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LAW
PART II
SALES
A. DEFINITION
December 2, 1994
December 2, 1994
Both the trial court and CA found that defendants' offer to sell was
never accepted by the plaintiffs for the reason that the parties did
not agree upon the terms and conditions of the proposed sale, hence,
there was no contract of sale at all. An accepted unilateral promise
which specifies the thing to be sold and the price to be paid, when
coupled with a valuable consideration distinct and separate from the
price, is what may properly be termed a perfected contract of option
and not perfected contract of sale.
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prospective buyer is not automatic. The prospective seller must convey title
to the property through a deed of conditional sale.
In this case, Castillo reserved his title to the property and undertook to
execute a deed of absolute sale upon Olivarez Realty Corporations full
payment of the purchase price. Since Castillo still has to execute a deed of
absolute sale to Olivarez RealtyCorporation upon full payment of the
purchase price, the transfer of title is not automatic. The contract in this
case is a contract to sell.
Since Olivarez Realty Corporation illegally withheld payments of the
purchase price, Castillo is entitled to cancel his contract with petitioner
corporation. However, we properly characterize the parties contract as a
contract to sell, not a contract of conditional sale.
In both contracts to sell and contracts of conditional sale, title to the property
remains with the seller until the buyer fully pays the purchase price. Both
contracts are subject to the positive suspensive condition of the buyers full
payment of the purchase price.
In a contract of conditional sale, the buyer automatically acquires title to the
property upon full payment of the purchase price. This transfer of title is "by
operation of law without any further act having to be performed by the
seller." In a contract to sell, transfer of title to the prospective buyer is not
automatic. The prospective seller must convey title to the property [through]
a deed of conditional sale."
The distinction is important to determine the applicable laws and remedies in
case a party does not fulfill his or her obligations under the contract. In
contracts of conditional sale, our laws on sales under the Civil Code of the
Philippines apply. On the other hand, contracts to sell are not governed by
our law on sales but by the Civil Code provisions on conditional obligations.
Specifically, Article 1191 of the Civil Code on the right to rescind reciprocal
obligations does not apply to contracts to sell. Failure to fully pay the
purchase price in contracts to sell is not the breach of contract under Article
1191. Failure to fully pay the purchase price is "merely an event which
prevents the [sellers] obligation to convey title from acquiring binding force.
This is because "there can be no rescission of an obligation that is still
nonexistent, the suspensive condition not having happened.
In this case, Castillo reserved his title to the property and undertook to
execute a deed of absolute sale upon Olivarez Realty Corporations full
payment of the purchase price. Since Castillo still has to execute a deed of
absolute sale to Olivarez Realty Corporation upon full payment of the
purchase price, the transfer of title is not automatic. The contract in this
case is a contract to sell.
As this case involves a contract to sell, Article 1191 of the Civil Code of the
Philippines does not apply. The contract to sell is instead cancelled, and the
parties shall stand as if the obligation to sell never existed.
HELEN E. CABLING, assisted by her husband ARIEL CABLING v
JOSELIN TAN LUMAPAS, as represented by NORY ABELLANES, G.R No.
196950, June 18, 2014. J. BRION
Where the seller promises to execute a deed of absolute sale upon the
completion by the buyer of the payment of the purchase price, the contract
is only a contract to sell even if their agreement is denominated as a Deed of
Conditional Sale, as in this case. This treatment stems from the legal
characterization of a contract to sell, that is, a bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the subject
property despite delivery thereof to the prospective buyer, binds himself to
sell the subject property exclusively to the prospective buyer upon fulfilment
of the condition agreed upon, such as, the full payment of the purchase
price. Elsewise stated, in a contract to sell, ownership is retained by the
vendor and is not to pass to the vendee until full payment of the purchase
price Spouses Roque have not paid the final installment of the purchase
price. As such, the condition which would have triggered the parties
obligation to
enter into and thereby perfect a contract of sale in order to effectively
transfer the ownership of the subject portion from the sellers to the buyers
(Spouses Roque) cannot be deemed to have been fulfilled. Consequently, the
latter cannot validly claim ownership over the subject portion even if they
had made an initial payment and even took possession of the same.
ART 1458
D. CONTRACT TO SELL
JUAN P. CABRERA vs. HENRY YSAAC, G.R. No. 166790, November 19,
2014, J. Leonen
Unless all the co-owners have agreed to partition their property, none of
them may sell a definite portion of the land. The co-owner may only sell his
or her proportionate interest in the co-ownership. A contract of sale which
purports to sell a specific or definite portion of unpartitioned land is null and
void ab initio.
At best, the agreement between Juan and Henry is a contract to sell, not a
contract of sale. A contract to sell is a promise to sell an object, subject to
suspensive conditions. Without the fulfillment of these suspensive conditions,
the sale does not operate to determine the obligation of the seller to deliver
the object.
A co-owner could enter into a contract to sell a definite portion of the
property. Such contract is still subject to the suspensive condition of the
partition of the property, and that the other co-owners agree that the part
subject of the contract to sell vests in favor of the co-owners buyer. Hence,
the co-owners consent is an important factor for the sale to ripen.
ART 1478
A. SELLER
ART 1459
HEIRS OF ARTURO REYES vs SOCCO-BELTRAN,
G.R. 176474
November 27, 2008
ART 1505
NOOL vs. COURT OF APPEALS, G.R. NO. 116635 July 24,
1997
Petitioners contend that they could repurchase the property that they
"sold" to private respondents when they allowed the respondent to
redeem the properties for them from DBP but DBP certified that the
mortgagors' right of redemption was not exercised within the period.
Article 1505 of the Civil Code provides that "where goods are sold by a
person who is not the owner thereof, and who does not sell them
under authority or with consent of the owner, the buyer acquires
no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller's
authority to sell.", hence, petitioners "sold" nothing, it follows that
they can also "repurchase" nothing.
B. BUYER
ART
1491
DAROY vs. ATTY. ABECIA, A.C. NO. 3046, October 26, 1998
The prohibition in Art. 1491 does not apply to the sale of a parcel of
land, acquired by a client to satisfy a judgment in his favor to his
counsel as long as the property was not the subject of the
litigation.
ARCENIO vs. JUDGE PAGOROGON, A.M . NO. MTJ-89-270
July 5, 1993
After the court declared with finality that the petitioners are the lawful
owners, they refused to comply when the respondent lawyer
proceeded to implement the contract of services between him and
the petitioners by taking possession and exercising rights of
ownership over 40% of said properties which are the subject of
litigation. A contract between a lawyer and his client stipulating a
contingent fee is not covered by said prohibition under Article 1491
(5) of the Civil Code because the payment of said fee is not made
during the pendency of the litigation but only after judgment has
been rendered in the case handled by the lawyer.
ART 1492
IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE
TERRITORY OF GUAM OF ATTY. LEON G. MAQUERA, B.M .
NO. 793. July 30, 2004
ART 1493
PROVINCE OF CEBU vs. HEIRS OF RUFINA MORALES, G.R.
NO. 170115, FEBRUARY 19, 2008
The City of Cebu was no longer the owner of the lot when it ceded
the same to petitioner under the compromise agreement and at
that time, the city merely retained rights as an unpaid seller but
had effectively transferred ownership of the lot to Morales. A
successor-in-interest could only acquire rights that its predecessor
had over the lo which include the right to seek rescission or
fulfillment of the terms of the contract and the right to damages in
either case.
Properties of public dominion, being for public use, are not subject to levy,
encumbrance or disposition through public or private sale. Any encumbrance,
levy on execution or auction sale of any property of public dominion is void
for being contrary to public policy.
Otherwise, essential public services would stop if properties of public
dominion would be subject to encumbrances, foreclosures and auction sale.
Since it is GEMASCO which is liable
for the payment of the separation pay and backwages to its illegally
dismissed employees, any contemplated sale must be confined only to
those properties absolutely owned by it and the subject water tanks lent to
it by the NHA must corollarily be excluded from the same.
A. SALE OF AN EXPECTED THING
ART 1461
HEIRS OF AMPARO DEL ROSARIO vs. SANTOS, G.R.
NO. L-46892
September 30, 1981
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Private respondent sold Lot 4221 to his nephew by means of a
"Kasulatan ng Bilihan ng Lupa" which incorporated both the area
and the definite boundaries of the lot, the former transferred not
merely the 822.5 square meters stated in their document of sale
but the entire area circumscribed within its boundaries. If
besides mentioning the boundaries, which
is indispensable in every conveyance of real
estate, its area or number should be designated in the contract,
the vendor shall be bound to deliver all that is included within said
boundaries, even when it exceeds the area or number specified in
the contract; and, should he not be able to do so, he shall suffer a
reduction in the price, in proportion to what is lacking in the area or
number, unless the contract is rescinded because the vendee does
not accede to the failure to deliver what has been stipulated.
ART 1495
CHUA vs COURT OF APPEALS, G.R. NO. 119255, April 9,
2003
ART 1496
VISAYAN SAWM ILL COMPANY, INC., vs. COURT OF
APPEALS, G.R. NO. 83851. March 3, 1993.
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The seller gave access to the buyer to enter his premises,
manifesting no objection thereto but even sending people to start
digging up the scrap iron. The seller has placed the goods in the
control and possession of the vendee and such action or real delivery
(traditio) transfered ownership.
ART 1497
MUNICIPALITY OF VICTORIAS vs. THE COURT OF APPEALS,
G.R. NO. L- 31189 March 31, 1987
ART 1523
PUROMINES, INC., vs. COURT OF APPEAL, G.R. NO.
91228. March 22, 1993.
Petitioner argues that the sales contract does not include the
contract of carriage which is a different contract entered into by the
carrier with the cargo owners.
As worded, the sales contract is comprehensive enough to include
claims for damages arising from carriage and delivery of the goods. As
a general rule, the seller has the obligation to transmit the goods to
the buyer, and concomitant thereto, the contracting of a carrier to
deliver the same. Art. 1523 of the Civil Code provides:
ART 1477
BOY vs. COURT OF APPEALS, G.R. NO. 125088, April 14,
2004
V.PRICE
RTC considered that although the sales of the properties on the lot
were simulated, it can be assumed that the intention of Ho in
such transaction was to give and donate such properties to the
respondent. The Court holds that the reliance of the trial court on the
provisions of Article 1471 of the Civil Code to conclude that the
simulated sales were a valid donation to the respondent is misplaced
because its finding was based on a mere assumption when the law
requires positive proof, which the respondent was unable to show.
B. FIXING OF THE
D. INTEREST
ART 1589
FULE vs. COURT OF APPEALS, G.R. NO. 112212, March 2,
1998
Neither may such failure to pay the balance of the purchase price
result in the
payment of interest thereon. Article 1589 of the Civil Code prescribes
the payment of interest by the vendee "for the period between the
delivery of the thing and the payment of the price" in the following
cases:
(2) Should the thing sold and delivered produce fruits or income;
ART 1592
SOLIVA vs. The INTESTATE ESTATE of MARCELO
M.VILLALBA, G.R. NO.
154017, December 8, 2003
ART 1324)
The court found the contract to be valid, but nonetheless ruled that
the option to buy is unenforceable because it lacked a
consideration distinct from the price and RCBC did not exercise its
option within reasonable time. Article 1324 of the Civil Code
provides that when an offeror has allowed the offeree a certain
period to accept, the offer maybe withdrawn at anytime before
acceptance by communicating such withdrawal, except when the
option is founded upon consideration, as something paid or
promised; on the other hand, Article 1479 of the Code provides
that an accepted unilateral promise to buy and sell a determinate
thing for a price certain is binding upon the promisor if the
promise is supported by a consideration distinct from the price.
C. EARNEST MONEY
The lower court ruled that the receipt stating that the respondent
made a partial payment and that the execution and final deed of
sale would be signed upon payment of the balance, is a Contract of
Sale and considered the partial payment as earnest money, which
prompted the respondent to demand specific performance and
damages when the herein petitioners cancelled the transaction.
Whenever earnest money is given in a contract of sale, it shall
be
considered as part of the price and proof of the perfection of the
contract, but the earnest money given in a contract to sell will form
part of the consideration only if the sale is consummated upon full
payment of the purchase price.
Under the Civil Code, the vendor is bound to transfer the ownership of and
deliver, as well as warrant the thing which is the object of the sale. The
ownership of thing sold is considered acquired by the vendee once it is
delivered to him. Thus, ownership does not pass by mere stipulation but
only by delivery. In the Law on Sales, delivery may be either actual or
constructive, but both forms of delivery contemplate "THE ABSOLUTE
GIVING UP OF THE CONTROL AND CUSTODY OF THE PROPERTY ON THE
PART OF THE VENDOR,
AND THE ASSUMPTION OF THE SAME BY THE VENDEE."
The seller has actually delivered the bulk bags to buyer-company, although
the same was not delivered to the person named in the Purchase Order but
to the representative of the general manager of buyer-company. By allowing
sellers employee to pass through the guard-on-duty, who allowed the entry
of delivery into the buyers premises which is the designated delivery site,
the buyer had effectively abandoned whatever infirmities may have
attended the delivery of the bulk bags. Therefore, there was a valid delivery
on the part of the seller which transferred ownership to the buyer and which
would then give rise to an obligation to pay on the part of the buyer for the
value of the bulk bags.
A. DEED OF SALE
ART 1498
B. CONSTRUCTIVE
The petitioner asserts that it has a better right of ownership over the
disputed property in the case at bar by virtue of a Dacion En Pago. The
Supreme Court ruled that the most prominent index of simulation is the
complete absence of an attempt on the part of the vendee to assert his
rights of ownership over the property in question. After the sale, the vendee
should have entered the land and occupied the premises.
ART 1544
DE LEON vs. ONG, G.R. NO. 170405, February 2, 2010
VIII. RISK OF
(2)
AEROSPACE CHEMICAL INDUSTRIES, INC. vs. CA,
G.R. NO. 108129
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September 23, 1999
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IX. DOCUMENTS OF TITLE
A. TORRENS TITLE
The fact that the certificate of title over the registered land is lost
does not convert it into unregistered land. After all, a certificate of
title is merely an evidence of ownership or title over the particular
property described therein. T
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second sale in good faith, meaning, he does so without knowledge
of any defect in the title over the property sold.
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Respondents caused the registration of the sale of the land in the
Registry of the Deeds. Petitioners, on the other hand, failed to
cause the registration of the sale to them. Where both parties
claim to have purchased the same property, the one who
registered the sale in his favor, in good faith, has a preferred right
over the other who has not registered his title, even if the latter is
in actual possession of the immovable property.
Between two buyers of the same immovable property, the law gives
ownership priority to (1) the first registrant in good faith; (2) then,
the first possessor in good faith; and (3) finally, the buyer who in
good faith presents the oldest title.
The general rule is that one who deals with property registered
under the Torrens system need not go beyond the same, but only
has to rely on the title. He is charged with notice only of such
burdens and claims as are annotated on the title.
However, this principle does 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. One
who falls within the exception can neither be denominated an
innocent purchaser for
value nor a purchaser in good faith.
Even assuming that Cortez was not guilty of bad faith when he
bought the land in question, the fact remains that the Isabela
Colleges was first in possession. Petitioner has been in possession
of the land since 1949. Between petitioner and Cortez, therefore,
the former had a better right for the latter only bought the
property in 1988 when it was already purchased by and titled
under the name of petitioner.
First buyer registered the sale under Act 3344, while second buyer
registered the sale under PD 1529. The governing principle is prius
tempore, potior jure (first in time, stronger in right). Knowledge by
the first buyer of the second sale cannot defeat the first buyers rights
except when the second buyer first registers in good faith the
second sale, conversely, knowledge gained by the second buyer of
the first sale defeats his rights even if he is first to register, since
such knowledge taints his registration with bad faith.
Amores was in good faith when he bought the disputed lots. When
he registered his title, however, he already had knowledge of the
previous sale of the disputed lots to petitioner. Such knowledge
tainted his registration with bad faith, and to merit protection
under article 1544, the second buyer must act in good faith from
the time of the sale until the registration of the same
X. REMEDIES OF AN UNPAID
ART 1486
The failure of TSEI to pay the consideration for the sale of the subject
property entitled the Sanchezes to rescind the Agreement. And in view of the
finding that the intervenors acted in bad faith in purchasing the property, the
subsequent transfer in their favor did not and cannot bar rescission. Contrary
to the contention of BPI, although the case was originally an action for
rescission, it became a direct attack on the title, certainly there is no
indication that when the Sanchezes filed their complaint with the RTC they
already knew of the existence of TCT 383697.
PEOPLE'S INDUSTRIAL AND COMMERCIAL CORPORATION,
vs. COURT OF APPEALS, G.R. NO. 112733 October 24, 1997
A. EXPRESS
WARRANTIES ART
1502
B. IMPLIED
WARRANTIES ART
1628
LO vs. KJS ECO-FORMWORK SYSTEM PHIL., INC., G.R.
NO. 149420
October 8, 2003
The vendor in good faith shall be responsible for the existence and
legality of the credit at the time of the sale, unless it should have
been sold as doubtful; but not for the solvency of the debtor,
unless it has been so expressly stipulated or unless the insolvency
was prior to the sale and of common knowledge.
ART 1546
ANG vs. COURT OF APPEALS, G.R. NO. 177874, September
29, 2008
The seller, in declaring that he owned and had clean title to the
vehicle at the time the Deed of Absolute Sale, is giving an implied
warranty of title which prescribes six months after the delivery of the
vehicle.
ART 1547
PNB vs MEGA PRIME REALTY AND HOLDINGS CORPORATION,
G.R. NO. 173454, October 6, 2008
ART 1548
ANG vs. COURT OF APPEALS, G.R. NO. 177874, September
29, 2008
The seller, in pledging that he will defend the same from all
claims or any claim whatsoe ver [and] will save the vendee from any
suit by the government of the Republic of the Philippines, is giving
a warranty against eviction. A breach of this warranty requires the
concurrence of these four requisites:(1) The purchaser has been
deprived of the whole or part of the thing sold; (2) This eviction is by
a final judgment; (3) The basis thereof is by virtue of a right prior to
the sale made by the vendor; and (4) The vendor has been
summoned and made co-defendant in the suit for eviction at the
instance of the vendee.
ART 1561
DE YSASI vs. ARCEO, G.R. NO. 136586, November 22,
2001
ART 1571
DINO vs COURT OF APPEALS, G.R. NO. 113564, June 20,
2001
Respondent made the last delivery of the vinyl products to
petitioners on September 28, 1988 and the action to recover the
purchase price of the goods petitioners returned to the respondent
was filed on July 24, 1989, more than nine months from the date of
last delivery. Actions arising from breach of warranty against
hidden defects shall be barred after six months from the delivery of
the thing sold.
XIII. BREACH OF
ART 1583
INTEGRATED PACKAGING CORP. vs. COURT OF APPEALS,
G.R. NO. 115117, June 8, 2000
ART 1597
VISAYAN SAWMILL COMPANY, INC., vs. THE HONORABLE
COURT OF APPEALS, G.R. NO. 83851. March 3, 1993.
The petitioner agreed to deliver the scrap iron only upon payment
of the purchase price by means of an irrevocable and unconditional
letter of credit, which the respondent failed to obtain, thus, there
was no actual sale. Where the goods have not been delivered to
the buyer, and the buyer has repudiated the contract of sale, or
has manifested his inability to perform his obligations, thereunder,
or has committed a breach thereof, the seller may totally rescind
the contract of sale by giving notice of his election to do to the
buyer.
Cameron Grandville filed a motion for reconsideration for the April 10, 2013
decision of the Supreme Court. It argues that the right of Eagle Ridge
Development to extinguish the obligation has already lapsed. However, the
Court in resolving this case stated that under the circumstances of this case,
the 30-day period under Article 1634 within which Eagle Ridge Developments
could exercise their right to extinguish their debt should begin to run only
from the time they were informed of the actual price paid by the assignee for
the transfer of their debt.
JUAN P. CABRERA VS. HENRY YSAAC, G.R. No. 166790. November 19,
2014, J. Leonen
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ownership. In fact, the issuance of the writ of possession at this point
becomes ministerial for the court.
The debtor contesting the purchasers possession may no longer avail of the
remedy under Section 8 of Act No. 3135, but should pursue a separate
action e.g., action for recovery of ownership, for annulment of mortgage
and/or annulment of foreclosure. FSAMIs consolidation of ownership
therefore makes the remedy under Section 8 of Act No. 3135 unavailable for
680 Home.
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NOOL vs. COURT OF APPEALS, G.R. NO. 116635, July 24,
1997
Petitioners contend that they could repurchase the property that they
"sold" to private respondents when they allowed the respondent to
redeem the properties for them from DBP. DBP, howe ver, certified
that the petitioner-mortgagors' right of redemption was not
exercised within the period, hence DBP became the absolute owner of
said parcels of land when it entered into a Deed of Conditional
Sale involving the same parcels of land with Private Respondent as
vendee. One "repurchases" only what one has previously sold since
the right to repurchase presupposes a valid contract of sale
between the same parties.
ART 1603
BAUTISTA vs UNANGST, G.R. NO. 173002, July 4, 2008
ART 1606
ABILLA vs. ANG GOBONSENG, JR., G.R. NO. 146651,
January 17, 2002
The lower court's dispositive position states: "Howe ver, the vendors
can still exercise the right to repurchase said property within thirty
(30) days from receipt of this decision pursuant to Article 1606 and
1607 of the New Civil Code." Article 1606 grants the vendor a
retro thirty (30) days from the time final judgment was rendered,
not from the defendants receipt of the judgment, "final judgment
must be construed to mean one that has become final and executory.
ART 1607
Spouses CRUZ vs. LEIS et al., G.R. NO. 125233, March 9,
2000
ART 1616
BPI FAM ILY SAVINGS BANK, INC. vs. SPS. VELOSO, G.R.
NO. 141974,
August 9, 2004
The respondents offer to redeem the foreclosed properties and the
subsequent consignation in court were made within the period of
redemption, but the amount consigned did not include the interest
and was also way below the amount paid by the highest bidder-
purchaser of the properties during the auction sale. The
redemption price should either be fully offered in legal tender or
else validly consigned in court because only by such means can the
auction winner be assured that the offer to redeem is being made
in good faith.
ART 1619
LEE CHUY REALTY CORPORATION vs.HON. COURT OF
APPEALS, G.R. NO.
104114 December 4, 1995
ART 1621
PRIMARY STRUCTURES CORP. vs. SPS. VALENCIA, G.R.
NO. 150060.
August 19, 2003
Article 1621 of the Civil Code expresses that the right of redemption
it grants to an adjoining owner of the property conveyed may be
defeated if it can be shown that the buyer or grantee does not own
any other rural land.
ART 1622
G.R. NO. 134117. February 9, 2000
SEN PO EK MARKETING CORPORATION vs. MARTINEZ
ART 1623
JUAN P. CABRERA VS. HENRY YSAAC, G.R. No. 166790. November 19,
2014, J. Leonen
If the alienation precedes the partition, the co-owner cannot sell a definite
portion of the land without consent from his or her co-owners. He or she
could only sell the undivided interest of the co-owned property.
In the case at bar, no contract of sale exist. The object of a valid sales
contract must be owned by the seller. If the seller is not the owner, the seller
must be authorized by the owner to sell the object. There was no showing
that respondent was authorized by his co- owners to sell the portion of land
occupied by Juan Cabrera, the Espiritu family, or the Borbe family. Without
the consent of his co-owners, respondent could not sell a definite portion of
the co-owned property.
SPOUSES MICHELLE M. NOYNAY and NOEL S. NOYNAY vs.CITIHOMES
BUILDER AND DEVELOPMENT, INC., G.R. No. 204160, September 22,
2014, J. Mendoza
Co-owners with actual notice of the sale are not entitled to written
notice. A written notice is a formal requisite to make certain that
the co-owners have actual notice of the sale to enable them to
exercise their right of redemption within the limited period of thirty
days. But where the co-owners had actual notice of the sale at the
time thereof and/or afterwards, a written notice of a fact already
known to them, would be superfluous. The statute does not
demand what is unnecessary.
Art. 1623 of the Civil Code is clear in requiring that the written
notification should come from the vendor or prospective vendor, not
from any other person. Since the vendor of an undivided interest is
in the best position to know who are his co-owners who under the
law must be notified of the sale, and is in the best position to
confirm whether consent to the essential obligation of selling the
property and transferring ownership thereof to the vendee has been
given.
ART 1625
TEOCO, JR.,vs METROPOLITAN BANK AND TRUST
COMPANY, G.R. NO.
162333, December 23, 2008
Would the exercise by the brothers Teoco of the right to redeem the
properties in question be precluded by the fact that the assignment
of right of redemption was not contained in a public document?
NO, the phrase "effect as against third person" in Article 1625 of
the Civil Code is interpreted as to be damage or prejudice to such third
person, hence if the third person would not be prejudiced then
the assignment of right to redeem may not be in a public instrument.
B. EQUITABLE MORTGAGE
ART 1602
HEIRS OF JOSE REYES, JR. vs. REYES, G.R. NO.
158377,
August 13, 2010
The provisions of the Civil Code governing equitable mortgages
disguised as sale contracts, like the one herein, are primarily
designed to curtail the evils brought about by contracts of sale with
right to repurchase, particularly the circumvention of the usury law
and pactum commissorium. Courts have taken judicial notice of the well-
known fact that contracts of sale with right to repurchase have been
frequently resorted to in order to conceal the true nature of a
contract, tha t is, a loan secured by a mortgage. It is a reality
that grave
financial distress renders persons hard-pressed to meet even their
basic needs or to respond to an emergency, leaving no choice to
them but to sign deeds of absolute sale of property or deeds of
sale with pacto de retro if only to obtain the much-needed loan from
unscrupulous money lenders. This reality precisely explains why
the pertinent provision of the Civil Code includes a peculiar rule
concerning the period of redemption, to wit:
xx
x
The purchase price stated in the deed was the amount of the
indebtedness of the respondent to petitioner but the deed
purports to be a sale with right to purchase. The rule is firmly
settled that whenever it is clearly shown that a deed of sale with
pacto de retro, regular on its face, is given as security for a loan, it
must be regarded as an equitable mortgage.
ART 1604
DEHEZA-INAMARGA vs ALANO, G.R. NO. 171321, December
18, 2008
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In this case, the contract to sell between Rotairo and Ignacio & Company
was entered into in 1970, and the agreement was fully consummated with
Rotairos completion of payments and the execution of the Deed of Sale in
his favor in 1979. Clearly, P.D. No. 957 ( Sale of Subdivision Lots and
Condominiums) is applicable in this case.
It was error for the CA to rule that the retroactive application of P.D. No. 957
is warranted only where the subdivision is mortgaged after buyers have
purchased individual lots. According to the CA, the purpose of Sec. 18
requiring notice of the mortgage to the buyers is to give the buyer the
option to pay the installments directly to the mortgagee; hence, if the
subdivision is mortgaged before the lots are sold, then there are no
buyers to notify.
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What the CA overlooked is that Sec. 21 requires the owner or developer of
the subdivision project to complete compliance with its obligations within two
years from 1976. The two - year compliance provides the developer the
opportunity to comply with its obligation to notify the buyers of the existence
of the mortgage, and consequently, for the latter to exercise their option to
pay the installments directly to the mortgagee.
FIL-ESTATE PROPERTIES, INC. AND FIL-ESTATE NETWORK, INC., vs.
SPOUSES CONRADO AND MARIA VICTORIA RONQUILLO, G.R. No.
185798, JANUARY 13, 2014, J.
Perez
The Spouses Rosario purchased a condominium unit from Fil-Estate. Fil-
Estate failed to comply with its obligations. The Supreme Court held that the
Spouses are entitled to rescission, pursuant to Section 23 of P.D. 957 which
regulates the sale of subdivisions and condominium lots. The Spouses
Rosario may be reimbursed the total amount paid including amortization
interests but excluding delinquency interests, with interest thereon at the
legal rate.
41
A buyer of a property at a foreclosure sale cannot disposses prior
purchasers on installment of individual lots therein, or compel them
to pay again for the lots which they previously bought from the
defaulting mortgagor-subdivision developer on the theory that P.D.
957, "The Subdivision and Condominium Buyers' Protective
Decree", is not applicable to the mortgage contract in question,
the same having been executed prior to the enactment of P.D.
957.
42
amortizations tendered by private respondents. Privity of contracts as
a defense does not apply in this case for the law explicitly grants to
the buyer the option to pay the installment payment for his lot or
unit directly to the mortgagee (petitioner), which is required to apply
such payments to reduce the corresponding portion of the mortgage
indebtedness secured by the particular lot or unit being paid for.
SUCCESSION
Opening of Succession
Testamentary Succession
Form and Solemnities of Notarial Wills
Baltazar v. Laxa, G.R.NO. 174489, April, 11, 2012
In the case at bar, private respondent read the testator's will and
codicil aloud in the presence of the testator, his three
instrumental witnesses, and the notary public. Prior and subsequent
thereto, the testator affirmed, upon being asked, that the contents
read corresponded with his instructions. Only then did the signing
and acknowledgement take place. There is no evidence, and
petitioner does not so allege, that the contents of the will and codicil
were not sufficiently made known and communicated to the testator.
On the contrary, with respect to the "Huling Habilin," the day of the
execution was not the first time that Brigido had affirmed the truth
and authenticity of the contents of the draft. The uncontradicted
testimony of Atty. Rino is that Brigido Alvarado already
acknowledged that the will was drafted in accordance with his
expressed wishes even prior to 5 November 1977 when Atty. Rino
went to the testator's residence precisely for the purpose of securing
his conformity to the draft.
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Palaganas v. Palaganas, 2011 640 SCRA 538
A foreign will can be given legal effects in our jurisdiction. But,
reprobate or re- authentication of a will already probated and
allowed in a foreign country is different from that probate where the
will is presented for the first time before a competent court.
Modes of Revocation
Casiano vs CA 158 SCRA 451
Revocation under this condition to be effective must have complied
with the two requirements: the overt act as mentioned under the
law; the intent to revoke on the part of the testator. The document
or paper burned by one of the witnesses was not satisfactorily
established to be the will at all, much less the will of Adriana.
52
will has been destroyed by any other person without the
knowledge or authority of the testator.
Allowance of W ills
Requirements for
probate Gan vs Yap,
104 Phil. 509
The loss of the holographic will entail the loss of the only
medium of proof; if
the ordinary will is lost, the subscribing witnesses are available to
authenticate. In case of holographic will if oral testimony were
admissible only one man could engineer the fraud this way.
Rodelas vs Aranza 119 SCRA 16
If the holographic will has been lost or destroyed and no other copy is
available, the will cannot be probated because the best and only
evidence is the handwriting of the testator. But a photostatic copy or
Xerox copy of the holographic will may be allowed because
comparison can be made with the standard writings of the testator.
Azaola vs Singson 109 Phil. 102
Since the authenticity of the will was not contested, the appellant
is not required to produce more than one witness. Even if
the genuiness of the
holographic will were contested, article 811 cannot be interpreted as
to require the compulsory presentation of three witnesses to identify
the handwriting of the testator, under penalty of having denied
the probate.
Codoy vs Calugay, 312 SCRA 333
We cannot eliminate the possibility that if the will is contested, the law
requires that three witnesses to declare that the will was in the
handwriting of the deceased. A visual examination of the holographic
will convince us that the strokes are different when compared with
other documents written by the testator.
Legitime, Institution,
Preterition Aznar vs.
Duncan, 17 SCRA 590
To constitute preterition, the omission must be total and
complete, such that
nothing must be given to the compulsory heir.
Substitution of Heirs
It is therefore clear from Article 992 of the New Civil Code that the
phrase "legitimate children and relatives of his father or mother"
includes Simona Pamuti Vda. de Santero as the word "relative"
includes all the kindred of the person spoken of. The record shows
that from the commencement of this case the only parties who
claimed to be the legitimate heirs of the late Simona Pamuti Vda.
de Santero are Felisa Pamuti Jardin and the six minor natural or
illegitimate children of Pablo Santero.
P ARTNERSHIP
I. Contract of Partnership
(1) Except as provided by Article 1825, persons who are not partners
as to each other are not partners as to third persons;
(2) Co-ownership or co-possession does not of itself establish a
partnership,
whether such co-owners or co-possessors do or do not share any
profits made by the use of the property;
(3) The sharing of gross returns does not of itself establish a
partnership, whether or not the persons sharing them have a joint
or common right or interest in any property which the returns are
derived;
(4) The receipt by a person of a share of the profits of a business is a
prima facie evidence that he is a partner in the business, but no
such inference shall be drawn if such profits were received in
payment:
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Verily, any one of the partners may, at his sole pleasure, dictate a
dissolution of the partnership at will. He must, however, act in
good faith, not that the attendance of bad faith can prevent the
dissolution of the partnership but that it can result in a liability
for damages. Among partners, mutual agency arises and the
doctrine of delectus personae allows them to have the power,
although not necessarily the right, to dissolve the partnership. An
unjustified dissolution by the partner can subject him to a possible
action for damages.
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Liwanag vs. CA, G.R. NO. 114398, October 24, 1997
Petitioner was charged with the crime of estafa and advances the
theory that the intention of the parties was to enter into a contract
of partnership, wherein Rosales (private complainant for Estafa) would
contribute the funds while she would buy and sell the cigarettes,
and later divide the profits between them But even assuming
that a contract of partnership was indeed entered into by and
between the parties, SC ruled that when money or property have
been received by a partner for a specific purpose (such as that
obtaining in the instant case) and he later misappropriated it, such
partner is guilty of estafa.
Moran, Jr. vs. CA, G.R. NO. L-59956, October 31, 1984
The rule is, when a partner who has undertaken to contribute a sum
of money fails to do so, he becomes a debtor of the partnership for
whatever he may have promised to contribute (Art. 1786, Civil Code)
and for interests and damages from the time he should have
complied with his obligation (Art. 1788, Civil Code). Thus in Uy v.
Puzon (79 SCRA 598), which interpreted Art. 2200 of the Civil Code of
the Philippines, we allowed a total of P200,000.00 compensatory
damages in favor of the appellee because the appellant therein
was remiss in his obligations as a partner and as prime
contractor of the construction projects in question.
Tai Tong Chuache & Co. vs. Insurance Commission, G.R. NO.
L-55397 February 29, 1988
61
Catalan and Gatchalian as partners mortgaged two lots together with
the improvements thereon to secure a credit. Catalan redeemed
the property and he contends that title should be cancelled and a
new one must be issued in his name. Under Article 1807 of the NCC
every partner becomes a trustee for his co-partner with regard to any
benefits or profits derived from his act as a partner. Consequently,
when Catalan redeemed the properties in question, he became a
trustee and held the same in trust for his co partner Gatchalian,
subject to his right to demand from the latter his contribution to the
amount of redemption.
62
Evangelista & Co. vs. Abad Santos, G.R. NO. L-31684 June
28, 1973
V.Dissolution
AGENCY
Persons dealing with an agent must ascertain not only the fact of agency,
but also the nature and extent of the agents authority. A third person with
whom the agent wishes to contract on behalf of the principal may require
the presentation of the power of attorney, or the instructions as regards the
agency. According to Article 1990 of the New Civil Code, insofar 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. In this case, Spouses Rabaja did not recklessly enter into
a contract to sell with the agent. They required her presentation of the power
of attorney before they transacted with her principal. And when the agent
presented the SPA to Spouses Rabaja, the latter had no reason not to rely on
it.
I. Definition of Agency
Country Bankers Insurance Corp.. vs. Keppel Cebu
Shipyard, June 18, 2012, G.R. NO. 166044
II. Powers
III.Express vs. Implies Agency
In this case, the validity of a mortgage was attacked on the ground that Leon
(petitioner Leonardos brother) was not authorized to contract it. Leon claims
that the Community Tax Certificate presented during the notarization of the
SPA was obtained after the SPA had been executed.
However, the defective notarization did not avoid the SPA. The defective
notarization will simply strip the document of its public character and
reduce it to a private instrument, but nonetheless, binding, provided its
validity is established by preponderance of evidence.
Article 1358 of the Civil Code requires that the form of a contract that
transmits or
extinguishes real rights over immovable property should be in a public
document, yet the failure to observe the proper form does not render the
transaction invalid. The necessity of a public document for said contracts is
only for convenience; it is not essential for validity or enforceability.
MACARIA ARGUELLES AND THE HEIRS OF THE DECEASED PETRONIO
ARGUELLES VS. MALARAYAT RURAL BANK INC. G.R. No. 200468
March 19, 2014, J. Villarama Jr.
The issue in this case is case is whether Malarayat Rural Bank is a mortgagee
in good faith who is entitled to protection on its mortgage lien.
In this case, Malarayat Rural Bank fell short of the required degree of
diligence, prudence, and care in approving the loan application of the
spouses Guia. Respondent should have diligently conducted an investigation
of the land offered as collateral. Although the Report of Inspection and Credit
Investigation found at the dorsal portion of the Application for Agricultural
Loan proved that the respondent Malarayat Rural Bank inspected the land,
the respondent turned a blind eye to the finding therein that the "lot is
planted [with] sugarcane with annual yield (crops) in the amount of P15,000.
They merely derived the authority to mortgage the lot from the Special Power
of Attorney allegedly executed by the late Fermina M. Guia. Hence, it was
incumbent upon the respondent Malarayat Rural Bank to be more cautious in
dealing with the spouses Guia, and inquire further regarding the identity and
possible adverse claim of those in actual possession of the property. Since
the subject land was not mortgaged by the owner thereof and since the
respondent Malarayat Rural Bank is not a mortgagee in good faith, said bank
is not entitled to protection under the law. The unregistered sale in favor of
the spouses Arguelles must prevail over the mortgage lien of respondent
Malarayat Rural Bank.
Our law mandates an agent to act within the scope of his authority.
The scope of an agents authority is what appears in the written
terms of the power of attorney granted upon him. Under Article
1878(11) of the Civil Code, a special power of attorney is necessary
to obligate the principal as a guarantor or surety.
X. Irrevocable Agency
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Under Article 1927 of the Civil Code, an agency cannot be revoked
if a bilateral contract depends upon it, or if it is the means of
fulfilling an obligation already contracted, or if a partner is
appointed manager of a partnership in the contract of partnership
and his removal from the management is unjustifiable. Stated
differently, an agency is deemed as one coupled with an interest
where it is established for the mutual benefit of the principal and of
the agent, or for the interest of the principal and of third persons,
and it cannot be revoked by the principal so long as the interest of
the agent or of a third person subsists. In an agency coupled with
an interest, the agents interest must be in the subject matter
of the power conferred and not merely an interest in the
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exercise of the power because it entitles him to compensation.
When an agents interest is confined to earning his agreed
compensation, the agency is not one coupled with an interest,
since an agents interest in obtaining his compensation as such
agent is an ordinary incident of the agency relationship.
XI.Modes of Extinguishment
TRUST
ELIZA ZUNIGA-SANTOS,* represented by her Attorney-in Fact,
NYMPHA Z. SALES v MARIA DIVINA GRACIA SANTOS-GRAN** and
REGISTER OF DEEDS OF MARIKINA CITY, G.R No. 197380, October 8,
2014. J. PERLAS-BERNABE.
To determine when the prescriptive period commenced in an action for
reconveyance, the plaintiffs possession of the disputed property is material.
If there is an actual need to reconvey the property as when the plaintiff is not
in possession, the action for reconveyance based on implied trust prescribes
in ten (10) years, the reference point being the date of registration of the
deed or the issuance of the title. On the other hand, if the real owner of the
property remains in possession of the property, the prescriptive period to
recover title and possession of the property does not run against him and in
such case, the action for reconveyance would be in the nature of a suit for
quieting of title which is imprescriptible.
71
Having alleged the commission of fraud by Gran in the transfer and
registration of the subject properties in her name, there was, in effect, an
implied trust created by operation of law pursuant to Article 1456 of the Civil
Code.
Here, the filing of the complaint was beyond the 10-year prescriptive
period, warranting the dismissal of the complaint.
72
HEIRS OF VALENTIN BASBAS, ANSELMA B. ENDRINAL, GERTRUD ES BASBAS,
RUFINA BASBAS, CEFERINA B. CARTECIANO, ANACLETO BASBAS, ARSENIA
BASBAS, ANASTACIO BASBAS, BEDACIO BASBAS, TEODOCIA B. OCAMPO,
SEGUNDO C. BASBAS, MARIA B. RAMOS AND EUGENIO BASBAS IN
REPRESENTATION OF PEDRO BASBAS; HERINO T. BASBAS AND NESTOR T.
BASBAS IN REPRESENTATION OF LUCAS BASBAS; ADELAIDA B. FLORENTINO,
RODRIGO BASBAS, FELIX BASBAS, JR., TEODULO BASBAS, ANDRESITO
BASBAS, LARRY BASBAS AND JOEY BASBAS IN REPRESENTATION OF FELIX
BASBAS, SR., VICTOR BEATO, ALIPIO BEATO, EUTIQUIO BEATO, JULIANA B.
DIAZ, PABLO BEATO AND ALEJANDRO BEATO IN REPRESENTATION OF
REMIGIA B. BEATO, AS REPRESENTED BY RODRIGO BASBAS V RICARDO
BASBAS as represented by EUGENIO BASBAS, G.R No. 188773, September 10, 2014. J.
PEREZ
The Court is in conformity with the finding of the trial court that an implied
resulting trust was created as provided under the first sentence of Article
1448which is sometimes referred to as a purchase money resulting trust, the
elements of which are: (a) an actual payment of money, property or services,
or an equivalent, constituting valuable consideration; and (b) such
consideration must be furnished by the alleged beneficiary of a resulting
trust. In this case, the petitioners have shown that the two elements are
present. Luis, Sr. was merely a trustee of Juan Tong and the petitioners in
relation to the subject property, and it was Juan Tong who provided the
money for the purchase of Lot 998 but the corresponding transfer certificate
of title was placed in the name of Luis, Sr.
COMPROM ISE
I. Definition
III. Effect
Philippine National Oil Company-Energy Development
Corporation (PNOC- EDC) v. Abella, G.R. NO. 153904,
January 17, 2005
A compromise once approved by final orders of the court has the force
of res judicata between the parties and should not be disturbed
except for vices of consent or forgery. Hence, a decision on a
compromise agreement is final and executory. Such agreement has
the force of law and is conclusive on the parties. It transcends its
identity as a mere contract binding only upon the parties thereto,
as it becomes a judgment that is subject to execution in accordance
with the Rules. Judges therefore have the ministerial and
mandatory duty to implement and enforce it. Hence, compromise
agreements duly approved by the courts are considered the
decisions in the particular cases they involve.
CREDIT TRANSACTIONS
CREDIT
I. LOAN
PHILIPPINE NATIONAL BANK vs. CARMELITA S. SANTOS, REYME L.
SANTOS, ET.AL/LINA B. AGUILAR vs. CARMELITA SANTOS, REYME L.
SANTOS, ET.AL, G.R. No.
208293/G.R. No. 208295, December 10, 2014, J. Leonen
Land Bank unilaterally offset the funds of the respondent without legal
justification and commit undocumented withdrawals from the said fund. The
SC held that the same was tantamount to a forbearance of money and
considered it as an involuntary loan.
CONTRACT OF LOAN
The agreement between PNB and [Spouses Tajonera] was one of a loan.
Under the law, a loan requires the delivery of money or any other
consumable object by one party to another who acquires ownership thereof,
on the condition that the same amount or quality shall be paid. Loan is a
reciprocal obligation, as it arises from the same cause where one party is the
creditor, and the other the debtor. The obligation of one party in a reciprocal
obligation is dependent upon the obligation of the other, and the
performance should ideally be simultaneous. This means that in a loan, the
creditor should release the full loan amount and the debtor repays it when it
becomes due and demandable.
PNB, not having released the balance of the last loan proceeds in accordance
with the 3rd Amendment had no right to demand from [Spouses Tajoneras]
compliance with their own obligation under the loan. Indeed, if a party in a
reciprocal contract like a loan does not perform its obligation, the other party
cannot be obliged to perform what is expected of them while the other's
obligation remains unfulfilled.
PHILIPPINE NATIONAL BANK vs. SPOUSES EDUARDO AND MA.
ROSARIO TAJONERA and EDUAROSA REALTY DEVELOPMENT, INC.G.R.
No. 195889, September 24, 2014, J.
Mendoza
A loan requires the delivery of money or any other consumable object by one
party to another who acquires ownership thereof, on the condition that the
same amount or quality shall be paid. Loan is a reciprocal obligation, as it
arises from the same cause where one party is the creditor, and the other
the debtor. The obligation of one party in a reciprocal obligation is dependent
upon the obligation of the other, and the performance should ideally be
simultaneous. This means that in a loan, the creditor should release the full
loan amount and the debtor repays it when it becomes due and demandable.
CHECKS
The Court holds that there was indeed a contract of loan between the
petitioners and respondent. The signatures of the petitioners were present
on both the PNB checks and the cash disbursement vouchers. The checks
were also made payable to the order of the petitioners. The Court pointed
out that a check functions more than a promissory note since it not only
contains an undertaking to pay an amount of money but is an "order
addressed to a bank and partakes of a representation that the drawer has
funds on deposit against which the check is drawn, sufficient to ensure
payment upon its presentation to the bank."
ART 1249
SPOUSES TAGUMPAY N. ALBOS AND AIDA C. ALBOS vs. SPOUSES
NESTOR M. EMBISAN AND ILUMINADA A. EMBISAN, DEPUTY SHERIFF
MARINO V. CACHERO, AND THE REGISTER OF DEEDS OF QUEZON
CITY, G.R. No. 210831, November 26, 2014, J.
Velasco Jr.
The interest rate of 24% per annum, penalty and collection charge of 3% or
36 % per annum on rental fees provided by invoices for the lease of heavy
equipment was found by the court to be iniquitous, unconscionable and
therefore void. Although C.B. Circular No. 905-82, which took effect on
January 1, 1983, effectively removed the ceiling on interest rates for both
secured and unsecured loans, regardless of maturity, nothing in the said
circular could possibly be read as granting carte blanche authority to
lenders to raise interest rates to levels which would either enslave their
borrowers or lead to a hemorrhaging of their assets. Therefore the rates
may be validly reduced by the court.
SUN LIFE OF CANADA (PHILIPPINES), INC. vs. SANDRA TAN KIT and
The Estate of the
Deceased NORBERTO TAN KIT, G.R. No. 183272, October 15, 2014, J.
Del Castillo
Monetary interest refers to the compensation set by the parties for the use
or forbearance of money. No such interest shall be due unless it has been
expressly stipulated in writing. On the other hand, compensatory interest
refers to the penalty or indemnity for damages imposed by law or by the
courts. This being the case and judging from the tenor of the CA, there can
be no other conclusion than that the interest imposed by the appellate-court
is in the nature of compensatory interest.
ROLANDO C. DE LA PAZ vs. L & J DEVELOPMENT COMPANY, G.R. No.
183360,
September 8, 2014, J. Del Castillo
When a person granted an unsecured loan without a maturity date in favor of
a corporation and its president and general manager (who is a lawyer)
without reducing the loan transaction in writing, the creditor cannot enforce
payment of 6% monthly interest. The payments of the debtor to the creditor
must be considered as payment of the principal amount of the loan because
Article 1956 was not complied with. In addition, even if the interest was in
writing, it cannot be collected because it is unconscionable.
The subject three PNs bear interests ranging from 21% to 23% per annum,
exclusive of penalty of 1% on the overdue amount per month of delay,
whereas in its complaint, Chinabank prayed to recover only the legal rate of
12% on whatever judgment it could obtain. Meanwhile, the Monetary Board
of the Bangko Sentral ng Pilipinas in its Resolution No. 796 dated May 16,
2013, and now embodied in Monetary Board Circular No. 799, has effective
July 1, 2013 reduced to 6%, from 12%, the legal rate of interest for the loan
or forbearance of any money, goods or credits and the rate allowed in
judgments, in the absence of stipulation. Since Chinabank demanded only
the legal, not the stipulated, interest rate on the deficiency and attorneys
fees due, the defendants will solidarily pay interest on their shares in the
deficiency at the rate of 12% from November 18, 1998 to June 30, 2013, and
6% from July 1, 2013 until fully paid.
ILEANA DR. MACALINAO vs BANK OF THE PHILIPPINE
ISLANDS, G.R. NO.
175490, September 17, 2009
The courts may reduce the interest rate as reason and equity
demand, for stipulations demanding interest excessive,
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iniquitous, unconscionable and exorbitant interest rates are void
for being contrary to morals, if not against the law.
COMMODATUM
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CATHOLIC VICAR APOSTOLIC CHURCH vs. CA,
G.R. L-80294-95,
September 21, 1988
When respondents allowed the free use of the property they became
bailors in commodatum and the petitioner the bailee. The bailees'
failure to return the subject matter of commodatum to the bailor did
not mean adverse possession on the part of the borrower. The
bailee held in trust the property subject matter of commodatum.
Hence, an adverse claim could not ripen into title by way of ordinary
acquisitive prescription because of the absence of just title.
The appellant had been in possession of the bull even after the
expiration of the contract. He contends, however, that since the
contract was commodatum the appellee retained ownership or title
to the bull. Hence, it should suffer its loss due to force majeure.
(3) If the thing loaned has been delivered with appraisal of its value,
unless there is a stipulation exempting the bailee from responsibility
in case of a fortuitous event; xxx
81
REPUBLIC OF THE PHILIPPINES vs. CA, G.R. NO. L-46145
November 26, 1986
82
The occupancy of the U.S. Navy partakes of the character of a
commodatum, and one's ownership of a thing may be lost by
prescription by reason of another's possession if such possession
be under claim of ownership, not where the possession is only
intended to be transient, in which case the owner is not divested of
his title, although it cannot be exercised in the meantime.
MUTUUM
II. DEPOSIT
TRUST RECEIPT
SURETYSHIP SURETY
The liabilities of an insurer under the surety bond are not extinguished when
the modifications in the principal contract do not substantially or materially
alter the principal's obligations. The surety is jointly and severally liable with
its principal when the latter defaults from its obligations under the principal
contract. On the basis of petitioners own admissions, the principal contract
of the suretyship is the signed agreement. The surety, therefore, is presumed
to have acquiesced to the terms and conditions embodied in the principal
contract when it issued its surety bond.
GUARANTY
In this case, the bank claims that it should be deemed a mortgagee in good
faith for having conducted exhaustive investigations on the history of the
mortgagors title.
However, the Court found this argument untenable. first, the doctrine of
mortgagee in good faith applies only to lands registered under the Torrens
system and not to unregistered lands, as the properties in suit; and second,
the principle is inapplicable to banking
institutions which are behooved to exercise greater care and prudence
before entering into a mortgage contract.
RURAL BANK OF CABADBARAN, INC. vs. JORGITA A. MELECIO-YAP,
LILIA MELECIO
PACIFICO (deceased, substituted by her only child ERILL*ISAAC M.
PACIFICO, JR.), REYNALDO A. MELECIO DELOSO, and SARAH MELECIO
PALMA-GIL, G.R. No. 178451,
July 30, 2014, J. Perlas-Bernabe
When a bank relied on a forged SPA, it has the burden to prove its
authenticity and due execution as when there is a defect in the notarization
of a document, the clear and convincing evidentiary standard normally
attached to a duly-notarized document is dispensed with, and the measure to
test the validity of such document is preponderance of evidence.
However, where a mortgage is not valid due to a forged SPA, the principal
obligation which it guarantees is not thereby rendered null and void. What is
lost is merely the right to foreclose the mortgage as a special remedy for
satisfying or settling the indebtedness which is the principal obligation. In
case of nullity, the mortgage deed remains as evidence or proof of a personal
obligation of the debtor and the amount due to the creditor may be enforced
in an ordinary action.
The partial invalidity of the subject real estate mortgage brought about by
the forged status of the subject SPA would not, therefore, result into the
partial invalidation of the loan obligation principally entered into by the
parties; thus, absent any cogent reason to hold otherwise, the need for the
recomputation of said loan obligation should be dispensed with.
LEONARDO C. CASTILLO, represented by LENNARD V. CASTILLO vs.
SECURITY BANK CORPORATION, JRC POULTRY FARMS or SPOUSES
LEON C. CASTILLO, JR., and TERESITA FLORESCASTILLO, G.R. No.
196118, July 30, 2014, J. Peralta
In a real estate mortgage, allegations of forgery, like all other allegations,
must be proved by clear, positive, and convincing evidence by the party
alleging it. But even if there is variation on the date of issuance of the
Community Tax Certificate (CTC) as indicated on the notarization of the
alleged SPA and on the day it was actually secured, such defect in the SPA
does not automatically render it invalid. Defective notarization will simply
strip the document of its public character and reduce it to a private
instrument, but nonetheless, binding, provided its validity is established by
preponderance of evidence.
The law requires that the form of a contract that transmits or extinguishes
real rights over immovable property should be in a public document, yet the
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failure to observe the proper form does not render the transaction invalid.
The necessity of a public document for said contracts is only for
convenience; it is not essential for validity or enforceability.
PHILIPPINE NATIONAL BANK vs. JOSE GARCIA and CHILDREN et al.,
G.R. No. 182839,
June 2, 2014, J. Brion
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The Amendment of Real Estate Mortgage constituted by Jose Sr. over the
entire property without his co-owners' consent is not necessarily void in its
entirety. The right of the PNB as mortgagee is limited though only to the
portion which may be allotted to Jose Sr. in the event of a division and
liquidation of the subject property. Registration of a property alone in the
name of one spouse does not destroy its conjugal nature. What is material is
the time when the property was acquired.
92
Further, respondent may rightfully take possession of the subject properties
through a wr it of possession, even if he was not the actual buyer thereof at
the public auction sale, in consonance with the Courts ruling in Ermitao v.
Paglas. The Court ruled that after the expiration of the redemption period
without redemption having been made by petitioner, respondent became the
owner thereof and consolidation of title becomes a right. Being already then
the owner, respondent became entitled to possession. Petitioner already lost
his possessory right over the property after the expiration of the said period.
DEVELOPMENT BANK OF THE PHILIPPINES vs. GUARINA
AGRICULTURAL AND REALTY DEVELOPMENT CORPORATION, G.R.
No. 160758, JANUARY 15, 2014, J.
Bersamin
The contract also provides that "it is agreed that the vendor shall
have the right to possess, use, and build on, the property during the
period of redemption." When the vendee acknowledged the right of
the vendor to retain possession of the property the contract is one
of loan guaranteed by mortgage, not a conditional sale or an
option to repurchase.
TIOSECO vs. CA, G.R. NO. L-66597, August 29, 1986
The insolvency court has exclusive jurisdiction to deal with the property of
the insolvent. Consequently, after the mortgagor-debtor has been declared
insolvent and the insolvency court has acquired control of his estate, a
mortgagee may not, without the permission of the insolvency court,
institute proceedings to enforce its lien.
LEASE
New World and AMA entered into a lease agreement whereby New World
agreed to lease to AMA its commercial building located in Manila. AMA
failed to pay its rentals citing financial losses. AMA then preterminated the
8 year lease agreement and demanded the
refund of its security deposit and advance rentals. It also prayed that its
liabilities be reduced on account of its financial difficulties.
The Supreme Court ruled that in the sphere of personal and contractual
relations governed by laws, rules and regulations created to promote justice
and fairness, equity is deserved, not demanded. The application of equity
necessitates a balancing of the equities involved in a case, for [h]e who
seeks equity must do equity, and he who comes into equity must come with
clean hands. Persons in dire straits are never justified in trampling on other
persons rights. Litigants shall be denied relief if their conduct has been
inequitable, unfair and dishonest as to the controversy in issue. The actions
of AMA smack of bad faith.
We agree with the petitioner's contention that the contract for the rent
of the safety deposit box is not an ordinary contract of lease as
defined in Article 1643 of the Civil Code. It cannot be characterized
as an ordinary contract of lease under Article 1643 because the full
and absolute possession and control of the safety deposit box was not
given to the joint renters the petitioner and the Pugaos.
SOLUTIO IN DEBITI
(1) Payment is made when there exists no binding relation between the payer,
who has no duty to pay, and the person who received the payment; and
(2) Payment is made through mistake, and not through liberality or some other
cause.
Though the principle of solutio indebiti may be applicable to some instances
of claims for a refund, the elements thereof are wanting in this case. First,
there exists a binding relation between petitioner and the CIR, the former
being a taxpayer obligated to pay VAT. Second, the payment of input tax
was not made through mistake, since petitioner was legally
obligated to pay for that liability. The entitlement to a refund or credit of
excess input tax is solely based on the distinctive nature of the VAT system.
At the time of payment of the input VAT, the amount paid was correct and
proper.
Torrens System
MARIFLOR T. HORTIZUELA, represented by JOVIER TAGAUFA vs.
GREGORIA TAGUFA, ROBERTO TAGUFA and ROGELIO LUMABAN, G.R.
No. 205867, February 23, 2015, J.
Mendoza
Petitioner assails the decision of the CA that the action for reconveyance
filed by her was not the proper remedy on the ground that it constitutes a
collateral attack on the validity of the subject certificate of title. The SC
however ruled that it is not unmindful of the principle of indefeasibility of a
Torrens title and that a certificate of title shall not be subject to collateral
attack. Contrary to the pronouncements of the MCTC and the CA, however,
the complaint of petitioner was not a collateral attack on the title warranting
dismissal. As a matter of fact, an action for reconveyance is a recognized
remedy, an action in personam, available to a person whose property has
been wrongfully registered under the Torrens system in anothers name. In
an action for reconveyance, the decree is not sought to be set aside. It does
not seek to set aside the decree but, respecting it as incontrovertible and no
longer open to review, seeks to transfer or reconvey the land from the
registered owner to the rightful owner.
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IMELDA SYJUCO, et.al vs. FELISA D. BONIFACIO and VSD REALTY &
CORPORATION,
G.R. No. 148748, January 14, 2015, J. Leonardo-De Castro
The persons who can file the petition for reconstitution of a lost certificate
are the registered owner, his assigns or persons in interest in the property.
In this case, Ungay Malobago Mines, Inc. admitted that it was not the owner
of the land on which the mining patent was issued as the same was owned
and registered in the name of Rapu Rapu Minerals Inc., thus it has no legal
capacity to institute a petition for reconstitution of a lost certificate.
REPUBLIC OF THE PHILIPPINES vs. HEIRS OF SPOUSES DONATO
SANCHEZ and JUANA
MENESES represented by RODOLFO S. AGUINALDO, G.R. No. 212388,
December 10, 2014, J. Velasco, Jr.
Before a certificate of title which has been lost or destroyed may be
reconstituted, it must first be proved by the claimants that said certificate
of title was still in force at the time it was lost or destroyed, among others.
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way oblige him to go beyond the certificate to determine the condition of
the property.
FLORENTINO W. LEONG AND ELENA LEONG, ET AL. vs. EDNA C. SEE,
G.R. No. 194077,
December 03, 2014, J. Leonen
Spouses owned the subject property wherein petitioner Elena was allowed
to stay. Upon the spouses divorce, the property went to the wife. She sold
it to the respondent See. The
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Court held that See was a buyer in good faith. She went to the Register of
Deeds to verify the title and relied on the marriage settlement agreement.
The Court found that she exerted due diligence. An innocent purchaser for
value refers to someone who buys the property of another without notice
that some other person has a right to or interest in it, and who pays a full and
fair price at the time of the purchase or before receiving any notice of
another persons claim.
Marietta could acquire valid title over the whole property if she were an
innocent purchaser for value. An innocent purchaser for value purchases a
property without any notice of defect or irregularity as to the right or interest
of the seller. He or she is without notice that another person holds claim to
the property being purchased. Marietta cannot claim the protection to
innocent purchasers for value because the circumstances do not make this
available to her. In this case, there was no certificate of title to rely on when
she purchased the property from Enrique. At the time of the sale, the
property was still unregistered. What was available was only a tax declaration
issued under the name of Heirs of Lopez.
The petitioners assail the decision of the CA affirming in toto the decision of
the RTC declaring that their predecessors-in-interest are not buyers in good
faith and for value. In denying the petition the SC ruled that the transfers of
the properties in question did not go far, but were limited to close family
relatives by affinity and consanguinity. Good faith among the parties to the
series of conveyances is therefore hard if not impossible to presume.
Unfortunately for the petitioners, they did not provide any sufficient
evidence that would convince the courts that the proximity of relationships
between/among the vendors and vendees in the questioned sales was not
used to perpetrate fraud. Thus there is nothing to dispel the notion that
apparent anomalies attended the transactions among close relations.
The settled rule is that a free patent issued over a private land is null and
void, and produces no legal effects whatsoever. Private ownership of land
as when there is a prima facie proof of ownership like a duly registered
possessory information or a clear showing of open, continuous, exclusive,
and notorious possession, by present or previous occupants is not affected
by the issuance of a free patent over the same land, because the Public Land
Law applies only to lands of the public domain. Lot No. 18563, not being land
of the public domain as it was already owned by Aznar Brothers, was no
longer subject to the free patent issued to the Spouses Ybaez.
Grey Alba vs. De la Cruz, 17 SCRA 49
The Torrens system aims to decree land titles that shall be final,
irrevocable, and indisputable, and to relieve the land of the burden
of known as well as unknown claims.
That the subject properties are not part of the bed of Laguna Lake,
however, does not necessarily mean that they already form part of the
alienable and disposable lands of the public domain. It is still incumbent
upon the respondent to prove, with we ll-nigh incontrovertible evidence,
that the subject properties are indeed part of the alienable and disposable
lands of the public domain.
Lands of the public domain that are patrimonial in character are susceptible
to acquisitive prescription and, accordingly, eligible for registration under
Section 14(2) of P.D. No. 1529 but the period of acquisitive prescription
would only begin to run from the time that the State officially declares that
the public dominion property is no longer intended for public use, public
service, or for the development of national wealth. The Court finds no
evidence of any official declaration from the state attesting to the patrimonial
character of the subject property. Cortez failed to prove that acquisitive
prescription has begun to run against the State, much less that he has
acquired title to the subject property by virtue thereof. It is of no moment
that Cortez and his predecessors-in-interest have been in possession of the
subject property for 57 years at the time he applied for the registration of
title thereto. "[l]t is not the notorious, exclusive and uninterrupted possession
and occupation of an alienable and disposable public land for the mandated
periods that converts it to patrimonial. The indispensability of an official
declaration that the property is now held by the State in its private capacity
or placed within the commerce of man for prescription to have any effect
against the State cannot be overemphasized.
REPUBLIC OF THE PHILIPPINES vs. SPS. JOSE CASTUERA AND PERLA
CASTUERA, G.R.
No. 203384, January 14, 2015, J. Carpio
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.
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. Thus, the property registration of a corporation merely
relying on the CENRO Certification must be dismissed for failure to prove that
the land had been declared alienable and disposable.
DANILO ALMERO, TERESITA ALAGON, CELIA BULASO, LUDY RAMADA,
REGINA GEGREMOSA, ISIDRO LAZARTE, THELMA EMBARQUE, FELIPE
LAZARTE, GUILERMA LAZARTE, DULCESIMA BENIMELEvs. HEIRS OF
MIGUEL PACQUING, as represented by LINDA PACQUING FADRILAN,
G.R. No. 199008, November 19, 2014, J. Brion
Thus, in order for the homestead grantees or their direct compulsory heirs to
retain their homestead, the following conditions must be satisfied: (a) they
must still be the owners of the original homestead at the time of the CARL's
effectivity, and (b) they must continue to cultivate the homestead land. In this
case, Linda, as the direct compulsory heir of the original homestead
grantee, is no longer cultivating the homestead land. That parcels of land
are covered by homestead patents will not automatically exempt them from
the operation of land reform. It is the continued cultivation by the original
grantees or their direct compulsory heirs that shall exempt their lands from
land reform coverage."
Petitioner Gahol applied for Townsite Sales Application with the DENR for the
land adjacent to her property. Respondent Cobarrubias filed a protest,
stating that she and her family are occupying said lot. The Court ruled that
Gahols application must be rejected because one of the requirements was
that the applicant must not own any other lot but Gahol is a registered owner
of a residential lot. She also stated that there are no signs of improvement or
occupation in the said lot but it was in fact occupied by Cobarrubias. She is
disqualified due to the untruthful statements in her application.
The approval by city and municipal boards and councils of an application for
subdivision through an ordinance should already be understood to include
approval of the reclassification of the land, covered by said application, from
agricultural to the intended non-agricultural use. Otherwise, the approval of
the subdivision application would serve no practical effect; for as long as the
property covered by the application remains classified as agricultural, it
could not be subdivided and developed for non-agricultural use.
REPUBLIC OF THE PHILIPPINES vs. CRISANTO S. RANESES, G.R. No.
189970, June 9, 2014, J.
Villarama, Jr.
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REPUBLIC OF THE PHILIPPINES vs. CORAZON C. SESE and FE
C. SESE, G.R. No.
185092, June 4, 2014, J. Mendoza
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Republic vs. Santos, G.R.NO. 180027, July 18, 2012
Jura Regalia simply means that the State is the original proprietor
of all lands and, as such, is the general source of all private titles.
Thus, pursuant to this principle, all claims of private title to land,
save those acquired from native title, must be traced from some
grant, whether express or implied, from the State. Absent a clear
showing that land had been let into private ownership through the
States imprimatur, such land is presumed to belong to the State.
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Yu Chang vs. Republic, G.R.NO. 171726, Feb. 23, 2011
The fact that the area within which the subject parcels of land are
located is being used for residential and commercial purposes does
not serve to convert the subject parcels of land into agricultural
land. It is fundamental that before any land may be declassified
from the forest group and converted into alienable or disposable land
for agricultural or other purposes, there must be a positive act
from the government.
Citizenship Requirement
Emeteria G. Lualhati filed with the RTC of Antipolo City an application for
original registration covering Lots 1 and 2 situated in C-5 C-6 Pasong
Palanas, Sitio Sapinit, San Juan, Antipolo, Rizal. To support her contention
that the lands subject of her application is alienable and disposable, Lualhati
submitted certifications from the DENR-CENRO, Region IV, Antipolo City,
stating that no public land application or land patent covering the subject
lots is pending nor are the lots embraced by any administrative title. It has
been repeatedly ruled that certifications issued by the CENRO, or specialists
of the DENR, as well as Survey Plans prepared by the DENR containing
annotations that the subject lots are alienable, do not constitute
incontrovertible evidence to overcome the presumption that the property
sought to be registered belongs to the inalienable public domain. Rather,
this Court stressed the importance of proving alienability by presenting a
copy of the original
classification of the land approved by the DENR Secretary and certified as
true copy by the legal custodian of the official records.
The State is not estopped from the acts of the Clerk of Court in land
registration cases. Illegal acts of government agents do not bind the State.
Assuming that it is, the respondents did not prove that the land sought to be
registered is an alienable and disposable land. All applications for original
registration under the Property Registration Decree must include both (1) a
CENRO or PENRO certification and (2) a certified true copy of the original
classification made by the DENR Secretary.
SURVIVING HEIRS OF ALFREDO R. BAUTISTA, namely: EPIFANIA G.
BAUTISTA and ZOEY G. BAUTISTA vs. FRANCISCO LINDO and
WELHILMINA LINDO; and HEIRS OF FILIPINA DAQUIGAN, IMELDA
DAQUIGAN and CORSINO DAQUIGAN, REBECCA QUIAMCO and
ANDRES QUIAMCO, ROMULO LORICA and DELIA LORCIA, GEORGE
CAJES and LAURA CAJES, MELIDA BANEZ AND FRANCISCO BANEZ,
MELANIE GOFREDO, GERVACIO CAJES and ISABEL CAJES, EGMEDIO
SEGOVIA and VERGINIA SEGOVIA, ELSA N. SAM, PEDRO M. SAM, and
LINA SAM, SANTIAGO MENDEZ and MINA MENDEZ, HELEN M.
BURTON and LEONARDO BURTON, JOSE JACINTO and BIENVENIDA
JACINTO, IMELDA DAQUIGAN, LEO MATIGA and ALICIA MATIGA,
FLORENCIO ACEDO JR., and LYLA VALERIO, G.R. No. 208232,
March 10, 2014, J.
Velasco Jr.
DAR Memorandum provides that tenants should (a) have actual knowledge
of unregistered transfers of ownership of lands covered by Torrens Certificate
of Titles prior to October 21, 1972, (b) have recognized the persons of the
new owners, and (c) have been paying rentals/amortization to such new
owners in order to validate the transfer and bind the tenants to the same. In
the case at bar, it is undisputed that the subject sale was not registered or
even annotated on the certificates of title covering the subject lands.
SPOUSES MARIO AND JULIA CAMPOS, vs. REPUBLIC OF THE
PHILIPPINES,G.R. No.
184371, March 5, 2014, J. Brion
Persons applying for registration of title under Section 14(1) of Presidential
Decree No. 1529 must prove: (1) that the land sought to be registered forms
part of the disposable and alienable lands of the public domain, and (2) that
they have been in open, continuous, exclusive and notorious possession and
occupation of the same under a bona fide claim of ownership since June 12,
1945, or earlier. It is emphasized that since the effectivity of P.D. No. 1073 on
January 25, 1977, a mere showing of possession and occupation for thirty
(30) years or more is no longer sufficient.
SPS. ANTONIO FORTUNA AND ERLINDA FORTUNA, vs.
REPUBLIC OF THE PHILIPPINES,G.R. No. 173423, March
05, 2014, J. Brion
Mere notations appearing in survey plans are inadequate proof of the
covered properties alienable and disposable character. These notations, at
the very least, only establish that the land subject of the application for
registration falls within the approved alienable and disposable area per
verification through survey by the proper government office. The applicant,
however, must also present a copy of the original classification of the land
into alienable and disposable land, as declared by the DENR Secretary or as
proclaimed by the President.
THE HON. SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM
VS. NEMESIO DUMAGPI, REPRESENTED BY VICENTE DUMAGPI,
G.R. No. 195412, February 04,
2015, J. Reyes
The respondent claims that he is the owner of the disputed parcel of land
by virtue of his open, exclusive, notorious and continuous possession of
the land for more than 30 years. The Supreme Court ruled that adverse
possession can only ripen into ownership when the land adversely owned
is classified as an agricultural land. If the disputed land is non-agricultural,
adverse possession cannot ripen into ownership.
REPUBLIC OF THE PHILIPPINES vs. CECILIA GRACE L. ROASA,
married to GREG
AMBROSE ROASA, as herein represented by her Attorneys-in-Fact,
BERNARDO M. NICOLAS, JR. and ALVIN B. ACAYEN, G.R. No. 176022,
February 2, 2015, J. Peralta
In the present case, there is no dispute that the subject lot has been declared
alienable and disposable on March 15, 1982. This is more than eighteen (18)
years before Roasa's application for registration, which was filed on
December 15, 2000. Moreover, the unchallenged testimonies of two of
Roasa's witnesses established that the latter and her predecessors-in-interest
had been in adverse, open, continuous, and notorious possession in the
concept of an owner even before June 12, 1945.
The advance plan and the CENRO certification are insufficient proofs of the
alienable and disposable character of the property. The applicants for
registration of title must present a certified true copy of the Department of
Environment and Natural Resources Secretarys declaration or classification
of the land as alienable and disposable.
Persons who can file the petition for reconstitution of a lost certificate are
the registered owner, his assigns or persons in interest in the property. In
this case, petitioner admitted that it was not the owner of the land on
which the mining patent was issued as the same was owned and
registered in the name of Rapu Rapu Minerals Inc. Thus, not having an
interest on the land amounting to a title to the same, petitioner is not
possessed of a legal personality to institute a petition for judicial
reconstitution of the alleged lost Original Certificate of Title.
To prove that the subject property forms part of the alienable and
disposable lands of the public domain, the respondent presented two
certifications issued by Senior Forest Management Specialist of the DENR
attesting that Lots form part of the alienable and disposable lands of the
public domain "under Project No. 27-B of Taguig, Metro Manila as per LC
Map 2623, approved on January 3, 1968." However, the said certifications
are insufficient to prove that the subject properties are alienable and
disposable. The certification issued by the proper government agency that
a parcel of land is alienable and disposable, applicants for land registration
must prove that the DENR Secretary had approved the land classification
and released the land of public domain as alienable and disposable. They
must present a copy of the original classification approved by the DENR
Secretary and certified as true copy by the legal custodian of the records.
With regard to possession, although it was testified that the respondent and
its predecessors-in-interest cultivated the subject properties, by planting
different crops thereon, his testimony is bereft of any specificity as to the
nature of such cultivation as to warrant the conclusion that they have been
indeed in possession and occupation of the subject properties in the manner
required by law. There was no showing as to the number of crops that are
planted in the subject properties or to the volume of the produce harvested
from the crops supposedly planted thereon.
Further, assuming ex gratia argumenti that the respondent and its
predecessors-in-interest have indeed planted crops on the subject properties,
it does not necessarily follow that the subject properties have been
possessed and occupied by them in the manner contemplated by law. The
supposed planting of crops in the subject properties may only have
amounted to mere casual cultivation, which is not the possession and
occupation required by law.
Registration under Section 14(1) of P.D. No. 1529 is based on possession and
occupation of the alienable and disposable land of the public domain since
June 12, 1945 or earlier, without regard to whether the land was susceptible
to private ownership at that time. The applicant needs only to show that the
land had already been declared alienable and disposable at any time prior to
the filing of the application for registration.
On the other hand, an application under Section 14(2) of P.D. No. 1529 is
based on acquisitive prescription and must comply with the law on
prescription as provided by the Civil Code. In that regard, only the patrimonial
property of the State may be acquired by prescription pursuant to the Civil
Code. For acquisitive prescription to set in, therefore, the land being
possessed and occupied must already be classified or declared as patrimonial
property of the State. Otherwise, no length of possession would vest any
right in the possessor if the property has remained land of the public
dominion. Malabanan stresses that even if the land is later converted to
patrimonial property of the State, possession of it prior to such conversion
will not be counted to meet the requisites of acquisitive prescription. Thus,
registration under Section 14(2) of P.D. No. 1529 requires that the land had
already been converted to patrimonial property of the State at the onset of
the period of possession required by the law on prescription.
An application for registration based on Section 14(2) of P.D. No. 1529 must,
therefore, establish the following requisites, to wit: (a) the land is an alienable
and disposable, and patrimonial property of the public domain; (b) the
applicant and its predecessors-in- interest have been in possession of the
land for at least 10 years, in good faith and with just title, or for at least 30
years, regardless of good faith or just title; and (c) the land had already been
converted to or declared as patrimonial property of the State at the
beginning of the said 10-year or 30-year period of possession.
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.
Republic vs. Vega, 639 SCRA 541
Thus, granting that Isabel and, later, Espinosa posse ssed and
occupied the property for an aggregate period of thirty (30) years,
this does not operate to divest the State of its ownership. The
property, albeit allegedly alienable and disposable, is not
patrimonial. As the property is not held by the State in its private
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capacity, acquisition of title thereto necessitates observance of the
provisions of Section 48(b) of the PLA in relation to Section 14(1) of
P.D. No. 1529 or possession and occupation since June 12, 1945.
For prescription to run against the State, there must be proof that
there was an official declaration that the subject property is no
longer earmarked for public service or the development of national
wealth. Moreover, such official declaration should have been issued
at least ten (10) or thirty (30) years, as the case may be, prior to
the filing of the application for registration. The period of
possession and occupation prior to the conversion of the
property to private or patrimonial
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shall not be considered in determining completion of the
prescriptive period. Indeed, while a piece of land is still reserved
for public service or the development of national wealth, even if
the same is alienable and disposable, possession and occupation
no matter how lengthy will not ripen to ownership or give rise to
any title that would defeat that of the States if such did not
commence on June 12, 1945 or earlier.
At any rate, the notation on the survey plan does not constitute
incontrovertible evidence that would overcome the presumption that
the property belongs to the inalienable public domain.
Subsequent Registration
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Lucena vs. CA, G.R. NO. L-77468, August 25, 1999
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eyes to the possibility of the existence of a defect in his vendor's
title, will not make him an innocent purchaser for value, if it
afterwards develops that the title was in fact defective, and it
appears that he had such notice of the defect as would have led
to its discovery had he acted with that measure of precaution
which may reasonably be required of a prudent man in a like
situation.
Heirs of Brusas vs. CA, G.R. No. 126875, August 26, 1999
Non-Registrable Properties
Only when the property has become patrimonial can the prescriptive
period for the acquisition of property of the public domain begin to
run.
The strength of the buyers inquiry on the sellers capacity or legal authority
to sell depends on the proof of capacity of the seller. If the proof of capacity
consists of a special power of
attorney duly notarized, mere inspection of the face of such public document
already constitutes sufficient inquiry. If no such special power of attorney is
provided or there is one but there appears to be flaws in its notarial
acknowledgment, mere inspection of the document will not do; the buyer
must show that his investigation went beyond the document and into the
circumstances of its execution.
While a third party may not be considered as innocent purchaser for value,
he can still rightfully claim for actual and compensatory damages,
considering that he did not join the other defendants in their efforts to
frustrate plaintiffs rights over the disputed properties and who might well be
an unwilling victim of the fraudulent scheme employed by the other
defendants.
Nonetheless, even if when no bad faith can be ascribed to the parties alike,
an equal footing of the parties necessarily tilts in favor of the superiority of
the notice of levy and the constructive notice against the whole world which
the original party to the contract of sale had produced and which effectively
bound third persons. Thus, the latter has two options available: 1) they may
exercise the right to appropriate after payment of indemnity representing the
value of the improvements introduced and the necessary and useful
expenses defrayed on the subject lots; or 2) they may forego payment of the
said indemnity and instead, oblige the Saberons to pay the price of the land.
JUST COMPENSATION
LAND BANK OF THE PHILIPPINES vs. JAIME K. IBARRA, ANTONIO K.
IBARRA, JR., LUZ IBARRA VDA. DE JIMENEZ, LEANDRO K IBARRA,
and CYNTHIA IBARRA- GUERRERO, G.R. No. 182472. November 24,
2014, J. Peralta
The petitioners lands were subjected to the coverage of the agrarian reform
program. The petitioner then filed a complaint for just compensation of the
said land. The issue in the case is what will be the basis of valuation of the
property taken for Just Compensation.
The Supreme Court held that the seizure of landholdings or properties
covered by PD No.
27 did not take place on October 21, 1972, but upon the payment of
just compensation. Indeed, acquisition of property under the Operation Land
Transfer Program under PD No. 27 does not necessarily mean that the
computation of just compensation thereof must likewise be governed by the
same law. In determining the applicable formula, the date of the payment of
just compensation must be taken into consideration for such payment marks
the completion of the agrarian reform process. If the agrarian reform process
is still incomplete as when just compensation is not settled prior to the
passage of RA No. 6657, it should be computed in accordance with said law
despite the fact that the property was acquired under PD No. 27. Clearly, by
law and jurisprudence, R.A. No. 6657, upon its effectivity, became the
primary law in agrarian reform covering all then pending and uncompleted
processes, with P.D. No. 27 and E.O. No. 228 being only suppletory to the said
law.
It is, therefore, on equitable considerations that the retroactive application of
RA No. 6657 is based for it would be highly inequitable on the part of the
landowners to compute just compensation using the values not at the time of
the payment but at the time of the taking in 1972, considering that the
government and the farmer-beneficiaries have already benefitted from the
land.
CANCELLATION OF TITLE
THE TORTFEASOR
RUKS KONSULT AND CONSTRUCTION vs. ADWORLD SIGN AND
ADVERTISING CORPORATION* AND TRANSWORLD MEDIA ADS,
INC.,G.R. No. 204866, January 21,
2015, J. Perlas-Bernabe
Pursuant to Article 2194, joint tortfeasors are solidarily liable. They are each
liable as principals, to the same extent and in the same manner as if they
had performed the wrongful act themselves. When a construction of a
billboards lower structure without the proper foundation by the first
contractor, and that of the second contractors finishing its upper structure
and just merely assuming that the first would reinforce the weak foundation
are the two successive acts which were the direct and proximate cause of
the damages sustained by the company who hired their services. Worse,
both contractors were fully aware that the foundation for the billboard was
weak; yet, neither of them took any positive step to reinforce the same. They
merely relied on each others word that repairs would be done to such
foundation, but none was done at all.
PROXIMATE CAUSE
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F.F. Cruz and Co. vs. Court of Appeals, 164 SCRA 731
A fire that broke out in the furniture shop of the petitioner spread
to an adjacent house because of the shop owners failure to construct
a firewall as required by a city ordinance. The doctrine of res ipsa
loquitur, which is applied
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by the Court in this case, may be stated as follows: Where the
thing which caused the injury complained of is shown to be under
the management of the defendant or his servants and the accident
is such as in the ordinary course of things does not happen if those
who have its management or control use proper care, it affords
reasonable evidence, in the absence of explanation by the
defendant, that the accident arose from want of care.
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Gregorio vs. Go, 102 Phil. 556
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Phoenix Construction, Inc. vs. Intermediate Appellate
Court, 148 SCRA 353
The Supreme Court said that the common law rule of contributory
negligence prevented any recovery at all by a plaintiff who was also
negligent, even if the plaintiff's negligence was relatively minor as
compared with the wrongful act or omission of the defendant. The
common law notion of last clear chance permitted courts to grant
recovery to a plaintiff who had also been negligent provided that the
defendant had the last clear chance to avoid the casualty and failed to
do so. Accordingly, it is difficult to see what role, if any, the
common law last clear chance doctrine has to play in a jurisdiction
where the common law concept of contributory negligence as an
absolute bar to recovery by the plaintiff, has itself been rejected, as it
has been in Article 2179 of the Civil Code of the Philippines.
The passenger ship of William Lines, Inc. caught fire and sank while
in the custody of Cebu Shipyard and Engineering Works to which it
was brought for annual repair. The doctrine of res ipsa loquitor
applies here because the fire that occurred and consumed MV
Manila City would not have happened in the ordinary course of things
if reasonable care and diligence had been exercised by Cebu
Shipyard.
LEGAL INJURY
INTENTIONAL TORTS
NEGLIGENCE
Negligence has been defined as "the failure to observe for the protection of
the interests of another person that degree of care, precaution, and vigilance
which the circumstances justly demand, whereby such other person suffers
injury. Verily, foreseeability is the fundamental test of negligence. It is the
omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would
do, or the doing of something which a prudent and reasonable man would
not do. The records show that driver Gimena was clearly running at a
reckless speed. He did not take the necessary precaution and instead, drove
on and bumped the deceased despite being aware that he was traversing a
commercial center where pedestrians were crossing the street. Gimena
should have observed due diligence of a reasonably prudent man by
slackening his speed and proceeding cautiously while passing the area.
UNKNOWN OWNER OF THE VESSEL M/V CHINA JOY, SAMSUN SHIPPING LTD.,
AND INTER-ASIA MARINE TRANSPORT, INC. vs. ASIAN TERMINALS, INC., G.R.
No. 195661, March 11, 2015, J. Reyes
Mere proof of delivery of the goods in good order to a common carrier and of
their arrival in bad order at their destination constitutes a prima facie case of
fault or negligence against the carrier. If no adequate explanation is given as
to how the deterioration, loss, or
destruction of the goods happened, the transporter shall be held
responsible. From the foregoing, the fault is attributable to ESLI. While no
longer an issue, it may be nonetheless state that ATI was correctly absolved
of liability for the damage.
This case involves a claim for damages arising from the death of a
motorcycle rider in a night time accident due to the supposed negligence of a
construction company then undertaking reblocking work on a national
highway. The plaintiffs insisted that the accident happened because the
construction company did not provide adequate lighting on the site, but the
latter countered that the fatal accident was caused by the negligence of the
motorcycle rider himself. In order that a party may be held liable for
damages for any injury brought about by the negligence of another, the
claimant must prove that the negligence was the immediate and proximate
cause of the injury. Proximate cause is defined as that cause, which, in
natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury and without which the result would not have
occurred.
The company has shown the installation of the necessary warning signs and
lights in the project site. In that context, the fatal accident was not caused by
any instrumentality within the exclusive control of the company. In contrast,
Balbino had the exclusive control of how he operated and managed his
motorcycle. The records disclose that he himself did not take the necessary
precautions. As Zamora declared, Balbino overtook another motorcycle rider
at a fast speed, and in the process could not avoid hitting a barricade at the
site, causing him to be thrown off his motorcycle onto the newly cemented
road. SPO1 Corporals investigation report corroborated Zamoras
declaration. It was shown that the proximate and immediate cause of the
death of Balbino was his own negligence. Hence, the heirs could not recover
damages.
VICENTE JOSEFA v MANILA ELECTRIC COMPANY, G.R No. 182705, July 18, 2014.
J. BRION
Paragraph 5, Article 2180 of the Civil Code holds the employer vicariously
liable for damages caused by his employees within the scope of their
assigned tasks. In this case, Josefa seeks to avoid the application of this
provision by denying that Bautista was his employee at the time of the
incident.
Josefa cannot evade his responsibility by mere denial of his employment
relations with Bautista in the absence of proof that his truck was used
without authorization or that it was stolen when the accident occurred. In
quasi-delict cases, the registered owner of a motor vehicle is the employer of
its driver in contemplation of law. The registered owner of any vehicle, even
if not used for public service, would primarily be responsible to the public or
to third persons for injuries caused while the vehicle was being driven on
highways or
streets. The purpose of motor vehicle registration is precisely to identify the
owner so that if any injury is caused by the vehicle, responsibility can be
imputed to the registered owner.
INDOPHIL TEXTILE MILLS, INC v ENGR. SALVADOR ADVIENTO, G.R No.
171212, August 4, 2012. PERALTA.
Engr. Adviento was hired by Indophil Textile Mills to maintain its thread-
manufacturing facilities. Later he was diagnosed with Chronic Poly Sinusitis.
Engr. Adviento filed a case for damages based on quasi-delict with the RTC,
alleging that he contracted such occupational disease by reason of the gross
negligence of petitioner to provide him with a safe, healthy and workable
environment. Indophil moved to dismiss, arguing that jurisdiction is with the
Labor Arbiter.
True, the maintenance of a safe and healthy workplace is ordinarily a subject
of labor cases. However, Advientos claim for damages is specifically
grounded on petitioners gross negligence to provide a safe, healthy and
workable environment for its employees a case of quasi-delict.
Clearly, injury and damages were allegedly suffered by respondent, an
element of quasi- delict. Secondly, the previous contract of employment
between petitioner and respondent cannot be used to counter the element of
"no pre-existing contractual relation" since petitioners alleged gross
negligence in maintaining a hazardous work environment cannot be
considered a mere breach of such contract of employment, but falls squarely
within the elements of quasi-delict under Article 2176 of the Civil Code since
the negligence is direct, substantive and independent.
NEDLLOYD LIJNEN B.V. ROTTERDAM and THE EAST ASIATIC CO., LTD.
vs. GLOW LAKS ENTERPRISES, LTD, G.R. No. 156330 , November 19,
2014, J. PEREZ
The respondent loaded to the vessel owned by the petitioner who is common
carrier. By an unfortunate turn of events, however, unauthorized persons
managed to forge the covering bills of lading and on the basis of the falsified
documents, the ports authority released the goods.
In this case, there is no dispute that the custody of the goods was never
turned over to the consignee or his agents but was lost into the hands of
unauthorized persons who secured possession thereof on the strength of
falsified documents. The loss or the misdelivery of the goods in the instant
case gave rise to the presumption that the common carrier is at fault or
negligent.
A common carrier is presumed to have been negligent if it fails to prove that
it exercised extraordinary vigilance over the goods it transported. When the
goods shipped are either lost or arrived in damaged condition, a presumption
arises against the carrier of its failure to observe that diligence, and there
need not be an express finding of negligence to hold it liable. To overcome
the presumption of negligence, the common carrier must establish by
adequate proof that it exercised extraordinary diligence over the goods. It
must do more than merely show that some other party could be responsible
for the damage. In the present case, petitioners failed to prove that they did
exercise the degree of diligence required by law over the goods they
transported.
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school child touched the wire and was electrocuted. It is doubtful
whether contributory negligence can properly be imputed to the
deceased, owing to his immature years and the natural curiosity
which a child would feel to do something out of the ordinary, and
the mere fact that the deceased ignored the caution of a
companion of the age of 8 years does not, in our opinion, alter the
case.
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A young man by the name of Juan Diaz Astudillo met his death
through electrocution, when he placed his right hand on a wire
connected with an electric light pole owned by Meralco. Meralco
was negligent in so placing the pole and wires as to be within the
proximity of a place frequented by many persons, with the
possibility of coming in contact with a highly charged and
defectively insulated wire.
GROSS M ISCONDUCT
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NOEL CASUMPANG, RUBY SANGA-MIRANDA AND SAN JUAN DE DIOS
HOSPITAL, vs. NELSON CORTEJO, G.R. No. 171127/DRA. RUBY
SANGA-MIRANDA, v. NELSON CORTEJO, G.R. No. 171217/SAN JUAN
DE DIOS HOSPITAL, vs. NELSON CORTEJO, G.R. No. 171228, March
11, 2015, J. Brion
Dr. Casumpang and Dr. Miranda are accused of negligence leading to the
death of a young boy. The SC held that, to successfully pursue a medical
malpractice suit, the plaintiff (in this case, the deceased patient's heir) must
prove that the doctor either failed to do what a reasonably prudent doctor
would have done, or did what a reasonably prudent doctor would not have
done; and the act or omission had caused injury to the patient. The patient's
heir/s bears the burden of proving his/her cause of action. The elements of
medical negligence are: (1) duty; (2) breach; (3) injury; and (4) proximate
causation. Given these elements, only Dr. Casumpang, attending physician,
was found to be negligent for having failed to promptly detect dengue fever
and undertake the proper medical management needed for this disease.
Atty. Lacaya claims he had an arrangement with his client that he would
be awarded one half of the property acquired by his client if they obtained
favorable judgment.
Article 1491 (5) of the Civil Code forbids lawyers from acquiring, by purchase
or assignment, the property that has been the subject of litigation in which
they have taken part by virtue of their profession. The same proscription is
provided under Rule 10 of the Canons of Professional Ethics.
A thing is in litigation if there is a contest or litigation over it in court or when
it is subject of the judicial action. Following this definition, SC held that the
subject lot was still in litigation when Atty. Lacaya acquired the disputed one-
half portion. We note in this regard the following established facts:(1)on
September 21, 1981, Atty. Lacaya filed a motion for the issuance of a writ of
execution in Civil Case No. 1721; (2) on September 23, 1981, the spouses
Ames filed Civil Case No. 3352 against the spouses Cadavedo; (3)on October
16, 1981, the RTC granted the motion filed for the issuance of a writ of
execution in Civil Case No. 1721 and the spouses Cadavedo took possession
of the subject lot on October 24, 1981;
(4) soon after, the subject lot was surveyed and subdivided into two equal
portions, and Atty. Lacaya took possession of one of the subdivided
portions; and (5) on May 13, 1982, Vicente and Atty. Lacaya executed the
compromise agreement.
From these timelines, whether by virtue of the alleged oral contingent fee
agreement or an agreement subsequently entered into, Atty. Lacaya
acquired the disputed one-half portion (which was after October 24, 1981)
while Civil Case No. 3352 and the motion for the issuance of a writ of
execution in Civil Case No. 1721 were already pending before the lower
courts. Similarly, the compromise agreement, including the subsequent
judicial approval, was effected during the pendency of Civil Case No. 3352.
In all of these, the relationship of a lawyer and a client still existed between
Atty. Lacaya and the spouses Cadavedo.
Thus, whether we consider these them to be prohibited and void by reason
of public policy. Under Article 1409 of the Civil Code, contracts which are
contrary to public policy and those expressly prohibited or declared void by
law are considered in existent and void from the beginning.
While contingent fee agreements are indeed recognized in this jurisdiction as
a valid exception to the prohibitions under Article 1491(5) of the Civil Code,
this recognition does not apply to the present case. A contingent fee
contract is an agreement in writing where the fee, often a fixed percentage
of what may be recovered in the action, is made to depend upon the success
of the litigation. The payment of the contingent fee is not made during the
pendency of the litigation involving the clients property but only after the
judgment has been rendered in the case handled by the lawyer.
In the present case, we reiterate that the transfer or assignment of the
disputed one-half portion to Atty. Lacaya took place while the subject lot
was still under litigation and the lawyer-client relationship still existed
between him and the spouses Cadavedo. Thus, the general prohibition
provided under Article 1491 of the Civil Code, rather than the exception
provided in jurisprudence, applies.
The compromise agreement entered into between Vicente and Atty. Lacaya
in Civil Case No. 215 (ejectment case) was intended to ratify and confirm
Atty. Lacayas acquisition and possession of the disputed one-half portion
which were made in violation of Article 1491
(5) of the Civil Code. As earlier discussed, such acquisition is void; the
compromise agreement, which had for its object a void transaction,
should be void.
A contract whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy is in existent and void from the
beginning. It can never be ratified nor the action or defense for the
declaration of the in existence of the contract prescribe; and any contract
directly resulting from such illegal contract is likewise void and in existent.
Consequently, the compromise agreement did not supersede the written
contingent fee agreement providing for attorneys fee of P2,000.00.
SC fixed the attorneys fees on a quantum meruit basis.The doctrine of
quantum meruit is a device to prevent undue enrichment based on the
equitable postulate that it is unjust for a person to retain benefit without
paying for it.
SPECIAL LIABILITY IN PARTICULAR ACTIVITIES
Doctors
PEDRITO DELA TORRE vs. DR. ARTURO IMBUIDO, DRA. NORMA IMBUIDO in
their capacity as
owners and operators of DIVINE SPIRIT GENERAL HOSPITAL and/or DR.
NESTOR PASAMBA,
G.R. No. 192973, September 29, 2014, J. Reyes
As the Court held in Spouses Flores v. Spouses Pineda, et al. ,the critical and
clinching factor in a medical negligence case is proof of the causal
connection between the negligence and the injuries. The claimant must
prove not only the injury but also the defendant's fault, and that such fault
caused the injury. A verdict in a malpractice action cannot be based on
speculation or conjecture. Causation must be proven within a reasonable
medical probability based upon competent expert testimony, which the Court
finds absent in the case at bar. As regards the respondents' counterclaim, the
CA's award of P48,515.58 is sustained.
Lawyers
STRICT LIABILITY
Theness, a three-year old child, was killed after she was bitten by
a dog while she was playing with the child of Purita Vestil in the
house of Vicente Miranda, the late father of Purita. Spouses
Vestils contention that they cannot be faulted as they are not the
owner of the house where the child was bitten cannot be
accepted because under the Article 2183 of the Civil Code the
possessor of animal is liable even if the animal should escape or
be lost and so be removed from his control.
Yu was inside his car when his driver bumped a carretela in front
and at the same time hit another car coming from the opposite
direct. Under [Article 2184], if the causative factor was the drivers
negligence, the owner of the vehicle who was present is likewise
held liable if he could have prevented the mishap by the exercise of
due diligence.
The present case stemmed from the filing before the Supreme
Court OF a complaint for disbarment against respondent by
petitioner which was dismissed. Respondent thereafter filed a
complaint for damages against the petitioner. The adverse result of
an action does not per se make the action wrongful and subject
the actor to make payment of damages for the law could not have
meant to impose a penalty on the right to because one who
exercises his rights does no injury, and if damage results from a
person's exe rcising his legal rights, it is damnum absque injuria.
EXTRAORDINARY DILIGENCE
EASTERN SHIPPING LINES INC., vs. BPI/MS INSURANCE CORP. and
MITSUI SUM TOMO INSURANCE CO. LTD., G.R. No. 193986 January 15,
2014, J. Villarama, Jr.
It bears stressing unto petitioner that common carriers, from the nature of
their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods transported by them.
Subject to certain exceptions enumerated under Article 1734 of the Civil
Code, common carriers are responsible for the loss, destruction, or
deterioration of the goods. The extraordinary responsibility of the common
carrier lasts from the time the goods are unconditionally placed in the
possession of, and
received by the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them. Owing to this high degree of diligence
required of them, common carriers, as a general rule, are presumed to have
been at fault or negligent if the goods they transported deteriorated or got
lost or destroyed. That is, unless they prove that they exercised extraordinary
diligence in transporting the goods. In order to avoid responsibility for any
loss or damage, therefore, they have the burden of proving that they
observed such high level of diligence. In this case, petitioner failed to hurdle
such burden.
For the doctrine of res ipsa loquitur to apply, the complainant must show
that: (1) the accident is of such character as to warrant an inference that it
would not have happened except for the defendants negligence (2) the
accident must have been caused by an agency or instrumentality within the
exclusive management or control of the person charged with the negligence
complained of and (3) the accident must not have been due to any
voluntary action or contribution on the part of the person injured. The
present case satisfies all the elements of res ipsa loquitur.
UNKNOWN OWNER OF THE VESSEL M/V CHINA JOY, SAMSUN
SHIPPING LTD., AND INTER-ASIA MARINE TRANSPORT, INC. v.
ASIAN TERMINALS, INC, G.R. No. 195661. March 11, 2015, J.
REYES
The three requisites to the application of the doctrine of res ipsa loquitur are
found to be attendant in the case at bar. First, the co-mingling of the two
foreign metal objects with the soybean meal cargo and the consequent
damage to ATIs unloader is an accident which ordinarily does not occur in
the absence of someones negligence. Second, the foreign metal objects
were found in the vessels Hold No. 2, which is within the exclusive control of
the petitioners. Third, records do not show that ATIs negligence had in any
way contributed to the damage caused to its unloader. All 3 requisites of res
ipsa loquitur being present, the presumption or inference arises that
defendants negligence was the proximate cause of the damage to ATIs
unloader. The burden of evidence shifted to defendants to prove otherwise.
The defendants failed to do so.
INTERNATIONAL CONTAINER TERMINAL SERVICES INC. VS. CELESTE
M. CHUA, G.R. No. 195031March 26, 2014, J. PEREZ
The container van loaded with the personal effects of respondent Chua
arrived at North Harbor, Manila and was unloaded in the depot belonging to
petitioner for safekeeping pending the customs inspection. The container van
was stripped and partially inspected by custom authorities. Further
inspection thereof was scheduled on May 8, 1997. However, on
the date scheduled, petitioners depot was gutted by fire and respondents
container van was burned.
The doctrine is based on the theory that the defendant either knows the
cause of the accident or has the best opportunity of ascertaining it and the
plaintiff, having no knowledge thereof, is compelled to allege negligence in
general terms. In such instance, the plaintiff relies on proof of the happening
of the accident alone to establish negligence. The principle, furthermore,
provides a means by which a plaintiff can hold liable a defendant who, if
innocent, should be able to prove that he exercised due care to prevent the
accident complained of from happening. It is, consequently, the defendants
responsibility to show that there was no negligence on his part. The doctrine,
however, can be invoked when and only when, under the circumstances
involved, direct evidence is absent and not readily available. Here, there was
no evidence as to how or why the fire in the container yard of petitioner
started; hence, it was up to petitioner to satisfactorily prove that it exercised
the diligence required to prevent the fire from happening. This it failed to do.
Thus, the trial court and the Court of Appeals acted appropriately in applying
the principle of res ipsa loquitur to the case at bar.
DAMAGES
NEW WORLD DEVELOPERS AND MANAGEMENT INC. vs. AMA
COMPUTER LEARNING CENTER INC., G.R. Nos. 187930 & 188250,
February 23, 2015, C.J. Sereno
The Court ruled that Mindanao Terminal had duly exercised the
required degree of diligence in loading and stowing the cargoes,
which is the ordinary diligence of a good father of a family. There is
no basis for the award of attorneys fees in favor of petitioner
since none of the circumstances enumerated in Article 2208 of
the Civil Code exists because the present case is clearly not an
unfounded civil action against the plaintiff as there is no showing
that it was instituted for the mere purpose of vexation or injury.
(1) the fact of the prosecution and the further fact that the defendant
was himself the prosecutor, and that the action was finally
terminated with an acquittal;
(2) that in bringing the action, the prosecutor acted without probable
cause; and
(3) the prosecutor was actuated or impelled by legal malice.
Two days before the wedding, defendant, who was then 28 years
old, simply left a note for plaintiff stating: "Will have to postpone
wedding My mother opposes it ... ", then enplaned to his home
city in Mindanao, and never returned and was never heard from
again. This is not a case of mere breach of promise to marry but
unjustifiably contrary to good customs for which defendant must
be held answerable in damages in accordance with Article 21
aforesaid and per express provision of Article 2219 (10) of the New
Civil Code, moral damages are recoverable in the cases mentioned
in Article 21 of said Code.
The demand letter sent to the petitioner on October 28, 1992, was
in accordance with an extra-judicial demand contemplated by law.
When the debtor knows the amount and period when he is to pay,
interest as damages is generally allowed as a matter of right.
EXEMPLARY DAMAGES
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METROPOLITAN BANK AND TRUST COMPANY vs. ANA GRACE
ROSALES AND YO YUK TO, G.R. No. 183204, JANUARY 13, 2014, J. del
Castillo
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legal basis. The banking industry is impressed with public interest. As such,
the highest degree of diligence is expected, and high standards of integrity
and performance are even required of it. It must therefore treat the
accounts of its depositors with meticulous care and always to have in mind
the fiduciary nature of its relationship with them.
SEVEN BROTHERS SHIPPING CORPORATION vs. DMC-
CONSTRUCTION RESOURCES, INC., G.R. No. 193914. November 26,
2014, C.J. Sereno
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exemplary damages by the trial court is likewise justified and,
therefore, sustained as a warning to all teleG.R.am companies to
observe due diligence in transmitting the messages of their
customers.
ART 2203
MORAL DAMAGES
ARCO PULP AND PAPER CO. v DAN T. LIM, G.R No. 206806, June 25,
2014. J. LEONEN
Moral damages are not recoverable on the mere breach of contract. Article
2220 requires that the breach be done fraudulently or in bad faith. To
recover moral damages in an action for breach of contract, the breach must
be palpably wanton, reckless and malicious, in bad faith, oppressive, or
abusive. Hence, the person claiming bad faith must prove its existence by
clear and convincing evidence for the law always presumes good faith.
When the party to a contracts actions clearly show "a dishonest purpose or
some moral obliquity and conscious doing of a wrong, a breach of known
duty through some motive or interest or ill will that partakes of the nature of
fraud, moral damages may be awarded. Here, the Court justified the award
since the debtor issued a bouncing check in partial payment of its obligation,
presumably with the knowledge that it was being drawn against a closed
account. Worse, it attempted to shift their obligations to a third person
without the consent of the creditor.
WPM INTERNATIONAL TRADING, INC. and WARLITO P. MANLAPAZ
v FE CORAZON LABAYEN, G.R No. 182770, September 17, 2014. J.
BRION
On the award of moral damages, the Court found the award in order in
view of WPM's unjustified refusal to pay a just debt. Such cold refusal to
pay a just debt amounts to a breach of contract in bad faith, as
contemplated by Article 2220.
Under Article 2220 of the New Civil Code, moral damages may be awarded in
cases of a breach of contract where the defendant acted fraudulently or in
bad faith or was guilty of gross negligence amounting to bad faith.
FIL-ESTATE PROPERTIES, INC. AND FIL-ESTATE NETWORK, INC., vs.
SPOUSES CONRADO AND MARIA VICTORIA RONQUILLO, G.R. No.
185798, JANUARY 13, 2014, J.
Perez
The relationship between the credit card issuer and the credit card holder is a
contractual one that is governed by the terms and conditions found in the
card membership agreement. Such terms and conditions constitute the law
between the parties. In case of their breach, moral damages may be
recovered where the defendant is shown to have acted fraudulently or in bad
faith. Malice or bad faith implies a conscious and intentional design to do a
wrongful act for a dishonest purpose or moral obliquity. However, a conscious
or intentional design need not always be present because negligence may
occasionally be so gross as to amount to malice or bad faith. Hence, bad faith
in the context of Article 2220 of the Civil Code includes gross negligence.
Nowhere in the terms and conditions requires the defendant to submit new
application form in order to reactivate her credit card. Indeed, BPI Express
Credit did not observe the prudence expected of banks whose business was
imbued with public interest, hence, defendant is entitled to damages.
Moral damages are mandatory without need of allegation and proof other
than the death of the victim, owing to the fact of the commission of murder
or homicide, such as when the victim was gunned down in front of his house.
If medical and funeral expenses were substantiated, actual damages may be
awarded. However, damages for loss of earning capacity may not be
awarded absent documentary evidence except where the victim was either
self-employed or a daily wage worker earning less than the minimum wage
under current labor laws. The testimony of the wife of the victim, a Senior
Desk Coordinator of a radio station, as to the latters monthly salary without
any documentary evidence will not suffice to substantiate the claim.
The trial court and the Court of Appeals, both found that the
accident and the death of Policronio had been due to the negligence
of the bus driver, for whom petitioner was liable under its contract of
carriage with the deceased but the only issue raised in this
appeal is the amount of damages recoverable by private
respondents herein. The determination of the indemnity to be
awarded to the heirs of a deceased person has therefore no fixed
basis and much is left to the discretion of the court considering the
moral and material damages involved, and so it has been said that
"(t)here can be no exact or uniform rule for measuring the value
of a human life and the measure of damages cannot be arrived at by
precise mathematical calculation, but the amount recoverable
depends on the particular facts and circumstances of each case.
TEMPERATE DAMAGES
S.V. MORE PHARMA CORPORATION and ALBERTO A. SANTILLANA vs.
DRUGMAKERS LABO RA TORIES, INC. and ELIEZER DEL MUNDO; S.V. MORE
PHARMA CORPORATION and ALBERTO
A. SANTILLANA vs. DRUGMAKERS LABO RA TORIES, INC. and ELIEZER DEL
MUNDO, G.R. No. 200408; G.R. No. 200416, November 12, 2014, J. Perlas-
Bernabe
The existence of contractual breach in this case revolves around the exclusive status
of Drugmakers as the manufacturer of the subject pharmaceutical products. In
particular, the Contract Manufacturing Agreement states that Drugmakers, being the
exclusive manufacturer of the subject pharmaceutical products, had to first give its
written consent before S.V. More could contract the services of another manufacturer.
The agreements notwithstanding, S.V More, through the CMPP and absent the prior
written consent of Drugmakers, contracted the services of Hizon Laboratories to
manufacture some of the pharmaceutical products covered by the said contracts.
Considering that Drugmakers palpably suffered some form of pecuniary loss resulting
from S.V. Mores breach of contract, the Court deems it proper to, instead, award in
their favor the sum of P100,000.00 in the form of temperate damages. This course of
action is hinged on Article 2224 of the Civil Code.
NOMINAL DAMAGES
ONE NETWORK RURAL BANK, INC., vs. DANILO G. BARIC, G.R. No.
193684, March 5,
2014, J. Castillo
Palado was the registered owner of real property with a building containing
commercial spaces for lease who eventually transferred his title to Network
Bank. Baric was a lessee therein, operating a barber shop on one of the
commercial spaces. Baric demanded nominal damages against Network Bank
after having been evicted from the building. The Supreme Court held he was
not entitled to nominal damages. Under Article 2221 of the Civil Code,
nominal damages may be awarded to a plaintiff whose right has been
violated or invaded by the defendant, for the purpose of vindicating or
recognizing that right, not for indemnifying the plaintiff for any loss suffered.
Nominal damages are not for indemnification of loss suffered but for the
vindication or recognition of a right violated or invaded. Network Bank did
not violate any of Baric's rights; it was merely a purchaser or transferee of
the property. If any, it was Palado who violated Barics rights.
LIBCAP MARKETING v BAQUIAL, G.R No. 192011, June 30, 2014. DEL
CASTILLO
Unpaid overtime pay should not be included in the computation for the
award of nominal damages. The Court did not agree with the CAs finding
that since respondent rendered overtime work for four years without
receiving any overtime pay, she is entitled to P100,000.00 nominal
damages. Nominal damages are awarded for the purpose of vindicating or
recognizing a right and not for indemnifying a loss. Hence, the CA should
have limited the justification of the award of nominal damages to
petitioners violation o f respondents right to due process in effecting her
termination. It should not have considered the claimed unpaid overtime pay.
ATTORNEYS FEES
The trial court awarded attorney's fees to petitioner as it "deemed it just and
reasonable" to do so, using the amount provided by petitioner on the
witness stand. Undoubtedly, attorney's fees may be awarded if the trial court
"deems it just and equitable." Such ground, however, must be fully
elaborated in the body of the ruling. Its mere invocation, without more,
negate the nature of attorney's fees as a form of actual damages.
JUAN CABRERA VS. HENRY YSAAC, G.R. No. 166790. November 19,
2014, J. LEONEN
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Petitioner is not entitled to attorney's fees and the costs of litigation since he
did not have a clear right over the property in question. The Court of Appeals
awarded attorney's fees and litigation costs on the erroneous premise that
the contract between petitioner and respondent was perfected. Without a
valid contract that stipulates his rights, petitioner risked litigation in order to
determine if he has rights, and not to protect rights that he
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currently has. Hence, the award of attorney's fees and litigation costs
was not properly justified.
BANK OF THE PHILIPPINE ISLANDS VS, AMADOR DOMINGO
(DECEASED) SUBSTITUTED BU HIS CHILDREN, JOANN MOYA, ET AL.
G.R. No. 169407. March 25, 2015, J. LEONARDO-DE CASTRO
It is basic that the claim for actual, moral and punitive damages as well as
exemplary damages and attorneys fees must each be independently
identified and justified.
ALEJANDRO C. ALMENDRAS, JR. vs. ALEXIS C. ALMENDRAS, G.R. No.
179491, January 14, 2015, C.J. Sereno
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In a licensing contract, the essence of which is the transfer by the licensor,
Honrado to the licensee, GMA Films, for a fee, of the exclusive right to
telecast the films listed in the Agreement. Stipulations for payment of
commission to the licensor is incongruous to the nature of such contracts
unless the licensor merely acted as agent of the film owners.
Nowhere in the Agreement, however, did the parties stipulate that Honrado
signed the
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contract in such capacity. Being a stranger to such arrangements, they are
not entitled to complain of any breach by Honrado of his contracts with the
film owners than the film owners are for any breach by a stranger of its
Agreement with aforementioned. The trial court awarded attorneys fees to
Honrado as it deemed it just and reasonable to do so, using the amount
provided by Honrado on the witness stand (P100,000). Undoubtedly,
attorneys fees may be awarded if the trial court deems it just and
equitable. Such ground, however, must be fully elaborated in the body of
the ruling. Its mere invocation, without more, negates the nature of
attorneys fees as a form of actual damages.
INTEREST/COMPUTATION
CIVIL LIABILITY
Ferro Chemicals, Inc. joined the public prosecutor in filing the petition for
certiorari before this court. Ramon Garcia, President of Ferro Chemicals, Inc.,
signed the verification and certification of non-forum shopping of the petition
for certiorari. When the civil action for the recovery of civil liability ex delicto
is instituted with the criminal action, whether by choice of private
complainant (i.e., no reservation is made or no prior filing of a separate civil
action) or as required by the law or rules, the case will be prosecuted under
the direction and control of the public prosecutor. The civil action cannot
proceed independently of the criminal case.
Properties of the Lajoms were taken due to the Agrarian Reform Program.
Just compensation was partially given. The Lajoms contested the
computation of just compensation due to an alleged error in the applicable
law. The Court ruled that the date of taking of the subject land for purposes
of computing just compensation should be reckoned from the issuance dates
of the emancipation patents. An emancipation patent constitutes the
conclusive authority for the issuance of a Transfer Certificate of Title in the
name of the grantee. It is from the issuance of an emancipation patent that
the grantee can acquire the vested right of ownership in the landholding,
subject to the payment of just compensation to the landowner.
RENATO L. DELFINO, SR. (Deceased), Represented by his Heirs,
namely: GRACIA DELFINO, GREGORIO A. DELFINO; MA. ISABEL A.
DELFINO, RENATO A. DELFINO, JR., MA. REGINA DELFINO ROSELLA,
MA. GRACIA A. DELFINO, MARIANO A. DELFINO, MA. LUISA DELFINO
GREGORIO and REV. FR. GABRIELA. DELFINO vs. AVELINO K. ANASAO
and ANGEL K. ANASAO (Deceased and represented by his sole heir,
SIXTO C. ANASAO), G.R. No. 197486, September 10, 2014, J.
Villarama, Jr.
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner; Provided, however, That in case
the area selected for retention by the landowner is tenanted, the tenant shall
have the option to choose whether to remain therein or be a beneficiary in
the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be
considered a leaseholder and shall lose his right to be a beneficiary under
this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a leaseholder to the land retained by
the landowner. The tenant must exercise this option within a period of one
(1) year from the time the landowner manifests his choice of the area for
retention.
AUTOMAT REALTY AND DEVELOPMENT CORPORATION, LITO CECILIA
AND LEONOR LIM vs. SPOUSES MARCIANO DELA CRUZ, SR. AND
OFELIA DELA CRUZ, G.R. No.
192026, October 01, 2014, J. Leonen
When Automat asked the spouses to vacate the premises, the spouses
refused to vacate unless they were paid compensation. They claimed they
were agricultural tenants [who] enjoyed security of tenure under the law. The
Court ruled that tenancy relationship cannot be presumed. The allegation of
its existence must be proven by evidence, and working on anothers
landholding raises no presumption of an agricultural tenancy. Consequently,
the landowners consent to an agricultural tenancy relationship must be
shown.
REMIGIO D. ESPIRITU and NOEL AGUSTIN vs. LUTGARDA TORRES DEL
ROSARIO
represented by SYLVIA R. ASPERILLA, G.R. No. 204964, October 15,
2014, J. Leonen
Lands classified as non-agricultural in zoning ordinances approved by the
Housing and Land Use Regulatory Board or its predecessors prior to June 15,
1998 are outside the coverage of the compulsory acquisition program of the
Comprehensive Agrarian Reform Law. However, there has to be substantial
evidence to prove that lands sought to be exempted fall within the non-
agricultural classification. In this case del Rosario failed to prove with
substantial evidence that the subject property is industrial property and as
such is not sufficient to rebut the findings of both the Department of Agrarian
Reform and the Office of the President.
SPOUSES JAIME SEBASTIAN AND EVANGELINE SEBASTIANvs.BPI
FAMILY BANK, INC., CARMELITA ITAPO AND BENJAMIN HAO, G.R.
No. 160107, October 22, 2014, J.
Bersamin
It bears emphasizing that Republic Act No. 6552 aimed to protect buyers of
real estate on installment payments, not borrowers or mortgagors who
obtained a housing loan to pay the costs of their purchase of real estate and
used the real estate as security for their loan. The "financing of real estate in
installment payments" referred to in Section 3, should be construed only as a
mode of payment vis--vis the seller of the real estate, and excluded the
concept of bank financing that was a type of loan. Accordingly, Sections 3, 4
and 5, supra, must be read as to grant certain rights only to defaulting buyers
of real estate on installment, which rights are properly demandable only
against the seller of real estate
The Sps. Sebastians insistence would have been correct if the monthly
amortizations being paid to BPI Family arose from a sale or financing of real
estate. In their case, however, the monthly amortizations represented the
installment payments of a housing loan that BPI Family had extended to
them as an employees benefit. The monthly amortizations they were liable
for was derived from a loan transaction, not a sale transaction, thereby
giving rise to a lender-borrower relationship between BPI Family and the
petitioners.
GCFI contracted substantial loans with the PNB DBP which were secured by
several real estate mortgages over GCFI properties. In 1981, Romualdez
abandoned the management of
the GCFI properties, after which DBP took over. Sometime during the
same year, certain people started to plant palay on the subject property,
eventually covering the riceland.
After the EDSA revolution, the possession and management of the GCFI
properties were returned to GCFI. However, in July 1987, the properties were
sequestered by the PCGG albeit, eventually cleared. In the meantime, PNB
and DBP transferred their financial claims against GCFI to the Asset
Privatization Trust (APT). KAMIFCI members were allegedly installed as
tenants by APT, the "legal possessor" of the land. However there was no
showing that APT was authorized by the propertys landowner, GCFI, to
install tenants thereon. Thus, since the consent of the standing landowner,
GCFI, had not been secured by APT in this case, it had no authority to enter
into any tenancy agreement with the KAMIFCI members. The right to hire a
tenant is basically a personal right of a landowner, except as may be
provided by law. Hence, the consent of the landowner should be secured
prior to the installation of tenants.
Under Republic Act No. 6657, the Comprehensive Agrarian Reform Law, the
Special Agrarian Courts shall have original and exclusive jurisdiction over all
petitions for the determination of just compensation to landowners, and the
prosecution of all criminal offenses. The case at bar deals with acts of the
DAR and the application, implementation, enforcement, or interpretation of
RA 6657 - issues which do not involve the "special jurisdiction" of the RTC
acting as a Special Agrarian Court. Hence, when the court a quo heard and
decided the instant case, it did so without jurisdiction. Decisions, orders,
awards or rulings of the DAR may be brought to the CA by certiorari and not
with the RTC through an ordinary action for cancellation of title.
The Supreme Court agreed. Said correction is substantial as it will affect his
legitimacy and convert him from a legitimate child to an illegitimate one.
Corrections of entries in the civil register including those on citizenship,
legitimacy of paternity or filiation, or legitimacy of
marriage, involve substantial alterations. Substantial errors in a civil
registry may be corrected and the true facts established provided the
parties aggrieved by the error avail themselves of the appropriate
adversary proceedings.
SPOUSES EDUARDO and LYDIA SILOS v PHILIPPINE NATIONAL BANK,
G.R No. 181045, July 2, 2014. J. DEL CASTILLO
One of the promissory notes issued by PNB to the spouses Silos contained a
penalty clause where upon default, a penalty charge of 24% per annum
based on the defaulted principal amount shall be imposed. PNB claims this
penalty charge should be covered by the real estate mortgage along with the
principal.
The Court ruled that the penalty may not be included as part of the secured
amount. An examination of the mortgage agreements reveals that nowhere
is it stated that penalties are to be included in the secured amount. Having
the attributes of a contract of adhesion as the principal credit documents,
we must construe the mortgage contracts strictly, and against the party who
drafted it.
BIGNA Y EX-IM PHILIPPINES, INC. vs. UNION BANK OF THE
PIDLIPPINES/UNION BANK OF THE PIDLIPPINES vs. BIGNAY EX-IM
PHILIPPINES, INC., G.R. No. 171590 171598 February 12, 2014, J. DEL
CASTILLO
Eviction shall take place whenever by a final judgment based on a right prior
to the sale or an act imputable to the vendor, the vendee is deprived of the
whole or of a part of the thing purchased. In case eviction occurs, the vendee
shall have the right to demand of the vendor, among others, the return of
the value which the thing sold had at the time of the eviction, be it greater
or less than the price of the sale; the expenses of the contract, if the vendee
has paid them; and the damages and interests, and ornamental expenses, if
the sale was made in bad faith.