Professional Documents
Culture Documents
Course Outline
Art. 2 NCC; Art.5 Labor Code; Sec. 3(1) & 4, Ch. 2, Book VII,
Administrative Code of 1987; BSP Circular 799
If the law provides for its own effectivity date, then it takes effect on the
said date, subject to the requirement of publication. The clause “unless
otherwise provided” refers to the date of effectivity and not the to the
requirement of publication itself, which cannot in any event be omitted.
Although the questioned circulars are a valid exercise of the police power
as delegated to the executive branch of Government, they are legally
invalid, defective and unenforceable for lack of proper publication and
filing in the Office of the National Administrative Register as required in
Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1)
and 4, Chapter 2, Book VII of the Administrative Code of 1987
Rep. vs. Extelcom, G.R. NO. 147096,Jan. 15, 2002 373 SCRA 316
Cojuangco, Jr. vs. Rep., G.R. NO. 180705, Nov. 27,2012 686 SCRA
472
The Court cannot rely on a handwritten note that was not part of
Proclamation No. 2476 as published. Without publication, the note never
had any legal force and effect.
The term “laws” do not include decisions of the Supreme Court because
lawyers in the active practice must keep abreast of decisions, particularly
where issues have been clarified, consistently reiterated and published in
advanced reports and the SCRA.
Bernabe v. Alejo G.R. NO. 140500, Jan. 21, 2002 374 SCRA 180
2
Whether or not, an alien, who is qualified to adopt at the time of filing the
petition, can be disqualified by the new provisions of the family code. An
alien qualified to adopt under the Child and Youth Welfare Code, which
was in force at the time of the filing of the petition, acquired a vested
right which could not be affected by the subsequent enactment of a new
law disqualifying him. Vested rights include not only legal or equitable
title to the enforcement of a demand, but also an exemption from new
obligations created after the right has vested.
The two marriages involved in this case was entered during the effectivity
of the New Civil Code. The Family Code has retroactive effect unless
there be impairment of vested rights.
Implied repeals are not to be favored because they rest only on the
presumption that because the old and the new laws are incompatible
with each other, there is an intention to repeal the old. There must be a
plain, unavoidable and irreconcilable repugnancy between the two.
When there is a conflict between a general law and a special statute, the
special statute should prevail since it evinces the legislative intent more
clearly than the general statute. The special law is to be taken as an
exception to the general law in the absence of special circumstances
forcing a contrary conclusion.
3
The Supreme Court declared the moratorium law unconstitutional but it
did not allow to toll the prescriptive period of the right to foreclose the
mortgage. The court adopted the view that before an act is declared
unconstitutional it is an operative fact which can be the source of rights
and duties.
Article 8. Stare Decisis; Case Law; See also Article 36, FC; article 9,
10, 11, 12 , 13, 14 NCC
Ting v. Velez-Ting, G.R. NO. 166562, Mar. 31, 2009 582 SCRA 694
Articles 15, 16, 17, 50, 51 (New Civil Code); Article 26, Family Code
David and Leticia are US citizens who own properties in the USA and in the
Philippines. Leticia obtained a decree of divorce from the Superior Court of
California in June 2005 wherein the court awarded all the properties in the USA to
Leticia. The trial court erred in recognizing the divorce decree The foreign
4
judgment and its authenticity must be proven as facts under our rules on evidence,
together with the alien’s applicable national law to show the effect of the judgment
on the alien himself or herself. The recognition may be made in an action instituted
specifically for the purpose or in another action where a party invokes the foreign
decree as an integral aspect of his claim or defense. With respect to their properties
in the Philippines, Leticia filed a petition for judicial separation of conjugal
properties. The Court ruled that the Philippine courts did not acquire jurisdiction
over the California properties of David and Leticia. Indeed, Article 16 of the Civil
Code clearly states that real property as well as personal property is subject to the
law of the country where it is situated. Thus, liquidation shall only be limited to the
Philippine properties.
NORMA A. DEL SOCORRO, for and in behalf of her minor child RODERIGO
NORJO VAN WILSEM, vs. ERNST JOHAN BRINKMAN VAN WILSEM, G.R. No.
193707 , December 10, 2014
A foreigner was sued for support. The Supreme Court ruled that Article 195 of the
New Civil Code cannot apply to him, since Article 15 of the New Civil Code stresses
the principle of nationality. Philippine laws, specifically the provisions of the Family
Code relating to support, only apply to Filipino citizens. By analogy, the same
principle applies to foreigners such that they are governed by their national law
with respect to family rights and duties. Be that as it may, the accused, who is
residing in the Philippines, was held liable under under Section 5(e) and (i) of R.A.
No. 9262 for unjustly refusing or failing to give support to petitioner’s son on since
respondent is currently living in the Philippines, on the basis of the Territoriality
Principle in criminal law, in relation to Article 14 of the New Civil Code, applies to
the instant case, which provides that: "[p]enal laws and those of public security and
safety shall be obligatory upon all who live and sojourn in Philippine territory,
subject to the principle of public international law and to treaty stipulations."
NORMA A. DEL SOCORRO for and in behalf of her Minor Child RODERIGO
NORJO VAN WILSEM vs. ERNST JOHAN BRINKMAN VAN WILSEM, G.R. No.
193707, December 10, 2014
Under the doctrine of processual presumption, if the foreign law involved is not
properly pleaded and proved, our courts will presume that the foreign law is the
same as our local or domestic or internal law. Hence, pleading a foreign law without
proving the same will bar its application in the Philippines
5
All told, the considerations for assumption of jurisdiction by Philippine tribunals as
outlined in Bank of America, NT&SA have been satisfied. First, all the parties are based
in the Philippines and all the material incidents transpired in this jurisdiction. Thus, the
parties may conveniently seek relief from Philippine tribunals. Second, Philippine
tribunals are in a position to make an intelligent decision as to the law and the facts.
Third, Philippine tribunals are in a position to enforce their decisions. There is no
compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the
immense public policy considerations attendant to this case behoove Philippine
tribunals to not shy away from their duty to rule on the case.
Van Dorn vs. Romillo G.R. NO.L-68470 October 8, 1985 139 SCRA
139
Pilapil vs. Ibay-Somera, G.R. NO. 80116 June 30, 1989 174 SCRA
652
Recio vs. Recio G.R. NO. 138322. October 2, 2001 366 SCRA 437
Roehr v. Rodriguez,G.R. NO. 142820 ,Jun. 30, 2003 404 SCRA 495
6
The mere private act of signing a marriage contract bears no semblance
to a valid marriage and thus, needs no judicial declaration of nullity.
Such act alone, without more, cannot be deemed to constitute an
ostensibly valid marriage for which petitioner might be held liable for
bigamy unless he first secures a judicial declaration of nullity before he
contracts a subsequent marriage. (Pro hac vice case)
Rep. v. Orbecido, G.R. NO. 154380, Oct. 05, 2005 472 SCRA 114 –
Whether or not, a Filipino Spouse can remarry under ARTICLE 26 OF
THE FAMILY CODE where his,her spouse is later naturalized as a foreign
citizen and obtains a valid divorce decree capacitating him or her to
remarry. The reckoning point is not the citizenship of the parties at the
time of the celebration of the marriage, but their citizenship at the time a
valid divorce is obtained abroad by the alien spouse capacitating the
latter to remarry.
Corpuz v. Sto. Tomas, G.R.NO. 186571, Aug. 11, 2010 628 SCRA
266
In Gerbert’s case, since both the foreign divorce decree and the national
law of the alien, recognizing his or her capacity to obtain a divorce,
purport to be official acts of a sovereign authority, Section 24, Rule 132
of the Rules of Court comes into play. This Section requires proof, either
by (1) official publications or (2) copies attested by the officer having legal
custody of the documents. If the copies of official records are not kept in
the Philippines, these must be (a) accompanied by a certificate issued by
the proper diplomatic or consular officer in the Philippine foreign service
stationed in the foreign country in which the record is kept and (b)
authenticated by the seal of his office.
Waterfields Corp. and the spouses Manzanilla entered into a contract of lease. When
Waterfields breached the contract by failing to pay rent, the lessors brought an
ejectment suit. Waterfields claims that if it was ejected prior to the expiration of the
lease, it would be tantamount to unjust enrichment as Waterfields already
introduced substantial improvements on the property.
7
The principle of unjust enrichment requires two conditions: (1) that a person is
benefited without a valid basis or justification, and (2) that such benefit is derived at
the expense of another.”
It does not, however, apply in this case since any benefit that the spouses Manzanilla
may obtain from the subject premises cannot be said to be without any valid basis
or justification. It is well to remind Waterfields that they violated the contract of
lease and that they failed to vacate the premises upon demand. Hence, the spouses
Manzanilla are justified in recovering the physical possession thereof and
consequently, in making use of the property. Besides, in violating the lease by failing
to pay the rent, Waterfields took the risk of losing the improvements it introduced
thereon in favor of the spouses Manzanilla.
RAUL SESBRENO VS. COURT OF APPEALS, G.R. No. 160689 March 26,
2014, J. BERSAMIN
This case concerns the claim for damages of petitioner Raul H. Sesbrenñ o founded on abuse of
rights. Sesbrenñ o accused the violation of contract (VOC) inspection team dispatched by the
Visayan Electric Company (VECO) to check his electric meter with conducting an unreasonable
search in his residential premises. It is worth noting that the VOC inspectors decided to enter
the main premises only after finding the meter of Sesbrenñ o turned upside down, hanging and
its disc not rotating. Their doing so would enable them to determine the unbilled electricity
consumed by his household. The circumstances justified their decision, and their inspection of
the main premises was a continuation of the authorized entry.
Although the act is not illegal, liability for damages may arise should there be an
abuse of rights. The concept of abuse of rights prescribes that a person should not
use his right unjustly or in bad faith; otherwise, he may be liable to another who
suffers injury. There is an abuse of rights if when the act is performed without
prudence or in bad faith. In order that liability may attach under the concept of
abuse of rights, the following elements must be present, to wit: (a) the existence of a
legal right or duty, (b) which is exercised in bad faith, and (c) for the sole intent of
prejudicing or injuring another. There is no hard and fast rule that can be applied to
ascertain whether or not the principle of abuse of rights is to be invoked. The
resolution of the issue depends on the circumstances of each case.
However, Sesbrenñ o did not persuasively demonstrate that there was an intervention
of malice or bad faith on the part of (VOC) inspection team during the inspection of
the main premises, or any excessiveness committed by them in the course of the
inspection. But Sesbrenñ o did not. On the other hand, the CA correctly observed that
the inspection did not zero in on Sesbrenñ o’s residence because the other houses
within the area were similarly subjected to the routine inspection. The court
eliminated any notion of malice or bad faith.
8
The issue for resolution is: whether or not petitioner committed acts amounting to
unfair competition under Article 28 of the Civil Code.The instant case falls under
Article 28 of the Civil Code on human relations, and not unfair competition under
Republic Act No. 8293, as the present suit is a damage suit and the products are not
covered by patent registration. A fortiori, the existence of patent registration is
immaterial in the present case.
The concept of "unfair competition"under Article 28 is very much broader than that
covered by intellectual property laws. Under the present article, which follows the
extended concept of "unfair competition" in American jurisdictions, the term covers
even cases of discovery of trade secrets of a competitor, bribery of his employees,
misrepresentation of all kinds, interference with the fulfillment of a competitor’s
contracts, or any malicious interference with the latter’s business.
CARLOS A. LORIA vs. LUDOLFO P. MUÑOZ, G.R. No. 187240, October 15, 2014, J.
Leonen
The principle of unjust enrichment has two conditions. First, a person must have
been benefited without a real or valid basis or justification. Second, the benefit was
derived at another person’s expense or damage. In this case, Loria received
P2,000,000.00 from Munñ oz for a subcontract of a government project to dredge the
Masarawag and San Francisco Rivers in Guinobatan, Albay. However, contrary to the
parties’ agreement, Munñ oz was not subcontracted for the project. Nevertheless,
Loria retained the P2,000,000.00. Thus, Loria was unjustly enriched. He retained
Munñ oz’s money without valid basis or justification. Under Article 22 of the Civil
Code of the Philippines, Loria must return the P2,000,000.00 to Munñ oz.
DOMINGO GONZALO VS.JOHN TARNATE JR., G.R. NO. 160600, JANUARY 15,
2014, J. Bersamin
9
Gonzalo, who was the sole contractor of the project in question, subcontracted the
implementation of the project to Tarnate in violation of the statutory prohibition.
Their subcontract was illegal because it did not bear the approval of the DPWH
Secretary. Necessarily, the deed of assignment was also illegal, because it sprung from
the subcontract. Thus, Tarnate and Gonzalo entered into an illegal contract.
While it is true that under Article 1412 (1) of the Civil Code, the guilty parties to an
illegal contract cannot recover from one another and are not entitled to an
affirmative relief because they are in pari delicto or in equal fault, the doctrine of in
pari delicto is not always rigid.
Under the principle of unjust enrichment exists then, Gonzalo would be unjustly
enriched at the expense of Tarnate, who provided the materials, if the latter was to
be barred from recovering because of the rigid application of the doctrine of in pari
delicto. The prevention of unjust enrichment called for the exception to apply in
Tarnate’s favor.
One who merely exercises one’s rights does no actionable injury and
cannot be held liable for damages.
Albenson Enterprises Corp. vs CA,217 SCRA 18 (1993)
Dionela filed a complaint for damages against RCPI alleging that the
defamatory words on the telegram sent to him not only wounded his
feelings but also caused him undue embarrassment and affected his
business as well as because other people have come to know of said
defamatory words. There is a clear case of breach of contract by the
petitioner in adding extraneous and libelous matters in the message sent
to Dionela.
10
Gashme Shookat Baksh vs CA,219 SCRA115 (1993)
Figueroa vs. Barranco, SBC Case NO. 519. July 31, 1997 276 5CRA
445 - His engaging in premarital sexual relations with complainant and
promises to marry suggests a doubtful moral character on his part but
the same does not constitute grossly immoral conduct.
University of the East vs Jader, G.R. NO. 132344, Feb. 7, 2000 325
SCRA 805
A law student was allowed to graduate by his school with a failing grade
but was later on prohibited by the said school to take the bar exams. The
negligent act of a professor who fails to observe the rules of the school,
for instance by not promptly submitting a student's grade, is not only
imputable to the professor but is an act of the school, being his
employer.
UP v. Philab, G.R. NO. 152411, Sept. 29, 2004 439 SCRA 467
Whether or not UP is liable to pay PHILAB considering that it is only a
donee of FEMF, FEMF being the one which funded the project, and
despite being a donee, unjust enrichment still applies to UP. In order that
accion in rem verso may prosper, the essential elements must be present:
(1) that the defendant has been enriched, (2) that the plaintiff has
suffered a loss, (3) that the enrichment of the defendant is without just
or legal ground, and (4) that the plaintiff has no other action based on
contract, quasi-contract, crime or quasi-delict.
Beumer vs. Amores, G.R. NO. 195670, Dec. 03, 2012 686 SCRA 770
An action for recovery of what has been paid without just cause has been
designated as an accion in rem verso. This provision does not apply if, as
11
in this case, the action is proscribed by the Constitution or by the
application of the pari delicto doctrine.
Padalhin vs. Laviña, G.R. NO. 183026,Nov. 14, 2012 685 SCRA 549
Civil Personality; Birth; Death; Arts 37, 38, 39 40, 41, 42; 390, 391,
712, 777 NCC; Art. 41, 96 &124, 99 & 126, 142 FC
12
Domicile; Arts 50 & 51 NCC; Arts. 68 & 69, FC; Residence v.
Domicile; Annulment or Nullity of Marriages – AM 02-11-10 SC;
Settlement of Estate
Marriage
Our Family Law is based on the policy that marriage is not a mere
contract, but a social institution in which the State is vitally interested.
Perido vs Perido, 63 SCRA 97
It is the union (and inviolable social institution) of one man with one
woman for the reciprocal blessings of a domestic home life, and for the
birth, rearing, and education of children. In one case, the Supreme Court
ruled that marriage is also a new relation in the maintenance of which
the general public is interested.
The offer of the accused to marry the victim establishes his guilt. As a
rule in rape cases, an offer of marriage is an admission of guilt
Appellant’s own admission that she was married to the victim was a
confirmation of the semper praesumitur matrimonio and the presumption
that a man and a woman so deporting themselves as husband and wife
had verily acted into a lawful contract of marriage.
13
Proof of Marriage; Marriage Certificate v. Presumption of Marriage;
Torrens Title Entry “Single, Civil Status’’;
The mere fact that no record of the marriage exists in the registry of
marriage does not invalidate said marriage, as long as in the celebration
thereof, all requisites for its validity are present. The forwarding of a copy
of the marriage certificate to the registry is not one of said requisites.
Trinidad vs. Court of Appeals, et. al., 289 SCRA 188 (1998)
The Supreme Court held that the following may be presented as proof of
marriage: (a) testimony of a witness to the matrimony; (b) the couple’s
public and open cohabitation as husband and wife after the alleged
wedlock; (c) the birth and baptismal certificate of children born during
such union; and (d) the mention of such nuptial in subsequent
documents.
The law favors the validity of marriage because the State is interested in
the preservation of the family and sanctity of the family is a matter of
constitutional concern. The burden of proof to show the nullity of the
marriage rests upon the party seeking its nullity
14
Añonuevo v. Estate of Jalandoni G.R. NO. 178221, Dec. 1, 2010 636
SCRA 420
A lawyer was married three times, while the first marriage was still
subsisting, his marriage contracts as certified by the NSO was presented
in the disbarment proceeding to prove his subsequent marriages. For
purposes of disbarment proceeding, these marriage contracts bearing the
name of respondent are competent and convincing evidence proving that
he committed bigamy.
Cariño v. Cariño, G.R. NO. 132529 , Feb. 02, 2001 351 SCRA 127
Requirements of Marriage
Essential requisite
Formal Requisite
15
city or municipality, not the residence of either of the contracting parties,
and issuance of a marriage license despite the absence of publication or
prior to the completion of the 10-day period for publication are
considered mere irregularities that do not affect the validity of the
marriage
Abbas v. Abbas, G.R. NO. 183896 , Jan. 30, 2013 689 SCRA 636
The Municipal Civil Registrar of Carmona, Cavite, where the marriage
license of Gloria and Syed was allegedly issued, issued a certification to
the effect that no such marriage license for Gloria and Syed was issued,
and that the serial number of the marriage license pertained to another
couple, Arlindo Getalado and Myra Mabilangan. The fact that the names
in said license do not correspond to those of Gloria and Syed does not
overturn the presumption that the registrar conducted a diligent search
of the records of her office.
Sy v. CA, G.R. NO. 127263 , Apr. 12, 2000 330 SCRA 550
The affidavit is for the purpose of proving the basis for exemption from
the marriage license. Even if there is failure on the part of the
solemnizing officer to execute the necessary affidavit, such irregularity
will not invalidate the marriage for the affidavit is not being required of
the parties.
16
No judicial notice can be taken of Mohammedan rites and customs for
marriage. They must be alleged and proved in court.
Marriage Ceremony
The failure of the solemnizing officer to ask the parties whether they take
each other as husband and wife cannot be regarded as a fatal omission if
the parties nonetheless signed the marriage contract in the presence of
the solemnizing officer. A declaration of word of mouth of what the
parties and already stated in writing would be a mere repetition, so that
its omission should not be regarded as fatal.
People v. Opeña, L-34954, Feb. 20, 1981
17
Persons who may solemnize Marriages
Arañes v. Occiano, A.M . 02-1390 , April 11, 2002 380 SCRA 402
The court does not accept the arguments of the respondent judges that
the ascertainment of the validity of the marriage license is beyond the
scope of the duty of a solemnizing officer especially when there are
glaring pieces of evidence that point to the contrary. As correctly
observed by the OCA, the presumption of regularity accorded to a
marriage license disappears the moment the marriage documents do not
appear regular on its face.
Compare the ruling of the court in the case of Cariño v. Cariño and
OCA vs. J. Necessario et al as to the duty of the solemnizing officer
to examine the validity of marriage license.
Divorce between Filipinos is void and ineffectual under the nationality rule adopted
by Philippine law. Hence, any settlement of property between the parties of the first
marriage involving Filipinos submitted as an incident of a divorce obtained in a
foreign country lacks competent judicial approval, and cannot be enforceable against
the assets of the husband who contracts a subsequent marriage.
18
Atty. Luna’s subsequent marriage to Soledad was void for being bigamous, on the
ground that the marriage between Atty. Luna and Eugenia had not been dissolved by
the Divorce Decree rendered by the CFI of Sto. Domingo in the Dominican Republic
but had subsisted until the death of Atty. Luna
Given the subsistence of the first marriage between Atty. Luna and Eugenia, the
presumption that Atty. Luna acquired the properties out of his own personal funds
and effort remained. It should then be justly concluded that the properties in litis
legally pertained to their conjugal partnership of gains as of the time of his death.
Consequently, the sole ownership of the 25/100 pro indiviso share of Atty. Luna in
the condominium unit, and of the law books pertained to the respondents as the
lawful heirs of Atty. Luna.
Petitioner questions the decision of the RTC, dismissing her petition for the
recognition of her second marriage as valid, for failing to comply with the
requirements set forth in Art. 13 of the Family Code – that is obtaining a judicial
recognition of the foreign decree of absolute divorce in our country. The SC however
ruled that a divorce obtained abroad by an alien may be recognized in our
jurisdiction, provided the decree is valid according to the national law of the
foreigner. The presentation solely of the divorce decree is insufficient; both the
divorce decree and the governing personal law of the alien spouse who obtained the
divorce must be proven. Because our courts do not take judicial notice of foreign
laws and judgment, our law on evidence requires that both the divorce decree and
the national law of the alien must be alleged and proven and like any other fact.
Hence, instead of filing a petition for the recognition of her second marriage as valid,
petitioner should have filed a petition for the judicial recognition of her foreign
divorce from her first husband.
19
divorce decree and the national law of her alien spouse, in an action instituted in the
proper forum.
Rep. v. Orbecido, G.R. NO. 154380, Oct. 05, 2005 472 SCRA 114 –
Whether or not, a Filipino spouse of an alien, who is a Filipino at the
time of marriage, remarry after the latter acquires a foreign divorce that
allows her to remarry. The reckoning point is not the citizenship of the
parties at the time of the celebration of the marriage, but their citizenship
at the time a valid divorce is obtained abroad by the alien spouse
capacitating the latter to remarry.
Corpuz v. Sto. Tomas, G.R. NO. 186571, Aug. 11, 2010 628 SCRA
266
Valid
Voidable
Void
Terminable
Others Classifications
Legal Separation
Separation in Fact
20
Declaration of Nullity; NCC v. FC, AM 02-11-10 SC; Civil Code and
Muslim Code [PD 1083]
Indeed, a brother like the petitioner, albeit not a compulsory heir under
the laws of succession, has the right to succeed to the estate of a
deceased brother under the conditions stated in Article 1001 and Article
1003 of the Civil Code Necessarily, therefore, the right of the petitioner to
bring the action hinges upon a prior determination of whether
Cresenciano had any descendants, ascendants, or children (legitimate or
illegitimate), and of whether the petitioner was the late Cresenciano’s
surviving heir. Such prior determination must be made by the trial court,
for the inquiry thereon involves questions of fact.
The marriage between the late Sen. Tamano and Zorayda was celebrated
in 1958, solemnized under civil and Muslim rites. The only law in force
governing marriage relationships between Muslims and non-Muslims
alike was the Civil Code of 1950, under the provisions of which only one
marriage can exist at any given time.
Carlos v. Sandoval G.R. NO. 179922 , Dec. 16, 2008 574 SCRA 116
Bolos v. Bolos, G.R. NO. 186400 , Oct. 20, 2010 634 SCRA 429
21
Article 36, FC; AM 02-11-10 SC; See also Articles 48, 68-71, 220-221
& 225 FC
The Committee did not give any examples of psychological incapacity for
fear that the giving of examples would limit the applicability of the
provision under the principle of ejusdem generis. Rather, the Committee
would like the judge to interpret the provision on a case-to-case basis,
guided by experience, the findings of experts and researchers in
psychological disciplines, and by decisions of church tribunals which,
although not binding on the civil courts, may be given persuasive effect
since the provision was taken from Canon Law.”
The courts are justified in declaring a marriage null and void under Article 36 of the
Family Code regardless of whether it is the petitioner or the respondent who
imputes the psychological incapacity to the other as long as the imputation is fully
substantiated with proof. Indeed, psychological incapacity may exist in one party
alone or in both of them, and if psychological incapacity of either or both is
established, the marriage has to be deemed null and void.
22
ROBERT F. MALLILIN vs. LUZ G. JAMESOLAMIN AND THE REPUBLIC OF THE
PHILIPPINES, G.R. No. 192718, February 18, 2015, J. Mendoza
The alleged failure of Luz to assume her duties as a wife and as a mother, as well as
her emotional immaturity, irresponsibility and infidelity, cannot rise to the level of
psychological incapacity that justifies the nullification of the parties' marriage.
Psychological incapacity as required by Article 36 must be characterized by (a)
gravity, (b) juridical antecedence and (c) incurability. The interpretations given by
the National Appellate Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling or decisive, should be given great respect by our
courts. The decision of the NAMT, however, was based on the second paragraph of
Canon 1095 which refers to those who suffer from a grave lack of discretion of
judgment concerning essential matrimonial rights and obligations to be mutually
given and accepted --- a cause not of psychological nature under Article 36 of the
Family Code. A cause of psychological nature similar to Article 36 is covered by the
third paragraph of Canon 1095 of the Code of Canon Law.
The burden of proof to show the nullity of the marriage belongs to the
plaintiff. Any doubt should be resolved in favor of the existence and
continuation of the marriage and against its dissolution and nullity.
In this case, there was no sexual contact between the parties since their
marriage on May 22, 1988 up to Mar. 15, 1989 or for almost a year. The
senseless and protracted refusal of one of the parties of sexual
cooperation for the procreation of children is equivalent to psychological
incapacity.
23
Marable v. Marable G.R. NO. 178741, Jan. 17, 2011 639 SCRA 557
The appellate court correctly ruled that the report of Dr. Tayag failed to
explain the root cause of petitioner’s alleged psychological incapacity. The
evaluation of Dr. Tayag merely made a general conclusion that petitioner
is suffering from an Anti-social Personality Disorder but there was no
factual basis stated for the finding that petitioner is a socially deviant
person, rebellious, impulsive, self-centered and deceitful.
Ochosa v. Alano, G.R. NO. 167459 , Jan. 26, 2011 640 SCRA 517
In this case the court proved that respondent was the sex partner of
many military officials. In view of the foregoing, the badges of Bona’ s
alleged psychological incapacity, i.e., her sexual infidelity and
abandonment, can only be convincingly traced to the period of time after
her marriage to Jose and not to the inception of the said marriage.
Yambao v. REP., G.R. NO. 184063 , Jan. 24, 2011 640 SCRA 355
Rep. v. Galang G.R. NO. 168335 , Jun. 6, 2011 650 SCRA 524
Aurelio v. Aurelio, G.R. NO. 175367 , Jun. 6, 2011 650 SCRA 561
Kalaw v. Fernandez, G.R. NO. 166357 , Sept 19, 2011 657 SCRA 822
24
He presented the testimonies of two supposed expert witnesses who
concluded that respondent is psychologically incapacitated, but the
conclusions of these witnesses were premised on the alleged acts or
behavior of respondent which had not been sufficiently proven. Sexual
infidelity per se is a G.R.ound for legal separation, but it does not
necessarily constitute psychological incapacity.
Toring v. Toring, G.R. NO. 165321 , Aug. 03, 2010 626 SCRA 389
In this case, the totality of evidence presented by Noel was not sufficient
to sustain a finding that Maribel was psychologically incapacitated.
Noel’s evidence merely established that Maribel refused to have sexual
intercourse with him after their marriage, and that she left him after
their quarrel when he confronted her about her alleged miscarriage.
In the present case, the petitioner’s testimony failed to establish that the
respondent’s condition is a manifestation of a disordered personality
rooted on some incapacitating or debilitating psychological condition that
makes her completely unable to discharge the essential marital
obligations. If at all, the petitioner merely showed that the respondent
had some personality defects that showed their manifestation during the
marriage; his testimony sorely lacked details necessary to establish that
the respondent’s defects existed at the inception of the marriage.
25
opinion for that purpose. Expert evidence submitted here did not
establish the precise cause of the supposed psychological incapacity of
Dominic, much less show that the psychological incapacity existed at the
inception of the marriage.
Republic v. Encelan, G.R. NO. 170022 , Jan. 9, 2013 688 SCRA 215
Evidentiary requirement
GLENN VIÑAS vs. MARY GRACE PAREL-VIÑAS, G.R. No. 208790, January 21,
2015, J. Reyes
26
Buenaventura vs CA, 454 SCRA 261 (2005)
The award of moral damages should be predicated, not on the mere act of
entering into the marriage, but on specific evidence that it was done
deliberately and with malice by a party who had knowledge of his or her
disability and yet willfully concealed the same.
Prescription
Niñal v. Bayadog G.R. NO. 133778=, Mar. 14, 2000 328 SCRA 122
Ablaza v. Republic, G.R. NO. 158298 , Aug. 11, 2010 628 SCRA 27
27
A judicial declaration of nullity of a previous marriage is necessary before
a subsequent one can be legally contracted and that one who enters into
a subsequent marriage without first obtaining such judicial declaration is
guilty of bigamy.
Morigo v. People, G.R. NO. 145226, Feb. 06, 2004 422 SCRA 376
The existence and the validity of the first marriage being an essential
element of the crime of bigamy, it is but logical that a conviction for said
offense cannot be sustained where there is no first marriage to speak of.
Jarillo v.People, G.R. NO.164435 , Sept. 29, 2009 601 SCRA 236
Tenebro v. CA, G.R. NO. 150758 , Feb. 18, 2004 423 SCRA 272
Antone v. Beronilla, G.R. NO.183824, Dec. 08, 2010 637 SCRA 615
Teves v. People, G.R. NO. 188775 , Aug 24, 2011 656 SCRA 307
28
Nollora v. People, G.R. NO.191425 , Sept. 7, 2011 657 SCRA 330
Indeed, Article 13(2) of the Code of Muslim Personal Laws states that
"[i]n case of a marriage between a Muslim and a non-Muslim, solemnized
not in accordance with Muslim law or this Code, the [Family Code of the
Philippines, or Executive Order NO. 209, in lieu of the Civil Code of the
Philippines] shall apply." Thus, regardless of his professed religion,
Nollora cannot claim exemption from liability for the crime of bigamy.
Villatuya v. Tabalingcos, A.C. NO. 6622 , July 10, 2012 676 SCRA 37
Armas v. Calisterio, G.R. NO.136467, Apr. 06, 2000 330 SCRA 201
Whether or not, the rule under the FC, that a judicial declaration of
presumptive death of the absent spouse is necessary before the present
spouse can remarry, has a retroactive effect. A judicial declaration of
absence of the absentee spouse is not necessary as long as the
prescribed period of absence is met. It is equally noteworthy that the
marriage in these exceptional cases are, by the explicit mandate of Article
83, to be deemed valid "until declared null and void by a competent
court."
Rep. v. Nolasco, G.R. NO. 94053 , Mar. 17, 1993 220 SCRA 20
In the case at bar, the Court considers that the investigation allegedly
conducted by respondent in his attempt to ascertain Janet Monica
Parker's whereabouts is too sketchy to form the basis of a reasonable or
well-founded belief that she was already dead. When he arrived in San
Jose, Antique after learning of Janet Monica's departure, instead of
seeking the help of local authorities or of the British Embassy, he
secured another seaman's contract and went to London, a vast city of
many millions of inhabitants, to look for her there.
Retroactive application of Art. 41
Valdez v. Republic, G.R. NO.180863 , Sept. 08, 2009 598 SCRA 646
29
Since death is presumed to have taken place by the seventh year of
absence, Sofio is to be presumed dead starting October 1982. To
retroactively apply the provisions of the Family Code requiring petitioner
to exhibit "well-founded belief" will, ultimately, result in the invalidation
of her second marriage, which was valid at the time it was celebrated.
Rep. v. Tango, G.R. NO.161062 , Jul. 31, 2009 594 SCRA 560
Even if the spouse present has a well-founded belief that the absent
spouse was already dead, a summary proceeding for the declaration of
presumptive death is necessary in order to contract a subsequent
marriage, a mandatory requirement which has been precisely
incorporated into the Family Code to discourage subsequent marriages
where it is not proven that the previous marriage has been dissolved or a
missing spouse is factually or presumptively dead, in accordance with
pertinent provisions of law.
Although the result of the Court of Appeals’ denial of the appeal would
apparently be the same, there is a big difference between having the
supposed appeal dismissed for lack of jurisdiction by virtue of the fact
that the RTC decision sought to be appealed is immediately final and
executory, and the denial of the appeal for lack of merit. In the former,
the supposed appellee can immediately ask for the issuance of an Entry
30
of Judgment in the RTC, whereas, in the latter, the appellant can still
raise the matter to this Court on petition for review and the RTC
judgment cannot be executed until this Court makes the final
pronouncement.
Rep. v. Granada, G.R. NO. 187512, June 13, 2012 672 SCRA 432
As a matter of course, it follows that no appeal can be had of the trial
court's judgment in a summary proceeding for the declaration of
presumptive death of an absent spouse under Article 41 of the Family
Code. It goes without saying, however, that an aggrieved party may file a
petition for certiorari to question abuse of discretion amounting to lack of
jurisdiction.
Armas v. Calisterio, G.R. NO.136467, Apr. 06, 2000 330 SCRA 201
Definition
A voidable marriage is considered valid and produces all its civil effects
until it is set aside by final judgment of a competent court in an action
for annulment. The terms “annul” and “null and void” have different legal
connotations and implications. Annul means to reduce to nothing; to
nullify; to abolish; to do away with; whereas, null and void is something
that does not exist from the beginning.
G.R.ounds
31
Tuazon vs. Court of Appeals, 256 SCRA 158 (1996)
The prosecuting attorney or fiscal may oppose the application for legal
separation or annulment (or declaration of nullity of marriages) through
the presentation of his own evidence, if in his opinion, the proof adduced
is dubious and fabricated.
Concept
Ong v. Ong, G.R. NO. 153206 , Oct. 23, 2006 505 SCRA 76
Also without merit is the argument of William that since Lucita has
abandoned the family, a decree of legal separation should not be granted,
following Art. 56, par. (4) of the Family Code which provides that legal
separation shall be denied when both parties have given ground for legal
separation. The abandonment referred to by the Family Code is
abandonment without justifiable cause for more than one year.
Manzano vs. Sanchez, A.M . NO.00-1329, Mar. 08, 2001 354 SCRA 1
The fact that Manzano and Payao had been living apart from their
respective spouses for a long time already is immaterial. Article 63(1) of
the Family Code allows spouses who have obtained a decree of legal
separation to live separately from each other, but in such a case the
marriage bonds are not severed.
SSS v. Aguas, G.R. NO. 165546 , Feb. 27, 2006 483 SCRA 383
32
Cooling off period; Art. 58 – 59
Pacete vs. Carriaga, Jr., G.R. NO. L-53880, March 17, 1994.
In this interim, the court should take steps toward getting the parties to
reconcile.
During this period, the court where the action is pending shall remain
passive and is precluded from hearing the suit.
Pacete vs. Carriaga, G.R. NO. 53880, Mar. 17, 1994 231 SCRA 321
Ilusorio v. Bildner, G.R. NO. 139789 , May 12, 200 332 SCRA 169
33
Marital rights including coverture and living in conjugal dwelling may not
be enforced by the extra-ordinary writ of habeas corpus. With his full
mental capacity coupled with the right of choice, Potenciano Ilusorio may
not be the subject of visitation rights against his free choice. Otherwise,
we will deprive him of his right to privacy.
Under Article 117 of the Civil Code (now Article 73 of the Family Code),
the wife may exercise any profession, occupation or engage in business
without the consent of the husband. In the instant case, we are
convinced that it was only petitioner Nancy Go who entered into the
contract with private respondent.
Concept
Marriage settlement
The following donations are not donations propter nuptias: (1) those made
in favor of the spouses after the celebration of marriage; (2) those
executed in favor of the future spouses but not in consideration of the
marriage; and (3) those Ggranted to persons other than the spouses even
though they may be founded on the marriage
34
Even if the donation proper nuptias is void for failure to comply with
formal requisites, it could still constitute as legal basis for adverse
possession.
Valencia v. Locquiao, G.R. NO. 122134, Oct. 3, 200 412 SCRA 600
Under the Old Civil Code, donations propter nuptias must be made in a
public instrument in which the property donated must be specifically
described. However, Article 1330 of the same Code provides that
"acceptance is not necessary to the validity of such gifts". In other words,
the celebration of the marriage between the beneficiary couple, in tandem
with compliance with the prescribed form, was enough to effectuate the
donation propter nuptias under the Old Civil Code.
Agapay vs. Palang, G.R. NO. 116668 , Jul. 28, 1997 276 SCRA 340
Article 87 of the Family Code expressly provides that the prohibition
against donations between spouses now applies to donations between
persons living together as husband and wife without a valid marriage, for
otherwise, the condition of those who incurred guilt would turn out to be
better than those in legal union.
Arcaba vs. Batocael, G.R. NO.146683 , Nov.22, 2001 370 SCRA 414
Respondents having proven by a preponderance of evidence that Cirila
and Francisco lived together as husband and wife without a valid
marriage, the inescapable conclusion is that the donation made by
Francisco in favor of Cirila is void under Art. 87 of the Family Code.
35
Section 4. Ownership, Administration, Enjoyment & Disposition of
the Community Property (Articles 96-98)
Sec. 3, Rule 87
Sec. 3, Rule 87
36
Concept
Homeowners Savings & Loan Bank vs. Dailo, 453 SCRA 283, 290
(2005)
Commencement of CPG
In this provision, net profits "shall be the increase in value between the
market value of the community property at the time of the celebration of
the marriage and the market value at the time of its dissolution."
General Provisions
FRANCISCO LIM vs. EQUITABLE PCI BANK, now known as the BANCO DE ORO
UNIBANK INC., January 15, 2014, J. del Castillo
37
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. The
registration of the property is not conclusive evidence of the exclusive ownership of
the husband or the wife. Although the property appears to be registered in the name
of the husband, it has the inherent character of conjugal property if it was acquired
for valuable consideration during marriage. In order to rebut the presumptive
conjugal nature of the property, the petitioner must present strong, clear and
convincing evidence of exclusive ownership of one of the spouses. The burden of
proving that the property belongs exclusively to the wife or to the husband rests
upon the party asserting it.
Dewara v. Lamela G.R. NO. 179010, Apr. 11, 2011 647 SCRA 483
38
For the presumption to apply, it is not even necessary to prove that the
property was acquired with funds of the partnership. In fact, even when
the manner in which the property was acquired does not appear, the
presumption applies and it will be considered conjugal property.
The party who invokes it must first prove that the property was acquired
during the marriage. Proof of acquisition during the coverture is a
condition sine qua non to the operation of the presumption in favor of the
conjugal partnership.
Pisueña vs. Heirs of Petra Unating, G.R. NO. 132803 , Aug. 31, 1999
313 SCRA 384
The words "married to" were merely descriptive of Petra Unating's status
at the time the lot was awarded and registered in her name. Since Petra
Unating did not leave any other property, will or debt upon her demise in
1948, the property in question was thus inherited by her children, Felix
and Catalina Villar; and her husband, Aquilino Villar.
Determination of Ownership
Ferrer v. Ferrer, G.R. NO.166496 , Nov. 29, 2006 508 SCRA 570
Homeowner’s Savings & Loan Bank vs. Dailo, 453 SCRA 283 (2005)
39
The burden of proof that the debt was contracted for the benefit of the
conjugal partnership of gains lies with the creditor-party litigant claiming
as such.
Ching vs. CA, G.R. NO. 124642 , Feb. 23, 2004 423 SCRA 356
The barefaced fact that the shares of stocks were registered in the
corporate books of Citycorp Investment Philippines solely in the name of
the petitioner-husband does not constitute proof that the petitioner-
husband, not the conjugal partnership, owned the same.
Carlos vs. Abelardo, G.R. NO. 146504 , Apr. 09, 2002 380 SCRA 361
SBTC v. Mar Tierra Corp., G.R. NO. 143382 , Nov. 29, 2006 508
SCRA 419
Ros v. PNB Laoag Br., G.R. NO.170166, Apr. 06, 2011 647 SCRA 334
40
Pana v. Heirs of Jose Juanite G.R. NO. 164201,Dec. 10, 2012 687
SCRA 414
In the present case, the fictitious Deed of Absolute Sale was executed on September
22, 1986, one month after Leonardo died. Auroraas one of the heirs and the duly
appointed administratrix of Leonardo’s estate, had the right therefore to seek for
the annulment of the Deed of Sale as it deprived her and the other legal heirs of
Leonardo of their hereditary rights.
Due to the second marriage between Atty. Luna and the petitioner being void ab
initio by virtue of its being bigamous, the properties acquired during the bigamous
marriage were governed by the rules on co-ownership, conformably with Article
144 of the Civil Code.
41
In such a situation, whoever alleges co-ownership carried the burden of proof to
confirm such fact. To establish co-ownership, therefore, it became imperative for the
Lavadia to offer proof of her actual contributions in the acquisition of property. Her
mere allegation of co-ownership, without sufficient and competent evidence, would
warrant no relief in her favor.
Tinitigan vs. Tinitigan, Sr., NO. L- 45418, October 30, 1980, 100
SCRA 619.
A husband may sell property belonging to the conjugal partnership even
without the consent of the wife if the sale is necessary to answer for a big
conjugal liability which might endanger the family’s economic standing.
This is one instance where the wife’s consent is not required and,
impliedly, no judicial intervention is necessary.
Spouses Guiang vs. Court of Appeals, G.R. No. 125172. June 26,
1998,
Roxas vs. CA G.R. NO. 92245, Jun. 26, 1991 198 SCRA 541
Guiang vs. CA, G.R. NO. 125172, Jun. 26, 1998 291 SCRA 372
The sale of a conjugal property requires the consent of both the husband
and the wife. The absence of the consent of one renders the sale null and
void, while the vitiation thereof makes it merely voidable. Only in the
latter case can ratification cure the defect.
Jader-Manalo vs. Camaisa, G.R. NO. 147978, Jan. 23, 2002 374
SCRA 498
Respondent Norma Camaisa admittedly did not give her written consent
to the sale. Even G.R.anting that respondent Norma actively participated
in negotiating for the sale of the subject properties, which she denied, her
written consent to the sale is required by law for its validity.
42
Significantly, petitioner herself admits that Norma refused to sign the
contracts to sell.
Uy vs. CA, G.R. NO. 10955, Nov. 29, 2000 346 SCRA 246
Ravina v. Villa Abrille G.R. NO. 160708, Oct. 16, 2009 604 SCRA
120
De la Cruz v. Segovia, G.R. NO. 149801, Jun. 26, 2008 555 SCRA
453
While Florinda’s husband did not affix his signature to the above -
mentioned Agreement, we find no ground to disturb the uniform findings
of the trial court and appellate court that Renato, by his actuations,
agreed and gave his conformity to the Agreement. As found by the courts
below, Renato’s consent to the Agreement was drawn from the fact that
he was present at the time it was signed by the sisters and their
witnesses; he had knowledge of the Agreement as it was presented to him
for his signature, although he did not sign the same because his wife
Florinda insisted that her signature already carried that of her husband;
Renato witnessed the fact that Leonila contributed her hard earned
savings in the amount of P36,000.00 to complete their share in the
purchase price of the properties in question in the total amount of
P180,000.00.
43
After the marriage of petitioner and respondent has been declared void, petitioner
filed a complaint for the partition of the house and lot obtained by them during their
marriage. The SC ruled that what governs them is Art. 147 of the Family Code. Under
this article, property acquired by both spouses through their work and industry
shall be governed by the rules on equal co-ownership. Any property acquired during
the union is prima facie presumed to have been obtained through their joint efforts.
A party who did not participate in the acquisition of the property shall be
considered as having contributed to the same jointly if said party's efforts consisted
in the care and maintenance of the family household. Efforts in the care and
maintenance of the family and household are regarded as contributions to the
acquisition of common property by one who has no salary or income or work or
industry. In the case at bar since the former spouses both agreed that they acquired
the subject property during the subsistence of their marriage, it shall be presumed
to have been obtained by their joint efforts, work or industry, thus, the property is
jointly owned by them in equal shares. MARIETTA N. BARRIDO vs. LEONARDO V.
NONATO, G.R. No. 176492, October 20, 2014, J. Peralta
MBTC v. Pascual, G.R. NO. 163744, Feb. 29, 2008 547 SCRA 246
Termination of Conjugal Property Regime does not ipso facto End the
Nature of Conjugal Ownership. While the declared nullity of marriage of
Nicholson and Florencia severed their marital bond and dissolved the
conjugal partnership, the character of the properties acquired before
such declaration continues to subsist as conjugal properties until and
after the liquidation and partition of the partnership.
Diño v. Diño, G.R. NO. 178044, Jan. 19, 2011 640 SCRA 178
44
Section 7. Liquidation of the Conjugal Partnership Assets &
Liabilities (Articles 129-133);
Agtarap v. Agtarap, G.R. NO. 177099, Jun. 8, 2011 651 SCRA 455
We hold that the general rule does not apply to the instant case
considering that the parties are all heirs of Joaquin and that no rights of
third parties will be impaired by the resolution of the ownership issue.
More importantly, the determination of whether the subject properties
are conjugal is but collateral to the probate court’s jurisdiction to settle
the estate of Joaquin.
There being no dispute that Protacio, Sr. and Marta were married prior to
the effectivity of the Family Code on August 3, 1988, their property
relation was properly characterized as one of conjugal partnership
governed by the Civil Code. Upon Marta’s death in 1987, the conjugal
partnership was dissolved, pursuant to Article 175 (1) of the Civil Code,
and an implied ordinary co-ownership ensued among Protacio, Sr. and
the other heirs of Marta with respect to her share in the assets of the
conjugal partnership pending a liquidation following its liquidation.
Grounds
Maquilan v. Maquilan, G.R. NO. 155409, Jun. 08, 2007 524 SCRA
166 –
45
CHAPTER 7. PROPERTY REGIMES OF UNIONS WITHOUT MARRIAGE
(Articles 147-148)
Valdes vs. RTC Br. 102, QC G.R. NO. 122749, Jul. 31, 1996 260
SCRA 221
Whether or not, Articles 50, 51 and 52 in relation to Articles 102 and
129 of the Family Code govern the disposition of the family dwelling in
cases where a marriage is declared void ab initio, including a marriage
declared void by reason of the psychological incapacity of the spouses.
The rules set up to govern the liquidation of either the absolute
community or the conjugal partnership of gains, the property regimes
recognized for valid and voidable marriages (in the latter case until the
contract is annulled), are irrelevant to the liquidation of the co-ownership
that exists between common-law spouses.
Mallilin, Jr. vs. Castillo, G.R. NO. 136803, Jun. 16, 2000 333 SCRA
628 –
Diño v. Diño, G.R. NO. 178044,Jan. 19, 2011 640 SCRA 178
Lacbayan v. Samoy, G.R. NO. 165427, Mar. 21, 2011 645 SCRA 677
46
whether the parties have the right to freely divide among themselves the
subject properties. Moreover, to follow petitioner’s argument would be to
allow respondent not only to admit against his own interest but that of
his legal spouse as well, who may also be lawfully entitled co-ownership
over the said properties.
Cariño v. Cariño, G.R. NO. 132529, Feb. 02, 2001 351 SCRA 127
As to the property regime of petitioner Susan Nicdao and the deceased,
Article 147 of the Family Code governs. This article applies to unions of
parties who are legally capacitated and not barred by any impediment to
contract marriage, but whose marriage is nonetheless void for other
reasons, like the absence of a marriage license
San Luis v. San Luis G.R. NO. 133743, Feb. 06, 2007 514 SCRA 294
Our family law is based on the policy that marriage is not a mere
contract but a social institution in which the state is vitally interested.
Hontiveros vs. RTC Iloilo City, G.R. NO. 125465, Jun. 29, 1999 309
SCRA 340
Religious relationship and relationship by affinity are not given any legal
effect in this jurisdiction. Consequently, private respondent Ayson, who
is described in the complaint as the spouse of respondent Hontiveros,
and petitioner Maria Hontiveros, who is admittedly the spouse of
petitioner Augusto Hontiveros, are considered strangers to the
Hontiveros family, for purposes of Art. 151.
47
The enumeration of "brothers and sisters" as member of the same family
does not comprehend "sisters-in-law." In that case, then Chief Justice
Concepcion emphasized that "sisters-in-law" (hence, also "brother-in-
law") are not listed under Art. 217 of the New Civil Code as members of
the same family.
Indeed, "there is no affinity between the blood relatives of one spouse and
the blood relatives of the other. A husband is related by affinity to his
wife’s brother, but not to the wife of his wife’s brother. There is no affinity
between the husband’s brother and the wife’s sister; this is calle d
affinitas affinitatis."
Taneo vs. Court of Appeals, G.R. NO. 108562, Mar. 09, 1999 304
SCRA 308
By the very definition of the law that the “family home is the dwelling
house where a person and his family resides and the land on which it is
situated,” it is understood that the house should be constructed on a
land not belonging to another.
Arriola v. Arriola, G.R. NO. 177703, Jan. 28, 2008 542 SCRA 666
Furthermore, Articles 152 and 153 specifically extend the scope of the
family home not just to the dwelling structure in which the family resides
48
but also to the lot on which it stands. Thus, applying these concepts, the
subject house as well as the specific portion of the subject land on which
it stands are deemed constituted as a family home by the deceased and
petitioner Vilma from the moment they began occupying the same as a
family residence 20 years back
Cabang v. Basay, G.R. NO. 180587, Mar. 20, 2009 582 SCRA 172
The family home must be established on the properties of (a) the absolute
community, or (b) the conjugal partnership, or (c) the exclusive property
of either spouse with the consent of the other. It cannot be established
on property held in co-ownership with third persons. However, it can be
established partly on community property, or conjugal property and
partly on the exclusive property of either spouse with the consent of the
latter.
Olivia De Mesa v. Acero, G.R. NO. 185064 Jan. 16, 2012 663 SCRA
40
The family home’s exemption from execution must be set up and proved
to the Sheriff before the sale of the property at public auction. The
petitioners now are barred from raising the same. Failure to do so estop
them from later claiming the said exemption.
Manacop vs. CA, 277 SCRA 57 (1997)
Articles 152 and 153 of the Family Code do not have a retroactive effect
such that all existing family residences are deemed to have been
constituted as family homes at the time of their occupation prior to the
effectivity of the Family Code and are exempt from execution for the
payment of obligations incurred before the effectivity of the Family Code.
49
TITLE VI. PATERNITY & FILIATION
Types of Filiation
Status of Children
Presumption of Legitimacy
Benitez-Badua vs. CA G.R. NO. 105625, Jan. 24, 1994 229 SCRA 468
Article 170 of the Family Code is inapplicable to this case because this is
not an action to impugn the legitimacy of a child, but an action of the
private respondents to claim their inheritance as legal heirs of their
childless deceased aunt. They do not claim that petitioner Violeta
Cabatbat Lim is an illegitimate child of the deceased, but that she is not
the decedent's child at all.
Liyao vs. Tanhoti-Liyao,G.R. NO. 138961, Mar. 07, 2002 378 SCRA
563
The grounds for impugning the legitimacy of the child mentioned in
Article 255 of the Civil Code may only be invoked by the husband, or in
proper cases, his heirs under the conditions set forth under Article 262
of the Civil Code.
Labagla vs. Santiago, G.R. NO. 132305, Dec. 04, 2001 371 SCRA 360
A baptismal certificate, a private document, is not conclusive proof of
filiation. More so are the entries made in an income tax return, which
only shows that income tax has been paid and the amount thereof.
In this case the husband and the wife continued to live in the same
province after their alleged separation, the Court did not discount the
possibility of physical access to each other considering their proximity to
50
each other and considering further that the wife still visited and
recuperated in her mother’s house where her spouse resided with their
children.
The court held that just because tuberculosis is advanced in a man does
not necessarily mean that he is incapable of sexual intercourse. There
are cases where persons suffering from tuberculosis can do the carnal
act even in the most crucial stage of health because then they seemed to
be more inclined to sexual intercourse.
RODOLFO S. AGUILAR vs. EDNA G. SIASAT, G.R. No. 200169, January 28, 2015, J.
Del Castillo
The filiation of illegitimate children, like legitimate children, is established by (1) the
record of birth appearing in the civil register or a final judgment; or (2) an admission
of legitimate filiation in a public document or a private handwritten instrument and
signed by the parent concerned. In the absence thereof, filiation shall be proved by
(1) the open and continuous possession of the status of a legitimate child; or (2) any
other means allowed by the Rules of Court and special laws. The due recognition of
an illegitimate child in a record of birth, a will, a statement before a court of record,
or in any authentic writing is, in itself, a consummated act of acknowledgment of the
child, and no further court action is required. In fact, any authentic writing is treated
not just a ground for compulsory recognition; it is in itself a voluntary recognition
that does not require a separate action for judicial approval.
It must be concluded that Rodolfo– who was born during the marriage of Alfredo
Aguilar and Candelaria Siasat-Aguilar and before their respective deaths – has
sufficiently proved that he is the legitimate issue of the Aguilar spouses. He correctly
argues, Alfredo Aguilar’s SSS satisfies the requirement for proof of filiation and
relationship to the Aguilar spouses under Article 172 of the Family Code; by itself,
said document constitutes an “admission of legitimate filiation in a public document
or a private handwritten instrument and signed by the parent concerned.”
51
Solinap vs. Locsin Jr. G.R. NO. 146737 , Dec. 10, 2001 371 SCRA
711
Verceles v. Posada, G.R. NO.159785, Apr. 27, 2007 522 SCRA 518
The court held that the due recognition of an illegitimate child in a record
of birth, a will, a statement before a court of record, or in any authentic
writing is, in itself, a consummated act of acknowledgement of the child,
and no further court action is required
De Asis vs CA, 303 SCRA 176
Lucas v. Lucas, G.R. NO. 190710, Jun. 6, 2011 650 SCRA 667
Rodriguez vs. CA, G.R. NO. 85723, Jun. 19, 1995 245 SCRA 150
When a recognition has been made by one parent, the name of the other
parent may be revealed in an action by the child to compel such other
parent to recognize him also.
Heirs of Cabais vs. CA, G.R. NO. 106314-15,Oct. 08, 1999 316 SCRA
338
Cenido vs. Apacionado, G.R .NO. 132474, Nov. 19, 1999 318 SCRA
688
Under the law, this statement must be made personally by the parent
himself or herself, not by any brother, sister or relative; after all, the
52
concept of recognition speaks of a voluntary declaration by the parent, or
if the parent refuses, by judicial authority, to establish the paternity or
maternity of children born outside wedlock.
Tayag v. Tayag-Gallor, G.R. NO. 174680, Mar. 24, 2008 549 SCRA 68
Puno v. Puno Ent. Inc., G.R. NO. 177066, Sept. 11, 2009 599 SCRA
585
Gotardo v. Buling, G.R. NO. 165166, Aug. 15, 2012 678 SCRA 436
We have held that such other proof of one's filiation may be a "baptismal
certificate, a judicial admission, a family bible in which [his] name has
been entered, common reputation respecting his pediG.R.ee, admission
by silence, the testimonies of witnesses, and other kinds of proof
admissible under Rule 130 of the Rules of Court." In this case, the
respondent established a prima facie case that the petitioner is the
putative father of Gliffze through testimony that she had been sexually
involved only with one man, the petitioner, at the time of her conception.
Rodulfo corroborated her testimony that the petitioner and the
respondent had intimate relationship.
Lucas v. Lucas, G.R . NO. 190710, Jun. 6, 2011 650 SCRA 667
53
applicable, and a proper showing of sufficient justification under the
particular factual circumstances of the case must be made before a court
may order a compulsory blood test.
Tonog vs. CA, G.R. NO. 122906 , Feb. 07, 2002 376 SCRA 523
In the case at bar, bearing in mind that the welfare of the said minor as
the controlling factor, the appellate court did not err in allowing her
father to retain in the meantime parental custody over her. Meanwhile,
the child should not be wrenched from her familiar surroundings, and
thrust into a strange environment away from the people and places to
which she had apparently formed an attachment.
Guy v. CA, G.R. NO. 163707, Sept. 15, 2006 502 SCRA 151
De La Cruz v. Gracia G.R. NO. 177728, Jul. 31, 2009 594 SCRA 648
Where the private handwritten instrument is the lone piece of evidence
submitted to prove filiation, there should be strict compliance with the
requirement that the same must be signed by the acknowledging parent.
Where the private handwritten instrument is accompanied by other
relevant and competent evidence, it suffices that the claim of filiation
therein be shown to have been made and handwritten by the
acknowledging parent as it is merely corroborative of such other
evidence.
Uy v. Chu, G.R. NO. 183965, Sept. 18, 2009 600 SCRA 806
It is settled, then, in law and jurisprudence, that the status and filiation
of a child cannot be compromised. Public policy demands that there be
no compromise on the status and filiation of a child. Paternity and
filiation or the lack of the same, is a relationship that must be judicially
54
established, and it is for the Court to declare its existence or absence. It
cannot be left to the will or aG.R.eement of the parties.
See RA 9858
Legitimation
Abadilla vs. Tabiliran, Jr. A.M NO. MTJ-92-716, Oct. 25, 1995 249
SCRA 447
Whether or not, a child born out of wedlock, by parents who have a legal
impediment to marry each other, can be legitimated. As a lawyer and a
judge, respondent ought to know that, despite his subsequent marriage
to Priscilla, these three children cannot be legitimated nor in any way be
considered legitimate since at the time they were born, there was an
existing valid marriage between respondent and his first wife, Teresita B.
Tabiliran.
Republic vs. Vergara, G.R. NO. 95551, Mar. 20, 1997 270 SCRA 206
The law here does not provide for an alien who is married to a former
Filipino citizen seeking to adopt jointly with his or her spouse a relative
by consanguinity, as an exception to the general rule that aliens may not
adopt.
Rosalina Dye cannot, on her own, adopt her brother and sister for the
law mandates joint adoption by husband and wife, subject to exceptions.
Republic vs. Miller, G.R. NO.125932, Apr. 21, 1999 306 5CRA 183
An alien qualified to adopt under the Child and Youth Welfare Code,
which was in force at the time of the filing of the petition, acquired a
vested right which could not be affected by the subsequent enactment of
a new law disqualifying him.
Republic vs. Toledano, G.R. NO.94147, Jun. 08, 1994 233 SCRA 9
The Family Code reiterated the rule by requiring that husband and wife
"must" jointly adopt, except in the cases mentioned before. Under the
said new law, joint adoption by husband and wife is mandatory
Cang vs. CA, G.R. NO.105308, Sept. 25, 1998 296 SCRA 128
The filing of a case for dissolution of the marriage between petitioner and
Olario is of no moment. It is not equivalent to a decree of dissolution of
marriage. Until and unless there is a judicial decree for the dissolution of
the marriage between petitioner and Olario, the marriage still subsists.
That being the case, joint adoption by the husband and the wife is
required.
56
Republic vs. CA & Bobiles, G.R. NO.92326, Jan. 24, 1992 205 SCRA
356
Under the Child and Youth Welfare Code, private respondent had the
right to file a petition for adoption by herself, without joining her
husband therein. When Mrs. Bobiles filed her petition, she was
exercising her explicit and unconditional right under said law.
Concept of Support
Lim v. Lim, G.R. NO. 163209, Oct. 30, 2009 604 SCRA 691
The inability of the parents to sufficiently provide for their children shifts
a portion of their obligation to the ascendants in the nearest degree, both
in the paternal (petitioners) and maternal lines, following the ordering in
Article 199.
Gan vs. Reyes, G.R. NO.145527, May.28, 2002 382 SCRA 357
A judgment ordering for support is immediately executory despite
pendency of appeal.
De Asis vs. CA, G.R. NO.127578, Feb. 15, 1999 303 SCRA 176
57
TITLE IX. PARENTAL AUTHORITY
Concept
Santos Sr. v. CA, G.R. NO. 113054, Mar. 16, 1995 242 SCRA 407
When a parent entrusts the custody of a minor to another, such as a
friend or godfather, even in a document, what is given is merely
temporary custody and it does not constitute a renunciation of parental
authority. Even if a definite renunciation is manifest, the law still
disallows the same.
Parents who exercises Parental
Authority Joint Parental Authority
Rule in case of Separation of Parents
Perez v. CA, G.R. NO. 118870, Mar. 29, 1996 255 SCRA 661
Only the most compelling of reasons shall justify the court's awarding the
custody of such a child to someone other than his mother, such as her
unfitness to exercise sole parental authority. In the past the following
grounds have been considered ample justification to deprive a mother of
custody and parental authority: neglect, abandonment, unemployment
and immorality, habitual drunkenness, drug addiction, maltreatment of
the child, insanity and being sick with a communicable disease.
It is clear that every child [has] rights which are not and should not be
dependent solely on the wishes, much less the whims and caprices, of
his parents. His welfare should not be subject to the parents' say-so or
mutual agreement alone. Where, as in this case, the parents are already
separated in fact, the courts must step in to determine in whose custody
the child can better be assured the rights granted to him by law. The
need, therefore, to present evidence regarding this matter, becomes
imperative.
58
another point. In disputes concerning post-separation custody over a
minor, the well-settled rule is that no child under seven (7) years of age
shall be separated from the mother, unless the court finds compelling
reasons to order otherwise.
The liability for the accident, whether caused by the negligence of the
minor driver or mechanical detachment of the steering wheel guide of the
jeep, must be pinned on the minor’s parents primarily. The negligence of
petitioner St. Mary’s Academy was only a remote cause of the accident.
It is a rule long accepted by the courts that the right of parents to the
custody of their minor children is one of the natural rights incident to
parenthood, a right supported by law and sound public policy.
Cang vs. CA, 296 SCRA 128 (1998).
BBB, vs. AAA, G.R. No. 193225, February 09, 2015, J. Reyes
59
It was improper for BBB, knowing that CCC was not his biological son, to have CCC
legitimated after the celebration of BBB and AAA’s marriage. The legal process of
legitimation was trifled with when BBB voluntarily but falsely acknowledged CCC as his
son. The principle of estoppel under Article 1431 thus applies, and it now bars BBB
from making an assertion contrary to his previous representations. He should not be
allowed to evade a responsibility arising from his own misrepresentations. He is bound
by the effects of the legitimation process. CCC remains to be BBB’s son, and pursuant to
Article 179 of the Family Code, the former is entitled to the same rights as those of a
legitimate child, including the receipt of his father’s support.
Duty of Representation
Licel was only 14 years old, definitely a minor, on May 22, 2001, when
she was presented before respondent’s sala to affirm the execution of her
affidavit of desistance. This being the case, said affidavit should have
been executed with the concurrence of her parents. Licel could not
validly give consent to an affidavit of desistance, for a minor is
incompetent to execute such an instrument.
(Articles 225-227)
Lindain v. CA, G.R. NO. 95305 , Aug. 20, 199 212 SCRA 725
Under the law, a parent, acting merely as the legal (as distinguished
from judicial) administrator of the property of his/her minor children,
does not have the power to dispose of, or alienate, the property of said
children without judicial approval.
Neri v. Heirs of Hadji Yusop, G.R. No 194366, Oct. 10, 2012 683
SCRA 253
Administration includes all acts for the preservation of the property and
the receipt of fruits according to the natural purpose of the thing. Any
act of disposition or alienation, or any reduction in the substance of the
patrimony of child, exceeds the limits of administration. Thus, a father or
60
mother, as the natural guardian of the minor under parental authority,
does not have the power to dispose or encumber the property of the latter
CHAPTER 5. SUSPENSION OR TERMINATION OF PARENTAL
AUTHORITY (Arts 228-233)
Bondagjy vs. Bondagjy, G.R. NO. 140817, Dec. 07, 2001 371 SCRA
64
Indeed, what determines the fitness of any parent is the ability to see to
the physical, educational, social and moral welfare of the children, and
the ability to give them a healthy environment as well as physical and
financial support taking into consideration the respective resources and
social and moral situations of the parents.
Regulations
61
See RA 9262 (Anti Violence against Women and Children [VAWC]) &
IRR
Uy (Jardeleza) vs. CA, G.R. NO. 109557, Nov. 29, 2000 346 SCRA
246
Rule 95 of the ROC, not the Rule on Summary Proceedings in the Family
Code, shall apply in a sale of a conjugal property where one spouse is is
an incompetent. A comatose spouse is incompetent.
Republic v. Tango, G.R. NO.161062, Jul. 31, 2009 594 SCRA 560
Rep. v. Bermudez-Lorino G.R. NO. 160258 , Jan. 19, 2005 449 SCRA
5
62
Title X. FUNERAL (Articles 305 -310, NCC)
The petitioner alleges that being a common law spouse who took care of the
deceased, she has the right to make funeral arrangements for the deceased. The
Supreme Court ruled that the duty and the right to make funeral arrangements are
confined within the family of the deceased particularly the spouse of the deceased to
the exclusion of a common law spouse. FE FLORO VALINO vs. ROSARIO D.
ADRIANO, FLORANTE D. ADRIANO, RUBEN D. ADRIANO, MARIA TERESA
ADRIANO ONGOCO, VICTORIA ADRIANO BAYONA, and LEAH ANTONETTE D.
ADRIANO, G.R. No. 182894, April 22, 2014, J. Mendoza
176 of the Family Code)”; IRR of 9255; Passport Law (RA 8239)
Arts.774 & 777; Art. 1456; Arts 22, 2142-2175; Wills & Succession
63
P R OP ER TY
Title I.
CLASSIFICA
TION OF
PROPERTY
PRELIMINA
RY
PROVISION
S
C
o
n
c
e
p
t
o
f
P
r
o
p
e
r
t
y
C
l
a
s
s
i
f
i
c
a
t
i
o
n
o
f
P
r
o
p
e
r
t
y
Kinds of
Immovable
Properties
Bicerra vs.
Teneza, 6
SCRA 649,
651 (1962).
A house (or
a building) is
classified as
immovable
property by
reason of its
adherence to
the soil on
which it is
built. Thus,
a building
which is
merely
superimpose
d on the soil
is not a real
property.
Punzalan,
Jr. v. Vda.
De
Lacsamana,
121 SCRA
331 (1983)
A building treated separately from the land on which it stood is
immovable property and the mere fact that the parties to a contract seem
to have dealt with it separate and apart from the land on which it stood
in no wise changed its character as immovable property.
In the instant case, the parties: (1) executed a contract styled as “Real
Estate Mortgage and Chattel Mortgage,” instead of just “Real Estate
Mortgage” if indeed their intention is to treat all properties included
therein as immovable, and (2) attached to the said contract a separate
“LIST OF MACHINERIES & EQUIPMENT”. These facts, taken together,
evince the conclusion that the parties’ intention is to treat these units of
machinery as chattels.
While the two storage tanks are not embedded in the land, they may,
nevertheless, be considered as improvements on the land, enhancing its
utility and rendering it useful to the oil industry. It is undeniable that the
two tanks have been installed with some deG.R.ee of permanence as
receptacles for the considerable quantities of oil needed by Meralco for its
operations.
Rights as property
Concept
65
Kinds of Movable Property
66
Properties of public dominion is outside the commerce of mend and it
cannot be alienated or leased or otherwise be the subject matter of
contracts.
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.
To qualify as foreshore land, it must be shown that the land lies between
the high and low water marks and is alternately wet and dry according to
the flow of the tide. The land's proximity to the waters alone does not
automatically make it a foreshore land.
Reclaimed Properties
The subject reclaimed lands are still part of the public domain,
owned by the State and, therefore, exempt from payment of real
estate taxes. Here, the subject lands are reclaimed lands,
specifically portions of the foreshore and offshore areas of Manila
Bay. As such, these lands remain public lands and form part of
the public domain.
68
fundamental that before any land may be declassified from the forest
G.R.oup and converted into alienable or disposable land for
aG.R.icultural or other purposes, there must be a positive act from the
government.
Title II Ownership
Ownership in General
In actions for recovery of possession, the plaintiff must show proof to support his
claim of his right to possession of the property. The defendant in turn must show
proof to controvert the plaintiff’s claim; otherwise the court will rule for the
plaintiff. Thus, when a landowner filed an action for recovery of possession against a
public school which built a gymnasium on a parcel of land which the owner allowed
the school to use as an access road for the schoolchildren, and the plaintiff showed
as evidence tax declarations and a certificate of title over the property, the lone
testimonial evidence the DepEd presented is not sufficient to controvert the
landowner’s case. In addition, the landowner’s claim is not barred by laches when
the school’s possession of the property is not adverse, and when the landowner
brought suit two years after he learned that the school is constructing a gymnasium
over the property.
69
MIDWAY MARITIME AND TECHNOLOGICAL FOUNDATION, represented by its
Chairman/President PhD in Education DR. SABINO M. MANGLICMOT vs.
MARISSA E. CASTRO, ET AL., G.R. No. 189061, August 6, 2014, J. Reyes
The petitioner is a lessee of a parcel of land and disputes the title of the owners of
the building built on the land they are leasing. The Supreme Court ruled that it is
settled that "[o]nce a contact of lease is shown to exist between the parties, the
lessee cannot by any proof, however strong, overturn the conclusive presumption
that the lessor has a valid title to or a better right of possession to the subject
premises than the lessee." Section 2(b), Rule 131 of the Rules of Court prohibits a
tenant from denying the title of his landlord at the time of the commencement of the
relation of landlord and tenant between them.
Though casino chips do not constitute legal tender, there is no law which prohibits
their use or trade outside of the casino which issues them. In any case, it is not
unusual – nor is it unlikely – that respondent could be paid by his Chinese client at
the former' s car shop with the casino chips in question; said transaction, if not
common, is nonetheless not unlawful. These chips are paid for anyway; petitioner
would not have parted with the same if their corresponding representative
equivalent - in legal tender, goodwill, or otherwise – was not received by it in return
or exchange. Given this premise - that casino chips are considered to have been
exchanged with their corresponding representative value - it is with more reason
that this Court should require petitioner to prove convincingly and persuasively that
the chips it confiscated from Ludwin and Deoven were indeed stolen from it; if so,
any Tom, Dick or Harry in possession of genuine casino chips is presumed to have
paid for their representative value in exchange therefor. If petitioner cannot prove its
loss, then Article 559 cannot apply; the presumption that the chips were exchanged
for value remains..
The petitioner claims that they are the rightful owners of the disputed property.
Thus, an ejectment proceeding cannot be commenced against them. The Supreme
Court ruled that "ejectment proceedings are summary proceedings intended to
provide an expeditious means of protecting actual possession or right to possession
of property. Title is not involved. The sole issue to be resolved is who is entitled to
the physical or material possession of the premises or possession de facto." "Issues
as to the right of possession or ownership are not involved in the action; evidence
70
thereon is not admissible, except only for the purpose of determining the issue of
possession."
Concept of Ownership
Attributes of Ownership
Recovery of Property
One who claims to be the owner of a property that is possessed by another must
bring the appropriate judicial action for its physical recovery. The term "judicial
process" could mean no less than an ejectment suit or reinvindicatory action in
which the ownership claims of the contending parties may be properly heard and
adjudicated.
Rosari G.
Del o v. Roxas Foundation, R.
NO.
170575,June 8, 2011
In forcible entry, the possession is illegal from the beginning and the only
issue is who has the prior possession de facto. In unlawful detainer,
possession was originally lawful but became unlawful by the expiration
or termination of the right to possess and the issue of rightful possession
is the one decisive, for in such action, the defendant is the party in
71
actual possession and the plaintiff's cause of action is the termination of
the defendant's right to continue in possession.
German Management & Services, Inc. v. CA. 177 SCRA 495 (1989)
Limitations on Ownership
72
property motorized deep wells but were prevented from doing so by the
authorities precisely because of the construction and existence of the
tunnels underneath the surface of their property.
General Provision
Accession
VILLASI VS. GARCIA, G.R. No. 190106, January 15, 2014, J. Perez
While it is a hornbook doctrine that the accessory follows the principal, that is, the
ownership of the property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or
artificially, such rule is not without exception. In cases where there is a clear and
convincing evidence to prove that the principal and the accessory are not owned by
one and the same person or entity, the presumption shall not be applied and the
actual ownership shall be upheld. To set the record straight, while petitioner may
have proven his ownership of the land, as there can be no other piece of evidence
more worthy of credence than a Torrens certificate of title, he failed to present any
evidence to substantiate his claim of ownership or right to the possession of the
building.
The rule on accession is not an iron-clad dictum. On instances where this Court was
confronted with cases requiring judicial determination of the ownership of the
building separate from the lot, it never hesitated to disregard such rule. The case at
bar is of similar import. When there are factual and evidentiary evidence to prove
that the building and the lot on which it stands are owned by different persons, they
shall be treated separately. As such, the building or the lot, as the case may be, can be
made liable to answer for the obligation of its respective owner.
73
BANK OF THE PHILIPPINE ISLANDS vs. VICENTE VICTOR C. SANCHEZ ET AL.;
GENEROSO TULAGAN ET AL. vs. VICENTE VICTOR C. SANCHEZ ET AL.;
REYNALDO V. MANIWANG vs. VICENTE VICTOR C. SANCHEZ and FELISA GARCIA
YAP, G.R. No. 179518; G.R. No. 179835; G.R. No. 179954, November 19, 2014, J.
Velasco Jr.
Article 453 of the Civil Code clearly reads that a landowner is considered in bad faith
if he does not oppose the unauthorized construction thereon despite knowledge of
the same. The fact that the Sanchezes did take action to oppose the construction on
their property by writing the HLURB and the City Building Official of Quezon City.
The Court agrees with both the RTC and the CA that Garcia and TSEI are builders in
bad faith. They knew for a fact that the property still belonged to the Sanchezes and
yet proceeded to build the townhouses not just without the authority of the
landowners, but also against their will.
1. Well settled is the rule that all persons dealing with property covered by a torrens
certificate of title are not required to go beyond what appears on the face of the title.
When there is nothing on the certificate of title to indicate any cloud or vice in the
ownership of the property, or any encumbrance thereon, the purchaser is not
required to explore further than what the torrens title upon its face indicates in
quest for any hidden defect or inchoate right that may subsequently defeat his right
thereto.
3. Likewise, one who buys property withfull knowledge of the flaws and defects in
the title of the vendor is enough proof of his bad faith and estopped from claiming
that he acquired the property in good faith against the owners.
4. To prove good faith, the following conditions must be present: (a) the seller is the
registered owner of the land; (b) the owner is in possession thereof; and (3) at the
time of the sale, the buyer was not aware of any claim or interest of some other
person in the property, or of any defect or restriction in the titleof the seller or in his
capacity to convey title to the property. All these conditions must be present,
otherwise, the buyer is under obligation to exercise extra ordinary diligence by
scrutinizing the certificates of title and examining all factual circumstances to enable
him to ascertain the seller’s title and capacity to transfer any interest in the
property.
74
Definition
Kinds of Accession
Kinds of Fruits
Fundamental rules
Industrial Accession
The rule under article 448 of the NCC applies only when the builder,
planter or sower believes he had the right so to build, plant or sow
because he thinks he owns the land or believes himself to have a claim of
title.
Article 448 applies only to a case where one builds on land in the belief
that he is the owner thereof and it does not apply where one’s only
interest in the land is that of a lessee under a rental contract.
75
PNB vs De Jesus, 411 SCRA 557
Natural Accession
Alluvion
Riparian owners are, strictly speaking, distinct from owners, the latter
being owners of lands bordering the shore of the sea or lakes or other
tidal waters.
76
Since the subject land was the direct result of the dumping of sawdust by
the Sun Valley Lumber Co., the accretion was man-made, hence, Art.
457 does not apply. Ergo, the subject land is part of the public domain.
Avulsion
Definition
Avulsion vs Alluvion
There need be no act on their part to subject the old river bed to their
ownership, as it is subject thereto ipso jure from the moment the mode of
acquisition becomes evident, without need of any formal act of
acquisition. Such abandoned riverbed had fallen to the private ownership
of the owner of the land through which the new river bed passes even
without any formal act of his will and any unauthorized occupant thereof
will be considered as a trespasser.
Formation of Island
77
Commixtion or Confusion
Specification
HEIRS OF PACIFICO POCIDO, ET AL. VS. ARSENIA AVILA AND EMELINDA CHUA G.R.
No. 199146, March 19, 2014, J. Carpio
The DENR Decision was affirmed by the Office of the President which held that lands
within the Baguio Townsite Reservation belong to the public domain and are no
longer registrable under the Land Registration Act. The Office of the President
ordered the disposition of the disputed property in accordance with the applicable
rules of procedure for the disposition of alienable public lands within the Baguio
Townsite Reservation, particularly Chapter X of Commonwealth Act No. 141 on
Townsite Reservations and other applicable rules. Having established that the
disputed property is public land, the trial court was therefore correct in dismissing
the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction
to determine who among the parties have better right over the disputed property
which is admittedly still part of the public domain.
For an action to quiet title to prosper, two indispensable requisites must concur,
namely: (1) the plaintiff or complainant has a legal or equitable title to or interest in
the real property subject of the action; and (2) the deed, claim, encumbrance, or
proceeding claimed to be casting cloud on the title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or efficacy. The
first requisite was not complied with. Petitioners’ alleged open, continuous,
exclusive, and uninterrupted possession of the subject property is belied by the fact
that respondents, in 2005, entered into a Contract of Lease with the Avico Lending
Investor Co. over the subject lot without any objection from the petitioners.
Petitioners’ inability to offer evidence tending to prove that Bienvenido and
Escolastica Ibarra transferred the ownership over the property in favor of
petitioners is likewise fatal to the latter’s claim.
78
Considering that the action for annulment and cancellation of title filed by the
respondents is substantially in the nature of an action for reconveyance based on an
implied or constructive trust, combined with the fact that the respondents have
always been in possession of the subject property, the Court treated Civil Case No.
18421 as an action to quiet title, the filing of which does not prescribe.
Requisites
The petitioners allege that they are the owners of the disputed property. This
allegation is anchored on the assertion that at the time of the death of their parents,
the disputed property is still under the latter’s name. The Supreme Court ruled that
for an action to quiet title to prosper, two indispensable requisites must concur: (1)
the plaintiff or complainant has a legal or equitable title or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting a cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy.
Petitioners’ Complaint in Civil Case No. TM-1118 failed to allege these two requisites
for an action to quiet title.
Thus, both requisites in order for an action for quieting of title to prosper have been
met in this case: (1) Phil-Ville had established its equitable title or interest in the 16
parcels of land subject of the action; and (2) TCT No. T-177013, found to overlap
titles to said properties of Phil-Ville, was previously declared invalid.
Chung Jr. vs. Mondragon, G.R. 179754,Nov. 21, 2012
The issues in a case for quieting of title are fairly simple; the plaintiff
need to prove only two things, namely: "(1) the plaintiff or complainant
has a legal or an equitable title to or interest in the real property subject
of the action; and (2) that the deed, claim, encumbrance or proceeding
claimed to be casting a cloud on his title must be shown to be in fact
79
invalid or inoperative despite its prima facie appearance of validity or
legal efficacy. Stated differently, the plaintiff must show that he has a
legal or at least an equitable title over the real property in dispute, and
that some deed or proceeding beclouds its validity or efficacy."
Under Articles 476 and 477 of the Civil Code, the two (2) indispensable
requisites in an action to quiet title are: (1) that the plaintiff or
complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) that a deed, claim, encumbrance
or proceeding is claimed to be casting cloud on his title.
In this case, an action to quiet title is not the proper remedy because
petitioner no longer had any legal or equitable title to or interest in the
lots. The petitioner’s status as possessor and owner of the lots had be en
settled in the final and executory December 4, 1985 decision of the
Bureau of Lands that the DENR Secretary and the OP affirmed on
appeal. Thus, the petitioner is not entitled to the possession and
ownership of the lots.
Definition
Requisites
Nature of Co-ownership
80
the lone signature of Lourdes on the verification attached to the CA petition
constituted substantial compliance with the rules.
VICENTE TORRES, JR., CARLOS VELEZ, AND THE HEIRS OF MARIANO VELEZ,
NAMELY: ANITA CHIONG VELEZ, ROBERT OSCAR CHIONG VELEZ, SARAH JEAN
CHIONG VELEZ AND TED CHIONG VELEZ vs. LORENZO LAPINID AND JESUS
VELEZ, G.R. No. 187987, November 26, 2014, J. Perez
Under Article 493 of the New Civil Code, a co-owner has an absolute ownership of
his undivided and pro-indiviso share in the co-owned property. He has the right to
alienate, assign and mortgage it, even to the extent of substituting a third person in
its enjoyment provided that no personal rights will be affected. In this case, Jesus
can validly alienate his co-owned property in favor of Lapinid, free from any
opposition from the co-owners. Lapinid, as a transferee, validly obtained the same
rights of Jesus from the date of the execution of a valid sale. Absent any proof that
the sale was not perfected, the validity of sale subsists. In essence, Lapinid steps into
the shoes of Jesus as co-owner of an ideal and proportionate share in the property
held in common. Thus, from the perfection of contract on 9 November 1997, Lapinid
eventually became a co-owner of the property. Even assuming that the petitioners
are correct in their allegation that the disposition in favor of Lapinid before partition
was a concrete or definite portion, the validity of sale still prevails.
Alejandrino v. Court of Appeals, 295 SCRA 536, 548, Sept. 17, 1998
Each co-owner of property which is held pro indiviso exercises his rights
over the whole property and may use and enjoy the same with no other
limitation than that he shall not injure the interests of his co-owners.
Sources of Co-ownership
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A stipulation in a contract requiring a co-owner to secure an authority from his co-
owners for the alienation of his share, as seemingly indicated in this case, should be
considered mere surplusage and does not, in any way, affect the validity or the
enforceability of the contract. Pursuant to Article 493, a co-owner has the right to
alienate his proindiviso share in the co-owned property even without the consent of
his co-owners.
A contract of sale is a consensual contract, which becomes valid and binding upon
the meeting of minds of the parties on the price and the object of the sale. The mere
inadequacy of the price docs not affect its validity when both parties are in a
position to form an independent judgment concerning the transaction, unless fraud,
mistake or undue influence indicative of a defect in consent is present. A contract
may consequently be annulled on the ground of vitiated consent and not due to the
inadequacy of the price. In the case at bar, however, no evidence to prove fraud,
mistake or undue influence indicative of vitiated consent is attendant.
RAUL V. ARAMBULO AND TERESITA DELA CRUZ VS. GENARO NOLASCO AND
JEREMY SPENCER NOLASCO, G.R. No. 189420 March 26, 2014, J. Perez
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Gapacan v. Omipet, 387 SCRA 383.
Extinguishment of Co-ownership
A partition case of a land co-owned by ten siblings was dismissed for the failure of
the parties and counsels to appear despite due notice under Rule 17, Section 3 of the
Rules of Court. Later, in a quieting of title case involving the same property, the
siblings demanded partition. The occupant of the lot claimed that the action for
partition is barred by res judicata.
It is indeed true that dismissal with prejudice under the above-cited rule amply
satisfies one of the elements of res judicata. However, dismissal with prejudice
under Rule 17, Sec. 3 of the Rules of Court cannot defeat the right of a co-owner to
ask for partition at any time, provided that there is no actual adjudication of
ownership of shares yet.
A perusal of Article 494 of the Civil Code shows that the law generally does not favor
the retention of co-ownership as a property relation, and is interested instead in
ascertaining the co-owners’ specific shares so as to prevent the allocation of
portions to remain perpetually in limbo. Thus, the law provides that each co-owner
may demand at any time the partition of the thing owned in common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co -
owners under Art. 494 of the Civil Code, the latter must prevail. To construe
otherwise would diminish the substantive right of a co-owner through the
promulgation of procedural rules. Such a construction is not sanctioned by the
principle, which is too well settled to require citation, that a substantive law cannot
be amended by a procedural rule. This is supported by Art. 496 of the New Civil
Code.
Thus SC held that Art. 494is an exception to Rule 17, Sec. 3 of the Rules of Court to
the effect that even if the order of dismissal for failure to prosecute is silent on
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whether or not it is with prejudice, it shall be deemed to be without prejudice.
This is not to say, however, that the action for partition will never be barred by res
judicata. There can still be res judicata in partition cases concerning the same
parties and the same subject matter once the respective shares of the co-owners
have been determined with finality by a competent court with jurisdiction or if the
court determines that partition is improper for co-ownership does not or no longer
exists.
The rule in this jurisdiction is that the redemption by one co-heir or co-
owner of the property in its totality does not vest in him ownership over it
since redemption is not a mode of terminating a co-ownership.
Sanchez v. Court of Appeals, 404 SCRA 541, 548, June 20, 2003
Pangan v. Court of Appeals, 166 SCRA 375, 382, Oct. 17, 1988
From the moment one of the co-owners claims that he is the absolute
and exclusive owner of the properties and denies the others any share
therein, the question involved is no longer one of partition but of
ownership
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When a co-owner or co-heir registered the properties in his name in
fraud of other co-owners or co-heirs, prescription can only be deemed to
have commenced from the time the latter discovered the former’s act of
defraudation.
The first phase of a partition and,or accounting suit is taken up with the
determination of whether or not a co-ownership in fact exists, and a
partition is proper (i.e., not otherwise legally proscribed) and may be
made by voluntary aG.R.eement of all the parties interested in the
property. This phase may end with a declaration that plaintiff is not
entitled to have a partition either because a co-ownership does not exist,
or partition is legally prohibited.
Title V Possession
The spouses Sombilon executed a mortgage over their property to secure a loan
from PNB, who upon the Sombilons’ default, foreclosed the mortgage and acquired
the property. The spouses then approached their neighbor Atty. Garay if he could
advance the money needed to repurchase the lot. However, the spouses later found
out that PNB sold the lot to Atty. Garay. PNB applied for a writ of possession. The
Sombilons claim that PNB has no legal personality to apply for the writ since the lot
had already been sold to Atty. Garay, who is disqualified from purchasing the subject
property pursuant to paragraph 5, Article 1491 of the Civil Code.
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The Court ruled that PNB has the right to the writ. The allegedly invalidity of the sale
between PNB and Atty. Garay is not a ground to oppose or defer the issuance of the
Writ of Possession as this does not affect PNB’s right to possess the subject
property. As the registered owner, PNB is entitled to the possession of the subject
property as a matter of right.
If the purchaser is a third party who acquired the property after the redemption
period, a hearing must be conducted to determine whether possession over the
subject property is still with the mortgagor or is already in the possession of a third
party holding the same adversely to the defaulting debtor or mortgagor. In the
instant case, while respondents' petition for the issuance of a writ of possession was
filed ex-parte, a “hearing” was, nonetheless, conducted when the RTC gave
petitioner her day in court by giving her the opportunity to file various pleadings to
oppose respondent's petition. Moreover, there is no dispute that petitioner
remained in possession of the subject property prior to the issuance of the
questioned writ of possession. It is, thus, clear that respondents' resort, as a
subsequent or third-party purchaser, the petition for the issuance of a writ of
possession is proper.
MARCELA M. DELA CRUZ VS. ANTONIO O. HERMANO, ET AL. G.R. No. 160914.
March 25, 2015, J. Sereno
The respondents have claimed from the inception of the controversy up to now that
they are using the property as their vacation house, this claim, however, is not
substantiated by any corroborative evidence. Their uncorroborated claim of that
fact, even if made under oath, is self-serving. . The respondents failed to discharge
their burden of proving the element of prior physical possession.
Concept of Possession
Elements of Possession
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Kinds of Possession
Parilla v. Pilar, G.R. NO. 167680, Nov. 30, 2006 - One whose interest
is merely that of a holder, such as a mere tenant, agent or usufructuary,
is not qualified to become a possessor builder in good faith.
For a forcible entry suit to prosper, the plaintiffs must allege and prove: (a) that they
have prior physical possession of the property; (b) that they were deprived of
possession either by force, intimidation, threat, strategy or stealth; and, (c) that the
action was filed within one (1) year from the time the owners or legal possessors
learned of their deprivation of the physical possession of the property.
As a rule, the word "possession" in forcible entry suits indeed refers to nothing more
than prior physical possession or possession de facto, not possession de Jure or legal
possession in the sense contemplated in civil law. Title is not the issue, and the
absence of it "is not a ground for the courts to withhold relief from the parties in an
ejectment case."
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Possession can be acquired by juridical acts. These are acts to which the law gives
the force of acts of possession. Examples of these are donations, succession,
execution and registration of public instruments, inscription of possessory
information titles and the like. The reason for this exceptional rule is that possession
in the eyes of the law does not mean that a man has to have his feet on every square
meter of ground before it can be said that he is in possession. It is sufficient that
petitioner was able to subject the property to the action of his will.
CARMENCITA SUAREZ VS. MR. AND MRS. FELIX E. EMBOY JR. AND MARILOU P.
EMBOY-DELANTAR G.R. No. 187944 March 12, 2014, J. Reyes
In a complaint for unlawful detainer, the following key jurisdictional facts must be
alleged and sufficiently established: (1) initially, possession of property by the
defendant was by contract with or by tolerance of the plaintiff;(2) eventually, such
possession became illegal upon notice by plaintiff to defendant of the termination of
the latter’s right of possession; (3) thereafter, the defendant remained in possession
of the property and deprived the plaintiff of the enjoyment thereof; and (4) within
one year from the last demand on defendant to vacate the property, the plaintiff
instituted the complaint for ejectment.
SPOUSES EDMUNDO DELA CRUZ AND AMELIA CONCIO-DELA CRUZ VS. SPOUSES
RUFINO R. CAPCO AND MARTY C. CAPCO G.R. No. 176055, March 17, 2014
"The only issue in an ejectment case is the physical possession of real property –
possession de facto and not possession de jure." But "[w]here the parties to an
ejectment case raise the issue of ownership, the courts may pass upon that issue to
determine who between the parties has the better right to possess the property."
Here, both parties anchor their right to possess based on ownership, i.e., the spouses
Dela Cruz by their own ownership while the spouses Capco by the ownership of
Rufino as one of the heirs of the alleged true owner of the property. Thus, the MeTC
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and the RTC correctly passed upon the issue of ownership in this case to determine
the issue of possession. However, it must be emphasized that "[t]he adjudication of
the issue of ownership is only provisional, and not a bar to an action between the
same parties involving title to the property."
Unlawful detainer is an action to recover possession of real property from one who
unlawfully withholds possession thereof after the expiration or termination of his
right to hold possession under any contract, express or implied. An ejectment case,
based on the allegation of possession by tolerance, falls under the category of
unlawful detainer. Where the plaintiff allows the defendant to use his/her property
by tolerance without any contract, the defendant is necessarily bound by an implied
promise that he/she will vacate on demand, failing which, an action for unlawful
detainer will lie. In unlawful detainer actions, the Court shall solely resolve the issue
as to who between the parties has the better right of possession de facto over the
subject lot. Corollary thereto, issues pertaining to ownership are better threshed out
in another action instituted for such purpose.
Where the plaintiff does not prove her alleged tolerance of the defendant's
occupation, the possession is deemed illegal from the beginning. Hence, the action
for unlawful detainer is an improper remedy. But the action cannot be considered as
one for forcible entry without any allegation in the complaint that the entry of the
defendant was by means of force, intimidation, threats, strategy or stealth.
ROBERT AND NENITA DE LEON, vs. GILBERT AND ANALYN DELA LLANA, G.R.
No. 212277, February 11, 2015, J. Perlas-Bernabe
An unlawful detainer complaint was filed by Gilbert dela Llana against petitioner
Robert de Leon and Gil de Leon. Robert and Gil contend that the lease contract was
simulated. It is quite apparent that the MCTC-Nabunturan-Mawab actually intended
to mean that the undated lease contract subject of this case was absolutely
simulated. Its pronouncement that the parties did not intend to be bound by their
agreement is simply inconsistent with relative simulation.
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For one to be considered in possession, one need not have actual or
physical occupation of every square inch of the property at all times.
Possession can be acquired not only by material occupation, but also by
the fact that a thing is subject to the action of one’s will or by the proper
acts and legal formalities established for acquiring such right, possession
can be acquired by juridical acts.
Soledad v. People, G.R. NO. 184274, Feb 23, 2011 - The acquisition of
possession involves two elements: the corpus or the material holding of
the thing, and the animus possidendi or the intent to possess it. Animus
possidendi is a state of mind, the presence or determination of which is
largely dependent on attendant events in each case. It may be inferred
from the prior or contemporaneous acts of the accused, as well as the
surrounding circumstances.
Chua--‐Bruce v. CA, G.R. NO. 109595, Apr. 27, 2000 –
Effects of Possession
PAUL P. GABRIEL, JR, et al. vs. CARMELING CRISOLOGO, G.R. No. 204626,
June 9, 2014, J. Mendoza
When it is shown that the plaintiff in a case of accion publiciana had a valid title
issued in her name in 1967, within the period which the Supreme Court held that
titles issued over the same properties were valid; that she has been paying the
realty taxes on the said properties since l969; that she likewise appointed an
administrator of the disputed lands, and more importantly, there is no question that
she offered to sell to petitioners the portions of the subject properties occupied by
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them, then she deserves to be respected and restored to her lawful possession as
provided in Article 539 of the New Civil Code.
SUBIC BAY LEGEND RESORTS AND CASINOS, INC. vs. BERNARD C. FERNANDEZ,
G.R. No. 193426, September 29, 2014, J. Del Castillo
Though casino chips do not constitute legal tender, there is no law which prohibits
their use or trade outside of the casino which issues them. In any case, it is not
unusual – nor is it unlikely – that respondent could be paid by his Chinese client at
the former's car shop with the casino chips in question; said transaction, if not
common, is nonetheless not unlawful. These chips are paid for anyway petitioner
would not have parted with the same if their corresponding representative
equivalent – in legal tender, goodwill, or otherwise – was not received by it in return
or exchange. Given this premise – that casino chips are considered to have been
exchanged with their corresponding representative value – it is with more reason
that the Court should require petitioner to prove convincingly and persuasively that
the chips it confiscated from the Fernandez brothers were indeed stolen from it; if
so, any Tom, Dick or Harry in possession of genuine casino chips is presumed to have
paid for their representative value in exchange therefor. If SBL cannot prove its loss,
then Art. 559 cannot apply; the presumption that the chips were exchanged for value
remains.
Penta Pacific leased its properties to Ley Construction. Both parties then entered
into a contract to sell. Ley Construction failed to pay its amortizations prompting
Penta Pacific to file an action for ejectment.
The MeTC correctly exercised its authority in finding for the petitioner as the
plaintiff. In unlawful detainer, the possession was originally lawful but became
unlawful by the expiration or termination of the right to possess; hence, the issue of
rightful possession is decisive for, in the action, the defendant is in actual possession
and the plaintiffs cause of action is the termination of the defendant's right to
continue in possession.
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HOMER C. JAVIER, represented by his mother and natural guardian, SUSAN G.
CANENCIA, vs. SUSAN LUMONTAD, G.R. No. 203760, December 3, 2014, J.
Perlas-Bernabe
In forcible entry, the complaint must necessarily allege that one in physical
possession of a land or building has been deprived of that possession by another
through force, intimidation, threat, strategy or stealth. It is not essential, however,
that the complaint should expressly employ the language of the law, but it would
suffice that facts are set up showing that dispossession took place under said
conditions.
Actual delivery of the books having been made, Cruz acquired ownership
over the books which he could then validly transfer to the private
respondents. The fact that he had not yet paid for them to EDCA was a
matter between him and EDCA and did not impair the title acquired by
the private respondents to the books.
Bad faith does not simply connote bad judgment or negligence; it imports
a dishonest purpose or some moral obliquity and conscious doing of
wrong; it partakes of the nature of fraud. We have held that it is a breach
of a known duty through some motive of interest or ill will.
Title VI Usufruct
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DEVELOPMENT CORPORATION,G.R. No. 191710, January 14, 2015, J. del
Castillo
Hence, the burden of proof to show the existence of the above conditions is imposed
on the person who seeks the easement of right of way.
Here the petitioner failed to establish that there was no adequate outlet to the
public highway and that the proposed easement was the least prejudicial to
respondents’ estate.
Mere convenience for the dominant estate is not what is required by law as the basis
of setting up a compulsory easement. Even in the face of necessity, if it can be
satisfied without imposing the easement, the same should not be imposed.
Based on the Ocular Inspection Report, petitioner’s property had another outlet to
the highway. In between her property and the highway or road, however, is an
irrigation canal, which can be traversed by constructing a bridge, similar to what
was done by the owners of the nearby properties.
Restrictive Covenant
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which one may use his own property, do not result in true easements,
but a case of servitudes (burden), sometimes characterized to be negative
easements or reciprocal negative easements.
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Classification of Nuisance
LINDA RANA vs. TERESITA LEE WONG, SPS. SHIRLEY LEE ONG and RUBEN
ANG ONG and SPS. ROSARIO and WILSON UY; SPS. ROSARIO and WILSON UY;
WILSON UY as attorney-in-fact of TERESITA LEE WONG, and SPS. SHIRLEY LEE
ONG and RUBEN ANG ONG vs. SPS. REYNALDO and LINDA LANA, G.R. No.
192861; G.R. No. 192862, June 30, 2014, J. Perlas -Bernabe
It is a standing jurisprudential rule that unless a nuisance is a nuisance per se, it may
not be summarily abated. Aside from the remedy of summary abatement which
should be taken under the parameters stated in Articles 704 (for public nuisances)
and 706 (for private nuisances) of the Civil Code, a private person whose property
right was invaded or unreasonably interfered with by the act, omission,
establishment, business or condition of the property of another may file a civil
action to recover personal damages. Abatement may be judicially sought through a
civil action therefor if the pertinent requirements under the Civil Code for summary
abatement, or the requisite that the nuisance is a nuisance per se, do not concur. To
note, the remedies of abatement and damages are cumulative; hence, both may be
demanded.
LINDA RANA v TERESITA WONG, G.R No. 192861, June 30, 2014. J. PERLAS-
BERNABE
The spouses Wong and the spouses Rana are neighbors who live across a road from
each other. The Ranas elevated and cemented the road without consultation from
the spouses Wong. Wong et al availed of the remedy of judicial abatement and
damages against Spouses Rana, claiming that the elevated and cemented portion are
nuisances that curtailed their use and enjoyment of their properties.
With respect to the elevated and cemented subject portion, the Court finds that the
same is not a nuisance per se. By its nature, it is not injurious to the health or
comfort of the community. It was built primarily to facilitate the ingress and egress
of Sps. Rana from their house which was admittedly located on a higher elevation
than the subject road and the adjoining Uy and Wong-Ong properties. Since the
subject portion is not a nuisance per se, it cannot be summarily abated. The
demolition order secured by Wong was thus unwarranted, entitling the spouses
Rana to nominal and temperate damages.
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OFFICE OF THE MUNICIPAL TREASURER, BORACAY PNP CHIEF, BORACAY
FOUNDATION, INC., represented by NENETTE GRAF, MUNICIPAL AUXILIARY
POLICE, and JOHN and JANE DOES. G.R No. 211356, September 29, 2014. J.
VELASCO
Article 694 of the Civil Code defines “nuisance” as any act, omission, establishment,
business, condition or property, or anything else that (1) injures or endangers the
health or safety of others; (2) annoys or offends the senses; (3) shocks, defies or
disregards decency or morality; (4) obstructs or interferes with the free passage of
any public highway or street, or any body of water; or (5) hinders or impairs the use
of property.
Challenging the validity of the public respondents’ actuations, petitioner posits that
the hotel cannot summarily be abated because it is not a nuisance per se, given the
hundred million peso-worth of capital infused in the venture. Petitioner also argues
that respondents should have first secured a court order before proceeding with the
demolition.
SC said that the property involved cannot be classified as a nuisance per se, but not
for the reason he so offers. Property valuation, after all, is not the litmus test for
such a determination. More controlling is the property’s nature and conditions,
which should be evaluated to see if it qualifies as a nuisance as defined under the
law.
Nuisances are of two kinds: nuisance per se and nuisance per accidens. The first is
recognized as a nuisance under any and all circumstances, because it constitutes a
direct menace to public health or safety, and, for that reason, may be abated
summarily under the undefined law of necessity. The second is that which depends
upon certain conditions and circumstances, and its existence being a question of
fact, it cannot be abated without due hearing thereon in a tribunal authorized to
decide whether such a thing does in law constitute a nuisance. cralawlawlibrary
In the case at bar, the hotel, in itself, cannot be considered as a nuisance per se since
this type of nuisance is generally defined as an act, occupation, or structure, which
is a nuisance at all times and under any circumstances, regardless of location or
surrounding. Here, it is merely the hotel’s particular incident––its location––and not
its inherent qualities that rendered it a nuisance. Otherwise stated, had it not been
constructed in the no build zone, Boracay West Cove could have secured the
necessary permits without issue. As such, petitioner is correct that the hotel is not a
nuisance per se, but, it is still a nuisance per accidens.
Remedies
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A nuisance per se is that which affects the immediate safety of persons
and property and may be summarily abated under the undefined law of
necessity. Evidently, the concrete posts summarily removed by petitioner
did not at all pose a hazard to the safety of persons and properties, which
would have necessitated immediate and summary abatement.
The wing walls do not per se immediately and adversely affect the safety
of persons and property. The fact that an ordinance may declare a
structure illegal does not necessarily make that structure a nuisance.
Perez v.Madrona G.R. NO. 184478,Mar.21, 2012 -
Respondents’ fence is not a nuisance per se. By its nature, it is not
injurious to the health or comfort of the community. It was built
primarily to secure the property of respondents and prevent intruders
from entering it.
Donation
Under Article 749 and 709 of the Civil Code, it may be inferred that as between the
parties to a donation of an immovable property, all that is required is for said
donation to be contained in a public document. Registration is not necessary for it to
be considered valid and effective. However, in order to bind third persons, the
donation must be registered in the Registry of Land Titles and Deeds. Although the
non-registration of a deed of donation shall not affect its validity, the necessity of
registration comes into play when the rights of third persons are affected, as in the
case at bar.
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DECEASED JOSE DACLAN, G.R. No. 197115 (consolidated), March 23, 2015, J.
Del Castillo
The Daclans lament the supposed failure of the Province to provide “agricultural
extension and on-site research services and facilities” as required under the IRR of
the LGC of 1991, which failure they believe, constituted a violation of the stipulation
contained in the deeds of donation to develop and improve the livestock industry of
the country. Yet this cannot be made a ground for the reversion of the donated lands;
on the contrary, to allow such an argument would condone undue interference by
private individuals in the operations of government. The deeds of donation merely
stipulated that the donated lands shall be used for the establishment of a breeding
station and shall not be used for any other purpose, and that in case of non-use,
abandonment or cessation of the activities of the BAI, possession or ownership shall
automatically revert to the Daclans. It was never stipulated that they may interfere in
the management and operation of the breeding station. Even then, they could not
directly participate in the operations of the breeding station.
Nature of Donations
Classification of Donations
Formalities of Donation
ESPERANZA C. CARINAN vs. SPOUSES GAVINO CUETO and CARMELITA CUETO, G.R.
No. 198636, October 8, 2014, J. Reyes
In order to sufficiently substantiate her claim that the money paid by the
respondents was actually a donation, petitioner should have also submitted in court
a copy of their written contract evincing such agreement. As earlier ruled by the
Court, a donation must comply with the mandatory formal requirements set forth by
law for its validity. When the subject of donation is purchase money, Article 748 of
the NCC is applicable. Accordingly, the donation of money as well as its acceptance
should be in writing. Otherwise, the donation is invalid for non-compliance with the
formal requisites prescribed by law.
The donation is null and void when (a) the deed of donation fails to show
the acceptance, or (b) where the formal notice of the acceptance made in
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a separate instrument is either not given to the donor or else noted in the
deed of donation, and in the separate acceptance.
Villanueva vs. Spouses Branoco, G.R. No. 172804, January 24, 2011
When the donor used the words that the gift "does not pass title during
my lifetime; but when I die, she shall be the true owner of the two
aforementioned parcels"] the donor meant nothing else than that she
reserved of herself the possession and usufruct of said two parcels of
land until her death, at which time the donee would be able to dispose of
them freely.
Since no period was imposed by the donor on when must the donee
comply with the condition, the latter remains the owner so long as he has
tried to comply with the condition within a reasonable period. Only then -
when the non-fulfillment of the resolutory condition was brought
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to the donor's knowledge - that ownership of the donated property
reverted to the donor as provided in the automatic reversion clause of the
deed of donation.
PRESCR IP TION
With the contract being voidable, petitioners’ action to annul the real estate
mortgage already prescribed. Article 1390, in relation to Article 1391 of the Civil
Code, provides that if the consent of the contracting parties was obtained through
fraud, the contract is considered voidable and may be annulled within four years
from the time of the discovery of the fraud. The discovery of fraud is reckoned from
the time the document was registered in the Register of Deeds in view of the rule
that registration was notice to the whole world. Thus, because the mortgage
involving the seven lots was registered on September 5, 1984, they had until
September 5, 1988 within which to assail the validity of the mortgage. But their
complaint was instituted in the RTC only on October 10, 1991.Hence, the action,
being by then already prescribed, should be dismissed.
In this case, the complaint for nullification of the SPA was filed before the RTC on
April 17,1996, or barely three years from the discovery of the averred forgery in
1993, which is within the four-year prescriptive period provided under Article 1146
of the Civil Code to institute an action upon the injury to their rights over the subject
properties. A delay within the prescriptive period is sanctioned by law and is not
considered to be a delay that would bar relief. Laches applies only in the absence of a
statutory prescriptive period.
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Since the complaint for annulment was anchored on a claim of mistake, i.e., that
petitioners are the borrowers under the loan secured by the mortgage, the action
should have been brought within four (4) years from its discovery. As mortgagors
desiring to attack a mortgage as invalid, petitioners should act with reasonable
promptness, else its unreasonable delay may amount to ratification. Verily, to allow
petitioners to assert their right to the subject properties now after their unjustified
failure to act within a reasonable time would be grossly unfair to PSMB, and
perforce should not be sanctioned. As such, petitioners' action is already barred by
laches, which, as case law holds, operates not really to penalize neglect or sleeping
on one's rights, but rather to avoid recognizing a right when to do so would result in
a clearly inequitable situation.
INTELLECTUAL PROPERTY
St. Francis Development Corporation (SFDC) uses the mark “ST. FRANCIS” to
identify numerous development projects at Ortigas Center. When Shang Properties
Realty (SPR) used the marks “The St. Francis Towers” and “The St. Francis Shangri-
La Place,” SFDC filed a complaint for intellectual property violation for unfair
competition and damages.
On the contrary, the Court upheld SPR’s use of the “St. Francis” mark since the use
was meant not to ride on SFDC’s goodwill, but merely to identify, or at least
associate, their real estate project/s with its geographical location. In the real estate
business, here can be no description of its geographical origin as precise and
accurate as that of the name of the place where they are situated.
In order to qualify the competition as "unfair," it must have two characteristics: (1)
it must involve an injury to a competitor or trade rival, and (2) it must involve acts
which are characterized as "contrary to good conscience," or "shocking to judicial
sensibilities," or otherwise unlawful; in the language of our law, these include force,
intimidation, deceit, machination or any other unjust, oppressive or high-handed
101
method. The public injury or interest is a minor factor; the essence of the matter
appears to be a private wrong perpetrated by unconscionable means.
The Supreme Court held that the news footage is copyrightable. he news footage is
copyrightable.
The Intellectual Property Code is clear about the rights afforded to authors of
various kinds of work. Under the Code, "works are protected by the sole fact of their
creation, irrespective of their mode or form of expression, as well as of their content,
quality and purpose." These include "[audio-visual works and cinematographic
works and works produced by a process analogous to cinematography or any
process for making audiovisual recordings."
It is true that under Section 175 of the Intellectual Property Code, "news of the day
and other miscellaneous facts having the character of mere items of press
information" are considered unprotected subject matter. However, the Code does
not state that expression of the news of the day, particularly when it underwent a
creative process, is not entitled to protection.
GMA-7's rebroadcast of ABS-CBN's news footage without the latter's consent is not
an issue. The mere act of rebroadcasting without authority from the owner of the
broadcast gives rise to the probability that a crime was committed under the
Intellectual Property Code.
Respondents cannot invoke the defense of good faith to argue that no probable cause
exists.Infringement under the Intellectual Property Code is malum prohibitum. The
Intellectual Property Code is a special law.
TAIWAN KOLIN CORPORATION, LTD VS. KOLIN ELECTRONICS CO., INC G.R. No.
209843. March 25, 2015, J. Velasco Jr.
102
The issue to be resolved in the case at bar is whether or not petitioner is entitled to
its trademark registration of “KOLIN” over its specific goods of television sets and
DVD players. Petitioner postulates, in the main, that its goods are not closely related
to those of Kolin Electronics. On the other hand, respondent hinges its case on the
CA’s findings that its and petitioner’s products are closely-related. Thus, granting
petitioner’s application for trademark registration, according to respondent, would
cause confusion as to the public.
The Supreme Court held that identical marks may be registered for products for the
same classification. Mere uniformity in categorization, by itself, does not
automatically preclude the registration of what appears to be an identical mark, if
that be the case. In fact, SC, in a long line of cases, has held that such circumstance
does not necessarily result in any trademark infringement. It is hornbook doctrine
that emphasis should be on the similarity of the products involved and not on the
arbitrary classification or general description of their properties or characteristics.
The mere fact that one person has adopted and used a trademark on his goods
would not prevent the adoption and use of the same trademark by others on
unrelated articles of a different kind.
It is erroneous to conclude that all electronic products are related and that the
coverage of one electronic product necessarily precludes the registration of a similar
mark over another. In this digital age wherein electronic products have not only
diversified by leaps and bounds, and are geared towards interoperability, it is
difficult to assert readily, as respondent simplistically did, that all devices that
require plugging into sockets are necessarily related goods. In addition, Supreme
court rule that there is no confusing similarity between the marks, given that the
products covered by the trademark, i.e., jeans, were, at that time, considered pricey,
typically purchased by intelligent buyers familiar with the products and are more
circumspect, and, therefore, would not easily be deceived.Hence, petitioner's
trademark registration not only covers unrelated good, but is also incapable of
deceiving the ordinary intelligent buyer.
OBLIGA TI ONS
I. DEFINITION
MAKATI STOCK EXCHANGE vs. CAMPOS, G.R. NO. 138814, April 16,
2009
Respondent used the terms "right and obligation" in his Petition from
which he concluded that that such Petition sufficiently states a cause of
action. Right and obligation are legal terms with specific legal meaning;
103
A right is a claim or title to an interest in anything whatsoever that is
enforceable by law, while an obligation is defined in the Civil Code as a
juridical necessity to give, to do or not to do and in the words of Arias
Ramos "An obligation is a juridical relation whereby a person (called the
creditor) may demand from another (called the debtor) the observance of
a determinative conduct (the giving, doing or not doing), and in case of
breach, may demand satisfaction from the assets of the latter."
For failure to pay on time the amortization, SSS imposed the 12% penalty
contained in the penal clause of the contract entered into between the
parties. Inpositive obligations, (to give and to do), the penalty is
demandable when the debtor is in mora; hence, the necessity of demand
by the debtor unless the same is excused.
104
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION vs.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, G.R. NO. 153827
April 25, 2006
ANSAY vs. BOARD OF DIRECTORS, G.R. NO. L-13667, April 29, 1960
Article 1423 of the New Civil Code classifies obligations into civil or
natural, "Civil obligations are a right of action to compel their
performance, while Natural obligations, not being based on positive law
but on equity and natural law, do not grant a right of action to enforce
their performance, but after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or rendered by reason
thereof".
105
2. CIVIL OBLIGATIONS
V. SOURCES OF OBLIGATIONS
Delfin, the father, was held jointly and severally liable with his minor son
Dante arising from the criminal act committed by the latter. The civil
liability which the law imposes upon the father and, in case of his death
or incapacity, the mother, for any damages that may be caused by the
minor children who live with them, is a necessary consequence of the
parental authority they exercise over them which imposes upon the
parents the "duty of supporting them, keeping them in their company,
educating them in proportion to their means", while, on the other hand,
gives them the "right to correct and punish them in moderation" .
106
METROPOLITAN BANK AND TRUST COMPANY vs. ANA GRACE ROSALES AND
YO YUK TO, G.R. No. 183204, January 13, 2014 J. del Castillo
Petitioner bank uses as basis for its refusal The “Hold Out” clause found in the
agreement it entered into with respondents. The Supreme Court held that the “Hold
Out” clause applies only if there is a valid and existing obligation arising from any of
the sources of obligation enumerated in Article 115779of the Civil Code, to wit: law,
contracts, quasi-contracts, delict, and quasi-delict. No such ground exists in this
case, hence the bank is guilty of breach of contract when it unjustifiably refused to
release respondents’ deposit despite demand.
Cruz alleged that Tuason had been enriched at the expense of Cruz by
virtue of an agreement made by Cruz and the Deudors in the clearing,
improving, subdividing and selling the large tract of land for the reasons
that said improvements are being used and enjoyed by Tuason. A
107
presumed quasi-contract cannot emerge as against one party when the
subject matter thereof is already covered by an existing contract with
another party.
A. NEGOTIORUM GESTIO
B. SOLUTIO INDEBITI
PUYAT & SONS, INC. vs. CITY OF MANILA, G.R. NO. L -17447, April
30, 1963
The City Treasurer of Manila refused to refund the retail dealer's tax
erroneously paid by the petitioner on it's belief that it was not exempted
from such, on the ground that the tax was voluntarily paid and not
under protest which was a condition sine qua non in order that a legal
basis may arise. Voluntariness is incompatible with mistake being a
108
case of solutio indebiti, protest is not required as a condition sine qua
non for its application.
NPC as a result of its inability to maintain the level of water in its dam
brought damages to defendants but asserts that the damages, if any,
were due to the heavy rains and should be regarded as a fortuitous
event. Negligence or imprudence is human factor which makes the whole
occurrence humanized, as it were, and removed from the rules applicable
to acts of God
JIMENEZ vs. CITY OF MANILA, G.R. NO. 71049, May 29, 1987
109
City of Manila is likewise liable for damages under Article 2189 of the
Civil Code, respondent City having retained control and supervision over
the Sta. Ana Public Market and as tort-feasor under Article 2176 of the
Civil Code on quasi-delicts Respondent City of Manila and Asiatic
Integrated Corporation being joint tort-feasors are solidarily liable under
Article 2194 of the Civil Code.
JIMENEZ vs. CITY OF MANILA, G.R. NO. 71049, May 29, 1987
Petitioner fell into the open drainage holes, causing him physical injuries,
in a public market being managed by Asiatic Integrated Corporation but
such public market is still under the control and supervision of the City
of Manila. As a defense against liability on the basis of a quasi-delict, one
must have exercised the diligence of a good father of a family. (Art. 1173
of the Civil Code).
110
that the genus of a thing can never perish, (Genus nunquan perit) and
an obligation to pay money is generic; therefore, it is not excused by
fortuitous loss of any specific property of the debtor.
B. FAILURE OF PERFORMANCE
ART 1170
It is clear upon the records that the sole and principal reason for the
cancellation of the allocation of rice contracted by the appellee herein in
Burma, was the failure of the letter of credit to be opened by NARIC
within the contemplated period which resulted in the consequent
damage. Every debtor who fails in performance of his obligations due to
fraud, negligence, or delay is bound to indemnify for the losses and
damages caused thereby.
C. DELAY
1. MORA SOLVENDI
ART 11
111
SANTOS VENTURA HOCORMA FOUNDATION, INC., vs. SANTOS, G.R.
NO. 153004, November 5, 2004
2. MORA ACCIPIENDI
3. COMPENSATIO MORAE
Cortes’ admission agreed that the Corporation’s full payment of the sum
would depend upon his delivery of the TCTs of the three lots.
Considering that their obligation was reciprocal, performance thereof
must be simultaneous and the mutual inaction of Cortes and the
Corporation therefore gave rise to a compensation morae or default on
the part of both parties because neither has completed their part in their
reciprocal obligation.
112
Petitioners contend that they have fully complied with their obligation
under the Memorandum of Agreement but due to respondents’ failure to
increase the capital stock of the corporation to an amount that will
accommodate their undertaking, it had become impossible for them to
perform their end of the Agreement. In reciprocal obligations, failure of
the other party to perform the obligation renders the other party to
demand fulfillment of the obligation or asked for the rescission of the
contract, but not simply not performing their part of the Agreement.
D. NEGLIGENCE
1. DEGREE OF DILIGENCE
Sicam exempts himself from liability on the ground that the robbery of
his pawnshop is a fortuitous event which is by definition is an
extraordinary event not foreseeable or avoidable. In order for a fortuitous
event to exempt one from liability, it is necessary that one has committed
no negligence or misconduct that may have occasioned the loss and
robbery per se, just like carnapping, is not a fortuitous event for it does
not foreclose the possibility of negligence on the part of herein
petitioners.
113
Mindanao Terminal was required to observe ordinary diligence only in
loading and stowing the cargoes of Del Monte Produce aboard M,V
Mistrau since there is nothing in the contract which requires a higher
degree of diligence. If the law or contract does not state the degree of
diligence which is to be observed in the performance of an obligation then
that which is expected of a good father of a family or ordinary diligence
shall be required.
2. FORTUITOUS EVENT
The principle of rebus sic stantibus neither fits in with the facts of the case. Under
this theory, the parties stipulate in the light of certain prevailing conditions, and
once these conditions cease to exist, the contract also ceases to exist. This theory is
said to be the basis of Article 1267 of the Civil Code. This article, which enunciates
the doctrine of unforeseen events, is not, however, an absolute application of the
principle of rebus sic stantibus, which would endanger the security of contractual
relations. The parties to the contract must be presumed to have assumed the risks
of unfavorable developments. It is therefore only in absolutely exceptional changes
of circumstances that equity demands assistance for the debtor.
Relying on Article 1267 of the Civil Code to justify its decision to pre-terminate its
lease with respondent, petitioner invokes the 1997 Asian currency crisis as causing
it much difficulty in meeting its obligations. In Philippine National Construction
Corporation v. CA, the Court held that the payment of lease rentals does not involve a
prestation “to do” envisaged in Articles 1266 and 1267 which has been rendered
legally or physically impossible without the fault of the obligor-lessor. Article 1267
speaks of a prestation involving service which has been rendered so difficult by
unforeseen subsequent events as to be manifestly beyond the contemplation of the
parties. To be sure, the Asian currency crisis befell the region from July 1997 and for
sometime thereafter, but petitioner cannot be permitted to blame its difficulties on
the said regional economic phenomenon because it entered into the subject lease
only on August 16, 2000, more than three years after it began, and by then petitioner
had known what business risks it assumed when it opened a new shop in Iloilo City.
NAKPIL & SONS v. CA, G.R. NO. L-47851 April 15, 1988
114
There was an earthquake which caused the building heavy damage but
the other nearby structures had less damages as compared to the said
building, the architects, engineers and contractors are claiming
fortuitous event as a defense. To be exempt from liability due to an act of
God, the ff must occur:
3. EXTRAORDINARY INFLATION
115
A. PURE OBLIGATIONS
ART 1179
HONGKONG AND SHANGHAI BANKING CORP. vs. BROQUEZA, G.R.
NO. 178610 November 17, 2010
B. CONDITIONAL OBLIGATIONS
SUSPENSIVE CONDITION
183 SCRA 171
Art. 1181
First, since Espidol failed to pay the installment on a day certain fixed in
their agreement, the Atienzas can afterwards validly cancel and ignore
the contract to sell because their obligation to sell under it did not arise.
Since the suspensive condition did not arise, the parties stood as if the
conditional obligation had never existed.
Second, it was not a pure suspensive condition in the sense that the
Atienzas made no undertaking while the installments were not yet
116
due. Mr. Justice Edgardo L. Paras gave a fitting example of suspensive
condition: “I’ll buy your land for P1,000.00 if you pass the last bar
examinations.” This he said was suspensive for the bar examinations
results will be awaited. Meantime the buyer is placed under no
immediate obligation to the person who took the examinations.
In view of our finding in the present case that the aG.R.eement between
the parties is a contract to sell, it follows that the appellate court erred
when it decreed that a judicial rescission of said aG.R.eement was
necessary. In a contract to sell, the payment of the purchase price is a
positive suspensive condition and failure to pay the price agreed upon is
not a mere breach, casual or serious, but a situation that prevents the
obligation of the vendor to convey title from acquiring an obligatory force.
CONDITION PRECEDENT
PARKS vs. PROVINCE OF TARLAC, G.R. NO. L -24190, July 13, 1926
117
condition is imposed, the compliance of which cannot be effected except
when the right is deemed acquired, such condition cannot be a condition
precedent but a condition subsequent.
RESOLUTORY CONDITION
ART 1181
Obligations with a resolutory period take effect at once, but terminate upon arrival of
the day certain. A day certain is understood to be that which must necessarily come,
although it may not be known when. If the uncertainty consists in whether the day
will come or not, the obligation is conditional. In the instant case, a plain reading of
the Contract of Reclamation reveals that the six (6)-year period provided for project
completion, or termination of the contract was a mere estimate and cannot be
considered a period or a "day certain" in the context of Art. 1193. To be clear, par. 15
of the Contract of Reclamation states: "the project is estimated to be completed in six
(6) years." The lapse of six (6) years from the perfection of the contract did not, make
the obligation to finish the reclamation project demandable, such as to put the
obligor in a state of actionable delay for its inability to finish. Thus, F.F. Cruz cannot
be deemed to be in delay.
118
RADIOWEALTH FINANCE COMPANY vs. Spouses DEL ROSARIO, G.R.
NO. 138739. July 6, 2000
Petitioner claimed that respondents are liable for the whole amount of
their debt and the interest thereon, after they defaulted on the monthly
installments, due to acceleration clause therein. Respondents, on the
other hand, countered that the installments were not yet due and
demandable, evidenced by the blank space left for the date on which the
installments should have commenced and theorized that fulfillment of
the obligation is dependent on the sole will of the debtor, hence proper
court should first fix a period for payment. The act of leaving blank the
due date of the first installment did not necessarily mean that the
debtors were allowed to pay as and when they could, since the presence
of an acceleration clause and a late payment penalty, showed the
intention of the parties that the installments should be paid at a definite
date, this is an obligation with a period.
Petitioner seeks the reversal of the decision of the lower court which
convicted her of the crime of Estafa when she failed to give the proceeds
of the sale of the tobacco in accordance with their agreement which says
that ''...payment should be given as soon as the tobaccos are sold...'' and
contended that the court should first fix the period. It is clear in the
aG.R.eement, that the obligation was immediately demandable as soon
as the tobacco was disposed of hence, Article 1197 of the New Civil Code,
which provides that the courts may fix the duration of the obligation if it
does not fix a period, does not apply.
ART 1197
Araneta, who was not able to comply with his obligation to create side
streets on the sides of the land which were sold to the PSE due to the
presence of squatters, questions the decision of the lower court ordering
him to comply with his obligation within 2 years from the finality of the
decision. It must be recalled that Article 1197 of the Civil Code involves a
two-step process, the Court must first determine that "the obligation
does not fix a period", or from the nature and the circumstances it can be
inferred that a period was intended, because courts can not fix a period
merely because in its opinion it is or should be reasonable and the
119
complaint not having sought that the court should set a period, but must
set the time that the parties are shown to have intended.
THE BACHRACH MOTOR CO., INC., vs. ESPIRITU, G.R. NO. L -28497
November 6, 1928
Defendant alleged that the decision of the lower court to pay 25 percent
of the amount of the trucks in addition to the amount of the trucks plus
12 per cent per annum is unconscionable and exceeds the rate fixed by
law. The penalty agreed upon does not include the interest, and which
may be demanded separetely and the penalty is not to be added to the
interest for the determination of whether the interest exceeds the rate
fixed by the law, since said rate was fixed only for the interest.
5. RECIPROCAL OBLIGATION
120
GOLDEN VALLEY EXPLORATION, INC. vs. PINKIAN MINING COMPANY and COPPER
VALLEY, INC., G.R. No. 190080, June 11, 2014, J. Perlas-Bernabe
In reciprocal obligations, either party may rescind the contract upon the other’s
substantial breach of the obligation/s he had assumed thereunder. The basis
therefor is Article 1191 of the Civil Code. PMC rescinded the operating agreement
with GVEI due to failure of the latter to advance payment for actual cost. The court
ruled that in reciprocal obligations, either party may rescind the contract upon the
other’s substantial breach of the obligation/s he had assumed thereunder.
The right of rescission of a party to an obligation under Article 1191 of the Civil
Code is predicated on a breach of faith by the other party who violates the
reciprocity between them. The breach contemplated in the said provision is the
obligor’s failure to comply with an existing obligation. When the obligor cannot
comply with what is incumbent upon it, the obligee may seek rescission and, in the
absence of any just cause for the court to determine the period of compliance, the
court shall decree the rescission. Thus, the delay in the completion of the project as
well as of the delay in the delivery of the unit are breaches of statutory and
contractual obligations which entitle respondent to rescind the contract, demand a
refund and payment of damages.
Petitioners contend that they have fully complied with their obligation
under the Memorandum of Agreement but due to respondents’ failure to
increase the capital stock of the corporation to an amount that will
accommodate their undertaking, it had become impossible for them to
perform their end of the Agreement. In reciprocal obligations, failure of
the other party to perform the obligation renders the other party to
121
demand fulfillment of the obligation or asked for the rescission of the
contract, but not simply not performing their part of the Agreement.
SOLIDARY OBLIGATION
SPOUSES RODOLFO BEROT AND LILIA BEROT vs.FELIPE C. SIAPNO, G.R. No.
188944, July 9, 2014, CJ. Sereno
As previous ruled by the Court, “The well entrenched rule is that solidary obligations
cannot be inferred lightly. They must be positively and clearly expressed. A liability is
solidary ‘only when the obligation expressly so states, when the law so provides or
when the nature of the obligation so requires.’” Respondent was not able to prove by
a preponderance of evidence that petitioners' obligation to him was solidary. Hence,
applicable to this case is the presumption under the law that the nature of the
obligation herein can only be considered as joint. It is incumbent upon the party
alleging otherwise to prove with a preponderance of evidence that petitioners'
obligation under the loan contract is indeed solidary in character.
OLONGAPO CITY vs. SUBIC WATER AND SEWERAGE CO., INC., G.R. No.
171626, August 6, 2014, J. Brion
Solidary liability must be expressly stated. In the present case, the joint and several
liability of Subic Water and OCWD was nowhere clear in the agreement. The
agreement simply and plainly stated that Olongapo City and OCWD were only
requesting Subic Water to be a co-maker, in view of its assumption of OCWD’s water
operations. Under these circumstances, Olongapo City cannot proceed after Subic
Water for OCWD’s unpaid obligations. The law explicitly states that solidary liability is
not presumed and must be expressly provided for. Not being a surety, Subic
Water is not an insurer of OCWD’s obligations under the compromise agreement.
122
ESTANISLAO AND AFRICA SINAMBAN VS. CHINA BANKING CORPORATION G.R.
No. 193890. March 11, 2015, J. REYES
A co-maker of a promissory note who binds himself with the maker “jointly and
severally” renders himself directly and primarily liable with the maker on the debt,
without reference to his solvency.
PNB assails the order of dismissal of the lower court dismissing its
complaint against several solidary debtors on the gr.ound that one of the
defendants died during the pendency of the case and therefore the
complaint, being a money claim based on contract, should be prosecuted
in the testate or intestate proceeding for the settlement of the estate of
the deceased. The choice is undoubtedly left to the solidary creditor to
determine against whom he will enforce collection and in case of the
death of one of the solidary debtors, the creditor may, if he so chooses,
proceed against the surviving solidary debtors without necessity of filing
a claim in the estate of the deceased debtors.
JOINT OBLIGATIONS
TOPIC: JOINT and SOLIDARY OBLIGATIONS
123
JOINT and SOLIDARY OBLIGATIONS
SPOUSES CHIN KONG WONG CHOI AND ANA O. CHUA VS. UNITED COCONUT
PLANTERS BANK, G.R. No. 207747. March 11, 2015, J. Carpio
Spouses Choi entered into contract to sell with Primetown Property Group, Inc. a
domestic corporation engaged in the business of condominium construction and
real estate development. Primetown on the other hand assigned its receivables to
United Coconut Planters Bank. Despite full payment Primetown failed to deliver the
condominium unit. Spouses Choi sued UCPB and Primetown. UCPB was not
Primetown’s successor-in-interest and was not jointly and severally liable with
Primetown for the latter’s failure to deliver the condominium unit. The Supreme
Court held that considering that UCPB is a mere assignee of the rights and
receivables under the Agreement, UCPB did not assume the obligations and
liabilities of Primetown under its contract to sell with Spouses Choi.
Philtranco Bus has been held solidarily liable with its bus driver, Calang,
when Calang accidentally collided with a jeepney killing a bystander and
two jeepney passengers while other passengers were seriously injured.
Since the cause of action against Calang was based on delict, Philtranco
cannot be held jointly and severally liable with Calang, based on quasi -
delict under Articles 2176 and 2180 of the Civil Code which pertain to
the vicarious liability of an employer for quasi-delicts that an employee
has committed.
RFC turned down the request of Saura, Inc. for an additional loan which
prompted Saura, Inc. to ask that the mortgage be cancelled, which was
done. The action thus taken by both parties was in the nature mutual
desistance — what Manresa terms "mutuo disenso" — which is a mode of
extinguishing obligations, a concept that derives from the principle that
since mutual aG.R.eement can create a contract, mutual disaG.R.eement
by the parties can cause its extinguishment.
124
A. EXTINGUISHMENT BY PAYMENT OR PERFORMANCE
RIVELISA REALTY, INC. VS. FIRST STA. CLARA BUILDERS CORPORATION G.R. No.
189618, January 15, 2014, J. Perlas-Bernabe
First Sta. Clara is entitled to be compensated for the development works it had
accomplished on the project based on the principle of quantum meruit. Case law
instructs that under this principle, a contractor is allowed to recover the reasonable
value of the thing or services rendered despite the lack of a written contract, in order
to avoid unjust enrichment. Quantum meruit means that, in an action for work and
labor, payment shall be made in such amount as the plaintiff reasonably deserves.
The measure of recovery should relate to the reasonable value of the services
performed because the principle aims to prevent undue enrichment based on the
equitable postulate that it is unjust for a person to retain any benefit without paying
for it. In this case, it is undisputed that First Sta. Clara already performed certain
works on the project with an estimated value of P4,578, 152.10. Clearly, to
completely deny it payment for the same would result in Rivelisa Realty's unjust
enrichment at the former' s expense. Besides, as may be gleaned from the parties'
correspondence, Rivelisa Realty obligated itself to unconditionally reimburse First
Sta. Clara the amount of P3,000,000.00 (representing First Sta. Clara's valuation of
its accomplished works at P4,578,152.10, less the cash advances and subcontractor's
fees) after the JV A had already been terminated by them through mutual assent. As
such, Rivelisa Realty cannot unilaterally renege on its promise by citing First Sta.
Clara's non-fulfilment of the terms and conditions of the terminated JVA. For all these
reasons, the CA' s ruling must be upheld.
Payment: Although Article 1271 of the Civil Code provides for a legal presumption of
renunciation of action (in cases where a private document evidencing a credit was
voluntarily returned by the creditor to the debtor), this presumption is
merely prima facie and is not conclusive; the presumption loses efficacy when faced
with evidence to the contrary. The provision merely raises a presumption, not of
payment, but of the renunciation of the credit where more convincing evidence
would be required than what normally would be called for to prove payment.
NETLINK COMPUTER INCORPORATED vs. ERIC DELMO, G.R No. 160827, June
18, 2014, J. Bersamin
One who pleads payment has the burden of proving it. Even where the plaintiff must
allege non-payment, the general rule is that the burden rests on the defendant to
prove payment, rather than on the plaintiff to prove non-payment. When the
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creditor is in possession of the document of credit, he need not prove non-payment
for it is presumed. The creditor's possession of the evidence of debt is proof that the
debt has not been discharged by payment. In this case, respondent's possession of
the original copies of the subject Trust Indenture Certificate strongly supports his
claim that petitioner Bank's obligation to return the principal plus interest of the
money placement has not been extinguished.
As a general rule, all obligations shall be paid in Philippine currency. However, the
contracting parties may stipulate that foreign currencies may be used for settling
obligations. This notwithstanding, the practice of a company of paying its sales
agents in US dollars must be taken into consideration.
Thus, in the absence of a written agreement between the employer and the
employee that sales commissions shall be paid in a foreign currency, the latter has
the right to be paid in such foreign currency once the same has become an
established practice of the former. The rate of exchange at the time of payment, not
the rate of exchange at the time of the sales, controls.
With the payment of US dollar commissions having ripened into a company practice,
there is no way that the commissions due to Delmo were to be paid in US dollars or
their equivalent in Philippine currency determined at the time of the sales. To rule
otherwise would be to cause an unjust diminution of the commissions due and
owing to Delmo.
Under Article 1256, the only instances where prior tender of payment is excused
are: (1) when the creditor is absent or unknown, or does not appear at the place of
payment; (2) when the creditor is incapacitated to receive the payment at the time it
is due; (3) when, without just cause, the creditor refuses to give a receipt; (4) when
two or more persons claim the same right to collect; and (5) when the title of the
obligation has been lost. None of these instances are present in the instant case.
Hence, the fact that the subject lots are in danger of being foreclosed does not
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excuse petitioner and her co-heirs from tendering payment to respondents, as
directed by the court.
Novation: In order to give novation legal effect, the creditor should consent to the
substitution of a new debtor. Novation must be clearly and unequivocally shown,
and cannot be presumed.
There are four instances when demand is not necessary to constitute the debtor in
default: (1) when there is an express stipulation to that effect; (2) where the law so
provides; (3) when the period is the controlling motive or the principal inducement
for the creation of the obligation; and (4) where demand would be useless. In the
first two paragraphs, it is not sufficient that the law or obligation fixes a date for
performance; it must further state expressly that after the period lapses, default will
commence. Based on a promissory note the parties evidently agreed that the
maturity of the obligation at a date certain, 31 December 1995. Until 31 December
1995, demand was not necessary before Rivera could be held liable for the principal
amount of P120,000.00. Thereafter, on 1 January 1996, upon default, Rivera became
liable to pay the Spouses Chua not only the principal obligation but also damages, in
the form of stipulated interest.
THE WELLEX GROUP INC. VS. U-LAND AIRLINES CO. LTD. G.R. No. 167519.
January 14, 2015, J. Leonen
Petitioner Wellex and respondent U-Land bound themselves to negotiate with each
other within a 40-day period to enter into a share purchase agreement. If no share
purchase agreement was entered into, both parties would be freed from their
respective undertakings. It is the non-occurrence or non-execution of the share
purchase agreement that would give rise to the obligation to both parties to free
each other from their respective undertakings. This includes returning to each other
all that they received in pursuit of entering into the share purchase agreement. At
the lapse of the 40-day period, the parties failed to enter into a share purchase
agreement. This lapse is the first circumstance provided for in Article 1185 that
gives rise to the obligation. Applying Article 1185, the parties were then obligated to
return to each other all that they had received in order to be freed from their
respective undertakings.
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NATIONAL POWER CORPORATION vs. LUCMAN M. IBRAHIM et al., G.R. No.
175863, February 18, 2015, J. Perez
Article 1242 of the Civil Code is an exception to the rule that a valid payment of an
obligation can only be made to the person to whom such obligation is rightfully
owed. It contemplates a situation where a debtor pays a “possessor of credit” i.e.,
someone who is not the real creditor but appears, under the circumstances, to be
the real creditor. In such scenario, the law considers the payment to the “possessor
of credit” as valid even as against the real creditor taking into account the good faith
of the debtor. Hence, NAPOCOR’s payment to Mangondato of the fees and indemnity
due for the subject land as a consequence of the execution of Civil Case No. 605-92
and Civil Case No. 610-92 could still validly extinguish its obligation to pay for the
same even as against the Ibrahims and Maruhoms.
AZCONA vs. JAMANDRE, G.R. NO. L-30597, SCRA, June 30, 1987
J. M . Tuason & Co., Inc. vs. Javier, NO. L-28569, February 27, 1970
Apart from the initial installment of P396.12, paid upon the execution of
the contract, the defendant religiously satisfied the monthly installments
accruing thereafter, for a period of almost eight (8) years and although
the principal obligation under the contract was P3,691.20, the total
payments made by the defendant including stipulated interest,
aggregated P4,134.08.
ART 1240
TO WHOM PAYMENT SHOULD BE MADE
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Admittedly, payment of the remaining balance of P200,000.00 was not
made to the creditors themselves, but rather, it was allegedly made to a
certain Losloso who was the authorized agent of petitioners.
Respondent’s obligation consists of payment of a sum of money, and in
general, a payment in order to be effective to discharge an obligation,
must be made to the proper person, thus, payment must be made to the
obligee himself or to an agent having authority, express or implied, to
receive the particular payment. Payment made to one having apparent
authority to receive the money will, as a rule, be treated as though actual
authority had been given for its receipt. If payment is made to one who
by law is authorized to act for the creditor, it will work as a discharge.
All dividends accruing to the said shares after the rendition of judgment
belonged to Aranas but UTEX paid the co-defendants despite its
knowledge and understanding of the final judgment. It is elementary that
payment made by a judgment debtor to a wrong party cannot extinguish
the obligation of such debtor to its creditor.
The promissory note in question provided on its face for payment of the
obligation in Philippine currency, but the aG.R.eement between the
parties originally involved a dollar transaction.
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creditor herein cannot oblige the debtor to pay him in dollars, even if the
loan were given in said currency.
Appellant claims that lower court erred in declaring and holding that the
balance owing from defendant-appellant to plaintiff-appellee on the IRRI
Project should be paid on the basis of the rate of exchange of the U.S.
dollar to the Philippine peso at the time of payment of judgment. Even if
the obligation assumed by the defendant was to pay the plaintiff a sum of
money expressed in American currency, the indemnity to be allowed
should be expressed in Philippine currency at the rate of exchange at the
time of judgment rather than at the rate of exchange prevailing on the
date of defendant's breach.
LEGAL TENDER
Checks representing deposit money do not have legal tender power and
their acceptance in the payment of debts, both public and private, is at
the option of the creditor.
Petitioner received the payment partly in cash and partly in check but
was not able to encash the check, and now questions the said payment
after 10 years. Respondents, on the other hand, want the petitioner to
deliver to them the owner’s duplicate of the title and the peaceful
possession and enjoyment of the lot in question.
The geneal rule is delivery of a check produces the effect of payment only
when it is cashed, pursuant to Art. 1249 of the Civil Code. The rule does
not apply, however, if the debtor is prejudiced by the creditor’s
unreasonable delay in the presentment of the check. Acceptance of a
check implies an undertaking of due diligence in presenting it for
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payment, and if he from whom it is received sustains loss by want of
such diligence, it will be held to operate as actual payment of the debt or
obligation for which it was given.
B. CONSIGNATION
ART 1257
SOCO vs. MILITANTE, G.R. NO. L-58961 June 28, 1983
ART 1258
If the creditor to whom tender of payment has been made refuses without
just cause to accept it, the debtor shall be released from responsibility by
consignation which is the act of depositing the thing due with the court
or judicial authorities but it generally requires a prior tender of payment.
ART 1259
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Defendant contended that payments of rental thru checks were made to
the plaintiff but the latter refused to accept them, hence defendant
authorized the bank to make consignation with the Clerk of Court. In
order to be valid, the tender of payment must be made in lawful
currency, but payment in check by the debtor may be acceptable as
valid, if no prompt objection to said payment is made.
The decision subject of the present petition for review holds the view that
there was substantial compliance with the requisites of consignation and
so ruled in favor of private respondent. Substantial compliance is not
enough and the essential requisites of a valid consignation, under
Articles 1256 to 1261 of the New Civil Code must be complied with fully
and strictly in accordance with the law and must be accorded a
mandatory construction.
Respondents alleged that the offer to redeem was not sincere, because
there was no consignation. The right to redeem is a RIGHT, not an
obligation, therefore, there is no consignation required to preserve the
right to redeem.
TENDER OF PAYMENT
SPOUSES TEOFILO vs. REYES, G.R. NO. 150913, February 20, 2003
132
deposited as full settlement of the obligation, or in the alternative, a
declaration by the court of the validity of the consignation.
In order that consignation may be effective the debtor must show that (a)
there was a debt due; (b) the consignation of the obligation had been
made because the creditor to whom a valid tender of payment was made
refused to accept it; (c) previous notice of the consignation had been
given to the person interested in the performance of the obligation; (d)
the amount due was placed at the disposal of the court; and, (e) after the
consignation had been made the person interested was notified thereof.
C. DACION EN PAGO
CALTEX (PHILIPPINES), INC., vs. CA, G.R. NO. 72703, November 13,
1992
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obligation and not for the purpose of transferring ownership thereof to
PNB in satisfaction of said loan.
In opposing the money claim, Respondent alleged that the surety bonds
and the indemnity agreements had been extinguished by the execution of
the deed of assignment, because this amounted to dation in payment
whereby the former is considered to have alienated his property in favor
of the latter in satisfaction of a monetary debt (Artide 1245). The
transaction could not be dation in payment because the deed of
assignment was executed on December 4, 1959, the obligation of the
assignor to refund the assignee had not yet arisen, hence, there was no
obligation yet on the part of the petitioner.
D. COMPENSATION
A debt is liquidated when its existence and amount are determined. Accordingly, an
unliquidated claim set up as a counterclaim by a defendant can be set off against the
plaintiff’s claim from the moment it is liquidated by judgment. Article 1290 of the
Civil Code provides that when all the requisites mentioned in Article 1279 of the
Civil Code are present, compensation takes effect by operation of law, and
extinguishes both debts to the concurrent amount. With petitioners’ expenses for
the repair of the dump truck being already established and determined with
certainty by the lower courts, it follows that legal compensation could take place
because all the requirements were present. The legal interest rate to be imposed
from February 11, 1993,the time of the extrajudicial demand by respondent, should
be 6% per annum in the absence of any stipulation in writing in accordance with
Article 2209 of the Civil Code.
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UNION BANK OF THE PHILIPPINES VS. DEVELOPMENT BANK OF THE
PHILIPPINES, G.R. No.191555, January 20, 2014, J. Perlas-Bernabe
In this case, Union Bank filed a motion to seek affirmation that legal compensation
had taken place in order to effectively offset (a) its own obligation to return the
funds it previously received from DBP as directed under the September 6, 2005 Writ
of Execution with (b) DBP’s assumed obligations under the Assumption Agreement.
However, legal compensation could not have taken place between these debts for the
apparent reason that requisites 3 and 4 under Article 1279 of the Civil Code are not
present. Since DBP’s assumed obligations to Union Bank for remittance of the lease
payments are – in the Court’s words in its Decision dated January 13, 2004 in
G.R. No. 155838 – " contingent on the prior payment thereof by [FW] to DBP," it
cannot be said that both debts are due (requisite 3 of Article 1279 of the Civil Code).
Also, in the same ruling, the Court observed that any deficiency that DBP had to
make up (by December 29, 1998 as per the Assumption Agreement) for the full
satisfaction of the assumed obligations " cannot be determined until after the
satisfaction of Foodmasters’ obligation to DBP." In this regard, it cannot be concluded
that the same debt had already been liquidated, and thereby became demandable
(requisite 4 of Article 1279 of the Civil Code).
In fine, since requisites 3 and 4 of Article 1279 of the Civil Code have not concurred
in this case, no legal compensation could have taken place between the above-stated
debts pursuant to Article 1290 of the Civil Code. Perforce, the petition must be
denied, and the denial of Union Bank’s motion to affirm legal compensation
sustained.
CESAR V. AREZA and LOLITA B. AREZA V EXPRESS SAVINGS BANK, INC. and
MICHAEL POTENCIANO. G.R No. 176697, September 10, 2014. J. Perez
Under Art. 1278 of the New Civil Code, compensation shall take place when two
persons, in their own right, are creditors and debtors of each other.
The relationship of the depositors and the Bank or similar institution is that of
creditor-debtor. Article 1980 of the New Civil Code provides that fixed, savings and
current deposits of money in banks and similar institutions shall be governed by the
provisions concerning simple loans. The bank is the debtor and the depositor is the
creditor. The depositor lends the bank money and the bank agrees to pay the
depositor on demand. The savings deposit agreement between the bank and the
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depositor is the contract that determines the rights and obligations of the parties.
Petitioners are not liable for the deposit of the altered checks. The Bank, as the
depositary and collecting bank ultimately bears the loss. Thus, there being no
indebtedness to the Bank on the part of petitioners, legal compensation cannot take
place.Under Art. 1278 of the New Civil Code, compensation shall take place when
two persons, in their own right, are creditors and debtors of each other.
In the landmark case of Eastern Shipping Lines, Inc. v. Court of Appeals, as regards
particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
“When the obligation is breached, and it consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of stipulation, the
rate of interest shall be 12% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.” In line with the recent circular of the Monetary Board of the
Bangko Sentral ng Pilipinas No. 799 (July 1, 2013), the Court has modified the
guidelines in Nacar v. Gallery Frames, wherein “the interest due shall itself earn legal
interest from the time it is judicially demanded and in the absence of stipulation, the
rate of interest shall be 6% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of
Article 1169 of the Civil Code.” This case, however, does not involve acquiescence to
the temporary use of a party’s money but a performance of a particular service,
specifically the construction of the diaphragm wall, capping beam, and guide walls of
the Trafalgar Plaza. Thus, in the absence of any stipulation as to interest in the
agreement between the parties herein, the matter of interest award arising from the
dispute in this case would actually fall under the second paragraph of the above-
quoted guidelines in the landmark case of Eastern Shipping Lines, which necessitates
the imposition of interest at the rate of 6%, instead of the 12% imposed by the courts
below. As to the rate of interest due thereon, however, the Court notes that the same
should be reduced to 6% per annum considering the fact that the obligation involved
herein does not partake of a loan or forbearance of money.
SOLINAP vs. DEL ROSARIO, G.R. No. L-50638 July 25, 1983
ART 1980
BPI vs CA, G.R. NO. 136202, January 25, 2007
136
Petitioner, as a collecting agent, debited Salazar's account. The account
was different from the original account to which the proceeds of the
check were credited but both accounts belonged to Salazar. The debited
account was the account of the sole proprietorship she owns. The other
account was her personal account.
A bank generally has a right of set-off over the deposits therein for the
payment of any withdrawals on the part of a depositor, because fixed,
savings, and current deposits of money in banks and similar institutions
are governed by the provisions concerning simple loan, hence, the
relationship between banks and depositors is that of creditor and debtor.
Legal compensation under Article 1278 of the Civil Code may take place
when all the requisites mentioned in Article 1279 are present.
GAN TION vs. HON. COURT OF APPEALS, G.R. NO. L -22490, May 21,
1969
The award for attorney's fees is made in favor of the litigant, not of his
counsel, hence, it is the litigant, not his counsel, who is the judgment
creditor and who may enforce the judgment by execution, such credit,
therefore, may properly be the subject of legal compensation.
ART 1278
PNB vs VDA. DE ONG ACERO, G.R. NO. L-69255, February 27, 1987
PNB's main thesis is that when it opened a savings account for ISABELA,
it (PNB) became indebted to ISABELA, so that when ISABELA itself
subsequently came to be indebted to it on account of ISABELA's breach
of the terms of the Credit Agreement, ISABELA and PNB became at the
same time creditors and debtors of each other, thus compensation
automatically took place between them, in accordance with Article 1278
of the Civil Code.
Compensation shall take when two persons, in their own right, are
creditors and debtors of each other and that compensation may transpire
by operation of law, as when all the requisites therefor, set out in Article
1279, are present. Nonetheless these legal provisions can not apply if it
has not proven by competent evidence that PNB is a creditor of ISABELA.
137
Francia contends that his tax delinquency has been extinguished by legal
compensation and claims that the government owed him when a portion
of his land was expropriated, hence, his tax obligation had been set-off
by operation of law.
138
Petitioner also claimed that it has the right to apply or set off private
respondent's money market claim despite the fact that the validity of the
extrajudicial foreclosure sale and petitioner's claim for deficiency are still
in question.
Article 1279 of the Civil Code requires among others, that in order that
legal compensation shall take place, "the two debts be due" and "they be
liquidated and demandable", because compensation is not proper where
the claim of the person asserting the set-off against the other is not clear
nor liquidated.
MONDRAGON vs. SOLA, JR., G.R. NO. 174882 January 21, 2013
E. NOVATION
ARCO PULP AND PAPER CO., INC. and CANDIDA A. SANTOS vs. DAN T. LIM, doing
business under the name and style of QUALITY PAPERS & PLASTIC PRODUCTS
ENTERPRISES, G.R. No. 206806, June 25, 2014, J. Leonen
Arco Pulp and Paper had an alternative obligation whereby it would either pay Dan T.
Lim the value of the raw materials or deliver to him their finished products of
139
equivalent value. When petitioner Arco Pulp and Paper tendered a check to Lim in
partial payment for the scrap papers, they exercised their option to pay the price.
This choice was also shown by the terms of the memorandum of agreement which
declared in clear terms that the delivery of petitioner Arco Pulp and Paper’s finished
products would be to a third person, thereby extinguishing the option to deliver the
finished products of equivalent value to respondent. The trial court erroneously
ruled that the execution of the memorandum of agreement constituted a novation of
the contract between the parties. Novation extinguishes an obligation between two
parties when there is a substitution of objects or debtors or when there is
subrogation of the creditor. The consent of the creditor must be secured for the
novation to be valid. In this case, Lim was not privy to the memorandum of
agreement, thus, his conformity to the contract need not be secured. If the
memorandum of agreement was intended to novate the original agreement between
the parties, respondent must have first agreed to the substitution of Eric Sy as his
new debtor.
THE WELLEX GROUP, INC. vs. U-LAND AIRLINES, CO., LTD., G.R. No. 167519.
January 14, 2015, J. Leonen
By virtue of the Deed of Assignment, the assignee is deemed subrogated to the rights
and obligations of the assignor and is bound by exactly the same conditions as those
which bound the assignor. Accordingly, an assignee cannot acquire greater rights
than those pertaining to the assignor. The general rule is that an assignee of a non-
negotiable chose in action acquires no greater right than what was possessed by his
assignor and simply stands into the shoes of the latter.55 Applying the foregoing, the
Court finds that MS Maxco, as the Trade Contractor, cannot assign or transfer any of
its rights, obligations, or liabilities under the Trade Contract without the written
consent of FBDC.
140
BANK OF THE PHILIPPINE ISLANDS VS. AMADOR DOMINGO (DECEASED)
SUBSTITUTED BY HIS CHILDREN, JOANN MOYA, ET AL. G.R. No. 169407. March
25, 2015, J. Leonardo-De Castro
The acceptance by a creditor of payments from a third person, who has assumed the
obligation, will result merely to the addition of debtors and not novation. The
creditor may therefore enforce the obligation against both debtors. As the Court
pronounced in Magdalena Estates, Inc. v. Rodriguez, 33 “[t]he mere fact that the
creditor receives a guaranty or accepts payments from a third person who has
agreed to assume the obligation, when there is no agreement that the first debtor
shall be released from responsibility, does not constitute a novation, and the creditor
can still enforce the obligation against the original debtor.” A stranger to a contract
may agree to assume an obligation; and while this may have the effect of adding to
the number of persons liable, it does not necessarily imply the extinguishment of the
liability of the first debtor. Neither would the fact alone that the creditor receives
guaranty or accepts payments from a third person who has agreed to assume the
obligation, constitute an extinctive novation absent an agreement that the first
debtor shall be released from responsibility.
Absent proof that BPI gave its clear and unmistakable consent to release the
spouses Domingo from the obligation to pay the car loan, Carmelita is simply
considered an additional debtor. Consequently, BPI can still enforce the obligation
against the spouses Domingo even 30 months after it had started accepting
payments from Carmelita.
Land Bank faults the CA for finding that novation given that substitution
of debtors was made without its consent, thus, it was not bound to
recognize the substitution under the rules on novation. Novation which
consists in substituting a new debtor in the place of the original one, may
be made even without the knowledge or against the will of the latter, but
not without the consent of the creditor.
141
inability or insolvency of the new debtor, hence, the creditor should agree
to accept the substitution in order that it may be binding on him.
F. RESCISSION
Rescission under Article 1191 takes place through either of two modes: (1) through
an extrajudicial declaration of rescission; or (2) upon the grant of a judicial decree of
rescission.
142
declaration of rescission produces legal effect such that the injured party is already
relieved from performing the undertaking. However, the power of declaring
extrajudicial rescission conferred upon the injured party is regulated by the Civil
Code. If the extrajudicial rescission is impugned by the other party, it shall be subject
to a judicial determination where court action must be taken, and the function of the
court is to declare the rescission as having been properly or improperly made, or to
give a period within which the debtor must perform the obligation alleged to be
breached. A unilateral cancellation of a contract may be questioned in courts by the
affected party to determine whether or not cancellation is warranted. Thus, in an
extrajudicial decree of rescission, revocation cannot be completely exercised solely
on a party’s own judgment that the other has committed a breach of the obligation
but always subject to the right of the other party to judicially impugn such decision.
The injured party may choose between the fulfilment and the rescission of the
obligation, with the payment of damages in either case. He may also seek rescission,
even after he has chosen fulfilment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing
the fixing of a period. This is understood to be without prejudice to the rights of
third persons who have acquired the thing, in accordance with Articles 1385 and
1388 and the Mortgage Law.
The cause of action supplied by the above article, however, is clearly predicated upon
the reciprocity of the obligations of the injured party and the guilty party. Reciprocal
obligations are those which arise from the same cause, and in which each party is a
debtor and a creditor of the other, such that the obligation of one is dependent upon
the obligation of the other. They are to be performed simultaneously such that the
performance of one is conditioned upon the simultaneous fulfillment of the other.
When Nuguid failed to deliver the agreed amount to Chiok, the latter had a cause of
action against Nuguid to ask for the rescission of their contract. On the other hand,
Chiok did not have a cause of action against Metrobank and Global Bank that would
allow him to rescind the contracts of sale of the manager’s or cashier’s checks, which
would have resulted in the crediting of the amounts thereof back to his accounts.
THE WELLEX GROUP, INC. vs. U-LAND AIRLINES, CO., LTD., G.R. No. 167519.
January 14, 2015, J. Leonen
143
Wellex and U-Land bound themselves to negotiate with each other within a 40-day
period to enter into a share purchase agreement. If no share purchase agreement
was entered into, both parties would be freed from their respective undertakings.
For Article 1191 to be applicable, however, there must be reciprocal prestations as
distinguished from mutual obligations between or among the parties. A prestation is
the object of an obligation, and it is the conduct required by the parties to do or not
to do, or to give. Parties may be mutually obligated to each other, but the prestations
of these obligations are not necessarily reciprocal. The reciprocal prestations must
necessarily emanate from the same cause that gave rise to the existence of the
contract. U-Land correctly sought the principal relief of rescission or resolution
under Article 1191. The obligations of the parties gave rise to reciprocal prestations,
which arose from the same cause: the desire of both parties to enter into a share
purchase agreement that would allow both parties to expand their respective airline
operations in the Philippines and other neighboring countries.
SWIRE REALTY DEVELOPMENT CORPORATION VS. JAYNE YU. G.R. No. 207133.
March 9, 2015, J. PERALTA
Based on the ocular inspection conducted on the subject condominium project and
subject unit shows that the amenities under the approved plan have not yet been
provided as of May 3, 2002, and that the subject unit has not been delivered to
respondent as of August 28, 2002, which is beyond the period of development of
December 1999 under the license to sell. Incontrovertibly, petitioner had incurred
delay in the performance of its obligation amounting to breach of contract as it
failed to finish and deliver the unit to respondent within the stipulated period. The
delay in the completion of the project as well as of the delay in the delivery of the
unit are breaches of statutory and contractual obligations which entitle respondent
to rescind the contract under Article 1191, demand a refund and payment of
damages.
ART 1191
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In the present case, the failure of respondents to pay the balance of the
purchase price within ten years from the execution of the Deed did not
amount to a substantial breach. Under Article 1191 of the Civil Code, the
right to rescind an obligation is predicated on the violation of the
reciprocity between parties, brought about by a breach of faith by one of
them however, rescission is allowed only where the breach is substantial
and fundamental to the fulfillment of the obligation.
ART 1169,1191
RODRIGO RIVERA vs. SPOUSES SALVADOR CHUA AND VIOLETA S. CHUA, G.R. No.
184458 (consolidated), January 14, 2015, J. Perez
There are four instances when demand is not necessary to constitute the debtor in
default: (1) when there is an express stipulation to that effect; (2) where the law so
provides; (3) when the period is the controlling motive or the principal inducement
for the creation of the obligation; and (4) where demand would be useless. In the
first two paragraphs, it is not sufficient that the law or obligation fixes a date for
performance; it must further state expressly that after the period lapses, default will
commence.
Art. 2209 is specifically applicable in this instance where: (1) the obligation is for a
sum of money; (2) the debtor, Rivera, incurred in delay when he failed to pay on or
before 31 December 1995; and (3) the Promissory Note provides for an indemnity
for damages upon default of Rivera which is the payment of a 5% monthly interest
from the date of default.
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SOLAR HARVEST, INC., vs DAVAO CORRUGATED CARTON
CORPORATION, G.R. NO. 176868. July 26, 2010
The CA added that even assuming that the agreement was for respondent
to deliver the boxes, respondent would not be liable for breach of contract
as petitioner had not yet demanded from it the delivery of the boxes.
Without a previous demand for the fulfillment of the obligation, petitioner
would not have a cause of action for rescission against respondent as the
latter would not yet be considered in breach of its contractual obligation,
since the right to rescind a contract arises once the other party defaults
in the performance of his obligation.
146
this remains true notwithstanding the absence of express stipulations in
the agreement indicating the consequences of breaches which the parties
may commit.
Defendants contend (1) that the fulfillment and the rescission of the
obligation in reciprocal ones are alternative remedies, and plaintiff having
chosen fulfillment in the Civil Case, she cannot now seek rescission; and
(2) that even if plaintiff could seek rescission the action to rescind the
obligation has prescribed. The rule that the injured party can only choose
between fulfillment and rescission of the obligation, and cannot have
both, applies when the obligation is possible of fulfillment, if the
fulfillment has become impossible, Article 1191 (3) allows the injured
party to seek rescission even after he has chosen fulfillment.
ART 1234
ANGELES, ET AL vs. CALASANZ, G.R. NO. L-42283, March 18, 1985
The party who deems the contract violated may consider it resolved or
rescinded, and act accordingly, without previous court action, but it
proceeds at its own risk, for it is only the final judgment of the
corresponding court that will conclusively and finally settle whether the
action taken was or was not correct in law.
G. RESTITUTION
147
UNIVERSAL FOOD CORPORATION vs. THE COURT OF APPEALS,
MAGDALO V. FRANCISCO, SR., and VICTORIANO N. FRANCISCO,
G.R. NO. L-29155, May 13, 1970
CONTRACTS
BCDA and SMLI have agreed to subject SMLI’s Original Proposal to Competitive
Challenge. This agreement is the law between the contracting parties with which
they are required to comply in good faith. Verily, it is BCDA’s subsequent unilateral
cancellation of this perfected contract which this Court deemed to have been tainted
with grave abuse of discretion. BCDA could not validly renege on its obligation to
subject the unsolicited proposal to a competitive challenge in view of this perfected
contract, and especially so after BCDA gave its assurance that it would respect the
rights that accrued in SMLI’s favor arising from the same.
GIDWANI VS. PEOPLE, G.R. No. 195064, January 15, 2014, J. Sereno
Considering that there was a lawful Order from the SEC, the contract is deemed
suspended. When a contract is suspended, it temporarily ceases to be operative; and
it again becomes operative when a condition occurs – or a situation arises –
warranting the termination of the suspension of the contract.
148
absolutely simulated or fictitious contract is void, and the parties may recover from
each other what they may have given under the contract.
In the present case, the true intention of the parties in the execution of the Deed of
Absolute Sale is immediately apparent from respondents’ very own Answer wherein
they admitted that the purpose of the Deed of Absolute Sale was simply to “facilitate
the titling of the subject property.” considering that the Deed of Absolute Sale has
been shown to be void for being absolutely simulated, petitioners are not precluded
from presenting evidence to modify, explain or add to the terms of the written
agreement as an exception to the parol evidence rule.
I. A. DEFINITION
SPOUSES BALILA vs. IAC, G.R. NO. L-68477 October 29, 1987
In the present case, there is no question that the subject matter of the
sale is the 364-square meter Davao lot owned by the Spouses Tongson
and the selling price agreed upon by the parties is P3,000,000, but the
149
existence of the remaining element, which is consent of the contracting
parties, to sell the property, claiming that their consent was vitiated by
fraud, renders the contract of sale void.
A. CONSENT
SPOUSES VICTOR AND EDNA BINUA vs. LUCIA P. ONG, G.R. No. 207176, June 18,
2014, J. Reyes
Article 1390(2) of the Civil Code provides that contracts where the consent is
vitiated by mistake, violence, intimidation, undue influence or fraud are voidable or
annullable.
Intimidation may vitiate consent and render the contract invalid, the following
requisites must concur: (1) that the intimidation must be the determining cause of
the contract, or must have caused the consent to be given; (2) that the threatened
act be unjust or unlawful; (3) that the threat be real and serious, there being an
evident disproportion between the evil and the resistance which all men can offer,
leading to the choice of the contract as the lesser evil; and (4) that it produces a
reasonable and well-grounded fear from the fact that the person from whom it
comes has the necessary means or ability to inflict the threatened injury.
Based on the petitioners’ own allegations, what the respondent did was merely
inform them of petitioner Edna’s conviction in the criminal cases for estafa. It might
have evoked a sense of fear or dread on the petitioners’ part, but certainly there is
nothing unjust, unlawful or evil in the respondent's act. The petitioners also failed to
show how such information was used by the respondent in coercing them into
signing the mortgages.
SC affirmed the finding of the CA that if the judgment of conviction is the only basis
of the [petitioners] in saying that their consents were vitiated, such will not suffice
to nullify the real estate mortgages and the subsequent foreclosure of the mortgaged
properties. No proof was adduced to show that [the respondent] used [force],
duress, or threat to make [petitioner] Victor execute the real estate mortgages.
Also, the threat to prosecute for estafa not being an unjust act, but rather a valid and
legal act to enforce a claim, cannot at all be considered as intimidation.
ECE REALTY AND DEVELOPMENT INC. vs.RACHEL G. MANDAP, G.R. No. 196182,
September 1, 2014, J. Peralta
Article 1338 of the Civil Code provides that "[t]here is fraud when through insidious
words or machinationsof one of the contracting parties, the other is induced to enter
into a contract which, without them, he would not have agreed to."
150
In addition, under Article 1390 of the same Code, a contract is voidable or
annullable "where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud."
Also, Article 1344 of the same Codeprovides that "[i]n order that fraud may make a
contract voidable, it should be serious and should not have been employed by both
contracting parties."
In order to constitute fraud that provides basis to annul contracts, it must fulfill two
conditions.
First, the fraud must be dolo causante or it must be fraud in obtaining the consent of the
party. This is referred to as causal fraud. The deceit must be serious. The fraud is
serious when it is sufficient to impress, or to lead an ordinarily prudent person into
error; that which cannot deceive a prudent person cannot be a ground for nullity.
The circumstances of each case should be considered, taking into account the
personal conditions of the victim.
Second, the fraud must be proven by clear and convincing evidence and not merely
by a preponderance thereof.
While the SC found that petitioner is guilty of false representation of a fact, it held
that the misrepresentation made by petitioner in its advertisements does not
constitute causal fraud which would have been a valid basis in annulling the
Contract to Sell between petitioner and respondent.
The rule that one who signs a contract is presumed to know its contentshas been
applied even to contract of illiterate persons on the ground that if such persons are
unable to read, they are negligent if they fail to have the contract read to them. If a
person cannot read the instrument, it is as much his duty to procure some reliable
persons to read and explain it tohim, before he signs it, as it would be to read it
before he signed it if he were able to do so and his failure to obtain a reading and
explanation of it is such gross negligence as will estop him from avoiding it on the
ground that he was ignorant of its contents.
151
SANTOS, SPOUSES ROSARIO SIERRA and EUSEBIO CALUMA LEYVA, and
SPOUSES SALOME SIERRA and FELIX GATLABAYAN (substituted by BUENA
VENTURA, ELPIDIO, PAULINO, CATALINA, GREGORIO, and EDGARDO
GATLABAYAN, LORETO REILLO, FERMINA PEREGRINA, and NIDA HASHIMOTO)
vs.PAIC SAVINGS AND MORTGAGE BANK, INC., G.R. No. 197857, September 10,
2014, J. Perlas-Bernabe
One who alleges any defect or the lack of a valid consent contract must establish the
same by full, clear, and convincing evidence, not merely by preponderance of
evidence. The rule is that he who alleges mistake affecting a transaction must
substantiate his allegation, since it is presumed that a person takes ordinary care of
his concerns and that private transactions have been fair and regular. Where
mistake or error is alleged by parties who claim to have not had the benefit of a
good education, as in this case, they must establish that their personal
circumstances prevented them from giving their free, voluntary, and spontaneous
consent to a contract.
The Deed of Absolute Sale executed by Avelina in favor of respondents was correctly
nullified and voided by the RTC. Avelina was not in the right position to sell and
transfer the absolute ownership of the subject property to respondents. As she was
not the sole heir of Eulalio and her Affidavit of Self-Adjudication is void, the subject
property is still subject to partition. Avelina, in fine, did not have the absolute
ownership of the subject property but only an aliquot portion. It is apparent from the
admissions of respondents and the records of this case that Avelina had no intention
to transfer the ownership, of whatever extent, over the property to respondents.
Hence, the Deed of Absolute Sale is nothing more than a simulated contract.
Edna Binua was convicted by the RTC of Estafa. For fear of conviction, Edna
executed several real estate mortgages over her husband’s properties to be able to
pay her creditor, Lucia Ong. Subsequently, the whole scenario was novated into
purely civil in nature. When Edna failed to settle her obligation, Ong foreclosed on
the mortgages. Edna now claims that the real estate mortgages were voidable under
Articles 1335 and1390 of the Civil Code as they were executed under duress and
intimidation in the form of the estafa conviction.
152
Article 1390(2) of the Civil Code provides that contracts where the consent is
vitiated by mistake, violence, intimidation, undue influence or fraud are voidable or
annullable. Article 1335 of the Civil Code, meanwhile, states that "there is
intimidation when one of the contracting parties is compelled by a reasonable and
well-grounded fear of an imminent and grave evil upon his person or property, or
upon the person or property of his spouse, descendants or ascendants, to give his
consent." The same article, however, further states that a "threat to enforce one’s
claim through competent authority, if the claim is just or legal, does not vitiate
consent."
In this case, Ong merely informed the spouses of Edna’s conviction in the criminal
cases for estafa. It might have evoked a sense of fear or dread on Edna’s part, but
certainly there is nothing unjust, unlawful or evil in Ong’s act. The judgment of
conviction was a result of a valid judicial process and will not suffice to nullify the
real estate mortgages and the subsequent foreclosure of the mortgaged properties.
No proof was adduced to show that Ong used [force], duress, or threat to make Edna
execute the real estate mortgages.
Article 2211 of the Civil Code provides that in crimes and quasi-delicts, interest as
part of the damage, may, in a proper case, be adjudicated in the discretion of the
court. Generally, interest is allowed as a matter of right for failure to pay liquidated
claims when due. For unliquidated claims, however, Article 2213 of the Civil Code
provides that interest cannot be recovered upon unliquidated claims or damages,
except when the demand can be established with reasonable certainty. In this case,
the Court allowed the award of interest on the actual and compensatory damages
based on justice, and because these damages could be measured against a
reasonably certain standard.
SPOUSES EDUARDO and LYDIA SILOS v PHILIPPINE NATIONAL BANK, G.R No.
181045, July 2, 2014. J. DEL CASTILLO
From 1987 to 1998, the spouses Silos executed promissory notes in favor of PNB, as
well as real estate mortgages to secure the loan. The loan contracts contained an
escalation clause: “The Borrower agrees that the Bank may modify the interest rate
in the Loan depending on whatever policy the Bank may adopt in the future,
including without limitation, the shifting from the floating interest rate system to
the fixed interest rate system, or vice versa” and “the Borrower hereby agrees that
the Bank may, without need of notice to the Borrower, increase or decrease its
spread over the floating interest rate at any time depending on whatever policy it
may adopt in the future.”
153
The Court held that the escalation clause in the loan contract was null and void for
being violative of mutuality of contracts. Any modification in the contract, such as
the interest rates, must be made with the consent of the contracting parties. The
minds of all the parties must meet as to the proposed modification, especially
when it affects an important aspect of the agreement. In the case of loan
agreements, the rate of interest is a principal condition, if not the most important
component. Thus, any modification thereof must be mutually agreed upon;
otherwise, it has no binding effect.
Pending resolution of the case, both parties freely and voluntarily entered
into an agreement for the purpose of finally settling their dispute in this
case. As a contract, a compromise is perfected by mutual consent,
however, a judicial compromise, while immediately binding between the
parties upon its execution, is not executory until it is approved by the
court and reduced to a judgment.
Petitioner takes the position that he was pressured into signing the
Agreement because of private respondent's demand, for payment for the
"exploitation" of the life story of Moises Padilla, otherwise, she would "call
a press conference declaring the whole picture as a fake, fraud and a
hoax and would denounce the whole thing in the press, radio, television
and that they were going to Court to stop the picture." It is necessary to
distinguish between real duress and the motive which is present when
one gives his consent reluctantly because a contract is valid even though
one of the parties entered into it against his own wish and desires, or
even against his better judgment.
154
PALATTAO vs. CA, G.R. NO. 131726, May 7, 2002
B. CAUSE OF CONTRACTS
ART 1354
LAW vs. OLYMPIC SAWMILL CO., G.R. NO. L-30771, May 28, 1984
The defendants admitted the principal obligation but claimed that the
additional amount constituted usurious interest. Under Article 1354 of
the Civil Code, the agreement of the parties relative to the additional
amount is presumed to exist and is lawful, unless the debtor proves the
contrary. Since no evidentiary hearing had been held, the defendants
therefore had not proven that the obligation was illegal.
C. CONSIDERATION
ART. 1354
155
Although the contract states that the purchase price of ₱2,000.00 was
paid by Policronio to Alfonso for the subject properties, it has been
proven that no such payment was made. It is well-settled that where a
deed of sale states that the purchase price has been paid but in fact has
never been paid, the deed of sale is null and void for lack of
consideration.
III. FORMALITIES
ART 1724
DUE OBSERVANCE OF PRESCRIBED FORMALITIES
In the absence of a written authority by the owner for the changes in the
plans and specifications of the building and of a written agreement
between the parties on the additional price to be paid to the contractor,
as required by Article 1724, the claim for the cost of additional works
must be denied.
Petitioner Lao Sok promised to give his employees their separation pay,
as soon as he receives the insurance proceeds for his burned building,
but contends that the contract was orally made hence unenforceable
since it does not comply with the Statute of Frauds. Contracts in
whatever form they may have been entered into are binding on the
parties unless form is essential for the validity and enforceability of that
particular contract.
ART 1356
156
The issue here is whether or not the unnotarized deed of sale can be
considered as a valid instrument for effecting the alienation by way of
sale of a parcel of land registerd under the Torrens System.
The general rule enunciated in said Art. 1356 is that contracts are
obligatory, in whatever form they may have been entered, provided all the
essential requisites for their validity are present, except when the law so
requires requiring a contract to be in some form for validity or
enforceability.
From the exchange of telegrams between the two parties, there was not
yet a meeting of the minds as to the cause of the contract. The cause of a
contract has been defined "as the essential reason which moves the
contracting parties to enter into it (8 Manresa, 5th Edition, p. 450). In
other words, the cause is the immediate, direct and proximate reason
which justifies the creation of an obligation thru the will of the
contracting parties (3 Castan, 4th Edition, p. 347)." (General Enterprises,
Inc. v. Lianga Bay Logging Co., Inc., 11 SCRA 733, 739). For the private
respondent, the cause of the contract was the repair of its vessel
Zamboanga-J while for the petitioner the cause would be its commitment
to repair the vessel and make it seaworthy. The telegrams dated January
17, January 20, and January 28, 1975 sent by the petitioner to the
private respondent, however, indicate that the former had not accepted
the repair of Zamboanga-J, the reason being that the extent of the repair
to be made necessitated a major expense so that the petitioner insisted
on the presence of the private respondent for evaluation before it
accepted the repair of the wooden vessel. That the petitioner had not yet
consented to the contract is evident when on January 28, 1975, it sent a
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telegram stating: "... NO AGREEMENT AS TO THE EX TENT OF REPAIRS
AND PAYMENT WILL UNDOCK VESSEL." The fact that the private
respondent who received this telegram ignored it, confirms that there
was no perfected contract to repair Zamboanga-J.
V. INTERPRETATION OF CONTRACTS
158
ASIAN CATHAY FINANCE AND LEASING CORPORATION vs.
SPOUSES G.R.AVADOR et al, G.R. NO. 186550, July 5, 2010
TIU vs. PLATINUM PLANS PHIL., INC., G.R. NO. 163512 February 28,
2007
URETA vs. URETA, G.R. No. 165748, September 14, 2011 -Lacking in
an absolutely simulated contract is consent which is essential to a valid
and enforceable contract. Thus, where a person, in order to place his
property beyond the reach of his creditors, simulates a transfer of it to
another, he does not really intend to divest himself of his title and control
of the property; hence, the deed of transfer is but a sham. Similarly, in
this case, Alfonso simulated a transfer to Policronio purely for taxation
purposes, without intending to transfer ownership over the subject lands.
The lower court held that the purchase by a lawyer of the property in
litigation from his client is categorically prohibited by Article 1491,
paragraph (5) of the Philippine Civil Code, and that consequently,
plaintiff's purchase of the property in litigation from his client was void
and could produce no legal effect, by virtue of Article 1409, paragraph (7)
of our Civil Code. Contracts "expressly prohibited or declared void by
159
law' are "inexistent and that "(T)hese contracts cannot be ratified, neither
can the right to set up the defense of illegality be waived."
ART 1410
TONGOY vs. THE HONORABLE COURT OF APPEALS, G.R. NO. L -
45645 June 28, 1983
The issue in this case is whether or not the rights of herein respondents
over subject properties, which were the subjects of simulated or fictitious
transactions, have already prescribed. A void or inexistent contract is one
which has no force and effect from the very beginning, as if it had never
been entered into, and which cannot be validated either by time or by
ratification.
LITA ENTERPRISES, INC.,vs. IAC, G.R. NO. L-64693 April 27, 1984
Petitioner questions the validity of the sale between the respondent and
Suralta but the lower court held that the benefit of said prohibition in the
Public Land Act against the disposal of any land granted to a citizen
under that law does not inure to any third party. The right to set up the
nullity of a void or non-existent contract is not limited to the parties as in
the case of annulable or voidable contracts. The right to set up the nullity
of a void or non-existent contract is extended to third persons who are
directly affected by the contract.
160
and the sale cannot be the subject of the ratification by the probate
court.
Respondent, through fraudulent means was able to transfer the lot from
his parents to himself without consideration or cause through a
purported deed of The IAC held that the action had already prescribed
because an action to annul a contract based on fraud prescribes in four
years. The SC, however, held that the alleged contract of sale is vitiated
by the total absence of a valid cause or consideration which is an
indispensable requisite for the existence of a valid contract. Thus, Article
1410 of the Civil Code provides that '(T)he action or defense for the
declaration of the inexistence of a contract does not prescribe.
The illicit purpose becomes the illegal causa rendering the contracts void.
B. VOIDABLE CONTRACTS
161
C. UNENFORCEABLE CONTRACTS
162
BISAYA LAND TRANSPORTATION CO., INC., vs. SANCHEZ, G.R. NO.
74623 August 31, 1987
In the case at bar, it is undisputed that Atty. Adolfo Amor was entrusted,
as receiver, with the administration of BISTRANCO and it business, but
the act of entering into a contract is one which requires the authorization
of the court which appointed him receiver. The questioned contracts can
rightfully be classified as unenforceable for having been entered into by
one who had acted beyond his powers, due to Receiver Amor's failure to
secure the court's approval of said Contracts.
STATUTE OF FRAUDS
AINZA vs. SPOUSES PADUA, G.R. NO. 165420, June 30, 2005
Gabriel Sr., during his lifetime, sold the subject property to Antonita, the
purchase price payable on installment basis, thus, Gabriel Sr. appeared
to have been a recipient of some partial payments but after his death, his
son questions the verbal sale contract between Gabriel Sr. and Antonita,
and alleged that the contract is unenforceable for non-compliance with
the Statute of Frauds. The Statute of Frauds, in context, provides that a
contract for the sale of real property or of an interest therein shall be
unenforceable unless the sale or some note or memorandum thereof is in
writing and subscribed by the party or his agent. Where the verbal
contract of sale, however, has been partially executed through the partial
payments made by one party duly received by the vendor, as in the
present case, the contract is taken out of the scope of the Statute.
163
Both courts were of the view essentially that the evidence did not bear
out the claim of fraud; that under the Statute of Frauds, the parties'
covenant as to their properties' metes and bounds was unenforceable
since it was not reduced to writing. Not every agreement "affecting land"
must be put in writing to attain enforceability, under the Statute of
Frauds, Article 1403(2) (e) of the Civil Code, such formality is only
required of contracts involving leases for longer than one year, or for the
sale of real property or of an interest therein.
D. RESCISSIBLE CONTRACTS
1. CONSENSUALITY OF CONTRACTS
ART 1306 , 1336 , 1337
164
REPUBLIC OF THE PHILIPPINES vs. PLDT G.R. NO. L-18841 January
27, 1969
,
The Republic commenced suit against the PLDT commanding the PLDT
to execute a contract with it for the use of the facilities of latter's
telephone system throughout the Philippines. Parties can not be coerce d
to enter into a contract where no agreement is had between them as to
the principal terms and conditions of the contract since freedom to
stipulate such terms and conditions is of the essence of our contractual
system, and by express provision of the statute, a contract may be
annulled if tainted by violence, intimidation, or undue influence (Articles
1306, 1336, 1337).
2. AUTONOMY OF CONTRACTS
TIU vs. PLATINUM PLANS PHIL., INC., G.R. NO. 163512 February 28,
2007
It is admitted by both parties that the phrase "they shall not sell to
others these three lots but only to the seller Vicente Santiago or to his
heirs or successors" is an express prohibition against the sale of the lots
described in the "Compraventa" to third persons or strangers to the
165
contract. Parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary
to law, morals, good customs, public order, or public policy.
A contract is the law between the contracting parties, and when there is
nothing in it which is contrary to law, morals, good customs, public
policy or public order, the validity of the contract must be sustained.
ART 1159
OCCENA vs. HON. JABSON, G.R. NO. L-44349, October 29, 1976
166
VIII. KINDS OF CONTRACTS
A. INNOMINATE CONTRACTS
ART 1307
CORPUS vs. COURT OF APPEALS, G.R. NO. L -40424 June 30, 1980
There was no express contract between the parties for the payment of
attorney's fees, but the respondent rendered legal services to petitioner.
The payment of attorney's fees to respondent may be justified by virtue of
the innominate contract of facio ut des (I do and you give which is based
on the principle that "no one shall unjustly enrich himself at the expense
of another" and under Article 1307 such contracts shall be regulated by
the stipulations of the parties, by the general provisions or principles of
obligations and contracts, by the rules governing the most analogous
nominate contracts, and by the customs of the people.
B. DIVISIBLE CONTRACTSAccording to the appellants, a usurious loan
is void due to illegality of cause or object, the rule of pari delicto applies,
so that neither party can bring action against each other. A contract of
loan with usurious interest consists of two stipulations which are
divisible in the sense that the former can still stand without the latter,
the principal and the accessory stipulations; the principal one is to pay
the debt; the accessory stipulation is to pay interest thereon, and in case
of a divisible contract, if the illegal terms can be separated from the legal
ones, the latter may be enforced."
C. CONTRACT OF ADHESION
ART 1750
ONG YIU vs. HONORABLE COURT OF APPEALS, G.R. NO. L-40597
June 29, 1979
ART 1332
TANG vs. COURT OF APPEALS, G.R. NO. L-48563 May 25, 1979
It is the position of the petitioner that because Lee See Guat was illiterate
and spoke only Chinese, she could not be held guilty of concealment of
her health history because the applications for insurance were in English
and the insurer has not proved that the terms thereof had been fully
explained to her. The obligation to show that the terms of the contract
had been fully explained to the party who is unable to read or
169
understand the language of the contract, when fraud or mistake is
alleged, devolves on the party seeking to enforce it.
The appellants seek to recover the insurance proceeds, relying upon the
insurance contract executed by and between the State Bonding &
Insurance Company, Inc. and Mora. Contracts take effect only between
the parties thereto, except where the contract contains some stipulations,
known as stipulations por atrui, in favor of a third person, who is allowed
to avail himself of a benefit granted to him by the terms of the contract,
provided that the contracting parties have clearly and deliberately
conferred a favor upon such person, however such third person not a
party to the contract has no action against the parties thereto, and
cannot generally demand the enforcement of the same, if he did not
communicate his acceptance thereto to the obligor before the revocation.