
voiding of the Contract to Sell the condominium unit.
HELD: YES. Banks are required to observe a high degree
of diligence in their affairs. This encompasses their dealings
concerning properties offered as security for loans. A bank
that wrongly advertises the area of a property acquired
through foreclosure because it failed to dutifully ascertain
the property's specifications is grossly negligent as to
practically be in bad faith in offering that property to
prospective buyers. Any sale made on this account is
voidable for causal fraud. In actions to void such sales,
banks cannot hide under the defense that a sale was made
on an as-is-where-is basis. As-is-where-is stipulations can
only encompass physical features that are readily
perceptible by an ordinary person possessing no
specialized skills.
Reliance on Section 12's as-is-where-is stipulation is
misplaced for two (2) reasons. First, a stipulation absolving
a seller of liability for hidden defects can only be invoked by
a seller who has no knowledge of hidden defects.
Respondent here knew that the Unit's area, as reckoned in
accordance with the Condominium Act, was not 95 square
meters. Second, an as-is-where-is stipulation can only
pertain to the readily perceptible physical state of the object
of a sale. It cannot encompass matters that require
specialized scrutiny, as well as features and traits that are
immediately appreciable only by someone with technical
competence.
A seller is generally responsible for warranty against hidden
defects of the thing sold. As stated in Article 1561 of the
New Civil Code. It is clear from the records that respondent
fully knew that the Unit's area, reckoned strictly in
accordance with the Condominium Act, did not total 95
square meters.
Whether it was unaware of the unit's actual interior area; or,
knew of it, but wrongly thought that its area should include
common spaces, respondent's predicament demonstrates
how it failed to exercise utmost diligence in investigating the
Unit offered as security before accepting it. This negligence
is so inexcusable; it is tantamount to bad faith.
Even the least effort on respondent's part could have very
easily confirmed the Unit's true area. Similarly, the most
cursory review of the Condominium Act would have
revealed the proper reckoning of a condominium unit's
area. Respondent could have exerted these most
elementary efforts to protect not only clients and innocent
purchasers but, most basically, itself. Respondent's
failure to do so indicates how it created a situation that
could have led to no other outcome than petitioner being
defrauded.
17. CE Construction Corporation v. Araneta
Center Inc., G.R.No.192725 | August 9, 2017
FACTS: Petitioner CECON was a construction contractor,
which, for more than 25 years, had been doing business
with respondent ACI, the developer of Araneta Center,
Cubao, Quezon City. In June 2002, ACI sent invitations to
different construction companies, including CECON, for
them to bid on a project identified as “Package #4
Structure/Mechanical, Electrical, and Plumbing/Finishes,
a part of its redevelopment plan for Araneta Center
Complex. The project would eventually be the Gateway
Mall. As described by ACI, the Project involved the
design, coordination, construction and completion of all
architectural and structural portions of Part B of the
Works and the construction of the architectural and
structural portions of Part A of the Works known as
Package 4 of the Araneta Center Redevelopment Project.
As part of its invitation to prospective contractors, ACI
furnished bidders with Tender Documents. The Tender
Documents described the project’s contract sum to be a
“lump sum” or “lump sum fixed price” and restricted cost
adjustments. The bidders’ proposals for the project were
submitted on August 30, 2002. These were based on
“design and construct” bidding.
CECON submitted its bid. CECON’s proposal specifically
stated that its bid was valid for only ninety (90) days, or
only until 29 November 2002. This tender proposed a
total of 400 days, or until January 10, 2004, for the
implementation and completion of the project. CECON
offered the lowest tender amount. However, ACI did not
award the project to any bidder. ACI only subsequently
informed CECON that the contract was being awarded to
it. ACI elected to inform CECON verbally and not in
writing. In a phone call, ACI instructed CECON to
proceed with excavation works on the project. ACI and
CECON subsequently agreed to include in the project the
construction of an office tower atop the portion identified
as Part A of the project. Despite these developments, ACI
still failed to formally award the project to CECON. The
parties had yet to execute a formal contract.
By January 2003 and with the project yet to be formally
awarded, the prices of steel products had increased by
5% and of cement by P5.00 per bag. On January 8, 2003,
CECON again wrote ACI notifying it of these increasing
costs and specifically stating that further delays may
affect the contract sum. Still without a formal award,
CECON again wrote to ACI on January 21, 2003
indicating cost and time adjustments to its original proposal.
Specifically, it referred to an 11.52% increase for the cost of
steel products for the project; and costs incurred because of
changes to the project’s structural framing,. The contract
sum, therefore, needed to be increased. CECON also
specifically stated that its tender relating to these adjusted
prices were valid only until January 31, 2003, as further
price changes may be forthcoming. CECON emphasized
that its steel supplier had actually already advised it of a
forthcoming 10% increase in steel prices by the first week
of February 2003. CECON further impressed upon ACI the
need to adjust the 400 days allotted for the completion of
the project. ACI delivered to CECON the initial tranche of its
down payment for the project. By then, prices of steel had
been noted to have increased by 24% from December 2002
prices. This increase was validated by ACI. Subsequently,
ACI informed CECON that it was taking upon itself the
design component of the project, removing from CECON’s
scope of work the task of coming up with designs.
Araneta Center, Inc. (ACI) hereby accepts the C-E
Construction Corporation (CEC) tender submitted to ACI in
the adjusted sum of P1,540,000,000.00, which sum
includes all additionally quoted and accepted items within
the acceptance letter and attachments. This acceptance
letter explicitly recognized that “all design except support to
excavation sites, is now by ACI. It thereby confirmed that
the parties were not bound by a design-and-construct
agreement but by a construct-only agreement. The letter
stated that CECON acknowledges that a binding contract is
now existing. However, consistent with ACI’s admitted
changes, it also expressed ACI’s corresponding
undertaking: “This notwithstanding, formal contract
documents embodying these positions will shortly be
prepared and forwarded to you for execution. Despite ACI’s
undertaking, no formal contract documents were delivered
to CECON or otherwise executed between ACI and
CECON. As it assumed the design aspect of the project,
ACI issued to CECON the construction drawings for the
project. Unlike schematics, these drawings specified “the
kind of work to be done and the kind of material to be used.
CECON laments, however, that “ACI issued the
construction drawings in piece-meal fashion at times of its
own choosing. With many changes to the project and ACI’s
delays in delivering drawings and specifications, CECON
increasingly found itself unable to complete the project.
ISSUE: 1. Whether or not the tender documents may have
characterized the contract sum as fixed and lump-sum, but
the premises for this arrangement have undoubtedly been
repudiated by intervening circumstances.
2. Whether or not the CIAC Arbitral Tribunal correctly found
that ACI had gained no solace in statutory provisions on the
immutability of prices stipulated between a contractor and a
landowner.
HELD: 1. The tender documents may have characterized
the contract sum as fixed and lump-sum, but the premises
for this arrangement have undoubtedly been repudiated by
intervening circumstances. When CECON made its offer of
P1,540,000,000.00, it proceeded from several premises.
Contrary to CECON’s reasonable expectations, ACI failed
to timely act either on CECON’s bid or on those of its
competitors. Negotiations persisted for the better part of
two (2) calendar years, during which the quoted contract
sum had to be revised at least five (5) times. The object
of the contract and CECON’s scope of work widely
varied. There were radical changes like the addition of an
entire office tower to the project and the change in the
project’s structural framing. There was also the undoing
of CECON’s freedom to design, thereby rendering it
entirely dependent on configurations that ACI was to
unilaterally resolve, It turned out that ACI took its time in
delivering construction drawings to CECON, with almost
38% of construction drawings being delivered after the
intended completion date. There were many other less
expansive changes to the project, such as ACI’s
fickleness on which equipment it would acquire by itself.
ACI even failed to immediately deliver the project site to
CECON so that CECON may commence excavation, the
most basic task in setting up a structure’s foundation. ACI
also failed to produce definite instruments articulating its
agreement with CECON, the final contract documents.
With the withering of the premises upon which a lumpsum, fixed price arrangement would have been founded,
such an arrangement must have certainly been negated:
The contract is fixed and lump sum when it was tendered
and contracted as a design and constant package. The
contract scope and character significantly changed when
the design was taken over by the Respondent. At the time
of the negotiation and agreement of the amount of
Php1.54 billion, there were no final plans for the change
to structural steel, and all the mechanical, electrical and
plumbing drawings were all schematics. It is apparent to
the Tribunal that the quantity and materials at the time of
the P1.54B agreement are significantly different from the
original plans to the finally implemented plans. The price
increases in the steel products and cement were
established to have already increased by 11.52% and by
P5.00 per bag respectively by January 21, 2003. The
Tribunal finds agreement with the Claimant that it is fairer
to award the price increase. It should also be mentioned
that Respondent had changed the scope and character of
the agreement. First, there were major changes in the
plans and specifications. Originally, the contract was for
design and construct. The design was deleted from the
scope of the Claimant. It was changed to a straight
construction contract. As a straight construction contract,
there were no final plans to speak of at the time of the
instructions to change. Then there was a verbal change
to structural steel frame. No plans were available upon
this instruction to change. Next, the [mechanical,
electrical and plumbing] plans were all schematics. It is
therefore expected that changes of plans are forthcoming,
and that changes in costs would follow. It has been
established that the original tender, request for proposal
and award is for a design and construct contract. The
contract documents are therefore associated for said
system of construction. When Respondent decided to
change and take over the design, such as the change
from concrete to structural steel framing, “take-out”
equipment from the contract and modify the [mechanical,
electrical and plumbing works, the original scope of work
had been drastically changed. To tie down the Claimant
to the tmit prices for the proposal for a different scope of
work would be grossly unfair. This Tribunal will hold that
unit price adjustment could be allowed but only for change
orders that were not in the original scope of work, such as
the change order from concrete to structural framing, the
[mechanical, electrical and plumbing w]orks, [schematic
drawings to construction drawings] and the Miscellaneous
Change Order Works.
2. Contrary to ACI’s oft-repeated argument, the CIAC
Arbitral Tribunal correctly found that ACI had gained no
solace in statutory provisions on the immutability of prices
stipulated between a contractor and a landowner. Article
1724 of the Civil Code provides that the contractor who
undertakes to build a structure or any other work for a
stipulated price, in conformity with plans and specifications
agreed upon with the land-owner, can neither withdraw
from the contract nor demand an increase in the price on
account of the higher cost of labor or materials, save when
there has been a change in the plans and specifications,
provided:
(1) Such change has been authorized by the proprietor in
writing; and
(2) The additional price to be paid to the contractor has
been determined in writing by both parties.
Article 1724 demands two (2) requisites in order that a price
may become immutable: first, there must be an actual,
stipulated price; and second, plans and specifications must
have definitely been agreed upon. Neither requisite avails in
this case. Yet again, ACI is begging the question. It is
precisely the crux of the controversy that no price has been
set. Article 1724 does not work to entrench a disputed price
and make it sacrosanct. Moreover, it was ACI which thn1st
itself upon a situation where no plans and specifications
were immediately agreed upon and from which no deviation
could be made. It was ACI, not CECON, which made,
revised, and deviated from designs and specifications.
18. Abella v Cabanero, G.R.No.206647 I August
9,2017 I LEONEN, J.
FACTS: Petitioner Richelle alleged that while she was still a
minor in the years 2000 to 2002, she was repeatedly
sexually abused by respondent Cabañero inside his rest
house at Barangay Masayo, Tobias Fornier, Antique. 9 As a
result, she allegedly gave birth to a child on August 21,
2002. Richelle added that on February 27, 2002, she
initiated a criminal case for rape against Cabañero, This,
however, was dismissed. Later, she initiated another
criminal case, this time for child abuse under Republic Act
No. 7610 or the Special Protection of Children Against
Abuse, Exploitation and Discrimination Act. This, too, was
dismissed. Richelle prayed for the child's monthly allowance
in the amount of P3,000.00. RTC dismissed Richelle’s
Complaint without prejudice, on account of her failure to
implead her minor child, Jhorylle, as plaintiff. CA sustained.
It ruled that filiation proceedings should have first been
separately instituted to ascertain the minor child’s paternity
and that without these proceedings having first resolved in
favour of the child’s paternity claim, petitioner’s action for
support could not prosper.
ISSUE: Whether CA erred in ruling that filiation
proceedings should have first been separately instituted
to ascertain the minor child’s paternity and that without
these proceedings having first resolved in favour of the
child’s paternity claim, petitioner’s action for support could
not prosper.
HELD: While it is true that the grant of support was
contingent on ascertaining paternal relations between
respondent and petitioner's daughter, Jhorylle, it was
unnecessary for petitioner's action for support to have
been dismissed and terminated by the Court of Appeals
in the manner that it did. Instead of dismissing the case,
the Court of Appeals should have remanded the case to
the Regional Trial Court. There, petitioner and her
daughter should have been enabled to present evidence
to establish their cause of action — inclusive of their
underlying claim of paternal relations — against
respondent. Indeed, an integrated determination of
filiation is "entirely appropriate" to the action for support
filed by petitioner Richelle for her child. An action for
support may very well resolve that ineluctable issue of
paternity if it involves the same parties, is brought before
a court with the proper jurisdiction, prays to impel
recognition of paternal relations, and invokes judicial
intervention to do so. This does not run afoul of any rule.
To the contrary, and consistent with Briz v. Briz, this is in
keeping with the rules on proper joinder of causes of
action. This also serves the interest of judicial economy
— avoiding multiplicity of suits and cushioning litigants
from the vexation and costs of a protracted pleading of
their cause. Thus, it was improper to rule here, as the
Court of Appeals did, that it was impossible to entertain
petitioner's child's plea for support without her and
petitioner first surmounting the encumbrance of an
entirely different judicial proceeding. Without meaning to
lend credence to the minutiae of petitioner's claims, it is
quite apparent that the rigors of judicial proceedings have
been taxing enough for a mother and her daughter whose
claim for support amounts to a modest P3,000.00 every
month. When petitioner initiated her action, her daughter
was a toddler; she is, by now, well into her adolescence.
The primordial interest of justice and the basic dictum that
procedural rules are to be "liberally construed in order to
promote their objective of securing a just, speedy and
inexpensive
disposition
of
every
action
and
proceeding"impel us to grant the present Petition.
19. Orbe v. Filinvest, G.R. No.
September 6, 2017 I LEONEN, J.
208185
|
FACTS: Orbe purchased land with Filinvest with a total
contract price of P2,566,795, payable from August 04,
2001 to April 08, 2009 on a monthly basis. From June 17,
2001 to July 14, 2004, Orbe paid a total of P608,648.20.
Orbe was unable to make further payments allegedly on
account of financial difficulties. As a result, Filinvest sent
a notice of cancellation rescinding the contract. Orbe filed
a complaint for refund with the HLURB. HLURB ruled in
favour of Orbe. Filinvest appealed to the Office of the
President, but the OP affirmed the decision of the
HLURB. Filinvest appealed to the CA, and the CA
Reversed the decision of the Office of the President.
Hence, this case with the SC.
“SUBSCRIBED AND SWORN to before me this OCT 06
2004, affiant exhibiting to me Community Tax Certificate
No. 05465460 issued on February 09, 2004 at Manila.”
Orbe emphasized that she had made payments "beginning
June, 2001 up to October, 2004." So he should be entitled a
50% cash surrender value under Section 3 of the Maceda
law [Please see detailed provision Below], since he has
paid his installments “for more than 2 years” already.
This is not, however, the valid notarial act contemplated
by the Maceda Law. In ordinary circumstances,
"[n]otarization of a private document converts the
document into a public one making it admissible in court
without further proof of its authenticity." To enable this
conversion, Rule 132, Section 19 of the Revised Rules of
Evidence specifically requires that a document be
"acknowledged before a notary public." Respondent's
notice of cancellation here was executed by an individual
identified only as belonging to respondent's Collection
Department. It was also accompanied not by an
acknowledgement, but by a jurat. A jurat is a distinct
notarial act, which makes no averment concerning the
authority of a representative.
CA on the other hand ruled that The Court of Appeals
reasoned that the phrase "two years of installments" under
Section 3 means that total payments made should at least
be equivalent to two years' worth of installments.
Considering that Orbe's total payment of P608,648.20 was
short of the required two (2) years' worth of installments,
she could not avail of the benefits of Section 3. What
applied instead was Section 4.
ISSUE: W/N Orbe’s right to a refund was based from
Section 3 of the Maceda Law
HELD: NO, it was under Section 4, BUT there was an
INVALID NOTARIAL NOTICE, hence there was no
cancellation of the contract.
When Section 3 speaks of paying "at least two years of
installments," it refers to the equivalent of the totality of
payments diligently or consistently made throughout a
period of two (2) years. Accordingly, where installments are
to be paid on a monthly basis, paying "at least two years of
installments" pertains to the aggregate value of 24 monthly
installments. Both the law and the contracts thus prevent
any buyer who has not been diligent in paying his monthly
installments tom unduly claiming the rights provided in
Section 3 of R.A. 6552. The phrase "at least two years of
installments" refers to value and time. It refers to the
proportionate value of the installments made, as well as
payments having been made for at least two (2) years.
Based from the payments made by Orbe, It shall appear
that petitioner has only paid 21.786 months' worth of
installments. This falls short of the requisite two (2) years' or
24 months' worth of installments.
Failing to satisfy Section 3's threshold, petitioner's case is
governed by Section 4 of the Maceda Law. For
cancellations under Section 4 to be valid, three (3)
requisites must concur:
(1) The seller shall give the buyer a 60-day grace period to
be reckoned from the date the installment became due;
(2)
The seller must give the buyer a notice of
cancellation/demand for rescission by notarial act if the
buyer fails to pay the installments due at the expiration of
the said grace period;
(3) The seller may actually cancel the contract only after
thirty (30) days from the buyer's receipt of the said notice of
cancellation/demand for rescission by notarial act.
The notice of cancellation made
accompanied by a jurat as follows:
by Filinvest
was
Even if Filinvests’ notarization by jurat and not by
acknowledgement were to be condoned, respondent's
jurat was not even a valid jurat executed according to the
requirements of the 2004 Rules on Notarial Practice. As
Rule II, Section 6 of these Rules clearly states, the
person signing the document must be "personally known
to the notary public or identified by the notary public
through competent evidence of identity." Rule II, Section
12 was eventually amended by A.M. No. 02-8-13-SC. As
amended, it specifically rebukes the validity of a
community tax certificate as a competent evidence of
identity. The proof of identity used by the signatory to
respondent's notice of cancellation was a community tax
certificate, which no longer satisfies this requirement.
Filinvests’ failure to diligently satisfy the imperatives of the
2004 Rules on Notarial Practice constrains this Court to
consider its notice as an invalid notarial act.
20. Dee Hwa Llong Foundation Medical Center v.
Asiamed
Supplies
and
Equipment
Corporation, G.R. No. 205638 I August 23,
2017 I J.Leonen
FACTS: Petitioner Dee Hwa Liong Foundation Medical
Center and respondent Asiamed Supplies and Equipment
Corporation entered into a Contract of Sale. This Contract
of Sale stated that DHLFMC agreed to purchase from
Asiamed a machine. The machine was delivered. A Sales
Invoice and two (2) Delivery Invoices were signed by
petitioner Anthony Dee and DHLFMC Vice President for
Administration, Mr. Alejandro Mateo. During the appeal,
Petitioners argue that the Court of Appeals and the
Regional Trial Court erred in finding them liable for
interest, penalty charges, and attorney's fees based on
Delivery Invoices. Petitioners claim that these are in the
nature of contracts of adhesion. The delivery invoices
were unilaterally prepared by respondent, without
petitioners' conformity. These stipulations attempted to
modify the Contract of Sale. However, petitioners insist
that the delivery invoices cannot be deemed to have
modified the Contract of Sale, considering that they
lacked the informed consent of petitioner DHLFMC. In
any case, the penalty stipulated in the delivery invoices was
unconscionably high and should be reduced.
ISSUE: Whether or not the interest rate and attorney's fees
stipulated in the delivery invoices are binding on the parties.
HELD: NO. A contract need not be contained in a single
writing. It may be collected from several different writings
which do not conflict with each other and which, when
connected, show the parties, subject matter, terms and
consideration, as in contracts entered into by
correspondence. A contract may be encompassed in
several instruments even though every instrument is not
signed by the parties, since it is sufficient if the unsigned
instruments are clearly identified or referred to and made
part of the signed instrument or instruments. Similarly, a
written agreement of which there are two copies, one
signed by each of the parties, is binding on both to the
same extent as though there had been only one copy of the
agreement and both had signed it.
Petitioners claim that the delivery invoice receipts are
contracts of adhesion and that they were unwittingly signed,
without informed consent. However, it is not disputed that
the delivery invoices provided for the interest and attorney's
fees or that petitioner Anthony and Mateo signed these
invoices. Thus, the Regional Trial Court and the Court of
Appeals ruled that the parties mutually agreed to the
interest and attorney's fees as a factual matter. Although
petitioners allege that these invoices lacked petitioner
DHLFMC's informed consent, there is no attempt to prove
this. It is also not proven that the stipulations were
somehow hidden or obscured such that DHLFMC could not
have read them, making it impossible for DHLFMC to agree
to the terms.
2016
1. Philippine National Bank v. Venaclo C. Reyes,
Jr., G.R. No. 212483 I October 5, 2016
FACTS: Three parcels of land owned by spouses Lilia and
Venancio Reyes were mortgaged to Philippine National
Bank to secure a loan. When the Reyes Spouses failed to
pay the loan obligations, Philippine National Bank
foreclosed the mortgaged real properties.
Venancio assailed the validity of the real estate mortgage
and claimed that his wife undertook the loan and the
mortgage without his consent and his signature was
falsified on the promissory notes and the mortgage. He
averred that since the three (3) lots involved were conjugal
properties, the mortgage constituted over them was void.
The Trial Court ordered the annulment of the real estate
mortgage and directed Lilia to reimburse PNB. Aggrieved,
Philippine National Bank appealed to the Court of Appeals.
It was denied. A Motion for Reconsideration was also
denied. In this petition, the PNB insists that the Court of
Appeals erred in affirming the ruling of the trial court. It
argues that the real estate mortgage is valid, that the
conjugal partnership should be held liable for the loan, and
that respondent Venancio C. Reyes, Jr.’s cause of action
should be deemed barred by laches.
ISSUES: 1. Whether the Court of Appeals erred in
declaring the real estate mortgage void;
2. Whether the conjugal partnership can be held liable for
the loan contracted unilaterally by Lilia C. Reyes
3. Whether respondent is guilty of laches and his claim is
now barred by estoppel.
HELD: 1. No, the Court of Appeals did not err in its ruling. It
committed no reversible error in affirming the ruling of the
Regional Trial Court that the real estate mortgage over the
conjugal properties is void for want of consent from
respondent. The Family Code is clear: the written consent
of the spouse who did not encumber the property is
necessary before any disposition or encumbrance of a
conjugal property can be valid.
2. Yes, the conjugal partnership can be held liable. The
lower courts may have declared the mortgage void, but the
principal obligation is not affected. It remains valid. The
Regional Trial Court found that the loan was used as
additional working capital for respondent’s printing
business. As held in Ayala Investment, since the loaned
money is used in the husband’s business, there is a
presumption that it redounded to the benefit of the family;
hence, the conjugal partnership may be held liable for the
loan amount.
3. No, the respondent is not guilty of laches. Laches does
not apply where the delay is within the period prescribed by
law.
As found by the trial court, records show that upon learning
about the mortgage, respondent immediately informed the
bank about his forged signature. He filed the Complaint for
Annulment of Certificate of Sale and Real Estate
Mortgage against petitioner within the prescribed period
to redeem a mortgaged property; and since respondent
filed the Complaint for Annulment of Certificate of Sale
and Real Estate Mortgage within the period of redemption
prescribed by law, petitioner fails to convince that
respondent slept on his right.
2. Bases Conversion Development Authority
(BCDA) v. DMCI Project Developers,Inc.
(DMCl-PDI), G.R. No. 173137 | January 11 ,
2016 I Leonen, J.
FACTS: On June 10, 1995, Bases Conversion
Development Authority (BCDA) entered into a Joint
Venture Agreement (NA) with the Philippine National
Railways and other foreign companies. The JVA aims to
construct a railroad system from Manila to Clark with
other possible extensions. The JVA contained, among
others, an arbitration clause. BCDA organized and
incorporated Northrail and was registered with the
Securities and Exchange Commission. BCDA invited
investors in the railroad project's financing and
implementation. The NA was later on amended to include
D.M. Consunji, Inc. (DMCI) and/or its nominee as Party.
On February 8, 1996 BCDA and the other parties
including DMCI entered into a MOA wherein the parties
agreed that the initial capital stock of 600 million be
infused to Northrail and out of that 600 million, DMCI's
share shall be 300 million in order to increase Northrairs
capital stock. DMCI deposited 300 million into Northrail's
account with Land Bank of the Philippines. Later,
Northrail withdrew from the SEC its application for
increased authorized capital stock which prompted DMCI
to demand the return of the 300M deposit. BCDA and
Northrail refused to return the deposit.
The Office of the Government Corporate Counsel issued
Opinion No. 116 which states that, "since there is no
increase in capital stock was implemented, it is but proper
to return the investment of both FBDC and DMCI." DMCI
requested for the refund but BCDA refused. DMCI filed
before the RTC a Petition to Compel Arbitration citing the
arbitration clause of the JVA. BCDA fled a Motion to
Dismiss contending that DMCI could not compel
arbitration since the DMCI was not a party to the original
JVA while Northrail fled a separate Motion to Dismiss on
the ground that the court did not have jurisdiction over it
and that DMCI had no cause for arbitration against it.
RTC dismissed BCDA and Northroad's motion to dismiss
and granted the Petition to compel Arbitration. RTC also
denied the MR filed by BCDA and Northroad. Hence,
BCDA filed a Petition under Rule 45 to SC. BCDA argued
that only parties to an arbitration agreement can be
bound by that agreement while DMCI contented that
BCDA breached their agreement.
ISSUE: Whether or not DMCI may compel BCDA and
Northrail to submit to Arbitration.
HELD: Yes. Arbitration is a mode of settling disputes
between parties. Like any alternative dispute resolution
processes, it is a product of the meeting of minds of parties
submitting a pre-defined set of disputes. They agree among
themselves to a process of dispute resolution that avoids
extended litigation. Our policy in favor of party autonomy in
resolving disputes has been reflected in our laws as early
as 1949 when our Civil Code was approved. Republic Act
No. 876 later explicitly recognized the validity and
enforceability of parties' decision to submit disputes and
related issues to arbitration. Arbitration agreement are
liberally construed in favor of proceeding to arbitration. We
adopt the interpretation that would render effective an
arbitration clause if the terms of the agreement allow for
such interpretation.
There is no rule that a contract should be contained in a
single document. A whole contract may be contained in
several documents that are consistent with one other.
Hence, the arbitration clause in the Joint Venture
Agreement should not be interpreted as applicable only to
the Joint Venture Agreement's original parties. The
succeeding agreements are deemed part of or a
continuation of the Joint Venture Agreement. The arbitration
clause should extend to all the agreements and its parties
since it is still consistent with all the terms and conditions of
the amendments and supplements. Therefore, DMCI may
compel BCDA and Northrail to submit to Arbitration.
3. Heirs of Delfin v. National Housing Authority,
G.R. No. 193618, November 28, 2016
FACTS: The Regional Trial Court's May 20, 2002 Decision
awarded compensation to Leopoldo and Soledad Delfin
(Delfin Spouses) for an Iligan City property subsequently
occupied by respondent National Housing Authority. he
assailed Court of Appeals Decision reversed the Regional
Trial Court's May 20, 2002 Decision and dismissed the
Delfin Spouses' complaint seeking compensation. The
assailed Court of Appeals Resolution denied their Motion
for Reconsideration. In a Complaint for "Payment of
Parcel(s) of Land and Improvements and Damages"5 the
Delfin Spouses claimed that they were the owners of a
28,800 square meter parcel of land in Townsite, Suarez,
Iligan City (the "Iligan Property").6 They allegedly bought
the property in 1951 from Felix Natingo and Carlos
Carbonay, who, allegedly, had been in actual possession of
the property since time immemorial.7 The Delfin Spouses
had been declaring the Iligan Property in their names for tax
purposes since 1952,8 and had been planting it with
mangoes, coconuts, corn, seasonal crops, and vegetables.
They farther alleged that, sometime in 1982, respondent
National Housing Authority forcibly took possession of a
10,798 square meter portion of the property.10 Despite
their repeated demands for compensation, the National
Housing Authority failed to pay the value of the property.11
The Delfin Spouses thus, filed their Complaint. On May 20,
2002, the Regional Trial Court rendered a Decision in favor
of the Delfin Spouses.
ISSUE: Whether petitioners are entitled to just
compensation for the Iligan City property occupied by
respondent National Housing Authority.
HELD: Petitioners are erroneously claiming title based on
acquisitive prescription under Section 14(2) of
Presidential Decree No. 1529. For acquisitive prescription
to set in pursuant to Section 14(2) of Presidential Decree
No. 1529, two (2) requirements must be satisfied: first,
the property is established to be private in character; and
second the applicable prescriptive period under existing
laws had passed. Contrary to petitioners' theory then, for
prescription to be viable, the publicly-owned land must be
patrimonial or private in character at the onset.
Possession for thirty (30) years does not convert it into
patrimonial property. For land of the public domain to be
converted into patrimonial property, there must be an
express declaration - "in the form of a law duly enacted by
Congress or a Presidential Proclamation in cases where
the President is duly authorized by law" - that "the public
dominion property is no longer intended for public service
or the development of the national wealth or that the
property has been converted into patrimonial." Attached
to the present Petition was a copy of a May 18, 1988
supplemental letter to the Director of the Land
Management Bureau. This referred to an executive order,
which stated that petitioners' property was no longer
needed for any public or quasi-public purposes:
That it is very clear in the 4th Indorsement of the
Executive Secretary dated April 24, 1954 the portion
thereof that will not be needed for any public or quasipublic purposes, be disposed in favor of the actual
occupants under the administration of the Bureau of
Lands (copy of the Executive Order is herewith attached
for ready reference) However, a mere indorsement of the
executive secretary is not the law or presidential
proclamation required for converting land of the public
domain into patrimonial property and rendering it
susceptible to prescription. There then was no viable
declaration rendering the Iligan property to have been
patrimonial property at the onset. Accordingly, regardless
of the length of petitioners' possession, no title could vest
on them by way of prescription. While petitioners may not
claim title by prescription, they may, nevertheless, claim
title pursuant to Section 48 (b) of Commonwealth Act No.
141 (the Public Land Act). Section 48 enabled the
confirmation of claims and issuance of titles in favor of
citizens occupying or claiming to own lands of the public
domain or an interest therein. Section 48 (b) specifically
pertained to those who "have been in open, continuous,
exclusive, and notorious possession and, occupation of
agricultural lands of the public domain, under a bona fide
claim of acquisition or ownership, since June 12,
1945"Section 48(b) of the Public Land Act therefore
requires that two (2) requisites be satisfied before claims
of title to public domain lands may be confirmed: first, that
the land subject of the claim is agricultural land; and
second, open, continuous, notorious, and exclusive
possession of the land since June 12, 1945. That the
Iligan property was alienable and disposable, agricultural
land, has been admitted. What is claimed instead is that
petitioners' possession is debunked by how the Iligan
Property was supposedly part of a military reservation area
which was subsequently reserved for Iligan City's slum
improvement and resettlement program, and the relocation
of families who were dislocated by the National Steel
Corporation's five-year expansion program.
petition. It found that Bautista was grossly negligent in
driving the vehicle. It awarded damages in favor of
Abejar. MR filed by Caravan was denied. CA affirmed
with modification of RTC's decision. Caravan’s MR was
denied. Hence this petition for review on certiorari on
CA’s decision.
Indeed, by virtue of Proclamation No. 2143 (erroneously
referred to by respondent as Proclamation No. 2151)
certain parcels of land in Barrio Suarez, Iligan City were
reserved for slum-improvement and resettlement program
purposes. The proclamation characterized the covered area
as "disposable parcel of public land" Clearly then,
petitioners acquired title over the Iligan Property pursuant to
Section 48(b) of the Public Land Act.
ISSUE: 1. WON Abejar is a real party-in-interest who may
bring an action for damages against Caravan on account
of Reyes’ death – YES
2. WON Caravan should be liable as an employer
pursuant to Art. 2180 CC – YES
First, there is no issue that the Iligan Property had already
been declared to be alienable and disposable land.
Respondent has admitted this and Deputy Public Land
Inspector Pio Lucero, Jr.'s letters to the Director of Land
attest to this.
Second, although the Delfin Spouses' testimonial evidence
and tax declarations showed that their possession went
only as far back as 1952, Deputy Public Land Inspector Pio
Lucero, Jr.'s letters to the Director of Land nevertheless
attest to a previous finding that the property had already
been occupied as early as June 1945.
Having shown that the requisites of Section 48(b) of the
Public Land Act have been satisfied and having established
their rights to the Iligan Property, it follows that petitioners
must be compensated for its taking.
4. Caravan Travel and Tours International, Inc. v.
Abejar, G.R. No. 170631 I February 10, 2016
FACTS: On 13 July 2000, Reyes was walking along the
west-bound lane of Sampaguita St., United Paranaque
Subd. IV, Paranaque City. On the opposite side, an L-300
van was traveling along the east-bound lane. To avoid an
incoming vehicle, the van swerved to its left and hit Reyes.
Witness Espinosa went to the aid of Reyes and loaded her
in the back of the van. Espinosa told Bautista, the driver, to
bring her to the hospital. But the driver left the van parked
inside a nearby subdivision, with Reyes inside. Fortunately,
an unidentified civilian helped and drove Reyes to the
hospital.
The registered owner of the van is Caravan, a corporation
engaged in organizing travels and tours. Bautista was its
employee who was assigned as its service driver. Caravan
shouldered the hospital expenses of Reyes, but she still
died two days after the accident. Abejar, Reyes’s paternal
aunt and the person who raised her since she was 9 years
old, filed a complaint for damages against Bautista and
Caravan in RTC Paranaque. Abejar alleged that Bautista
was an employee of Caravan and that Caravan is the
registered owner of the van.
Summons could not be served on Bautista, so Abejar
moved to drop Bautista as a defendant. RTC granted the
HELD: 1. Abejar is a real party-in-interest.
Abejar’s right to proceed against Caravan is based on two
grounds:
(1) Abejar suffered actual personal loss.
(2) Abejar is capacitated to do what Reyes’ actual
parents would have been capacitated to do.
Although Reyes was already 18 years old – age of
majority and emancipation – when she died, and parental
authority is terminated upon emancipation, Abejar
continued to support and care. Their relationship
remained the same. The anguish and damage caused to
Abejar by Reyes’ death was no different because of
Reyes’ emancipation. The termination of Abejar’s
parental authority is not an insurmountable legal bar that
precludes the filing of her Complaint. Art. 1902 of Old CC
or Art. 2176 NCC is broad enough to accommodate even
plaintiffs who are not relatives of the deceased.
2. YES. Caravan is liable as employer. Complaint is
anchored on an employer’s liability for quasi-delict as
provided in Art. 2180 in relation to Art. 2176 CC. It was
not fatal to Abejar’s cause that she did not adduce proof
that Bautista acted within the scope of his authority. It
was sufficient that Caravan was proven as the registered
owner of the van that hit Reyes.
Two rules must be considered:
Art. 2180’s specification that “Employers shall be
liable for the damages caused by their
employees…acting within the scope of their
assigned tasks.”
The operation of the registered-owner rule that
registered owners are liable for death or injuries
caused by the operation of their vehicles
(1)
An
employer-employee
relationship between the driver and
owner
(2)
That the driver acted within the
scope of his/her assigned tasks.
Applying the registered owner rule only requires
plaintiff to prove that defendant-employer is
registered-owner of the vehicle. Jurisprudence
Registered-owner rule: Thus, it is imperative to apply
the
the
on
the
rule in a manner that harmonizes it with Arts. 2176 and
2180, CC. Rules must be construed in a manner that will
harmonize them with other rules so as to form a uniform
and consistent system of jurisprudence—Art. 2180 should
defer to the registered-owner rule, but it was never stated
that Art. 2180 should be completely abandoned.
Appropriate approach where both apply:
(1) Plaintiff must establish that the employer is the
registered-owner of the vehicle
(2) There then arises a disputable presumption that
the requirements of Art. 2180 have been proven
and as a consequence, the burden of proof shifts to
the defendant to show that no liability under Art.
2180 has arisen. This disputable presumption,
insofar as the registered-owner in relation to the
actual driver is concerned recognizes that between
the owner and the victim, it is the former that should
carry the costs of moving forward with the
evidence.
5. Republic v. Sogod Development Corporation,
G.R. No.175760 I February 17, 2016
FACTS: Sogod filed an application for registration and
confirmation of land title of a parcel of land situated in
Municipality of Sogod, Province of Cebu. The Office of the
Solicitor General moved to dismiss the Petition on the
ground that Sogod was disqualified from applying for
original registration of title to alienable lands pursuant to
Article XII, Section 3 of the 1987 Constitution. Sogod
presented testimonial and documentary evidence that
predecessors-in-interest had been in possession of lot
since 1945, that they had ownership of the land on 1999
and subsequent to when the property was declared
alienable and disposable in 1986. The RTC granted the
land registration, which the CA affirmed. Hence, the OSG’s
petition.
ISSUE: W/N the Sogod Development Corporation had
sufficiently established its possession in the concept of
owner of the property since 1945, in order to acquire a
judicial confirmation of title, as contemplated by the Public
land Act. YES.
W/N the character of the property subject of the application
as alienable and disposable agricultural land of the public
domain determines its eligibility for land registration, not the
ownership or title over it. YES.
HELD: Petitioner's claim that "the alienable nature of the
land is essential to the bona fide claim of ownership and
possession since June 12, 1945" is likewise untenable. The
Public Land Act states that the land to be registered only
needs to be alienable and disposable at the time of the
application. The ownership and title of the land is not a
determinant for which.
As Sogod had proved its and its predecessors-in-interest's
continuous possession of the land tracing back to June 12,
1945 or earlier, and that the property was declared
alienable and disposable in 1986, its registration on 1999
is deemed valid.
The agricultural land subject of the application needs only
to be classified as alienable and disposable as of the time
of the application, provided the applicant’s possession
and occupation of the land dates back to June 12, 1945,
or earlier. The fixed date of June 12, 1945 qualifies
possession and occupation, not land classification, as
alienable and disposable. The agricultural land subject of
the application needs only to be classified as alienable
and disposable at time of the application, provided the
applicant’s possession and occupation of the land dates
back to June 12, 1945, or earlier.
Alienable public land held by a possessor, either
personally or through his predecessors-in-interest,
openly, continuously and exclusively during the
prescribed statutory period is converted to private
property by the mere lapse or completion of the period.
6. Philippine Economic Zone Authority v. Pilhino
Sales Corporation, GR No. 185765 I
September 28, 2016 I Leonen J.
FACTS: On October 4, 1997, the PEZA published an
invitation to bid for its acquisition of two brand new fire
truck units. Three companies participated in the bidding:
Starbilt Enterprise, Inc., Shurway Industries, Inc., and
Pilhino.
Pilhino secured the contract for the acquisition of the fire
trucks. The contract awarded to Pilhino stipulated that
Pilhino was to deliver to the PEZA two FF3HP brand fire
trucks within 45 days of receipt of a purchase order from
the PEZA. A further stipulation stated that “in case of
failure to deliver the . . . good on the date specified . . . ,
the Supplier agrees to pay penalty at the rate of 1/10 of
1% of the total contract price for each day commencing
on the first day after the date stipulated above.”
Pilhino failed to deliver the trucks as it had committed.
As Pilhino still failed to comply, despite repeated
demands, the PEZA filed before the RTC a Complaint for
rescission of contract and damages.
The RTC ruled for the PEZA. Subsequently, the CA partly
granted Pilhino’s appeal by deleting the forfeiture of
Pilhino’s performance bond and pegging the liquidated
damages due from it to the PEZA in the amount of
P1,400,000.00.
The PEZA moved for reconsideration, but it was denied
by the CA.
Hence, this Petition for Review on Certiorari.
Petitioner asks for the reinstatement of the RTC’s award
asserting that it already suffered damage when
respondent Pilhino Sales Corporation failed to deliver the
trucks on time; that the contractually stipulated penalty of
1/10 of 1% of the contract price for every day of delay
was neither unreasonable nor contrary to law, morals, or
public order; that the stipulation on liquidated damages was
freely entered into by it and respondent; and that the CA’s
computation had no basis in fact and law.
On the other hand, respondent suggests that with the
rescission of its contract with petitioner must have come the
negation of the contractual stipulation on liquidated
damages and the obliteration of its liability for such
liquidated damages.
ISSUE: Whether or not an award based on contractually
stipulated liquidated damages is proper notwithstanding
the rescission of the same contract stipulating it.
HELD: Although the provisions of a contract are legally null
and void, the stipulated method of computing liquidated
damages may be accepted as evidence of the intent of the
parties.
The provisions, therefore, can be basis for finding a factual
anchor for liquidated damages. The liable party may
nevertheless present better evidence to establish a more
accurate basis for awarding damages. In this case, the
respondent failed to do so.
Respondent’s intimation that with the rescission of a
contract necessarily and inexorably follows the obliteration
of liability for what the same contracts stipulates as
liquidated damages is entirely misplaced.
A contract of sale, such as that entered into by petitioner
and respondent, entails reciprocal obligations.
As explained in Spouses Velarde v. CA,
“[i]n a contract of sale, the seller obligates itself to transfer
the ownership of and deliver a determinate thing, and the
buyer to pay therefor a price certain in money or its
equivalent.”
Rescission on account of breach of reciprocal obligations is
provided for in Article 1191 of the Civil Code:
Article 1191. The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and
the rescission of the obligation, with the payment of
damages in either case.
He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there
be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of
third persons who have acquired the thing, in accordance
with articles 1385 and 1388 and the Mortgage Law.
Jurisprudence has long settled that the restoration of the
contracting parties to their original state is the very essence
of rescission.
In Spouses Velarde:
Considering that the rescission of the contract is based
on Article 1191 of the Civil Code, mutual restitution is
required to bring back the parties to their original situation
prior to the inception of the contract.
Accordingly, the initial payment of P800,000 and the
corresponding mortgage payments . . . should be
returned by private respondents, lest the latter unjustly
enrich themselves at the expense of the former.
Rescission creates the obligation to return the object of
the contract. It can be carried out only when the one who
demands rescission can return whatever he may be
obliged to restore.
To rescind is to declare a contract void at its inception
and to put an end to it as though it never was. It is not
merely to terminate it and release the parties from further
obligations to each other, but to abrogate it from the
beginning and restore the parties to their relative
positions as if no contract has been made.
Contrary to respondent’s assertion, mutual restitution
under Article 1191 is, however, no license for the
negation of contractually stipulated liquidated damages.
Article 1191 itself clearly states that the options of
rescission and specific performance come with “with the
payment of damages in either case.” The very same
breach or delay in performance that triggers rescission is
what makes damages due.
When the contracting parties, by their own free acts of
will, agreed on what these damages ought to be, they
established the law between themselves. Their
contemplation of the consequences proper in the event of
a breach has been articulated. When courts are,
thereafter, confronted with the need to award damages in
tandem with rescission, courts must not lose sight of how
the parties have explicitly stated, in their own language,
these consequences. To uphold both Article 1191 of the
Civil Code and the parties’ will, contractually stipulated
liquidated damages must, as a rule, be maintained.
7. PABLO M. PADILLA, JR. AND MARIA LUISA
P. PADILLA v. LEOPOLDO MALICSI, LITO
CASINO, AND AGRIFINO GUANES, G.R. No.
201354 | September 21, 2016
FACTS: Spouses Padilla bought a parcel of land in
Magsaysay Norte, Cabanatuan City in 1984. Sometime in
1998, Spouses Padilla discovered that Leopoldo Malicsi,
Lito Casino, and Agrifino Guanes (Malicsi, et al.)
constructed houses on their lot. Spouses Padilla made
repeated verbal and written demands for Malicsi, et al. to
vacate the premises and pay monthly rentals, but Malicsi,
et al. refused to heed Spouses Padilla's demands.
On August 6, 2007, Spouses Padilla filed a complaint for
recovery of possession against Malicsi, et al., along with
three (3) others: Larry Marcelo, Diosdado dela Cruz, and
Rolando Pascua.
Malicsi, et al. alleged that they believed in all honesty and
good faith that the lot belonged to Toribia Vda. De
Mossessgeld (De Mossessgeld). They claimed that they
possessed the land and built their houses on the lot only
after receiving De Mossessgeld's permission.
ISSUE: Whether the Certification from the Office of the
Civil Registrar that it has no record of the marriage
license issued to petitioner Norberto A. Vitangcol and his
first wife Gina proves the nullity of petitioner’s first
marriage and exculpates him from the bigamy charge.
ISSUE: WON respondents are builders in good faith.
HELD: No. Petition for Certiorari is DENIED.
HELD: Undoubtedly, [Malicsi, et al.] cannot claim that they
were builders in good faith because they relied on the
promise of De Mossessgeld who will sell the same to them
but such allegations are contrary to the actual
circumstances obtaining in this case.
The Certification from the Office of the Civil Registrar that
it has no record of the marriage license is suspect.
Assuming that it is true, it does not categorically prove
that there was no marriage license. Furthermore,
marriages are not dissolved through mere certifications
by the civil registrar. For more than seven (7) years
before his second marriage, petitioner did nothing to have
his alleged spurious first marriage declared a nullity. Even
when this case was pending, he did not present any
decision from any trial court nullifying his first marriage.
As builders in bad faith, respondents have no right to
recover their expenses over the improvements they have
introduced to petitioners' lot under Article 449 of the Civil
Code, which provides: Article 449. He who builds, plants or
sows in bad faith on the land of another, loses what is built,
planted or sown without right to indemnity. Under Article
452 of the Civil Code, a builder in bad faith is entitled to
recoup the necessary expenses incurred for the
preservation of the land. However, respondents neither
alleged nor presented evidence to show that they
introduced improvements for the preservation of the land.
Therefore, petitioners as landowners became the owners of
the improvements on the lot, including the residential
buildings constructed by respondents, if they chose to
appropriate the accessions. However, they could instead
choose the demolition of the improvements at respondents'
expense or compel respondents to pay the price of the land
under Article 450 of the Civil Code. Considering that
petitioners pray for the reinstatement of the Regional Trial
Court Decision ordering respondents to vacate the lot and
surrender its possession to them, petitioners are deemed to
have chosen to appropriate the improvements built on their
lot without any obligation to pay indemnity to respondents.
8. Vitangcol v People, G.R. No. 207406 I January
13, 2016 I Leonen, J.
FACTS: On December 4, 1994, Norberto married Alice G.
Eduardo (Alice). Born into their union were three (3)
children. After some time, Alice eventually discovered that
Norberto was previously married to a certain Gina M.
Gaerlan (Gina) on July 17, 1987, as evidenced by a
marriage contract registered with the National Statistics
Office. Alice subsequently filed a criminal Complaint for
bigamy against Norberto.
Norberto argues that the first element of bigamy is absent in
this case. He presents as evidence a Certification from the
Office of the Civil Registrar of Imus, Cavite, which states
that the Office has no record of the marriage license
allegedly issued in his favor and his first wife, Gina. He
argues that with no proof of existence of an essential
requisite
of
marriage—the
marriage
license—the
prosecution fails to establish the legality of his first
marriage. In addition, Norberto claims that the legal
dissolution of the first marriage is not an element of the
crime of bigamy.
Ratio:
Contrary to petitioner’s claim, all the elements of bigamy
are present in this case. Petitioner was still legally
married to Gina when he married Alice. Thus, the trial
court correctly convicted him of the crime charged.
9. Sps. Lam v. Kodak Phils., Ltd., G.R. No.
167615 1 January 11,2016 I LEONEN, J.
FACTS: On January 8, 1992, the Lam Spouses and
Kodak Philippines, Ltd. entered into an agreement (Letter
Agreement) for the sale of three (3) units of the Kodak
Minilab System 22XL6 (Minilab Equipment) in the amount
of ₱1,796,000.00 per unit, with the following terms:
“This confirms our verbal agreement for Kodak Phils., Ltd.
To provide Colorkwik Laboratories, Inc. with three (3)
units Kodak Minilab System 22XL . . . for your proposed
outlets in Rizal Avenue (Manila), Tagum (Davao del
Norte), and your existing Multicolor photo counter in
Cotabato City under the following terms and conditions:
1. Said Minilab Equipment packages will avail a
total of 19% multiple order discount based on
prevailing equipment price provided said
equipment packages will be purchased not later
than June 30, 1992.
2. 19% Multiple Order Discount shall be applied
in the form of merchandise and delivered in
advance immediately after signing of the
contract. * Also includes start-up packages worth
P61,000.00.
3. NO DOWNPAYMENT.
4. Minilab Equipment Package shall be payable
in 48 monthly installments at THIRTY FIVE
THOUSAND PESOS (P35,000.00) inclusive of
24% interest rate for the first 12 months; the
balance shall be re-amortized for the remaining
36 months and the prevailing interest shall be
applied.
CA modified the decision of the RTC.
5. Prevailing price of Kodak Minilab System 22XL
as of January 8, 1992 is at ONE MILLION SEVEN
HUNDRED NINETY SIX THOUSAND PESOS.
6. Price is subject to change without prior notice.
*Secured with PDCs; 1st monthly amortization due
45 days after installation.”
Kodak Philippines, Ltd. delivered one (1) unit of the Minilab
Equipment in Tagum, Davao Province. The delivered unit
was installed by Noritsu representatives. The Lam Spouses
issued postdated checks amounting to ₱35,000.00 each for
12 months as payment for the first delivered unit, with the
first check due on March 31, 1992.
The Lam Spouses requested that Kodak Philippines, Ltd.
not negotiate the check dated March 31, 1992 allegedly due
to insufficiency of funds. The same request was made for
the check due on April 30, 1992. However, both checks
were negotiated by Kodak Philippines, Ltd. and were
honored by the depository bank. The 10 other checks were
subsequently dishonored after the Lam Spouses ordered
the depository bank to stop payment.
Kodak Philippines, Ltd. canceled the sale and demanded
that the Lam Spouses return the unit. The Lam Spouses
ignored the demand but also rescinded the contract through
the letter dated November 18, 1992 on account of Kodak
Philippines, Ltd.’s failure to deliver the two (2) remaining
Minilab Equipment units.
Kodak Philippines, Ltd. filed a Complaint for replevin and/or
recovery of sum of money. The Lam Spouses failed to
appear during the pre-trial conference. Thus, they were
declared in default.
Kodak Philippines, Ltd. presented evidence ex-parte. The
trial court issued the Decision in favor of Kodak Philippines,
Ltd. ordering the seizure of the Minilab Equipment. Based
on this Decision, Kodak Philippines, Ltd. was able to obtain
a writ of seizure for the Minilab Equipment installed at the
Lam Spouses’ outlet in Tagum, Davao Province. The writ
was enforced and Kodak Philippines, Ltd. gained
possession of the Minilab Equipment unit, accessories, and
the generator set.
The Lam Spouses then filed before the CA a Petition to Set
Aside the Orders issued by the trial court. These Orders
were subsequently set aside by the CA, and the case was
remanded to the trial court for pre-trial.
In its Decision, the RTC dismissed the case and ordered
the plaintiff to pay Lam Spouses
Lam Spouses filed their Notice of Partial Appeal. Kodak
Philippines, Ltd. also filed an appeal. However, the CA
dismissed it for Kodak Philippines, Ltd.’s failure to file its
appellant’s brief, without prejudice to the continuation of the
Lam Spouses’ appeal. The Resolution became final and
executory.
ISSUES: 1. Whether the contract between petitioners
Spouses Alexander and Julie Lam and respondent Kodak
Philippines, Ltd. pertained to obligations that are
severable, divisible, and susceptible of partial
performance under Article 1225 of the New Civil Code;
and
2. Upon rescission of the contract, what the parties are
entitled to under Article 1190 and Article 1522 of the New
Civil Code.
HELD: 1. The Letter Agreement contained an indivisible
obligation.
The intention of the parties is for there to be a single
transaction covering all three (3) units of the Minilab
Equipment. Respondent’s obligation was to deliver all
products purchased under a "package," and, in turn,
petitioners’ obligation was to pay for the total purchase
price, payable in installments.
The intention of the parties to bind themselves to an
indivisible obligation can be further discerned through
their direct acts in relation to the package deal. There was
only one agreement covering all three (3) units of the
Minilab Equipment and their accessories. The Letter
Agreement specified only one purpose for the buyer,
which was to obtain these units for three different outlets.
If the intention of the parties were to have a divisible
contract, then separate agreements could have been
made for each Minilab Equipment unit instead of covering
all three in one package deal. Furthermore, the 19%
multiple order discount as contained in the Letter
Agreement was applied to all three acquired units. The
"no downpayment" term contained in the Letter
Agreement was also applicable to all the Minilab
Equipment units. Lastly, the fourth clause of the Letter
Agreement clearly referred to the object of the contract as
"Minilab Equipment Package."
In ruling that the contract between the parties intended to
cover divisible obligations, the Court of Appeals
highlighted: (a) the separate purchase price of each item;
(b) petitioners’ acceptance of separate deliveries of the
units; and (c) the separate payment arrangements for
each unit. However, through the specified terms and
conditions, the tenor of the Letter Agreement indicated an
intention for a single transaction. This intent must prevail
even though the articles involved are physically separable
and capable of being paid for and delivered individually,
consistent with the New Civil Code: Article 1225. For the
purposes of the preceding articles, obligations to give
definite things and those which are not susceptible of
partial performance shall be deemed to be indivisible.
When the obligation has for its object the execution of a
certain number of days of work, the accomplishment of
work by metrical units, or analogous things which by their
nature are susceptible of partial performance, it shall be
divisible. However, even though the object or service may
be physically divisible, an obligation is indivisible if so
provided by law or intended by the parties.
In Nazareno v. Court of Appeals, the indivisibility of an
obligation is tested against whether it can be the subject of
partial performance: An obligation is indivisible when it
cannot be validly performed in parts, whatever may be the
nature of the thing which is the object thereof. The
indivisibility refers to the prestation and not to the object
thereof. In the present case, the Deed of Sale of January
29, 1970 supposedly conveyed the six lots to Natividad.
The obligation is clearly indivisible because the
performance of the contract cannot be done in parts,
otherwise the value of what is transferred is diminished.
Petitioners are therefore mistaken in basing the indivisibility
of a contract on the number of obligors.
There is no indication in the Letter Agreement that the units
petitioners ordered were covered by three (3) separate
transactions. The factors considered by the Court of
Appeals are mere incidents of the execution of the
obligation, which is to deliver three units of the Minilab
Equipment on the part of respondent and payment for all
three on the part of petitioners. The intention to create an
indivisible contract is apparent from the benefits that the
Letter Agreement afforded to both parties. Petitioners were
given the 19% discount on account of a multiple order, with
the discount being equally applicable to all units that they
sought to acquire. The provision on "no down payment"
was also applicable to all units. Respondent, in turn, was
entitled to payment of all three Minilab Equipment units,
payable by installments.
2. The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with
what is incumbent upon him.
The injured party may choose between the fulfilment and
the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even
after he has chosen fulfilment, if the latter should become
impossible.
The court shall decree the rescission claimed, unless there
be just cause authorizing the fixing of a period.
Rescission under Article 1191 has the effect of mutual
restitution. In Velarde v. Court of Appeals: Rescission
abrogates the contract from its inception and requires a
mutual restitution of benefits received.
The Court of Appeals correctly ruled that both parties must
be restored to their original situation as far as practicable,
as if the contract was never entered into. Petitioners must
relinquish possession of the delivered Minilab Equipment
unit and accessories, while respondent must return the
amount tendered by petitioners as partial payment for the
unit received. Further, respondent cannot claim that the two
(2) monthly installments should be offset against the
amount awarded by the Court of Appeals to petitioners
because the effect of rescission under Article 1191 is to
bring the parties back to their original positions before the
contract was entered into.
When rescission is sought under Article 1191 of the Civil
Code, it need not be judicially invoked because the power
to resolve is implied in reciprocal obligations. The right to
resolve allows an injured party to minimize the damages
he or she may suffer on account of the other party’s
failure to perform what is incumbent upon him or her.
When a party fails to comply with his or her obligation, the
other party’s right to resolve the contract is triggered. The
resolution immediately produces legal effects if the nonperforming party does not question the resolution. Court
intervention only becomes necessary when the party who
allegedly failed to comply with his or her obligation
disputes the resolution of the contract. Since both parties
in this case have exercised their right to resolve under
Article 1191, there is no need for a judicial decree before
the resolution produces effects.
WHEREFORE, the Petition is DENIED.
10. National Power Corporation v. Southern
Philippines Power, G.R. No. 219627 I July 4,
2016 I LEONEN, J.
FACTS: ALSONS Power Holdings Corporation and
TOMEN Corporation entered into an Energy Conversion
Agreement5 with the National Power Corporation for a
50-megawatt bunker- C fired diesel-generating power
project.
Southern Philippines Power Corporation informed the
National Power Corporation that it installed an additional
engine . Thus Southern Philippines Power Corporation
guaranteed to the National Power Corporation a total
capacity of 55 megawatts, equivalent to 110% of the
nominal capacity allowed under the Energy Conversion
Agreement. They then requested payment for the
additional 10% capacity made available. This request was
denied. NAPOCOR claimed that it had the discretion to
accept or reject Southern Philippines Power Corporation's
capacity nomination if it exceeds 100% of the nominal
capacity.
The Energy Regulatory Commission ruled in favor of
SPP. NAPOCOR fled a motion for reconsideration but the
same was denied for being fled 4 days late.
The Court of Appeals' denied NAPOCOR's Petition for
Review
and
affirmed
the
Energy
Regulatory
Commission's decision
ISSUE: 1. Whether the Court of Appeals erred in
affirming the Energy Regulatory Commission's denial of
petitioner's Motion for Reconsideration, which was fled by
private courier and received by the Energy Regulatory
Commission four (4) days after due date
2. Whether under the Energy Conversion Agreement,
petitioner is obliged to accept a capacity nomination of up
to 110% and, thus, liable to pay respondent for the
additional capacity supplied.
HELD: 1. YES The Court of Appeals erred in upholding
the denial by the Energy Regulatory Commission of
petitioner's Motion for Reconsideration purely on a
technicality. It is a basic tenet that procedural rules are
necessary to facilitate an orderly and speedy adjudication of
disputes.
2. YES. The Agreement does not limit respondent to the
five (5) generating units initially required to be installed, and
that what is of prime importance is that respondent makes
available to petitioner electricity no less than 50,000
kilowatts. The fact that a sixth generating unit was installed
is irrelevant, a reading of the entire Energy Conversion
Agreement and its Schedules reveals no express
prohibition against respondent's installation of a sixth
engine in its Power Station.
The Court of Appeals' decision is affirmed. Thus
NAPOCOR is liable to pay respondent Southern Philippines
Power Corporation for the contracted capacity of 55
megawatts from 2005 to 2010.
11. Vitug v. Abuda, G.R.No.201264
11,2016 I J.Leonen
I
All the elements of a valid mortgage contract were
present. For a mortgage contract to be valid, the absolute
owner of a property must have free disposal of the
property. That property must be used to secure the
fulfillment of an obligation. Article 2085 of the Civil Code
provides:
Art. 2085. The following requisites are essential to
contracts of pledge and mortgage:
(1) That they be constituted to secure the fulfillment of
a principal obligation;
(2) That the pledgor or mortgagor be the absolute
owner of the thing pledged or mortgaged;
(3) That the persons constituting the pledge or
mortgage have the free disposal of their property, and
in the absence thereof, that they be legally authorized
for the purpose.
January
FACTS: Abuda loaned P250,000.00 to Vitug and his wife,
Narcisa Vitug. As security for the loan, Vitug mortgaged to
Abuda his property. The property was then subject of a
conditional Contract to Sell between the National Housing
Authority and Vitug. That, upon consummation and
completion of the sale by the NHA of said property, the titleaward thereof, shall be received by the Mortgagee by virtue
of a Special Power of Attorney, executed by Mortgagor in
her favor. The parties executed a "restructured" mortgage
contract on the property to secure the amount of
P600,000.00 representing the original P250,000.00 loan,
additional loans, and subsequent credit accommodations
given by Abuda to Vitug with an interest of five (5) percent
per month. By then, the property was covered by Transfer
Certificate of Title under Vitug's name. Spouses Vitug failed
to pay their loans despite Abuda's demands.
Abuda filed a Complaint for Foreclosure of Property before
the Regional Trial Court of Manila.
On December 19, 2008, the Regional Trial Court
promulgated a Decision in favor of Abuda. On appeal, the
RTC ruled in favor of Abuda and ordered Vitug to pay the
principal sum with interest and upon default of the
defendant to fully pay the aforesaid sums, the subject
mortgaged property shall be sold at public auction to pay off
the mortgage debt. The judgement was affirmed with the
modification as to the payment of interest. Petitioner argues
that not all the requisites of a valid mortgage are present.
He contends that a mortgagor must have free disposal of
the mortgaged property. That the existence of a restriction
clause in his title means that he does not have free disposal
of his property.
ISSUE: Whether the restriction clause in petitioner's title
rendered invalid the real estate mortgage he and
respondent Evangeline Abuda executed.
HELD: No. Petitioner may dispose or encumber his
property. The restrictions are mere burden or limitations on
petitioner’s jus disponendi.
Petitioner's undisputed title to and ownership of the
property is sufficient to give him free disposal of it. As
owner of the property, he has the right to enjoy all
attributes of ownership including jus disponendi or the
right to encumber, alienate, or dispose his property
"without other limitations than those established by law."
Petitioner's claim that he lacks free disposal of the
property stems from the existence of the restrictions
imposed on his title by the National Housing Authority.
These restrictions do not divest petitioner of his
ownership rights. They are mere burdens or limitations on
petitioner's jus disponendi. Thus, petitioner may dispose
or encumber his property. However, the disposition or
encumbrance of his property is subject to the limitations
and to the rights that may accrue to the National Housing
Authority. When annotated to the title, these restrictions
serve as notice to the whole world that the National
Housing Authority has claims over the property, which it
may enforce against others. Contracts entered into in
violation of restrictions on a property owner's rights do not
always have the effect of making them void ab initio.
Contracts that contain provisions in favor of one party
may be void ab initio or voidable. Contracts that lack
consideration, those that are against public order or
public policy, and those that are attended by illegality or
immorality are void ab initio.
Contracts that only subject a property owner's property
rights to conditions or limitations but otherwise contain all
the elements of a valid contract are merely voidable by
the person in whose favor the conditions or limitations are
made. The mortgage contract entered into by petitioner
and respondent contains all the elements of a valid
contract of mortgage. The trial court and the Court of
Appeals found no irregularity in its execution. There was
no showing that it was attended by fraud, illegality,
immorality, force or intimidation, and lack of
consideration. At most, therefore, the restrictions made
the contract entered into by the parties voidable by the
person in whose favor they were made—in this case, by
the National Housing Authority. Petitioner has no
actionable right or cause of action based on those
restrictions.
2015
1. THE REGISTER OF DEEDS OF NEGROS
OCCIDENTAL
AND
THE
NATIONAL
TREASURER OF THE REPUBLIC OF THE
PHILIPPINES v. OSCAR ANGLO, SR., and
ANGLO AGRICULTURAL CORPORATION, G.R.
No. 171804, August 05, 2015
FACTS: Anglo SR., conveyed in exchange of shares of
stocks, the property disputed in this case, to Anglo
Agricultural Corp (AAC).
Anglo Sr., acquired said land from de Ocampo under
conditional sale. The agreement between them was made
when the registration proceeding of the subject lot was still
pending and was under the objection of Bureau of
Education. The CFI (now RTC) decided in favor of de
Ocampo. Notice of lis pendens was caused by the
petitioners. The petitioner filed a relief from judgment but
was dismissed by the CFI.
Despite the notice, Anglo Sr. conveyed the lots to AAC. The
petitioner appealed to the CA but it was also denied.
Hence, the case found its way to the Supreme Court which
ordered the case be remanded to the CA. Consequently,
the CA reversed the decision of the CFI, thus invalidating
the claims of the herein respondents. By virtue of the
decision of the CA, the respondents filed a complaint for
damages from the assurance funds against the ROD of
Negros Occidental and The National Treasurer of the
Republic. The RTC granted the claim and the CA, on
appeal, affirmed the judgment with modification. Hence, the
instant case.
ISSUE: WON THE RESPONDENTS ARE ENTITLED TO
DAMAGES FROM THE ASSURANCE FUNDS
HELD: SC ruled that respondent Anglo, Sr. in the sale
transaction on January 6, 1966 acted in good faith.
However, he no longer had an interest over the lots after he
had transferred these to respondent Anglo Agricultural
Corporation in exchange for shares of stock. Hence, he no
longer has a claim from the Assurance Fund. On the other
hand, respondent Anglo Agricultural Corporation cannot be
considered a transferee in good faith, considering it was
aware of the title’s notices of lis pendens. Hence, it also has
no right to claim damages from the Assurance Fund.
The court further explained that “[t]he Assurance Fund is
intended to relieve innocent persons from the harshness of
the doctrine that a certificate is conclusive evidence of an
indefeasible title to land.
Based solely on Section 95 of Presidential Decree No.
1529, the following conditions must be met: First, the
individual must sustain loss or damage, or the individual is
deprived of land or any estate or interest. Second, the
individual must not be negligent. Third, the loss, damage, or
deprivation is the consequence of either (a) fraudulent
registration under the Torrens system after the land’s
original registration, or (b) any error, omission, mistake, or
misdescription in any certificate of title or in any entry or
memorandum in the registration book. Fourth, the
individual must be barred or otherwise precluded under
the provision of any law from bringing an action for the
recovery of such land or the estate or interest therein.
The Assurance Fund is only liable in the last resort, as
suggested under Section 97 of Presidential Decree No.
1529. The person causing the fraud or the error should be
liable first.
2. Mendoza vs Valte, G.R. No. 17296
FACTS: Sometime in 1978, Reynosa Valte (Valte) filed a
free patent application. The application listed Procopio
Vallega and Pedro Mendoza (Mendoza) as witnesses
who would testify to the truth of the allegations in Valte's
application.||| The Director of Lands then issued the
Notice of Application for Free Patent. and a Free Patent
and OTC were issued in Valte's name. On December 6,
1982, Mendoza and Jose Gonzales filed a protest against
Valte's application, claiming to be lawful owners and
possessors since 1930 through a predecessor- in-interest
who had been in actual, uninterrupted, open, peaceful,
exclusive and adverse possession in the concept of an
owner of the land. Mendoza and Gonzales alleged that
Valte procured Free Patent No. 586435 by means of
fraud, misrepresentation, and connivance. Valte
countered that her father bought the land in 1941, and her
mother ceded the land to her in 1978.
The DENR found Mendoza and Gonzales to be mere
tenants of the land and dismissed the protest. The OP
reversed the DENR's decision and adjudged Mendoza
and Gonzales to have preferential right over the land. The
Court of Appeals' Decision reversed and set aside the
Office of the President Decision and reinstated the
Department of Environment and Natural Resources
Secretary's Decision.
ISSUE: Whether or not petitioners failed to overcome
their burden to prove fraud by respondent in her claim of
continuous occupation and cultivation of the land
HELD: YES. Petitioners failed to overcome their burden
to prove fraud by respondent in her claim of continuous
occupation and cultivation of the land. As observed by the
Court of Appeals, petitioner Mendoza admitted against
his interest when he stated in his Joint Affidavit that
respondent "has continuously occupied and cultivated the
land."
The law allowing fraud as a ground for a reopening of a
land registration contemplates actual and extrinsic fraud,
not merely constructive or intrinsic. Petitioners did not
allege nor show any irregularity in the free patent
application proceedings conducted before the Director of
Lands. In fact, petitioner Mendoza was one of the
witnesses stated in respondent's free patent application.
The Notice of Application for Free Patent also provides
that "[a]ll adverse claims to the tract of land above-
described must be filed in the Bureau of Lands on or before
the 7th day of August 1978. Any claim not so filed will be
forever barred."
Petitioners only filed their protest on December 6, 1982,
after Patent No. 586435 had been issued on December 28,
1978 and even after the Registry of Deeds had issued
Original Certificate of Title No. P-10119 on January 16,
1979.
Sec. 32 of PD 1529 or the Property Registration Decree
states that a petition for reopening and review of the decree
of registration of the land must be filed not later than one
year from and after the date of the entry of such decree of
registration. Petitioners only filed their protest on Dec. 6,
1982, almost four years after the Free Patent had been
issued on Dec.
28, 1978. Their right to action, thus, already prescribed.
Sec. 101 of Commonwealth Act No. 141 allows actions by
the state for the reversion of land fraudulently granted to
private individuals even when they are filed after the lapse
of the one-year period.
However, the state has not initiated such a case.
3. Saudla v. Rebesenclo et. al, G.R. No. 198587,
January 14, 2015
FACTS: Petitioner Saudi Arabian Airlines is a foreign
corporation established and existing under the Royal
Decree No. M/24 of Jeddah, who hired Respondents as
flight attendants. After undergoing seminars required by the
Philippine Overseas Employment Administration for
deployment overseas, as well as training modules offered
by Saudia, Respondents became Temporary and then
eventually Permanent Flight Attendants; they entered into
the necessary Cabin Attendant Contracts with Saudi.
Respondents were released from service on separate dates
in 2006; claimed that such release was illegal since the
basis of termination of contract was solely because they
were pregnant. They claim that they had informed Saudia of
their respective pregnancies and had gone through the
necessary procedures to process their maternity leaves and
while initially, Saudia had given its approval, they ultimately
reneged and rather required them to file for resignation.
Respondents claim that Petitioner Airlines threatened that if
they would not resign, they would be terminated along with
loss of benefits, separation pay, and ticket discount
entitlements; they anchored such on
its “Unified
Employment Contract for Female Cabin Attendants" which
provides that “ if the Air Hostess becomes pregnant at any
time during the term of this contract, this shall render her
employment contract as void and she will be terminated
due to lack of medical fitness. “
ISSUE: WON the Labor Arbiter and the NLRC has
jurisdiction over Saudi Arabian Airlines and apply Philippine
jurisdiction over the dispute?
HELD: Yes. Summons were validly served on Saudia and
jurisdiction over it validly acquired. No doubt that the
pleadings were served to Petitioner Airlines through their
counsel, however they claim that the NLRC and Labor
Arbiter had no jurisdiction since summons were served to
Saudi Airlines Manila and not to them, Saudi Airlines
Jeddah. Saudi Airlines Manila was neither a party to the
Cabin attendant contracts nor funded the Respondents,
and it was to Saudi Jeddah that they filed their
resignations. Court ruled however that b y its own
admission, Saudia, while a foreign corporation, has a
Philippine office, and that under the Foreign Investments
act of 1991, they are a foreign corporation doing business
in the Phils and therefore are subject to Philippine
jurisdiction
Petitioner Airlines also asserts that the Cabin Attendant
Contracts require the application of the laws of Saudi
Arabia rather than those of the Philippines. It claims that
the difficulty of ascertaining foreign law calls into
operation the principle of forum non conveniens, thereby
rendering improper the exercise of jurisdiction by
Philippine tribunals.
Furthermore, contracts relating to labor and employment
are impressed with public interest. Article 1700 of the Civil
Code provides that "[t]he relation between capital and
labor are not merely contractual. They are so impressed
with public interest that labor contracts must yield to the
common good.
Pakistan Airlines Ruling: relationship is much affected
with public interest and that the otherwise applicable
Philippine laws and regulations cannot be rendered
illusory by the parties agreeing upon some other law to
govern their relationship.
As the present dispute relates to (what the respondents
alleged to be) the illegal termination of respondents'
employment, this case is immutably a matter of public
interest and public policy. Consistent with clear
pronouncements in law and jurisprudence, Philippine
laws properly find application in and govern this case.
4. Perfecto vs Esidera, A.M. No. RTJ-15-2417
FACTS: Petitioner Eladio Perfecto filed an administrative
complaint against respondent Judge Alma Consuelo
Desales- Esidera for falsification of public document and
dishonesty.
Petitioner Perfecto alleged that respondent Judge Esidera
falsified her daughter’s birth certificate to make it appear
that she and Renato Verano Esidera were married on
March 18, 1990 when in fact they were married on June
3, 1992, hence, in order to show that their daughter was a
legitimate child of Renato Verano Esidera. It was also
alleged that her first marriage with Richard Tang Tepace
was contracted on May 7, 1987 and was later declared
void on January 27, 1992.
Perfecto prays for respondent Judge Esidera’s dismissal
from office for her alleged dishonesty. However, respondent
Judge Esidera argued that everything she did was legal and
in accordance with her religious beliefs.
She was indeed, married to her second husband (Renato
Verano Esidera) on March 18, 1990, but only under
recognized Catholic rites. The priest who officiated their
marriage had no authority to solemnize marriages under the
civil law. She said that couples who are civilly married are
considered living in state of sin, and may be excommunicated. They cannot receive the sacraments.
ISSUE: Whether or not respondent Judge Esidera was
guilty of immoral conduct based on, among others, her
alleged affair and falsification of her daughter’s birth
certificate.
HELD: No. The Court finds respondent Judge Esidera’s
omission to correct her child’s birth certificate is not
sufficient to render her administratively liable under the
circumstances. The error in the birth certificate cannot be
attributed to her. She did not participate in filling in the
required details in the document. The birth certificate shows
that it was her husband who signed it as informant.
Respondent Judge Esidera is also not guilty of disgraceful
and immoral conduct under the Code of Professional
Responsibility. The Court cannot conclude that respondent
Judge’s acts of contracting a second marriage during the
subsistence of her alleged first marriage and having an
alleged “illicit” affair are “immoral” based on her Catholic
faith. The Court is not a judge of religious morality.
The Court may not sit as judge of what is immoral conduct
according to a particular religion. The Court has no
jurisdiction over and is not the proper authority to determine
which conduct contradicts religious doctrine.
They have jurisdiction over matters of morality only insofar
as it involves conduct that affects the public or its
interest.
For purposes of determining administrative liability of
lawyers and judges, “immoral conduct” should related to
their conduct as officers of the court. To be guilty of
“immorality” under the Code of Professional
Responsibility, a lawyer’s conduct must be so depraved as
to reduce the public’s confidence in the Rule of Law.
Religious morality is not binding whenever this court
decides the administrative liability of lawyers and persons
under this court’s supervision. At best, religious morality
weighs only persuasively on the Court.
Hence, the Court cannot properly conclude that respondent
judge’s acts of contracting a second marriage during the
subsistence of her alleged first marriage and having an
alleged “illicit” affair are “immoral” based on
her catholic faith. The Court is not a judge of religious
morality.
5. Spouses Abella v. Spouses Abella, G.R. No.
195166
FACTS: Petitioners Spouses Salvador and Alma Abella
filed a Complaint for sum of money and damages against
respondents Spouses Romeo and Annie Abella wherein it
was alleged that respondents obtained a loan from them
in the amount of P500K. The loan was evidenced by an
acknowledgment receipt dated March 22, 1999 and was
payable within one (1) year. Petitioners added that
respondents were able to pay a total of P200K—P100K
paid on two separate occasions—leaving an unpaid
balance of P300K.
In their Answer, respondents alleged that the amount
involved did not pertain to a loan but was part of the
capital for a joint venture involving the lending of money
when respondents that they were approached by
petitioners, who proposed that if respondents were to
"undertake the management of whatever money
[petitioners] would give them, [petitioners] would get 2.5%
a month with a 2.5% service fee to [respondents]."
Moreover, they claimed that the entire amount of
P500,000.00 was disposed of in accordance with their
agreed terms and conditions and that petitioners
terminated the joint venture, prompting them to collect
from the joint venture's borrowers. They were, however,
able to collect only to the extent of P200,000.00; hence,
the P300,000.00 balance remained unpaid.
The RTC ruled in favor of petitioners. On respondents'
appeal, the Court of Appeals ruled that while respondents
had indeed entered into a simple loan with petitioners,
respondents were no longer liable to pay the outstanding
amount of P300,000.00.
ISSUE: What contract was entered into by the parties?
Whether interest accrued on respondents' loan from
petitioner and if in the affirmative, at what rate?
HELD: Respondents entered into a simple loan or
mutuum, rather than a joint venture, with petitioners.
Respondents' claims, as articulated in their testimonies
before the trial court, cannot prevail over the clear terms
of the document attesting to the relation of the parties. "If
the terms of a contract are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning
of its stipulations shall control.”
First issue - Guided by the decision in Nacar v. Gallery
Frames: In the absence of an express stipulation as to
the rate of interest that would govern the parties, the rate
of legal interest for loans or forbearance of any money,
goods or credits and the rate allowed in judgments shall
no longer be twelve percent (12%) per annum — as
reflected in the case of Eastern Shipping Lines and
Subsection X305.1 of the Manual of Regulations for
Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of
the Manual of Regulations for Non-Bank Financial
Institutions, before its amendment by BSP-MB Circular
No. 799 — but will now be six percent (6%) per annum
effective July 1, 2013.
It should be noted, nonetheless, that the new rate could
only be applied prospectively and not retroactively.
Consequently, the twelve percent (12%) per annum legal
interest shall apply only until June 30, 2013. Come July 1,
2013 the new rate of six percent (6%) per annum shall be
the prevailing rate of interest when applicable.
6. Maltos v. Heirs of Borromeo, GR No. 172720
sections one hundred and eighteen, one
hundred and twenty, one hundred and
twenty-one, one hundred and twenty-two,
and one hundred and twenty-three of this.
Act shall be unlawful and null and void
from its execution and shall produce the
effect of annulling and cancelling the grant,
title, patent, or permit originally issued,
recognized or confirmed, actually or
presumptively, and cause the reversion of
the property and its improvements to the
State.
FACTS: On February 13, 1979, Eusebio Borromeo was
issued Free Patent over a piece of agricultural land located
in San Francisco, Agusan del Sur. On June 15, 1983, well
within the five-year prohibitory period, Eusebio Borromeo
sold the land to Eliseo Maltos. Eusebio Borromeo died on
January 16, 1991. His heirs claimed that prior to his death,
he allegedly told his wife, Norberta Borromeo, and his
children to nullify the sale made to Eliseo Maltos and have
the Transfer Certificate of Title cancelled because the sale
was within the five-year prohibitory period.
Reversion is a remedy provided under Section 101 of the
Public Land Act:
On June 23, 1993, Norberta Borromeo and her children
filed a Complaint for Nullity of Title and Reconveyance of
Title against Eliseo Maltos, Rosita Maltos, and the Register
of Deeds of Agusan del Sur. Eliseo Maltos and Rosita
Maltos filed their Answer, arguing that the sale was made in
good faith and that in purchasing the property, they relied
on Eusebio Borromeo's title. Further, since the sale was
made during the five-year prohibitory period, the land would
revert to the public domain and the proper party to institute
reversion proceedings was the Office of the Solicitor
General.
The purpose of reversion is "to restore public land
fraudulently awarded and disposed of to private
individuals or corporations to the mass of public domain.”
The trial court also ruled that "the sale was null and void
because it was within the five (5) year prohibitory period"
under the Public Land Act. The defense of indefeasibility of
title was unavailing because the title to the property stated
that it was "subject to the provisions of Sections 118, 119,
121, 122 and 124" of the Public Land Act. Since the
property was sold within the five-year prohibitory period,
such transfer "resulted in the cancellation of the grant and
the reversion of the land to the public domain."
The Court of Appeals reversed the Decision of the trial
court and held that since Eusebio Borromeo sold his
property within the five-year prohibitory period, the property
should revert to the state. However, the government has to
file an action for reversion because "reversion is not
automatic." While there is yet no action for reversion
instituted by the Office of the Solicitor General, the property
should be returned to the heirs of Borromeo.
ISSUE: Whether or not reversion of a property acquired by
virtue of a free patent which was later sold within the five (5)
year prohibitory period is automatic?
HELD: No. The effect of violating the five-year prohibitory
period is provided under Section 124 of the Public Land
Act, which provides:
SECTION 124. Any acquisition, conveyance,
alienation, transfer, or other contract made or
executed in violation of any of the provisions of
SECTION 101. All actions for the
reversion to the Government of lands of the
public domain or improvements thereon
shall be instituted by the SolicitorGeneral or the officer acting in his stead,
in the proper courts, in the name of
Commonwealth of the Philippines.
The general rule is that reversion of lands to the state is
not automatic, and the Office of the Solicitor General is
the proper party to file an action for reversion. There is,
however, an exception to the rule that reversion is not
automatic. Section 29 of the Public Land Act provides:
SECTION 29. After the cultivation of the land
has begun, the purchaser, with the approval
of the Secretary of Agriculture and
Commerce, may convey or encumber his
rights to any person, corporation, or
association legally qualified under this Act to
purchase agricultural public lands, provided
such conveyance or encumbrance does not
affect any right or interest of the Government
in the land: And provided, further, That the
transferee is not delinquent in the payment
of any installment due and payable. Any
sale and encumbrance made without the
previous approval of the Secretary of
Agriculture and Commerce shall be null
and void and shall produce the effect of
annulling the acquisition and reverting
the property and all rights to the State,
and all payments on the purchase price
theretofore made to the Government shall
be forfeited. After the sale has been
approved, the vendor shall not lose his right
to acquire agricultural public lands under the
provisions of this Act, provided he has the
necessary qualifications.
In Francisco vs. Rodriguez, et al, this court differentiated
reversion under Sections 29 and 101 of the Public Land
Act. This court explained that reversion under Section 29 is
self-operative, unlike Section 101 which requires the Office
of the Solicitor General to institute reversion proceedings.
Also, Section 101 applies in cases where "title has already
vested in the individual."
In this case, Section 101 of the Public Land Act is
applicable since title already vested in Eusebio Borromeo's
name. Both the trial court and the Court of Appeals found
that the sale was made within the five-year prohibitory
period. Thus, there is sufficient cause to revert the property
in favor of the state. However, this court cannot declare
reversion of the property in favor of the state in view of the
limitation imposed by Section 101 that an action for
reversion must first be filed by the Office of the Solicitor
General. Hence, the Court of Appeals did not err in ruling
that while there is yet no action for reversion filed by the
Office of the Solicitor General, the property should be
conveyed by Spouses Maltos to the heirs of Borromeo.
7. The Wellex Group v. U-Land Airlines, G.R. No.
167519
FACTS: Wellex and U-Land agreed to develop a long-term
business relationship through the creation of joint interest in
airline operations and property development projects in the
Philippines. The agreement includes: I. Acquisition of APIC
and PEC shares; II. Operation and management of
APIC/PEC/APC; III. Entering into and funding a joint
development agreement; and IV. The option to acquire from
WELLEX shares of stock of EXPRESS SAVINGS BANK
("ESB") up to 40% of the outstanding capital stock of ESB
of U-Land. The provisions of the memorandum were agreed
to be executed within 40 days from its execution date.
The 40-day period lapsed but Wellex and U-Land were not
able to enter into any share purchase agreement although
drafts were exchanged between the two. However, Despite
the absence of a share purchase agreement, U-Land
remitted to Wellex a total of US$7,499,945.00. Wellex
acknowledged the receipt of these remittances in a
confirmation letter addressed to U-Land and allegedly
delivered stock certificates and TCTs of subject properties.
Despite these transactions, Wellex and U-Land still failed to
enter into the share purchase agreement and the joint
development agreement. Thus, U-Land filed a Complaint72
praying for rescission of the First Memorandum of
Agreement and damages against Wellex and for the
issuance of a Writ of Preliminary Attachment. Note: After
verification with the Securities and Exchange Commission,
U-Land discovered that "APIC did not own a single share of
stock in APC.
RTC: Ruled In favor of Uland and ordered rescission of
contract under Art. 1911 of the civil code. Basis of
rescission: Wellex’s misrepresentation that APIC was a
majority shareholder of APC that compelled it to enter into
the agreement.
“Notwithstanding the said remittances, APIC does not own
a single share of APC. On the other hand, defendant could
not even satisfactorily substantiate its claim that at least it
had the intention to cause the transfer of APC shares to
APIC. Defendant obviously did not enter into the
stipulated SPA because it did not have the shares of APC
transferred to APIC despite its representations. Under the
circumstances, it is clear that defendant fraudulently
violated the provisions of the MOA.”
On appeal, the Court of Appeals affirmed the ruling of the
Regional Trial Court. Hence this petition.
Petitioners invokes Suria v. Intermediate Appellate Court,
which held that an "action for rescission is not a principal
action that is retaliatory in character under Article 1191 of
the Civil Code, but a subsidiary one which is available
only in the absence of any other legal remedy under
Article 1384 of the Civil Code Respondent U-land avers
that this case was inapplicable because the pertinent
provision in Suria was not Article 1191 but rescission
under Article 1383 of the Civil Code. The "rescission"
referred to in Article 1191 referred to "resolution" of a
contract due to a breach of a mutual obligation, while
Article 1384 spoke of "rescission" because of lesion and
damage. Thus, the rescission that is relevant to the
present case is that of Article 1191, which involves
breach in a reciprocal obligation. It is, in fact, resolution,
and not rescission as a result of fraud or lesion, as found
in Articles 1381, 1383, and 1384 of the Civil Code.
ISSUE: Whether or not respondent U-Land correctly
sought the principal relief of rescission or resolution under
Article 1191.
HELD: Yes. Respondent U-Land is praying for rescission
or resolution under Article 1191, and not rescission under
Article 1381. The failure of one of the parties to comply
with its reciprocal prestation allows the wronged party to
seek the remedy of Article 1191. The wronged party is
entitled to rescission or resolution under Article 1191, and
even the payment of damages. It is a principal action
precisely because it is a violation of the original reciprocal
prestation. Article 1381 and Article 1383, on the other
hand, pertain to rescission where creditors or even third
persons not privy to the contract can file an action due to
lesion or damage as a result of the contract. Rescission
or resolution under Article 1191, therefore, is a principal
action that is immediately available to the party at the
time that the reciprocal prestation was breached. Article
1383 mandating that rescission be deemed a subsidiary
action cannot be applicable to rescission or resolution
under Article 1191. Thus, respondent U-Land correctly
sought the principal relief of rescission or resolution under
Article 1191.
The order is valid. Enforcement of Section 9 of the First
Memorandum of Agreement has the same effect as
rescission or resolution under Article 1191 of the Civil
Code. The parties are obligated to return to each other all
that they may have received as a result of the breach by
petitioner Wellex of the reciprocal obligation. Therefore,
the Court of Appeals did not err in affirming the rescission
granted by the trial court.
Contrary to petitioner Wellex’s argument, this is not
rescission under Article 1381 of the Civil Code. This case
does not involve prejudicial transactions affecting
guardians, absentees, or fraud of creditors. Article 1381(3)
pertains in particular to a series of fraudulent actions on the
part of the debtor who is in the process of transferring or
alienating property that can be used to satisfy the obligation
of the debtor to the creditor. There is no allegation of fraud
for purposes of evading obligations to other creditors. The
actions of the parties involving the terms of the First
Memorandum of Agreement do not fall under any of the
enumerated contracts that may be subject of rescission.
Further, respondent U-Land is pursuing rescission or
resolution under Article 1191, which is a principal action.
Justice J.B.L. Reyes’ concurring opinion in the landmark
case of Universal Food Corporation v. Court of Appeals184
gave a definitive explanation on the principal character of
resolution under Article 1191 and the subsidiary nature of
actions under Article 1381:
The rescission on account of breach of stipulations is not
predicated on injury to economic interests of the party
plaintiff but on the breach of faith by the defendant, that
violates the reciprocity between the parties. It is not a
subsidiary action, and Article 1191 may be scanned without
disclosing anywhere that the action for rescission
thereunder is subordinated to anything other than the
culpable breach of his obligations by the defendant. This
rescission is a principal action retaliatory in character, it
being unjust that a party be held bound to fulfill his
promises when the other violates his. As expressed in the
old Latin aphorism: "Non servanti fidem, non est fides
servanda." Hence, the reparation of damages for the
breach is purely secondary.
On the contrary, in the rescission by reason of lesion or
economic prejudice, the cause of action is subordinated to
the existence of that prejudice, because it is the raison
detre as well as the measure of the right to rescind. Hence,
where the defendant makes good the damages caused, the
action cannot be maintained or continued, as expressly
provided in Articles 1383 and 1384. But the operation of
these two articles is limited to the cases of rescission for
lesión enumerated in Article 1381 of the Civil Code of the
Philippines, and does not apply to cases under Article 1191.
Rescission or resolution under Article 1191, therefore, is a
principal action that is immediately available to the party at
the time that the reciprocal prestation was breached. Article
1383 mandating that rescission be deemed a subsidiary
action cannot be applicable to rescission or resolution
under Article 1191. Thus, respondent U-Land correctly
sought the principal relief of rescission or resolution under
Article 1191.
The obligations of the parties gave rise to reciprocal
prestations, which arose from the same cause: the desire of
both parties to enter into a share purchase agreement that
would allow both parties to expand their respective airline
operations in the Philippines and other neighboring
countries.
Other Matters:
1. The MOA is ambiguous. The parties were never able to
arrive at a specific period within which they would bind
themselves to enter into an agreement.
2. There was no express or implied novation of the First
Memorandum of Agreement. There was no incompatibility
between the original terms of the First Memorandum of
Agreement and the remittances made by respondent ULand for the shares of stock. These remittances were
actually made with the view that both parties would
subsequently enter into a share purchase agreement. It is
clear that there was no subsequent agreement
inconsistent with the provisions of the First Memorandum
of Agreement. There being no novation of the First
Memorandum of Agreement, respondent U-Land is
entitled to the return of the amount it remitted to petitioner
Wellex. Petitioner Wellex is likewise entitled to the return
of the certificates of shares of stock and titles of land it
delivered to respondent U-Land.
3. Applying Article 1185 of the Civil Code, the parties are
obligated to return to each other all they have received.
petitioner Wellex is obligated to return the remittances
made by respondent U-Land, in the same way that
respondent U-Land is obligated to return the certificates
of shares of stock and the land titles to petitioner Wellex.
4. The jurisprudence relied upon by petitioner Wellex is
not applicable.
5. Petitioner Wellex was not guilty of fraud but of violating
Article 1159 of the Civil Code. The absence of fraud in a
transaction does not mean that rescission under Article
1191 is not proper. This case is not an action to declare
the First Memorandum of Agreement null and void due to
fraud at the inception of the contract or dolo causante.
This case is not an action for fraud based on Article 1381
of the Civil Code. Rescission or resolution under Article
1191 is predicated on the failure of one of the parties in a
reciprocal obligation to fulfill the prestation as required by
that obligation. It is not based on vitiation of consent
through fraudulent misrepresentations.
6. Respondent U-Land was not bound to pay the US$3
million under the joint development agreement.
7. Respondent U-Land was not obligated to exhaust the
"securities" given by petitioner Wellex
Provisions:
ART. 1191. The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and
the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission,
even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of
third persons who have acquired the thing, in accordance
with articles 1385 and 1388 and the Mortgage Law.
Articles 1380 and 1381, on the other hand, provide an
enumeration of rescissible contracts: ART. 1380.
Contracts validly agreed upon may be rescinded in the
cases established by law. ART. 1381. The following
contracts are rescissible:
(1) Those which are entered into by guardians whenever
the wards whom they represent suffer lesion by more than
one-fourth of the value of the things which are the object
thereof;
(2) Those agreed upon in representation of absentees, if
the latter suffer the lesion stated in the preceding number;
(3) Those undertaken in fraud of creditors when the latter
cannot in any other manner collect the claims due them;
(4) Those which refer to things under litigation if they have
been entered into by the defendant without the knowledge
and approval of the litigants or of competent judicial
authority;
(5) All other contracts specially declared by law to be
subject to rescission.
Article 1383 expressly provides for the subsidiary nature of
rescission:
ART. 1383. The action for rescission is subsidiary; it cannot
be instituted except when the party suffering damage has
no other legal means to obtain reparation for the same.
Rescission itself, however, is defined by Article 1385:
ART. 1385. Rescission creates the obligation to return the
things which were the object of the contract, together with
their fruits, and the price with its interest; consequently, it
can be carried out only when he who demands rescission
can return whatever he may be obliged to restore. Neither
shall rescission take place when the things which are the
object of the contract are legally in the possession of third
persons who did not act in bad faith.
For Article 1191 to be applicable, however, there must be
reciprocal prestations as distinguished from mutual
obligations between or among the parties. A prestation is
the object of an obligation, and it is the conduct required by
the parties to do or not to do, or to give.177 Parties may be
mutually obligated to each other, but the prestations of
these obligations are not necessarily reciprocal. The
reciprocal prestations must necessarily emanate from the
same cause that gave rise to the existence of the contract.
This distinction is best illustrated by an established authority
in civil law, the late Arturo Tolentino:
This article applies only to reciprocal obligations. It has no
application to every case where two persons are mutually
debtor and creditor of each other. There must be reciprocity
between them. Both relations must arise from the same
cause, such that one obligation is correlative to the other.
Thus, a person may be the debtor of another by reason of
an agency, and his creditor by reason of a loan. They are
mutually obligated, but the obligations are not reciprocal.
Reciprocity arises from identity of cause, and necessarily
the two obligations are created at the same time.
Note: Wellex is a corporation established under Philippine
law and it maintains airline operations in the Philippines. It
owns shares of stock in several corporations including Air
Philippines International Corporation (APIC), Philippine
Estates Corporation (PEC), and Express Savings Bank
(ESB). Wellex alleges that it owns all shares of stock of Air
Philippines Corporation (APC).
U-Land Airlines Co. Ltd. (U-Land) "is a corporation duly
organized and existing under the laws of Taiwan,
registered to do business . . . in the Philippines." It is
engaged in the business of air transportation in Taiwan
and in other Asian countries.
Note: This case distinguished rescission under Art.
1191-“resolution” and rescission under Art. 1381, 1383
and 1384.
When a party seeks the relief of rescission as provided in
Article 1381, there is no need for reciprocal prestations to
exist between or among the parties. All that is required is
that the contract should be among those enumerated in
Article 1381 for the contract to be considered rescissible.
Unlike Article 1191, rescission under Article 1381 must be
a subsidiary action because of Article 1383.
Rescission or resolution under Article 1191 is a principal
action that is immediately available to the party at the
time that the reciprocal prestation was breached. Mutual
restitution is required in cases involving rescission under
Article 1191. This means bringing the parties back to their
original status prior to the inception of the contract.
Determining the existence of fraud is not necessary in an
action for rescission or resolution under Article 1191. The
existence of fraud must be established if the rescission
prayed for is the rescission under Article 1381.
8. Reyes v Sps. Ramos, G.R.No.194488
FACTS: Petitioner Alicia B. Reyes, through Dolores B.
Cinco, filed a Complaint for easement of right of way
against respondents, Spouses Francisco S. Valentin and
Anatalia Ramos. Alicia alleged that she was the owner of
a parcel of land which used to be a portion of Lot No. 3-B
and was surrounded by estates belonging to other
persons. Petitioner further alleged that respondent’s
property was the only adequate outlet from her property
to the highway.
In their Answer, respondents contended that the isolation
of petitioner's property was due to her mother's own act of
subdividing the property among her children without
regard to the pendency of an agrarian case between her
and her tenants. The property chosen by petitioner as
easement was also the most burdensome for
respondents. The Branch Clerk of Court conducted an
ocular inspection. The trial court dismissed the complaint.
The trial court found that petitioner's proposed right of
way was not the least onerous to the servient estate of
respondents. The trial court noted the existence of an
irrigation canal that limited access to the public road.
However, the trial court pointed out that "[o]ther than the
existing
irrigation
canal,
no
permanent
improvements/structures can be seen standing on the
subject rice land." Moreover, the nearby landowner was
able to construct a bridge to connect a property to the
public road. Hence, "[t]he way through the irrigation canal
would . . . appear to be the shortest and easiest way to
reach the barangay road."
ISSUE: Whether Alicia Reyes is entitled to the easement of
right of way. (NO)
HELD: Articles 649 and 650 of the Civil Code provide the
requisites of an easement of right of way. Based on these
provisions, the following requisites need to be established
before a person becomes entitled to demand the
compulsory easement of right of way: 1. An immovable is
surrounded by other immovables belonging to other
persons, and is without adequate outlet to a public highway;
2. Payment of proper indemnity by the owner of the
surrounded immovable; 3. The isolation of the immovable is
not due to its owner's acts; and 4. The proposed easement
of right of way is established at the point least prejudicial to
the servient estate, and insofar as consistent with this rule,
where the distance of the dominant estate to a public
highway may be the shortest. There is an adequate exit to a
public highway. This court explained in Dichoso, Jr. v.
Marcos that the convenience of the dominant estate's
owner is not the basis for granting an easement of right of
way, especially if the owner's needs may be satisfied
without imposing the easement. Based on the Ocular
Inspection Report, petitioner's property had another outlet
to the highway. In between her property and the highway or
road, however, is an irrigation canal, which can be
traversed by constructing a bridge, similar to what was
done by the owners of the nearby properties. There is,
therefore, no need to utilize respondents' property to serve
petitioner's needs. Another adequate exit exists. Petitioner
can use this outlet to access the public roads. The outlet
referred to in the Ocular Inspection Report may be longer
and more inconvenient to petitioner because she will have
to traverse other properties and construct a bridge over the
irrigation canal before she can reach the road. However,
these reasons will not justify the imposition of an easement
on respondents' property because her convenience is not
the gauge in determining whether to impose an easement
of right of way over another's property. Petitioner also failed
to satisfy the requirement of "least prejudicial to the servient
estate. Article 650 of the Civil Code provides that in
determining the existence of an easement of right of way,
the requirement of "least prejudice] to the servient estate"
trumps "distance [between] the dominant estate [and the]
public highway." "Distance" is considered only insofar as it
is consistent to the requirement of "least prejudice." This
court had already affirmed the preferred status of the
requirement of "least prejudice" over distance of the
dominant estate to the public highway. Petitioner would
have permanent structures — such as the garage, garden,
and grotto already installed on respondent's property —
destroyed to accommodate her preferred location for the
right of way. The cost of having to destroy these structures,
coupled with the fact that there is an available outlet that
can be utilized for the right of way, negates a claim that
respondents' property is the point least prejudicial to the
servient estate. The trial court found that there is still no
necessity for an easement of right of way because
petitioner's property is among the lots that are presently
being tenanted by Dominador and Filomena Ramos'
children. Petitioner is yet to use her property. The
Complaint for easement was found to have been filed
merely "for future purposes." The aspect of necessity may
not be specifically included in the requisites for the grant
of compulsory easement under the Civil Code. However,
this goes into the question of "least prejudice." An
easement of right of way imposes a burden on a property
and limits the property owner's use of that property. The
limitation imposed on a property owner's rights is
aggravated by an apparent lack of necessity for which his
or her property will be burdened.
9. Republic v. Tatlonghari, G.R. No. 170458
FACTS: The notation "in trust for" or "for escrow" that
comes with deposited funds indicates that the deposit is
for the benefit of a third party. In this case, Asset
Privatization Trust deposited funds "in trust for" Pantranco
North Express, Inc., (Pantranco) a corporation under the
management of Asset Privatization Trust. These funds
belong to Pantranco. Further, in the absence of evidence
that Asset Privatization Trust is authorized to collect
Pantranco’s indebtedness to Philippine National Bank,
the subject funds can be garnished to satisfy the claims of
Pantranco’s creditors.
Through this Petition for Review, the Asset Privatization
Trust challenges the Decision of the Court of Appeals
denying it relief. The Court of Appeals reversed the
Decision of the Regional Trial Court of Makati City and
held that the subject funds are private funds and can be
garnished.
Pantranco was formerly a government-owned and
controlled corporation without original charter. Sometime
in 1972, Pantranco suffered financial losses. One of
Pantranco's creditors was Philippine National Bank.
Pantranco's assets was foreclosed by Philippine National
Bank, and in 1978, the ownership of Pantranco was
transferred to the National Investment Development
Corporation, a subsidiary of the Philippine National Bank.
In 1985, National Investment Development Corporation
sold Pantranco to North Express Transport, Inc., which
was owned by Gregorio Araneta III, while Pantranco's
assets were sold to Max B. Potenciano, Max Joseph A.
Potenciano, and Dolores A. Potenciano. The Potencianos
thereafter incorporated Pantranco as a private
corporation.
After the 1986 People Power Revolution, Pantranco was
sequestered by the Presidential Commission on Good
Government. Pantranco was allegedly part of Ferdinand
Marcos' ill-gotten wealth and was acquired by using
Gregorio Araneta III and the Potencianos as dummies.
The sequestration was lifted in 1988 "to give way to the
sale of Pantranco North Express Inc." At that time, Asset
Privatization Trust took over Pantranco's management.
On May 26, 1988, a Complaint was filed against
Pantranco. In the this case, the trial court allowed the sale
of Pantranco's assets, "on the condition that the buyer
shall comply with the contractual commitments of PNEI-
PNB-NIDC, wherein all receipts up to the extent of P25
Million plus the accrued interest thereon shall be deposited
with the Security Bank and disbursement for operation to be
taken therefrom." Pantranco prayed for the issuance of a
writ of preliminary injunction, which the trial court granted. A
P 1 million bond was required for the issuance of the writ of
preliminary injunction.
In view of the trial court Order, Pantranco's Board of
Directors passed a Resolution authorizing the transfer of
P20 million to Asset Privatization Trust as the manager of
Pantranco. Pantranco interpreted the trial court's Order to
mean that it was required "to deposit the amount of
P2Omillion pesos." A check amounting to P20 million was
issued in favor of Asset Privatization Trust.
Pantranco subsequently realized that what was required
was not the payment of P20 million, but only the posting of
the PI million bond for the writ of preliminary mandatory
injunction to be issued. Pantranco requested Asset
Privatization Trust to return the funds. However, Asset
Privatization Trust did not do so. The Imexco case was
dismissed in 1992, due to "failure to prosecute for an
unreasonable length of time." The P20 million deposit
earned interest, and as of January 31, 1993, the deposit
increased to P29,533,072.69.
In a Memorandum, Special Investigator Calimag stated that
the money amounting to P29,816,225.91 belongs to
Pantranco and could be released to Domingo P. Uy,
Guillermo P. Uy, and Hinosan Motors. Atty. Espinosa
concurred
with
Special
Investigator
Calimag's
recommendation and informed Tatlonghari. Tatlonghari
then informed Asset Privatization Trust that notices of
garnishment were issued, and that Atty. Espinosa
recommended the release of the funds to Domingo P. Uy,
Guillermo P. Uy, and Hinosan Motors.
Tatlonghari then sought the opinion of the Treasury
Miscellaneous Accounting Division of the Bureau of
Treasury. In a Memorandum, the Treasury Miscellaneous
Accounting Division informed Tatlonghari "that the deposit
was recorded as a trust liability account of the Bureau and
not as income of the National Government, and as such, do
not form part of the income in the General Fund of the
National Government."
In respect of the proceeds from the sale or other disposition
of corporate subsidiaries of parent government
corporations, such proceeds shall accrue to the parent
corporation. The proceeds shall be net of fees,
commissions and other reimbursable expenses of the Trust
as approved by the Committee, where the disposition was
undertaken by or through the Trust.
The trial court explained that the assets in this case, which
are in cash, should automatically be considered as part of
the general fund.
On appeal, the Court of Appeals reversed the Decision of
the trial court and held that the funds were not public.
The Court of Appeals held that Section 2 of Proclamation
No. 50 must be read in conjunction with Section 23.
Under Section 23, the transfer of assets must be
identified "in an appropriate instrument describing such
assets or identifying the loan or other transactions giving
rise to the receivables, obligations and other property
constituting assets to be transferred." In this case, Asset
Privatization Trust did not present any Deed of
Assignment to prove that Pantranco's loan with the
Philippine National Bank was assigned to it.
Also, the terms of the loan agreement between Philippine
National Bank and Pantranco were not sufficient bases to
rule that the subject funds are public funds. The Court of
Appeals also held that Asset Privatization Trust had the
burden to prove that the subject funds are public funds,
but failed to do so.
On January 6, 2006, Asset Privatization Trust, through
the Office of the Solicitor General, filed this Petition for
Review. In the Resolution dated March 20, 2006, this
court required Tatlonghari, Domingo P. Uy, Guillermo P.
Uy, Hinosan Motors, and Western Guaranty Corporation
to file their comments.
Asset Privatization Trust, represented by the Office of the
Solicitor General, argues that the subject funds are public
funds and cites the definitions of "fund," "government
funds," "depository funds," and "depository" in the
Revised Administrative Code and Presidential Decree No.
1445. Further, Asset Privatization Trust argues that the
trial court's finding that the subject funds are public funds
is a finding of fact that should be respected by this court.
Domingo P. Uy argues that these documents show that
the subject funds exist. He also quotes the Court of
Appeals Decision and emphasizes that the subject funds
are private funds because Asset Privatization Trust was
unable to prove its allegation that the subject funds are
part of Pantranco's indebtedness to Philippine National
Bank, which was assigned to Asset Privatization Trust.
Guillermo P. Uy and Western Guaranty Corporation point
out that Asset Privatization Trust did not present any
deed of assignment or board resolution authorizing the
transfer of Philippine National Bank's assets to the
national government.
ISSUE: Whether or not the CA erred in ruling that the
funds were private.
HELD: No. there was no error on the part of the Court of
Appeals. Asset Privatization Trust could no longer
question the Notice of Levy and/or Sale on Execution
because the order denying the third-party claim became
final and executory. Even when the procedural infirmity
was brushed aside, there was still no error on the part of
the Court of Appeals since no evidence was presented to
show that the properties of Pantranco levied upon "were
among those included in the list of accounts that were
transferred to the National Government and which were
subsequently transferred to the APT.
APT deposited funds "in trust for" Pantranco, a corporation
under its management. These funds belong to Pantranco.
Further, in the absence of evidence that APT is authorized
to collect Pantranco's indebtedness to Philippine National
Bank, the subject funds can be garnished to satisfy the
claims of Pantranco's creditors.
10. Crisostomo vs Victoria, G.R. No. 175098
FACTS: Crisostomo, were the registered owners of a parcel
of riceland located in Sta. Barbara, Balivag, Bulacan.
He and his brother allegedly entered into a lease contract
with David Hipolito (Hipolito) over a portion of the riceland
The contract was supposedly in effect until Hipolito's death
As Hipolito died without any known heirs, Crisostomo was
set to reclaim possession and to take over cultivation of the
disputed portion.
However, Victoria entered the disputed portion... and began
cultivating it without the knowledge and consent of
Crisostomo. Crisostomo confronted Victoria, who insisted
that he had tenancy rights over the disputed portion.
In his Answer, Victoria claimed that Hipolito was his uncle.
He alleged that even during the lifetime of Hipolito, it was
he who was doing farmwork on the disputed portion and
that he did so with Crisostomo's knowledge. He added that
from the time Hipolito became bedridden, it... was he who
performed all duties pertaining to tenancy, including the
delivery of lease rentals and corresponding shares in the
harvest to Crisostomo. He asserted that Crisostomo's act of
receiving lease rentals from him amounted to implied
consent, which gave rise to a tenancy... relationship
between them.
Provincial Agrarian Reform Adjudicator held that ruled in
favor of Crisostomo, DAR likewise. CA however reversed
the ruling off both.
The Court of Appeals reasoned that "Hipolito, as the legal
possessor, could legally allow [Victoria] to work and till the
landholding" and that Crisostomo was bound by Hipolito's
act. It added that Crisostomo "had been receiving his share
of the harvest from [Victoria], as evidenced by the
numerous receipts indicating so." It emphasized that "[t]he
receipts rendered beyond dispute [Victoria's] status as the
agricultural tenant on the landholding." It further noted that
as an agricultural tenant, Victoria was entitled to security of
tenure who, absent any of the grounds for extinguishing
agricultural leasehold relationships, "should not be deprived
of but should continue his tenancy on the landholding.
ISSUE: Whether respondent Martin P. Victoria is a bona
fide tenant of the disputed portion
HELD: No. The Office of the Provincial Agrarian Reform
Adjudicator, noting that the essential element of consent
was absent, held that Victoria could not be deemed the
tenant of the disputed portion. It further held that implied
tenancy could not arise in a situation where another
person is validly instituted as tenant and is enjoying
recognition as such by the landowner.
Section 6 of Republic Act No. 3844, otherwise known as
the Agricultural Land Reform Code, identifies the
recognized parties in an agricultural leasehold relation:
SECTION 6. Parties to Agricultural Leasehold Relation.
— The agricultural leasehold relation shall be limited to
the person who furnishes the landholding, either as
owner, civil law lessee, usufructuary, or legal possessor,
and the person who personally cultivates the same.
This court has settled that tenancy relations cannot be an
expedient artifice for vesting in the tenant rights over the
landholding which far exceed those of the landowner. It
cannot be a means for vesting a tenant with security of
tenure, such that he or she is effectively the... landowner.
Even while agrarian reform laws are pieces of social
legislation, landowners are equally entitled to protection.
The landowners deserve as much consideration as the
tenants themselves in order not to create an economic
dislocation, where tenants are solely favored but the
landowners become... impoverished.
Sec. 6 of R.A. No. 3844, as amended, does not
automatically authorize a civil law lessee to employ a
tenant without the consent of the landowner.
Section 6 of the Agricultural Land Reform Code is a
subsequent restatement of a “precursor" provision:
Section 8 of Republic Act No. 1199.
SECTION 8. Limitation of Relation. — The relation of
landholder and tenant shall be limited to the person who
furnishes land, either as owner, lessee, usufructuary, or
legal possessor, and to the person who actually works the
land himself with the aid of labor... available from within
his immediate farm household.
It is simply to settle that whatever relation exists, it shall
be limited to two persons only first, the person who
furnished the land; and second, the person who actually
works the land. "Once the tenancy relation is established,
the parties to that... relation are limited to the persons
therein stated."... the reason for Sec. 6 of R.A. No. 3844
and Sec. 8 of R.A. No. 1199 in limiting the relationship to
the lessee and the lessor is to "discourage absenteeism
on the part of the lessor and the custom of co-tenancy"
under which "the tenant (lessee) employs another to do
the farm work for him, although it is he with whom the
landholder (lessor) deals directly.
Hipolito was not clothed with authority to “allow"
respondent to be the tenant himself. Hipolito, as lessee,
was entitled to possession of the disputed portion, and
legally so. He was, in this sense, a "legal possessor."
However, his capacities ended here. There was nothing
that authorized him to enter into a tenancy relation with
another.
The following essential elements of tenancy:
1) the parties are the landowner and the tenant or
agricultural lessee;
2) the subject matter of the relationship is an agricultural
land;
3) there is consent between the parties to the relationship;
4) the purpose of the relationship is to bring about
agricultural production;
5) there is personal cultivation on the part of the tenant or
agricultural lessee; and
6) the harvest is shared between landowner and tenant or
agricultural lessee. The presence of all these elements
must be proved by substantial evidence.
a. The applicant, by himself or through his
predecessor-in-interest, has been in possession
and occupation of the property subject of the
application;
b. The possession and occupation must be open,
continuous, exclusive, and notorious;
c. The possession and occupation must be under a
bona fide claim of acquisition of ownership;
d. The possession and occupation must have taken
place since June 12, 1945, or earlier; and
e. The property subject of the application must be
an agricultural land of the public domain.
Unless a person has established his status as a de jure
tenant, he is not entitled to security of tenure and is not
covered by the Land Reform Program of the Government
under existing tenancy laws. Tenancy relationship cannot
be presumed. Claims that one is a tenant do not
automatically give rise to security of tenure.
Heirs of Mario Malabana clarified that the June 12, 1945
reckoning point refers to the date of possession and not
to date of land classification as alienable and disposable.
To hold that respondent is the bona fide tenant of the
disputed portion would be to extend petitioner's
dispossession for a period much longer that he had
originally contemplated. It puts him at the mercy of a person
whom he recognized as a tenant. This is precisely the
"economic dislocation" that this court warned against in
Calderon. To hold as such would be to permit agrarian
reform laws to be used as a convenient artifice for investing
in a supposed tenant rights that far exceed those of the
owner.
Victoria and all those claiming rights under him are ordered
to vacate and surrender possession of the disputed portion
to petitioner Ismael V. Crisostomo.
11. La Tondena, Inc. v. Republic, G.R. No. 194617
FACTS: The petitioner applied for the registration of a
parcel of land alleged to have been possessed by the
petitioner before World War II. Petitioner based its
allegation of possession on the notation on a survey plan
which was purportedly issued on 1938. The MTC granted
its application. On appeal by the respondent, the CA
reversed the decision for the reason that the petitioner did
not prove possession from June 12, 145 or earlier. Also, on
appeal the respondent presented a report from the LRAA
that the subject land was declared as disposable and
alienable only sometime in 1987.
ISSUES: 1. Whether or not the land applied for registration
under Section14 (1) should have been declared as
alienable and disposable land since June 12, 1945 or
earlier.
2. Whether or not the applicant satisfactorily proved that the
land is disposable and alienable.
HELD: 1. Based on Section 48(b) of the Public Land Act in
relation to Section 14(1) of the Property Registration
Decree, an applicant for land registration must comply with
the following requirements:
2. Survey notations are not considered substantive
evidence of the land’s classification as alienable and
disposable. It is not enough for the PENRO or CENRO to
certify that a land is alienable and disposable. The
applicant for land registration must prove that the DENR
Secretary had approved the land classification and
released the land of the public domain as alienable and
disposable, and that the land subject of the application for
registration falls within the approved area per verification
through survey by the PENRO or CENRO. In addition, the
applicant for land registration must present a copy of the
original classification approved by the DENR Secretary
and certified as a true copy by the legal custodian of the
official records. These facts must be established to prove
that the land is alienable and disposable.