SUMMARY
OF DOCTRINES
I. PERSONS AND FAMILY RELATIONS
Art. 26, NCC
The philosophy behind Art. 26, NCC underscores the
necessity for its inclusion in our Civil Law.
The Code Commission stressed in no uncertain terms that the human
personality be exalted. Thus, under this
article, the rights of a person are amply protected, and damages are provided
for violations of a person’s dignity, personality, privacy and peace of
mind. Further, the violations mentioned
in this codal provision are not exclusive but merely examples and do not
preclude other similar or analogous acts such as the one involved in this case. (CONCEPCION
Prejudicial Question
A prejudicial question is one that arises in a case the
resolution of which is a logical antecedent of the issue involved therein, and
the cognizance of which pertains to another tribunal. The prejudicial question
must be determinative of the case before the court but the jurisdiction to try
and resolve the question must be lodged in another court or tribunal.
More
simply, for the court to appreciate the pendency of a prejudicial question, the
law requires the concurrence of two essential requisites, to wit:
a) The civil action involves an issue similar or intimately related
to the issue raised in the criminal action; and
b) The
resolution of such issue determines whether or not the criminal action may
proceed. (CHING vs. COURT OF APPEALS,
G.R. No. 110844, April 27, 2000)
Pendency
of a civil action for nullity of marriage does not pose a prejudicial question
in a criminal case for concubinage. The
rationale behind the principle of prejudicial question is to avoid two
conflicting decisions. For a civil case to be considered prejudicial to a
criminal action as to cause the suspension of the latter pending the final
determination of the civil case, it must appear not only that the said civil
case involves the same facts upon which the criminal prosecution would be
based, but also that in the resolution of the issue or issues raised in the
aforesaid civil action, the guilt or innocence of the accused would necessarily
be determined. (BELTRAN vs. PEOPLE, G.R. No. 137567, June 20, 2000)
Property Regime of
Unions Without Marriage (Art. 148, FC); Support; Retroactive Application of the
Family Code
Actual contribution is required by Art. 148 of the Family
Code, in contrast to Art. 147 . which states that 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. The care given by one party
[to] the home, children, and household, or spiritual or moral inspiration
provided to the other, is not included in Art.148. Hence, if actual contribution of the party is
not proved, there will be no co-ownership and no presumption of equal shares
The right to
support (for shelter) of illegitimate
children does not prevail over the right
of the spouses to eject them. Article
203 of the Family Code expressly provides that the obligation to give support
shall be demandable from the time the person who has the right to receive the
same needs it for maintenance, but it shall not be paid except from the date of
the judicial or extra-judicial demand. (TUMLOS vs. FERNANDEZ, G.R. No.
137650, April 12, 2000)
Judicial Declaration of Presumptive Death of a Spouse
Since the marriage was contracted in 1958, the
applicable provision is Art. 83, NCC which provides that a subsequent marriage
contracted during the lifetime of the first spouse is illegal and void ab
initio unless the prior marriage is first annulled or dissolved, except when
the first spouse (1) has been absent for seven consecutive years at the time of
the second marriage without the spouse present having news of the absentee
being alive, or (2) if absent for less than seven years, is generally
considered as dead and believed to be so by the spouse present at the time of
contracting such subsequent marriage, or (3) is presumed dead according to
Articles 390 and 391 of the Civil Code.
For the exception to apply, the subsequent marriage must have been made
in good faith. A judicial declaration of
absence of the absentee spouse is not necessary as long as the prescribed
period of absence is met. The marriage
under these exceptional cases is deemed to be valid “until declared null and
void by a competent court.” In contrast,
under the 1988 Family Code, in order that a subsequent bigamous marriage may
exceptionally be considered valid, the following conditions must concur: (a)
the prior spouse of the contracting party must have been absent for four
consecutive years, or two years where the danger of death under the
circumstances in Article 391 of the Civil Code at the time of disappearance;
(b) the spouse present has a well founded belief that the absent spouse is
already dead; and (c) there is, unlike the old rule, a judicial declaration of
presumptive death of the absentee for which purpose the spouse present can
institute a summary proceeding in court to ask for that declaration. (ARMAS
vs. CALISTERIO, G. R. No. 136467, April 6, 2000)
Validity of Marriage; Marriage License Required
A
marriage license is a formal requirement, its absence renders the marriage void
ab initio. Absence any claim of an exceptional character, the
purported marriage between the parties could not be classified among those
exempt from the marriage license requirement. (SY vs. COURT OF APPEALS , G.R.
No. 127263, April 12, 2000)
Exemption from
Marriage License; Declaration of Nullity of a Void Marriage
The five-year period provided by law in order to
exempt the future spouses from securing a marriage license should be computed
on the basis of a cohabitation as "husband and wife" where the only
missing factor is the special contract of marriage to validate the union. In
other words, the five-year common-law cohabitation period, which is counted
back from the date of celebration of marriage, should be a period of legal
union had it not been for the absence of the marriage. This 5-year period
should be the years immediately before the day of the marriage and it should be
a period of cohabitation characterized by exclusivity — meaning no third party
was involved at any time within the 5 years and continuity — that is unbroken.
Otherwise, if that continuous 5-year cohabitation is computed without any
distinction as to whether the parties were capacitated to marry each other
during the entire five years, then the law would be sanctioning immorality and
encouraging parties to have common law relationships and placing them on the
same footing with those who lived faithfully with their spouse.
The Family Code is silent as to who can file a
petition to declare the nullity of a marriage. A void marriage can be attacked
collaterally and can be questioned even after the death of either party. That
is why the action or defense for nullity is imprescriptible. Any proper
interested party may attack a void marriage.
(NIÑAL vs. BAYADOG, G.R. No.
133778, March 14, 2000)
Property Relations
of Unions Without Marriage
The co-ownership in Article 144 of the Civil Code requires that the man and woman living
together as husband and wife without the benefit of marriage must not in any
way be incapacitated to marry. If the property is acquired during the time when
the other party to the cohabitation has a subsisting marriage, such property is
presumed to be conjugal unless it be proved that it pertains exclusively to the
husband or to the wife. (ADRIANO vs. COURT OF APPEALS, G.R. No.
124118, March 27, 2000)
II. PROPERTY
Property of Public
Dominion
Like public street, public parks are beyond the commerce of
man and, thus, could not be the subject of a lease contract. (LANSANG
vs. COURT OF APPEALS, G.R. No. 102667, February 23, 2000)
Builder in Good Faith
Both Article 448 and
Article 546, NCC which allow full reimbursement of useful improvements and
retention of the premises until reimbursement is made, apply only to a
possessor in good faith, i.e., one who builds on land with the belief that he
is the owner thereof. Verily, persons whose occupation of a realty is by sheer
tolerance of its owners are not possessors in good faith. Neither did the
promise of the alleged owners that they were going to donate the premises to
petitioners convert them into builders in good faith for at the time the
improvements were built on the premises, such promise was not yet fulfilled,
i.e., it was a mere expectancy of ownership that may or may not be realized. (VERONA
Quieting of Title; Termination of
Co-ownership by Prescription
An action to quiet title, under Art. 476, NCC, is a common-law remedy for the removal of any
cloud or doubt or uncertainty on the title to real property. It is essential for the plaintiff or
complainant to have a legal or an equitable title to or interest in the real
property which is the subject matter of the action. Also, the deed, claim, encumbrance or
proceeding that is being alleged as a cloud on plaintiff's title must be shown
to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy.
It is
a fundamental principle that a co-owner cannot acquire by prescription the
share of the other co-owners, absent any clear repudiation of the co-ownership.
In order that the title may prescribe in favor of a co-owner, the following
requisites must concur: (1) the co-owner has performed unequivocal acts of
repudiation amounting to an ouster of the other co-owners; (2) such positive
acts of repudiation have been made known to the other co-owners; and (3) the
evidence thereof is clear and convincing. (ROBLES
vs. COURT OF APPEALS, G.R. No.
123509, March 14, 2000)
Quieting of Title;
Laches; Freedom to Enter into Contracts; Waiver of Rights
Persons having legal as well as equitable title to or
interest in a real property may bring an action for quieting of title and
"title" here does not necessarily denote a certificate of title
issued in favor of the person filing the suit.
Moreover, if the plaintiff in an action for quieting of
title is in possession of the property being litigated, such action is
imprescriptible. One who is in actual
possession of a land, claiming to be the owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to
vindicate his right because his undisturbed possession gives him a continuing
right to seek the aid of the courts to ascertain the nature of the adverse
claim and its effects on his title.
Although prescription and laches are distinct concepts, nonetheless in
some instances, the doctrine of laches is inapplicable where the action was
filed within the prescriptive period provided by law. Moreover, since laches is a creation of equity,
acts or conduct alleged to constitute the same must be intentional and
unequivocal so as to avoid injustice.
Laches 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.
The
act of registration of a voluntary instrument is the operative act which
conveys or affects registered land insofar as third persons are concerned.
Hence, even without registration, the contract (oral partition) is still valid
as between the parties. Neither a
Transfer Certificate of Title nor a subdivision plan is essential to the
validity of an oral partition.
Quitclaims
are valid contracts of waiver of property rights. The freedom to enter into
contracts, such as the quitclaims, is protected by law and the courts are not quick to interfere
with such freedom unless the contract is contrary to law, morals, good customs,
public policy or public order. Quitclaims, being contracts of waiver, involve the
relinquishment of rights, with knowledge of their existence and intent to
relinquish them. The intent
to waive rights must be clearly and convincingly shown. Moreover, when the only
proof of intent is the act of a party, such act should be manifestly consistent
and indicative of an intent to voluntarily relinquish a particular right such
that no other reasonable explanation of his conduct is possible. (
MAESTRADO vs. COURT OF APPEALS, G.R. No. 133345 & 133324, March 9, 2000)
Preference of
Possession; Ownership
Between the claimants, ownership shall be vested to the one
who has proven acquisitive prescription.
Tax receipts and declarations of ownership for taxation, when coupled
with proof of actual possession of the property, can be the basis of a claim
for ownership through prescription.
It is
settled that ownership cannot be acquired
by mere occupation. Unless it
is hostile, occupation and use, however long, will not confer title by
prescription or adverse possession. The tax declarations and receipts are only prima facie,
not conclusive, evidence of ownership in the absence of actual public and
adverse possession. (CEQUENA vs.
BOLANTE, G. R. No. 137944, April 6, 2000)
Donation
Inter Vivos; Repudiation Of Inheritance; Escheat
There are 3 essential elements of a donation: (a) the
reduction of the patrimony of the donor; (b) the increase in the patrimony of
the donee; and (c) the intent to do an act of liberality or animus donandi. When applied to a donation of an immovable property, the law further requires
that the donation be made in a public
document and that there should be an acceptance thereof made in the same deed
of donation or in a separate public document. In cases where the acceptance is made in a
separate instrument, it is mandated that the donor should be notified thereof
in an authentic form, to be noted in both instruments.
The inexistence of a donation does not render the
repudiation of the inheritance valid.
There is no valid repudiation of inheritance as there was already an
acceptance and where there is no showing that such acceptance was made thru any
of the causes which vitiate consent or there is no proof of the existence of an
unknown will. Art. 1056 of the Civil Code provides – “The acceptance or
repudiation of an inheritance is irrevocable and cannot be impugned except when
it was made thru any of the causes that vitiate
consent or when and unknown will appears.”
Nevertheless, the nullity of the repudiation does not ipso
facto operate to convert the parcels of land into res nullius to be escheated in favor of the Government. The repudiation, being of no effect
whatsoever, the parcels of land should revert to their private owner, who
although being an American citizen is qualified by hereditary succession to own
the property subject of the litigation. (REPUBLIC
vs. GUZMAN, G.R. No.132964, Feb.
18,2000)
Donation Inter Vivos
A donation as a
mode of acquiring ownership results in an effective transfer of title over the
property from the donor to the donee and
the donation is perfected from the moment the donor knows of the acceptance by
the donee. And once a donation is
accepted, the donee becomes the absolute owner of the property donated. (VELASQUEZ vs. COURT OF APPEALS, G.R. No.
126996, February 15,2000)
Prescription
Real actions over immovables prescribe after thirty
years. Good faith consists in the
reasonable belief that the person from whom the possessor received the thing
was its owner but could not transmit the ownership thereof. (SERASPI vs. COURT OF APPEALS, G.R. No.
135602, April 28, 2000)
Prescription in
Action for Reconveyance
Prescription cannot be invoked in an action for reconveyance
when the claimant is in possession of the land to be reconveyed. (MILLENA vs. COURT OF APPEALS, G.R. No.
127797, January 31, 2000)
Ownership Through
Acquisitive Presciption
Together with actual possession of the land, tax
declarations constitute strong evidence of ownership of the land occupied by a
person.
Uninterrupted adverse
possession of the land for more than 30 years could only ripen into ownership
of the land through acquisitive prescription which is a mode of acquiring
ownership and other real rights over immovable property. Prescription
requires public, peaceful, uninterrupted and adverse possession of the property
in the concept of an owner for ten (10) years, in case the possession is in
good faith and with a just title. (DBP vs. COURT OF APPEALS, G.R.
No. 129471. April 28, 2000.)
III. SUCCESSION
Successional
Rights; Transmission of; Scope
It is a general rule under the law on succession that
successional rights are transmitted from the moment of death of the
decedent and compulsory heirs are called
to succeed by operation of law. Under
Article 776 NCC, inheritance includes all the property, rights and obligations
of a person, not extinguished by his death.
In a modal institution, the testator states (1) the object
of the institution, (2) the purpose or application of the property left by the
testator, or (3) the charge imposed by the testator upon the heir. A
"mode" imposes an obligation upon the heir or legatee but it does not
affect the efficacy of his rights to the succession. On the other hand, in a
conditional testamentary disposition, the condition must happen or be fulfilled
in order for the heir to be entitled to succeed the testator. The condition
suspends but does not obligate; and the mode obligates but does not
suspend. To some extent, it is similar
to a resolutory condition.
Substitution
is the designation by the testator of a person or persons to take the place
of the heir or heirs first instituted. Under substitutions in general, the
testator may either (1) provide for the designation of another heir to whom the
property shall pass in case the original heir should die before him/her,
renounce the inheritance or be incapacitated to inherit, as in a simple
substitution, or (2) leave his/her
property to one person with the express charge that it be transmitted
subsequently to another or others, as in a fideicommissary substitution.
A Will is a personal, solemn, revocable and free act by
which a person disposes of his property, to take effect after his death. Since
the Will expresses the manner in which a person intends how his properties
be disposed, the wishes and desires of the testator must be strictly
followed. Thus, a Will cannot be the subject of a compromise agreement
which would thereby defeat the very purpose of making a Will. (RABADILLA
vs. COURT OF APPEALS, G.R. No. 129471.
April 28, 2000.)
Partition; Preterition
Every act intended to put an end to indivision among
co-heirs and legatees or devisees would be a partition although it would
purport to be a sale, an exchange, a compromise, a donation or an extrajudicial
settlement. The deed of donation and
deed of extra-judicial settlement consolidated the title solely to one of the
heirs and ceased the co-ownership.
The exclusion of
one of the children of the decedent from
the deed of extrajudicial settlement has the effect of preterition. This kind
of preterition, in the absence of proof and bad faith, does not justify a
collateral attack on the new TCT. The relief instead rests on Art.1104, NCC to
the effect that where the preterition is not attended by bad faith and fraud,
the partition shall not be rescinded but the preterited heir shall be paid the
value pertaining to her. (VIADO NON vs. COURT OF APPEALS, G.R. No.
137287, February 15, 2000)
Formal
Requirements of a Valid Partition
The intrinsic validity of partition not executed in a public
instrument is not undermined when no
creditors are involved. The partition of inherited property need not be
embodied in a public document so as to be effective as regards the heirs that
participated therein. The requirement of Article 1358 of the Civil Code that
acts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property, must appear in a public
instrument, is only for convenience, non-compliance with which does not affect
the validity or enforceability of the acts of the parties as among themselves.
And neither does the Statute of Frauds under Article 1403 of the New Civil Code
apply because partition among heirs is not legally deemed a conveyance of real
property, considering that it involves not a transfer of property from one to
the other but rather, a confirmation or ratification of title or right of
property that an heir is renouncing in favor of another heir who accepts and
receives the inheritance. (VERONA
IV. OBLIGATIONS AND CONTRACTS
Novation
Novation is never presumed; it must be proven as a fact
either by express stipulation of the parties or by implication derived from an
irreconcilable incompatibility between old and new obligations or contracts. Otherwise, the original contract remains
in force. (ESPINA vs. COURT OF APPEALS, G.R. No.
116805 June 22, 2000)
Relativity
of Contracts
The general rule under Article 1311, NCC is that heirs are
bound by contracts entered into by their predecessors-in-interest except when
the rights and obligations arising therefrom are not transmissible by (1) their
nature, (2) stipulation or (3) provision of law.
A good measure for determining whether a
contract terminates upon the death of one of the parties is whether it is of
such character that it may be performed by the promissor’s personal
representative. Furthermore, the subject
matter of the contract is a lease, which is a property right. The death of a party does not excuse
nonperformance of a contract which involves a property right, and the rights
and obligations thereunder pass to the personal representatives of the
deceased. Similarly, nonperformance is
not excused by the death of the party when the other party has a property
interest in the subject matter of the contract. (DKC HOLDINGS CORP. vs. COURT OF APPEALS, G. R. No. 118248, April 5, 2000)
Onerous Contract
The fact that no
renewal was granted removed the basis for the continued payment of the monthly
royalty fee. It is the essence of a royalty fee that it is paid in
consideration of an existing right. In its ordinary acceptation, royalties
refer to payments made to the owner for permitting another to use his
property. Royalties are similar to the
rents payable for the use or right to use an invention and after the right to
use it has terminated there is no obligation to make further royalty payments.
The MOA is an onerous contract, wherein the contracting
parties are obliged to render reciprocal prestations.
Entitlement to the royalty fee is wholly dependent upon the existence and
subsistence of the right for which the royalty was granted. If the reason which
gave rise to the contract has ceased to exist, the result is that the
obligation too, has ceased to exist.
(GOLDEN DIAMOND vs. COURT OF APPEALS, G.R. No. 131436, May 31, 2000)
Power to Rescind in Reciprocal
Obligations
The power to
rescind or resolve is given to the injured party. More, the
rescission of the contracts requires the parties to restore to each other what
they have received by reason of the contracts.
The rescission has the effect of abrogating the contracts in all
parts. (RELIANCE COMMODITIES INC. vs. INTERMEDIATE APPELLATE COURT, G.R. No.
74729, May 31, 2000)
The
right to rescind a contract involving reciprocal obligations is provided for in
Article 1191 of the Civil Code. The law
speaks of the right of the "injured party" to choose between
rescission or fulfillment of the obligation, with the payment of damages in
either case. The parties should not be allowed to rescind the
contract where they themselves did not perform their essential obligation
thereunder. It should be emphasized that a contract of
sale involves reciprocity between the parties. (CENTRAL BANK OF THE PHILIPPINES
Contract
to Sell; Rescission
Article
1191,NCC on rescission, speaks of obligations already existing. In a contract to sell, the full payment of
the purchase price is a positive suspensive condition, the failure of which is
not considered a breach, casual or serious, but simply an event which prevented
the obligation of the vendor to convey title from acquiring any obligatory
force. There can be no rescission of an obligation that is non-existent,
considering that the suspensive condition therefor has not yet happened. (PADILLA vs. PAREDES, G.R. No. 124874, March 17, 2000)
Interpretation of Contracts; Rescission
The various stipulations in a contract should be
interpreted together. Ambiguous ones should be so construed as to conform to
the sense that would result if all the provisions are comprehended jointly.
The act of treating
a contract as cancelled or rescinded on account of infractions by the other
contracting party is always provisional; that is, contestable and subject to
judicial determination. When one party resolved or rescinded the Agreement
without previous court action, it proceeded at its own risk. Only the final
judgment of a court will conclusively and finally settle whether such recourse
was correct in law.
If breach is insubstantial, rescission is not
justified. (PHIL. NATIONAL CONSTRUCTION
CORP. vs. MARS CONSTRUCTION ENT., G.R. No.133909, February 15, 2000)
Badges of Fraud
Under Article 1381(3) of the Civil Code, contracts
which are undertaken in fraud of creditors when the latter cannot in any manner
collect the claims due them, are rescissible.
The existence of fraud with intent to defraud creditor may either be
presumed in accordance with Article 1387, NCC or duly proved in accordance with
the ordinary rules of evidence. Hence, the law presumes that there is fraud of
creditors when: a) There is alienation of property by
gratuitous title by the debtor who has not reserved sufficient property to pay
his debts contracted before such alienation; or b) There is alienation of
property by onerous title made by a debtor against whom some judgment has been
rendered in any instance or some writ of attachment has been issued. The
decision or attachment need not refer to the property alienated and need not
have been obtained by the party seeking rescission.
In determining whether or not a certain conveyance is
fraudulent, the question in every case is whether the conveyance was a bona
fide transaction or a trick and contrivance to defeat creditors or whether it
conserves to the creditor to the debtor or a special right. It is not
sufficient that it is founded on good considerations or is made with bona fide
intent. It must have both elements. If defective in either of these, although
good between the parties, it is voidable as to creditors. The question as to whether or not the conveyance is fraudulent is: does it
prejudice the rights of the creditors?
The mere fact that the conveyance was founded on valuable consideration
does not necessarily negate the presumption of fraud under Art. 1387, NCC.
There has to be a valuable consideration and the transaction must have been
made bona fide. (China Banking Corp. vs. Court of Appeals, G.R. No. 129644, March 7, 2000)
Void
and Voidable Contracts
Under Art. 1409
(2),NCC, one type of contract which can be declared void and inexistent is that
which is absolutely simulated or fictitious, as when there are several badges
of simulation proving that the sale between the parties was not intended to
have any legal effect between them..
Nonetheless, a sale of the entire property by a co-heir is
unenforceable having been entered into in behalf of the co-heirs who gave no authority or legal
representation. However, such a contract is susceptible of ratification. Where
there is a ratification, then the sale is considered valid and binding. (SEN PO EK MARKETING CORP. vs. MARTINEZ
Capacity to Enter
into Contract
A person
is not incapacitated to contract merely because of advanced years of AGE or by
reason of physical infirmities. Only
when such age or infirmities impair his mental faculties to such extent as to
prevent him from properly, intelligently, and fairly protecting his property
rights is he considered incapacitated. (LOYOLA vs. COURT OF APPEALS, G.R. No. 115734,
February 23, 2000)
Unenforceable Contract
Article
1529 of the old Civil Code, which was the prevailing law in 1948 and thus
governed the questioned Deed of Sale, clearly provided that a contract is
unenforceable when there is an absence of authority on the part of one of the
contracting parties. The mere lapse of time cannot give efficacy to such a
contract. The defect is such that it cannot be cured except by the subsequent
ratification of the unenforceable contract by the person in whose name the
contract was executed. (VILLANUEVA-MIJARES vs. COURT OF APPEALS, G.R. No.
108921, April 12, 2000)
Simulation of
Contracts
Simulation
is the declaration of a fictitious will deliberately made by agreement of the
parties, in order to produce, for the purposes of deception, the appearances of
a juridical act which does not exist or is different what that which does not
exist or is different what that which was really executed.” Characteristic of
simulation is that the apparent contract is not really desired or intended to
produce legal effect or in any way alter the judicial situation of the
parties. The requisites for simulation
are: (a) an outward declaration of will different from the will of the parties;
(b) the false appearance must have been intended by mutual agreement; and (c)
the purpose is to deceive third persons.
(LOYOLA vs. COURT OF APPEALS, G.R.
No. 115734, February 23, 2000)
Laches;
Prescription
While a review of the decree of
registration is no longer available after the expiration of the one-year period
from entry thereof pursuant to the doctrine of res judicata, an equitable
remedy is still available. Those wrongfully deprived of their property may
initiate an action for reconveyance of the property. (VILLANUEVA-MIJARES vs. COURT OF APPEALS, G.R. No.
108921, April 12, 2000)
The
essence of laches is the failure, or neglect, for an unreasonable and
unexplained length of time to do that which, by exercising due diligence, could
or should have been done earlier; it is the negligence
or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or
declined to assert it. (GASTON vs. COURT OF APPEALS, G.R. No. 116340 June 29, 2000)
TRUST
Express Trust
Trust is the right to the beneficial enjoyment of property,
the legal title to which is vested in another.
It is a fiduciary relationship that obliges the trustee to deal with the
property for the benefit of the beneficiary.
Trust relations between parties may either be express or implied. An express
trust is created by the intention of the trustor or of the parties. An implied
trust comes into being by operation of law. Under Art. 1444, NCC ‘no particular words are
required for the creation of an express trust, it being sufficient that a trust
is clearly intended.’
While no time limit is imposed for the enforcement
of rights under express trusts, prescription may, however, bar a beneficiary’s
action for recovery, if a repudiation of the trust is proven by clear and
convincing evidence and made known to the beneficiary. (SECUYA
vs. VDA. DE SELMA
SALES AND LEASE
Elements
of a Contract of Sale
Since the lot subsequently sold is said to adjoin the
"previously paid lot" on three sides thereof, the subject lot is
capable of being determined without the need of any new contract. The fact that
the exact area of these adjoining residential lots is subject to the result of a
survey does not detract from the fact that they are determinate or
determinable. Concomitantly, the object
of the sale is certain and determinate. Under Article 1460,NCC, a thing sold is
determinate if at the time the contract is entered into, the thing is capable of
being determined without necessity of a new or further agreement between the
parties.
There is also no reservation of ownership nor a stipulation
providing for a unilateral rescission by either party. The stipulation that the "payment of the
full consideration based on a survey shall be due and payable in five (5) years
from the execution of a formal deed of sale" is not a condition which
affects the efficacy of the contract of sale. It merely provides the manner by
which the full consideration is to be computed and the time within which the
same is to be paid. But it does not affect in any manner the effectivity of the
contract. (SAN ANDRES vs. RODRIGUEZ, G.R. No. 137287, February 15,
2000)
Option
Money vs. Earnest Money
An option contract
is a preparatory contract in which one party grants to the other, for a fixed
period and under specified conditions, the power to decide, whether or not to
enter into a principal contract, it binds the party who has given the option
not to enter into the principal contract with any other person during the
period designated, and within that period, to enter into such contract with the
one to whom the option was granted, if the latter should decide to use the
option. It is a separate agreement distinct from the contract to which the
parties may enter upon the consummation of the option. An option contract is
therefore a contract separate from and preparatory to a contract of sale which,
if perfected, does not result in the perfection or consummation of the sale.
In this case, after the payment
of the 10% option money, the Offer to Purchase provides for the payment only of
the balance of the purchase price, implying that the "option money"
forms part of the purchase price. This is precisely the result of paying
earnest money under Art. 1482 of the Civil Code. It is clear then that the
parties in this case actually entered into a contract of sale, partially
consummated as to the payment of the price. (CAVITE DEVELOPMENT BANK vs. CYRUS LIM, G.R.
No. 131679, February 1, 2000)
Delivery in
Contract of Sale
For
while a contract of sale is perfected by the meeting of minds upon the thing
which is the object of the contract and upon the price, the ownership of the
thing sold is not transferred to the vendee until actual or constructive
delivery of the property. Hence, the
maxim non nudis pactis, sed traditione
dominia dominica
Under Article 1497, NCC, a thing sold shall be understood as
delivered when it is placed in the control or possession of the vendee. Delivery is generally evidenced by a written
acknowledgment of a person that he or she has actually received the thing or
the goods, as in delivery receipts. A bill of lading cannot substitute for a
delivery receipt. This is because it is a written acknowledgment of the receipt
of the goods by the carrier and an agreement to transport and deliver them at a
specific place to a person named or upon his order. It does not evidence
receipt of the goods by the consignee or the person named in the bill of
lading; rather, it is evidence of receipt by the carrier of the goods from the
shipper for transportation and delivery. Likewise, a factory consignment
invoice is not evidence of actual delivery of the goods. An invoice is nothing
more than a detailed statement of the nature, quantity and cost of the thing
sold. It is not proof that the thing or goods were actually delivered to the
vendee or the consignee. (LAO vs. COURT OF APPEALS, G.R. No. 47013,
60647 & 60958-59, February 17, 2000)
The
mere fact that the price is inadequate does not prove support the conclusion
that the contract was a loan or that the property was not at all sold. The
price fixed in the sale with a right to repurchase is not necessarily the true
value of the land sold. The rationale is that the vendor has the right to fix a
relatively reduced price, although not a grossly inadequate one, in order to
afford the vendor a retro every facility
to redeem the land. Thus, inadequacy of the price is not sufficient to set
aside a sale unless it is grossly inadequate or purely shocking to the conscience.
(ABAPO vs. COURT OF APPEALS, GR No.
128677, March 2, 2000)
Consolidation
of Title in Pacto de Retro Sale
Art. 1607, NCC requiring a judicial order for the
consolidation of the ownership in the vendee a retro to be recorded in the
Registry of Property is intended to minimize the evils which the pacto de retro
sale has caused in the hands of usurers. A judicial order is necessary in order
to determine the true nature of the transaction and to prevent the
interposition of buyers in good faith while the determination is being made. Notwithstanding Art. 1607, the recording in
the Registry of Property of the consolidation of ownership of the vendee is not
a condition sine qua non to the transfer of ownership. The essence of the pacto
de retro sale is that title and ownership of the property sold are immediately
vested in the vendee a retro, subject to the resolutory condition of repurchase
by the vendor a retro within the stipulated period. Failure thus of the vendor
a retro to perform said resolutory condition vests upon the vendee by operation
of law absolute title and ownership over the property sold. As title is already
vested in the vendee a retro, his failure to consolidate his title under
Article 1607, NCC does not impair such title or ownership for the method
prescribed thereunder is merely for the purpose of registering the consolidated
title. (CRUZ vs. LEIS, G.R. No.
125233, March 9, 2000)
Double Sale
The
prior registration of the disputed property by the second buyer does not by
itself confer ownership or a better right over the property. Article 1544,NCC
requires that such registration must be coupled with good faith. Primus tempore, potior jure (first in
time, stronger in right). Knowledge gained by the first buyer of the
second sale cannot defeat the first buyer's rights except where the second
buyer registers in good faith the second sale ahead of the first. Such knowledge of the first buyer does not
bar him from availing of his rights under the law, among them, to register
first his purchase as against the second buyer. But in converso, knowledge
gained by the second buyer of the first sale defeats his rights even if he is
first to register the second sale, since such knowledge taints his prior
registration with bad faith. This is the price exacted by Art. 1544
for the second buyer being able to displace the first buyer; that before the
second buyer can obtain priority over the first, he must show that he acted in
good faith throughout (i.e. in ignorance of the first sale and of the first
buyer's rights) — from the time of acquisition until the title is transferred
to him by registration or failing registration, by delivery of possession. The second buyer must show continuing
good faith and innocence or lack of knowledge of the first sale until his
contract ripens into full ownership through prior registration as provided by
law. To merit protection under
Art. 1544, the second buyer must act in good faith from the time of the sale until
the registration of the same. (BARICUATRO,
JR. vs. COURT OF APPEALS, G.R. No. 105902,
February 9, 2000)
Under
Article 1544 of the Civil Code before the second buyer can obtain
priority over the first, he must show that he acted in good faith throughout
(i.e., in ignorance of the first sale and of the first buyer's rights) — from
the time of acquisition until title is transferred to him by registration or
failing registration, by delivery of possession. Knowledge gained by the second buyer of
the first sale defeats his rights even if he is first to register the second
sale, since such knowledge taints his prior registration with bad faith. (ANGEL BAUTISTA vs.
COURT OF APPEALS,
G.R. No. 123655, January 19, 2000)
Legal Redemption
A letter given by the vendee notifying the co-owner of the
sale of the co-owned property cannot be considered compliance with the notice requirement of
Art. 1623, NCC for purposes of legal redemption. Art. 1623 of the Civil Code is clear in
requiring that the written notification
should come from the vendor or prospective vendor, not from any other person.
In the second place, it makes sense to require that the notice required in Art. 1623 be given by the vendor and by nobody else.
The vendor of an undivided interest is in the best position to know who are his
co-owners who under the law must be notified of the sale. It is the
notification from the seller, not from anyone else, which can remove all doubts
as to the fact of the sale, its perfection, and its validity, for in a contract
of sale, the seller is in the best position to confirm whether consent to the
essential obligation of selling the property and transferring ownership thereof
to the vendee has been given. (FRANCISCO vs. BOISER, G.R. No.
137677, May 31, 2000)
Validity of Stipulations in a Lease
Contract
Jurisprudence supports the view that when parties to a
contract expressly reserve an option to terminate or rescind a contract upon
the violation of a resolutory condition, notice of resolution must be given to
the other party when such right is exercised. In Zulueta vs. Mariano, the SC ruled that resort to courts may be
necessary when the right involves the retaking of property which is not
voluntarily surrendered by the other party. The rationale for such ruling is
based on the thesis that no one should take the law into his own hands. In this
sense, the stipulation is legally vulnerable. Permitting the use of unqualified
force to repossess the property and without condition of notice upon the lessee
is fraught with dangerous possibilities. Such a broad stipulation cannot be
sanctioned for the reason that it would allow the lessor/owner to take the law
into his own hands, and undermine the philosophy behind the remedy of forcible
entry which is to prevent breach of the peace and criminal disorder and to compel the party out of possession to
respect and resort to the law alone to obtain what he claims to be his. (CAMPO ASSETS CORP. vs. CLUB X. O. COMPANY,
G.R. No. 134986, March 17, 2000)
Nature of Lease of Chattels
In the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use
thereof, otherwise, he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision
and control over the latter. The management of the business is in the owner’s
hands. The owner as holder of the certificate of public convenience must see to
it that the driver follows the route prescribed by the franchising authority
and the rules promulgated as regards its operations. This relationship may be applied by analogy
to taxi owners/operators and taxi drivers.
(JARDIN vs. NLRC, G.R. No. 119268,
February 23, 2000)
Right of First
Refusal of a Lessee
Art. 1622, NCC which only deals with small urban lands that are
bought for speculation where only adjoining lot owners can exercise the right
of pre-emption or redemption is not available to one who is not an adjoining lot owner, but a lessee
trying to buy the land that it was leasing.
Indeed the right of first refusal may be provided for in a lease
contract. However, such grant of the
right of first refusal must be clearly embodied in a written contract. (SEN PO
EK MARKETING CORP. vs. MARTINEZ
Renewal of Term of Lease
Pursuant
to Art. 1196, NCC, the period of the lease contract is deemed to have been set
for the benefit of both parties. Renewal of the contract may be had only upon
their mutual agreement or at the will of both of them. It is the owner-lessor’s
prerogative to terminate the lease at its expiration. The continuance,
effectivity and fulfillment of a contract of lease cannot be made to depend
exclusively upon the free and uncontrolled choice of the lessee between
continuing the payment of the rentals or not, completely depriving the owner of
any say in the matter. Mutuality does not obtain in such a contract of lease
and no equality exists between the lessor and the lessee since the life of the
contract would be dictated solely by the lessee. (BUCE vs. COURT OF APPEALS, G.R. No. 136913, May 12, 2000)
Extension of Lease
The provisions of a contract should not be read in isolation
from the rest of the instrument but, on the contrary, interpreted in the light
of the other related provisions in order to fix the meaning of any of its
parts. Furthermore, in a reciprocal
contract like a lease, the period of the lease must be deemed to have been
agreed upon for the benefit of both parties, absent language showing that the
term was deliberately set for the benefit of the lessee or lessor alone. (UNIVERSITY PHYSICIANS SERVICES, INC. vs.
CA, G.R. No. 115045, January 31, 2000)
Concept of Implied
New Lease
The prescriptive period
for an action of reformation should be counted from the date of
execution of the lease contract and not from the date of extension of the
same. First, Art. 1670 speaks of an
implied new lease (tacita reconduccion)
where at the end of the contract, the lessee continues to enjoy the thing
leased "with the acquiescence of the lessor", so that the duration of
the lease is "not for the period of the original contract, but for the
time established in Article 1682 and 1687." Hence, if the extended period
of lease was expressly agreed upon by the parties, then the term should be
exactly what the parties stipulated, not more, not less. Second, even if the
supposed 4-year extended lease be considered as an implied new lease under Art.
1670, "the other terms of the original contract" contemplated in said
provision are only those terms which are germane to the lessee’s right of
continued enjoyment of the property leased.
The prescriptive period of 10 years provided for in Art. 1144 for
reformation of an instrument applies by operation of law, not by the will of
the parties. (ROSELLO-BENTIR vs. LEANDA,
G.R. No. 128991, April 12, 2000)
V. TORTS AND DAMAGES
Damages
In seeking recovery for actual damages it is necessary that
the claimant produce competent proof or the best evidence obtainable such as
receipts to justify an award therefor.
Actual or compensatory damages
cannot be presumed but must be proved with reasonable degree of certainty. Only substantiated and proven expenses or
those which appear to have been genuinely incurred in connection with the
death, wake or burial of the victim will be recognized by the court.
Civil indemnity (ex delicto) requires no proof other than
the fact of death of the victim and assailant’s responsibility therefor.
Compensation
for lost income is in the nature of damages and as such requires due proof of
the damages suffered; there must be
unbiased proof of the deceased’s average income. (PEOPLE vs. EREñO, G.R. 1224706,
Feb. 22, 2000)
The award
authorized by criminal law as civil indemnity (ex delicto) for the offended
party is mandatory upon the finding of the fact of rape; it is distinct from and should not be
denominated as moral damages which are based on different jural foundation and
assessed by the court in the exercise of sound discretion. (PEOPLE vs. MENDIONA, G.R. No. 129056, Feb. 21, 2000)
As
a general rule, moral damages are not recoverable in actions for damages
predicated on a breach of contract for it is not one of the items enumerated
under Art. 2219 of the Civil Code. As an exception, such damages are
recoverable: (1) in cases in which the mishap results in the death of a
passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil
Code; and (2) in the cases in which the carrier is guilty of fraud or bad
faith, as provided in Art. 2220. (CALALAS vs. COURT OF APPEALS, G.R. No.
122039, May 31, 2000)
Indemnity for death is presently fixed at P50,000.00. As to actual damages. Art. 2199,NCC provides
that "except as provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he has
duly proved."
The civil liability of accused for indemnity for death and
actual and moral damages is solidary
Under Art. 2230,NCC, "exemplary damages as a part of
the civil liability may be imposed when the crime was committed with one or
more aggravating circumstances." (PEOPLE vs. BAUTISTA, G.R. No. 131840, April 27, 2000)
As to the matter of moral damages, the law clearly states
that one may only recover moral damages if they are the proximate result of the
other party’s wrongful act or omission.
Two elements are required. First,
the act or omission must be the proximate result of the physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation and similar injury. Second, the act must be wrongful. The rule has always been that moral damages
cannot be recovered from a person who has filed a complaint against another in
good faith.
Where a party is not entitled to actual or moral damages, an
award of exemplary damages is likewise baseless.
No premium should be placed on
the right to litigate and not every winning party is entitled to an automatic
grant of attorney’s fees. The party must
show that he falls under one of the instances enumerated in Article 2208 of the
Civil Code. Where the award of moral and
exemplary damages is eliminated, so must the award for attorney’s fees be
deleted. (OROSA vs. COURT OF APPEALS, G.
R. No. 111080, April 5, 2000)
The amount of
indemnity for loss of earning capacity is based on the income at the time of
death and the probable life expectancy of the victim. It should be stressed that the amount
recoverable is not the entire earnings, but only that portion which the
beneficiaries would have received. Thus,
indemnity for lost income refers to the victim's total earnings minus the
necessary living expenses. (PEOPLE
vs. CABANDE, G.R. No. 132747, February
8, 2000)
Any person who seeks
to be awarded actual or compensatory damages due to acts of another has the
burden of proving said damages as well as the amount thereof. Actual damages cannot be allowed unless
supported by evidence on the record. The
court cannot rely on speculation, conjectures or guesswork as to the fact and
amount of damages. To justify a grant of
actual or compensatory damages, it is necessary to prove with a reasonable
degree of certainty, the actual amount of loss.
Moral damages may be recovered in cases involving acts
referred to in Art. 21, NCC. As a rule, a public official may not recover
damages for charges of falsehood related to his official conduct unless he
proves that the statement was made with actual malice. (BAÑAS, JR. vs. COURT OF APPEALS, G.R. No. 102967, February 10, 2000)
The Court can only grant such amount for expenses if they
are supported by receipts. In the
absence thereof, no award for actual damages can be granted. (PEOPLE
vs. ALAGON, G.R. Nos. 126536-37,
February 10, 2000)
The heirs are also entitled to receive a compensation for
the loss of earning capacity of the victim. The formula for computing the same
as established in decided cases is as
follows:
Gross Necessary
Net
Earning = Life x Annual
- Living
Capacity Expectancy
Income Expenses.
(PEOPLE vs.
DANDO, G.R. No. 120646, February 14,
2000)
Attorney's fees
may be awarded if one who claims it is
compelled to litigate with third persons or to incur expenses to protect one's
interests by reason of an unjustified act or omission on the part of the party
from whom it is sought. (INDUSTRIAL INSURANCE
COMPANY vs. BONDAD, G.R. No. 136722,
April 12, 2000)
The requisites for an action for damages based on malicious
prosecution are: (1) the fact of the prosecution and the further fact that the
defendant was himself the prosecutor, and that the action was finally
terminated with an acquittal; (2) that in bringing the action, the prosecutor
acted without probable cause; and (3) the prosecutor was actuated or impelled
by legal malice. (BAYANI vs. PANAY
ELECTRIC CO., G.R. No. 139680, April 12,
2000)
The adverse result of an action does not make the
prosecution thereof wrongful neither does it subject the action to payment of
damages. The law does not impose a penalty to the right to litigate. Resort to judicial processes, by itself, is
not an evidence of ill will. As the mere act of filing criminal complaint does
not make the complainant liable for malicious prosecution. There must be proof
that the suit was performed by legal malice, an inexcusable intent to oppress, vex, annoy or humiliate. A contrary
rule would discourage peaceful resources to the court and unjustly penalize the
exercise of a citizen’s right to litigate. Where the action is filed in good
faith, no penalty should be imposed thereon. (VILLANUEVA vs. UNITED COCONUT PLANTERS BANK, G.R. No. 138291, March 7, 2000)
Recovery of Damages
in Negligent Acts
In quasi-delict, the negligence or fault should be clearly
established because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the existence of the
contract and the fact that the obligor, in this case the common carrier, failed
to transport his passenger safely to his destination. (CALALAS vs. COURT OF APPEALS, G.R. No. 122039, May 31, 2000)
Negligence;
Easement
Even if the heavy
rains constituted an act of God, one may still be held liable for damages to
the other. The event was not occasioned
exclusively by an act of God or force majeure; a human factor – negligence or
imprudence – had intervened. The effect
then of the force majeure in question may be deemed to have, even if only
partly, resulted from the participation of man.
Thus, the whole occurrence was thereby humanized, as it were, and
removed from the rules applicable to acts of God.
Article 637, NCC provides that lower
estates are imposed the obligation to receive the waters which naturally and
without the intervention of man descend from higher estates. However, where the waters which flow from a
higher state are those which are artificially collected in man-made lagoons,
any damage occasioned thereby entitles the owner of the lower or servient
estate to compensation. (REMMAN
ENTERPRISES vs. COURT OF APPEALS, G. R. No. 125018, April 6, 2000)
Rule Against Double Recovery in Negligence Cases
In negligence cases, the aggrieved party has the choice
between (1) an action to enforce civil liability arising from crime under
Article 100 of the Revised Penal Code; and (2) a separate action for quasi
delict under Article 2176 of the Civil Code. Once the choice is made, the
injured party can not avail himself of any other remedy because he may not
recover damages twice for the same negligent act or omission of the
accused. This is the rule against double
recovery. In other words, the same act
or omission can create two kinds of liability on the part of the offender, that
is, civil liability ex delicto, and
civil liability quasi delicto, either
of which may be enforced against the culprit, subject to the caveat under
Article 2177 of the Civil Code that the offended party can not recover damages
under both types of liability. (RAFAEL
REYES TRUCKING CORPORATION vs. PEOPLE, G.R. No. 129029, April 3, 2000)
Liability of an Educational Institution
It is the contractual obligation of the school to timely
inform and furnish sufficient notice and information to each and every student
as to whether he or she had already complied with all the requirements for the
conferment of a degree or whether they would be included among those who will
graduate. The negligent act of professor who fails to observe the rules of the
school, for instance by not promptly submitted a student’s grade, is not only
imputable to the professor but is an act of the school, being his employer.
Educational institutions are duty-bound to inform the student of their academic
status and not wait for the latter to inquire from the former. The conscious
indifference of a person to the rights or welfare of the person/persons who may
be affected by his act or omission can support a claim for damages. Want of care to the conscious disregard of
civil obligation coupled with a conscious knowledge the cause naturally
calculated to produce them would make the erring party liable. (UNIVERSITY OF THE
EAST vs. JADER, G.R. NO. 132344, February 17, 2000)
VI. CREDIT TRANSACTIONS
Escalation
Clause; Interest
Pursuant
to P.D. No. 1684 which became effective March 1980 wherein to be valid,
escalation clauses should provide: 1) that there can be an increase in interest
if increased by law or by the Monetary Board; and 2) in order for such
stipulation to be valid, it must include a provision for the reduction of the
stipulated interest in the event that the maximum rate of interest is reduced
by law or by the Monetary Board. Despite the validity of the escalation clause,
the contracting party may not, however,
increase the stipulated interest pursuant to the Central Bank Circular 494 from
12% to 17%. CB Circular 494, although
it has the force and effect of law, is not a law and is not the law
contemplated by the parties. (BANCO
FILIPINO SAVINGS & MORTGAGE BANK vs. COURT OF APPEALS, G.R. No.
129227, May 30, 2000)
Real Estate Mortgage
In a real
estate mortgage contract, it is essential that the mortgagor be the absolute
owner of the property to be mortgaged; otherwise, the mortgage is void. Buyers of unregistered real property,
especially banks, must exert due diligence in ascertaining the titles of
mortgagors and sellers, lest some innocent parties be prejudiced. Failure to
observe such diligence may amount to bad faith and may result in the nullity of
the mortgage, as well as of the subsequent foreclosure and/or auction
sale. (ROBLES vs. COURT OF APPEALS, G.R. No. 123509, March 14, 2000)
Rights
of a Mortgagee
A
mortgage is a contract entered into in order to secure the fulfillment of a
principal obligation. It is constituted by recording the document in which it
appears with the proper Registry of Property, although, even if it is not
recorded, the mortgage is nevertheless binding between the parties. Thus, the only
right granted by law in favor of the mortgagee is to demand the execution and
the recording of the document in which the mortgage is formalized. As a general
rule, the mortgagor retains possession of the mortgaged property since a
mortgage is merely a lien and title to the property does not pass to the
mortgagee. However, even though a mortgagee does not have possession of the
property, there is no impairment of his security since the mortgage directly
and immediately subjects the property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation for whose security it
was constituted. If the debtor is unable to pay his debt, the mortgage creditor
may institute an action to foreclose the mortgage, whether judicially or extrajudicially,
whereby the mortgaged property will then be sold at a public auction and the
proceeds therefrom given to the creditor to the extent necessary to discharge
the mortgage loan. Regardless of its
possessor, the mortgaged property may still be sold, with the prescribed
formalities, in the event of the debtor's default in the payment of his loan
obligation. (ISAGUIRRE vs. DE LARA, G.R.
No. 138053, May 31, 2000)
Legal Redemption; Mortgage
Under RA No. 3844, Section 12, "In case the landholding is sold to
a third person without the knowledge of the agricultural lessee, the latter
shall have the right to redeem the same at a reasonable price and
consideration. Provided, that the entire landholding sold must be redeemed.
Provided further, that where there are two or more agricultural lessees, each
shall be entitled to said right of redemption only to the extent of the area
actually cultivated by him. The right of redemption under this section may be
exercised within two (2) years from the registration of the sale and shall have
priority over any other right of legal redemption." (PHILBANCOR FINANCE vs. COURT OF APPEALS, G.R. No.
129572, June 26, 2000)
Concurrence and
Preference of Credit
Art. 2242, NCC provides that the claims of
contractors engaged in the construction, reconstruction or repair of buildings
or other works shall be preferred with respect to the specific building or
other immovable property constructed.
However, this provision only finds application when there is a
concurrence of credits, i.e. when the same specific property of the debtor is
subjected to the claims of several creditors and the value of such property of
the debtor is insufficient to pay in full all the creditors. In such a situation, the question of
preference will arise, that is, there will be a need to determine which of the
creditors will be paid ahead of the others.
This statutory lien should only be enforced in the context of some kind
of a procedure where the claims of all preferred creditors may be bindingly
adjudicated, such as in insolvency proceedings. (J.L. BERNARDO CONSTRUCTION vs. COURT OF APPEALS, G.R. No. 105827, January 31, 2000)
VII. LAND
Registration of
Land Under the Torrens System
Registration
has never been a mode of acquiring ownership over an immovable property. The purpose of the Land Registration Act is
not to create or vest title but to confirm and register already created and
already vested. (DBP vs. COURT OF
APPEALS, G.R. No. 129471, April 28,
2000)
Proof required in
Land Registration Proceedings
The burden of proof in land registration cases is incumbent
on the applicant who must show that he is the real and absolute owner in fee
simple of the land applied for. On him
also rests the burden to overcome the presumption that the land sought to be
registered forms part of the public domain considering that the inclusion in a
title of a part of the public domain nullifies the title.
The declaration by the applicant that the land applied for
has been in the possession of her predecessor-in-interest for a certain period,
does not constitute the "well-nigh incontrovertible" and
"conclusive" evidence required in land registration. Further, it
should be noted that tax declaration, by itself, is not considered conclusive
evidence of ownership in land registration cases. Rosario
Considering that the writ of possession was sought by Rosario Rosario ,
especially considering the evidentiary rule under Article 434 of the Civil Code
that a claimant of a parcel of land, such as Rosario ROSARIO VALERA
Evidence of Ownership
A Torrens Certificate of Title covers only the land
described therein together with improvements existing thereon, if any, nothing
more.
True, tax
declarations do not prove ownership. However, tax declarations can be strong
evidence of ownership when accompanied by possession for a period sufficient
for prescription. (SANTIAGO
Grant
of Title/Confirmation of Imperfect Title on Lands
Under the Regalian doctrine, all lands of the public domain
belong to the State, and that the State is the source of any asserted right to
ownership in land and charged with conservation of such patrimony. This same
doctrine also states all lands not otherwise appearing to be clearly within
private ownership are presumed to belong to the State. Hence, the burden of proof in overcoming the
presumption of State ownership of lands of the public domain is on the person
applying for registration. The applicant must also show that the land
subject of the application is alienable or disposable. The adverse possession which may be the basis
of a grant of title or confirmation of an imperfect title refers only to
alienable or disposable portions of the public domain. (BRACEWELL vs. COURT OF APPEALS, G.R. No. 107427,
January 25, 2000)
Remedies Available to Aggrieved Party in Registration
Proceedings
In
land registration proceedings, the rule is that whoever first acquires title to
a piece of land shall prevail. This rule refers to the date of the certificate
of title and not to the date of filing of the application for registration of
title. Hence, even though an applicant precedes another, he may not be deemed
to have priority of right to register title. As such, while his application is
being processed, an applicant is duty-bound to observe vigilance and to take
care that his right or interest is duly protected.
An applicant for registration has
but a one-year period from the issuance of the decree of registration in favor
of another applicant, within which to question the validity of the certificate
of title issued pursuant to such decree. Once the one-year period has lapsed,
the title to the land becomes indefeasible. However the aggrieved party is without a remedy at
law. If the property has not yet passed to an innocent purchaser for value, an
action for reconveyance is still available. If the property has passed into the
hands of an innocent purchaser for value, the remedy is an action for damages
against those who employed the fraud, and if the latter are insolvent, an
action against the Treasurer of the Philippines
Grant/Transfer of Friar Lands
In case the holder of the
certificate shall have sold his interest in the land before having complied
with all the conditions thereof, the purchaser from the holder of the
certificate shall be entitled to all the rights of the holder of the
certificate upon presenting his assignment to the Chief of the Bureau of Public
Lands for registration. In order that a
transfer of the rights of a holder of a certificate of sale of friar lands may
be legally effective, it is necessary that a formal certificate of transfer be
drawn up and submitted to the Chief of the Bureau of Public Lands for his
approval and registration. The law
authorizes no other way of transferring the rights of a holder of a certificate
of sale of friar lands. (DELA TORRE vs. COURT OF APPEALS, G.R. No.
113095, February 8, 2000)
Free Patent
In the
light of their open, continuous and notorious possession and occupation of the land, petitioners are deemed to have
acquired by operation of law, a right to a grant, a government grant without a necessity of a certificate of title
being issued. The land was “segregated from the public domain”. Accordingly,
the Director of Lands had no authority to issue a free patent thereto in favor
of another person. Verily, jurisprudence holds that free patent covering
private land is void. (ROBLES vs. COURT
OF APPEALS, G.R. No. 123509, March 14, 2000)
Presumptive
Conclusiveness of Torrens Title
If a
property covered by Torrens title is involved, the presumptive conclusiveness of such title should be given
due weight, and in the absence of strong compelling evidence to the contrary,
the holder thereof should be considered as the owner of the property in
controversy until his title is nullified or modified in an appropriate ordinary
action, particularly, when possession of the property itself is in the persons
named in the title. (LIM vs. COURT OF APPEALS, G.R. No. 124715, January 24, 2000)
Tenancy
The
requisites of a tenancy relationship are: (1)
the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) there is personal cultivation; and (5) there is sharing of harvest. Tenancy
relationship can only be created with the consent of the true and lawful
landholder who is either the owner, lessee, usufructuary or legal possessor of
the land, and not thru the acts of the supposed landholder who has no right to
the land subject of the tenancy. (BAUTISTA vs. ARANETA, G.R. No. 135829, February 22, 2000)
A tenant is defined
under Section 5 (a) of Republic Act No. 1199 as a person who himself and with
the aid available from within his immediate farm household cultivates the land
belonging to or possessed by another, with the latter's consent, for purposes
of production, sharing the produce with the landholder under the share tenancy
system, or paying to the landholder a price certain or ascertainable in produce
or in money or both under the leasehold tenancy system. Briefly stated, for
this relationship to exist, it is necessary that:
1. The parties are the landowner and the
tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.
Upon
proof of the existence of the tenancy relationship, a tenant could avail of the
right of redemption under RA 3844. This right of redemption is validly
exercised upon compliance with the following requirements: a) the redemptioner
must be an agricultural lessee or share tenant; b) the land must have been sold
by the owner to a third party without prior written notice of the sale given to
the lessee or lessees and the DAR in accordance with Sec. 11, RA 3844, as
amended; c) only the area cultivated by the agricultural lessee may be
redeemed; d) the right of redemption must be exercised within 180 days from
notice; and e) there must be an actual tender or valid consignation of the
entire amount which is the reasonable price of the land sought to be redeemed. (RUPA, SR. vs. COURT OF APPEALS, G.R. No. 80129,
January 25, 2000)
The right
of tenancy attaches to the landholding by operation of law. The leasehold
relation is not extinguished by the alienation or transfer of the legal possession
of the landholding. (PHILBANCOR FINANCE vs. COURT OF APPEALS, G.R. No.
129572, June 26, 2000)
RA 3844 allows only one heir to succeed to the tenancy of
the deceased tenant in the order of preference prescribed by Section 9 of the
said law. However, where the land is not cultivated by one
tenant alone (predecessor of the present claimants) but with other tenants who
are likewise qualified and who are related to him, this provision does not
apply. Thus, it can be said that the
entitlement of the other possessors is not by virtue of succession to the
rights of a predecessor-in-interest, but in their individual capacity as
tenants therein simultaneously with an ascendant.
Under Section 22 of RA 6657, the Comprehensive Agrarian
Reform Law, those entitled to the award of the land are: “Section 22. Qualified Beneficiaries – the
lands covered by the CARP shall be distributed as much as possible to landless
residents of the same barangay or in the absence thereof, landless residents of
the same municipality in the following order of priority:
a.)
agricultural lessees and share tenants
b.)
regular farm workers
c.)
seasonal farmworkers
d.)
other farmworkers
e.)
actual tillers or occupants of public
lands
f.)
collective or cooperatives of the above
beneficiaries
g.)
others directly working on the
land.
(GREENFIELD
REALTY CORP. vs. CARDAMA, G.R. No. 129246,
January 25, 2000)
Preferential Rights of Tenants under P.D. 1517
Jurisdictional
Requirements for Reconstitution of Title
The
requirements for reconstitution of title, under R.A. 26, Secs. 12 and 13, are the following: That the petition must state (1) the nature
and description of the buildings and improvements, if any, which do not belong
to the owner of the land, and the names and addresses of the owners of such building
and improvements, (2) the names and addresses of the occupants of the adjoining
properties and of all persons who may have any interest in the property, and
(3) that no deeds or other instrument affecting the property may have been
presented for registration; and That there should be notice and publication of
said petition. The failure to comply with
the requirements of publication and posting of notices prescribed in RA 26 Sec.
12 & 13 is fatal to the jurisdiction of the court. Hence, non-compliance with the jurisdictional
requirements renders its decision approving the reconstitution and all
proceedings therein utterly null and void. (HEIRS OF EULALIO RAGUA vs. COURT OF APPEALS,
G.R. 88521-22 & 89366-67, January 31, 2000)
CASE DIGESTS
I. PERSONS AND
FAMILY RELATIONS
Art.
26, NCC
CONCEPCION
G.R. No. 120706, January 31, 2000
Facts: Spouses
Nestor and Allem Nicolas reside in an apartment leased to them by Florence
Concepcion. The spouses engage in a
joint venture by supplying government agencies with office supplies and
equipment. Sometime in July 1985,
petitioner Rodrigo, brother of the deceased husband of Florence
accosted Nestor and accused him of conducting an adulterous relationship with Florence
Issue: Is
there a legal basis for the award of damages?
Held: Yes. The incident charged of Rodrigo was no less
than an invasion on the right of Nestor as a person. The philosophy behind Art. 26, NCC
underscores the necessity for its inclusion in our Civil Law. The Code Commission stressed in no uncertain
terms that the human personality be exalted.
Thus, under this article, the rights of a person are amply protected,
and damages are provided for violations of a person’s dignity, personality,
privacy and peace of mind. Further, the
violations mentioned in this codal provision are not exclusive but merely
examples and do not preclude other similar or analogous acts such as the one
involved in this case.
Prejudicial
Question
CHING vs. COURT OF APPEALS
G.R. No. 110844, April 27, 2000
Facts: On 04
February 1992, petitioner Ching was
charged before the RTC of Makati with four counts of estafa punishable under
Article 315 par. 1(b) of the Revised Penal Code, in relation to Presidential
Decree 115, otherwise known as the "Trust Receipts Law". On 05 March 1992, Ching, together with
Philippine Blooming Mills Co. Inc., filed a case before the RTC of Manila for declaration of
nullity of documents and for damages docketed as Civil Case No. 92-60600,
entitled "Philippine Blooming Mills, Inc. et. al. vs. Allied Banking Corporation."
On 07 August 1992, Ching filed a petition before the RTC-Makati, for the suspension of
the criminal proceedings on the ground of prejudicial question in a civil
action. Said court denied the petition
to suspend.
Issue: Does
the pendency of a civil action for damages and declaration of nullity of
documents constitute a prejudicial question as to warrant the suspension of
criminal proceedings?
Held: NO. As defined, a prejudicial question is one
that arises in a case the resolution of which is a logical antecedent of the
issue involved therein, and the cognizance of which pertains to another
tribunal. The prejudicial question must be determinative of the case before the
court but the jurisdiction to try and resolve the question must be lodged in
another court or tribunal. It is a
question based on a fact distinct and separate from the crime but so intimately
connected with it that it determines the guilt or innocence of the accused, and
for it to suspend the criminal action, it must appear not only that said case
involves facts intimately related to those upon which the criminal prosecution
would be based but also that in the resolution of the issue or issues raised in
the civil case, the guilt or innocence of the accused would necessarily be
determined. It comes into play generally
in a situation where a civil action and a criminal action are both pending and
there exists in the former an issue which must be preemptively resolved before
the criminal action may proceed, because howsoever the issue raised in the
civil action is resolved would be determinative juris et de jure of the guilt
or innocence of the accused in the criminal case.
More
simply, for the court to appreciate the pendency of a prejudicial question, the
law requires the concurrence of two essential requisites, to wit:
a) The civil action involves an issue similar
or intimately related to the issue raised in the criminal action; and
b) The resolution of such issue determines
whether or not the criminal action may proceed.
Verily,
under the prevailing circumstances, the alleged prejudicial question in the
civil case for declaration of nullity of documents and for damages, does not
juris et de jure determine the guilt or innocence of the accused in the
criminal action for estafa. Assuming arguendo that the court hearing the civil
aspect of the case adjudicates that the transaction entered into between the
parties was not a trust receipt agreement, nonetheless the guilt of the accused
could still be established and his culpability under penal laws determined by
other evidence. To put it differently, even on the assumption that the
documents are declared null, it does not ipso facto follow that such
declaration of nullity shall exonerate the accused from criminal prosecution
and liability.
Therefore, the civil action for declaration of nullity of
documents and for damages does not constitute a prejudicial question to the
criminal cases for estafa filed against petitioner.
BELTRAN vs. PEOPLE
G.R.
No. 137567, June 20, 2000
Facts: Petitioner
Meynardo Beltran sought a declaration of nullity of his marriage on the ground
of psychological incapacity before the RTC of QC. His wife, Charmaine Felix alleged that it was
petitioner who abandoned the conjugal home and lived with a certain woman named
Milagros Salting. Later on, upon complaint of Charmaine, a criminal case for
concubinage was instituted before the Metropolitan TC of Mkti. City against
petitioner and his paramour. Petitioner
moved to defer the proceedings arguing that the pendency of the civil case for
declaration of nullity of his marriage
posed a prejudicial question to the determination of the criminal
case.
Issue: Does a
pending petition for declaration of nullity of marriage constitute a
prejudicial question that should merit the suspension of the criminal case for
concubinage?
Held: NO. Pendency of a civil action for nullity of
marriage does not pose a prejudicial question in a criminal case for
concubinage.
The rationale behind the principle of prejudicial
question is to avoid two conflicting decisions. It has two essential elements:
(a) the civil action involves an issue similar or intimately related to the
issue raised in the criminal action; and (b) the resolution of such issue
determines whether or not the criminal action may proceed. For a civil case to be considered
prejudicial to a criminal action as to cause the suspension of the latter
pending the final determination of the civil case, it must appear not only that
the said civil case involves the same facts upon which the criminal prosecution
would be based, but also that in the resolution of the issue or issues
raised in the aforesaid civil action, the guilt or innocence of the accused
would necessarily be determined.
In
a case for concubinage, the accused, like the herein petitioner need not
present a final judgment declaring his marriage void for he can adduce evidence
in the criminal case of the nullity of his marriage other than proof of a final
judgment declaring his marriage void. Article
40 of the Family Code provides:
"The
absolute nullity of a previous marriage may be invoked for purposes of
remarriage on the basis solely of a final judgment declaring such previous
marriage void."
In Domingo vs. CA, this
Court ruled that the import of said provision is that for purposes of
remarriage, the only legally acceptable basis for declaring a previous marriage
an absolute nullity is a final judgment declaring such previous marriage void,
whereas, for purposes of other than remarriage, other evidence is acceptable.
With regard to
petitioner's argument that he could be acquitted of the charge of concubinage
should his marriage be declared null and void, suffice it to state that even a
subsequent pronouncement that his marriage is void from the beginning is not a
defense. Parties to the marriage should
not be permitted to judge for themselves its nullity, for the same must be
submitted to the judgment of the competent courts and only when the nullity of
the marriage is so declared can it be held as void, and so long as there is no
such declaration the presumption is that the marriage exists for all intents
and purposes. Therefore, he who cohabits with a woman not his wife before the
judicial declaration of nullity of the marriage assumes the risk of being
prosecuted for concubinage.
Property Regime of
Unions Without Marriage (Art. 148, FC); Support; Retroactive Application of the
Family Code
TUMLOS vs. FERNANDEZ
G.R. No. 137650, April 12, 2000
Facts: Respondent-spouses
Mario and Lourdes Fernandez filed an action for ejectment against petitioner
Guillerma Tumlos and her two children. In her Answer, Guillerma averred that
the Fernandez spouses had no cause of action against her, since she is a
co-owner of the subject premises as evidenced by a Contract to Sell wherein it was
stated that she is a co-vendee of the property in question together with Mario.
The MTC ruled for the spouses Fernandez.
Upon appeal to the RTC, Guillerma alleged that Mario and Guillerma had an amorous
relationship, and that they acquired the property in question as their love
nest, that they lived together in the apartment building subject of the
ejectment suit with their 2 children for around 10 years, and that Guillerma
administered the property by collecting rentals from the lessees of the other apartments,
until she discovered that Mario deceived her as to the annulment of his
marriage. The RTC ruled that Guillerma and Mario acquired the property during
their cohabitation as husband and wife, although without the benefit of
marriage, it concluded that Guillerma Tumlos was a co-owner of the subject
property and could not be ejected therefrom.
Issues: 1. Did
Guillerma have the right of co-ownership over the property in question?
2. Does the right to support (for shelter) of illegitimate children
prevail over the right of the spouses to eject them?
Held: 1. NO.
There was no proof of actual contribution by Guillerma in the purchase
of the subject property. Her only evidence was her being named in the Contract
to Sell as the wife of Mario. Since she failed to prove that she contributed
money to the purchase price of the subject apartment building, there is no
basis to justify her co-ownership with Mario. The said property is thus
presumed to belong to the conjugal partnership property of Mario and Lourdes
Fernandez, it being acquired during the subsistence of their marriage and no
other proof to the contrary. It is clear
that actual contribution is required by Art. 148 of the Family Code, in contrast
to Art. 147 . which states that 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. The care given by one party [to] the home,
children, and household, or spiritual or moral inspiration provided to the
other, is not included in Art.148.
Hence, if actual contribution of the party is not proved, there will be
no co-ownership and no presumption of equal shares
2. NO. Article 203 of the Family Code expressly provides
that the obligation to give support shall be demandable from the time the
person who has the right to receive the same needs it for maintenance, but it
shall not be paid except from the date of the judicial or extra-judicial
demand. Thus, it cannot be presumed. No demand was made by Guillerma to make
the obligation to give support for dwelling demandable.
Judicial Declaration of Presumptive Death of a Spouse
ARMAS
vs. CALISTERIO
G. R. No. 136467, April 6, 2000
Facts: On
April 24, 1992, Teodorico Calisterio died intestate, leaving parcels of
land. He was survived by his wife,
respondent Marietta Calisterio.
Teodorico was the second husband of Marietta Marietta
found a new romance in the loving arms of Teodorico when the two got married on
May 8, 1958, without Marietta
On October 9, 1992, herein petitioner
Antonia, a surviving sister of Teodorico, filed with the RTC of Quezon City a
petition for the granting of letters of administration, claiming herself to be
the sole surviving heir of Teodorico, the marriage between the latter and
respondent Marietta
Issue: Was
the subsequent marriage between Teodorico and Marietta
invalid due to Marietta
Held: NO. The subsequent marriage was valid. When the marriage between Teodorico and Marietta
Hence, the applicable provision is Art.
83, NCC which provides that a subsequent marriage contracted during the
lifetime of the first spouse is illegal and void ab initio unless the prior marriage
is first annulled or dissolved, except when the first spouse (1) has been
absent for seven consecutive years at the time of the second marriage without
the spouse present having news of the absentee being alive, or (2) if absent
for less than seven years, is generally considered as dead and believed to be
so by the spouse present at the time of contracting such subsequent marriage,
or (3) is presumed dead according to Articles 390 and 391of the Civil
Code. For the exception to apply, the
subsequent marriage must have been made in good faith. A judicial declaration of absence of the
absentee spouse is not necessary as long as the prescribed period of absence is
met. The marriage under these
exceptional cases is deemed to be valid “until declared null and void by a
competent court.” In contrast, under the
1988 Family Code, in order that a subsequent bigamous marriage may
exceptionally be considered valid, the following conditions must concur: (a)
the prior spouse of the contracting party must have been absent for four
consecutive years, or two years where the danger of death under the
circumstances in Article 391 of the Civil Code at the time of disappearance;
(b) the spouse present has a well founded belief that the absent spouse is
already dead; and (c) there is, unlike the old rule, a judicial declaration of
presumptive death of the absentee for which purpose the spouse present can
institute a summary proceeding in court to ask for that declaration.
In the case at bar, Marietta
Validity of
Marriage; Marriage License Required
SY vs. COURT OF APPEALS
G.R.
No. 127263, April 12, 2000
Facts: Filipina Sy filed a petition for the declaration of
absolute nullity of her marriage to Fernando Sy on the ground of psychological
incapacity. To show the manifestations of her husband’s psychological
incapacity, she presented the following proofs: 1) final judgment rendered in
her favor, in her previous petitions for separation of property and legal
separation; 2) Fernando's infliction of physical violence on her which led to
the previous conviction of her husband for slight physical injuries; 3)
habitual alcoholism; 4) refusal to live with her without fault on her part,
choosing to live with his mistress instead; and 5) refusal to have sex with
her, performing the marital act only to satisfy himself. The petition was denied.
Hence the present petition whereby
Filipina raises for the first time the nullity of their marriage on the ground
of the lack of marriage license at the time of the celebration of the marriage.
Issue: Is the marriage
between Filipina and Fernando void from the beginning for lack of a marriage
license at the time of the ceremony?
Held: The documents (marriage certificate,
photocopies of birth certificates of their children, marriage license) and
pleadings submitted by Filipina show the incongruity between the date of the
actual celebration of their marriage (November 15, 1973) and the date of the
issuance of their marriage license (September 17, 1974). The ineluctable conclusion is that the
marriage was indeed contracted without a marriage license. A marriage license
is a formal requirement, its absence renders the marriage void ab initio.
There
being no claim of an exceptional character, the purported marriage between
Filipina and Fernando could not be classified among those exempt from the marriage
license requirement.
Exemption from Marriage License; Declaration of
Nullity of a Void Marriage
Niñal vs. Bayadog
G.R. No. 133778, March 14, 2000
Facts: Pepito
Niñal was married to Teodulfa Bellones on September 26, 1974. Out of their marriage
were born herein petitioners. Teodulfa was shot by Pepito resulting in her
death on April 24, 1985. One year and eight months thereafter Pepito and Norma
Badayog got married without any marriage license. In line thereof, Pepito and
Norma executed an affidavit stating that they have lived together at least five
years and more thus exempt for securing a marriage license. Pepito died in a
car accident. After their father’s death, petitioners filed a petition for
declaration of nullity of the marriage of Pepito and Norma alleging that said
marriage was void for lack of marriage license. Norma filed a motion to dismiss
on the ground that the petitioners have no cause of action since they are not
among the persons who can file action for annulment of marriage under Article
47 of the Family Code.
Issues: 1. What nature of cohabitation is contemplated
by law to warrant the counting of the five-year period in order to exempt the
future spouses from securing a marriage license?
2. Do the petitioners have the personality to
file a petition to declare their father’s marriage void ab initio after his
death?
Held: The 5-year
period should be computed on the basis of a
cohabitation as “husband and wife” where the only missing factor is the
special contract of marriage to validate the union.
The two marriages involved herein having been
solemnized prior to the effectivity of the Family Code (FC), the applicable law
to determine their validity is the Civil Code which was the law in effect at
the time of their celebration. A valid
marriage license is a requisite of marriage under Art. 53 of the Civil Code,
the absence of which renders the marriage void ab initio. However there are
several instances recognized by the Civil Code wherein a marriage license is
dispensed with, one of which is that provided in Art. 76, referring to the
marriage of a man and a woman who have lived together and exclusively with each
other as husband and wife for a continuous and unbroken period of at least five
years before the marriage. There is no dispute that the marriage of
petitioners' father to respondent Norma was celebrated without any marriage
license. In lieu thereof, they executed an affidavit stating that "they
have attained the age of majority, and, being unmarried, have lived together as
husband and wife for at least five years, and that we now desire to marry each
other." Working on the assumption that Pepito and Norma have lived
together as husband and wife for five years without the benefit of marriage,
that five-year period should be computed on the basis of a cohabitation as
"husband and wife" where the only missing factor is the special
contract of marriage to validate the union. In other words, the five-year
common-law cohabitation period, which is counted back from the date of
celebration of marriage, should be a period of legal union had it not been for
the absence of the marriage. This 5-year period should be the years immediately
before the day of the marriage and it should be a period of cohabitation characterized
by exclusivity — meaning no third party was involved at any time within the 5
years and continuity — that is unbroken. Otherwise, if that continuous 5-year
cohabitation is computed without any distinction as to whether the parties were
capacitated to marry each other during the entire five years, then the law
would be sanctioning immorality and encouraging parties to have common law
relationships and placing them on the same footing with those who lived
faithfully with their spouse.
2. YES. Petitioners have the personality to file the
petition. Having determined that the
second marriage involved in this case is not covered by the exception to the
requirement of a marriage license, it is void ab initio because of the absence
of such element. The Family Code is silent as to who can file a petition to
declare the nullity of a marriage. A void marriage can be attacked collaterally
and can be questioned even after the death of either party. That is why the
action or defense for nullity is imprescriptible. Any proper interested party
may attack a void marriage. Contrary to
the trial court's ruling, the death of petitioner's father extinguished the
alleged marital bond between him and respondent. The conclusion is erroneous
and proceeds from a wrong premise that there was a marriage bond that was
dissolved between the two. It should be noted that their marriage was void
hence it is deemed as if it never existed at all and the death of either
extinguished nothing.
Property Relations of Unions Without Marriage
ADRIANO vs.
COURT OF APPEALS
G.R. No.
124118, March 27, 2000.
Facts: The
testator Lucio Adriano, married Gliceria Dorado in 1933 and they had 3
children, herein private respondents. Sometime in 1942 or prior thereto, Lucio
cohabited with Vicenta Villa, with whom he had 8 children. All his children by Vicenta are the named
petitioners in the instant case, with the exception of Jose Vergel, who died
before the inception of the proceedings.
After the death of Gliceria in 1968, Lucio married Vicenta. In 1980, Lucio executed a will disposing of
all his properties to his second wife Vicenta and all his children by his first
and second marriages. While estate
settlement proceedings were pending before the RTC, petitioners instituted an
action for annulment of Lucio’s will. In the complaint, petitioners alleged
that before the marriage of Lucio and their mother, Vicenta, the two lived
together as husband and wife and as such, acquired properties which became the
subject of inventory and administration in the petition for probate of the
will. Petitioners claimed that the properties bequeathed in Lucio's will are
undivided "civil partnership and/or conjugal properties of Lucio and
Vicenta ", and thus, the will sought to be probated should be declared void
and ineffective insofar as it disposes of the rightful share or properties of
Vicenta.
The trial court
favored the evidence of private respondents, which indicated that the purchase
money for the contested properties came from the earnings of Lucio during the
subsistence of his marriage to Gliceria.
Issue: Is Vicenta a
co-owner with respect to ½ of the properties in question or does the entire
property belong to the conjugal partnership of Lucio and Gliceria?
Held: NO.
Petitioners' insistence that a co-ownership of properties existed between Lucio
and Vicenta during their period of cohabitation before their marriage in 1968
is without lawful basis considering that Lucio's marriage with Gliceria was
then subsisting. The co-ownership in Article 144 of the Civil Code requires that the man and woman living
together as husband and wife without the benefit of marriage must not in any
way be incapacitated to marry. Considering that the property was acquired in
1964, or while Lucio's marriage with Gliceria subsisted, such property is
presumed to be conjugal unless it be proved that it pertains exclusively to the
husband or to the wife.
In Belcodero vs. CA, the SC held that property acquired by a
man while living with a common-law wife during the subsistence of his marriage
is conjugal property, even when the property was titled in the name of the
common-law wife. In such cases, a constructive trust is deemed to have been
created by operation of Article 1456 of the Civil Code over the property which
lawfully pertains to the conjugal partnership of the subsisting marriage.
In
Vicenta's case, it is clear that her designation as a co-owner of the property
in the TCT is a mistake which needs to be rectified by the application of the
foregoing provisions of Article 1456 and the ruling in Belcodero. The principle
that a trustee who takes a Torrens title in
his or her name cannot repudiate the trust by relying on the registration, is a
well-known exception to the principle of conclusiveness of a certificate of
title.
PROPERTY
Property of Public
Dominion
LANSANG vs. COURT OF APPEALS
G.R. No. 102667, February 23, 2000
Facts: Private
respondents General Assembly of the Blind, Inc. (GABI) and Jose Iglesias were
allegedly given office and library space as well as kiosks area for sale of
food and drinks in Rizal
Park
To clean up Rizal Park
Issue: Did
petitioner Amado Lansang abuse his authority in ordering the ejectment of
private respondents GABI and Iglesias?
Held: NO.
There is no evidence of abuse of authority on the part of the
petitioner.
Like public street, public parks are beyond the commerce of
man and, thus, could not be the subject of a lease contract. Admittedly, there was no written
contract. That private respondents were
allowed to occupy office and kiosk spaces in the park was only a matter of
accommodation by the previous administrator.
This being so, petitioner may validly discontinue the accommodation to
private respondents, who may be ejected from the park when necessary. Private respondents cannot and does not claim
a vested right to continue to occupy Rizal
Park
Builder in Good
Faith
G.R. No. 134329, January 19, 2000.
Facts: One
Jacinto Pada died intestate leaving 6 children.
His estate included a parcel of land located at Poblacion, Matalom, Leyte .
During the lifetime of Jacinto Pada, his half-brother,
Feliciano Pada, obtained permission from him to build a house on the northern
portion of subject land. When Feliciano
died, his son, Pastor, continued living in the house together with his 8
children. Petitioner Verona Pada-Kilario, one of Pastor's children, has been
living in that house since 1960.
In 1993, private respondent Silverio Pada bought the
co-ownership right over the subject land of one of the heirs of Jacinto. Thereafter, he demanded that petitioner
spouses vacate the northern portion of the subject land so his family can
utilize the said area. They went through a series of meetings with the barangay
officials concerned for the purpose of amicable settlement, but all earnest
efforts toward that end, failed.
Consequently, Silverio instituted a complaint for ejectment with prayer
for damages against petitioner spouses.
The petitioner spouses were eventually ordered to remove their house at their expense unless
Silverio exercises the option of acquiring the same.
Issue: Are the
petitioner spouses Pada-Kilario builders in good faith as to be entitled to
reimbursement for improvements made on the property?
Held: No.
Petitioner spouses explicitly admitted in their Answer that they had
been occupying the subject property since 1960 without ever paying any rental
as they only relied on the liberality and tolerance of the Pada family.
Considering that they were in possession of the subject property by sheer
tolerance of its owners, they knew that their occupation of the premises may be
terminated any time. Thus, they cannot be considered possessors nor builders in
good faith. It is well-settled that both Article 448 and Article 546, NCC which allow full
reimbursement of useful improvements and retention of the premises until
reimbursement is made, apply only to a possessor in good faith, i.e., one who builds
on land with the belief that he is the owner thereof. Verily, persons whose
occupation of a realty is by sheer tolerance of its owners are not possessors
in good faith. Neither did the promise of the alleged owners that they were
going to donate the premises to petitioners convert them into builders in good
faith for at the time the improvements were built on the premises, such promise
was not yet fulfilled, i.e., it was a mere expectancy of ownership that may or
may not be realized. As such, petitioner spouses cannot be said to be entitled
to the value of the improvements that they built on the said lot.
Builder in Bad
Faith
ISAGUIRRE vs. DE LARA
G.R. No. 138053, May 31, 2000
Facts: Petitioner
Isaguirre and respondent De Lara were parties
in a case involving a parcel of land wherein there was dispute as to its
ownership as well as the nature of the transaction they entered into regarding
the disputed land. The case was resolved by the Supreme Court which declared
that De Lara was the lawful owner of the land and held that the contract they
entered into was an equitable mortgage and not a sale.
On the basis of the Court’s decision, De Lara filed a motion
for execution with the trial court for the delivery of possession of the land.
Isaguirre opposed the motion, asserting that, as mortgagee, he had the right of
retention over the property until
payment of the value of the improvements, arguing that he is builder in good
faith with respect to the said improvements he made before the transaction was
declared to be an equitable mortgage.
Issue: Can
Isaguirre be considered a builder in good faith?
Held: No. Isaguirre is not a builder in good
faith. He is a possessor in bad
faith. It is evident that petitioner
knew from the very beginning that there was really no sale and that he held
respondent's property as mere security for the payment of the loan obligation
Therefore, petitioner may claim reimbursement only for necessary expenses;
however, he is not entitled to reimbursement for any useful expenses which he may have incurred.
Quieting of Title; Termination of
Co-ownership by Prescription
ROBLES vs. COURT OF APPEALS
G.R. No. 123509, March 14, 2000
Facts: The
property subject of this case is originally owned by Leon Robles. When he died, it passed to his son Silvino
who declared the property in his name and paid the taxes thereon. Upon the latter’s death, his widow and
children inherited the property. Petitioners Lucio Robles, et al. were the
children of Silvino, and Hilario Robles is their half-brother. The task of
cultivating was assigned to Lucio while
the payment of the land taxes was entrusted to Hilario. For unknown reason, the
tax declaration of the parcel of land in the name of Silvino was cancelled and
transferred to Exequiel Ballena. Ballena secured a loan from Antipolo Rural Bank using the tax declaration
as security. Somehow the tax declaration was transferred to the name of
Antipolo Rural Bank and later was transferred to the name of respondent- spouses Hilario and
Andrea Robles. Andrea secured a loan from Cardona Rural Bank using the tax declaration as
security. For failure to pay the
mortgage debt, the property was foreclosed with Cardona Rural Bank emerging
as the highest bidder. The bank sold the property to spouses Vergel and Ruth Santos. In Sept. 1987, petitioners discovered the
mortgage and attempted to redeem the property but was unsuccessful. In 1988, the spouses Santos Santos
Issues: 1. Do
the petitioners have appropriate title
that will entitle them to the remedy of the quieting of title?
2.
Did Hilario acquire the share of his co-owners in the disputed property
by prescription?
Held: 1. YES. An action to quiet title, under Art. 476,
NCC, is a common-law remedy for the
removal of any cloud or doubt or uncertainty on the title to real property. It is essential for the plaintiff or
complainant to have a legal or an equitable title to or interest in the real
property which is the subject matter of the action. Also, the deed, claim, encumbrance or
proceeding that is being alleged as a cloud on plaintiff's title must be shown
to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy. That there is an instrument or a document which, on
its face, is valid and efficacious is clear in the present case. Petitioners
allege that their title as owners and possessors of the disputed property is
clouded by the tax declaration and, subsequently, the free patent thereto
granted to Spouses Santos. Petitioners
anchor their claim on their open and continuous possession as owners. Spouses Santos
2. NO. Hilario
effected no clear and evident repudiation of the co-ownership. It is a
fundamental principle that a co-owner cannot acquire by prescription the share
of the other co-owners, absent any clear repudiation of the co-ownership. In
order that the title may prescribe in favor of a co-owner, the following
requisites must concur: (1) the co-owner has performed unequivocal acts of
repudiation amounting to an ouster of the other co-owners; (2) such positive
acts of repudiation have been made known to the other co-owners; and (3) the
evidence thereof is clear and convincing. In the present case, Hilario did not
have possession of the subject property; neither did he exclude the petitioners
from the use and the enjoyment thereof, as they had indisputably shared in its
fruits. Likewise, his act of entering
into a mortgage contract with the bank cannot be construed to be a repudiation
of the co-ownership. As absolute owner of his undivided interest in the land,
he had the right to alienate his share, as he in fact did. Neither should his payment of land taxes in
his name, as agreed upon by the co-owners, be construed as a repudiation of the
co-ownership. The assertion that the declaration of ownership was tantamount to
repudiation was belied by the continued occupation and possession of the
disputed property by the petitioners as owners.
Quieting of Title; Laches; Freedom to
Enter into Contracts; Waiver of Rights
MAESTRADO vs. COURT OF APPEALS
G.R. No. 133345 & 133324, March 9,
2000.
Facts: The spouses Ramon and Rosario Chaves died intestate
leaving several properties. They were
survived by their six children who later entered into a project of partition
which was approved by the court.
Accordingly, the estate was divided and distributed to the heirs. Lot 5872,
for some reason however, was not included in the project of partition, nor in
the inventory. During the actual
partition in 1956, Lot 5872 was delivered to
petitioners Josefa Maestrado and her children, one of the heirs. The non-inclusion of said lot was discovered
only in 1976. In an effort to set things
right, petitioners prepared a quitclaim in their favor to confirm to the
alleged oral agreement, which notarized quitclaim was signed by the other
heirs. Six years after the execution of
said quitclaim, or in 1983, respondents, children of the other heirs,
discovered that Lot 5872 is still in the name
of the deceased spouses Chaves. They requested that the property be divided
and distributed to the heirs. In
response, petitioners filed an action for quieting of title. Respondents argued, among others, that
petitioners have no standing to sue for the quieting of title and that their
action is barred by laches. They likewise
assailed the validity and due execution of the quitclaim. The trial court declared that Lot 5872 is still common property and ordered its
division among the heirs.
Issues: 1. Do the petitioners have the legal
standing to sue for quieting of title?
If so, is such action barred by laches?
2.
Is Lot No. 5872
still a common property?
Held: 1. YES.
Petitioners are proper parties to bring an action for quieting of title.
Persons having legal as well as equitable title to or interest in a real
property may bring such action and "title" here does not necessarily
denote a certificate of title issued in favor of the person filing the
suit. Moreover, if the plaintiff in an
action for quieting of title is in possession of the property being litigated,
such action is imprescriptible. One who
is in actual possession of a land, claiming to be the owner thereof may wait
until his possession is disturbed or his title is attacked before taking steps
to vindicate his right because his undisturbed possession gives him a
continuing right to seek the aid of the courts to ascertain the nature of the
adverse claim and its effects on his title.
Although prescription and laches are distinct concepts, nonetheless in
some instances, the doctrine of laches is inapplicable where the action was
filed within the prescriptive period provided by law. Thus, laches does not apply in this case
because petitioners' possession of the subject lot has rendered their right to
bring an action for quieting of title imprescriptible and, hence, not barred by
laches. Moreover, since laches is a creation of equity, acts or conduct alleged
to constitute the same must be intentional and unequivocal so as to avoid
injustice. Laches 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. In the case at bench, the cloud on
petitioners' title to the subject property came about only on December 1, 1983
when Angel Chaves transmitted respondents' letters to petitioners, while
petitioners' action was filed on December 22, 1983. Clearly, no laches could
set in under the circumstances since petitioners were prompt and vigilant in
protecting their rights.
2. NO.
Lot No. 5872 is no longer common property of the heirs of the deceased
spouses Chaves. Petitioners' ownership over said lot was acquired by reason of
the oral partition agreed upon by the deceased spouses' heirs sometime before
1956. That oral agreement was confirmed by the notarized quitclaims executed by
the said heirs. Nevertheless, respondent court was convinced that Lot No. 5872
is still common property of the heirs of the spouses Chaves because the TCT
covering the said property is still registered in the name of the said spouses.
Unfortunately, respondent court was oblivious to the doctrine that the act of
registration of a voluntary instrument is the operative act which conveys or
affects registered land insofar as third persons are concerned. Hence, even
without registration, the contract is still valid as between the parties. Neither a Transfer Certificate of Title nor a
subdivision plan is essential to the validity of an oral partition. Since the oral partition has been duly
established, the notarized quitclaims confirmed such prior oral agreement as
well as the petitioners' title of ownership over the subject Lot No. 5872. More
importantly, independent of such oral partition, the quitclaims in the instant
case are valid contracts of waiver of property rights. The freedom to enter
into contracts, such as the quitclaims, is protected by law and the courts are not quick to interfere
with such freedom unless the contract is contrary to law, morals, good customs,
public policy or public order.
Quitclaims, being contracts of waiver, involve the relinquishment of
rights, with knowledge of their existence and intent to relinquish them. The intent to waive rights must be clearly
and convincingly shown. Moreover, when the only proof of intent is the act of a
party, such act should be manifestly consistent and indicative of an intent to
voluntarily relinquish a particular right such that no other reasonable
explanation of his conduct is possible.
In the instant case, the terms of the subject quitclaims are clear; and
the heirs' signatures thereon have no other significance but their conformity
thereto resulting in a valid waiver of property rights.
Preference of
Possession; Ownership
CEQUENA vs. BOLANTE
G. R. No. 137944, April 6, 2000
Facts: Since
1926, a parcel of land was declared in the name of Sinforoso Mendoza, father of
respondent Bolante. When Sinforoso died
in 1930, his brother Margarito Mendoza, father of petitioners Cequena and
Lirio, took possession of the land and cultivated it with his son Miguel
(brother of petitioners). At the same
time, respondent and her mother continued residing in the lot. When respondent came of age in 1948, she paid
realty taxes for the years 1932-1948, and thereafter. On the basis of an affidavit allegedly signed
by respondent and her mother, the tax declaration in the name of Sinforoso of
the contested lot was cancelled and subsequently declared in the name of
Margarito in 1953 who paid its realty taxes beginning 1952. When Margarito died, Miguel continued
cultivating the land until 1985 when he was physically ousted by the
respondent.
Based on the foregoing, the trial court
resolved the issue of lawful ownership and possession favor of
petitioners.
Issue: As
between the claimants, who is the preferred possessor and the lawful owner of
the subject parcel of land?
Held: Respondent
is the preferred possessor and lawful owner of the disputed land. Despite their dispossession in 1985, the
petitioners did not lose legal possession because possession cannot be acquired
through force or violence. A possessor,
even if physically ousted, is still deemed the legal possessor. However, possession by the petitioners does
not prevail over that of the respondent.
Their possession before 1985 was not exclusive, as the latter also
acquired it before 1985. Petitioner’s
father and brother, as well as the respondent and her mother were
simultaneously in adverse possession of the land. Based on Article 538 of the
Civil Code, respondent is the preferred possessor because, benefiting from her
father’s tax declaration of the subject lot since 1926, respondent has been in
possession thereof for a longer period.
On the other hand, petitioners’ father acquired joint possession only in
1952.
As to the issue of
ownership, respondent argues that she was legally presumed to possess the
subject land with a just title since she possessed it in the concept of
owner. Under Article 541 of the Civil
Code, she could not be obliged to show or prove such title. This is untenable since the presumption in
Article 541 is merely disputable.
Article 538 settles only the question of possession, and possession is
different from ownership. Ownership in
this case should be established in one of the ways provided by law.
Between the claimants, ownership shall be vested to the one
who has proven acquisitive prescription.
Respondent’s possession was not disturbed until 1953 when petitioners’
father claimed the land. But by then,
her possession, which was in the concept of owner – public, peaceful, and uninterrupted
– had already ripened into ownership.
Furthermore she herself declared and paid realty taxes for the disputed
land. Tax receipts and declarations of
ownership for taxation, when coupled with proof of actual possession of the
property, can be the basis of a claim for ownership through prescription. In contrast, petitioners did not acquire
ownership despite 32 years (1953-1985) of farming the subject land. It is settled that ownership cannot be
acquired by mere occupation. Unless it
is hostile, occupation and use, however long, will not confer title by
prescription or adverse possession.
Moreover, the petitioners cannot claim that their possession was public,
peaceful and uninterrupted. Although
their father and brother arguably acquired ownership through extraordinary
prescription because of their adverse possession of 32 years, this supposed
ownership can not extend to the entire disputed lot, but must be limited to the
portion that they actually farmed. The
tax declarations and receipts of petitioners are only prima facie, not
conclusive, evidence of ownership in the absence of actual public and adverse
possession.
Donation Inter
Vivos; Repudiation Of Inheritance; Escheat
REPUBLIC vs. GUZMAN
G.R. No.132964, Feb. 18, 2000
Facts:
Respondent David Rey Guzman, a natural born American citizen
is the son of spouses Simeon Guzman , naturalized American citizen and Helen
Meyers Guzman, American citizen. In
1968, Simeon died living to his sole heirs Helen and David an estate consisting of several parcels of land located
in Bulacan. Thereafter, Helen and David executed a Deed of Extrajudicial
settlement dividing and adjudicating to themselves the property belonging to the estate of Simeon. The document was registered in the Register
of Deeds and the parcels of land were accordingly registered in the name of
Helen and David in undivided equal shares.
In 1981, Helen executed a Quitclaim Deed conveying to David her
undivided ½ interest on said lands. On
Aug. 9, 1989, she executed another Deed of Quitclaim confirming the earlier
quitclaim in 1981 as well as modifying the document to encompass all her other
property in the Philippines. More than a
week later, David executed a Special Power of Attorney (SPA) where he
acknowledged that he became the owner of
the parcels of land subject of the Aug. 9, 1989 Deed of Quitclaim and
empowering Atty. Abella to sell or otherwise dispose of the lot. On Feb. 1, 1990, Atty. Abella, upon
instruction of Helen, paid donor’s taxes to facilitate the registry of the
parcels of land in the name of David.
In 1994, upon information furnished by a certain Atty.
Batongbacal, showing that David’s ownership of ½ of Simeon’s estate was
defective, the Government filed before the RTC of Bulacan a petition for escheat
praying that ½ of David’s interest in each of the subject parcels of land be
forfeited in its favor. Petitioner
anchors its argument on Art. XII, Secs. 7 & 8 of the Constitution, which
sets the rule that only Filipino citizen can acquire private lands in the Philippines
Issue: Should
respondent’s ½ interest of the disputed parcels of land be escheated in favor
of the government?
Held: NO. Escheat is not proper under the
circumstances.
In the first place, there is no valid donation. There are 3 essential elements of a donation:
(a) the reduction of the patrimony of the donor; (b) the increase in the
patrimony of the donee; and (c) the intent to do an act of liberality or animus donandi. When applied to a donation of an immovable
property, the law further requires that the donation be made in a public
document and that there should be an acceptance thereof made in the same deed
of donation or in a separate public document.
In cases where the acceptance is made in a separate instrument, it is
mandated that the donor should be notified thereof in an authentic form, to be
noted in both instruments. Not all the elements of a donation of an immovable
property are present in the instant case.
The transfer of the property by virtue of the Deed of Quitclaim executed
by Helen resulted in the reduction of her patrimony as donor and the consequent
increase in the patrimony of David as donee.
However, Helen’s intention to perform an act of liberality in favor of
David was not sufficiently established. A perusal of the Deeds of Quitclaim reveals that Helen
intended to convey to her son David certain parcels of land located in the Philippines
However, the inexistence of a donation does not render the
repudiation made by Helen in favor of David valid. There is no valid repudiation of inheritance
as Helen had already accepted her share of the inheritance when she together
with David executed a Deed of Extrajudicial Settlement of the Estate of
Simeon. By virtue of such extrajudicial
settlement, the parcels of land were registered in her and her son’s name in
undivided equal share and for 11 years they possessed the lands in the concept
of owner. Art. 1056 of the Civil Code provides – “The
acceptance or repudiation of an inheritance is irrevocable and cannot be
impugned except when it was made thru any of the causes that vitiate consent or when and unknown will
appears.” Nothing on record shows that
Helen’s acceptance of her inheritance from Simeon was made thru any of the
causes which vitiated her consent nor is there any proof of the existence of an
unknown will executed by Simeon. Thus,
Helen cannot belatedly execute an instrument which has the effect of revoking
or impugning her previous acceptance of her ½ share. Hence, the 2 Quitclaims
which she executed 11 years after her acceptance have no legal force and
effect.
Nevertheless, the nullity of the repudiation does not ipso
facto operate to convert the parcels of land into res nullius to be escheated in favor of the Government. The repudiation, being of no effect
whatsoever, the parcels of land should revert to their private owner, Helen,
who although being an American citizen is qualified by hereditary succession to
own the property subject of the litigation.
Donation Inter
Vivos
VELASQUEZ
vs. COURT OF APPEALS
G.R. No. 126996, February 15, 2000
Facts: The
spouses Cornelio Aquino and Leoncia de Guzman acquired six pieces of real
properties during their marriage. They were childless and died intestate.
Leoncia de Guzman was survived by her sisters Anatalia and Tranquilina. The
heirs of Anatalia filed a complaint for partition of the six properties against
the heirs of Cesario Velasquez (son of Tranquilina). In their answer, the heirs
of Cesario were able to adduce uncontroverted
documentary
evidences showing that during the lifetime of the spouses Aquino, they had
already disposed of four of the six properties in favor of their
predecessors-in-interest through donation or conveyance.
Issue: Did
the heirs of Cesario acquire absolute ownership over the property in dispute as
to bar an action for partition?
Held: YES. The heirs of
Cesario have acquired absolute and exclusive ownership over the property in
question. A donation as a mode of acquiring
ownership results in an effective transfer of title over the property from the
donor to the donee and the donation is
perfected from the moment the donor knows of the acceptance by the donee. And once a donation is accepted, the donee
becomes the absolute owner of the property donated. The donation of the first parcel made by the
Aquino spouses to petitioners Jose and Anastacia Velasquez who were then minors
was accepted through their father Cesario Velasquez, and the acceptance was
incorporated in the body of the same deed of donation and made part of it, and
was signed by the donor and the acceptor. Legally speaking there was delivery
and acceptance of the deed, and the donation existed perfectly and irrevocably.
The donation inter vivos may be revoked only for the reasons provided in
Articles 760, 764 and 765 of the Civil Code.
The donation propter nuptias in favor of Cesario Velasquez and Camila de
Guzman over the third and sixth parcels including a portion of the second
parcel became the properties of the spouses Velasquez since 1919. The deed of
donation propter nuptias can be revoked by the non-performance of the marriage
and the other causes mentioned in article 86 of the Family Code. The alleged reason for the repudiation of the
deed, i.e., that the Aquino spouses did not intend to give away all their
properties since Anatalia (Leoncia's sister) had several children to support is
not one of the grounds for revocation of donation either inter vivos or propter
nuptias, although the donation might be inofficious.
Prescription
SERASPI vs. COURT OF APPEALS
G.R. No. 135602, April 28,
2000
Facts: Marcelino
Recasa was the owner of two parcels of land. During his lifetime, Marcelino
contracted 3 marriages. At the time of his death in 1943, he had 15 children
from his three marriages. In 1948, his intestate estate was partitioned into
three parts by his heirs, each part corresponding to the share of the heirs in
each marriage. The heirs of the first
marriage, sold their share to Dominador Recasa, an heir of the second marriage.
Dominador, representing the heirs of the second marriage, in turn sold the
share of the heirs to Quirico and Purificacion Seraspi whose heirs are the
present petitioners. In 1958, the
Seraspis obtained a loan from the Kalibo Rural Bank, Inc. (KRBI) on the security
of the lands in question to finance improvements on the lands. However, they
failed to pay the loan for which reason the mortgage was foreclosed and the
lands were sold to KRBI as the highest bidder. Subsequently, the lands were
sold by KRBI to Manuel Rata, brother-in-law of Quirico Seraspi. It appears that
Rata, as owner of the property, allowed Quirico Seraspi to administer the
property.
In 1974, private respondent Simeon Recasa, Marcelino’s child
by his third wife, taking advantage of the illness of Quirico Seraspi, forcibly
entered the lands in question and took possession thereof. In 1983, the Seraspis purchased the lands
from Manuel Rata and afterwards filed a complaint against Simeon Recasa for
recovery of possession of the lands.
Issues: 1. Is
the action for recovery of possession ( accion publiciana) barred by extinctive
prescription?
2. Has Simeon
acquired the ownership of the land by prescription?
Held: 1.
NO. Art. 1141 NCC provides that
real actions over immovables prescribe after thirty years. From 1974 to April 12, 1987 when the action
was filed, only thirteen years has elapsed.
2. NO. Simeon has no
just title or not in good faith to acquire the land by acquisitive
prescription. Private respondent could
not have acquired ownership over the property through occupation since, under
Art. 714 of the Civil Code, the ownership of a piece of land cannot be acquired
by occupation. Nor can he base his ownership on succession for the property was
not part of those distributed to the heirs of the third marriage, to which private
respondent belongs. It must be remembered that in the partition of the
intestate estate of Marcelino Recasa, the properties were divided into three
parts, each part being reserved for each group of heirs belonging to one of the
three marriages Marcelino entered into. Since the contested parcels of land
were adjudicated to the heirs of the first and second marriages, it follows
that private respondent, as heir of the third marriage, has no right over the
parcels of land. While, as heir to the intestate estate of his father, private
respondent was co-owner of all of his father’s properties, such co-ownership
rights were effectively dissolved by the partition agreed upon by the heirs of
Marcelino Recasa. Neither can private
respondent claim good faith in his favor. Good faith consists in the reasonable
belief that the person from whom the possessor received the thing was its owner
but could not transmit the ownership thereof.
Private respondent entered the property without the consent of the
previous owner. For all intents and purposes, he is a mere usurper.
Prescription in
Action for Reconveyance
MILLENA vs. COURT OF APPEALS
G.R.
No. 127797, January 31, 2000
Facts: In
1926, a parcel of land in Daraga, Albay (Lot
1874) was divided between Gregoria Listana and Potenciana Maramba: ¼ was given
to Gregoria and ¾ to Potenciana. The
portion owned by Gregoria was sold to Gaudencia Jacob who entered the same and
started harvesting the coconuts found therein.
In 1966, the land was passed on to Gaudencia’s daughter, Felisa Jacob by
virtue of an extrajudicial settlement.
Sometime in 1981, Felisa discovered that Potenciana’s son (Florencio)
was able to acquire a free patent over the entire lot including the portion
adjudicated to her. Notwithstanding Felisa’s
protest filed before the Bureau of Lands, the heirs of Florencio sold the
entire lot to Alejandro Millena. In
1992, Felisa filed a complaint against Alejandro for annulment of title and
reconveyance of the portion owned by the former. RTC ordered the reconveyance
of the ¼ portion of the land. CA
affirmed the TC.
Issue: Is the
action for reconveyance barred by prescription?
Held: NO.
Prescription cannot be invoked in an action for reconveyance when the
claimant is in possession of the land to be reconveyed. Apparently, Felisa Jacob met the requisite
elements of possession. She exercised
control over the parcel of land in litigation through her caretaker. Moreover, her declaration that the land was
her property and the payment of real property taxes manifested clearly that she
was in possession of the land.
Consequently, Alejandro may not validly invoke prescription as defense
against Felisa.
Ownership Through
Acquisitive Presciption
DBP vs. COURT OF APPEALS
G.R. No. 129471. April 28, 2000.
Facts: The
land in dispute consisting of 19.4 hectares was originally owned by Ulipiano
Mumar, whose ownership since 1917 was evidenced by Tax Declaration No. 3840. In 1950, Mumar sold the land to respondent
Cajes who was issued Tax Declaration No. R-1475 that same year. Cajes occupied
and cultivated the said land. In 1969, unknown to Cajes, Jose Alvarez succeeded
in obtaining the registration of a parcel of land with an area of 1,512, 468.00
square meters, in his name for which he was issued OCT No. 546 on June 16,
1969. The parcel of land included the 19.4 hectares occupied by respondent.
Alvarez never occupied nor introduced improvements on said land.
In 1972, Alvarez
sold the land to the spouses Gaudencio and Rosario Beduya to whom TCT No. 10101
was issued. That same year, the spouses Beduya obtained a loan from petitioner
DBP for P526,000.00 and, as security, mortgaged the land covered by TCT No.
10101 to the bank. In 1978, the SAAD
Investment Corp., and the SAAD Agro-Industries, Inc., represented by Gaudencio
Beduya, and the spouses Beduya personally executed another mortgage over the
land in favor of DBP to secure a loan of P1,430,000.00. The spouses Beduya later failed to pay their
loans, as a result of which, the mortgage on the property was foreclosed and
sold to DBP as the highest bidder. As
the spouses Beduya failed to redeem the property, DBP consolidated its
ownership. It appears that Cajes had
also applied for a loan from DBP in 1978, offering his 19.4 hectare property
under Tax Declaration No. D-2247 as security for the loan. Cajes’ loan
application was later approved. However, it was found that the land mortgaged
by Cajes was included in the land covered by TCT No. 10101 in the name of the
spouses Beduya. DBP, therefore, cancelled the loan and demanded immediate
payment of the amount. Cajes paid the loan to DBP for which the former was
issued a Cancellation of Mortgage releasing the property in question from
encumbrance. DBP asked Cajes to vacate
the property. As the latter refused to do so,
DBP filed a complaint for recovery of possession with damages against
him. The RTC of Tagbilaran City declared
DBP the lawful owner of the entire land covered by TCT No. 10101 on the ground
that the decree of registration was binding upon the land.
Issue: Who has better
right to the land in dispute, DBP or Cajes?
Held: Cajes
has better right. In the present case, Cajes has been in actual, open, peaceful
and continuous possession of the property since 1950. His claim based on actual occupation of the
land is bolstered by the Tax
Declarations issued in his name. Together with his actual possession of the
land, these tax declarations constitute strong evidence of ownership of the
land occupied by him. More importantly,
it was established that respondent, having been in possession of the land since
1950, was the owner of the property when it was registered by Jose Alvarez in
1969, his possession tacked to that of his predecessor-in-interest, Mumar,
which dates back to 1917. Clearly, more
than 30 year had elapsed before a decree of registration was issued in favor of
Alvarez. This uninterrupted adverse possession of the land for more than 30
years could only ripen into ownership of the land through acquisitive prescription
which is a mode of acquiring ownership and other real rights over immovable
property. Prescription requires public, peaceful, uninterrupted and adverse
possession of the property in the concept of an owner for ten (10) years, in
case the possession is in good faith and with a just title. Accordingly, the
land in question must be reconveyed in favor of Cajes, the true and actual
owner thereof, reconveyance being clearly the proper remedy in this case.
II. SUCCESSION
Successional Rights; Transmission of;
Scope
RABADILLA vs. COURT OF APPEALS
G.R. No. 113725, June
29, 2000
Facts: In a
Codicil appended to the will of testatrix Aleja Belleza, Dr. Jorge
Rabadilla was instituted as a devisee of
a parcel of land in Bacolod
City
The lot was transferred to Dr. Rabadilla, who died in 1983
and was survived by his wife and children, one of which is petitioner
herein. In 1989, private respondent
sought before the RTC of Bacolod City, the reconveyance of the property to the
surviving heirs of the testatrix. During pre-trial, parties admitted that in
1998, the private respondent and a certain Alan Azurin, a lessee of the
property, arrived at an amicable settlement and assumed the obligation to
deliver one hundred piculs of sugar. There was no compliance with the
agreement.
In 1991, the RTC dismissed the complaint for lack of cause
action. On appeal, the CA reversed the
decision of the TC. The CA ordered
reconveyance of the lot to the estate of Aleja Belleza on the ground of
non-compliance of petitioner, as heirs of the modal heir Rabadilla, of the
obligation under the codicil, since 1985.
Hence this petition.
Issue: Does the private respondent have a cause
of action to institute the present case for reconveyance of the land in
controversy against petititoner?
Held: YES. Private respondent has a cause of action against
petitioner. It is a general rule under
the law on succession that successional rights are transmitted from the moment
of death of the decedent and compulsory
heirs are called to succeed by operation of law. The petitioner, his mother and
sisters, as compulsory heirs of the instituted heir, Dr. Rabadilla, succeeded
the latter by operation of law, without need of further proceedings, and the
successional rights were transmitted to them from the moment of death of the
decedent. Under Article 776 NCC,
inheritance includes all the property, rights and obligations of a person, not
extinguished by his death. Conformably, whatever rights and obligations Dr.
Rabadilla had by virtue of subject Codicil were transmitted to his forced
heirs, at the time of his death. Such obligation of the instituted heir
reciprocally corresponds to the right of private respondent over the usufruct,
the fulfillment or performance of which is now being demanded by the latter
through the institution of the case at bar.
Modal Institution vs. Conditional
institution; Substitution
Issue: Is the testamentary institution of Dr.
Rabadilla a modal institution?
Held: YES.
The institution of Dr. Rabadilla under subject Codicil is in the nature
of a modal institution.
In
a modal institution, the testator states (1) the object of the institution, (2)
the purpose or application of the property left by the testator, or (3) the
charge imposed by the testator upon the heir. A "mode" imposes an
obligation upon the heir or legatee but it does not affect the efficacy of his
rights to the succession. On the other hand, in a conditional testamentary
disposition, the condition must happen or be fulfilled in order for the heir to
be entitled to succeed the testator. The condition suspends but does not
obligate; and the mode obligates but does not suspend. To some extent, it is similar to a resolutory
condition. The manner of institution of Dr. Rabadilla under subject Codicil is
evidently modal in nature because it imposes a charge upon the instituted heir
without, however, affecting the efficacy of such institution. Further, since testamentary
dispositions are generally acts of liberality, an obligation imposed upon the
heir should not be considered a condition unless it clearly appears from the
Will itself that such was the intention of the testator. In case of doubt, the
institution should be considered as modal and not conditional.
The Codicil sued
upon does not contemplate a substitution.
Substitution is the designation by the testator of a person or persons
to take the place of the heir or heirs first instituted. Under substitutions in
general, the testator may either (1) provide for the designation of another
heir to whom the property shall pass in case the original heir should die
before him/her, renounce the inheritance or be incapacitated to inherit, as in
a simple substitution, or (2) leave
his/her property to one person with the express charge that it be transmitted
subsequently to another or others, as in a fideicommissary substitution. The provisions of subject Codicil do not
provide that should Dr. Rabadilla default due to predecease, incapacity or
renunciation, the testatrix's near descendants would substitute him. What the
Codicil provides is that, should Dr. Rabadilla or his heirs not fulfill the
conditions imposed in the Codicil, the property referred to shall be seized and
turned over to the testatrix's near descendants. Neither is there a
fideicommissary substitution. In a fideicommissary substitution, the first heir
is strictly mandated to preserve the property and to transmit the same later to
the second heir. In this case, the instituted heir is in fact allowed under the
Codicil to alienate the property provided the negotiation is with the near
descendants or the sister of the testatrix. Also, the near descendants' right
to inherit from the testatrix is not definite. The property will only pass to
them should Dr. Rabadilla or his heirs not fulfill the obligation to deliver
part of the usufruct to private respondent. Under Article 863, the second heir
or the fideicommissary to whom the property is transmitted must not be beyond
one degree from the first heir or the fiduciary. In this case, the near
descendants are not at all related to the instituted heir, Dr. Rabadilla.
Wills
Issue: Can the provisions of a Codicil be a valid subject of
an amicable settlement subsequently entered into between the private respondent
and the lessee of the subject land which effectively relieves the petitioner
from the obligation?
Held: NO.
The amicable settlement whereby the lessee assumed the obligation in the
codicil, cannot be deemed to be a substantial and constructive compliance of
petitioner’s obligation therein as to effectively release the latter from his
obligation. A Will is a personal,
solemn, revocable and free act by which a person disposes of his property, to
take effect after his death. Since the Will expresses the manner in which a
person intends how his properties be disposed, the wishes and desires of the
testator must be strictly followed. Thus,
a Will cannot be the subject of a compromise agreement which would thereby
defeat the very purpose of making a Will.
Partition; Preterition
VIADO NON vs. COURT OF APPEALS
G.R. No. 137287, February 15, 2000
Facts: During
their lifetime, spouses Julian and Virginia Viado owned a house and lot in Quezon City Virginia
Issues: 1. Did
the heirs of Nilo acquire absolute ownership over the property in question?
2. What is the effect of the exclusion of Delia
in the extrajudicial settlement?
Held: 1. When Virginia died
intestate in 1982, her part of the conjugal property was transmitted to her
heirs — her husband Julian and their children. The inheritance, which vested
from the moment of death of the decedent,
remained under a co-ownership regime
among the heirs until partition. Every act intended to put an end to
indivision among co-heirs and legatees or devisees would be a partition
although it would purport to be a sale, an exchange, a compromise, a donation
or an extrajudicial settlement. The
deed of donation and deed of extra-judicial settlement consolidated the title
solely to Nilo and ceased the co-ownership.
2. The exclusion of
Delia Viado from the deed of extrajudicial settlement has the effect of
preterition. This kind of preterition, in the absence of proof and bad faith,
does not justify a collateral attack on the new TCT. The relief instead rests
on Art.1104, NCC to the effect that where the preterition is not attended by
bad faith and fraud, the partition shall not be rescinded but the preterited
heir shall be paid the value pertaining to her.
Therefore, the value of the property must be ascertained to determine
the amount due to Delia.
Formal requirements
of a valid partition
G.R. No. 134329, January 19, 2000.
Facts: Sometime in May,
1951, the heirs of Jacinto Pada entered into an extra-judicial partition of his
estate which includes a parcel of land in Leyte .
The partition was not registered as it was written in a private document. The land was allocated to 2 of the heirs,
Ananias and Marciano. Meanwhile,
petitioner spouses occupied the northern portion of the subject land with the
consent of the heirs of Jacinto.
In 1993, Maria Pada sold the co-ownership right of her
father, Marciano to private respondent, Silverio Pada. Thereafter, Silverio demanded that petitioner
spouses vacate the northern portion of the subject land so his family can
utilize the said area. When conciliation proceedings failed, Silverio filed in
the MCTC of Matalom, Leyte , a complaint for
ejectment against petitioner spouses.
The MCTC sustained the possession of petitioner spouses and
held that the extra-judicial partition was not valid since it was executed in a
private document and was never registered. On appeal, the RTC reversed the
decision of the lower court holding that Maria Pada was the legal owner of the
property sold. The CA affirmed the
decision of the RTC holding that the 1951 extrajudicial partition being legal
and effective as among Jacinto’s heirs, Maria Pada validly transferred her
ownership rights over the subject land to Silverio.
Issue: Is it necessary
for the validity of the extrajudicial partition that the same be embodied in a
public instrument?
Held: No.
The intrinsic validity of partition not executed in a public
instrument is not undermined when no
creditors are involved. The partition of inherited property need not be
embodied in a public document so as to be effective as regards the heirs that
participated therein. The requirement of Article 1358 of the Civil Code that
acts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property, must appear in a public
instrument, is only for convenience, non-compliance with which does not affect
the validity or enforceability of the acts of the parties as among themselves.
And neither does the Statute of Frauds under Article 1403 of the New Civil Code
apply because partition among heirs is not legally deemed a conveyance of real
property, considering that it involves not a transfer of property from one to
the other but rather, a confirmation or ratification of title or right of
property that an heir is renouncing in favor of another heir who accepts and
receives the inheritance.
III. OBLIGATIONS AND CONTRACTS
Novation
ESPINA vs. COURT OF APPEALS
G.R. No. 116805, June 22, 2000
Facts: Petitioner
Mario Espina is the registered owner of a Condominium Unit in Antipolo,
Rizal. In 1987, the condominium unit in
question was leased to respondent Rene Diaz.
In 1991 while Diaz occupied the premises as lessee, Mario executed a
Provisional Deed of Sale whereby he agreed to sell the condominium unit to
respondent for the initial downpayment of
P100,000.00 to be paid upon the execution of the contract and the
balance to be paid in 6 installments through PCI Bank postdated checks. Diaz’s
checks all bounced and were dishonored upon presentment for the reason that the
bank account was closed. Consequently, on July 26, 1992, Mario terminated the
provisional deed of sale by a notarial notice of cancellation. Nonetheless, Diaz continued to occupy the
premises, as lessee, but failed to pay the rentals due. On October 28, 1992,
Diaz made a payment of P100,000.00 which was accepted by Mario. On February 24,
1993, Mario filed with the MTC-Antipolo Rizal, an action for unlawful detainer
against Diaz. The TC ordered Diaz to vacate the premises and to pay back &
current rentals, attorneys fees and costs.
On appeal to the RTC, the latter court affirmed the decision of the MTC. Diaz filed with the CA a petition for review.
The CA reversed the appealed decision and dismissed the complaint for unlawful
detainer. MFR filed by Mario was
denied. Hence, this appeal via petition
for review on certiorari.
Issue: Did the provisional deed of sale novate the existing
lease contract?
Held: NO. The provisional deed of sale that was
subsequently executed by the parties did not novate the original existing
contract of lease.
Novation is never presumed; it must be proven as a fact
either by express stipulation of the parties or by implication derived from an
irreconcilable incompatibility between old and new obligations or contracts. Otherwise, the original contract remains
in force.
Relativity of
Contracts
DKC HOLDINGS CORP. vs. COURT OF APPEALS
G. R. No. 118248, April 5, 2000
Facts: On
March 16, 1988, petitioner corporation entered into a Contract of Lease with
Option to Buy with Encarnacion Bartolome, whereby petitioner was given the
option to lease or lease with purchase the subject land. Petitioner
regularly paid the monthly P3,000.00
reservation fee until the death of Encarnation in January 1990. Thereafter, petitioner coursed its payment to
private respondent Victor Bartolome, the sole heir of Encarnacion. Victor, however, refused to accept. On March 14, 1990, petitioner served upon
Victor a written notice that it was exercising its option to lease the
property. Again, Victor refused to
accept the rental fee and to surrender possession of the property to
petitioner. Petitioner thus opened a
savings account with a bank in the name of Victor Bartolome and deposited
therein the aforesaid rental fee as well as P6,000.00 reservation fees.
Petitioner then filed a Complaint for specific performance and damages against
Victor.
The trial court dismissed the complaint,
holding that the subject contract was terminated upon the death of Encarnacion
Bartolome and did not bind Victor because he was not a party thereto.
Issue: Was
the Contract of Lease with Option to Buy entered into by Encarnacion with
petitioner terminated upon her death, hence not binding upon Victor?
Held: NO. The contract was
not terminated upon Encarnacion’s death.
It remains binding upon Victor. The
general rule under Article 1311, NCC is that heirs are bound by contracts
entered into by their predecessors-in-interest except when the rights and
obligations arising therefrom are not transmissible by (1) their nature, (2)
stipulation or (3) provision of law. In
the case at bar, there is neither contractual stipulation nor legal provision
making the rights and obligations under the contract intansmissible. In fact, the nature of the rights and
obligations therein are, by their nature, transmissible.
A good measure for determining whether a
contract terminates upon the death of one of the parties is whether it is of
such character that it may be performed by the promissor’s personal
representative. In the case at bar,
there is no personal act required from the late Encarnacion Bartolome. Rather, the obligation of Encarnaction in the
contract to deliver the possession of the subject property to petitioner upon
the exercise by the latter of its option to lease the same may very well be
performed by her heir Victor. There
exists a privity of interest between Victor and his deceased mother. Victor
cannot escape the legal consequence of a transaction entered into by his
predecessor-in-interest because he has inherited the property subject to the
liability affecting the latter.
Furthermore, the subject matter of the
contract is a lease, which is a property right.
The death of a party does not excuse nonperformance of a contract which
involves a property right, and the rights and obligations thereunder pass to
the personal representatives of the deceased.
Similarly, nonperformance is not excused by the death of the party when
the other party has a property interest in the subject matter of the contract.
Onerous
Contract
GOLDEN DIAMOND vs.
COURT OF APPEALS
G.R. No.
131436, May 31, 2000
Facts: Petitioner
Golden Diamond, Inc. (GDI) entered into a Dealer Agreement with International
Family Food Services, Inc. (IFFSI), the exclusive licensee in the Philippines
of Shakey's U.S.A. , for the
operation of Shakey's pizza parlors in Caloocan City
On February 1991, Cheng stopped payment of the royalty fees
on the ground that the contract between GDI and IFFSI had expired. Cheng
insisted that his payment of the royalty fees is conditioned on the existence
of the agreement between petitioner GDI and IFFSI.
Issue: Is
Cheng obliged to pay the royalty fee to GDI even after the expiration of GDI’s
area franchise?
Held: NO. Cheng is no longer obliged to pay the royalty
fee. The fact that no renewal was
granted removed the basis for the continued payment of the monthly royalty fee.
It is the essence of a royalty fee that it is paid in
consideration of an existing right. In its ordinary acceptation, royalties
refer to payments made to the owner for permitting another to use his
property. Royalties are similar to the
rents payable for the use or right to use an invention and after the right to
use it has terminated there is no obligation to make further royalty payments.
The MOA is an onerous contract, wherein the
contracting parties are obliged to render reciprocal prestations. GDI is
entitled to receive the royalty fee in return for Cheng’s use of its (GDI)
exclusive right to the Shakey's outlet at the Gotesco Grand Central. Indelibly,
the very reason which impelled Cheng to assume the obligation to pay the
royalty fee was that of GDI’s representation that it has the exclusive right to
operate the outlet. To expect Cheng to continue paying the royalty fee after
February 1991, or until August 1993, when what GDI assigned no longer exists —
is legally untenable. GDI’s entitlement
to the royalty fee is wholly dependent upon the existence and subsistence of
the right for which the royalty was granted. If the reason which gave rise to
the contract has ceased to exist, the result is that the obligation too, has
ceased to exist.
Power
to Rescind in Reciprocal Obligations
RELIANCE
COMMODITIES INC. vs. INTERMEDIATE APPELLATE COURT
G.R. No.
74729, May 31, 2000
Facts: Respondent
Marvin Paez entered into contract with Reliance Commodities, Inc. (RCI) whereby
the latter agreed to provide the former with funds and equipment for the
operation of a manganese mining claim. Subsequently, Paez and his wife executed
a deed of first real estate mortgage (REM) on their property in favor of RCI as
security for more cash advances needed to sustain the mining operation. RCI then made cash advances to Paez until
subsequently, a difference arose between Paez and RCI concerning these cash
advances. Later, for failure to repay, RCI foreclosed extrajudicially the
mortgage executed by Paez in its favor.
The spouses Paez thereafter filed an action to annul the Deed of First
Real Estate Mortgage, and for damages. The trial court ordered Paez to pay RCI
the cash advances they received and lifted the TRO as to the foreclosure,
allowing RCI to proceed with the extrajudicial foreclosure of the mortgage
should Paez fails to pay. The CA
however, declared the REM and the
contract between the parties void, finding that it is RCI which gave cause for
the rescission of the contract, and that restitution is not available in rescission. RCI
now claims that the violation of the contracts came from the Paez
spouses because they failed to deliver at all the manganese ores stipulated in
the contract according to the schedule outlined. Hence, they were not entitled
to rescind the contracts or recover damages and by reason of which RCI was
entitled to foreclose on the security constituted.
Issue: Does
RCI have the power to rescind the contract? If so, is restitution available?
Held: YES. RCI has the power to rescind the contract, it
having been established that Paez failed to comply with his obligation under
the contract. Under the agreement of RCI
with Paez, the former was to pay Paez P70.00 for every ton of manganese ores delivered. On the other hand, Paez failed to make even a
single delivery of manganese ores to the stockpile yard at Gabaldon. In fact,
there was no mining operation at all.
Consequently, RCI rescinded the contracts. The power to
rescind or resolve is given to the injured party. More, the
rescission of the contracts requires the parties to restore to each other what
they have received by reason of the contracts.
The rescission has the effect of abrogating the contracts in all parts.
CENTRAL BANK
OF THE PHILIPPINES
G.R. No. 131074, March 27, 2000
Facts: On
July 19, 1983, respondents Spouses Alfonso and Anacleta Bichara sold 2 lots in Legazpi City
Title over the property was issued in CBP's name on
September 6, 1983. Despite the issuance
of the title, CBP failed to pay the spouses. The latter did not fill up the lot
with escombro despite several demands made by the former. CBP was thus
constrained to undertake the filling up of the said lots, by contracting the
services of BGV Construction. The filling up of the lots cost CBP P45,000.00,
which amount was deducted from the purchase price payable to the spouses.
CBP, however, still did not pay the spouses. Consequently,
on September 7, 1992, the spouses filed an action for rescission or specific
performance with damages, against CBP before the RTC of Legazpi City, alleging
that CBP failed to pay the purchase price despite demand.
Issues: Is
rescission of the contract of sale a proper remedy available to the Spouses?
Held: No. The right to rescind a contract involving
reciprocal obligations is provided for in Article 1191 of the Civil Code. The law speaks of the right of the
"injured party" to choose between rescission or fulfillment of the
obligation, with the payment of damages in either case. Here, the spouses claim
to be the injured party and they aver that they are entitled to cancel the
obligation altogether in view of CBP's failure to pay the purchase price when
the same became due. CBP disputes the spouses’
stand, claiming that it was entitled to withhold payment of the purchase
price because of the latter’s failure to
comply with their contractual obligations.
By law, "[t]he vendee is bound to accept the delivery
and to pay the price of the thing sold at the time and place stipulated in the
contract." In the case at bench,
CBP's obligation to pay arose as soon as the deed of sale was registered and a
clean title was issued. CBP justifies non-payment on the spouses' breach of several
stipulations in the contract, such as: non-payment
of tax and the occupation by squatters of the premises. However, CBP’s
obligation to pay was not subject to the foregoing "conditions," only
that its demandability is suspended until the opportune time. That arrived upon
the registration of the deed of sale and the issuance of a clean title in its
favor.
The Spouses should not be allowed to rescind the contract
where they themselves did not perform their essential obligation thereunder. Evidently, the spouses were guilty of
non-performance of an essential contractual obligation. The deed of sale
expressly stipulated that the vendors were to undertake, at their expense, the
filling up of the lots with escombro free from waste material compacted to the
street level. This was required in order to make the site suitable for the
construction of a substantial edifice which will house the regional office of
CBP. This was to be accomplished upon
the signing of the contract and insofar as CBP was concerned, the spouses
obligation was demandable at once.
It should be emphasized that a contract of sale
involves reciprocity between the parties. Since the spouses were in bad faith,
they may not seek the rescission of the agreement they themselves breached.
Contract to Sell;
Rescission
PADILLA vs. PAREDES
G.R. No. 124874, March 17, 2000
Facts: Petitioner Albert
Padilla and private respondents Floresco and Adelina Paredes entered into a
contract to sell a parcel of land in San
Juan
Issue: Are the Spouses
Paredes entitled to rescind their "contract to sell" the land to
Padilla?
Held: YES.
The spouses may validly cancel the contract to sell their land to
Padilla. However, the reason for this is
not that the spouses have the power to rescind such contract, but because their
obligation thereunder did not arise.
Article 1191 of the Civil Code, on rescission, speaks of obligations
already existing. In a contract to sell,
the full payment of the purchase price is a positive suspensive condition, the
failure of which is not considered a breach, casual or serious, but simply an
event which prevented the obligation of the vendor to convey title from
acquiring any obligatory force. There can be no rescission of an obligation
that is non-existent, considering that the suspensive condition therefor has
not yet happened. Because of Padilla's
failure to fully pay the purchase price, the obligation of the spouses to
convey title to the property did not arise. Thus, they are under no obligation,
and may not be compelled, to convey title to Padilla and receive the full
purchase price.
Interpretation of Contracts; Rescission
PHIL.
NATIONAL CONSTRUCTION CORP. vs. MARS CONSTRUCTION ENT.
G.R.
No.133909, February 15, 2000
Facts: Mars
Construction Enterprises, Inc. (Mars) entered into a contract with the Phil.
National Construction Corp. (PNCC) for the supply of approximately 70,000 cubic
meters of aggregates but with out specification as to the volume of each of the
items mentioned therein. The two parties subsequently amended the contract by
specifying the volume for three of the items, totaling the originally agreed
70,000 cubic meters of aggregate, except the fourth item, the volume of which
was not specified.
Because the delivery of aggregates was delayed for 8
months, PNCC was constrained to obtain necessary materials from other sources,
incurring additional costs representing the difference between the agreed price
in the contract and the pricing of outside sources, which was reimbursed by
Mars in accordance with the default clause under the contract. When Mars delivered 17,000 cubic meters of
washed gravel, PNCC refused to accept, on the following grounds:
1.
Mars has already
delivered aggregates 45% over and above the required volume in the amended
contract and PNCC had no more need for the same;
2.
PNCC has already
informed Mars in a letter of the final quantities of concrete aggregates to be
delivered and that it would not accept any further deliveries from Mars;
3.
Mars has
defaulted on its contractual obligations.
Issue: May
PNCC be compelled to accept the delivery of the 17,000 cu. m. of washed gravel?
Held: YES. PNCC may be compelled to accept.
(1) The amendment made the agreement ambiguous because
the quantity of sub-base 2” minus crusher run was not specified. If said
aggregate were included however, the total would definitely be in excess of
70,000 cu. m. PNCC had ordered from Mars more than what was specified in the
agreement. This act signified that the maximum limit of 70,000 cu. m. was
disregarded because of PNCC's needs. What then would be the significance of the
quantities stated in the amendment? We interpret that these are the minimum
quantities that must be delivered by Mars. Both parties are bound by these
figures. In this way, both parties would know exactly how much to demand from
each other to be able to comply with their respective obligations. The various
stipulations in a contract should be interpreted together. Ambiguous ones
should be so construed as to conform to the sense that would result if all the
provisions are comprehended jointly.
(2) By saying that the quantity specified in the letter was
its last order, PNCC unilaterally amended its Contract with the Mars. The act
of treating a contract as cancelled or rescinded on account of infractions by
the other contracting party is always provisional; that is, contestable and
subject to judicial determination. When PNCC resolved or rescinded the
Agreement without previous court action, it proceeded at its own risk. Only the
final judgment of a court will conclusively and finally settle whether such
recourse was correct in law.
3) The default was an insubstantial breach. The contract
specifically provided that if Mars failed to deliver the required aggregates,
PNCC could procure them from other sources so as not to jeopardize the entire
construction project. Since PNCC was already compensated for Mars’ defaults,
such defaults cannot be considered as a substantial breach that justified the rescission of the
Contract and the refusal to accept the questioned delivery. Furthermore, when
PNCC exercised its options in case of delay or default on the part of Mars, the
former waived its right to rescind and was thus estopped from rescinding the
Contract by reason of such short delivery.
Badges of Fraud
China Banking Corp. vs. Court of
Appeals
G.R. No. 129644, March 7, 2000
Facts: In
connection with a civil case filed by Metropolitan Bank against Alfonso Roxas Chua , a notice of levy
affecting the residential land
of Alfonso
Issue: Was
the assignment by Alfonso to Paulino of the right of redemption done to defraud
his creditors and may be rescinded under Art. 1387, NCC?
Held: YES. The assignment was done in fraud of
creditors. China Bank is, therefore
entitled to rescind the same. Under Article 1381(3) of the Civil Code,
contracts which are undertaken in fraud of creditors when the latter cannot in
any manner collect the claims due them, are rescissible. The existence of fraud with intent to defraud
creditor may either be presumed in accordance with Article 1387,NCC or duly
proved in accordance with the ordinary rules of evidence. Hence, the law
presumes that there is fraud of creditors when:
a) There is alienation of property by
gratuitous title by the debtor who has not reserved sufficient property to pay
his debts contracted before such alienation; or
b) There is
alienation of property by onerous title made by a debtor against whom some
judgment has been rendered in any instance or some writ of attachment has been
issued. The decision or attachment need not refer to the property alienated and
need not have been obtained by the party seeking rescission.
Inasmuch as the judgment of the trial court in favor
of China Bank against Alfonso was rendered as early as 1985, there is a
presumption that the 1988 sale of his property, in this case the right of
redemption, is fraudulent under Article 1387 of the Civil Code. The fact that
private respondent Paulino redeemed the property and caused its annotation on
the TCT more than two years ahead of petitioner China Bank is of no
moment. The Court of Appeals maintained
that although the transfer was made between father and son, the conveyance was
not fraudulent since Paulino has indeed paid the redemption fee of
P1,463,375.39 to Metrobank and the sum of P100,000 to his father. In determining whether or not a certain
conveyance is fraudulent, the question in every case is whether the conveyance
was a bona fide transaction or a trick and contrivance to defeat creditors or
whether it conserves to the creditor to the debtor or a special right. It is
not sufficient that it is founded on good considerations or is made with bona
fide intent. It must have both elements. If defective in either of these,
although good between the parties, it is voidable as to creditors. The question as to whether or not the conveyance is fraudulent is: does it
prejudice the rights of the creditors?
The mere fact that the conveyance was founded on valuable consideration
does not necessarily negate the presumption of fraud under Art. 1387, NCC.
There has to be a valuable consideration and the transaction must have been
made bona fide. In the case at bar, the presumption that the conveyance is
fraudulent has not been overcome. At the time a judgment was rendered in favor
of China Bank against Alfonso, Paulino was still living with his parents in the
subject property. Paulino himself admitted that he knew his father was heavily
indebted and could not afford to pay his debts. The transfer was undoubtedly
made between father and son at the the time when the father was insolvent and
had no other property to pay his creditors. Hence, it is of no consequence
whether or not Paulino had given valuable consideration for the conveyance.
Void and Voidable
Contracts
SEN PO EK MARKETING CORP. vs. MARTINEZ
G.R. No. 134117, February 9, 2000
Facts: Sofia
Martinez was the registered owner of 2 parcels of land who leased the lots to
Yu Siong, father of the president and stockholders of petitioner Sen Po Ek for
a period of 10 years. When the lease
expired it was later renewed several times, the last renewal being on March
1982 which is to expire on Jan. 1987. In
the meantime, Sofia Sofia Po Ek informing it of her
intention to sell the leased premises and authorizing a broker to negotiate the sale "with any and all
interested parties." Sen Po Ek
offered to purchase the poperty. Another
buyer, Tiu Uyping, was also interested.
Sen Po Ek then filed a complaint for the annulment of the sale executed
by Sofia
Issue: Were
the two disputed sale transactions valid?
Held: The first sale is void. The second sale, however, is valid and
binding. The first sale between Sofia
and Teodora was void for being fictitious. Under Art. 1409 (2),NCC, one type of
contract which can be declared void and inexistent is that which is absolutely
simulated or fictitious, and this was established by several badges of
simulation proving that the sale between Sofia and Teodora was not intended to
have any legal effect between them.The combination of all of these events leads
one to the inescapable conclusion that the first sale transaction was
absolutely simulated, hence void.
Nonetheless,
the sale between Teodora and the Tiu Uyping, is valid. Teodora, as only one of the co-heirs of Sofia Sofia
Capacity to Enter into Contract
LOYOLA vs. COURT OF APPEALS
G.R. No. 115734, February 23, 2000
Facts: Three years before
her death, Gaudencia Zarraga sold to private respondents, the children of one
her siblings, her share in Lot 115-A-1 for
P34,000.00. The sale was evidenced by a
notarized document denominated as “Bilihang Tuluyan ng Kalahati ng isang Lagay
na Lupa.” Her other siblings assail the validity of the execution of the deed
of the absolute sale suggesting that the deed of sale is not valid because
Gaudencia was old and senile and incapable of independent and clear judgment.
Issue: Is the deed of
absolute sale invalid on the ground of Gaudencia’s incapacity?
Held: NO. A
person is not incapacitated to contract merely because of advanced years of by
reason of physical infirmities. Only
when such age or infirmities impair his mental faculties to such extent as to
prevent him from properly, intelligently, and fairly protecting his property
rights is he considered incapacitated.
Petitioners show no proof that Gaudencia had lost control of her mental
faculties at the time of the sale. The
notary public who interviewed her, testified that when he talked to Gaudencia
before preparing the deed of sale, she answered correctly and he was convinced
that Gaudencia was mentally fit and knew what she was doing.
Unenforceable Contract
VILLANUEVA-MIJARES vs. COURT OF APPEALS
G.R. No. 108921, April 12, 2000
Facts: Petitioners
are the legitimate children of the late Leon Villanueva. Leon Leon Leon
After the death of Leon
in August 1972, private respondents discovered that the shares of four of the
heirs of Felipe were purchased by Leon Leon
Issue: Are
the petitioners the legal owners of the
property in question in accordance with the individual titles issued to them?
Held: No.
The Deed of Sale of August 25, 1946 was "unenforceable” and thus did not
make the petitioners the legal owners of the property in question in accordance
with the individual titles issued to them.
Article 1529 of the old Civil Code, which
was the prevailing law in 1948 and thus governed the questioned Deed of Sale,
clearly provided that a contract is unenforceable when there is an absence of
authority on the part of one of the contracting parties. The mere lapse of time
cannot give efficacy to such a contract. The defect is such that it cannot be
cured except by the subsequent ratification of the unenforceable contract by
the person in whose name the contract was executed. In the instant case, there is no showing of
any express or implied ratification of the assailed Deed of Sale by the private
respondents.
Simulation of
Contracts
LOYOLA vs. COURT OF APPEALS
G.R. No. 115734, February 23, 2000
Facts: Three years before
her death, Gaudencia Zarraga sold to private respondents, the children of one
her siblings, her share in Lot 115-A-1 for
P34,000.00. The sale was evidenced by a
notarized document denominated as “Bilihang Tuluyan ng Kalahati ng isang Lagay
na Lupa.” Her other siblings assail the validity of the execution of the deed
of the absolute sale suggesting that the deed of sale is simulated.
Issue: Is the deed of
absolute sale simulated?
Held: NO.
Simulation is the declaration of a fictitious will deliberately made by
agreement of the parties, in order to produce, for the purposes of deception,
the appearances of a juridical act which does not exist or is different what
that which does not exist or is different what that which was really executed.”
Characteristic of simulation is that the apparent contract is not really
desired or intended to produce legal effect or in in any way alter the judicial
situation of the parties. Perusal of the
questioned deed will show that the sale of the property would convert the
co-owners to vendors and vendees, a clear alteration of the judicial
relationships. This is contrary to the
requisite of simulation that the apparent contract was not really meant to
produce any legal effect. Also in a
simulated contract, the parties have no intention to be bound by the
contract. But in this case, the parties
clearly intended to be bound by the contract of sale, an intention they do not
deny. The requisites for simulation are:
(a) an outward declaration of will different from the will of the parties; (b)
the false appearance must have been intended by mutual agreement; and (c) the
purpose is to deceive third persons.
None of these are present in the assailed transaction.
Laches;
Prescription
VILLANUEVA-MIJARES vs. COURT OF APPEALS
G.R. No. 108921, April 12, 2000
Facts: Petitioners
are the legitimate children of the late Leon Villanueva. Leon Leon Leon
After the death of Leon
in August 1972, private respondents discovered that the shares of four of the
heirs of Felipe were purchased by Leon Leon
Issue: Is the
claim by private respondents to recover
the property in question barred by laches, estoppel, prescription and res
judicata?
Held: NO. At the time of signing of the Deed of Sale of August 26,
1948, private respondents Procerfina, Prosperidad, Ramon and Rosa were minors.
Even if the case was brought more than 29 years later, they could not be
faulted for their failure to file a case to recover their inheritance from
their uncle Leon, since up to the age of majority, they believed and considered
Leon
Moreover, there is no impled ratification in the instant
case because no benefit accrued to the children of Maria Baltazar, thus the
action is not barred by prescription.
While a review of the decree of registration is no longer
available after the expiration of the one-year period from entry thereof
pursuant to the doctrine of res judicata, an equitable remedy is still
available. Those wrongfully deprived of their property may initiate an action
for reconveyance of the property.
GASTON vs. COURT OF APPEALS
G.R. No. 116340, June 29, 2000.
Facts: In
1972, private respondent Gertrudes Medel filed a complaint before the RTC of
Silay City, against petitioner Cecilia Gaston's mother Sofia de Oca vda. De
Gaston and other defendants for recovery of her share over certain parcels of land of Talisay Cadastre
Issue: Is the
petition for nullification of the questioned order dated Jan. 17, 1992
time-barred?
Held: YES.
The questioned order of the respondent court is dated
January 17, 1992 but the petition was filed only on December 29, 1992 or almost
a year after the issuance of the questioned order. The yardstick to measure the
timeliness of a petition for certiorari is the reasonableness of the length of
time that had expired from the commission of the actuation complained of up to
the institution of the proceeding to amend the same. Failure to file the
certiorari petition within a reasonable time renders the petitioner susceptible
to the adverse legal consequences of laches.
The essence of laches is the failure, or neglect, for an
unreasonable and unexplained length of time to do that which, by exercising due
diligence, could or should have been done earlier; it is the negligence or
omission to assert a right within a reasonable time, warranting a presumption
that the party entitled to assert it either has abandoned it or declined to
assert it. This Court has ruled that an interval of seven (7) months after
rendition of the last order sought to be set aside is definitely barred by
laches. A petition brought after 99 days
is also barred by laches. The special civil action for certiorari under Rule 65
of the Rules of Court must be filed within a reasonable period of only 3
months.
TRUSTS
Express Trust
SECUYA
vs. VDA. DE SELMA
G.R. No. 136021, February 22, 2000
Facts: The
present petition is rooted in an action for quieting of title filed before the
RTC by petitioners, all surnamed Secuya against Gerarda De Selma.
The parcel of land subject of this case is a portion of Lot 5679 of the Talisay-Minglanilla Friar Lands
Estate. The lot was originally sold to Maxima Caballero Vda. De Carino. During the lifetime of the latter, she
entered into an Agreement of Partition dated January 5, 1938 with Paciencia
Sabellona, whereby Maxima bound herself to part with 1/3 of Lot
5679 in favor of Paciencia upon the approval of her application for
patent. Paciencia took possession and
occupation of said portion adjudicated to her.
Later she sold the 3,000 sq. m. portion thereof to Dalmacio Secuya on
October 20,1953. After said purchase,
Dalmacio and his siblings took physical possession of the land and cultivated
the same. The petitioners herein are the
heirs of Dalmacio. In 1975, Gerarda
bought a bulk of Lot 5679, which embraced and
included the land bought by Dalmacio.
Issue: Do
petitioners have the requisite title that would enable them to avail themselves
of the remedy of quieting of title?
Held: NO. Petitioners do not have the requisite title
to pursue an action for quieting of title.
Petitioners anchor their claim of ownership on the Agreement of Partition. Notwithstanding its nomenclature, the
Agreement is not one of partition, because there was no property to partition
and the parties were not co-owners.
Rather, it is in the nature of a trust agreement. Trust is the right to the beneficial
enjoyment of property, the legal title to which is vested in another. It is a fiduciary relationship that obliges
the trustee to deal with the property for the benefit of the beneficiary. Trust relations between parties may either be
express or implied. An express trust is
created by the intention of the trustor or of the parties. An implied trust comes into being by
operation of law.
The present Agreement involves an express
trust. Under Art. 1444 of the Civil
Code, ‘no particular words are required for the creation of an express trust,
it being sufficient that a trust is clearly intended.’
While no time limit is imposed for the
enforcement of rights under express trusts, prescription may, however, bar a
beneficiary’s action for recovery, if a repudiation of the trust is proven by
clear and convincing evidence and made known to the beneficiary. There was a repudiation of the express trust
when the heirs of Maxima failed to deliver or transfer the property to
Paciencia, and instead sold the same to a 3rd person not privy to
the Agreement. The Agreement was not
registered, thus, it could not bind 3rd persons. Consequently, the
subsequent sales transactions involving the land in dispute, which ultimately
led to its purchase by Gerarda, and the titles covering it must be upheld, in
the absence of proof that the said transactions were fraudulent and irregular.
SALES AND LEASE
Elements of a
Contract of Sale
SAN ANDRES vs. RODRIGUEZ
G.R. No. 135634, May 31, 2000
Facts: Juan
San Andres sold a parcel of land with an area of 345 square meters to
respondent Vicente Rodriguez. The sale is evidenced by a Deed of Sale. When San Andres died, the judicial
administrator of the decedent's estate undertook a survey of the entire land
owned by the decedent including the land sold to Rodriguez. It was found that
respondent had enlarged the area which he purchased from San Andres by 509
square meters. Accordingly, the judicial
administrator demanded that Rodriguez vacate the portion allegedly encroached
by him. When Rodriguez refused to leave, the judicial administrator thereafter
brought an action for the recovery of possession of the 509-square meter lot
Rodriguez claims the disputed portion was also subsequently
the subject of an absolute sale to him as shown by a receipt signed by the late
San Andres, which reads in full as follows: “Received from Vicente Rodriguez
the sum of Five Hundred (P500.00) Pesos representing an advance payment for a
residential lot adjoining his previously
paid lot on three sides excepting on the frontage with the agreed price of
Fifteen (15.00) Pesos per square meter and the payment of the full
consideration based on a survey shall be due and payable in five (5) years
period from the execution of the formal deed of sale.”
Issue: Was
there a perfected contract of absolute sale for the portion of the disputed 509
sq.m.-land?
Held: YES. There was a perfected contract of sale. Since the lot subsequently sold to Rodriguez
is said to adjoin the "previously paid lot" on three sides thereof,
the subject lot is capable of being determined without the need of any new
contract. The fact that the exact area of these adjoining residential lots is
subject to the result of a survey does not detract from the fact that they are
determinate or determinable.
Concomitantly, the object of the sale is certain and determinate. Under
Article 1460,NCC, a thing sold is determinate if at the time the contract is
entered into, the thing is capable of being determined without necessity of a
new or further agreement between the parties. Here, this definition finds
realization. Thus, all of the essential elements of a contract of sale are
present, i.e., that there was a meeting of the minds between the parties, by
virtue of which San Andres undertook to transfer ownership of and to deliver a
determinate thing for a price certain in money. Without any doubt, the receipt
profoundly speaks of a meeting of the mind between San Andres and Rodriguez for
the sale of the property adjoining portion previously sold to Rodriguez. The
price is certain, which is P15.00 per square meter. Evidently, this is a
perfected contract of sale on a deferred payment of the purchase price. All the
pre-requisite elements for a valid purchase transaction are present.
There is also no reservation of ownership nor a
stipulation providing for a unilateral rescission by either party. The stipulation that the "payment of the
full consideration based on a survey shall be due and payable in five (5) years
from the execution of a formal deed of sale" is not a condition which
affects the efficacy of the contract of sale. It merely provides the manner by
which the full consideration is to be computed and the time within which the
same is to be paid. But it does not affect in any manner the effectivity of the
contract.
Option Money vs.
Earnest Money
CAVITE
DEVELOPMENT BANK vs. CYRUS LIM
G.R.
No. 131679, February 1, 2000
Facts: A certain Rodolfo Guansing obtained a loan
from Cavite Development Bank (CDB), to secure which he mortgaged a parcel of
land. As Rodolfo defaulted in the payment of his loan, CDB foreclosed the
mortgage. At the foreclosure sale held on March 15, 1984, the mortgaged
property was sold to CDB as the highest bidder and later title to the property
was issued in its name. On June 16, 1988, private respondent Lolita Chan Lim
offered to purchase the property from CDB. Pursuant to the terms of the offer,
Lim paid CDB P30,000.00 as Option Money. However, after some time following up
the sale, Lim discovered that the title of subject property was originally
registered in the name of Perfecto Guansing, father of mortgagor Rodolfo, and
that title of Rodolfo was cancelled on March 23, 1984 by the RTC of Q.C as it
was fraudulently secured by the latter. This decision has since become final
and executory. Lim filed an action for
specific performance and damages against CDB and its mother company FEBTC for
the latter’s alleged misrepresentation on their ability to sell the property.
CDB deny that a
contract of sale was ever perfected between them and Lolita Chan Lim. They
contend that Lim's letter-offer clearly states that the sum of P30,000.00 was
given as option money, not as earnest money. They thus conclude that the
contract between CDB and Lim was merely an option contract, not a contract of
sale. The trial court ruled in favor of
Lim.
Issue: Is there a
perfected contract of sale between Lim and CDB?
Held:
Yes. The sum of P30,000.00,
although denominated in the offer to purchase as "option money," is
actually in the nature of earnest money or down payment when considered with
the other terms of the offer. In determining the nature of a contract, the
courts are not bound by the name or title given to it by the contracting
parties. In Carceler v. CA, the SC has
explained the nature of an option contract:
“An option contract
is a preparatory contract in which one party grants to the other, for a fixed period
and under specified conditions, the power to decide, whether or not to enter
into a principal contract, it binds the party who has given the option not to
enter into the principal contract with any other person during the period
designated, and within that period, to enter into such contract with the one to
whom the option was granted, if the latter should decide to use the option. It
is a separate agreement distinct from the contract to which the parties may
enter upon the consummation of the option. An option contract is therefore a
contract separate from and preparatory to a contract of sale which, if
perfected, does not result in the perfection or consummation of the sale.”
In this case, after the payment of the 10% option
money, the Offer to Purchase provides for the payment only of the balance of
the purchase price, implying that the "option money" forms part of
the purchase price. This is precisely the result of paying earnest money under
Art. 1482 of the Civil Code. It is clear then that the parties in this case
actually entered into a contract of sale, partially consummated as to the
payment of the price.
Delivery in
Contract of Sale
SERASPI vs. COURT OF APPEALS
G.R. No. 135602, April 28, 2000
Facts: Marcelino
Recasa was the owner of two parcels of land. During his lifetime, Marcelino
contracted 3 marriages. At the time of his death in 1943, he had 15 children
from his three marriages. In 1948, his intestate estate was partitioned into
three parts by his heirs, each part corresponding to the share of the heirs in
each marriage. The heirs of the first
marriage, sold their share to Dominador Recasa, an heir of the second marriage.
Dominador, representing the heirs of the second marriage, in turn sold the
share of the heirs to Quirico and Purificacion Seraspi whose heirs are the
present petitioners. In 1958, the
Seraspis obtained a loan from the Kalibo Rural Bank, Inc. (KRBI) on the
security of the lands in question to finance improvements on the lands.
However, they failed to pay the loan for which reason the mortgage was
foreclosed and the lands were sold to KRBI as the highest bidder. Subsequently,
the lands were sold by KRBI to Manuel Rata, brother-in-law of Quirico Seraspi.
It appears that Rata, as owner of the property, allowed Quirico Seraspi to
administer the property.
In 1974, private
respondent Simeon Recasa, Marcelino’s child by his third wife, taking advantage
of the illness of Quirico Seraspi, forcibly entered the lands in question and
took possession thereof. In 1983, the Seraspis
purchased the lands from Manuel Rata and afterwards filed a complaint against
Simeon Recasa for recovery of possession of the lands.
Issue: Did
the petitioners acquire ownership over the property in question?
Held: NO. For while a contract of sale is perfected by the meeting
of minds upon the thing which is the object of the contract and upon the price,
the ownership of the thing sold is not transferred to the vendee until actual
or constructive delivery of the property.
Hence, the maxim non nudis pactis,
sed traditione dominia dominica
LAO
vs. COURT OF APPEALS
G.R. No. 47013, 60647 & 60958-59,
February 17, 2000
Facts: The
Associated Anglo-American Tobacco Corporation (Associated) entered into a
“Contract of Sales Agent” with petitioner Andres Lao where Lao would sell
cigarettes manufactured and delivered by Associated. Lao would in turn remit
the sale proceeds to the corporation. During the effectivity of the contract,
Lao failed to accomplish his monthly sales report despite a demand letter sent
by Associated. Associated stopped its shipments to Lao.
Lao filed a complaint for accounting and damages against
Associated. The CFI ruled in favor of Lao and ordered both parties to undergo a
court supervised accounting of their respective account with the view of
establishing the true and correct accountability of Lao to Associated. The
Audit Committee submitted its report to the court. The committee excluded
shipments by Associated covered by bill of lading and factory invoices but
without the corresponding delivery receipts.
Issue: Was
the committee correct in excluding the shipments not supported by delivery
receipts although covered by bills of lading and factory consignment invoices?
Held:
YES. Under Article 1497, NCC, a thing
sold shall be understood as delivered when it is placed in the control or
possession of the vendee. The Audit Committee was correct when it adopted as
guideline that accountability over the goods shipped was transferred from the
corporation to Andres Lao only upon actual delivery of the goods to him. For it
is only when the goods were actually delivered to and received by Lao, did Lao
have control and possession over subject goods, and only when he had control
and possession over said goods could he sell the same.
Delivery is generally evidenced by a written
acknowledgment of a person that he or she has actually received the thing or
the goods, as in delivery receipts. A bill of lading cannot substitute for a delivery
receipt. This is because it is a written acknowledgment of the receipt of the
goods by the carrier and an agreement to transport and deliver them at a
specific place to a person named or upon his order. It does not evidence
receipt of the goods by the consignee or the person named in the bill of
lading; rather, it is evidence of receipt by the carrier of the goods from the
shipper for transportation and delivery. Likewise, a factory consignment
invoice is not evidence of actual delivery of the goods. An invoice is nothing
more than a detailed statement of the nature, quantity and cost of the thing
sold. It is not proof that the thing or goods were actually delivered to the
vendee or the consignee.
However, as to shipments covered only by bills of lading
and factory consignment invoices but were reported in Lao’s sales reports, the
Audit Committee correctly considered them in Lao's account. The fact that Lao
included them in his sales reports is an implied admission that subject goods
were actually delivered to him, and that he received the said goods for resale.
ABAPO vs. COURT OF APPEALS
GR No. 128677, March 2, 2000
Facts: Crispula
Abapo and Santiago Abapo executed in favor of Teodulfo Quimada a contract denominated
as “Deed of Sale under Pacto de Retro”. Under the contract, the land was sold
for P500.00 with right of repurchase within five (5) years, failing which the
conveyance would become absolute and irrevocable without the necessity of
drawing up a new deed. No redemption was made. More than seven years later,
Teodulfo Quimada sold the property to Crispula and husband Pedro Bacalao for
P500.00 . Upon the death of the spouses Bacalao, the land was alloted to their
heirs in equal individual shares and succeeded the possessions and enjoyment of
the land and paid each real estate taxes thereon to the exclusion of Santiago
Abapo.
In 1990, Santiago Santiago Santiago Santiago
Issue: Should
the Deed of Absolute Sale under Pacto de Retro be considered an equitable
mortgage due to the alleged inadequacy of price?
Held: NO.
The price of P500 is not unusually inadequate. The record reveals that the
assessed value of the land in dispute in 1970 was only P400. Thus, at the time
of sale in 1967, the price of P500 is inadequately over and above the assessed
value of P400. Besides, the mere fact that the price is inadequate does not
prove support the conclusion that the contract was a loan or that the property
was not at all sold to Teodulfo Quimada. The price fixed in the sale with a
right to repurchase is not necessarily the true value of the land sold. The
rationale is that the vendor has the right to fix a relatively reduced price,
although not a grossly inadequate one, in order to afford the vendor a retro every facility to redeem the land.
Thus, inadequacy of the price is not sufficient to set aside a sale unless it
is grossly inadequate or purely shocking to the conscience.
Consolidation
of Title in Pacto de Retro Sale
CRUZ vs.
LEIS
G.R. No.
125233, March 9, 2000
Facts: Gertrudes
Isidro, mother or respondents Leis, et al. obtained a loan from the
petitioner-spouses Alexander and Adelaida Cruz. The loan was secured by a
mortgage over the property covered by TCT No. 43100. Unable to pay her
outstanding obligation after the debt became due and payable, Gertrudes
executed two contracts in favor of Alexander. The first is denominated as
“Kasunduan” which the parties concede is a Pacto de Retro sale granting
Gertrudes one year to repurchase the property. The second is a “Kasunduan ng
Tuwirang Bilihan”, a Deed of Absolute Sale covering the same property per the
price of P39,083.00, the same amount stipulated in the Kasunduan. For failure
of Gertrudes to repurchase the property, ownership was therefore consolidated
in the name of Alexander in whose name a new TCT was issued. Gertrudes died. Thereafter, her heirs
received demands to vacate the premises from spouses Cruz, the new owners of
the property. The private respondents responded by filing a complaint for the
nullification of sale. The trial court
court ruled that the "Kasunduan," providing for a sale con pacto de
retro, had superseded the "Kasunduan ng Tuwirang Bilihan," the deed
of absolute sale. It was likewise found that Gertrudes as well as private
respondents failed to repurchase the property within the period stipulated and
has lost all their rights to it.
Nonetheless, the trial court and
the CA found for private respondents. It rationalized that spouses Cruz failed
to comply with the provisions of Article 1607 of the Civil Code requiring a
judicial order for the consolidation of the ownership in the vendee a retro to
be recorded in the Registry of Property.
Issue: Is
the recording in the Registry of Property of the consolidation of ownership of
the vendee a condition sine qua non to the transfer of ownership?
Held: NO.
Art. 1607, NCC requiring a judicial order for the consolidation of the
ownership in the vendee a retro to be recorded in the Registry of Property is
intended to minimize the evils which the pacto de retro sale has caused in the
hands of usurers. A judicial order is necessary in order to determine the true
nature of the transaction and to prevent the interposition of buyers in good
faith while the determination is being made.
Notwithstanding Art. 1607, the recording in the Registry of Property of
the consolidation of ownership of the vendee is not a condition sine qua non to
the transfer of ownership. Petitioners are the owners of the subject property
since neither Gertrudes nor the co-owners redeemed the same within one year
stipulated in the “Kasunduan”. The essence of the pacto de retro sale is that
title and ownership of the property sold are immediately vested in the vendee a
retro, subject to the resolutory condition of repurchase by the vendor a retro
within the stipulated period. Failure thus of the vendor a retro to perform
said resolutory condition vests upon the vendee by operation of law absolute
title and ownership over the property sold. As title is already vested in the
vendee a retro, his failure to consolidate his title under Article 1607, NCC
does not impair such title or ownership for the method prescribed thereunder is
merely for the purpose of registering the consolidated title.
Double
Sale
BARICUATRO, JR. vs. COURT OF APPEALS
G.R. No. 105902, February 9, 2000
Facts:
On October 16, 1968, petitioner
Severino Baricuatro, Jr., bought 2 lots on an installment basis from respondent
Constantino Galeos. Baricuatro, however, was unable to pay the full amount to
Galeos. At the time the original action for quieting of title was filed in the
trial court, Baricuatro had an unpaid balance of P4,000.00. The titles to the
said lots remained in the name of Galeos. The contract of sale involving Lot
No. 10 expressly provided that "the parties both agree that a final deed
of sale shall be executed, in favor of the buyer upon full and complete payment
of the total purchase price agreed upon."
After the sale, Baricuatro introduced certain improvements on the said
lots and started to reside therein in 1970.
Since then he has been in actual and physical possession of the 2
lots. However, on December 7,
1968, Galeos sold the entire subdivision,
including the 2 lots, to Eugenio Amores. Subsequently, Baricuatro was informed
by Galeos about the sale to Amores and was advised to pay the balance of the
purchase price of the 2 lots directly to Amores. After the sale of the entire subdivision to
Amores, he allegedly took possession thereof and developed the same for
residential purposes and registered the deed of sale.
Thereafter, Amores sold the 2 lots to the
spouses Mariano and Felisa Nemenio. Prior to the sale, however, Baricuatro was
informed through a letter by Amores about the impending sale of the lots but
the former failed to respond. The spouses Nemenio caused the transfer of the
titles to the said lots and the issuance of tax declarations in their names.
Thereafter, the spouses Nemenio demanded from Baricuatro to vacate the said
lots but the latter refused to do so.
Issue: Who has better
right over the lots in dispute?
Held: Petitioner
Baricuatro as the first buyer has better right over the disputed lots. Although
Amores as the second buyer had caused the registration of the Deed of Sale, the
prior registration of the disputed property by the second buyer does not by
itself confer ownership or a better right over the property. Article 1544,NCC
requires that such registration must be coupled with good faith. Primus tempore, potior jure (first in
time, stronger in right). Knowledge
gained by the first buyer of the second sale cannot defeat the first buyer's
rights except where the second buyer registers in good faith the second sale
ahead of the first. Such knowledge of
the first buyer does not bar him from availing of his rights under the law,
among them, to register first his purchase as against the second buyer. But in
converso, knowledge gained by the second buyer of the first sale defeats his
rights even if he is first to register the second sale, since such knowledge
taints his prior registration with bad faith. This is the price exacted by Art.
1544 for the second buyer being able to displace the first buyer; that before
the second buyer can obtain priority over the first, he must show that he acted
in good faith throughout (i.e. in ignorance of the first sale and of the first
buyer's rights) — from the time of acquisition until the title is transferred
to him by registration or failing registration, by delivery of possession. The
second buyer must show continuing good faith and innocence or lack of knowledge
of the first sale until his contract ripens into full ownership through prior
registration as provided by law. It does not appear that Amores was in good
faith when he registered the sale.
Assuming arguendo that Amores was in good faith, there is no showing
in the assailed decision that he continued to act in good faith as required by
Art. 1544. A careful and thorough
scrutiny of the records of this case reveals that Amores did not act in good faith when he
registered his title. Moreover, the preponderance of evidence supports the
finding that he already had knowledge of the previous sale of the disputed lots
to Baricuatro. Such knowledge tainted
his registration with bad faith. To merit protection under Art. 1544, the
second buyer must act in good faith from the time of the sale until the
registration of the same.
Double Sale
ANGEL BAUTISTA vs. COURT OF APPEALS
G.R.
No. 123655, January 19, 2000
Facts: On
April 13, 1977, respondents Atienzas sold to petitioner Angel Bautista a parcel
of land in Tagaytay
City
a. P10,000.00 upon signing of the contract;
b. P90,000.00 upon the Atienza’s presentation to
Bautista of a new certificate of title of the property subject of the sale,
registered in their name. However, the buyer may advance the necessary amount
to the sellers for payment of their taxes which might be required by the
Register of Deeds of Tagaytay City before the TCT from the registered owners to
the sellers can be effected but not exceeding P90,000.00. Any and all cash
advances made by the buyer to the sellers shall be deducted from the second
payment of P90,000.00. Bautista made the
initial payment of P10,000.00.
In July 1977, the Atienzas wrote a letter to Bautista,
asking P50,000.00 for the inheritance and realty taxes due on the subject
property and other incidental expenses to facilitate the transfer of the title
of the subject property in their names. Bautista refused to give the additional
money arguing that advance payment would be discretionary on his part. Hence, the Atienzas cancelled the contract to
sell the subject land.
Meanwhile, Bautista discussed with the Chairman of the Board
of Realty Baron Corporation (RBC) the possible sale of the subject property in
favor of RBC which however, did not push through.
In October, 1978 the Atienzas were able to secure title over
subject land. Thereafter, they sold a
portion of the land to RBC. TCT was
issued in the name of RBC.
Issues: 1. Do the Atienzas have the right to rescind the
contract of sale because of Bautista's refusal to advance the payment intended
to pay for taxes and other fees?
2. Is the sale of a portion of the land by the
Atienzas to RBC valid?
Held: 1.
No. The Atienzas have no right to
rescind the contract.
The rule is that where the language of a contract is
plain and unambiguous, its meaning should be determined without reference to
extrinsic facts or aids. The intention of the parties must be gathered from
that language, and from that language alone unless some good reason can be
assigned to show that the words used should be understood in a different sense.
In the case at bar, the provision of the Contract of Sale is plain and unambiguous
that Bautista as buyer MAY advance to the Atienzas as sellers the necessary
amount (not exceeding P90,000.00) for the payment of such taxes as may be
required before the TCT in favor of the sellers can be effected. The use of the word MAY meant that Bautista
has the discretion whether or not to advance the P90,000.00. He has no duty to
do it. It is purely optional on his part. Thus, Bautista did not violate the
contract when he refused to pay the advance money.
2.
No. Under Article 1544 of the
Civil Code before the second buyer can obtain priority over the first, he must
show that he acted in good faith throughout (i.e., in ignorance of the first
sale and of the first buyer's rights) — from the time of acquisition until
title is transferred to him by registration or failing registration, by
delivery of possession. RBC cannot pretend to be a buyer in good faith. In
Uraca vs. Court of Appeals, the SC held that " . . . knowledge gained by
the second buyer of the first sale defeats his rights even if he is first to
register the second sale, since such knowledge taints his prior registration
with bad faith. There is no dispute that RBC knew that Bautista was the first
buyer of the subject lot. Its initial plan was to buy the whole lot from
Bautista. It changed its plan only when it found squatters on the hilly portion
of the property. Thus, it cannot claim the right of an innocent purchaser for
value.
"One
who purchases real estate with knowledge of a defect or lack of title in his
vendor cannot claim good faith as well as one who has knowledge of facts which
should have put him upon such inquiry or investigation as might be necessary to
acquaint him with the defects in the title of his vendor. . . His mere refusal
to believe that such defect exists, or his willful closing of his eyes to the
possibility of existence of a defect in the vendor's title, will not make him
an innocent purchaser for value if it afterwards develop that title was in fact
defective and it appears that he had such notice of defect as would have led to
its discovery had he acted with that measure of precaution which may reasonably
be required of a prudent man in a like situation."
Void Contract of Sale
CAVITE
DEVELOPMENT BANK vs. CYRUS LIM
G.R.
No. 131679, February 1, 2000
Facts: A certain Rodolfo Guansing obtained a loan
from Cavite Development Bank (CDB), to secure which he mortgaged a parcel of
land. Upon default of Rodolfo in the payment of his loan, the mortgaged
property was sold to CDB in a foreclosure sale held in March, 1984. In June,
1988, private respondent Lolita Chan Lim offered to purchase the property from
CDB. Pursuant to the terms of the offer, Lim paid CDB P30,000.00 as Option
Money. However, after some time following up the sale, Lim discovered that the
title of subject property was originally registered in the name of Perfecto
Guansing, father of mortgagor Rodolfo, and that title of Rodolfo was cancelled
on March 23, 1984 by the RTC of Q.C as it was fraudulently secured by the
latter. This decision has since become final and executory. Spouses Lim filed an action for specific
performance and damages against CDB and its mother company FEBTC for the
latter’s alleged misrepresentation on their ability to sell the property. The trial court rendered a decision in favor
of spouses Lim. It held CDB and FEBTC
liable for damages (P250,000.00 as moral damages; P50,000.00 as exemplary and
P30,000.00 as attoryney’s fees) arising from the impossibility of the
performance of their obligation under the perfected contract of sale.
Issue: Is the contract of
sale between petitioners CDB and FEBTC and respondents Lim valid? If not, what is the effect of the nullity of
the contract?
Held: No.
CDB does not have a valid title over the property sold. Under Art. 1459 NCC, at the time of delivery or consummation stage
of the sale, it is required that the seller be the owner of the thing sold.
Otherwise, he will not be able to comply with his obligation to transfer
ownership to the buyer.
The foreclosure sale from which CDB derived its title over
the property cannot be given effect:
1) Rodolfo, the mortgagor did not
have a valid title over the property sold.
Being a sale, the rule that the seller must be the owner of the thing
sold also applies in a foreclosure sale. This is the reason Art. 2085 NCC,
requires, among other things, that the mortgagor or pledgor be the absolute
owner of the thing pledged or mortgaged, in anticipation of a possible
foreclosure sale should the mortgagor default in the payment of the loan; and
2) Neither can the foreclosure sale be
given effect based on the doctrine of “the mortgagee in good faith” which
provides the rule that all persons dealing with property covered by a Torrens
Certificate of Title, as buyers or mortgagees, are not required to go beyond
what appears on the face of the title.
CDB cannot be considered a mortgagee in good faith because it failed to
observe its duty of diligence in ascertaining the validity of Rodolfo’s title,
as is required of banking institutions. It appears that Rodolfo obtained his
fraudulent title by executing an Extra-Judicial Settlement of the Estate With
Waiver where he made it appear that he and Perfecto were the only surviving
heirs entitled to the property, and that Perfecto had waived all his rights
thereto. This self-executed deed should have placed CDB on guard against any
possible defect in or question as to the mortgagor's title. Indeed, CDB and
FEBTC admit that they are aware that the subject land was being occupied by
persons other than Rodolfo and that said persons, who are the heirs of
Perfecto, contest the title of Rodolfo.
Pursuant to Article 1412(2) of the Civil Code, spouses Lim,
being the non-guilty parties, are entitled to recover the P30.000.00 option
money paid by them with interest at the legal rate to be computed from the date
of the filing of the complaint. However,
under this provision, prior demand is necessary in order that the obligation to
return what was given becomes legally demandable. The filing of the action for
damages against CDB and FEBTC amounted to a demand by respondents Lim for the
return of their money. Considering CDB's
negligence, the latter is liable to pay moral damages on the basis of Arts. 21
and 2219 of the Civil Code and the SC’s ruling in Tan v. CA that moral damages
may be recovered even if a bank's negligence is not attended with malice and
bad faith. However, the sum of P250,000.00 awarded by the trial court is
excessive. Moral damages are only intended to alleviate the moral suffering
undergone by respondents Lim, not to enrich them at the expense of CDB and
FEBTC. Accordingly, the award of moral damages must be reduced to
P50,000.00. Likewise, the award of
P50,000.00 as exemplary damages and P30,000 as attorneys fees, although justified
under the Civil Code is reduced for being excessive.
Legal Redemption
FRANCISCO vs. BOISER
G.R. No. 137677, May 31, 2000
Facts: Petitioner Adalia Francisco, three of her sisters, and
their mother Adela Blas, were co-owners of land on which stands a commercial
building. On August 1986, without the knowledge of the other co-owners, Adela
Blas sold her 1/5 share to respondent Zenaida Boiser.
On August 5, 1992,
Francisco received summons concerning a complaint filed by Boiser demanding her
share in the rentals from the tenants of the building. Francisco then informed
Boiser that she was exercising her right of redemption. On August 12, 1992, she
deposited the redemption price with the Court.
On September 14,
1995, Francisco filed a case in court for legal redemption alleging that the
30-day period for redemption under Art. 1623, NCC had not yet expired since the
vendor, Blas, never informed her and the other owners about the sale to
respondent. Boiser, however, claims that
Francisco had knowledge of the sale as early as May 30, 1992 when she sent
Francisco a letter with a copy of the deed of sale between her (Boiser) and
Blas attached, informing petitioner of the sale and demanding that rentals
corresponding to her 1/5 share of the property be remitted to her. The trial
court dismissed the complaint for legal redemption holding that Art. 1623 does
not prescribe any form of notifying co-owners about a sale of co-owned property
to enable them to exercise legal redemption. The court considered the May
30,1992 letter with the copy of the deed of sale as substantial compliance with
the required notice under Art. 1623. Consequently, the 30-day period of
redemption should be counted not from August 5, 1992, when petitioner received
the summons, but at the latest from June 8, 1992, the date petitioner wrote the
tenants of the building advising them to continue paying rentals in full to
her.
Issue:
Can
the May 30, 1992 letter by Boiser to Francisco notifying her of the sale of
be considered compliance with the notice requirement of Art. 1623 for the
purposes of legal redemption?
Held: NO. Art. 1623 of the Civil Code is clear in
requiring that the written notification should come from the vendor or
prospective vendor, not from any other person. There is, therefore, no room for
construction. Indeed, the principal difference between Art. 1524 of the former
Civil Code and Art. 1623 of the present one is that the former did not specify
who must give the notice, whereas the present one expressly says the notice
must be given by the vendor. Effect must be given to this change in statutory
language. In the second place, it makes
sense to require that the notice required in Art. 1623 be given by the vendor
and by nobody else. The vendor of an undivided interest is in the best position
to know who are his co-owners who under the law must be notified of the sale.
It is the notification from the seller, not from anyone else, which can remove
all doubts as to the fact of the sale, its perfection, and its validity, for in
a contract of sale, the seller is in the best position to confirm whether
consent to the essential obligation of selling the property and transferring
ownership thereof to the vendee has been given.
Now, it is clear that by not immediately notifying the
co-owner, the vendor can effectively prevent the exercise of right of
redemption. In the present case, the sale took place in 1986 but kept secret
until 1992. It is, therefore, unjust when the subject sale has already been
established before both lower courts and now, before this Court, to further
delay petitioner's exercise of her right of legal redemption by requiring that
notice be given by the vendor before petitioner can exercise her right. For
this reason, we rule that the receipt by petitioner of summons on August 5,
1992 constitutes actual knowledge on the basis of which petitioner may now
exercise her right of redemption within 30 days from finality of this decision.
Validity of Stipulations in a Lease
Contract
CAMPO ASSETS
CORP. vs. CLUB X. O. COMPANY
G.R.
No. 134986, March 17, 2000
Facts: Alma
Arambulo (Arambulo) used to operate a food and entertainment business
establishment in Pasay
City
"VI. In case
the premises shall be deserted or vacated before the expiration of this
Agreement, the FIRST PARTY shall have the right to enter the same as the agent
of the SECOND PARTY either by force or otherwise, without being liable to any
prosecution thereof, and the FIRST PARTY shall furthermore have the option to
retake and operate the business itself or relet the same as agent of the SECOND
PARTY xxx.”
Consequently, Club X. O. represented by Allan filed a
complaint for forcible entry to recover possession of the premises and damages.
The case was dismissed for lack of merit. The court held
that the act of Campo Assets in taking possession is pursuant to Par. VI of the
MOA, which stipulation is valid, being in the nature of a resolutory condition
which is not proscribed by law.
Issue: Is the
stipulation in Par. VI of the lease contract void for being contrary to public
order and public policy?
Held: YES. The stipulation is void. Although Par. VI of the MOA employs the
prefatory words "in case the premises shall be deserted or vacated before
the expiration of the Agreement", which would restrict the operation of
the clause to situations wherein the premises are in fact vacated already, and
would therefore imply that the re-entry with the use of force if at all, is
against property only, the stipulation would not proscribe re-taking by use of
force against persons despite the fact that the premises are still in the
actual possession of another, albeit under a questioned right. Moreover, there
is no requirement of notice before re-entry. Jurisprudence supports the view
that when parties to a contract expressly reserve an option to terminate or
rescind a contract upon the violation of a resolutory condition, notice of
resolution must be given to the other party when such right is exercised. In
Zulueta vs. Mariano, the SC ruled that
resort to courts may be necessary when the right involves the retaking of
property which is not voluntarily surrendered by the other party. The rationale
for such ruling is based on the thesis that no one should take the law into his
own hands. In this sense, the stipulation is legally vulnerable. Permitting the
use of unqualified force to repossess the property and without condition of
notice upon the lessee is fraught with dangerous possibilities. Such a broad
stipulation cannot be sanctioned for the reason that it would allow the
lessor/owner to take the law into his own hands, and undermine the philosophy
behind the remedy of forcible entry which is to prevent breach of the peace and
criminal disorder and to compel the
party out of possession to respect and resort to the law alone to obtain what
he claims to be his.
Nature of Lease of Chattels
JARDIN vs. NLRC
G.R. No. 119268, February 23, 2000
Facts:
Petitioners were drivers of private
respondent, Philjama International, Inc.
(PII), a domestic corporation engaged in the operation of “Goodman
Taxi.” Petitioners used to drive PII’s
taxicabs every other day on a 24-hr. work schedule under the boundary
system. Under this arrangement, the
petitioners earned an average of P400 daily.
Nevertheless, PII deducts from said daily earnings P30.00 for the
washing of the taxi units. Believing
that the deduction is illegal, petitioners decided to form a labor union to
protect their rights, however their plans were cut short by their
dismissal. Petitioners filed a complaint
for unfair labor practice and illegal dismissal with the labor arbiter, who
dismissed said complaint. On appeal, the
NLRC dismissed the case on the ground of lack of jurisdiction over the case as
petitioners and private respondent have no employer-employee relationship but
rather a leasehold agreement which is covered under the Civil Code.
Issue: Is there a
lessor-lessee relationship between petitioners and PII?
Held: NO.
In the lease of chattels, the lessor loses complete control over the
chattel leased although the lessee
cannot be reckless in the use thereof, otherwise, he would be responsible for
the damages to the lessor. In the case
of jeepney owners/operators and jeepney
drivers, the former exercise supervision and control over the latter. The management of the business is in the
owner’s hands. The owner as holder of
the certificate of public convenience must see to it that the driver follows
the route prescribed by the franchising authority and the rules promulgated as
regards its operations. This
relationship may be applied by analogy to taxi owners/operators and taxi
drivers.
Right of First
Refusal of a Lessee
SEN PO EK MARKETING CORP. vs. MARTINEZ
G.R. No. 134117, February 9, 2000
Facts: Sofia
Martinez was the registered owner of 2 parcels of land who leased the lots to
Yu Siong, father of the president and stockholders of petitioner Sen Po Ek for
a period of 10 years. When the lease
expired it was later renewed several times, the last renewal being on March
1982 which is to expire on Jan. 1987. In
the meantime, Sofia Sofia Po Ek informing it of her intention to
sell the leased premises and authorizing a broker to negotiate the sale "with any and all
interested parties." Sen Po Ek
offered to purchase the poperty. Another
buyer, Tiu Uyping, was also interested.
Sen Po Ek then filed a complaint for the annulment of the sale executed
by Sofia in favor of Teodora, invoking its alleged right of first refusal or
preferential right to buy the leased premises
Days later, the property was sold to Tiu Uyping. Sen Po Ek amended its complaint, praying for
the nullity of the second sale transaction.
Issue: Does
petitioner Sen Po Ek have a right of first refusal?
Held: NO.
Sen Po Ek does not have a right of first refusal to assert against
private respondents. Neither any law nor any contract grants it preference in
the purchase of the leased premises.
Petitioner cites P.D. No. 1517, R.A. No. 1162 and Art. 1622,NCC but they
are not applicable to the case at bar. P.D. No. 1517(The Urban Land Reform Act)
pertains to areas proclaimed as urban land reform zones. The lots in dispute
are located in Tacloban
City Manila
Renewal of
Term of Lease
BUCE vs. COURT OF
APPEALS
G.R. No.
136913, May 12, 2000
Facts: Petitioner
entered into a lease contract over a parcel of land with private respondents
Tiongcos for a period of 15 years to commence on June 1979 and to end on June
1994 "subject to renewal for another 10 years, under the same terms and
conditions." Petitioner then constructed a building and paid the required
monthly rentals. When private respondents later demanded an increase in the
rent, petitioner offered to pay the previous lower rental which the former
refused to accept.
On August 1993, petitioner
filed with the RTC a complaint for specific performance praying that private
respondents be ordered to accept the rentals she tendered and to respect the
lease of fifteen years, which was renewable for another ten years.
Issue: Can it
be reasonably inferred that the parties intended an automatic renewal of the
lease contract when they stipulated that the lease shall be for a period of 15
years "subject to renewal for another 10 years"?
Held: NO. There is nothing in the stipulations in the
contract and the parties’ actuation that shows that the parties intended an
automatic renewal or extension of the term of the contract. The fact that the
lessee was allowed to introduce improvements on the property is not indicative
of the intention of the lessors to automatically extend the contract. Neither
the filing of the complaint a year before the expiration of the 15-year term
has any bearing on the intention of the parties regarding renewal. In the case at bar, it was not specifically
indicated who may exercise the option to renew, neither was it stated that the
option was given for the benefit of herein petitioner. Thus, pursuant to Art.
1196, NCC, the period of the lease contract is deemed to have been set for the
benefit of both parties. Renewal of the contract may be had only upon their
mutual agreement or at the will of both of them. It is the owner-lessor’s
prerogative to terminate the lease at its expiration. The continuance,
effectivity and fulfillment of a contract of lease cannot be made to depend
exclusively upon the free and uncontrolled choice of the lessee between
continuing the payment of the rentals or not, completely depriving the owner of
any say in the matter. Mutuality does not obtain in such a contract of lease
and no equality exists between the lessor and the lessee since the life of the
contract would be dictated solely by the lessee.
Extension of Lease
UNIVERSITY PHYSICIANS SERVICES, INC.
vs. COURT OF APPEALS
G.R. No. 115045,
January 31, 2000
Facts: Spouses
Lourdes and Fausto Mabanta and University Physicians Services, Inc. (UPSI)
entered into a lease agreement, commencing on June 1, 1973 and ending on May
31, 1983, with a provision that the ‘period of this lease may be extended for
another period of 5 years subject only to re-negotiation of rentals, which
re-negotiations should start not less than 6 months prior to the termination of
the original period of this lease.’
On May 12, 1983, UPSI informed the
spouses that it is exercising its option to extend the lease for another period
of 5 years and that it is willing to negotiate the rentals. The spouses, through their lawyers, answered
that since there was no renegotiation on the rentals which should have started
not less than 6 months prior to the termination of the original period, there
are no rights which have arisen thereunder.
UPSI insisted on its right to extend the lease.
Meanwhile, the lease was terminated upon
the filing of the unlawful detainer case by the spouses, which was ultimately
resolved against UPSI in the IAC.
On November 21, 1985, Spouses Mabanta filed a complaint for
Compensation and Damages against UPSI before the RTC of Pasig claiming that
despite the lapse of the original period of the lease, the latter continuously
occupied and used the leased premises without paying the necessary rent. The trial court granted the claim of the
spouses. On appeal, the CA affirmed the
decision of the trial court with some modifications. Hence, this appeal.
Issue: Does
UPSI have the right to extend the duration of the lease under the terms of the
lease agreement?
Held: NO. The provisions of a contract should not be
read in isolation from the rest of the instrument but, on the contrary,
interpreted in the light of the other related provisions in order to fix the
meaning of any of its parts. A careful
reading of the renewal clause yields no basis for recognizing an exclusive
unilateral right on the part of the lessee to extend the term of the lease for
another 5 years. The word ‘extended’ was
qualified by the word ‘may be’ which connotes possibility; it does not connote
certainty. The extension clearly was
premised on the act of both parties, i.e., renegotiation of rentals, which
should start not less than 6 months prior to the termination of the original period
of the lease. Furthermore, in a
reciprocal contract like a lease, the period of the lease must be deemed to
have been agreed upon for the benefit of both parties, absent language showing
that the term was deliberately set for the benefit of the lessee or lessor
alone. UPSI failed to comply
with the 6 month period, hence, no extension of the lease in its favor has
arisen.
Concept of Implied
New Lease
ROSELLO-BENTIR vs. LEANDA
G.R.
No. 128991, April 12, 2000
Facts: Respondent Leyte Gulf Traders, Inc. (LGTI)
entered into a contract of lease of a parcel of land with Bentir for a period
of 20 years starting May 5, 1968, which was extended for another 4 years or
until May 31, 1992. In 1989, Bentir sold the leased premises to spouses Pormada.
LGTI questioned the sale alleging that it had a right of first refusal. On May
15, 1992, LGTI filed a complaint for reformation of the expired contract of
lease to incorporate therein, the verbal agreement between the parties that in
the event Bentir leases or sells the lot after the expiration of the lease,
LGTI has the right of first refusal or the right to equal the highest
offer. The complaint was dismissed on
the ground of prescription. On LGTI’s
motion for reconsideration, respondent judge reversed the order of dismissal on
the ground that the action for reformation had not yet prescribed.
Bentir and Spouses Pormada filed a petition for certiorari
to the CA seeking the annulment of the order of respondent court. In holding that the action for reformation
has not prescribed, the CA upheld the ruling of the trial court that the
10-year prescriptive period should be reckoned not from the execution of the
contract of lease in 1968, but from the date of the alleged 4-year extension of
the lease contract after it expired in 1988. Consequently, when the action for
reformation of instrument was filed in 1992 it was within 10 years from the
extended period of the lease. LGTI theorized, and the CA agreed, that the
extended period of lease was an "implied new lease" within the
contemplation of Article 1670 of the Civil Code, under which provision, the
other terms of the original contract were deemed revived in the implied new
lease.
Issue: Has the complaint for reformation of
instrument filed by respondent Leyte Gulf Traders, Inc. prescribed?
Held: YES. The prescriptive period should be
counted from the date of execution of the lease contract and not from the date
of extension of the same. First, Art.
1670 speaks of an implied new lease (tacita reconduccion) where at the end of
the contract, the lessee continues to enjoy the thing leased "with the
acquiescence of the lessor", so that the duration of the lease is
"not for the period of the original contract, but for the time established
in Article 1682 and 1687." Hence, if the extended period of lease was
expressly agreed upon by the parties, as in the present case, then the term
should be exactly what the parties stipulated, not more, not less. Second, even
if the supposed 4-year extended lease be considered as an implied new lease
under Art. 1670, "the other terms of the original contract"
contemplated in said provision are only those terms which are germane to the
lessee’s right of continued enjoyment of the property leased. The prescriptive period of 10 years provided
for in Art. 1144 for reformation of an instrument applies by operation of law,
not by the will of the parties. Therefore, the right of action for reformation
accrued from the date of execution of the contract of lease in 1968. As the action was filed only in 1992 or 24
years after the cause of action accrued, the same has become stale, hence,
time-barred.
CREDIT
TRANSACTIONS
Escalation
Clause; Interest
BANCO FILIPINO
SAVINGS & MORTGAGE BANK vs. COURT OF APPEALS
G.R. No. 129227, May 30, 2000
Facts: Respondent-spouses
Arcilla obtained loans secured by real estate mortages from the petitioner Banco Filipino Savings and
Mortgage Bank (BANK) where the BANK may increase the rate of interest on said
loans, within the limits allowed by law, as its Board of Directors may
prescribe for its borrowers. At that time, under the Usury Law, as amended, the
maximum rate of interest for loans secured by real estate mortgages was 12% per
annum.
On January 1976, the Central Bank of the Philippines
On September 1985, the spouses Arcilla filed a complaint for
the annulment of the loan contracts and foreclosure sale. They contend, among
others, that the loan contracts and mortgages between the parties were null and
void because: (a) the rate of interests charged by the BANK were usurious; (b)
that they are entitled to the refund inasmuch as the escalation clause
incorporated in the loan contracts do not have a corresponding de-escalation
clause and is therefore illegal.
Issue: Is the
unilateral increase in interest rate made by petitioner based on an escalation
clause in their contract valid?
Held: NO. The unilateral increase in interest is not
valid. The loan contracts with real estate mortgage entered into by and between
the petitioner and respondents stated that the petitioner may increase the
interest on said loans, within the limits allowed by law, as petitioner's Board
of Directors may prescribe for its borrowers. At the time the contracts were
entered into, said escalation clause was valid. It was only pursuant to P.D.
No. 1684 which became effective March 1980 wherein to be valid, escalation
clauses should provide: 1) that there can be an increase in interest if
increased by law or by the Monetary Board; and 2) in order for such stipulation
to be valid, it must include a provision for the reduction of the stipulated
interest in the event that the maximum rate of interest is reduced by law or by
the Monetary Board. Despite the validity of the escalation clause, the
petitioner may not, however, increase
the stipulated interest pursuant to the Central Bank Circular 494 from 12% to
17%. CB Circular 494, although it has
the force and effect of law, is not a law and is not the law contemplated by
the parties which authorizes the petitioner to unilaterally raise the interest
rate of the loan. Consequently, the reliance by the petitioner on Central Bank
Circular 494 to unilaterally raise the interest rates on the loan in question
was without any legal basis.
Real Estate
Mortgage
ROBLES vs. COURT OF APPEALS
G.R. No. 123509, March 14, 2000
Facts: The
property subject of this case is originally owned by Leon Robles. When he died, it passed to his son Silvino
who declared the property in his name and paid the taxes thereon. Upon the latter’s death, his widow and
children inherited the property. Petitioners Lucio Robles, et al. were the
children of Silvino, and Hilario Robles is their half-brother. The task of
cultivating was assigned to Lucio while
the payment of the land taxes was entrusted to Hilario. For unknown reason, the
tax declaration of the parcel of land in the name of Silvino was cancelled and
transferred to Exequiel Ballena. Ballena secured a loan from Antipolo Rural Bank using the tax declaration
as security. Somehow the tax declaration was transferred to the name of
Antipolo Rural Bank and later was transferred to the name of respondent- spouses Hilario and
Andrea Robles. Andrea secured a loan from Cardona Rural Bank using the tax declaration as
security. For failure to pay the
mortgage debt, the property was foreclosed with Cardona Rural Bank emerging
as the highest bidder. The bank sold the property to spouses Vergel and Ruth Santos. In Sept. 1987, petitioners discovered the
mortgage and attempted to redeem the property but was unsuccessful. In 1988, the spouses Santos
Issue: Is the
real estate mortgage constituted by Hilario valid?
Held: NO. In a real estate mortgage contract, it is
essential that the mortgagor be the absolute owner of the property to be
mortgaged; otherwise, the mortgage is void.
In the present case, it is apparent that Hilario was not the absolute
owner of the entire subject property; and that the Rural Bank of Cardona, Inc.,
in not fully ascertaining his title thereto, failed to observe due diligence
and, as such, was a mortgagee in bad faith. Buyers of unregistered real
property, especially banks, must exert due diligence in ascertaining the titles
of mortgagors and sellers, lest some innocent parties be prejudiced. Failure to
observe such diligence may amount to bad faith and may result in the nullity of
the mortgage, as well as of the subsequent foreclosure and/or auction sale. Considering that Hilario can be deemed to
have mortgaged the disputed property not as absolute owner but only as a
co-owner, he can be adjudged to have disposed to the Rural Bank of Cardona,
Inc., only his undivided share therein. The said bank, being the immediate
predecessor of the Santos
Rights of a Mortgagee
ISAGUIRRE vs. DE LARA
G.R. No. 138053, May 31, 2000
Facts: Petitioner
Isaguirre and respondent De Lara were
parties in a case involving a parcel of land wherein there was dispute as to
its ownership as well as the nature of the transaction they entered into
regarding the disputed land. The case was resolved by the Supreme Court which
declared that De Lara was the lawful owner of the land and held that the
contract they entered into was an equitable mortgage and not a sale.
On the basis of the Court’s decision, De
Lara filed a motion for execution with the trial court for the delivery of
possession of the land. Isaguirre opposed the motion, asserting that, as
mortgagee, he had the right of retention over the property pending actual payment of the loan by De
Lara.
Issue: Is Isaguirre, as
mortgagee, entitled to retain possession of the subject property until payment
of the loan?
Held: NO.
A mortgage is a contract entered into in order to secure the fulfillment
of a principal obligation. It is constituted by recording the document in which
it appears with the proper Registry of Property, although, even if it is not
recorded, the mortgage is nevertheless binding between the parties. Thus, the
only right granted by law in favor of the mortgagee is to demand the execution
and the recording of the document in which the mortgage is formalized. As a
general rule, the mortgagor retains possession of the mortgaged property since
a mortgage is merely a lien and title to the property does not pass to the
mortgagee. However, even though a mortgagee does not have possession of the
property, there is no impairment of his security since the mortgage directly
and immediately subjects the property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation for whose security it
was constituted. If the debtor is unable to pay his debt, the mortgage creditor
may institute an action to foreclose the mortgage, whether judicially or
extrajudicially, whereby the mortgaged property will then be sold at a public
auction and the proceeds therefrom given to the creditor to the extent
necessary to discharge the mortgage loan.
Regardless of its possessor, the mortgaged property may still be sold,
with the prescribed formalities, in the event of the debtor's default in the
payment of his loan obligation.
Legal Redemption; Mortgage
PHILBANCOR FINANCE vs. COURT OF APPEALS
G.R. No. 129572, June 26, 2000
Facts: Petitioner
Vicente Hizon, Jr. is the owner of agricultural lands located in Balite, San Fernando
Issue: Can the private respondents still exercise
their legal right of redemption over the subject lands considering that they
invoked their right to redeem only on July 14, 1992, seven years after the date
of registration of the certificate of sale with the Register of Deeds?
Held: NO. Private respondents can no longer redeem the
subject lands.
RA No. 3844, Section
12, provides as follows: "In case
the landholding is sold to a third person without the knowledge of the
agricultural lessee, the latter shall have the right to redeem the same at a
reasonable price and consideration. Provided, that the entire landholding sold
must be redeemed. Provided further, that where there are two or more
agricultural lessees, each shall be entitled to said right of redemption only
to the extent of the area actually cultivated by him. The right of redemption
under this section may be exercised within two (2) years from the registration
of the sale and shall have priority over any other right of legal
redemption."
Concurrence and
Preference of Credit
J.L.
BERNARDO CONSTRUCTION vs. COURT OF APPEALS
G.R. No. 105827, January 31, 2000
Facts: The municipal government of San Antonio
The lower court issued the writ of
preliminary attachment and it also granted the right to maintain possession of
the public market and to operate the same.
It held that since BC has not been reimbursed, it stands in the position
of an unpaid contractor and as such is entitled pursuant to Art. 2242 &
2243 NCC to a lien upon the public market which it constructed.
Issue: May
the contractor’s lien be enforced?
Held:
NO. Art. 2242, NCC
provides that the claims of contractors engaged in the construction,
reconstruction or repair of buildings or other works shall be preferred with
respect to the specific building or other immovable property constructed. However, this provision only finds
application when there is a concurrence of credits, i.e. when the same specific
property of the debtor is subjected to the claims of several creditors and the
value of such property of the debtor is insufficient to pay in full all the
creditors. In such a situation, the
question of preference will arise, that is, there will be a need to determine
which of the creditors will be paid ahead of the others. This statutory lien should only be enforced
in the context of some kind of a procedure where the claims of all preferred
creditors may be bindingly adjudicated, such as in insolvency proceedings.
The action filed by petitioner does not
partake of the nature of an insolvency proceeding, but is basically for
specific performance and damages. Thus,
even if it is finally adjudicated that BC is entitled to invoke the
contractor’s lien, such lien cannot be enforced in the present action for there
is no way of determining whether or not there exist other preferred creditors
with claims over the public market.
IV. TORTS AND DAMAGES
Damages
PEOPLE vs. TOREJOS
G.R. No. 132217, Feb. 18, 2000
Facts: On
April 25, 1997, accused Bonifacio Torejos was convicted for raping Mary Cris Cerna and was meted the supreme
penalty of death. The victim was, at
the time of the commission of the crime, only 3 years old and nine days. The judgment of the RTC of Davao City, finding
him guilty beyond reasonable doubt of the crime of rape, and ordering him to
pay the parents of Mary Cris Cerna, Luciano and Rosalie Cerna, the amount of
P30,000.00 as civil indemnity pursuant to Art. 100 in relation to Art. 104,RPC,
is now before the Supreme Court on automatic review.
Issue: How
much and to whom should the civil indemnity and moral damages be awarded?
Held: Considering
that the crime was committed under circumstances which justify the imposition
of death penalty, i.e., the victim is a child below 7 years
old, the amount of civil
indemnity is increased to P75,000.00.
Moreover, accused Torejos is also ordered to pay moral damages in the
amount P50,000.00. Finally, the civil
indemnity and moral damages should be awarded to Mary Cris as the offended party.
PEOPLE vs. GONZALO PENASO
G.R. No. 121980, February 23, 2000
Facts: Gonzalo Penaso was found guilty by the RTC
of Tagbilaran of the crime of rape and sentenced to suffer an imprisonment of
reclusion perpetua and to pay the victim indemnity and moral damages in the
amount of P50,000.00 The victim was 15
years old at the time the offense was committed.
Issue: Is the award of
damages proper?
Held: NO.
Pursuant to current jurisprudence, the award of P50,000.00 as civil
indemnity is mandatory upon the finding of the fact of rape. In addition, moral damages amounting to
P50,000.00 at the least should be imposed in rape cases involving young and
immature girls between the ages of 13 and 14, without need of further
proof. Hence, the amount of damages
awarded should be P100,000.00.
PEOPLE vs. EREñO
G.R. 1224706, Feb. 22, 2000
Facts: On the
night of June 21, 1995, an altercation over a flashlight led to the untimely
death of Rosanna Honrubia. The victim
died by reason of the stab wounds she sustained at the back and at the chest.
An eyewitness sufficiently identified
the assailant as the accused
Carlito Ereño. The mother of Rosanna
claimed she spent P24,000.00 in connection with her death and burial.
She was also claiming P187,200.00
by way of lost income which
Rosanna could have earned had she not been untimely killed. There was also a claim for moral damages
brought by the pain and sorrow caused by Rosanna’s demise.
The trial court
found accused guilty of murder and ordered him to pay to the heirs of Rosanna
P24,000.00 for expenses incurred in connection with her death and burial;
P50,000.00 for loss of the victim’s life and P50,000.00 by way of moral
damages. The claim for loss income was
however denied.
Issue: Is the
award of damages and the denial of the award for loss of income proper and
correct under the circumstances?
Held: As to actual damages, NO. In seeking recovery for actual damages it is
necessary that the claimant produce competent proof or the best evidence
obtainable such as receipts to justify an award therefor. Actual or compensatory damages cannot be presumed but must be proved
with reasonable degree of certainty.
Only substantiated and proven expenses or those which appear to have
been genuinely incurred in connection with the death, wake or burial of the
victim will be recognized by the court.
The list of expenses incurred for the wake, funeral and burial of the
victim amounting to P24, 700.00
submitted by the victim’s mother is self-serving and not substantiated. The Supreme Court cannot, therefore, affirm
the trial court’s award of P24,000.00 as actual expenses.
As to the civil indemnity,
YES. In line with current jurisprudence the award of P50,000.00 as civil
indemnity (ex delicto) is sustained, which requires no proof other than the
fact of death of the victim and assailant’s responsibility therefor.
As to the moral damages, YES. The award of P50,000.00 by way
of moral damages for the pain and sorrow
suffered by the victim’s family in connection with Rosanna’s death is
sustained. Such award is adequate
reasonable and with sufficient basis taking into consideration the pain and
mental anguish suffered by the victim’s family.
As to denial of the award for loss of income, YES. The court
a quo correctly denied for lack of
factual basis the claim of the victim’s mother for an award for loss of income
or earning capacity of the deceased estimated by her at P600 per day or
P15,600.00 a month or P187,200.00 a
year. This handwritten estimate of the
deceased’s daily income as a self- employed fish vendor during the past eight
years prior to her death submitted by the victim’s mother in the course of her
testimony in court is not supported by competent evidence like income tax
returns or receipts. It bears stress that compensation for lost income is in
the nature of damages and as such requires due proof of the damages
suffered; there must be unbiased proof
of the deceased’s average income. In the
instant case the victim’s mother gave only a self-serving hence unreliable
statement of her deceased daughter’s income.
Moreover, the award for lost income refers to the net income of the
deceased, that is, her total income less her average expenses. No proof of the victim’s average expenses was
presented. Hence, there can be no reliable estimate of the deceased’s lost
income.
N.B. The SC held the accused guilty only of
the crime of homicide.
PEOPLE vs. DE GUZMAN
G.R. No.118670, Feb. 22, 2000
Facts: Accused
Renato de Guzman, et al. were found guilty by the RTC of Baguio City of the
crime of robbery with homicide committed against the person of Dr. Amadeo
Belmonte and the house helper Teresa Hape.
On the civil aspect, they were ordered to restore or pay the value of
the stolen properties, to indemnify P50,000.00 each victim in accordance with
Art. 2206, NCC; P46,200,000.00 representing
the lost earnings of Dr. Belmonte for 25 years since he was only 35 years old
when killed and the life expectancy of an average Filipino is 60 years
old, P274,809 representing actual and
compensatory damages, P1,000,000 as
moral damages and P100,000.00 as exemplary damages to the heirs of Dr.
Belmonte; and P100,000.00 exemplary damages to the heirs of Hape.
Issue: Is the
award of damages proper and correct under the circumstances?
Held: The
award given by the trial court for loss of earnings is erroneous. As established, Dr. Belmonte was earning an
average of P150,000.00 as practicing physician; P20,000 as professor of
medicine per month or P2,088,000 per year. It was likewise established that Dr.
Belmonte was only 35 years old at the time of his death. Loss of earning
capacity is computed on the following formula:
Net
Life expectancy Gross Living
Earning = [(2/3) (80-35)] x annual _ expenses
Capacity at
death income (GAI ) ( 50% of GAI)
=[(2/3) (80-35)] x P2,088,000.00 – P1,044.000.00
=[(2/3) (45)] x P1,044,000.00
= 30 x P1,044,000.00
=P31,320,000.00
Thus
the award for loss of earning is reduced to P31,320,000.00.
As regards the award for actual damages the same is reduced
from P274,809 to P113,709.75 since this is the amount that was proved and duly
receipted.
The award for moral damages to the legal heirs of Dr.
Belmonte is likewise reduced to P50,000.00 in line with prevailing
jurisprudence. The lower court should
have awarded moral damages for the killing of Teresa Hape considering its
finding that aggravating circumstances attended the robbery-killing, in
accordance with Art. 2230 of the Civil Code.
Thus, the award of P50,000.00 as moral damages is warranted under the
circumstances. Likewise the award for exemplary damages is reduced to P20,000.00 each for the heirs
of Dr. Belmonte and Teresa Hape.
PEOPLE vs. MENDIONA
G.R. No. 129056, Feb. 21, 2000
Facts: Accused
Liberato Mendiona was convicted of the crime of rape, and sentenced to suffer
the supreme penalty of death. He was also ordered to pay the offended party,
Maricel Capongcol, the amount of P50,000.00 as moral damages.
Issue: Should
the P50,000.00 awarded to the offended party be classified as moral damages?
Held: NO. We correct the
trial court’s erroneous classification of the award of P50,000.00 as moral
damages. The award authorized by
criminal law as civil indemnity (ex delicto) for the offended party is
mandatory upon the finding of the fact of rape;
it is distinct from and should not be denominated as moral damages which
are based on different jural foundation and assessed by the court in the
exercise of sound discretion. Further,
our more recent rulings hold that the indemnification for the victim shall be
in the increased amount of P75,000.00 if the crime of rape is committed or
effectively qualified by any of the circumstances under which the death penalty
is authorized by law. Applying the
foregoing ruling, the civil indemnity to be awarded to the complainant is P75,000.00.
CALALAS vs. COURT OF APPEALS
G.R.
No. 122039, May 31, 2000
Facts: On the
way to Poblacion Sibulan, Negros Occidental, petitioner Vicente Calalas’ passenger jeepney was bumped by an Isuzu
truck. Private respondent Eliza Sunga, a
passenger in the jeepney sustained injuries.
Eliza filed a complaint for damages against Vicente based on breach of
contract of carriage by the latter in
failing to exercise the diligence required of him as a common carrier. Vicente was adjudged liable for damages to
Eliza, including P50,000 as moral damages.
Issue: Is the award of moral damages proper?
Held: NO. As a general rule, moral damages are
not recoverable in actions for damages predicated on a breach of contract for
it is not one of the items enumerated under Art. 2219 of the Civil Code. As an
exception, such damages are recoverable: (1) in cases in which the mishap
results in the death of a passenger, as provided in Art. 1764, in relation to
Art. 2206(3) of the Civil Code; and (2) in the cases in which the carrier is
guilty of fraud or bad faith, as provided in Art. 2220.
In this case, there is no legal basis for awarding moral
damages since there was no factual finding by the appellate court that
petitioner acted in bad faith in the performance of the contract of carriage.
PEOPLE vs. MAGAT
G.R. No. 130026, May 31, 2000
Facts: Before this court
for automatic review is the joint decision of the RTC of QC, in 2 criminal
cases, finding accused Antonio Magat guilty of raping his daughter, Ann Fideli
Magat, on two occasions and sentencing him to suffer the extreme penalty of
death for each case, and to pay the sum of P50,000.00 as compensatory damages,
P200,000.00 as moral damages and, P500,000 00 as exemplary and corrective
damages.
Issue: Is the award of
damages proper?
Held: The sum awarded as compensatory damages should be increased
from P50,000.00 to P75,000.00. The SC
has previously held that “if the crime of rape is committed or effectively
qualified by any of the circumstances under which the death penalty is
authorized by the present amended law, the indemnity of the victim shall be in
the increased amount of not less than P75,000.00. In the 2nd
criminal case however, while appellant was sentenced to reclusion perpetua, as
the crime of rape was committed when the victim is already above 18 years old,
the compensatory damage should be the same (P75,000.00). The trauma, ignominy,
pain and shame suffered by the complainant can not be treated or regarded any
lesser.
In crimes of rape, moral damages may additionally be awarded
to the victim in the criminal proceeding, in such amount as the Court deems
just, without the need for pleading or proof of the basis thereof. The fact
that complainant has suffered the trauma of mental, physical and psychological
sufferings which constitute the bases for moral damages are too obvious to
still require the recital thereof at the trial by the victim, since the Court
itself even assumes and acknowledges such agony on her part as a gauge of her
credibility. Nevertheless, the award of
P200,000.00 as moral damages is excessive. An award of P50,000.00 for each
count of rape is more reasonable.
The award of exemplary or corrective damages is deleted in the
absence of any legal basis therefor.
PEOPLE vs. BAUTISTA
G.R. No. 131840, April 27, 2000
Facts: The RTC of Rizal found Henry and Nilo Bautista guilty of
murder and sentenced them to suffer the penalty of reclusion perpetua and to
pay jointly the amounts of P24,839.00 as actual damages and P30,000.00 as civil
indemnity to the heirs of the victim, Igmidio Grajo. The prosecution witness
Richard Grajo, son of the victim, testified on the commission of the crime by
the accused. Purita Grajo testified on the amount of damages: funeral expenses,
earning capacity, hospital bill amounting to P24,839.00.
Issue: What
are the nature and the amount of damages that may be awarded by the court?
Held: Every
person criminally liable for a felony is also civilly liable. The amount and
nature of damages to be awarded are:
1. Indemnity for Death. Art. 2206,NCC provides for the payment of
indemnity for death caused by a crime. Initially fixed in Art. 2206 at P3,000.00,
the amount of indemnity for death has, through the years, been gradually
increased in view of the declining value of the peso. It is presently fixed at
P50,000.00. Hence, the trial court
correctly awarded indemnity for death to the heirs of Igmidio in this amount.
2. Actual Damages.
Art. 2199,NCC provides that "except as provided by law or by stipulation,
one is entitled to an adequate compensation only for such pecuniary loss
suffered by him as he has duly proved." The prosecution submitted receipts
and presented the testimony of Purita,
the widow of Igmidio, showing that his family incurred expenses in the total
amount of P24,839.00 for his wake and burial. Hence, the trial court likewise
correctly awarded actual damages to the heirs of Igmidio in this amount.
The civil liability of accused for indemnity for death and
actual and moral damages, however, is solidary and not joint as ruled by the
trial court.
3. Moral
Damages. Under Art. 2206,NCC, the
spouse, legitimate and illegitimate descendants and ascendants of the deceased
are entitled to moral damages "for mental anguish by reason of the death
of the deceased." Purita testified that she suffered pain from the death
of her husband. Thus, in accordance with recent decisions of this Court, accused should be liable to
pay the additional amount of P50,000.00 as moral damages.
4. Exemplary Damages. Under Art. 2230,NCC, "exemplary
damages as a part of the civil liability may be imposed when the crime was
committed with one or more aggravating circumstances." In this case, the
aggravating circumstance of abuse of superior strength should be appreciated
against Nilo. Thus, accused Nilo Bautista should be ordered to pay the heirs of
Igmidio the additional sum of P30,000.00 as exemplary damages.
N.B.
Accused were found guilty of homicide not murder.
PEOPLE vs. PASCUAL
G.R. No. 127761, April 28, 2000
Facts: The accused, Pedro R. Pascual, and a certain John Doe were
charged with the crime of murder.
Pascual was found guilty of killing Dr. Picio by testimony of
prosecution witness Marissa Robles. Rosalinda S.Picio, wife of the late
Dr.Picio, testified on the civil aspect of the case. She stated she spent around P300,000 for the
wake and funeral service. She also declared that her husband used to receive a
monthly salary of P13,000 as municipal health officer in addition to the
P240,000 annual income he used to earn in farming and grains business.
Issue: What
are the nature and the amount of damages that may be awarded?
Held: In
view of the death of the victim, Dr. Maximino Picio, Jr., his forced heirs are
entitled to P50,000.00 representing civil indemnity ex delicto. They are also
entitled to P50,000.00 by way of moral damages inasmuch as the widow of the
victim, Rosalinda Picio, testified on how she felt over the loss of her
husband. Additionally, the accused is
liable to pay to the heirs of the victim damages for loss of earning capacity
of the deceased. However, actual damages may not be awarded in view of the
absence of competent evidence to support the same.
It appears that Dr. Picio was 64 years old at the time of his death on March
14, 1995. Her widow testified that he used to receive a monthly salary of
P13,000.00 as Municipal Health Officer of San Manuel, Isabela. In accordance with
the American Expectancy Table of Mortality which was adopted by the Court, the
loss of earning capacity shall be computed as follows:
Net
Earning Capacity (X) = Life Expectancy x (Gross Annual Income – Living Expenses
e.g. 50% of annual gross income)
= 2 (80-64) x
(156,000.00-78,000.00)
————
3
= 10.667 x 78,000.00
= P832,026.00
OROSA
vs. COURT OF APPEALS
G. R. No. 111080, April 5, 2000
Facts: Petitioner
Jose Orosa purchased a Ford Sedan on
installment from Fiesta Motor Sales Corporation (FMSC), executing and
delivering to the latter a promissory note payable in monthly
installments. To secure payment, he
executed a chattel mortgage over the subject motor vehicle in favor of FMSC
which in turn assigned the promissory note and chattel mortgage to private
respondent FCP Credit Corporation. Orosa
failed to pay part of an installment as well as three (3) other consecutive
installments. Consequently, FCP Credit
Corporation demanded from him payment of the entire outstanding balance of the
obligation with accrued interest and to surrender the vehicle which petitioner
was allegedly detaining. As Orosa failed
to do so, FMSC filed a complaint for replevin and damages in the RTC of Manila
against the former. It was able to
provisionally secure the writ.
The trial court ruled that FMSC is not
entitled to the writ of replevin since Orosa already made payments on the
installments, albeit late and irregular.
It ordered the return of the subject vehicle, or its equivalent, to
petitioner. It likewise granted
petitioner’s counterclaim for moral damages, exemplary damages, and attorney’s
fees.
Issue: Is
Orosa entitled to moral damages, exemplary damages, and attorney’s fees?
Held: NO. Orosa’s claim must be denied. As to the matter of moral damages, the law
clearly states that one may only recover moral damages if they are the
proximate result of the other party’s wrongful act or omission. Two elements are required. First, the act or omission must be the
proximate result of the physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation and similar injury. Second,
the act must be wrongful.
According to Orosa, the car subject of
this case was being used by his daughter, married to Jose Concepcion III, a
scion of a prominent family. He
maintains that when the complaint was filed against him, he suffered untold
embarrassment as he had to explain the suit to his daughter’s in-laws. However, that could have been avoided had he
not assigned the car to his daughter and had he been faithful and prompt in
paying the installments required. Orosa
brought the situation upon himself and cannot now complain that FMSC is liable
for the mental anguish and humiliation he suffered. Further, FMSC brought the complaint only to
exercise a legal right, believing that it had a meritorious cause of action
clearly borne out by a mere perusal of the promissory note and chattel
mortgage. The rule has always been that
moral damages cannot be recovered from a person who has filed a complaint
against another in good faith.
Anent the award of exemplary damages,
jurisprudence provides that where a party is not entitled to actual or moral
damages, an award of exemplary damages is likewise baseless.
In the matter of attorney’s fees, it should likewise be
denied. No premium should be placed on
the right to litigate and not every winning party is entitled to an automatic
grant of attorney’s fees. The party must
show that he falls under one of the instances enumerated in Article 2208 of the
Civil Code. This, Orosa failed to
do. Furthermore, where the award of
moral and exemplary damages is eliminated, so must the award for attorney’s
fees be deleted.
PEOPLE vs. CABANDE
G.R. No. 132747, February 8, 2000
Facts: Vicente
Trinidad and Victor Trinidad and accused Cabande, had serious misunderstanding
over Lot No. 1990 of the Buenavista Estate in Bulacan. In convicting Cabande,
the trial court relied on the eyewitness account of Christopher Trinidad, son
of Victor, who was five years old when the crime was committed and who was then
riding the jeepney together with the two victims. The court a quo also noted
that there was a feud between accused and the victims over the ownership of a
parcel of land. It concluded that the killing was qualified by treachery,
because the victims "were totally defenseless and had no opportunity to
defend themselves or retaliate when shot."
The trial court likewise ordered the accused to pay P50,000.00 as civil
indemnity, P100,000.00 for the wake and burial expenses, moral damages and
exemplary damages each to the heirs of the victims, as well as indemnity for
loss of income in the amount of P1.5 million to the heirs of Victor and
P337,000.00 to the heirs of Vicente.
Issue: Is the
award of damages and civil indemnity proper and correct under the
circumstances?
Held: In
line with current jurisprudence, we
affirm the award of indemnity ex delicto to the heirs of each victim in the sum
of P50,000 or a total of P100,000. This may be awarded without need of proof
other than the commission of the crime. Likewise, we sustain the award of
P100,000.00 to the heirs of each victim for the wake and burial expenses, for
these were duly proven. Although the
records show that they were entitled to moral damages, we hold that the award
should be reduced to P100,000 or P50,000 for each set of heirs of the victims.
We cannot sustain, however, the award of exemplary damages,
which are awarded only in the presence of one or more aggravating
circumstances. None was established in
this case.
Likewise, we hold
that the trial court erred in awarding the amount of P1.5 million and P337,000.
as loss of income. The amount of
indemnity for loss of earning capacity is based on the income at the time of
death and the probable life expectancy of the victim. It should be stressed that the amount
recoverable is not the entire earnings, but only that portion which the
beneficiaries would have received. Thus,
indemnity for lost income refers to the victim's total earnings minus the
necessary living expenses. In the case
of Victor, his wife testified that the annual income from their piggery
business was P300,000. Considering that the two of them operated and managed
the business, the profits should be divided equally between them. Accordingly,
the annual income of Victor, who was 39 years old at the time of his death, was
P150,000. Considering that his living expenses have not been proven, the Court
exercises the discretion to ascertain and fix the same. Under the
circumstances, we-find the amount of P50,000 as reasonable living expenses.
BAÑAS, JR. vs. COURT OF APPEALS
G.R. No. 102967, February 10, 2000
Facts: A sale of land
and nonpayment of income tax thereon
resulted to the filing by BIR Regional Director Aquilino Larin of a
criminal complaint for tax evasion against petitioner Banas. Such filing of the case against him was
publicized in several newspapers.
Reacting to the complaint for tax evasion and the news reports, Banas filed
with the RTC of Manila an action for damages against respondents Larin, et al.
for extortion and malicious publication of the BIR's tax audit report. He
claimed that the filing of criminal complaints against him for violation of tax
laws were improper because he had already availed of the tax amnesty laws.
The
trial court decided in favor of the respondents and awarded Larin P200,000.00
as actual damages.
Issue: Is the
award of damages to Larin proper?
Held: NO.
Any person who seeks to be awarded actual or compensatory damages due to
acts of another has the burden of proving said damages as well as the amount
thereof. Larin says the extortion cases
filed against him hampered his immediate promotion, caused him strong anxiety
and social humiliation. The trial court awarded him actual damages. However,
the appellate court stated that, despite pendency of this case, Larin was given
a promotion at the BIR. Said respondent court found nothing on record, to show
that he suffered loss of seniority that allegedly barred his promotion. In
fact, he was promoted to his present position despite the pendency of the
instant case Moreover, the records of
the case contain no statement whatsoever of the amount of the actual damages
sustained by the respondents. Actual damages cannot be allowed unless supported
by evidence on the record. The court
cannot rely on speculation, conjectures or guesswork as to the fact and amount
of damages. To justify a grant of actual
or compensatory damages, it is necessary to prove with a reasonable degree of
certainty, the actual amount of loss.
Since we have no basis with which to assess, with certainty, the actual
or compensatory damages counter-claimed by
Larin, the award of such damages should be deleted.
Moral damages may be recovered in cases involving acts
referred to in Art. 21, NCC. As a rule, a public official may not recover
damages for charges of falsehood related to his official conduct unless he
proves that the statement was made with actual malice.
PEOPLE vs. ALAGON
G.R. Nos. 126536-37, February 10, 2000
Facts: The
RTC of Pasig City found accused Alagon and Rafael guilty of two counts of
murder for the death of Magno and Barcelona
Issue: Is the
award of damages and indemnity proper and correct under the circumstances?
Held: As to
actual damages, NO. We cannot sustain
the award of actual damages in favor of the heirs of Magno for failure to
substantiate the bare assertion of the widow with other corroborative evidence.
The Court can only grant such amount for expenses if they are supported by
receipts. In the absence thereof, no
award for actual damages can be granted. For the same reason, the award of
actual damages to the heirs of Isidro Barcelona should be reduced as the amount
duly supported by documentary evidence.
As to the award of
P50,000.00 each to the heirs of the victims as indemnity for the deaths of
Magno and Barcelona
As to moral and exemplary damages, NO. The trial court erred in awarding to the
heirs of the two victims lump sums of P100,000.00 each for moral and exemplary
damages. These are separate in nature and require separate determination.
Considering that the heirs of the victims asked for it and testified that they
experienced moral suffering, moral damages in the amount of P50,000.00 is
awarded to the heirs of the victims to compensate them for the injuries to
their feelings. The award for exemplary
damages must be deleted, considering the crime was committed without any other
aggravating circumstances.
Finally, we must also add the award for loss of earning
capacity. The sister of the deceased Barcelona
PEOPLE vs. DANDO
G.R. No. 120646, February 14, 2000.
Facts: The
RTC of Laguna found accused PO3 Apolinar Dando guilty of murder for the killing
of Cesar Castro and awarded to the heirs of the victims civil indemnity for the
death of Castro, reimbursement for
actual expenses incurred for the wake and burial, as well as indemnity for loss
of earning capacity in the amount of P1,620,000.00.
Issue: Is the
award of damages and indemnity proper and correct under the circumstances?
Held: As to
the amount of P50,000 as indemnity for the death for Castro, YES. Said amount
is awarded, without need of further proof other than the death of the
victim. In addition, the heirs are also
entitled to receive a compensation for the loss of earning capacity of the
victim. The formula for computing the same as established in decided cases is as follows:
Gross Necessary
Net
Earning = Life x Annual
- Living
Capacity
Expectancy Income Expenses
The life expectancy is equivalent to two thirds (2/3)
multiplied by the difference of 80 and the age of the deceased. Since Castro was 47 years old at the time of
his death, his life expectancy was 22 more years. Celso, Castro’s son, testified that his
father earned P3,000.00 monthly or P36,000.00 annually from the sash factory.
In addition, the victim's annual income from farming as found by the trial
court was P53,000.00. The gross annual income of the deceased was P89,000.00.
Allowing for necessary living expenses of fifty percent (50%) of his gross
earnings, his total net earning capacity amounts to P979,000.00. 39
As
to the expenses actually incurred by the family of the victim for the wake and
burial, Celso was able to prove during trial that they incurred the sum of
P39,974.00. The amount of P35,974.00 awarded by the trial court as
reimbursement of funeral expenses is, accordingly, increased to P39,974.00.
Attorney’s Fees in
the Concept of Damages
INDUSTRIAL INSURANCE COMPANY vs. BONDAD
G.R. No. 136722, April 12, 2000
Facts: The
present Petition finds its roots in an incident which involved three vehicles:
a Galant Sigma car driven by Grace Morales, a packed passenger jeepney
originally driven by Ligorio Bondad, and a DM Transit Bus driven by Eduardo
Mendoza. The respondents asserted that their vehicle was on full stop because
of a flat tire and it was the bus which hit Morales' car. Moreover, they
contended that petitioner had acted in bad faith in impleading them and that,
contrary to its allegation, no prior demand had been made upon them.
The trial court exculpated the Bondads and ordered
petitioner to pay them actual, moral and exemplary damages, as well as
attorney's fees.
Issue: May
attorney’s fees and other litigation expenses be awarded if one who claims it
is compelled to litigate with third persons?
Held:
YES. Attorney's fees may be
awarded if one who claims it is
compelled to litigate with third persons or to incur expenses to protect one's
interests by reason of an unjustified act or omission on the part of the party
from whom it is sought. In justifying
the award of attorney's fees and other litigation expenses, the court held that
respondents were compelled to litigate an unfounded suit because of
petitioner's negligence and lack of prudence in not verifying the facts before
filing this action. The facts of this case clearly show that petitioner was
motivated by bad faith in impleading respondents. Indeed, a person's right to
litigate, as a rule, should not be penalized. This right, however, must be
exercised in good faith. Absence of good faith in the present case is shown by
the fact that petitioner clearly has no cause of action against respondents but
it recklessly filed suit anyway and wantonly pursued pointless appeals, thereby
causing the latter to spend valuable time, money and effort in unnecessarily
defending themselves, incurring damages in the process. In this case, the
records show that petitioner's suit against respondents was manifestly
unjustified.
Liability for
Damages in Action Based on Malicious Prosecution
BAYANI vs. PANAY ELECTRIC CO.
G.R. No. 139680, April 12, 2000
Facts: In
March 1996, Panay Electric Company, Inc. (PECO) discontinued supplying
electrical services to two pension houses owned by petitioner. Alleging that it
had discovered theft of electricity in petitioner's business establishments,
PECO filed two complaints for violation of R.A. No. 7832 against petitioner with the City Prosecutor
of Iloilo City. The City Prosecutor dismissed the complaints on August 8, 1996
and August 19, 1996, respectively. PECO appealed the dismissal to the Secretary
of Justice.
On
October 10, 1996, petitioner filed with the RTC of Iloilo City an action for
injunction and damages arising from malicious prosecution, then amended his
complaint to add a prayer for writ of preliminary prohibitory injunction to
make PECO desist from making "false imputations that plaintiff allegedly
continued to commit violations" of R.A. No. 7832. PECO filed a motion to
dismiss the amended complaint, but said motion was denied. On September 2,
1997, the trial court granted petitioner's request for the issuance of a writ
of preliminary mandatory injunction.
On November 17, 1997, PECO filed a petition for certiorari and
prohibition with the Court of Appeals, praying that the appellate court declare
the orders of the trial court denying the motion to dismiss and grant of writ
of PMI null and void and likewise sought the dismissal of herein petitioner's complaint
in the lower court.
The Secretary of Justice upheld the dismissal of the
complaints for violations of R.A. No. 7832 on March 4, 1998. The CA dismissed
the complaint for injunction and damages filed by Bayani.
Issue: Is the
action for malicious prosecution premature?
Held: YES.
The requisites for an action for damages based on malicious prosecution
are: (1) the fact of the prosecution and the further fact that the defendant
was himself the prosecutor, and that the action was finally terminated with an
acquittal; (2) that in bringing the action, the prosecutor acted without
probable cause; and (3) the prosecutor was actuated or impelled by legal
malice. Considering the facts in this
case, we agree with the appellate court that one of the elements for an action
based on malicious prosecution, the element of final termination of the action
resulting in an acquittal, was absent at the time petitioner filed civil case.
The records show that petitioner's action for injunction and damages was filed
on October 10, 1996, whereas the Secretary of Justice dismissed with finality
PECO's criminal complaints against herein petitioner only on March 4, 1998.
Hence, the civil case for malicious prosecution was prematurely filed.
VILLANUEVA
vs. UNITED COCONUT PLANTERS BANK
G.R. No.
138291, March 7, 2000
Facts: Herminigildo
Villanueva, father of the petitioner, applied for and was granted a loan by
UCPB which at the time was managed by Bobby Café. In the course of the bank
audit, certain fraud, anomalies and irregularities were discovered in the
application, processing and quantity of said amount which prompted UCPB to
conduct investigation on the matter. UCPB filed criminal complaints which
resulted to the acquittal of the defendants. In view of the acquittal, Hector
Villanueva filed an action for damages on the ground of alleged malicious
prosecution with RTC. In its answer, UCPB denied the allegation in the
complaint and asserted that there is no cause of action since the filling of
the criminal complaint was not tainted with malice.
Issue: Is UCPB liable
for damages?
Held: NO. The
adverse result of an action does not make the prosecution thereof wrongful
neither does it subject the action to payment of damages. The law does not
impose a penalty to the right to litigate.
Resort to judicial processes, by itself, is not an evidence of ill will.
As the mere act of filing criminal complaint does not make the complainant
liable for malicious prosecution. These must be proof that the suit was
performed by legal malice. An inexcusable intent to oppress, vex, annoy or humiliate. A contrary
rule would discourage peaceful resources to the court and unjustly penalize the
exercise of a citizen’s right to litigate. Where the action is filed in good
faith, no penalty should be imposed thereon.
Recovery of Damages
in Negligent Acts
CALALAS vs. COURT OF APPEALS
G.R.
No. 122039, May 31, 2000
Facts: On the
way to Poblacion Sibulan, Negros Occidental, Petitioner Vicente Calalas’ passenger jeepney was bumped by an Isuzu
truck owned by Francisco Salva. Private
respondent Eliza Sunga, a passenger in the jeepney sustained injuries. Eliza filed a complaint for damages against
Vicente based on breach of contract of carriage
by the latter in failing to exercise the diligence required of him as a
common carrier. Vicente, on the other
hand, filed a 3rd party complaint againt Francisco.
The lower court rendered judgment, against Francisco
and absolved Vicente of liability. It
took cognizance of another case (Civil Case No. 3490) filed by Vicente against
Francisco and his driver Verena, for quasi-delict, in which the latter were
held jointly liable to Vicente for the damage to his jeepney.
On appeal to the CA, the ruling of the lower court was
reversed on the ground that Eliza’s cause of action was based on a contract of
carriage, not quasi-delict, and that the common carrier failed to exercise the
diligence required under the Civil Code. The appellate court dismissed the
third-party complaint against Francisco and adjudged Vicente liable for damages
to Eliza.
Issue: Is Eliza bound by the ruling in the
earlier case (Civil Case No. 3490) finding the driver and the owner of the
truck liable for quasi-delict?
Held: NO. The issue in the former case (Civil Case No.
3490) is not the same as those in the present.
The issue in Civil Case No. 3490 was whether Salva and his driver Verena
were liable for quasi-delict for the damage caused to petitioner's jeepney. On
the other hand, the issue in this case is whether petitioner is liable on his
contract of carriage. The first, quasi-delict, also known as culpa aquiliana or
culpa extra contractual, has as its source the negligence of the tortfeasor.
The second, breach of contract or culpa contractual, is premised upon the
negligence in the performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault
should be clearly established because it is the basis of the action, whereas in
breach of contract, the action can be prosecuted merely by proving the
existence of the contract and the fact that the obligor, in this case the
common carrier, failed to transport his passenger safely to his destination.
Negligence;
Easement
REMMAN
ENTERPRISES vs. COURT OF APPEALS
G. R. No. 125018, April 6, 2000
Facts: Petitioner
REMMAN Enterprises, Inc. (REMMAN) and private respondent Crispin Lat are owners
of adjoining lots. Lat’s land is agricultural and planted mostly with fruit
tress, while REMMAN devotes its land to its piggery business. REMMAN’s land is 1½ meters higher in
elevation than that of respondent Lat.
Sometime in July 1984, Lat noticed that REMMAN’s waste disposal lagoon
was already overflowing and inundating his plantation. He made several representations with REMMAN
but the latter fell on deaf ears. On
March 14, 1985, after almost one hectare of Lat’s plantation was already
inundated with ankle-deep water containing pig manure, as a result of which
trees growing on the flooded portion started to wither and die, Lat filed a
complaint for damages with preliminary mandatory injunction against
REMMAN. REMMAN denied the allegations
and argued that additional measures such as the construction of additional
lagoons were already adopted to contain the waste water coming from its piggery
to prevent any damage to the adjoining estates.
The trial court held REMMAN liable for
damages. In this petition, REMMAN
contends that its negligence and liability for damages were not sufficiently
established. It also raises the defense
of fortuitous event (heavy rains) which caused the inundation of Lat’s
plantation, and the supposed natural easement imposed upon Lat’s property.
Issue: Is REMMAN negligent and should be held liable
for damages?
Held: YES. REMMAN’s
negligence was clearly established.
Lat’s property was practically made a catch basin of polluted water and
other noxious substances emptying from REMMAN’s piggery which could have been
prevented had it not been for the negligence of appellant arising from its: (a)
failure to monitor the increases in the level of water in the lagoons before,
during and after the heavy downpours; (b) failure to augment the existing
lagoons prior to the incident, notwithstanding the fact that at the time of the
flooding, the piggery had grown to a capacity of 11,000 heads, and considering
that it was reasonably foreseeable that the existing waste disposal facilities
were no longer adequate to accommodate the increasing volume of waste matters;
and (c) the repeated failure to comply with its promise to private respondent.
REMMAN’s assertion that the damages, if
any, were due to a fortuitous event is not well taken. Even if the heavy rains constituted an act of
God, REMMAN was still guilty of negligence.
The event was not occasioned exclusively by an act of God or force
majeure; a human factor – negligence or imprudence – had intervened. The effect then of the force majeure in
question may be deemed to have, even if only partly, resulted from the
participation of man. Thus, the whole
occurrence was thereby humanized, as it were, and removed from the rules
applicable to acts of God.
As regards the contended natural easement
imposed upon Lat’s property, Article 637 provides that lower estates are
imposed the obligation to receive the waters which naturally and without the
intervention of man descend from higher estates. However, where the waters which flow from a
higher state are those which are artificially collected in man-made lagoons,
any damage occasioned thereby entitles the owner of the lower or servient
estate to compensation.
Rule Against Double
Recovery in Negligence Cases
RAFAEL REYES TRUCKING CORPORATION vs.
PEOPLE
G.R. No. 129029, April 3, 2000
Facts: Petitioner Rafael
Reyes Trucking Corporation is a domestic corporation engaged in the business of
transporting beer products for San Miguel Corporation. Among its fleet of vehicles is a truck driven
by the accused Romeo Dunca who met an accident in Isabela with a Nissan
Pick-up. Dunca’s vehicle rammed the Nissan, causing severe damages to it and
the instant death to its driver, Balcita, and passenger, Dy.
An Information was filed in the RTC of
Isabela against Romeo Dunca for reckless imprudence resulting in double
homicide and damage to property.
Offended parties, heirs of the two deceased, made a reservation to file
a separate civil action against the accused arising from the offense
charged. Thereafter, they actually filed
with the RTC of Isabela a complaint against petitioner Corporation, as employer
of Romeo Dunca, based on quasi delict. Petitioner settled the claim of heirs of
Balcita. The heirs of Dy opted to
continue with the criminal and civil actions.
Later, they withdrew their reservation to file a separate civil action ex delicto against the accused and
manifested their intention to prosecute the same in the criminal action. They did not, however, withdraw the separate
civil action based on quasi delict
against petitioner. Upon agreement of
the parties, both criminal and civil cases were consolidated.
The trial court found Dunca guilty and
ordered him to indemnify private respondents with damages. Petitioner
corporation was ordered to pay private respondents actual damages. Private respondents moved for amendment of
the dispositive portion to hold petitioner subsidiarily liable for all the
damages ex delicto awarded to them in
the event of insolvency of the accused.
Issue: May
petitioner be held subsidiarily liable for the damages awarded to the offended
parties in the criminal action against the accused despite the filing of a
separate civil action against said petitioner?
Held: NO.
Petitioner cannot be held subsidiarily liable. In negligence cases, the aggrieved party has
the choice between (1) an action to enforce civil liability arising from crime
under Article 100 of the Revised Penal Code; and (2) a separate action for
quasi delict under Article 2176 of the Civil Code. Once the choice is made, the
injured party can not avail himself of any other remedy because he may not
recover damages twice for the same negligent act or omission of the
accused. This is the rule against double
recovery. In other words, the same act
or omission can create two kinds of liability on the part of the offender, that
is, civil liability ex delicto, and
civil liability quasi delicto, either
of which may be enforced against the culprit, subject to the caveat under
Article 2177 of the Civil Code that the offended party can not recover damages
under both types of liability.
In the instant case, the offended parties
elected to file a separate civil action for damages against petitioner under
Article 2176,NCC to hold him vicariously liable for the fault or negligence of
the accused-employee, based on quasi
delict. Having made such choice,
private respondents cannot now recover their claim in a civil action for
damages ex delicto primarily against
the accused, and subsidiarily against petitioner.
Based on the foregoing, and on Rule 111, Sec. 1, par. 3 of
the 1985 Rules on Criminal Procedure which provides that the reservation to file
or the filing of a separate civil action results in a waiver of other available
civil actions arising from the same act or omission of the accused, the trial
court grievously erred in holding, and the court of Appeals in affirming, that
petitioner is subsidiarily liable for damages arising from crime (ex delicto) in the criminal action.
There would be no occasion to rule on the accused’s ex delicto civil liability, and petitioner’s subsidiary liability,
because of the aforesaid waiver and proscription against double recovery.
Liability of an Educational Institution
UNIVERSITY OF THE EAST V.
JADER
G.R. NO. 132344, February 17, 2000
Facts: Respondent
was enrolled in the plaintiff’s College
of Law Practice Court
The respondent’s name appeared in the
Tentative List of Candidates for graduation.
The respondent attended the investiture ceremonies.
Respondent thereafter prepared himself
for the bar examination. He took a leave of absence without pay from his job
and enrolled at the pre-bar review class in Far Eastern University. Having
learned of his deficiency he dropped his review class and was not able to take
the bar examinations.
Issues: 1. May an educational institution be held
liable for damages for misleading a student into believing that the latter had
satisfied all the requirements for graduation?
2. May he be awarded moral
damages?
Held:
1. Yes. It is the contractual obligation of the school to timely inform
and furnish sufficient notice and information to each and every student as to
whether he or she had already complied with all the requirements for the
conferment of a degree or whether they would be included among those who will
graduate. Although commencement exercises are but a formal ceremony, it
nonetheless is not an ordinary occasion, since such ceremony is the educational
institution’s way of announcing to the whole world that the students included
in the list of those who will be conferred a degree during the ceremony have
satisfied all the requirements for such degree.
The negligent act of professor who fails
to observe the rules of the school, for instance by not promptly submitted a
student’s grade, is not only imputable to the professor but is an act of the
school, being his employer. Educational institutions are duty-bound to inform
the student of their academic status and not wait for the latter to inquire
from the former. The conscious indifference of a person to the rights or
welfare of the person/persons who may be affected by his act or omission can
support a claim for damages. Want of care
to the conscious disregard of civil obligation coupled with a conscious
knowledge the cause naturally calculated to produce them would make the erring
party liable.
2. NO.
While petitioner was guilty of negligence and thus liable for respondent
for actual damages, we hold that respondent should not be awarded moral
damages. It behooves upon respondent to verify for himself whether he has
completed all necessary requirements to be eligible for the bar examinations.
As a senior law student, respondent should have been responsible enough to
ensure that all his affairs, specifically those pertaining to his academic
achievement, are in order.
VI. LAND TITLES AND DEEDS/AGRICULTURAL TENANCY LAWS
Registration of
Land Under the Torrens System
DBP vs. COURT OF APPEALS
G.R. No. 129471, April 28, 2000
Facts: The
land in dispute consisting of 19.4 hectares was originally owned by Ulpiano
Mumar, whose ownership since 1917 was evidenced by Tax Declaration No. 3840. In 1950, Mumar sold the land to respondent
Cajes who was issued Tax Declaration No. R-1475 that same year. Cajes occupied
and cultivated the said land. In 1969, unknown to Cajes, Jose Alvarez succeeded
in obtaining the registration of a parcel of land with an area of 1,512, 468.00
square meters, in his name for which he was issued OCT No. 546 on June 16,
1969. The parcel of land included the 19.4 hectares occupied by respondent.
Alvarez never occupied nor introduced improvements on said land.
In 1972, Alvarez
sold the land to the spouses Gaudencio and Rosario Beduya to whom TCT No. 10101
was issued. That same year, the spouses Beduya obtained a loan from petitioner
DBP for P526,000.00 and, as security, mortgaged the land covered by TCT No.
10101 to the bank. In 1978, the SAAD
Investment Corp., and the SAAD Agro-Industries, Inc., represented by Gaudencio
Beduya, and the spouses Beduya personally executed another mortgage over the
land in favor of DBP to secure a loan of P1,430,000.00. The spouses Beduya later failed to pay their
loans, as a result of which, the mortgage on the property was foreclosed and
sold to DBP as the highest bidder. As
the spouses Beduya failed to redeem the property, DBP consolidated its
ownership. It appears that Cajes had
also applied for a loan from DBP in 1978, offering his 19.4 hectare property
under Tax Declaration No. D-2247 as security for the loan. Cajes’ loan
application was later approved. However, it was found that the land mortgaged
by Cajes was included in the land covered by TCT No. 10101 in the name of the
spouses Beduya. DBP, therefore, cancelled the loan and demanded immediate
payment of the amount. Cajes paid the loan to DBP for which the former was
issued a Cancellation of Mortgage releasing the property in question from
encumbrance. DBP asked Cajes to vacate
the property. As the latter refused to do so,
DBP filed a complaint for recovery of possession with damages against
him. The RTC of Tagbilaran City declared
DBP the lawful owner of the entire land covered by TCT No. 10101 on the ground
that the decree of registration was binding upon the land.
Issue: Is
registration of land under the Torrens System a mode of acquiring ownership
over an immovable?
Held: NO. Registration has never been a mode of acquiring
ownership over an immovable property.
The purpose of the Land Registration Act is not to create or vest title
but to confirm and register already created and already vested.
Proof required in
land registration proceedings
MARIANO TURQUESA, ET AL. vs. ROSARIO VALERA
G.R. No. 76371 January 20, 2000
Facts: More than half a
century ago, private respondent Rosario Valera applied for the registration of
2 parcels of land located in Barrio Pulot, Laguyan, Abra. Lot 1 has an area of
210,767 sq. m. and Lot 2 has an area of 22,141
sq. m. In support of her application, private respondent presented documents
showing that she bought Lot 1 during the years
1929-1932 from Cristeta Trangued and the heirs of Juan Valera Rufino who were
allegedly in possession thereof since the Spanish regime in the concept of
owners and who declared it in their name for taxation purposes. From 1929, she
continued possession of said land in the concept of owner and continued to pay
the tax thereon in her name. The Director of Lands together with petitioners
and other persons opposed the application of Rosario
Issue: Is
private respondent Rosario Valera properly entitled to a writ of possession of
portions of Lot 1 occupied by Partolan and
Baltar?
Held: No. Rosario
The declaration by the applicant that the land applied for
has been in the possession of her predecessor-in-interest for a certain period,
does not constitute the "well-nigh incontrovertible" and
"conclusive" evidence required in land registration. Further, it
should be noted that tax declaration, by itself, is not considered conclusive
evidence of ownership in land registration cases. Rosario
Considering that the writ of possession was sought by Rosario Rosario ,
especially considering the evidentiary rule under Article 434 of the Civil Code
that a claimant of a parcel of land, such as Rosario
Evidence of Ownership
G.R. No. 109111, June 28, 2000
Facts: In 1980, the MWSS
filed with the RTC of Rizal an application for registration of title of eleven
(11) parcels of land, situated in San
Mateo
Issue: Is the MWSS the
owner of the lands in controversy?
Held:
YES.
The titles presented
by petitioners, while showing ownership, is not of the land claimed, but over
the adjoining parcels of land. The technical descriptions in the titles
presented by petitioners betray them as adjacent and adjoining owners of the land
claimed by MWSS for registration. A torrens certificate of title covers only
the land described therein together with improvements existing thereon, if any,
nothing more.
MWSS presented tax declarations to buttress its ownership of
the land. True, tax declarations do not prove ownership. However, tax
declarations can be strong evidence of ownership when accompanied by possession
for a period sufficient for prescription. Since MWSS possessed the land in the
concept of owner for more than thirty (30) years preceding the application,
MWSS acquired ownership by prescription. By placing the pipelines under the
land, there was material occupation of the land by MWSS, subjecting the land to
its will and control. Petitioners cannot argue that MWSS' possession was not
"open". The existence of the pipes was indicated above the ground by
" pilapils". Even assuming
arguendo that the pipes were "hidden" from sight, petitioner cannot
claim ignorance of the existence of the pipes. The possession must be public in
order to be the basis for prescription. Petitioners also cannot claim that MWSS
abandoned its possession. There is no showing that by discontinuing the use of
the pipes, MWSS voluntarily renounced its claim over the land. Petitioners did
not prove that the spes recuperendi was gone and the animus revertendi was
given up.
Grant of
Title/Confirmation of Imperfect Title on Lands
BRACEWELL vs. COURT OF APPEALS
G.R. No. 107427,
January 25, 2000
Facts: In
1908, Maria Cailles acquired certain parcels of land in Las Pinas, Metro
Manila. In 1961, Cailles sold the same
to her son, petitioner James Bracewell,
Jr. In 1963, Bracewell filed before the
CFI an action for confirmation of imperfect title under Sec 48(b) of CA No.
141. The Solicitor General opposed
petitioner’s application on the grounds that neither he nor his
predecessors-in-interest possessed sufficient title to the subject land nor
have they been in open, continuous, exclusive and notorious possession and
occupation of the same for at least thirty (30) years prior to the application,
and that the subject parcels of land were only classified as alienable or
disposable on March 27, 1972.
Issue: Are
the lands in question alienable or disposable at the time of the application
for confirmation of imperfect title?
Held: NO. Under the Regalian doctrine, all lands of the
public domain belong to the State, and that the State is the source of any
asserted right to ownership in land and charged with conservation of such
patrimony. This same doctrine also states all lands not otherwise appearing to
be clearly within private ownership are presumed to belong to the State. Hence, the burden of proof in overcoming the
presumption of State ownership of lands of the public domain is on the person
applying for registration. The applicant must also show that the land
subject of the application is alienable or disposable. This Bracewell failed to do. On the contrary, it was
conclusively shown by the government that the same were only classified as alienable
or disposable on March 27, 1972. Thus,
even granting that Bracewell and his predecessors-in-interest had occupied the
same since 1908, he still cannot claim
title thereto by virtue of such possession since the subject parcels of land
were not yet alienable land at that time nor capable of private
appropriation. The adverse possession
which may be the basis of a grant of title or confirmation of an imperfect
title refers only to alienable or disposable portions of the public domain.
Remedies Available to Aggrieved Party in Registration
Proceedings
HEIRS OF PEDRO LOPEZ vs. DE
CASTRO
G.R. No. 112905, February 3, 2000
Facts: Two applications for registration of the
same parcel of land were filed 12 years apart in different branches of the same
CFI, but a certificate of title was issued in one case while the other is still
pending appeal. The first application
was filed in 1956 by Pedro Lopez, et. al. with Branch III of the CFI of Cavite Tagaytay City
Seven (7) years later, or in 1988, the heirs of Pedro Lopez,
et al. filed a complaint for execution of judgment and cancellation of land
titles of De Castro, et. al. before the RTC of Cavite
at Tagaytay City
Issue: Should the Torrens Certificate of Title issued
in favor of De Castro be nullified?
Held: NO. First, the Court is not persuaded that the registration
proceedings instituted by De Castro, et. al. should be nullified by reason of
the fact that the Cavite
City
Second, Lopez, et.
al. failed to exercise the due diligence required of them as applicants for
land registration. They let almost 7 years to pass from discovery of the
registration of the land in favor of De Castro, et. al. before they acted to revive what already was
a dormant judgment. They were guilty of laches as they neglected or omitted to
assert a right within a reasonable time.
An applicant for registration has but a one-year period from the
issuance of the decree of registration in favor of another applicant, within
which to question the validity of the certificate of title issued pursuant to
such decree. Once the one-year period has lapsed, the title to the land becomes
indefeasible. However the aggrieved
party is without a remedy at law. If the property has not yet passed to an
innocent purchaser for value, an action for reconveyance is still available. If
the property has passed into the hands of an innocent purchaser for value, the
remedy is an action for damages against those who employed the fraud, and if
the latter are insolvent, an action against the Treasurer of the Philippines
Grant/Transfer of
Friar Lands
DELA TORRE vs. COURT OF APPEALS
G.R. No. 113095, February 8, 2000
Facts: This
case involves a tract of friar land titled in the name of the government which
was bought by Mamerto dela Torre for P110.00 payable in installments. Mamerto
then occupied the subject land until his death. Meanwhile, respondent Isabelo
dela Torre obtained from the Director of Lands a Deed of Conveyance executed in
his favor covering the subject property, on the strength of a Joint Affidavit,
executed by his father, Feliciano, and then minor nephew, petitioner Eliseo
dela Torre, certifying that he bought the subject parcel of land from Mamerto
for P400. Thus, a TCT was issued in Isabelo’s name.
Issue:
Was there a valid grant of the disputed
friar lands in favor of Isabelo?
Held: NO.
The grant made by the government of the subject property in favor of
Isabelo was invalid. In case the holder of the certificate shall have sold his
interest in the land before having complied with all the conditions thereof,
the purchaser from the holder of the certificate shall be entitled to all the
rights of the holder of the certificate upon presenting his assignment to the
Chief of the Bureau of Public Lands for registration. In order that a transfer of the rights of a
holder of a certificate of sale of friar lands may be legally effective, it is
necessary that a formal certificate of transfer be drawn up and submitted to
the Chief of the Bureau of Public Lands for his approval and registration. The law authorizes no other way of
transferring the rights of a holder of a certificate of sale of friar lands. In the case at bar, no such assignment or
formal certificate of transfer was submitted to the Bureau of Public Lands for
its approval and registration.
Free Patent
ROBLES vs. COURT OF APPEALS
G.R. No. 123509, March 14, 2000
Facts: The
property subject of this case is originally owned by Leon Robles. When he died, it passed to his son Silvino
who declared the property in his name and paid the taxes thereon. Upon the latter’s death, his widow and
children inherited the property. Petitioners Lucio Robles, et al. were the
children of Silvino, and Hilario Robles is their half-brother. The task of
cultivating was assigned to Lucio while
the payment of the land taxes was entrusted to Hilario. For unknown reason, the
tax declaration of the parcel of land in the name of Silvino was cancelled and
transferred to Exequiel Ballena. Ballena secured a loan from Antipolo Rural Bank using the tax declaration
as security. Somehow the tax declaration was transferred to the name of
Antipolo Rural Bank and later was transferred to the name of respondent- spouses Hilario and
Andrea Robles. Andrea secured a loan from Cardona Rural Bank using the tax declaration as
security. For failure to pay the
mortgage debt, the property was foreclosed with Cardona Rural Bank emerging
as the highest bidder. The bank sold the property to spouses Vergel and Ruth Santos. In 1988, the spouses Santos
Issue: Is the free patent
issued to the spouses Santos
Held:
NO.
The free patent issued is not valid.
In the light of their open, continuous and notorious possession and
occupation of the land, petitioners are
deemed to have acquired by operation of law, a right to a grant, a government
grant without a necessity of a
certificate of title being issued. The land was “segregated from the public
domain”. Accordingly, the Director of Lands had no authority to issue a free
patent thereto in favor of another person. Verily, jurisprudence holds that free
patent covering private land is void.
Presumptive
Conclusiveness of Torrens Title
LIM vs. COURT OF APPEALS
G.R. No. 124715, January 24, 2000
Facts: Petitioner
Rufina Lim is the surviving spouse of the late Pastor Lim whose estate is the
subject of estate proceedings. Private
respondents Auto Truck Corp., et al. are domestic corporations which owned real
properties covered under the Torrens
system. These properties were included
in the inventory of the estate of Pastor.
Respondent corporations filed a motion for the lifting of the lis
pendens and the exclusion of said
properties from the estate of the decedent.
Rufina, on the other hand, argued that said properties must be included
because the assets, capital, and equity of respondent corporations are
personally owned by Pastor.
Issue: Should the
properties in question be included in the inventory of the estate of Pastor?
Held:
NO. If a property covered by
Torrens title is involved, the presumptive
conclusiveness of such title should be given due weight, and in the
absence of strong compelling evidence to the contrary, the holder thereof
should be considered as the owner of the property in controversy until his
title is nullified or modified in an appropriate ordinary action, particularly,
when possession of the property itself is in the persons named in the
title. A perusal of the records would
reveal that no strong compelling evidence was ever presented by petitioner to
bolster her bare assertions as to the title of the deceased Pastor Lim over the
properties. Even so, P.D. 1529 (The Property Registration Decree) proscribes
collateral attack on Torrens Title. It
provides that a certificate of title shall not be subject to collateral attack.
It cannot be altered, modified or cancelled except in a direct proceeding in
accordance with law.
Inasmuch as the real properties included in the inventory of
the estate of Pastor are in the possession of and are registered in the name of
private respondent corporations, which under the law possess a personality
separate and distinct from their stockholders, and in the absence of any
cogency to shred the veil of corporate fiction, the presumption of
conclusiveness of said titles in favor of private respondents should stand
undisturbed. Therefore, the properties
in question should not be included from the inventory of the property of the
estate.
Tenancy
BAUTISTA vs. ARANETA
G.R. No. 135829, February 22, 2000
Facts: In
1978, petitioner Bayani Bautista allegedly entered into an oral tenancy
agreement with Gregorio Araneta II and had since then, cultivated and possessed
the land in an open, peaceful and continuous manner. Bayani’s possession however was disturbed
when in 1991, a group of armed men sent by respondent, Patricia Araneta, successor
of GA II, ordered Bayani to vacate the land.
Bayani filed a complaint praying for injunctive relief and for
recognition of his right as tenant.
Patricia, on the other hand, filed a counterclaim to dismiss the
complaint and eject Bayani.
The Provincial Adjudicator decided in
favor of Bayani. The CA reversed the
same. It held that Bayani has not been
constituted as a tenant by the landowner.
Issue: Is
respondent Patricia Araneta bound by the alleged oral leasehold agreement
between Bayani and Gregorio Araneta II?
Held: NO. The requisites of a tenancy relationship are:
(1) the parties are the landowner and
the tenant; (2) the subject is
agricultural land; (3) there is consent
by the landowner; (4) there is personal
cultivation; and (5) there is sharing of
harvest. Bayani is not a tenant of the
disputed land. Bayani admitted in his
own testimony that he does not even know the landowner as he was not introduced
to the same. Further, Bayani did not
establish that Gregorio, whom he has known and believed as the owner of the
land, became or was ever, the landowner.
Since he hinges his right on his alleged agreement with Gregorio, it
follows that his position is untenable since it was never shown that Gregorio
has a right on the landholding. In
Lastimosa vs. Blanco, the SC has ruled that ‘tenancy relationship can only be
created with the consent of the true and lawful landholder who is either the
owner, lessee, usufructuary or legal possessor of the land, and not thru the
acts of the supposed landholder who has no right to the land subject of the
tenancy.’
RUPA, SR. vs. COURT OF APPEALS
G.R. No. 80129, January 25, 2000
Facts: Claiming
that he was the agricultural share tenant and overseer of parcels of coconut
lands, petitioner Gerardo Rupa commenced
an action for redemption on March 26, 1981 against private respondent Magin
Salipot, the vendee in the sale made by spouses Vicente and Patrocinia Lim in
January 1981 without any prior written or verbal notice required by law. Rupa
came to know about the sale when he was informed in writing by the
former landowner on February 16, 1981.
Both the RTC and CA shared the view that Rupa is not a share
tenant and accordingly dismissed the
complaint for redemption.
Issue: Is Rupa a share tenant so as to be
entitled to the right of redemption?
Held:
YES. A tenant is defined under
Section 5 (a) of Republic Act No. 1199 as a person who himself and with the aid
available from within his immediate farm household cultivates the land
belonging to or possessed by another, with the latter's consent, for purposes
of production, sharing the produce with the landholder under the share tenancy
system, or paying to the landholder a price certain or ascertainable in produce
or in money or both under the leasehold tenancy system. Briefly stated, for
this relationship to exist, it is necessary that:
1. The parties are the landowner and the
tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.
Upon proof of the existence of the tenancy relationship,
Rupa could avail of the right of redemption under RA 3844. This right of
redemption is validly exercised upon compliance with the following
requirements: a) the redemptioner must be an agricultural lessee or share
tenant; b) the land must have been sold by the owner to a third party without
prior written notice of the sale given to the lessee or lessees and the DAR in
accordance with Sec. 11, RA 3844, as amended; c) only the area cultivated by
the agricultural lessee may be redeemed; d) the right of redemption must be
exercised within 180 days from notice; and e) there must be an actual tender or
valid consignation of the entire amount which is the reasonable price of the
land sought to be redeemed.
The statements of Rupa in the criminal case that he is an
“administrator” of the landowners are not sufficient basis to overcome the
rights of the petitioner as provided in the Constitution and Agrarian
statutes. The essence of agricultural
tenancy lies in the establishment of owner-cultivatorship and the economic family-size farm as the
basis of Philippine agriculture, and as a consequence, divert landlord capital
in agriculture to industrial development.
Rupa’s evidence to prove the tenancy relationship consisted of his own
testimony and those of his witnesses from whose declarations it appears that
the petitioner has physically possessed the landholding continuously until he
was ejected from it. Rupa lives on the
landholding and he has built a house next to the copra kiln. It has also been established that Rupa has
cultivated the land from the time he has taken possession thereof, although
there may have already been existing coconut trees in the landholding. The fact that Rupa has been planting coconut
seedlings and minor crops in the vacant portions of the subject land as well as
cleaning and gathering coconuts to process them into copra is borne out by the
records. Further indicating the tenancy relationship between the landlord and
Rupa is their agreement to share 50/50. The sharing arrangement taken together
with other factors characteristic of tenancy shown to be present in the case at
bar, strengthens the claim of Rupa that indeed, he is a tenant.
PHILBANCOR FINANCE vs. COURT OF APPEALS
G.R. No. 129572, June 26, 2000
Facts: Petitioner
Vicente Hizon, Jr. is the owner of agricultural lands located in Balite, San Fernando
Issue: Can the private
respondents maintain their possession of the subject lands?
Held: YES. Private respondents may continue in
possession and enjoyment of the land in question as legitimate tenants because the right of tenancy attaches to the
landholding by operation of law. The leasehold relation is not extinguished by
the alienation or transfer of the legal possession of the landholding.
GREENFIELD REALTY CORP. vs. CARDAMA
G.R. No. 129246, January 25, 2000
Facts: Private
respondents Loreto Cardama, et al. claim to have succeeded their father
Hermogenes Cardama who died in 1989 in the latter’s tenancy rights, and should
be declared as leasehold tenants and actual tillers of the subject irrigated
rice land. It is alleged that the leasehold tenancy began in 1978 through a
verbal agreement entered into by and between Independent Realty Corp. (IRC) and
the late Hermogenes wherein the former had designated the latter to take over
the maintenance of said landholding which was then undeveloped and uncultivated
but with the aid of the immediate members of their respective families became productive as irrigated rice
land. To prove their contention, the
Cardamas submitted their up-to-date payment of the lease rentals as evidenced
by the receipts issued by IRC and petitioner Greenfield Realty Corp. (GRC).
Issue: Are the private
respondents bona fide tenants of the subject irrigated rice land?
Held: YES.
The DARAB ruled that Loreto, et al. cannot simultaneously claim the
right to succeed since RA 3844 allows only one heir to succeed to the tenancy
of the deceased tenant in the order of preference prescribed by Section 9 of
the said law. In this case however, the land is not cultivated by Hermogenes
alone but with other tenants who are likewise qualified and who are related to
him. Thus, it can be said that the
entitlement of the other possessors is not by virtue of succession to the
rights of a predecessor-in-interest, but in their individual capacity as
tenants therein simultaneously with an ascendant. It is to be noted that the
land herein involved is more than 10 hectares which cannot be personally
cultivated by Hermogenes alone.
Under Section 22 of RA 6657, the Comprehensive Agrarian
Reform Law, those entitled to the award of the land are: “Section 22. Qualified Beneficiaries – the
lands covered by the CARP shall be distributed as much as possible to landless
residents of the same barangay or in the absence thereof, landless residents of
the same municipality in the following order of priority:
h.)
agricultural lessees and share tenants
i.)
regular farm workers
j.)
seasonal farmworkers
k.)
other farmworkers
l.)
actual tillers or occupants of public
lands
m.)
collective or cooperatives of the above
beneficiaries
n.)
others directly working on the land
Being
the agricultural lessees on the land,
Loreto et al. are qualified
beneficiaries
absent
any showing that they have been validly ejected or removed therefrom.
Preferential Rights of Tenants under P.D. 1517
G.R. No.108205, February 15, 2000
Facts: Petitioners
are occupants of the lands that belonged to Alejandro Castro. Upon Castro’s
death, his wife and son sold the lands for P500 per square meter to Cesar
Gatdula, a tenant of the land. Pending the transfer of the titles, Gatdula
offered to sell the disputed lots at P3,000 per square meter to each of the
petitioners who were occupants of the lands.. Petitioners did not buy at the
price offered. They filed a complaint against Gatdula for the exercise of their
preferential right to purchase the lands under Sec.6 of P.D. 1517, which grants
pre-emptive rights to (1) legitimate tenants who have resided on the land for
ten years or more who have built their homes on the land and (2) residents who
have legally occupied the land by contract, continuously for the last ten
years.
Issue: Was
the sale to Gatdula alone, among the many tenants sufficient compliance with
P.D. 1517?
Held: YES. The Castro heirs offered petitioners
the chance to buy the land which they respectively occupied. Gatdula, a tenant,
expressed his intention to buy the land provided he be given time to raise the
funds. Petitioners stopped paying rent after the death of Alejandro Castro, and
they offered no proof that they did pay. They also failed to show that they
have resided on the land for ten years or more. Nor have they shown that they
are residents who have legally occupied the land by contract, continuously for
the last ten years and were entitled to benefit from the provisions of P.D.
1517. With their failure to establish entitlement thereto, the offer and sale
of the land to Gatdula could not be said to be outside the pale of the Decree.
Jurisdictional
Requirements for Reconstitution of Title
HEIRS OF EULALIO RAGUA vs. COURT OF
APPEALS
G.R. 88521-22 & 89366-67, January
31, 2000
Facts: A
petition for reconstitution of title was filed by Eulalio Ragua in 1964
covering 439 hectares of land situated in QC.
He averred that the owner’s duplicate of the OCT was lost and destroyed
in 1945 when his personal effects and papers were eaten by termites. The petition was opposed by several parties
contending that there was failure to comply with the jurisdictional
requirements for judicial reconstitution under RA 26 Sec. 12 & 13. The lower court ordered the Register of Deeds
to reconstitute in the name of Eulalio.
However, the CA reversed the decision, holding that the TC had no
jurisdiction because of Eulalio’s failure to comply with the requirements of
the said law and that the latter’s
action is also barred by laches.
Issue: Did
the trial court acquire jurisdiction over the proceedings for reconstitution of
title?
Held: Petitioners
admittedly did not comply with the requirements of Sec. 12 (d), (e) and (g),
namely: The petition did not state (1)
the nature and description of the buildings and improvements, if any, which do
not belong to the owner of the land, and the names and addresses of the owners
of such building and improvements, (2) the names and addresses of the occupants
of the adjoining properties and of all persons who may have any interest in the
property, and (3) that no deeds or other instrument affecting the property may
have been presented for registration.
Neither do this data appear in the notice of hearing. Besides, petitioners also did not comply with
the notice and publication under Sec. 13 because the order directed that the
notice be posted at the Caloocan
City Hall
We have ruled that the failure to comply
with the requirements of publication and posting of notices prescribed in RA 26
Sec. 12 & 13 is fatal to the jurisdiction of the court. Hence, non-compliance with the jurisdictional
requirements renders its decision approving the reconstitution and all
proceedings therein utterly null and void.
Moreover, petitioners filed the petition
for reconstitution 19 years after the title was allegedly lost or
destroyed. Hence, petitioners are guilty
of laches.
isang malaking tulong.
TumugonBurahin