Civil Law Digested Cases

DAEL CHURCHILL T.
GERONG Civil Law Review (Additional Notes)

CASES: March 17, 2003 GEORGE HAMBON, petitioner, vs. COURT OF APPEALS AND VALENTINO U. CARANTES, respondents. FACTUAL BACKGROUND: Petitioner filed before the RTC, a complaint for damages for the injuries and expenses he sustained after the truck driven by the respondent bumped him. In answer thereto, respondent contended that the criminal case arising from the same incident, Criminal Case No. 2049 for Serious Physical Injuries thru Reckless Imprudence, earlier filed, had already been provisionally dismissed by the MTC due to petitioners lack of interest; and that the dismissal was with respect to both criminal and civil liabilities of respondent. After trial, the RTC ruling that the civil case was not barred by the dismissal of the criminal case, and that petitioner is entitled to damages. On appeal, the CA reversed and set aside the decision of the trial court, and dismissed petitioners complaint for damages. According to the appellate court, since the petitioner did not make any reservation to institute a separate civil action for damages, it was impliedly instituted with the criminal case, and the dismissal of the criminal case carried with it the dismissal of the suit for damages, notwithstanding the fact that the dismissal was provisional as it amounted to an acquittal and had the effect of an adjudication on the merits.Hence, herein petition. ISSUES: 1. Whether or not a civil case for damages based on an independent civil action be duly dismissed for failure to make reservation to file a separate civil action in the criminal case arising from the same act or omission. Due to the fact that the criminal case was dismissed before the prosecution started to present evidence for failure of the Private Complainant to appear despite notice. 2. Should a strict interpretation of Rule 111, section 1 of the Rules of Court which infringes on a right of a party based on a substantive law be permitted when to do so would diminish, modify, and or amend a substantive right. HELD: Petitioner argues that the ruling in the case of Abellana v. Marave should be observed, i.e., a civil action for damages may be filed and proceed independently of the criminal action even without reservation to file the same has been made; and that the requirement of reservation, as provided in Rule 111 of the Rules of Court, practically diminished, amended, modified his substantial right. The petition must be denied. Petitioner filed the complaint for damages on June 6, 1989. Hence, Section 1, Rule 111 of the 1985 Rules on Criminal Procedure, as amended in 1988, is the prevailing and governing law in this case, viz.: SECTION 1. Institution of criminal and civil actions . When a criminal action is instituted, the civil action for the recovery of civil liability is impliedly instituted with the criminal action, unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. Such civil action includes recovery of indemnity under the Revised Penal Code, and damages under Article 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act or omission of the accused. . . . Under the foregoing rule, civil actions to recover liability arising from crime ( ex delicto) and under Articles 32, 33, 34 and 2176 of the Civil Code (quasi-delict) are deemed impliedly instituted with the criminal action unless waived, reserved or previously instituted. Thus, in Maniago v. Court of Appeals , the Court ruled that the right to bring an action for damages under the Civil Code must be reserved, as required by Section 1, Rule 111, otherwise it should be dismissed; and that the reservation requirement does not impair, diminish or defeat substantive rights, but only regulates their exercise in the general interest of orderly procedure. In the Maniago case, petitioner Maniago was the owner of the bus driven by Andaya that figured in a vehicular accident with the jeepney owned by respondent Boado. The petitioner initially sought for the suspension of the civil case for damages filed against him in view of the pendency of the criminal case for reckless imprudence resulting in damage to property and multiple physical injuries filed against his driver. The respondent, in the criminal case, did not reserve the right to bring the separate civil action against the petitioner or his driver. The criminal case was later dismissed for the failure of the prosecution to prosecute its case. On appeal, the Court identified the issues as (1) whether the respondent can file a civil action for damages despite the absence of reservation; (2) whether the dismissal of the criminal case brought with it the dismissal of the civil action; and (3) whether the reservation requirement is substantive in character and beyond the rule-making power of the Court. The Court expounded that a reservation must be made to institute separately all civil actions for the recovery of civil liability, otherwise they will be deemed to have been instituted with the criminal case. In other words the right of the injured party to sue separately for the recovery of the civil liability whether arising from crimes ( ex delicto) or from quasi-delict under Art. 2176 of the Civil Code must be reserved otherwise they will be deemed instituted with the criminal action. Contrary to private respondents contention, the requirement that before a separate civil action may be brought it must be reserved does not impair, diminish or defeat substantive rights, but only regulates their exercise in the general interest of procedure. The requirement is merely procedural in nature. For that matter the Revised Penal Code, by providing in Art. 100 that any person criminally liable is also civilly liable, gives the offended party the right to bring a separate civil action, yet no one has ever questioned the rule that such action must be reserved before it may be brought separately.
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DAEL CHURCHILL T. GERONG Civil Law Review (Additional Notes)

While the Abellana case ruled that a reservation is not necessary, the 1988 amendment of the rule explicitly requires reservation of the civil action. Prior reservation is a condition sine qua non before any of these independent civil actions can be instituted and thereafter have a continuous determination apart from or simultaneous with the criminal action. Far from altering substantive rights, the primary purpose of the reservation is to avoid multiplicity of suits, to guard against oppression and abuse, to prevent delays, to clear congested dockets, to simplify the work of the trial court; in short, the attainment of justice with the least expense and vexation to the parties-litigants. Thus, herein petitioner Hambon should have reserved his right to separately institute the civil action for damages in the Criminal Case. Having failed to do so, the Civil Case for damages subsequently filed by him without prior reservation should be dismissed. With the dismissal of Criminal Case, whatever civil action for the recovery of civil liability that was impliedly instituted therein was likewise dismissed. WHEREFORE, the instant petition for review on certiorari is hereby DENIED for lack of merit, and the decision of the Court of Appeals dated March 8, 1995, is AFFIRMED in toto. SO ORDERED. March 11, 2005 HOMEOWNERS SAVINGS & LOAN BANK, Petitioner, vs. MIGUELA C. DAILO, Respondents. FACTUAL ANTECEDENTS: Respondent Miguela Dailo and Marcelino Dailo, Jr. were married on August 8, 1967. During their marriage, the spouses purchased a house and lot from a certain Sandra Dalida. The subject property was declared for tax assessment purposes. The Deed of Absolute Sale, however, was executed only in favor of the late Marcelino Dailo, Jr. as vendee to the exclusion of his wife. On December 1, 1993, Marcelino Dailo, Jr. executed a Special Power of Attorney in favor of Gesmundo, authorizing the latter to obtain a loan from petitioner Homeowners Savings and Loan Bank to be secured by the spouses Dailos house and lot. Pursuant to the SPA, Gesmundo obtained a loan in the amount of P300,000.00. As security, Gesmundo executed a Real Estate Mortgage constituted on the subject property in favor of petitioner. The abovementioned transactions, including the execution of the SPA in favor of Gesmundo, took place without the knowledge and consent of Miguela (the wife). Upon maturity, the loan remained outstanding. As a result, petitioner instituted extrajudicial foreclosure proceedings on the mortgaged property. After the extrajudicial sale, a Certificate of Sale was issued in favor of petitioner as the highest bidder. After the lapse of one year without the property being redeemed, petitioner, consolidated the ownership thereof by executing an Affidavit of Consolidation of Ownership and a Deed of Absolute Sale. In the meantime, Marcelino Dailo, Jr. died on December 20, 1995. In one of her visits to the subject property, respondent learned that petitioner had already employed a certain Roldan Brion to clean its premises and that her car was razed because Brion allowed a boy to play with fire within the premises. Claiming that she had no knowledge of the mortgage constituted on the subject property, which was conjugal in nature, respondent instituted with the RTC a Civil Case for Nullity of Real Estate Mortgage and Certificate of Sale, Affidavit of Consolidation of Ownership, Deed of Sale, Reconveyance with Prayer for Preliminary Injunction and Damages against petitioner. In the latters Answer with Counterclaim, petitioner prayed for the dismissal of the complaint on the ground that the property in question was the exclusive property of the late Marcelino Dailo, Jr. Appellate court affirmed the trial courts finding that the subject property was conjugal in nature, in the absence of clear and convincing evidence to rebut the presumption that the subject property acquired during the marriage of spouses Dailo belongs to their conjugal partnership. The appellate court declared as void the mortgage on the subject property because it was constituted without the knowledge and consent of respondent. Hence, this petition. ISSUES: 1. Whether or not the mortgage constituted by the late Marcelino Dailo, Jr. on the subject property as co-owner thereof valid as to his undivided share. 2. Whether or not the conjugal partnership is liable for the payment of the loan obtained by the late Marcelino Dailo, Jr. the same having redounded to the benefit of the family. HELD: First, petitioner contends that Article 124 of the Family Code should be construed in relation to Article 493 of the Civil Code, which states: ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Article 124 of the Family Code provides in part: ART. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. . . . In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. . . .
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Petitioner argues that although Article 124 of the Family Code requires the consent of the other spouse to the mortgage of conjugal properties, the framers of the law could not have intended to curtail the right of a spouse from exercising full ownership over the portion of the conjugal property pertaining to him under the concept of coownership. Thus, petitioner would have this Court uphold the validity of the mortgage to the extent of the late Marcelino Dailo, Jr.s share in the conjugal partnership. In Guiang v. Court of Appeals, it was held that the sale of a conjugal property requires the consent of both the husband and wife. In applying Article 124 of the Family Code, this Court declared that the absence of the consent of one renders the entire sale null and void, including the portion of the conjugal property pertaining to the husband who contracted the sale. The same principle in Guiang squarely applies to the instant case. As shall be discussed next, there is no legal basis to construe Article 493 of the Civil Code as an exception to Article 124 of the Family Code. Respondent and the late Marcelino Dailo, Jr. were married on August 8, 1967. In the absence of a marriage settlement, the system of relative community or conjugal partnership of gains governed the property relations. With the effectivity of the Family Code on August 3, 1988, Conjugal Partnership of Gains in the Family Code was made applicable to conjugal partnership of gains already established before its effectivity unless vested rights have already been acquired under the Civil Code or other laws. The rules on co-ownership do not even apply to the property relations of respondent and the late Marcelino Dailo, Jr. even in a suppletory manner. The regime of conjugal partnership of gains is a special type of partnership, where the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance. Unlike the absolute community of property wherein the rules on co-ownership apply in a suppletory manner, the conjugal partnership shall be governed by the rules on contract of partnership in all that is not in conflict with what is expressly determined in the chapter (on conjugal partnership of gains) or by the spouses in their marriage settlements. Thus, the property relations of respondent and her late husband shall be governed, foremost, on Conjugal Partnership of Gains of the Family Code and, suppletorily, by the rules on partnership under the Civil Code. In case of conflict, the former prevails because the Civil Code provisions on partnership apply only when the Family Code is silent on the matter. The basic and established fact is that during his lifetime, without the knowledge and consent of his wife, Marcelino Dailo, Jr. constituted a real estate mortgage on the subject property, which formed part of their conjugal partnership. By express provision of Article 124 of the Family Code, in the absence of (court) authority or written consent of the other spouse, any disposition or encumbrance of the conjugal property shall be void. The aforequoted provision does not qualify with respect to the share of the spouse who makes the disposition or encumbrance in the same manner that the rule on co-ownership under Article 493 of the Civil Code does. Where the law does not distinguish, courts should not distinguish. Thus, both the trial court and the appellate court are correct in declaring the nullity of the real estate mortgage for lack of respondents consent. Second, petitioner imposes the liability for the payment of the principal obligation obtained by the late Marcelino Dailo, Jr. on the conjugal partnership to the extent that it redounded to the benefit of the family. Under Article 121 of the Family Code, "The conjugal partnership shall be liable for debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited." For the subject property to be held liable, the obligation contracted by the late Marcelino Dailo, Jr. must have redounded to the benefit of the conjugal partnership. There must be the requisite showing then of some advantage which clearly accrued to the welfare of the spouses. Certainly, to make a conjugal partnership respond for a liability that should appertain to the husband alone is to defeat and frustrate the avowed objective of the new Civil Code to show the utmost concern for the solidarity and well-being of the family as a unit. The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains lies with the creditor-party claiming. (he who asserts, not he who denies, must prove). Petitioners sweeping conclusion that the loan obtained by the late Marcelino Dailo, Jr. to finance the construction of housing units without a doubt redounded to the benefit of his family, without adducing adequate proof, does not persuade this Court. Other than petitioners bare allegation, there is nothing from the records of the case to compel a finding that, indeed, the loan obtained by the late Marcelino redounded to the benefit of the family. Consequently, the conjugal partnership cannot be held liable for the payment of the principal obligation. In addition, petitioner vigorously asserted that the subject property was the exclusive property of the late Marcelino Jr. Nowhere in the answer filed with the trial court was it alleged that the proceeds of the loan redounded to the benefit of the family. Even on appeal, petitioner never claimed that the family benefited from the proceeds of the loan. When a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensive to the basic rules of fair play, justice and due process. A party may change his legal theory on appeal only when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue raised in the new theory. WHEREFORE, the petition is DENIED. Costs against petitioner. SO ORDERED. March 15, 2010 TITAN CONSTRUCTION CORPORATION, Petitioner, vs. MANUEL A. DAVID, SR. and MARTHA S. DAVID, Respondents. FACTS: Manuel and Martha were married on March 25, 1957. In 1970, the spouses acquired a lot which was registered in the name of "MARTHA S. DAVID, of legal age, Filipino, married to Manuel A. David". In 1976, the spouses separated de facto. In March 1995, Manuel discovered that Martha had previously sold the property to Titan for P1,500,000.00 through a Deed of Sale dated April 24, 1995. Thus, on March 13, 1996, Manuel filed a
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Complaint for Annulment of Contract and Recovenyance against Titan before the RTC. Manuel alleged that the sale executed by Martha in favor of Titan was without his knowledge and consent, and therefore void. The RTC found that the property was conjugal in character since it was purchased by Manuel and Martha with conjugal funds during their marriage. The fact that TCT No. 156043 was registered in the name of "MARTHA S. DAVID x x x married to Manuel A. David" did not negate the propertys conjugal nature. Thus, the Deed of Sale is void. On appeal, the CA affirmed the decision of the trial court. Hence this petition. ISSUE: Whether or not the subject property is conjugal or paraphernal (exclusive property of the wife). HELD: The property is part of the spouses conjugal partnership. The Civil Code of the Philippines, the law in force at the time of the celebration of the marriage between Martha and Manuel in 1957, provides: Article 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife. Article 153 of the Civil Code also provides: Article 153. The following are conjugal partnership property: (1) That which is acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; These provisions were carried over to the Family Code. In particular, Article 117 thereof provides: Art. 117. The following are conjugal partnership properties: (1) Those acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; Article 116 of the Family Code is even more unequivocal in that "all property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved." We are not persuaded by Titans arguments that the property was Marthas exclusive property because Manuel failed to present proof of his income in 1970, hence he could not have had the financial capacity to contribute to the purchase of the property in 1970; and that Manuel admitted that it was Martha who concluded the original purchase of the property. Manuel was not required to prove that the property was acquired with funds of the partnership. Rather, the presumption applies even when the manner in which the property was acquired does not appear. Here, we find that Titan failed to overturn the presumption that the property, purchased during the spouses marriage, was part of the conjugal partnership. In the absence of Manuels consent, the Deed of Sale is void. Since the property was undoubtedly part of the conjugal partnership, the sale to Titan required the consent of both spouses. Article 165 of the Civil Code expressly provides that "the husband is the administrator of the conjugal partnership". Likewise, Article 172 of the Civil Code ordains that "the wife cannot bind the conjugal partnership without the husbands consent, except in cases provided by law". Similarly, Article 124 of the Family Code requires that any disposition or encumbrance of conjugal property must have the written consent of the other spouse, otherwise, such disposition is void. Thus: Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. WHEREFORE, the petition is DENIED. The July 20, 2004 Decision of the Court of Appeals in CA-G.R. CV No. 67090 which affirmed with modifications the March 7, 2000 Decision of the Regional Trial Court of Quezon City, Branch 80, and its August 31, 2005 Resolution denying the motion for reconsideration, are AFFIRMED, without prejudice to the recovery by petitioner Titan Construction Corporation of the amounts it paid to Martha S. David in the appropriate action before the proper court. SO ORDERED. September 7, 2011 THE HEIRS OF PROTACIO GO, SR. and MARTA BAROLA, namely: LEONOR, SIMPLICIO, PROTACIO, JR., ANTONIO, BEVERLY ANN LORRAINNE, TITA, CONSOLACION, LEONORA and ASUNCION, all surnamed GO, represented by LEONORA B. GO, Petitioners, vs. ESTER L. SERVACIO and RITO B. GO, Respondents. The disposition by sale of a portion of the conjugal property by the surviving spouse without the prior liquidation mandated by Article 130 of the Family Code is not necessarily void if said portion has not yet been allocated by
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judicial or extrajudicial partition to another heir of the deceased spouse. At any rate, the requirement of prior liquidation does not prejudice vested rights. FACTS: On February 1976, Jesus Gaviola sold two parcels of land to Protacio Go, Jr. On March 1999, Protacio, Jr. executed an Affidavit of Renunciation and Waiver, whereby he affirmed under oath that it was his father, Protacio Go, Sr., not he, who had purchased the two parcels of land. On November 1987, Marta Barola Go died. She was the wife of Protacio, Sr. and mother of the petitioners. On December 1999, Protacio, Sr. and his son Rito Go (joined by his wife Dina Go) sold a portion of the property to Ester Servacio. On March 2001, petitioners demanded the return of the property, but Servacio refused to heed their demand. After barangay proceedings failed to resolve the dispute, they sued Servacio and Rito in the RTC for the annulment of the sale. The petitioners averred that following Protacio, Jr.s renunciation, the property became conjugal property; and that the sale of the property to Servacio without the prior liquidation of the community property between Protacio, Sr. and Marta was null and void. Servacio and Rito countered that Protacio, Sr. had exclusively owned the property because he had purchased it with his own money. RTC declared that the property was the conjugal property of Protacio, Sr. and Marta because there were three vendors in the sale to Servacio (namely: Protacio, Sr., Rito, and Dina); that the participation of Rito and Dina as vendors had been by virtue of their being heirs of the late Marta; that under Article 160 of the Civil Code, the law in effect when the property was acquired, all property acquired by either spouse during the marriage was conjugal unless there was proof that the property thus acquired pertained exclusively to the husband or to the wife; and that Protacio, Jr.s renunciation was grossly insufficient to rebut the legal presumption. Nonetheless, RTC affirmed the validity of the sale of the property, holding that: "As long as the portion sold, alienated or encumbered will not be allotted to the other heirs in the final partition of the property, or to state it plainly, as long as the portion sold does not encroach upon the legitime of other heirs, it is valid." This rule applies not only to sale but also to mortgages. The alienation, mortgage or disposal of the conjugal property without the required formality, is not however, null ab initio, for the law recognizes their validity so long as they do not exceed the portion which, after liquidation and partition, should pertain to the surviving spouse who made the contract." It seems clear that the alienation made by the surviving spouse of a portion of the community property is not wholly void ab initio despite Article 103 of the Family Code, and shall be valid to the extent of what will be allotted, in the final partition, to the vendor. And rightly so, because why invalidate the sale by the surviving spouse of a portion of the community property that will eventually be his/her share in the final partition? Practically there is no reason for that view and it would be absurd. Now, in the instant case, the 5,560 square meter portion of the 17,140 square-meter conjugal lot is certainly much less than what vendors Protacio Go, Sr. and his son Rito Go will eventually get as their share in the final partition of the property. So the sale is still valid. ISSUE: Whether or not the sale of the subject property is valid. HELD: Yes. The sale is valid but it is unenforceable until partition. Article 130 of the Family Code reads: Article 130. Upon the termination of the marriage by death, the conjugal partnership property shall be liquidated in the same proceeding for the settlement of the estate of the deceased. If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the conjugal partnership property either judicially or extra-judicially within one year from the death of the deceased spouse. If upon the lapse of the six month period no liquidation is made, any disposition or encumbrance involving the conjugal partnership property of the terminated marriage shall be void. Should the surviving spouse contract a subsequent marriage without compliance with the foregoing requirements, a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage. Article 130 is to be read in consonance with Article 105 of the Family Code, viz: Article 105. In case the future spouses agree in the marriage settlements that the regime of conjugal partnership of gains shall govern their property relations during marriage, the provisions in this Chapter shall be of supplementary application. The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code, without prejudice to vested rights already acquired in accordance with the Civil Code or other laws, as provided in Article 256. It is clear that conjugal partnership of gains established before and after the effectivity of the Family Code are governed by the rules found in Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property Relations Between Husband And Wife) of the Family Code. Hence, any disposition of the conjugal property after the dissolution of the conjugal partnership must be made only after the liquidation; otherwise, the disposition is void. Before applying such rules, however, the conjugal partnership of gains must be subsisting at the time of the effectivity of the Family Code. There being no dispute that Protacio, Sr. and Marta were married prior to the effectivity of the Family Code on August 3, 1988, their property relation was properly characterized as one of
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conjugal partnership governed by the Civil Code. Upon Martas death in 1987, the conjugal partnership was dissolved and an implied ordinary co-ownership ensued among Protacio, Sr. and the other heirs of Marta with respect to her share in the assets of the conjugal partnership pending a liquidation following its liquidation. The ensuing implied ordinary co-ownership was governed by Article 493 of the Civil Code, to wit: Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Protacio, Sr., although becoming a co-owner with his children in respect of Martas share in the conjugal partnership, could not yet assert or claim title to any specific portion of Martas share without an actual partition of the property being first done either by agreement or by judicial decree. Until then, all that he had was an ideal or abstract quota in Martas share. Nonetheless, a co-owner could sell his undivided share; hence, Protacio, Sr. had the right to freely sell and dispose of his undivided interest, but not the interest of his co-owners. Consequently, the sale by Protacio, Sr. and Rito as co-owners without the consent of the other co-owners was not necessarily void, for the rights of the selling co-owners were thereby effectively transferred, making the buyer (Servacio) a coowner of Martas share. This result conforms to the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. Article 105 of the Family Code, expressly provides that the applicability of the rules on dissolution of the conjugal partnership is "without prejudice to vested rights already acquired in accordance with the Civil Code or other laws." This provision gives another reason not to declare the sale as entirely void. Indeed, such a declaration prejudices the rights of Servacio who had already acquired the shares of Protacio, Sr. and Rito in the property subject of the sale. In their separate comments, the respondents aver that each of the heirs had already received "a certain allotted portion" at the time of the sale, and that Protacio, Sr. and Rito sold only the portions adjudicated to and owned by them. However, they did not present any public document on the allocation among her heirs, including themselves, of specific shares in Martas estate. Neither did they aver that the conjugal properties had already been liquidated and partitioned. Accordingly, pending a partition among the heirs of Marta, the efficacy of the sale, and whether the extent of the property sold adversely affected the interests of the petitioners might not yet be properly decided with finality. The appropriate recourse to bring that about is to commence an action for judicial partition. since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-ownerseller are transferred, thereby making the buyer a co-owner of the property. The proper action in cases like this is not for the nullification of the sale or for the recovery of possession of the thing owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION of the common property as if it continued to remain in the possession of the co-owners who possessed and administered it. Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for PARTITION. Meanwhile, Servacio would be a trustee for the benefit of the co-heirs of her vendors in respect of any portion that might not be validly sold to her. The following observations of Justice Paras are explanatory of this result, viz: If it turns out that the property alienated or mortgaged really would pertain to the share of the surviving spouse, then said transaction is valid. If it turns out that there really would be, after liquidation, no more conjugal assets then the whole transaction is null and void. But if it turns out that half of the property thus alienated or mortgaged belongs to the husband as his share in the conjugal partnership, and half should go to the estate of the wife, then that corresponding to the husband is valid, and that corresponding to the other is not. Since all these can be determined only at the time the liquidation is over, it follows logically that a disposal made by the surviving spouse is not void ab initio. Thus, it has been held that the sale of conjugal properties cannot be made by the surviving spouse without the legal requirements. The sale is void as to the share of the deceased spouse (except of course as to that portion of the husbands share inherited by her as the surviving spouse). The buyers of the property that could not be validly sold become trustees of said portion for the benefit of the husbands other heirs, the cestui que trust ent. Said heirs shall not be barred by prescription or by laches. WHEREFORE, we DENY the petition for review on certiorari; and AFFIRM the decision of the Regional Trial Court. The petitioners shall pay the costs of suit. SO ORDERED. September 29, 1998 SAN JUAN STRUCTURAL AND STEEL FABRICATORS, INC., petitioner, vs. COURT OF APPEALS, MOTORICH SALES CORPORATION, NENITA LEE GRUENBERG, ACL DEVELOPMENT CORP. and JNM REALTY AND DEVELOPMENT CORP., respondents. May corporate treasurer, by herself and without any authorization from the board of directors, validly sell a parcel of land owned by the corporation? May the veil of corporate fiction be pierced on the mere ground that almost all of the shares of stock of the corporation are owned by said treasurer and her husband? SC answered in the negative. FACTS: San Juan Structural and Steel Fabricators entered into an agreement with Motorich Corporation through Nenita Gruenberg, corporate treasurer of Motorich, for the transfer to the former a parcel of land upon a P100,000 earnest money, balance to be payable within March 2, 1989. Upon payment of the earnest money, and on March
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1, 1989, San Juan allegedly asked to be submitted a computation of the balance due to Motorich. The latter, despite repeated demands, refused to execute the Deed of Assignment of the land. San Juan discovered that Motorich entered into a Deed of Absolute Sale of the land to ACL Development Corporation. Hence, San Juan filed a complaint with the RTC. On the other hand, Motorich contends that since Nenita Gruenberg was only the treasurer of said corporation, and that its president, Reynaldo Gruenberg, did not sign the agreement entered into by San Juan and Motorich, the treasurers signature was inadequate to bind Motorich to the agreement. Furthermore, Nenita contended that since San Juan was not able to pay within the stipulated period, no deed of assignment could be made. The deed was agreed to be executed only after receipt of the cash payment, and since according to Nenita, no cash payment was made on the due date, no deed could have been executed. RTC dismissed the case holding that Nenita Gruenberg was not authorized by Motorich to enter into said contract with San Juan, and that a majority vote of the BoD was necessary to sell assets of the corporation. CA affirmed the decision of the RTC. Hence, this petition. ISSUES: 1. whether or not there was a valid contract existing between San Juan and Motorich. 2. May the doctrine of piercing the veil of corporate fiction be applied to Motorich? HELD: First Issue: There was No Valid contract Petitioner San Juan alleges that it entered into an agreement, through its president Andres Co, with Motorich which was in turn allegedly represented by its treasurer, Nenita Gruenberg. Petitioner insists that "when Gruenberg and Co affixed their signatures on the contract they both consented to be bound by the terms thereof." Ergo, petitioner contends that the contract is binding on the two corporations. We do not agree. True, Gruenberg and Co signed the Agreement, according to which a lot owned by Motorich was purportedly sold. Such contract, however, cannot bind Motorich, because it never authorized or ratified such sale. A corporation is a juridical person separate and distinct from its stockholders or members. Accordingly, the property of the corporation is not the property of its stockholders or members and may not be sold by the stockholders or members without express authorization from the corporation's board of directors. Indubitably, a corporation may act only through its board of directors or, when authorized either by its bylaws or by its board resolution, through its officers or agents in the normal course of business. The general principles of agency govern the relation between the corporation and its officers or agents, subject to the articles of incorporation, bylaws, or relevant provisions of law. Thus, a corporate officer or agent may represent and bind the corporation in transactions with third persons to the extent that the authority to do so has been conferred upon him, and this includes powers which have been intentionally conferred, and also such powers as, in the usual course of the particular business, are incidental to, or may be implied from, the powers intentionally conferred, powers added by custom and usage, as usually pertaining to the particular officer or agent, and such apparent powers as the corporation has caused persons dealing with the officer or agent to believe that it has conferred. Furthermore, the burden of proof is with the petitioner. Unless duly authorized, a treasurer, whose powers are limited, cannot bind the corporation in a sale of its assets. In the case at bar, Motorich denies that it ever authorized Nenita Gruenberg, its treasurer, to sell the subject parcel of land. Consequently, petitioner had the burden of proving that Nenita Gruenberg was in fact authorized to represent and bind Motorich in the transaction. Petitioner failed to discharge this burden. Its evidence contained no proof of such authority. It has not shown any provision of said respondent's articles of incorporation, bylaws or board resolution to prove that Nenita Gruenberg possessed such power. That Nenita Gruenberg is the treasurer of Motorich does not free petitioner from the responsibility of ascertaining the extent of her authority to represent the corporation. Petitioner cannot assume that she, by virtue of her position, was authorized to sell the property of the corporation. Selling is obviously foreign to a corporate treasurer's function, which generally has been described as "to receive and keep the funds of the corporation, and to disburse them in accordance with the authority given him by the board or the properly authorized officers." Neither was such real estate sale shown to be a normal business activity of Motorich. The primary purpose of Motorich is marketing, distribution, export and import in relation to a general merchandising business. Unmistakably, its treasurer is not cloaked with actual or apparent authority to buy or sell real property, an activity which falls way beyond the scope of her general authority. Art. 1874 and 1878 of the Civil Code of the Philippines provides: Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing: otherwise, the sale shall be void. Art. 1878. Special powers of attorney are necessary in the following case: (5) To enter any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration; Petitioner further contends that Respondent Motorich has ratified said contract of sale because of its "acceptance of benefits," as evidenced by the receipt issued by Respondent Gruenberg. Petitioner is clutching at straws. As a general rule, acts of corporate officers within the scope of their authority are binding on the corporation. But when these officers exceed their authority, their actions "cannot bind the corporation, unless it has ratified such acts or is estopped from disclaiming them."
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In this case, there is a clear absence of proof that Motorich ever authorized Nenita Gruenberg, or made it appear to any third person that she had the authority, to sell its land or to receive the earnest money. Neither was there any proof that Motorich ratified, expressly or impliedly, the contract. Petitioner rests its argument on the receipt which, however, does not prove the fact of ratification. This document alone does not prove that her acts were authorized or ratified by Motorich. Art. 1318 of the Civil Code lists the requisites of a valid and perfected contract: "(1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; (3) cause of the obligation which is established." As found by the trial court and affirmed by the CA, there is no evidence that Gruenberg was authorized to enter into the contract of sale, or that the said contract was ratified by Motorich. As the consent of the seller was not obtained, no contract to bind the obligor was perfected. Therefore, there can be no valid contract of sale between petitioner and Motorich. Because Motorich had never given a written authorization to Gruenberg to sell its parcel of land, we hold that the Agreement entered into by the latter with petitioner is void. Being inexistent and void from the beginning, said contract cannot be ratified. Second Issue: Piercing the Corporate Veil Not Justified A. San Juan argues that the veil of corporate fiction should be pierced because the spouses Reynaldo and Nenita Gruenberg own 99.96% of the subscribed capital stock, they needed no authorization from the BoD to enter into the said contract. The Court is not persuaded The veil can only be disregarded when it is utilized as a shield to commit fraud, illegality or inequity, defeat public convenience, confuse legitimate issues, or serve as a mere alter ego or business conduit of a person or an instrumentality, agency or adjunct of another corporation. Thus, the Court has consistently ruled that "when the fiction is used as a means of perpetrating a fraud or an illegal act or as vehicle for the evasion of an existing obligation, the circumvention of statutes, the achievement or perfection of a monopoly or generally the perpetration of knavery or crime, the veil with which the law covers and isolates the corporation from the members or stockholders who compose it will be lifted to allow for its consideration merely as an aggregation of individuals." The question of piercing the veil of corporate fiction is essentially, then, a matter of proof. In the case at bar, SC found no reason to pierce the veil. San Juan failed to establish that said corporation was formed for the purpose of shielding any fraudulent act of its officers and stockholders. B. a) Petitioner claims that Motorich is a close corporation. We rule that it is not. A close corporation is one whose articles of incorporation provide that: (1) All of the corporation's issued stock of all classes, exclusive of treasury shares, shall be held of record by not more than a specified number of persons, not exceeding twenty (20); (2) All of the issued stock of all classes shall be subject to one or more specified restrictions on transfer permitted by this Title; and (3) The corporation shall not list in any stock exchange or make any public offering of any of its stock of any class. Notwithstanding the foregoing, a corporation shall be deemed not a close corporation when at least two-thirds (2/3) of its voting stock or voting rights is owned or controlled by another corporation which is not a close corporation within the meaning of this Code. The articles of incorporation of Motorich does not contain any provision stating that (1) the number of stockholders shall not exceed 20, or (2) a preemption of shares is restricted in favor of any stockholder or of the corporation, or (3) listing its stocks in any stock exchange or making a public offering of such stocks is prohibited. From its articles, it is clear that Motorich is not a close corporation. Motorich does not become one either, just because Spouses Reynaldo and Nenita Gruenberg owned 99.866% of its subscribed capital stock. The "mere ownership by a single stockholder or by another corporation of all or capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate personalities." The Court is not unaware that there are exceptional cases where "an action by a director, who singly is the controlling stockholder, may be considered as a binding corporate act and a board action as nothing more than a mere formality." The present case, however, is not one of them.As stated by petitioner, Spouses Reynaldo and Nenita Gruenberg own "almost 99.866%" of Motorich. Since Nenita is not the sole controlling stockholder of Motorich, the aforementioned exception does not apply. Granting arguendo that the corporate veil of Motorich is to be disregarded, the subject parcel of land would then be treated as conjugal property of Spouses Gruenberg, because the same was acquired during their marriage. There being no indication that said spouses, who appear to have been married before the effectivity of the Family Code, have agreed to a different property regime, their property relations would be governed by conjugal partnership of gains. As a consequence, Nenita Gruenberg could not have effected a sale of the subject lot because "there is no co-ownership between the spouses in the properties of the conjugal partnership of gains. Hence, neither spouse can alienate in favor of another, his or her interest in the partnership or in any property belonging to it; neither spouse can ask for a partition of the properties before the partnership has been legally dissolved." Assuming further, for the sake of argument, that the spouses' property regime is the absolute community of property, the sale would still be invalid. Under this regime, "alienation of community property must have the written consent of the other spouse or the authority of the court without which the disposition or encumbrance is void." Both requirements are manifestly absent in the instant case. WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED. SO ORDERED.
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August 31, 2005 GERARDO B. CONCEPCION, Petitioners, vs. COURT OF APPEALS and MA. THERESA ALMONTE, Respondent The child, by reason of his mental and physical immaturity, needs special safeguard and care, including appropriate legal protection before as well as after birth. In case of assault on his rights by those who take advantage of his innocence and vulnerability, the law will rise in his defense with the single-minded purpose of upholding only his best interests. FACTS: Gerardo and Ma. Theresa were married. Almost a year later, Ma. Theresa gave birth to Jose Gerardo. On December 1991, Gerardo filed a petition to have his marriage to Ma. Theresa annulled on the ground of bigamy. He alleged that 9 years before he married Ma. Theresa, she had married one Mario Gopiao, which marriage was never annulled. Ma. Theresa did not deny marrying Mario. She, however, averred that the marriage was a sham and that she never lived with Mario at all. Trial court ruled that Ma. Theresas marriage to Mario was valid and subsisting when she married Gerardo and annulled her marriage to the latter for being bigamous. It declared Jose Gerardo to be an illegitimate child as a result. The custody of the child was awarded to Ma. Theresa while Gerardo was granted visitation rights. She moved for the reconsideration INSOFAR ONLY as the visitation rights. She argued that there was nothing in the law granting "visitation rights in favor of the putative father of an illegitimate child." She further maintained that Jose Gerardos surname should be changed from Concepcion to Almonte, her maiden name, following the rule that an illegitimate child shall use the mothers surname. Applying the "best interest of the child" principle, the trial court denied Ma. Theresas motion and made the following observations:
It is a pity that the parties herein seem to be using their son to get at or to hurt the other, something they should never do if they want to assure the normal development and well-being of the boy. The Court allowed visitorial rights to the father knowing that the minor needs a father, especially as he is a boy, who must have a father figure to recognize something that the mother alone cannot give. Moreover, the Court believes that the emotional and psychological well-being of the boy would be better served if he were allowed to maintain relationships with his father. There being no law which compels the Court to act one way or the other on this matter, the Court invokes the provision of Art. 8, PD 603 as amended, otherwise known as the Child and Youth Welfare Code, to wit: "In all questions regarding the care, custody, education and property of the child, his welfare shall be the paramount consideration."
After hearing the oral arguments, the appellate court resolved the motion for reconsideration. It held that Jose Gerardo was not the son of Ma. Theresa by Gerardo but by Mario during her first marriage:
It is undeniable that Ma. Theresa was married to Mario Gopiao and that she had never entered into a lawful marriage with Gerardo since the marriage with the latter was void ab initio. In other words, Ma. Theresa was legitimately married to Mario Gopiao when the child Jose Gerardo was born. Therefore, the child Jose under the law is the legitimate child of the legal and subsisting marriage between Ma. Theresa and Mario Gopiao; he cannot be deemed to be the illegitimate child of the void and non-existent marriage between Ma. Theresa and Gerardo, but is said by the law to be the child of the legitimate and existing marriage between Ma. Theresa and Mario Gopiao (Art. 164, FC). Consequently, she is right in saying that Gerardo can claim neither custody nor visitorial rights over the child Jose Gerardo. Further, Gerardo cannot impose his name upon the child. Not only is it without legal basis (even supposing the child to be his illegitimate child [Art. 146, The Family Code]); it would tend to destroy the existing marriage between Ma. Theresa and Gopiao, would prevent any possible rapprochement (establishment or resumption of harmonious relationship) between the married couple, and would mean a judicial seal upon an illegitimate relationship.
The appellate court brushed aside the common admission of Gerardo and Ma. Theresa that Jose Gerardo was their son. It gave little weight to Jose Gerardos birth certificate showing that he was born a little less than a year after Gerardo and Ma. Theresa were married:
We are not unaware of the movants argument that various evidence exist that Ma. Theresa and Gerardo have judicially admitted that the minor is their natural child. But, in the same vein, we cannot overlook the fact that Art. 167 of the Family Code mandates: "The child shall be considered legitimate although the mother may have declared against its legitimacy or may have been sentenced as an adulteress." Thus, implicit from the above provision is the fact that a minor cannot be deprived of his legitimate status on the bare declaration of the mother and/or even much less, the supposed father. In fine, the law and only the law determines who are the legitimate or illegitimate children for ones legitimacy or illegitimacy cannot ever be compromised. Not even the birth certificate of the minor can change his status for the information contained therein are merely supplied by the mother and/or the supposed father. It should be what the law says and not what a parent says it is.
Shocked and stunned, Gerardo moved for a reconsideration of the above decision but the same was denied. Hence, this appeal. ISSUE: 1. Whether or not Jose is the illegitimate son of Gerardo and Ma. Theresa. 2. Whether or not Jose has the right to use the surname of Gerardo. 3. Whether or not Gerardo has visitorial rights over Jose Gerardo.
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HELD: The status and filiation of a child cannot be compromised. Art. 164 of the Family Code is clear. A child who is conceived or born during the marriage of his parents is legitimate. As a guaranty in favor of the child and to protect his status of legitimacy, Article 167 of the Family Code provides: Article 167. The child shall be considered legitimate although the mother may have declared against its legitimacy or may have been sentenced as an adulteress. The law requires that every reasonable presumption be made in favor of legitimacy. We explained the rationale of this rule that the presumption of legitimacy does not only flow out of a declaration in the statute but is based on the broad principles of natural justice and the supposed virtue of the mother. It is grounded on the policy to protect the innocent offspring from the odium of illegitimacy. Gerardo invokes Art. 166 (1)(b) of the Family Code. He cannot. He has no standing in law to dispute the status of Jose Gerardo. Only Ma. Theresas husband Mario or, in a proper case, his heirs, who can contest the legitimacy of the child Jose Gerardo born to his wife. Impugning the legitimacy of a child is a strictly personal right of the husband or, in exceptional cases, his heirs. Since the marriage of Gerardo and Ma. Theresa was void from the very beginning, he never became her husband and thus never acquired any right to impugn the legitimacy of her child. The presumption of legitimacy proceeds from the sexual union in marriage, particularly during the period of conception. To overthrow this presumption on the basis of Article 166 (1)(b) of the Family Code, it must be shown beyond reasonable doubt that there was no access that could have enabled the husband to father the child. Sexual intercourse is to be presumed where personal access is not disproved, unless such presumption is rebutted by evidence to the contrary. The presumption is quasi-conclusive and may be refuted only by the evidence of physical impossibility of coitus (sexual intercourse) between husband and wife within the first 120 days of the 300 days which immediately preceded the birth of the child. To rebut the presumption, the separation between the spouses must be such as to make marital intimacy impossible. This may take place, for instance, when they reside in different countries or provinces and they were never together during the period of conception. Or, the husband was in prison during the period of conception, unless it appears that sexual union took place through the violation of prison regulations. In the present case, during the period that Gerardo and Ma. Theresa were living together, Mario was living only a scant four kilometers apart. Not only did both Ma. Theresa and Mario reside in the same city but also that no evidence at all was presented to disprove personal access between them. Considering these circumstances, the separation between Ma. Theresa and her lawful husband, Mario, was certainly not such as to make it physically impossible for them to engage in the marital act. Sexual union between spouses is assumed. Evidence sufficient to defeat the assumption should be presented by him who asserts the contrary. There is no such evidence here. Thus, the presumption of legitimacy in favor of Jose Gerardo, as the issue of the marriage between Ma. Theresa and Mario, stands. Gerardo relies on Ma. Theresas statement in her answer to the petition for annulment of marriage that she never lived with Mario. He claims this was an admission that there was never any sexual relation between her and Mario, an admission that was binding on her. Gerardos argument is without merit. First, the import of Ma. Theresas statement is that Jose Gerardo is not her legitimate son with Mario but her illegitimate son with Gerardo. This declaration an avowal by the mother that her child is illegitimate is the very declaration that is proscribed by Art. 167 of the Family Code. The language of the law is unmistakable. An assertion by the mother against the legitimacy of her child cannot affect the legitimacy of a child born or conceived within a valid marriage. Second, even assuming the truth of her statement, it does not mean that there was never an instance where Ma. Theresa could have been together with Mario or that there occurred absolutely no intercourse between them. All she said was that she never lived with Mario. She never claimed that nothing ever happened between them. Telling is the fact that both of them were living in the same city during the time material to Jose Gerardos conception and birth. Far from foreclosing the possibility of marital intimacy, their proximity to each other only serves to reinforce such possibility. Thus, the impossibility of physical access was never established beyond reasonable doubt. Third, to give credence to Ma. Theresas statement is to allow her to arrogate unto herself a right exclusively lodged in the husband, or in a proper case, his heirs. A mother has no right to disavow a child because maternity is never uncertain. Hence, Ma. Theresa is not permitted by law to question Jose Gerardos legitimacy. Finally, for reasons of public decency and morality, a married woman cannot say that she had no intercourse with her husband and that her offspring is illegitimate. The proscription is in consonance with the presumption in favor of family solidarity. It also promotes the intention of the law to lean toward the legitimacy of children. Gerardos insistence that the filiation of Jose Gerardo was never an issue both in the trial court and in the appellate court does not hold water. The fact that both Ma. Theresa and Gerardo admitted and agreed that Jose Gerardo was born to them was immaterial. That was, in effect, an agreement that the child was illegitimate. If the Court were to validate that stipulation, then it would be tantamount to allowing the mother to make a declaration against the legitimacy of her child and consenting to the denial of filiation of the child by persons other than her husband. These are the very acts from which the law seeks to shield the child. Public policy demands that there be no compromise on the status and filiation of a child. Otherwise, the child will be at the mercy of those who may be so minded to exploit his defenselessness.
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The reliance of Gerardo on Jose Gerardos birth certificate is misplaced. The law itself establishes the status of a child from the moment of his birth. Although a birth certificate may be used as primary evidence of the filiation of a child, as the status of a child is determined by the law itself, proof of filiation is necessary only when the legitimacy of the child is being questioned, or when the status of a child born after 300 days following the termination of marriage is sought to be established. Here, the status of Jose Gerardo as a legitimate child was not under attack as it could not be contested collaterally and, even then, only by the husband or, in extraordinary cases, his heirs. Hence, the presentation of proof of legitimacy in this case was improper and uncalled for. In addition, a record of birth is merely prima facie evidence of the facts contained therein. As prima facie evidence, statements in the record of birth may be rebutted by more preponderant evidence. It is not conclusive evidence with respect to the truthfulness of the statements made therein by the interested parties. Between the certificate of birth which is prima facie evidence of Jose Gerardos illegitimacy and the quasi-conclusive presumption of law (rebuttable only by proof beyond reasonable doubt) of his legitimacy, the latter shall prevail. Not only does it bear more weight, it is also more conducive to the best interests of the child and in consonance with the purpose of the law. The law, reason and common sense dictate that a legitimate status is more favorable to the child. In the eyes of the law, the legitimate child enjoys a preferred and superior status. He is entitled to bear the surnames of both his father and mother, full support and full inheritance. On the other hand, an illegitimate child is bound to use the surname and be under the parental authority only of his mother. He can claim support only from a more limited group and his legitime is only half of that of his legitimate counterpart. Moreover, in the eyes of society, a bastard is usually regarded as bearing a stigma or mark of dishonor. Needless to state, the legitimacy presumptively vested by law upon Jose Gerardo favors his interest. DECISION: Having only his best interests in mind, we uphold the presumption of his legitimacy. I. As a legitimate child, Jose Gerardo shall have the right to bear the surnames of his father Mario and mother Ma. Theresa. A persons surname or family name identifies the family to which he belongs and is passed on from parent to child. Hence, Gerardo cannot impose his surname on Jose Gerardo who is, in the eyes of the law, not related to him in any way. The matter of changing Jose Gerardos name and effecting the corrections of the entries in the civil register regarding his paternity and filiation should be threshed out in a separate proceeding. II. In case of annulment or declaration of absolute nullity of marriage, Article 49 of the Family Code grants visitation rights to a parent who is deprived of custody of his children. Such visitation rights flow from the natural right of both parent and child to each others company. There being no such parent-child relationship between them, Gerardo has no legally demandable right to visit Jose Gerardo. III. Our laws seek to promote the welfare of the child. Article 8 of PD 603, otherwise known as the Child and Youth Welfare Code, is clear and unequivocal: Article 8. Childs Welfare Paramount. In all questions regarding the care, custody, education and property of the child, his welfare shall be the paramount consideration. Article 3 (1) of the United Nations Convention on the Rights of a Child of which the Philippines is a signatory is similarly emphatic: In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. The State as parens patriae affords special protection to children from abuse, exploitation and other conditions prejudicial to their development. It is mandated to provide protection to those of tender years. The State safeguards them from everyone, even their own parents, to the end that their eventual development as responsible citizens and members of society shall not be impeded, distracted or impaired by family acrimony(ill feeling). This is especially significant where, as in this case, the issue concerns their filiation as it strikes at their very identity and lineage. WHEREFORE, the petition is hereby DENIED. The September 14, 1995 and January 10, 1996 resolutions of the Court of Appeals in CA-G.R. CV No. 40651 are hereby AFFIRMED. Costs against petitioner. SO ORDERED. ====================================================================================== March 18, 2010 BEN-HUR NEPOMUCENO, Petitioner, vs. ARHBENCEL ANN LOPEZ, represented by her mother ARACELI LOPEZ, Respondent. FACTS: Respondent Arhbencel, represented by her mother Araceli, filed a Complaint with the RTC for recognition and support against Ben-Hur. Arhbencel claimed to have been begotten out of an extramarital affair of petitioner Benhur with Araceli; that petitioner refused to affix his signature on her Certificate of Birth; and that, by a handwritten note, petitioner nevertheless obligated himself to give her financial support. Arhbencel prayed that petitioner be ordered to: (1) recognize her as his child, (2) give her support pendente lite, and (3) give her adequate monthly financial support until she reaches the age of majority.
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RTC, which dismissed the case, held that Arhbencels Certificate of Birth was not prima facie evidence of her filiation to petitioner as it did not bear petitioners signature; that petitioners handwritten undertaking to provide support did not contain a categorical acknowledgment that Arhbencel is his child; and that there was no showing that petitioner performed any overt act of acknowledgment of Arhbencel as his illegitimate child after the execution of the note. On appeal, CA reversed the trial courts decision, declared Arhbencel to be petitioners illegitimate daughter and accordingly ordered petitioner to give Arhbencel financial support. The appellate court found that from petitioners payment of Aracelis hospital bills when she gave birth to Arhbencel and his subsequent commitment to provide monthly financial support, the only logical conclusion to be drawn was that he was Arhbencels father; that petitioner merely acted in bad faith in omitting a statement of paternity in his handwritten undertaking to provide financial support. ISSUE: Whether or not Arbencel is the illegitimate child of Ben-hur. HELD: Petitioner contends that nowhere in the documentary evidence shows an explicit statement made by him that he is the father of Arhbencel; that absent recognition or acknowledgment, illegitimate children are not entitled to support from the putative parent; that the supposed payment made by him of Aracelis hospital bills was neither alleged in the complaint nor proven during the trial; and that Arhbencels claim of paternity and filiation was not established by clear and convincing evidence. The petition is impressed with merit. The relevant provisions of the Family Code that treat of the right to support are Articles 194 to 196, thus: Article 194. Support compromises everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family. The education of the person entitled to be supported referred to in the preceding paragraph shall include his schooling or training for some profession, trade or vocation, even beyond the age of majority. Transportation shall include expenses in going to and from school, or to and from place of work. Article 195. Subject to the provisions of the succeeding articles, the following are obliged to support each other to the whole extent set forth in the preceding article: 1. The spouses; 2. Legitimate ascendants and descendants; 3. Parents and their legitimate children and the legitimate and illegitimate children of the latter; 4. Parents and their illegitimate children and the legitimate and illegitimate children of the latter; and 5. Legitimate brothers and sisters, whether of the full or half-blood. Article 196. Brothers and sisters not legitimately related, whether of the full or half-blood, are likewise bound to support each other to the full extent set forth in Article 194, except only when the need for support of the brother or sister, being of age, is due to a cause imputable to the claimant's fault or negligence. Arhbencels demand for support, being based on her claim of filiation to petitioner as his illegitimate daughter, falls under Article 195(4). As such, her entitlement to support from petitioner is dependent on the determination of her filiation. LAWS, RULES, AND JURISPRUDENCE ESTABLISHING FILIATION The relevant provisions of the Family Code provide as follows: ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence as legitimate children.
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ART. 172. The filiation of legitimate children is established by any of the following: (1) The record of birth appearing in the civil register or a final judgment; or (2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. In the absence of the foregoing evidence, the legitimate filiation shall be proved by: (1) The open and continuous possession of the status of a legitimate child; or (2) Any other means allowed by the Rules of Court and special laws. The Rules on Evidence include provisions on pedigree. The relevant sections of Rule 130 provide: SEC. 39. Act or declaration about pedigree. The act or declaration of a person deceased, or unable to testify, in respect to the pedigree of another person related to him by birth or marriage, may be received in evidence where it occurred before the controversy, and the relationship between the two persons is shown by evidence other than such act or declaration. The word "pedigree" includes relationship, family genealogy, birth, marriage, death, the dates when and the places where these facts occurred, and the names of the relatives. It embraces also facts of family history intimately connected with pedigree. SEC. 40. Family reputation or tradition regarding pedigree. The reputation or tradition existing in a family previous to the controversy, in respect to the pedigree of any one of its members, may be received in evidence if the witness testifying thereon be also a member of the family, either by consanguinity or affinity. Entries in family bibles or other family books or charts, engraving on rings, family portraits and the like, may be received as evidence of pedigree. This Court's rulings further specify what incriminating acts are acceptable as evidence to establish filiation. In Pe Lim v. CA, we stated that the issue of paternity still has to be resolved by such conventional evidence as the relevant incriminating verbal and written acts by the putative father. Under Art. 278 of the New Civil Code, voluntary recognition by a parent shall be made in the record of birth, a will, a statement before a court of record, or in any authentic writing. To be effective, the claim of filiation must be made by the putative father himself and
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the writing must be the writing of the putative father. A notarial agreement to support a child whose filiation is admitted by the putative father was considered acceptable evidence . Letters to the mother vowing to be a good father to the child and pictures of the putative father cuddling the child on various occasions, together with the certificate of live birth, proved filiation. However, a student permanent record, a written consent to a father's operation, or a marriage contract where the putative father gave consent, cannot be taken as authentic writing. Standing alone, neither a certificate of baptism nor family pictures are sufficient to establish filiation. In the present case, Arhbencel relies mainly on the handwritten note executed by petitioner which reads:
I, Ben-Hur C. Nepomuceno, hereby undertake to give and provide financial support in the amount of P3,000.00 a month starting Aug. 15, 1999, to Ahrbencel Ann Lopez, presently in the custody of her mother Araceli Lopez without the necessity of demand, subject to adjustment later depending on the needs of the child and my income.
The abovequoted note does not contain any statement whatsoever about Arhbencels filiation to petitioner. It is, therefore, not within the ambit of Article 172(2) vis--vis Article 175 of the Family Code which admits as competent evidence of illegitimate filiation an admission of filiation in a private handwritten instrument signed by the parent concerned. The only other documentary evidence submitted by Arhbencel, a copy of her Certificate of Birth, has no probative value to establish filiation to petitioner, the latter not having signed the same. All that Arhbencel really has is petitioners handwritten undertaking to provide financial support to her which, without more, fails to establish her claim of filiation. The Court is mindful that the best interests of the child in cases involving paternity and filiation should be advanced. It is, however, just as mindful of the disturbance that unfounded paternity suits cause to the privacy and peace of the putative fathers legitimate family. WHEREFORE, the petition is GRANTED. The Court of Appeals Decision is SET ASIDE. The Order RTC dismissing the complaint for insufficiency of evidence is REINSTATED. SO ORDERED. July 31, 2009 JENIE SAN JUAN DELA CRUZ and minor CHRISTIAN DELA CRUZ "AQUINO," represented by JENIE SAN JUAN DELA CRUZ, Petitioners, vs. RONALD PAUL S. GRACIA, in his capacity as City Civil Registrar of Antipolo City, Respondent. FACTS: For several months, then 21-year old Jenie and then 19-year old Dominique lived together as husband and wife without the benefit of marriage. They resided in the house of Dominiques parents. On 2005, Dominique died. After two months, Jenie, who continued to live with Dominiques parents, gave birth to her minor child Christian. Jenie applied for registration of the childs birth, using Dominiques surname Aquino, with the Office of the City Civil Registrar. In support of which she submitted the childs Certificate of Live Birth, Affidavit to Use the Surname of the Father (AUSF) which she had executed and signed, and Affidavit of Acknowledgment executed by Dominiques father Domingo Butch Aquino. Both affidavits attested that during the lifetime of Dominique, he had continuously acknowledged his yet unborn child, and that his paternity had never been questioned. Jenie attached to the AUSF a document entitled "AUTOBIOGRAPHY" which Dominique, during his lifetime, wrote in his own handwriting, the pertinent portions of which read:
AUTOBIOGRAPHY IM CHRISTIAN DOMINIQUE STO. TOMAS AQUINO, 19 YEARS OF AGE TURNING 20 THIS COMING OCTOBER 31, 2005. I RESIDE AT PULANG-LUPA STREET BRGY. DULUMBAYAN, TERESA, RIZAL. I AM THE YOUNGEST IN OUR FAMILY. I HAVE ONE BROTHER NAMED JOSEPH BUTCH STO. TOMAS AQUINO. MY FATHERS NAME IS DOMINGO BUTCH AQUINO AND MY MOTHERS NAME IS RAQUEL STO. TOMAS AQUINO. AS OF NOW I HAVE MY WIFE NAMED JENIE DELA CRUZ. WE MET EACH OTHER IN OUR HOMETOWN, TEREZA RIZAL. AT FIRST WE BECAME GOOD FRIENDS, THEN WE FELL IN LOVE WITH EACH OTHER, THEN WE BECAME GOOD COUPLES. AND AS OF NOW SHE IS PREGNANT AND FOR THAT WE LIVE TOGETHER IN OUR HOUSE NOW. THATS ALL.
The City Civil Registrar of denied Jenies application for registration of the childs name in this wise: Rule 7 of AO No. 1, S-2004 (IRR of RA9255"An Act Allowing Illegitimate Children to Use the Surname of their Father, Amending for the Purpose, Art. 176 of EO No.209, otherwise Known as the Family Code of the Philippines") provides that: Requirements for the Child to Use the Surname of the Father 7.1 For Births Not Yet Registered 7.1.1 The illegitimate child shall use the surname of the father if a public document is executed by the father, either at the back of the Certificate of Live Birth or in a separate document. 7.1.2 If admission of paternity is made through a private handwritten instrument, the child shall use the surname of the father, provided the registration is supported by the following documents: a. AUSF 2. SSS/GSIS records b. Consent of the child, if 18 years old and 3. Insurance over at the time of the filing of the document. 4. Certification of membership in any c. Any two of the following documents showing organization clearly the paternity between the father and 5. Statement of Assets and Liability the child: 6. Income Tax Return (ITR) 1. Employment records In summary, the child cannot use the surname of his father because he was born out of wedlock and the father unfortunately died prior to his birth and has no more capacity to acknowledge his paternity to the child (either through the back of Municipal Form No. 102 Affidavit of Acknowledgment/Admission of Paternity or the Authority to Use the Surname of the Father). Jenie and the child promptly filed a complaint before the RTC alleging that the denial of registration of the childs name is a violation of his right to use the surname of his deceased father under Art. 176 of the Family Code, as amended by RA 9255, which provides:
Article 176. Illegitimate children shall use the surname and shall be under the parental authority of their mother, and shall be entitled to support in conformity with this Code. However, illegitimate children may use the surname of their father if their filiation has been expressly recognized by the father through the record of birth appearing in the civil register, or when an admission in a public document or private handwritten instrument is made by the father. Provided, the father has
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the right to institute an action before the regular courts to prove non-filiation during his lifetime. The legitime of each illegitimate child shall consist of one-half of the legitime of a legitimate child.
They maintained that the Autobiography executed by Dominique constitutes an admission of paternity in a "private handwritten instrument" within the contemplation of the above-quoted provision of law. RTC dismissed the complaint "for lack of cause of action" as the Autobiography was unsigned, citing par 2.2, Rule 2 of AO No. 1, S-2004 (IRR of RA 9255) which defines "private handwritten document" through which a father may acknowledge an illegitimate child as follows:
2.2 Private handwritten instrument an instrument executed in the handwriting of the father and duly signed by him where he expressly recognizes paternity to the child.
The trial court held that even if Dominique was the author of the handwritten Autobiography, the same does not contain any express recognition of paternity. ISSUE: Whether or not the unsigned handwritten statement of the deceased father can be considered as a recognition of paternity in a private handwritten instrument. HELD: Petitioners contend that Art. 176 of the Family Code, as amended, does not expressly require that the private handwritten instrument containing the putative fathers admission of paternity must be signed by him; that the deceaseds handwritten Autobiography, though unsigned by him, is sufficient, for the requirement in the AO No.1; that the admission/recognition must be "duly signed" by the father is void as it "unduly expanded" Article 176 of the Family Code. In its Comment, OSG submits that Dominiques Autobiography "merely acknowledged Jenies pregnancy but not his paternity of the child she was carrying in her womb. Thus, case should be dismissed. Art. 176 of the Family Code, as amended by RA 9255, permits an illegitimate child to use the surname of his father if the latter had expressly recognized him as his offspring through the record of birth appearing in the civil register, or through an admission made in a public or private handwritten instrument. The recognition made in any of these documents is, in itself, a consummated act of acknowledgment of the childs paternity; hence, no separate action for judicial approval is necessary. Article 176 of the Family Code, as amended, does not, indeed, explicitly state that the private handwritten instrument acknowledging the childs paternity must be signed by the putative father. This provision must, however, be read in conjunction with related provisions of the Family Code which require that recognition by the father must bear his signature, thus: Art. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence as legitimate children. Art. 172. The filiation of legitimate children is established by any of the following: (1) The record of birth appearing in the civil register or a final judgment; or (2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. A father who acknowledges paternity of a child through a written instrument must affix his signature thereon is clearly implied in Art. 176 of the Family Code. Par 2.2, Rule 2 of AO No. 1, S-2004, merely articulated such requirement; it did not "unduly expand" the import of Art. 176. In the present case, however, special circumstances exist to hold that Dominiques Autobiography, though unsigned by him, substantially satisfies the requirement of the law. First, Dominique died about 2 months prior to the childs birth. Second, the relevant matters in the Autobiography, unquestionably handwritten by Dominique, correspond to the facts culled from the testimonial evidence Jenie proffered. Third, Jenies testimony is corroborated by the Affidavit of Acknowledgment of Dominiques father and testimony of his brother whose hereditary rights could be affected by the registration of the recognition of the child. These circumstances indicating Dominiques paternity of the child give life to his statements in his Autobiography that "JENIE DELA CRUZ" is "MY WIFE" as "WE FELL IN LOVE WITH EACH OTHER" and "NOW SHE IS PREGNANT AND FOR THAT WE LIVE TOGETHER."
In Herrera v. Alba, the Court summarized the laws, rules, and jurisprudence on establishing filiation, to wit: Laws, Rules, and Jurisprudence Establishing Filiation. The relevant provisions of the Family Code provide as follows: ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence as legitimate children. ART. 172. The filiation of legitimate children is established by any of the following: (1) The record of birth appearing in the civil register or a final judgment; or (2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. In the absence of the foregoing evidence, the legitimate filiation shall be proved by: (1) The open and continuous possession of the status of a legitimate child; or (2) Any other means allowed by the Rules of Court and special laws. The Rules on Evidence include provisions on pedigree. The relevant sections of Rule 130 provide: SEC. 39. Act or declaration about pedigree. The act or declaration of a person deceased, or unable to testify, in respect to the pedigree of another person related to him by birth or marriage, may be received in evidence where it occurred before the controversy, and the relationship between the two persons is shown by evidence other than such act or declaration. The word "pedigree" includes relationship, family genealogy, birth, marriage, death, the
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dates when and the places where these facts occurred, and the names of the relatives. It embraces also facts of family history intimately connected with pedigree. SEC. 40. Family reputation or tradition regarding pedigree. The reputation or tradition existing in a family previous to the controversy, in respect to the pedigree of any one of its members, may be received in evidence if the witness testifying thereon be also a member of the family, either by consanguinity or affinity. Entries in family bibles or other family books or charts, engraving on rings, family portraits and the like, may be received as evidence of pedigree. Court's rulings further specify what incriminating acts are acceptable as evidence to establish filiation. In Re Lim v. CA, we stated that the issue of paternity still has to be resolved by such conventional evidence as the relevant incriminating verbal and written acts by the putative father. Under Art. 278 of the New Civil Code, voluntary recognition by a parent shall be made in the record of birth, a will, a statement before a court of record, or in any authentic writing. To be effective, the claim of filiation must be made by the putative father himself and the writing must be the writing of the putative father. A notarial agreement to support a child whose filiation is admitted by the putative father was considered acceptable evidence. Letters to the mother vowing to be a good father to the child and pictures of the putative father cuddling the child on various occasions, together with the certificate of live birth, proved filiation. However, a student permanent record, a written consent to a father's operation, or a marriage contract where the putative father gave consent, cannot be taken as authentic writing. Standing alone, neither a certificate of baptism nor family pictures are sufficient to establish filiation.
In the case at bar, there is no dispute that statements in Dominiques Autobiography have been made and written by him. Taken together with the other relevant facts that Dominique, during his lifetime, and Jenie were living together as common-law spouses for several months at his parents house; she was pregnant when Dominique died; and about two months after his death, Jenie gave birth to the child they sufficiently establish that the child of Jenie is Dominiques. In view of the pronouncements herein made, Court sees it fit to adopt the following rules respecting the requirement of affixing the signature of the acknowledging parent in any private handwritten instrument wherein an admission of filiation of a legitimate or illegitimate child is made: 1) Where the private handwritten instrument is the lone piece of evidence submitted to prove filiation, there should be strict compliance with the requirement that the same must be signed by the acknowledging parent; and 2) Where the private handwritten instrument is accompanied by other relevant and competent evidence, it suffices that the claim of filiation therein be shown to have been made and handwritten by the acknowledging parent as it is merely corroborative of such other evidence. Our laws instruct that the welfare of the child shall be the "paramount consideration" in resolving questions affecting him. It is "the policy of the Family Code to liberalize the rule on the investigation of the paternity and filiation of children, especially of illegitimate children." Also, "the State as parens patriae affords special protection to children from abuse, exploitation and other conditions prejudicial to their development." In the eyes of society, a child with an unknown father bears the stigma of dishonor. It is to petitioner minor childs best interests to allow him to bear the surname of the now deceased Dominique and enter it in his birth certificate. WHEREFORE, the petition is GRANTED. The City Civil Registrar of Antipolo City is DIRECTED to immediately enter the surname of the late Christian Dominique Sto. Tomas Aquino as the surname of petitioner minor Christian dela Cruz in his Certificate of Live Birth, and record the same in the Register of Births. SO ORDERED. September 11, 2009 JOSELITO MUSNI PUNO (as heir of the late Carlos Puno), Petitioner, vs. PUNO ENTERPRISES, INC., represented by JESUSA PUNO, Respondent. Upon the death of a stockholder, the heirs do not automatically become stockholders of the corporation; neither are they mandatorily entitled to the rights and privileges of a stockholder. FACTS: Carlos L. Puno, who was an incorporator of respondent Puno Enterprises, died. petitioner Joselito Musni Puno, claiming to be an heir of Carlos, initiated a complaint for specific performance against respondent. Petitioner averred that he is the son of the deceased with the latters common-law wife, Amelia Puno. As surviving heir, he claimed entitlement to the rights and privileges of his late father as stockholder of respondent. The complaint thus prayed that respondent allow petitioner to inspect its corporate book, render an accounting of all the transactions from 1962, and give petitioner all the profits, earnings, dividends, or income pertaining to the shares of Carlos. Respondent filed a motion to dismiss on the ground that petitioner did not have the legal personality to sue because his birth certificate names him as "Joselito Musni Muno." Apropos, there was yet a need for a judicial declaration that "Joselito Musni Puno" and "Joselito Musni Muno" were one and the same. Petitioner submitted the corrected birth certificate with the name "Joselito M. Puno," certified by the Civil Registrar and the Certificate of Finality thereof. The trial court rendered judgement to allow petitioner to inspect the corporate books. On appeal, CA dismissed the complaint on the ground that petitioner was not able to establish the paternity of and his filiation to Carlos L. Puno since his birth certificate was prepared without the intervention of and the participatory acknowledgment of paternity by Carlos L. Puno. Petitioner had no right to demand that he be allowed to examine respondents books. Moreover, petitioner was not a stockholder of the corporation but was merely claiming rights as an heir of Carlos, an incorporator of the corporation. His action for specific performance therefore appeared to be premature; the proper action to be taken was to prove the paternity of and his filiation to Carlos L. Puno in a petition for the settlement of the estate of the latter. ISSUE:
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Whether or not petitioner has satisfactorily proved his filiation to Carlos L. Puno. HELD: No. The petition is without merit. Petitioner failed to establish the right to inspect respondent corporations books and receive dividends on the stocks owned by Carlos L. Puno. Petitioner anchors his claim on his being an heir of the deceased, however, petitioner was not able to prove satisfactorily his filiation to the deceased stockholder; thus, the former cannot claim to be an heir of the latter. Factual findings of the CA supported by substantial evidence are conclusive and binding. A certificate of live birth purportedly identifying the putative father is not competent evidence of paternity when there is no showing that the putative father had a hand in the preparation of the certificate. The local civil registrar has no authority to record the paternity of an illegitimate child on the information of a third person. Here, only petitioners mother supplied the data in the birth certificate and signed the same. There was no evidence that Carlos L. Puno acknowledged petitioner as his son. As for the baptismal certificate, it can only serve as evidence of the administration of the sacrament on the date specified but not of the veracity of the entries with respect to the childs paternity. In any case, Sections 74 and 75 of the Corporation Code enumerate the persons who are entitled to the inspection of corporate books, thus
Sec. 74. Books to be kept; stock transfer agent. x x x. The records of all business transactions of the corporation and the minutes of any meeting shall be open to the inspection of any director, trustee, stockholder or member of the corporation at reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records or minutes, at his expense. Sec. 75. Right to financial statements. Within ten (10) days from receipt of a written request of any stockholder or member, the corporation shall furnish to him its most recent financial statement, which shall include a balance sheet as of the end of the last taxable year and a profit or loss of statement for said taxable year, showing in reasonable detail its assets and liabilities and the result of its operations.
The stockholders right of inspection of the corporations books is based upon his ownership of shares in the corporation and the necessity for self-protection. After all, a shareholder has the right to be intelligently informed about corporate affairs. Similarly, only stockholders of record are entitled to receive dividends declared by the corporation, a right inherent in the ownership of the shares. Upon the death of a shareholder, heirs do not automatically become stockholders of the corporation and acquire the rights and privileges of the deceased as shareholder of the corporation. The stocks must be distributed first to the heirs in estate proceedings, and the transfer of the stocks must be recorded in the books of the corporation. Sec. 63 of the Corporation Code provides that no transfer shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation. During such interim period, the heirs stand as the equitable owners of the stocks, the executor or administrator duly appointed by the court being vested with the legal title to the stock. Until a settlement and division of the estate is effected, the stocks of the decedent are held by the administrator or executor. Consequently, during such time, it is the administrator or executor who is entitled to exercise the rights of the deceased as stockholder. Thus, even if petitioner presents sufficient evidence in this case to establish that he is the son of Carlos, he would still not be allowed to inspect respondents books and be entitled to receive dividends from respondent, absent any showing in its transfer book that some of the shares owned by Carlos were transferred to him. This would only be possible if petitioner has been recognized as an heir and has participated in the settlement of the estate of the deceased. Corollary is the doctrine that a determination of whether a person, claiming proprietary rights over the estate of a deceased person, is an heir of the deceased must be ventilated in a special proceeding instituted precisely for the purpose of settling the estate of the latter. The status of an illegitimate child who claims to be an heir to a decedents estate cannot be adjudicated in an ordinary civil action, as in a case for the recovery of property. The doctrine applies to the instant case, which is one for specific performance to direct respondent corporation to allow petitioner to exercise rights that pertain only to the deceased and his representatives. WHEREFORE, the petition is DENIED. The Court of Appeals Decision and Resolution are AFFIRMED. SO ORDERED. June 29, 2010 ST. JOSEPH'S COLLEGE, SR. JOSEPHINI AMBATALI, SFIC, and ROSALINDA TABUGO, Petitioners, vs. JAYSON MIRANDA, represented by his father, RODOLFO S. MIRANDA, Respondent. FACTS: Inside SJCs premises, the class to which respondent Jayson belonged was conducting a science experiment under the tutelage (guidance) of petitioner Tabugo, the subject teacher and employee of SJC. The adviser of Jaysons class is Abdan. Tabugo left her class while it was doing the experiment without having adequately secured it from any untoward incident or occurrence. During the experiment, Jaysonchecked the result of the experiment by looking into the test tube. The test tube was being held by one of his group mates who moved it close and towards the eye of Jayson. The compound in the test tube spurted out and several particles hit Jaysons eye. As a result, Jaysons eyes were chemically burned. Upon filing of the complaint, Jaysons wound had not completely healed and still had to undergo another surgery. After the treatment, parents of Jayson wrote SJC a letter demanding that it should shoulder all the medical expenses of Jayson Petitioners alleged that before the experiment was conducted, Jayson and his classmates were given strict instructions to follow the written procedure for the experiment and not to look into the test tube until the heated compound had cooled off. Jayson, however, a person of sufficient age and discretion and completely capable of understanding the English language and the instructions of his teacher, without waiting for the heated compound
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to cool off violated such instructions and looked at the compound, which at that moment a small particle spurted out of the test tube hitting one of Jaysons eyes. RTC rendered judgment in favor of Jayson which CA affirmed. ISSUE: Whether or not SJC is liable for the injuries suffered by Jayson. HELD: We find no reason to depart from the uniform rulings of the lower courts that petitioners were " negligent since they all failed to exercise the required reasonable care, prudence, caution and foresight to prevent or avoid injuries to the students."
Jurisprudence dictates that factual findings of the trial court, especially when affirmed by the appellate court, are accorded the highest degree of respect and are considered conclusive between the parties. A review of such findings by this Court is not warranted except for highly meritorious circumstances when: (1)findings of a trial court are grounded entirely on speculation, surmises or conjectures; (2)lower courts inference from its factual findings is manifestly mistaken, absurd or impossible; (3)there is grave abuse of discretion in the appreciation of facts; (4)findings of the appellate court go beyond the issues of the case, or fail to notice certain relevant facts which, if properly considered, will justify a different conclusion; (5)there is a misappreciation of facts; (6)findings of fact are conclusions without mention of the specific evidence on which they are based, are premised on the absence of evidence, or are contradicted by evidence on record. None of the exceptions which would warrant a reversal of the assailed decision exist in this case.
Petitioners maintain that the proximate cause of Jaysons injury was his own negligence in disregarding the instructions given by Tabugo prior to the experiment and peeking into the test tube. Petitioners invoke our ruling in St. Marys Academy v. Carpitanos which absolved St. Marys Academy from liability for the untimely death of its student during a school sanctioned activity, declaring that "the negligence of petitioner St. Marys Academy was only a remote cause of the accident." We are not convinced. Contrary to petitioners assertions, both courts correctly concluded that the immediate and proximate cause of the accident which caused injury to Jayson was the sudden and unexpected explosion of the chemicals, independent of any intervening cause. In this case, petitioners failed to show that the negligence of Jayson was the proximate cause of the latters injury. We find that the immediate cause of the accident was not the negligence of Jayson when he curiously looked into the test tube when the chemicals suddenly exploded which caused his injury, but the sudden and unexpected explosion of the chemicals independent of any intervening cause. Petitioners could have prevented the mishap if they exercised a higher degree of care, caution and foresight. The court a quo correctly ruled that:
"All of the petitioners are equally at fault and are liable for negligence because all of them are responsible for exercising the required reasonable care, prudence, caution and foresight to prevent or avoid injuries to the students. The individual petitioners are persons charged with the teaching and vigilance over their students as well as the supervision and ensuring of their well-being. These petitioners were remiss in their responsibilities and lacking in the degree of vigilance expected of them. Subject teacher Tabugo was inside the classroom when the class undertook the experiment although Jayson insisted that Tabugo left the classroom. No evidence, however, was presented to establish that Tabugo was inside the classroom for the whole duration of the experiment. It was unnatural in the ordinary course of events that Jayson was brought to the school clinic for treatment not by teacher Tabugo but by somebody else. The Court believes that Tabugo was not inside the classroom at the time the accident happened. The Court is also perplexed why none of the other students (who were eyewitnesses to the incident) testified in Court to corroborate the story of the petitioners. The Court, however, understands that these other students cannot testify for Jayson because Jayson is no longer enrolled in said school and testifying for Jayson would incur the ire of school authorities. Abdan is equally at fault as the subject adviser or teacher in charge because she exercised control and supervision over Tabugo and the students themselves. It was her obligation to insure that nothing would go wrong and that the science experiment would be conducted safely and without any injury to the students. Petitioner Ambatali is likewise culpable under the doctrine of command responsibility because the other individual petitioners were under her direct control and supervision. The negligent acts of the other individual petitioners were done within the scope of their assigned tasks. The defense of due diligence of a good father of a family raised by petitioner St. Joseph College will not exculpate it from liability because it has been shown that it was guilty of inexcusable laxity in the supervision of its teachers (despite an apparent rigid screening process for hiring) and in the maintenance of what should have been a safe and secured environment for conducting dangerous experiments. SJC is still liable for the wrongful acts of the teachers because it had full information on the nature of dangerous science experiments but did not take affirmative steps to avert damage and injury to students. The fact that there has never been any accident in the past during the conduct of science experiments is not a justification to be complacent in just preserving the status quo and do away with creative foresight to install safety measures. Schools should not simply install safety reminders and distribute safety instructional manuals. More importantly, schools should provide protective gears and devices to shield students from expected risks and anticipated dangers. Ordinarily, the liability of teachers does not extend to the school or university itself, however an educational institution may be held liable under the principle of RESPONDENT SUPERIOR. It is well settled that the liability of the employer for the tortuous acts or negligence of its employees is primary and solidary, direct and immediate and not conditioned upon the insolvency of or prior recourse against the negligent employee.
Petitioners insist that Tabugo specifically instructed her students, including Jayson, at the start of the experiment, not to look into the heated test tube before the compound had cooled off. Petitioners allocate all liability and place all blame for the accident on herein respondent Jayson. We disagree. As found by both lower courts, the proximate cause of Jaysons injury was the concurrent failure of petitioners to prevent the foreseeable mishap. Petitioners were negligent by failing to exercise the higher degree of care, caution and foresight incumbent upon the school, its administrators and teachers. Art. 218 of the Family Code, in relation to Article 2180 of the Civil Code, bestows special parental authority on the following persons with the corresponding obligation, thus:
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Art. 218. The school, its administrators and teachers, or the individual, entity or institution engaged in child care shall have special parental authority and responsibility over the minor child while under their supervision, instruction or custody. Authority and responsibility shall apply to all authorized activities whether inside or outside the premises of the school, entity or institution. Art. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. Petitioners negligence and failure to exercise the requisite degree of care and caution is demonstrated by the following: 1. Petitioner school did not take affirmative steps to avert damage and injury to its students although it had full information on the nature of dangerous science experiments conducted by the students during class; 2. Petitioner school did not install safety measures to protect the students who conduct experiments in class; 3. Petitioner school did not provide protective gears and devices, specifically goggles, to shield students from expected risks and dangers; and 4. Petitioner Tabugo was not inside the classroom the whole time her class conducted the experiment, specifically, when the accident involving Jayson occurred. Moreover, petitioners cannot simply deflect their negligence and liability by insisting that Tabugo gave specific instructions to her class. Neither does our ruling in St. Marys preclude their liability in this case. Unfortunately for petitioners, St. Marys is not in point. In St. Mary case, respondents thereat admitted that the cause of the accident was a mechanical defect and not the recklessness of the minor, James, in driving the jeep. We held, thus:
Significantly, respondents did not present any evidence to show that the proximate cause of the accident was the negligence of the school authorities, or the reckless driving of James. there was no evidence that petitioner school allowed the minor James to drive the jeep of respondent Vivencio. It was Ched, grandson of Vivencio, who had possession and control of the jeep. He was driving the vehicle and he allowed James, a minor, to drive the jeep at the time of the accident. Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minors parents primarily. The negligence of St. Mary was only a remote cause of the accident. Between the remote cause and the injury, there intervened the negligence of the minors parents or the detachment of the steering wheel guide of the jeep.
In present case, lower courts concluded that the mishap was foreseeable by the school, its officials and teachers. This neglect in preventing a foreseeable injury and damage equates to neglect in exercising the utmost degree of diligence required of schools, its administrators and teachers, and, ultimately, was the proximate cause of the damage and injury to Jayson. As we have held in St. Marys, "for petitioner St. Marys Academy to be liable, there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the accident." As regards the contributory negligence of Jayson, the proximate cause of Jaysons injury was the explosion of the heated compound independent of any efficient intervening cause. The negligence of Tabugo in not making sure that the science experiment was correctly conducted was the proximate cause or reason why the heated compound exploded and injured Jayson. However, Jayson is partly responsible for his own injury, hence, he should not be entitled to recover damages in full but must likewise bear the consequences of his own negligence. Petitioners, therefore, should be held liable only for the damages actually caused by their negligence. WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED. SO ORDERED. February 5, 2010 HERALD BLACK DACASIN, Petitioner, vs. SHARON DEL MUNDO DACASIN, Respondent. FACTS: Petitioner Herald, American, and respondent Sharon, Filipino, were married. They have one daughter, Stephanie. Respondent sought and obtained from the Illinois court a divorce decree against petitioner. In its ruling, the Illinois court dissolved the marriage, awarded to respondent sole custody of Stephanie and retained jurisdiction over the case for enforcement purposes. Petitioner and respondent executed in Manila an Agreement for the joint custody of Stephanie. Parties chose Philippine courts as exclusive forum to adjudicate disputes arising from the Agreement. Respondent undertook to obtain fdszarom the Illinois court an order "relinquishing" its jurisdiction to Philippine courts. In 2004, petitioner sued respondent in the RTC to enforce the Agreement alleging that in violation of the Agreement, respondent exercised sole custody over Stephanie. RTC dismissed the case for lack of jurisdiction which held that: (1) it is precluded from taking cognizance over the suit considering the Illinois courts retention of jurisdiction to enforce its divorce decree, including its order awarding sole custody of Stephanie to respondent; (2) the divorce decree is binding on petitioner following the "nationality rule"; and (3) the Agreement is void for contravening Art. 2035, par 5 of the Civil Code prohibiting compromise agreements on jurisdiction. ISSUE: Whether the trial court has jurisdiction to take cognizance of petitioners suit and enforce the Agreement on the joint custody of the parties child. HELD:
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The trial court has jurisdiction to entertain petitioners suit but not to enforce the Agreement which is void. However, factual and equity considerations militate against the dismissal of petitioners suit and call for the remand of the case to settle the question of Stephanies custody. Regional Trial Courts Vested With Jurisdiction to Enforce Contracts Subject matter of jurisdiction is conferred by law. At the time petitioner filed his suit in the trial court, statutory law vests on RTC exclusive original jurisdiction over civil actions incapable of pecuniary estimation. An action for specific performance, such as petitioners suit to enforce the Agreement on joint child custody, belongs to this species of actions. Thus, jurisdiction-wise, petitioner went to the right court. Indeed, the trial courts refusal to entertain petitioners suit was grounded not on its lack of power to do so but on its thinking that the Illinois courts divorce decree stripped it of jurisdiction. This conclusion is unfounded. What the Illinois court retained was "jurisdiction for enforcing provisions of its Judgment for Dissolution." Petitioners suit seeks the enforcement not of the various provisions of the divorce decree but of the post-divorce Agreement on joint child custody. Thus, the action lies beyond the zone of the Illinois courts so-called "retained jurisdiction." Petitioners Suit Lacks Cause of Action The trial court cannot enforce the Agreement which is contrary to law. In this jurisdiction, parties to a contract are free to stipulate the terms of agreement subject to the minimum ban on stipulations contrary to law, morals, good customs, public order, or public policy. Otherwise, the contract is denied legal existence, deemed "inexistent and void from the beginning." At the time the parties executed the Agreement, two facts are undisputed: (1) Stephanie was under 7 years old; and (2) petitioner and respondent were no longer married under the laws of US because of the divorce decree. The relevant Philippine law on child custody for spouses separated in fact or in law (Art. 213, par (2) of the Family Code) is also undisputed: "no child under 7 years of age shall be separated from the mother." (This statutory awarding of sole parental custody to the mother is mandatory, grounded on sound policy consideration, subject only to a narrow exception). Clearly, the Agreements object to establish a post-divorce joint custody regime between respondent and petitioner over their child under seven years old contravenes Philippine law. The Agreement is not only void ab initio for being contrary to law; it has also been repudiated by the mother when she refused to allow joint custody by the father. The Agreement would be valid if the spouses have not divorced or separated because the law provides for joint parental authority when spouses live together. However, upon separation of spouses, the mother takes sole custody if the child is below seven years old and any agreement to the contrary is void. Thus, the law suspends the joint custody regime for (1)children under seven of (2)separated or divorced spouses. Simply put, for a child within this age bracket (and for commonsensical reasons), the law decides for the separated or divorced parents how best to take care of the child and that is to give custody to the separated mother. Indeed, the separated parents cannot contract away the provision in the Family Code on the maternal custody of children below seven years anymore than they can privately agree that a mother who is unemployed, immoral, habitually drunk, drug addict, insane or afflicted with a communicable disease will have sole custody of a child under seven as these are reasons deemed compelling to preclude the application of the exclusive maternal custody regime. It is wrong to believe that the 2nd par of Art. 213 of the Family Code applies only to judicial custodial agreements based on its text that "No child under seven years of age shall be separated from the mother, unless the court finds compelling reasons to order otherwise." To limit this provisions enforceability to court sanctioned agreements while placing private agreements beyond its reach is to sanction a double standard in custody regulation of children under seven years old of separated parents. This effectively empowers separated parents, by the simple expedient of avoiding the courts, to subvert a legislative policy vesting to the separated mother sole custody of her children under seven years of age "to avoid a tragedy where a mother has seen her baby torn away from her." This ignores the legislative basis that "no man can sound the deep sorrows of a mother who is deprived of her child of tender age." It could be that Article 213s bias favoring one separated parent (mother) over the other (father) encourages paternal neglect, presumes incapacity for joint parental custody, robs the parents of custodial options, or hijacks decision-making between the separated parents. However, these are objections which question the laws wisdom not its validity or uniform enforceability. The forum to air and remedy these grievances is the legislature, not this Court. At any rate, the rules seeming harshness or undesirability is tempered by ancillary agreements that separated parents may wish to enter such as granting the father visitation and other privileges. These arrangements are not inconsistent with the regime of sole maternal custody which merely grants to the mother final authority on the care and custody of the minor under seven years of age, in case of disagreements. Further, the imposed custodial regime is limited in duration, lasting only until the childs seventh year. From the eighth year until the childs emancipation, the law gives the separated parents freedom, subject to the usual contractual limitations, to agree on custody regimes they see fit to adopt. Even supposing that petitioner and respondent are not barred from entering into the Agreement for the joint custody of Stephanie, respondent repudiated the Agreement by asserting sole custody over Stephanie. Respondents act effectively brought the parties back to ambit of the default custodial regime in Art. 213 par 2 of the Family Code vesting on respondent sole custody of Stephanie. Nor can petitioner rely on the divorce decrees alleged invalidity - not because the Illinois court lacked jurisdiction or that the divorce decree violated Illinois law, but because the divorce was obtained by his Filipino spouse - to support the Agreements enforceability. True that owing to the nationality principle, only Philippine nationals are covered by the policy against absolute divorces being considered contrary to our concept of public policy and morality. However, aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law. It is well settled that an alien spouse of a Filipino is bound by a divorce decree obtained abroad. We rejected the submission that the foreign divorce obtained by the Filipino spouse is not valid in this jurisdiction.
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In Pilapil vs. Somera, we dismiss the criminal complaints for adultery filed by the alien divorcee (who obtained the foreign divorce decree) against his former Filipino spouse because he no longer qualified as "offended spouse" entitled to file the complaints under Philippine procedural rules. Thus, it is clear that a foreign divorce decree carries as much validity against the alien divorcee in this jurisdiction as it does in the jurisdiction of the aliens nationality, irrespective of who obtained the divorce. The Facts of the Case and Nature of Proceeding Justify Remand Instead of dismissing petitioners suit which is the logical end to its lack of cause of action, we remand the case for the trial court to settle the question of Stephanies custody. Stephanie is now nearly 15 years old, thus removing the case outside of the ambit of the mandatory maternal custody regime under Art 213 and bringing it within coverage of the default standard on child custody proceedings the best interest of the child. As the question of custody is already before the trial court and the childs parents, by executing the Agreement, initially showed inclination to share custody, it is in the interest of swift and efficient rendition of justice to allow the parties to take advantage of the courts jurisdiction, submit evidence on the custodial arrangement best serving Stephanies interest, and let the trial court render judgment. This disposition is consistent with the settled doctrine that in child custody proceedings, equity may be invoked to serve the childs best interest. WHEREFORE, we REVERSE the Orders of the Regional Trial Court. The case is REMANDED for further proceedings consistent with this ruling. SO ORDERED. May 17, 2005 JOSE RIVERO, JESSIE RIVERO and AMALIA RIVERO, petitioners, vs. COURT OF APPEALS, MARY JANE DY CHIAO*-DE GUZMAN, and BENITO DY CHIAO, JR., represented by his uncle HENRY S. DY CHIAO, respondents. FACTS: On August 1996, Benedick Arevalo filed a Complaint against Mary Jane Dy Chiao, Benito Dy Chiao, Jr., and Benson Dy Chiao in the RTC for compulsory recognition as the illegitimate child of their father, Benito Dy Chiao, Sr., and for the administration and partition of Benito Dy Chiao, Sr.s estate as he had died intestate on 1995. Since Benedick was a minor, his natural mother and guardian ad litem, Shirley Arevalo, filed the complaint on his behalf. Benedick made the following allegations: Benito Dy Chiao, Sr. courted Shirley Arevalo (Benedick's mother) in 1991, assuring her of his sincere love, Shirley agreed to an amorous relationship with Benito, Sr. Benito, Sr. then provided her with a residential house and lot where they cohabited and resided. On October 1995, Benedick the plaintiff was born whom Benito, Sr. acknowledged as his son. He also continued to give Shirley and their son financial and moral support. It was also alleged that the Dy Chiao siblings recognized Benedick as the illegitimate son of their father. Moreover, when he died intestate, Benito, Sr. left residential lands and commercial buildings worth P100,000,000.00; as such, there was a need for the appointment of an administrator of the estate to preserve Benedick's rights over the same before its partition. It was prayed that Benedick's mother be appointed as his guardian ad litem, that an administrator of the estate be appointed, and that after due proceedings, judgment be rendered in favor of Benedick, a.) declaring the Plaintiff as the illegitimate son of the late Benito Dy Chiao, b.) ordering Defendants to recognize and acknowledge the Plaintiff as the illegitimate son of the late Benito Dy Chiao, and c.) ordering Partition of Estate and distributing the same in favor of Defendants and Plaintiff. In an answer to the complaint, Mary Jane for herself, and purportedly in behalf of her brothers, denied the allegations that Shirley and her father had an amorous relationship and that Benedick was the illegitimate son of their father, which was specifically denied for want of knowledge or information. Finally, she alleged that the plaintiff's action was for a claim against the estate of their father, which should be filed in an action for the settlement of the estate of their deceased parents. On October 1996, Benedick filed a Motion, praying that the court order a mental examination of the Dy Chiao brothers, who were patients at the Rodriguez Mental Hospital; and for the appointment of their sister as their guardian ad litem in the case. It was, likewise, prayed that the director of the hospital be summoned to appear before the court to inform it of the mental condition of the Dy Chiao brothers. On December 1996, Benedick, however, through counsel, filed a "Compromise Agreement" with the following signatories: Shirley Arevalo, for the plaintiff assisted by counsel Atty. Simando and Mary Jane Dy Chiao, assisted by counsel, Atty. Botor, purportedly for and in behalf of her brothers. Appended to the agreement was a photocopy of SPA dated Sept. 1995, notarized by Atty. Simando, purportedly signed by the Dy Chiao brothers, who were then still confined in the hospital. Mary Jane was therein appointed to be their attorney-in-fact. On Dec. 1996, trial court approved the agreement and enjoined the parties to faithfully abide by the terms and conditions of the Compromise Agreement, quoted as follows:
"COMPROMISE AGREEMENT Plaintiff and defendant Maryjane Dy Chiao duly assisted by their respective counsels hereby submit the following Compromise Agreement: 1. That the defendant Maryjane Dy Chiao hereby recognizes plaintiff as the illegitimate son of her deceased father Benito Dy Chiao, Sr.; 2. That in full satisfaction and settlement of plaintiff's claim from the estate of the late Benito Dy Chiao, Sr., defendant Maryjane Dy Chiao for herself and in behalf of her brothers, who are likewise defendants in this case, hereby agree and bind herself to pay the plaintiff the amount of P6,000,000.00 which shall be taken from the estate. 3. That the parties hereby waive other claims and counterclaims against each other; 4. That any violation of this Compromise Agreement shall render the same to be immediately executory.
On Dec. 1996, Mary Jane through Atty. Simando (the counsel of Benedick in the Civil Case), filed a petition for the settlement of the estate of her father and for her appointment as administrator thereto (a Special Proceeding).
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On Apr. 1997, Benedick filed a Motion for Execution on the allegation that the defendants had failed to comply with their obligations under the compromise agreement. The trial court granted the same and issued a Writ of Execution. Benedick terminated the services of Atty. Simando since he was Mary Jane's counsel in the Special Proceedings. The sheriff issued a Notice of Sale on Execution of Real Property over five parcels of land titled under Benito Dy Chiao, Sr. The Dy Chiao brothers, represented by their uncle, Henry Dy Chiao, then filed with the CA a Petition for Annulment of Judgment with prayer for a TRO, assailing the decision of the RTC in the Civil Case as well as the writ of execution issued. The petition alleged that the Dy Chiao brothers had no legal capacity to be sued because they were of unsound mind. They did not authorize their sister Mary Jane to execute any compromise agreement in their behalf; yet, in confabulation (fabrication) with Benedick's counsel, she was able to secure a judgment based on a void compromise agreement. The Dy Chiao brothers, likewise, opposed the appointment of their sister as the administrator of their parents' estate. The verification and certification of non-forum shopping in the petition was signed by their uncle Henry as their representative. The CA issued a status quo order. However, before the said order was served on Benedick, several lots of Benito, Sr. had already been sold at public auction: Lot No. 3, to Jose Rivero; Lot No. 4 to Jessie Rivero and Lot No. 5, to Amalia Rivero. On Mar. 1999, the CA rendered judgment in favor of Benito, Jr., nullifying the decision and writ of execution issued by the RTC, including the sale at public auction of the property of the deceased. Appellate court ruled that the RTC had no jurisdiction over Benedick's action for recognition as the illegitimate son of Benito, Sr. and for the partition of his estate; that the filiation of a person could not be the subject of a compromise agreement; hence, the RTC acted without jurisdiction. It concluded that the said compromise agreement was procured through extrinsic fraud. The CA ordered the RTC to deliverthe amount of P15,482,200.00 to the buyers of the said properties. It also ordered Benedick to turn over the amount of P5,711,164.00 received together with all other amounts paid pursuant to the compromise agreement. This was, however, without prejudice to the buyers' right of recourse against Mary Jane, who was declared subsidiarily liable therefor. Thereafter, the properties would be delivered to the intestate estate of Benito, Sr. for proper disposition by the intestate court. Hence, Jose Rivero, Jessie Rivero and Amalia Rivero filed the present petition. ISSUE: 1. Whether or not Henry Dy Chiao had the authority to file the amended petition for Benito Dy Chiao, Jr. 2. Whether or not the RTC had jurisdiction over the action of Benedick Arevalo for recognition as the illegitimate sonas well as the action for partition. 3. Whether the decision of the RTC based on the compromise agreement is null and void for extrinsic fraud and lack of jurisdiction. HELD: The petition is denied for lack of merit. On the first issue, Henry had the authority to file the amended petition and sign the requisite certification on nonforum shopping when the CA admitted the amended petition and appointed him as guardian ad litem of his nephews. The CA made the following statement:
We find the opposition to be devoid of merit, firstly because there is an obvious necessity to amend the petition; and secondly, because the representation of an incompetent need not be by a duly appointed judicial guardian. A guardian ad litem may be appointed by the court. In the instant case, this Court who conducted several hearings, are convinced from an observation of the petitioners that they are not of a sound or disposing mind.
In resolving whether to appoint a guardian ad litem for respondent, the appellate court needed only to determine whether the individual for whom a guardian was proposed was so incapable of handling personal and financial affairs as to warrant the need for the appointment of a temporary guardian. It only needed to make a finding that, based on clear and convincing evidence, respondent is incompetent and that his welfare requires the immediate appointment of a temporary guardian. A finding that the person for whom a guardian ad litem is proposed is incapable of managing his own personal and financial affairs by reason of his mental illness is enough. Guardians ad litem are considered officers of the court in a limited sense, and the office of such guardian is to represent the interest of the incompetent or the minor. Whether or not to appoint a guardian ad litem is addressed to the sound discretion of the court where the petition was filed, taking into account the best interest of the incompetent or the minor that will best promote the interest of justice. The appointment of a guardian ad litem is designed to assist the court in its determination of the incompetent's best interest. It must be stressed that the appellate court was not proscribed from appointing Henry as guardian ad litem for the respondents, merely because of the pendency of his petition for appointment as guardian over their person and property. Time was of the essence; the RTC had issued a writ of execution based on the compromise agreement; the plaintiff, Benedick, was bent on enforcing the same, and had in fact caused the sale of five parcels of land belonging to the estate of Benito, Sr. Indeed, the sheriff was able to sell at public auction real property of the estate. Also worth noting is that the finding of the CA on the mental capacity of the respondents is without prejudice to the outcome of the petition. On the issue of jurisdiction, it is well settled that jurisdiction of the tribunal over the nature and subject matter of an action is determined by the allegations of the complaint, the law in effect when the complaint was filed and the character of the relief prayed for by the plaintiff. The caption of the complaint is not determinative of the nature of the action. If a court is authorized by statute to entertain jurisdiction in a particular case only and undertakes to exercise jurisdiction to which the statute has no application, the judgment rendered is void . The lack of statutory authority to make a particular judgment is akin to lack of subject-matter jurisdiction .
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I. - The CA nullified the decision of the RTC on the ground that the filiation of Benedick could not be the subject of a compromise, and that Mary Jane had no authority to execute the compromise agreement for and in behalf of her brothers. The petitioners, for their part, maintain that Mary Jane's recognition of Benedick as the illegitimate son of her father was not a compromise, but an affirmation of the allegations in the complaint that the Dy Chiao siblings had, in effect, recognized him as the illegitimate son of their deceased father. The petitioners posit that the admissions in the compromise agreement are likewise binding on the Dy Chiao siblings. The contention of the petitioners is bereft of merit. Court finds and so holds that the decision of the RTC based on the compromise agreement executed by Mary Jane is null and void. Art. 2035(1) of the New Civil Code provides that no compromise upon the civil status of persons shall be valid. As such, paternity and filiation, or the lack of the same, is a relationship that must be judicially established, and it is for the court to determine its existence or absence. It cannot be left to the will or agreement of the parties. A compromise is a contract whereby parties, making reciprocal concerns, avoid litigation or put an end to one already commenced. Like any other contract, it must comply with the requisite provisions in Art. 1318 of the New Civil Code, to wit: (a)consent of the contracting parties; (b)object certain which is the subject matter of the contract; and (c)cause of the obligation which is established. Like any other contract, the terms and conditions of a compromise agreement must not be contrary to law, morals, good customs, public policy and public order. Any compromise agreement which is contrary to law or public policy is null and void, and vests no rights and holds no obligation to any party. It produces no legal effect at all. Thus, the decision of the RTC on the basis of a compromise agreement where Benedick was recognized as the illegitimate child of Benito, Sr. is null and void. Art. 1878 of the New Civil Code provides that an SPA is required for a compromise. The power of attorney should expressly mention the action for which it is drawn; as such, a compromise agreement executed by one in behalf of another, who is not duly authorized to do so by the principal, is void and has no legal effect, and the judgment based on such compromise agreement is null and void. A compromise must be strictly construed and can include only those expressly or impliedly included therein. Court is convinced that the compromise agreement signed by Mary Jane and Benedick was a compromise relating to the latter's filiation. Mary Jane recognized Benedick as the illegitimate son of her father, the consideration for which was the amount of P6,000,000.00 to be taken from the estate, the waiver of other claims from the estate of the deceased. This is readily apparent, considering that the compromise agreement was executed despite the siblings' unequivocal allegations in their answer that Benedick was merely an impostor, that they have not recognized any person having a filial relation with their deceased father. To stress, the compromise agreement executed by Benedick and Mary Jane is null and void; as such, the decision of the RTC based thereon is also without force and effect. True that only Mary Jane recognized Benedick as the illegitimate son of her deceased father. Such recognition, however, is ineffectual, because under the law, the recognition must be made personally by the putative parent and not by any brother, sister or relative. II. - The compromise agreement shows that the brothers did not specifically empower their sister to enter into a compromise agreement with Benedick. It bears stressing that the SPA was executed as early as Sept. 1995, while the complaint was filed almost a year thereafter. The trial court acted with precipitate and inordinate speed in approving the compromise agreement. The records show that at the time when it was executed by Mary Jane, her brothers were patients at the Rodriguez Mental Hospital. Barely two weeks earlier, Mary Jane (whom Benedick branded as a spendthrift and a drug addict), executed the compromise agreement, not only in her behalf, but also in behalf of her brothers who were confined in the hospital and whom Benedick considered as mentally incompetent, and needed a guardian ad litem. The trial court ignored all the foregoing proceedings and approved the compromise agreement without bothering to resolve the issue of whether the Dy Chiao brothers were indeed incompetent, and whether there was a need to appoint a guardian ad litem for them. What is so worrisome is that the counsel of the Dy Chiao brothers, Atty. Botor, did not even bother to file any pleading relative to the motions filed by Benedick. Despite the allegations that the Dy Chiao brothers were in the mental hospital and needed a guardian ad litem, and that Mary Jane was a spendthrift and a drug addict, Atty. Botor still proceeded to sign the compromise agreement as their counsel. More ominously, the said counsel knew that it was he who had been empowered by the Dy Chiao brothers to compromise; yet, he still allowed Mary Jane to execute the same based on an SPA notarized by no less than Benedick's counsel, Atty. Simando. The Court is convinced that the compromise agreement was the handiwork of Atty. Simando, because it was he who notarized the SPA purportedly executed by the Dy Chiao brothers. He later became the counsel of Benedick against the Dy Chiao siblings. He signed the compromise agreement as Benedick's counsel, despite his incessant claim that the brothers were incompetent and needed a guardian ad litem. Barely 11 days after the execution of the compromise agreement, Atty. Simando filed a Petition for the Settlement of the Estate of Benito Dy Chiao, Sr., this time as counsel of Mary Jane. It bears stressing that Mary Jane was the defendant in the Civil Case and that as counsel of Benedick, the plaintiff in the said civil case, Atty. Simando had accused her of being a drug addict and a spendthrift. By then of course, his client (Benedick) had already received P6,000,000.00 from the estate of his alleged putative father. Since the decision of the RTC is null and void, the writ of execution issued pursuant thereto and the subsequent sale at public auction of the properties belonging to the estate of Benito Dy Chiao, Sr. are null and void. IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. SO ORDERED.
March 7, 2002 WILLIAM LIYAO, JR., represented by his mother Corazon Garcia, petitioner, vs. JUANITA TANHOTI-LIYAO, PEARL MARGARET L. TAN, TITA ROSE L. TAN AND LINDA CHRISTINA LIYAO, respondents.
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FACTS: Corazon Garcia is legally married to but living separately from Ramon Yulo for more than 10 years at the time of the institution of the said civil case. Corazon cohabited with the late William Liyao from 1965 up to the time of Williams untimely demise. They lived together in the company of Corazons two children from her subsisting marriage. Corazon gave birth to William Liyao, Jr. And during her three day stay at the hospital, William Liyao visited and stayed with her and the new born baby, William, Jr. (Billy). All the medical and hospital expenses, food and clothing were paid under the account of William Liyao. William Liyao even asked his confidential secretary to secure a copy of Billys birth certificate. He likewise instructed Corazon to open a bank account for Billy with the Consolidated Bank and gave weekly amounts to be deposited therein. William Liyao would bring Billy to the office, introduce him as his good looking son and had their pictures taken together. Since birth, Billy had been in continuous possession and enjoyment of the status of a recognized and/or acknowledged child of William Liyao by the latters direct and overt acts. Respondents, on the other hand, painted a different picture of the story. Linda stated that her parents, William Liyao and Juanita Tanhoti, were legally married. Linda grew up and lived with her parents until she got married; that her parents were not separated legally or in fact. Her father lived at their house and came home regularly. Ramon, driver and bodyguard of William Liyao, said that Mr. Liyao suffered from another heart attack. On Dec. 2, 1975, Pineda was called inside the office of Mr. Liyao and saw the latter leaning on the table. He brought him to the hospital but Mr. Liyao died upon arrival. Mrs. Liyao and Linda were the first to arrive at the hospital. ISSUE: Whether or not petitioner may impugn his own legitimacy to be able to claim from the estate of his supposed father William Liyao. HELD: We deny the present petition. Under the New Civil Code, a child born and conceived during a valid marriage is presumed to be legitimate . The presumption of legitimacy of children does not only flow out from a declaration contained in the statute but is based on the broad principles of natural justice and the supposed virtue of the mother. The presumption is grounded in a policy to protect innocent offspring from the odium of illegitimacy. The presumption of legitimacy of the child, however, is not conclusive and consequently, may be overthrown by evidence to the contrary. Hence, Art. 255 of the New Civil Code provides: Children born after 180 days following the celebration of the marriage, and before 300 days following its dissolution or the separation of the spouses shall be presumed to be legitimate. Against this presumption no evidence shall be admitted other than that of the physical impossibility of the husband having access to his wife within the first 120 days of the 300 which preceded the birth of the child. This physical impossibility may be caused: 1) By the impotence of the husband; 2) By the fact that husband and wife were living separately in such a way that access was not possible; 3) By the serious illness of the husband. Petitioner insists that his mother, Corazon, had been living separately for 10 years from her husband at the time that she cohabited with the late William Liyao and it was physically impossible for her to have sexual relations with Ramon Yulo when petitioner was conceived and born. The fact that Corazon Garcia had been living separately from her husband, Ramon Yulo, at the time petitioner was conceived and born is of no moment. While physical impossibility for the husband to have sexual intercourse with his wife is one of the grounds for impugning the legitimacy of the child, it bears emphasis that the grounds for impugning the legitimacy of the child mentioned may only be invoked by the husband, or in proper cases, his heirs. Impugning the legitimacy of the child is a strictly personal right of the husband, or in exceptional cases, his heirs for the simple reason that he is the one directly confronted with the scandal and ridicule which the infidelity of his wife produces and he should be the one to decide whether to conceal that infidelity or expose it in view of the moral and economic interest involved. It is therefore clear that the present petition initiated by Corazon as guardian ad litem of the then minor, petitioner, to compel recognition by respondents of petitioner William Liyao, Jr, as the illegitimate son of the late William Liyao cannot prosper. It is settled that a child born within a valid marriage is presumed legitimate even though the mother may have declared against its legitimacy or may have been sentenced as an adulteress. Only the husband, or in exceptional circumstances, his heirs, could impugn the legitimacy of a child born in a valid and subsisting marriage. The child himself cannot choose his own filiation. If the husband, presumed to be the father does not impugn the legitimacy of the child, then the status of the child is fixed, and the latter cannot choose to be the child of his mothers alleged paramour. On the other hand, if the presumption of legitimacy is overthrown, the child cannot elect the paternity of the husband who successfully defeated the presumption. Do the acts of Enrique Yulo and Bernadette Yulo, the undisputed children of Corazon Garcia with Ramon Yulo, in testifying for petitioner amount to impugnation of the legitimacy of the latter? No. It is only in exceptional cases that the heirs of the husband are allowed to contest the legitimacy of the child. Nothing on the records indicate that Ramon Yulo has already passed away at the time of the birth of the petitioner nor at the time of the initiation of this proceedings. Notably, the case at bar was initiated by petitioner himself through his mother, Corazon, and not through Enrique and Bernadette Yulo. IT IS SETTLED THAT THE LEGITIMACY OF THE CHILD CAN BE IMPUGNED ONLY IN A DIRECT ACTION BROUGHT FOR THAT PURPOSE, BY THE PROPER PARTIES AND WITHIN THE PERIOD LIMITED BY LAW .
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Considering the foregoing, we find no reason to discuss the sufficiency of the evidence presented by both parties on the petitioners claim of filiation with the late William Liyao. In any event, there is no clear, competent and positive evidence presented by the petitioner that his alleged father had admitted or recognized his paternity. WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of Appeals is hereby AFFIRMED. No costs. SO ORDERED.
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