CIVIL LAW CASE DIGESTS

Contract; contract of carriage; defnition; common carrier; defnition; breach of

contract of carriage; entitlement to damages; contract of services; standard of care
re!ired; damages; "hen recoverable; !asi#delict; solidar$ liabilit$ of %oint
tortfeasors& A contract of carriage is defned as one "hereb$ a certain 'erson or
association of 'ersons obligate themselves to trans'ort 'ersons( things( or ne"s
from one 'lace to another for a f)ed 'rice& *n its face( the air'lane tic+et is a valid
"ritten contract of carriage& This Co!rt has held that "hen an airline iss!es a tic+et
to a 'assenger confrmed on a 'artic!lar ,ight( on a certain date( a contract of
carriage arises( and the 'assenger has ever$ right to e)'ect that he "o!ld ,$ on
that ,ight and on that date& If he does not( then the carrier o'ens itself to a s!it for
breach of contract of carriage&
-nder Article ./01 of the Civil Code( this 2'ersons( cor'orations( frms( or
associations engaged in the b!siness of carr$ing or trans'orting 'assengers or
goods or both( b$ land( "ater( or air( for com'ensation( o3ering their services to the
'!blic4 is called a common carrier&
In contrast( the contract!al relation bet"een Sam'ag!ita Travel and res'ondents is
a contract for services& 5 Since the contract bet"een the 'arties is an ordinar$ one
or services( the standard of care re!ired of res'ondent is that of a good father of a
famil$ !nder Article ../0 of the Civil Code& This connotes reasonable care
consistent "ith that "hich an ordinaril$ 'r!dent 'erson "o!ld have observed "hen
confronted "ith a similar sit!ation& The test to determine "hether negligence
attended the 'erformance of an obligation is6 did the defendant in doing the alleged
negligent act !se that reasonable care and ca!tion "hich an ordinaril$ 'r!dent
'erson "o!ld have !sed in the same sit!ation7 If not( then he is g!ilt$ of
negligence&
8or one to be entitled to act!al damages( it is necessar$ to 'rove the act!al amo!nt
of loss "ith a reasonable degree of certaint$( 'remised !'on com'etent 'roof and
the best evidence obtainable b$ the in%!red 'art$& To %!stif$ an a"ard of act!al
damages( there m!st be com'etent 'roof of the act!al amo!nt of loss& Credence
can be given onl$ to claims "hich are d!l$ s!''orted b$ recei'ts&
-nder Article 1119 of the Civil Code of the :hili''ines( an a"ard of moral damages(
in breaches of contract( is in order !'on a sho"ing that the defendant acted
fra!d!lentl$ or in bad faith& What the la" considers as bad faith "hich ma$ f!rnish
the gro!nd for an a"ard of moral damages "o!ld be bad faith in sec!ring the
contract and in the e)ec!tion thereof( as "ell as in the enforcement of its terms( or
an$ other +ind of deceit& In the same vein( to "arrant the a"ard of e)em'lar$
damages( defendant m!st have acted in "anton( fra!d!lent( rec+less( o''ressive(
or malevolent manner&
'g& .
;ominal damages are recoverable "here a legal right is technicall$ violated and
m!st be vindicated against an invasion that has 'rod!ced no act!al 'resent loss of
an$ +ind or "here there has been a breach of contract and no s!bstantial in%!r$
or act!al damages "hatsoever have been or can be sho"n& -nder Article 111. of
the Civil Code( nominal damages ma$ be a"arded to a 'lainti3 "hose right has
been violated or invaded b$ the defendant( for the '!r'ose of vindicating or
recogni<ing that right( not for indemnif$ing the 'lainti3 for an$ loss s!3ered&
The amo!nt to be a"arded as nominal damages shall be e!al or at least
commens!rate to the in%!r$ s!stained b$ res'ondents considering the conce't and
'!r'ose of s!ch damages& The amo!nt of nominal damages to be a"arded ma$ also
de'end on certain s'ecial reasons e)tant in the case& The amo!nt of s!ch damages
is addressed to the so!nd discretion of the co!rt and ta+ing into acco!nt the
relevant circ!mstances( s!ch as the fail!re of some res'ondents to board the ,ight
on sched!le and the slight breach in the legal obligations of the airline com'an$ to
com'l$ "ith the terms of the contract( i.e&( the air'lane tic+et and of the travel
agenc$ to ma+e the correct boo+ings&
Catha$ :acifc and Sam'ag!ita Travel acted together in creating the conf!sion in
the boo+ings "hich led to the erroneo!s cancellation of res'ondents= boo+ings&
Their negligence is the 'ro)imate ca!se of the technical in%!r$ s!stained b$
res'ondents& Therefore( the$ have become %oint tortfeasors( "hose res'onsibilit$ for
quasi-delict, !nder Article 1.>? of the Civil Code( is solidar$& Cathay Pacifc Airways
v. Juanita Reyes, et al&( G&@& ;o& .ABA>.( C!ne 1D( 19.0
Contract; contract of sale; dis'!table 'res!m'tions; fail!re to 'a$ the 'rice; e3ect
of; do!ble sale; e3ect; registration in good faith; b!$er in good faith; d!t$ of a b!$er
"hen a 'iece of land is in the act!al 'ossession of third 'ersons& -nder Section 0(
@!le .0. of the @!les of Co!rt( the follo"ing are dis'!table 'res!m'tions6 E.F
'rivate transactions have been fair and reg!lar; E1F the ordinar$ co!rse of b!siness
has been follo"ed; and E0F there was sufcient consideration for a contract& These
'res!m'tions o'erate against an adversar$ "ho has not introd!ced 'roof to reb!t
them& The$ create the necessit$ of 'resenting evidence to reb!t the prima facie
case the$ created( and "hich( if no 'roof to the contrar$ is 'resented and o3ered(
"ill 'revail& The b!rden of 'roof remains "here it is b!t( b$ the 'res!m'tion( the
one "ho has that b!rden is relieved for the time being from introd!cing evidence in
s!''ort of the averment( beca!se the 'res!m'tion stands in the 'lace of evidence
!nless reb!tted&
Granting that there "as no deliver$ of the consideration( the seller "o!ld have no
right to sell again "hat he no longer o"ned& Gis remed$ "o!ld be to rescind the
sale for fail!re on the 'art of the b!$er to 'erform his 'art of their obligation
'!rs!ant to Article ..>. of the ;e" Civil Code& In the case of Clara . !alat"at v.
Court #f Appeals and $pouses Jose Repuyan and Aurora Repuyan( it "as "ritten6
The failure of the buyer to make good the price does not, in law, cause the
ownership to revest to the seller !nless the bilateral contract of sale is frst
rescinded or resolved '!rs!ant to Article ..>. of the ;e" Civil Code& Non-
'g& 1
payment only creates a right to demand the fulfllment of the obligation or
to rescind the contract. HEm'hases s!''liedI
H*I"nershi' of an immovable 'ro'ert$ "hich is the s!b%ect of a do!ble sale shall be
transferred6 E.F to the 'erson ac!iring it "ho in good faith frst recorded it in the
@egistr$ of :ro'ert$; E1F in defa!lt thereof( to the 'erson "ho in good faith "as frst
in 'ossession; and E0F in defa!lt thereof( to the 'erson "ho 'resents the oldest title(
'rovided there is good faith& The re!irement of the la" then is t"o#fold6 ac!isition
in good faith and registration in good faith& Good faith m!st conc!r "ith the
registration& If it "o!ld be sho"n that a b!$er "as in bad faith( the alleged
registration the$ have made amo!nted to no registration at all&
When a 'iece of land is in the act!al 'ossession of 'ersons other than the seller( the
b!$er m!st be "ar$ and sho!ld investigate the rights of those in 'ossession&
%ithout ma&in' such inquiry, one cannot claim that he is a "uyer in 'ood faith.
When a man 'ro'oses to b!$ or deal "ith realt$( his d!t$ is to read the '!blic
man!scri't( that is( to loo+ and see "ho is there !'on it and "hat his rights are& A
"ant of ca!tion and diligence( "hich an honest man of ordinar$ 'r!dence is
acc!stomed to e)ercise in ma+ing '!rchases( is in contem'lation of la"( a "ant of
good faith& The b!$er "ho has failed to +no" or discover that the land sold to him is
in adverse 'ossession of another is a b!$er in bad faith&
HIIf a vendee in a do!ble sale registers the sale after he has ac!ired +no"ledge of
a 'revio!s sale( the registration constit!tes a registration in bad faith and does not
confer !'on him an$ right& If the registration is done in bad faith( it is as if there is
no registration at all( and the b!$er "ho has frst ta+en 'ossession of the 'ro'ert$
in good faith shall be 'referred& (ospicio ). Rosaroso, et al. v. *ucila *a"orte $oria,
et al., G&@& ;o& .>?A?D( C!ne .>( 19.0
Contract; contract of sale; elements; contract to sell; elements; di3erence bet"een
a contract of sale and a contract to sell; e3ect of non#'a$ment in a contract of sale;
laches; defnition; Torrens s$stem; e)ce'tion to general r!le that action to recover
registered land covered b$ the Torrens S$stem ma$ not be barred b$ laches& A
contract of sale is defned !nder Article .?BA of the Civil Code6
J$ the contract of sale( one of the contracting 'arties obligates himself to transfer
the o"nershi' of and to deliver a determinate thing( and the other to 'a$ therefore
a 'rice certain in mone$ or its e!ivalent&
The elements of a contract of sale are6 EaF consent or meeting of the minds( that is(
consent to transfer o"nershi' in e)change for the 'rice; EbF determinate s!b%ect
matter; and EcF 'rice certain in mone$ or its e!ivalent&
A contract to sell( on the other hand( is defned b$ Article .?/> of the Civil Code6
HAI bilateral contract "hereb$ the 'ros'ective seller( "hile e)'ressl$ reserving the
o"nershi' of the s!b%ect 'ro'ert$ des'ite deliver$ thereof to the 'ros'ective b!$er(
binds himself to sell the said 'ro'ert$ e)cl!sivel$ to the 'ros'ective b!$er !'on
f!lfllment of the condition agreed !'on( that is( f!ll 'a$ment of the '!rchase 'rice&
'g& 0
In a contract of sale( the title to the 'ro'ert$ 'asses to the b!$er !'on the deliver$
of the thing sold( "hereas in a contract to sell( the o"nershi' is( b$ agreement(
retained b$ the seller and is not to 'ass to the vendee !ntil f!ll 'a$ment of the
'!rchase 'rice&
Even ass!ming( ar'uendo( that the 'etitioner "as not 'aid( s!ch non 'a$ment is
immaterial and has no e3ect on the validit$ of the contract of sale& A contract of
sale is a consens!al contract and "hat is re!ired is the meeting of the minds on
the ob%ect and the 'rice for its 'erfection and validit$& In this case( the contract "as
'erfected the moment the 'etitioner and the res'ondent agreed on the ob%ect of
the sale K the t"o#hectare 'arcel of land( and the 'rice K Three Tho!sand :esos
E:0(999&99F& ;on#'a$ment of the '!rchase 'rice merel$ gave rise to a right in favor
of the 'etitioner to either demand s'ecifc 'erformance or rescission of the contract
of sale&
Laches has been defned as the fail!re or neglect( for an !nreasonable and
!ne)'lained length of time( to do that "hich( b$ e)ercising d!e diligence co!ld or
sho!ld have been done earlier& It sho!ld be stressed that laches is not concerned
onl$ "ith the mere la'se of time& As a general r!le( an action to recover registered
land covered b$ the Torrens S$stem ma$ not be barred b$ laches& ;either can
laches be set !' to resist the enforcement of an im'rescri'tible legal right& In
e)ce'tional cases( ho"ever( the Co!rt allo"ed laches as a bar to recover a titled
'ro'ert$& Th!s( in Romero v. +atividad( the Co!rt r!led that laches "ill bar recover$
of the 'ro'ert$ even if the mode of transfer "as invalid& Li+e"ise( in ,da. de
Ca"rera v. CA( the Co!rt r!led6
In o!r %!risdiction( it is an enshrined r!le that even registered owners of
property may be barred from recovering possession of property by virtue
of laches. -nder the Land @egistration Act Eno" the :ro'ert$ @egistration DecreeF(
no title to registered land in derogation to that of the registered o"ner shall be
ac!ired b$ 'rescri'tion or adverse 'ossession& The same is not tr!e "ith regard to
laches&
Lore 'artic!larl$( laches "ill bar recover$ of a 'ro'ert$( even if the mode of transfer
!sed b$ an alleged member of a c!lt!ral minorit$ lac+s e)ec!tive a''roval& Th!s( in
(eirs of )icman v. Cari-o( the Co!rt !'held the Deed of Conve$ance of :art @ights
and Interests in Agric!lt!ral Land e)ec!ted b$ Ting#el Dicman in favor of Sioco
CariMo des'ite lac+ of e)ec!tive a''roval& The Co!rt stated that 2des'ite the %!dicial
'rono!ncement that the sale of real 'ro'ert$ b$ illiterate ethnic minorities is n!ll
and void for lac+ of a''roval of com'etent a!thorities( the right to recover
'ossession has nonetheless been barred thro!gh the o'eration of the e!itable
doctrine of laches&4 Ali A&an' v. unicipality of .sulan, $ultan /udarat Province, G&@&
;o& .AD9.?( C!ne 1D( 19.0
Contract; contract of sale; dis!alifcation of a la"$er to b!$ !nder Article .?>.;
elements of a contract; a!tonomo!s nat!re; obligator$ nat!re of contract;
inter'retation; co!rts have no a!thorit$ to alter a contract b$ constr!ction or to
ma+e a ne" contract for the 'arties; 'enal cla!se; generall$ s!bstit!tes the
indemnit$ for damages and the 'a$ment of interests in case of non#com'liance&
'g& ?
Admittedl$( Article .?>. EBF of the Civil Code 'rohibits la"$ers from ac!iring b$
'!rchase or assignment the 'ro'ert$ or rights involved "hich are the ob%ect of the
litigation in "hich the$ intervene b$ virt!e of their 'rofession& The CA lost sight of
the fact( ho"ever( that the 'rohibition a''lies onl$ d!ring the 'endenc$ of the s!it
and generall$ does not cover contracts for contingent fees "here the transfer ta+es
e3ect onl$ after the fnalit$ of a favorable %!dgment&
Defned as a meeting of the minds bet"een t"o 'ersons "hereb$ one binds himself(
"ith res'ect to the other to give something or to render some service( a contract
re!ires the conc!rrence of the follo"ing re!isites6 EaF consent of the contracting
'arties; EbF ob%ect certain "hich is the s!b%ect matter of the contract; and( EcF ca!se
of the obligation "hich is established&
Vie"ed in the light of the a!tonomo!s nat!re of contracts en!nciated !nder Article
.09D of the Civil Code( on the other hand( "e fnd that the /asunduan "as correctl$
fo!nd b$ the @TC to be a valid and binding contract bet"een the 'arties&
*bligations arising from contracts( after all( have the force of la" bet"een the
contracting 'arties "ho are e)'ected to abide in good faith "ith their contract!al
commitments( not "easel o!t of them& Loreover( "hen the terms of the contract
are clear and leave no do!bt as to the intention of the contracting 'arties( the r!le
is settled that the literal meaning of its sti'!lations sho!ld govern& In s!ch cases(
co!rts have no a!thorit$ to alter a contract b$ constr!ction or to ma+e a ne"
contract for the 'arties& Since their d!t$ is confned to the inter'retation of the one
"hich the 'arties have made for themselves "itho!t regard to its "isdom or foll$( it
has been r!led that co!rts cannot s!''l$ material sti'!lations or read into the
contract "ords it does not contain& Indeed( co!rts "ill not relieve a 'art$ from the
adverse e3ects of an !n"ise or !nfavorable contract freel$ entered into&
An accessor$ !nderta+ing to ass!me greater liabilit$ on the 'art of the obligor in
case of breach of an obligation( the foregoing sti'!lation is a 'enal cla!se "hich
serves to strengthen the coercive force of the obligation and 'rovides for li!idated
damages for s!ch breach& 2The obligor "o!ld then be bo!nd to 'a$ the sti'!lated
indemnit$ "itho!t the necessit$ of 'roof of the e)istence and the meas!re of
damages ca!sed b$ the breach&4
In obligations "ith a 'enal cla!se( the 'enalt$ generall$ s!bstit!tes the indemnit$
for damages and the 'a$ment of interests in case of non#com'liance& -s!all$
incor'orated to create an e3ective deterrent against breach of the obligation b$
ma+ing the conse!ences of s!ch breach as onero!s as it ma$ be 'ossible( the r!le
is settled that a 'enal cla!se is not limited to act!al and com'ensator$ damages&
(eirs of anuel 0y 1& *ion' v. auricia eer Castillo, (eirs of !uena2or C. 0mali,
represented "y +ancy 0mali, et al.( G&@& ;o& ./D?1B( C!ne B( 19.0&
Contract; defa!lt of debtor; defnition; re!isites; li!idated damages; sti'!lation
therefor; do!ble f!nction; 'enalt$ cla!se; defnition; f!nction& Defa!lt or mora on
the 'art of the debtor is the dela$ in the f!lfllment of the 'restation b$ reason of a
ca!se im'!table to the former& It is the nonf!lfllment of an obligation "ith res'ect
to time&
'g& B
It is a general r!le that one "ho contracts to com'lete certain "or+ "ithin a certain
time is liable for the damage for not com'leting it "ithin s!ch time( !nless the dela$
is e)c!sed or "aived&
In this %!risdiction( the follo"ing re!isites m!st be 'resent in order that the debtor
ma$ be in defa!lt6 E.F that the obligation be demandable and alread$ li!idated; E1F
that the debtor dela$s 'erformance; and E0F that the creditor re!ires the
'erformance %!diciall$ or e)tra%!diciall$&
Liabilit$ for li!idated damages is governed b$ Articles 111D to 111A of the Civil
Code& A sti'!lation for li!idated damages is attached to an obligation in order to
ens!re 'erformance and has a do!ble f!nction6 E.F to 'rovide for li!idated
damages( and E1F to strengthen the coercive force of the obligation b$ the threat of
greater res'onsibilit$ in the event of breach& The amo!nt agreed !'on ans"ers for
damages s!3ered b$ the o"ner d!e to dela$s in the com'letion of the 'ro%ect& As a
'recondition to s!ch a"ard( ho"ever( there m!st be 'roof of the fact of dela$ in the
'erformance of the obligation&
A 'enalt$ cla!se( e)'ressl$ recogni<ed b$ la"( is an accessor$ !nderta+ing to
ass!me greater liabilit$ on the 'art of the obligor in case of breach of an obligation&
It f!nctions to strengthen the coercive force of obligation and to 'rovide( in e3ect(
for "hat co!ld be the li!idated damages res!lting from s!ch a breach& The obligor
"o!ld then be bo!nd to 'a$ the sti'!lated indemnit$ "itho!t the necessit$ of 'roof
on the e)istence and on the meas!re of damages ca!sed b$ the breach& It is "ell#
settled that so long as s!ch sti'!lation does not contravene la"( morals( or '!blic
order( it is strictl$ binding !'on the obligor& J Plus Asia )evelopment Corporation v.
0tility Assurance Corporation( G&@& ;o& .>>DB9( C!ne 1D( 19.0
Contract; rescission !nder Article ..>.; m!t!al restit!tion; contracts; defnition&
L!t!al restit!tion is re!ired in cases involving rescission !nder Article ..>. of the
Civil Code; s!ch restit!tion is necessar$ to bring bac+ the 'arties to their original
sit!ation 'rior to the ince'tion of the contract&
As a general r!le( a contract is a meeting of minds bet"een t"o 'ersons& The Civil
Code !'holds the s'irit over the form; th!s( it deems an agreement to e)ist(
'rovided the essential re!isites are 'resent& A contract is !'held as long as there is
'roof of consent( s!b%ect matter and ca!se& Loreover( it is generall$ obligator$ in
"hatever form it ma$ have been entered into& 8rom the moment there is a meeting
of minds bet"een the 'arties( Hthe contractI is 'erfected& 3il-1state 4old and
)evelopment, .nc., et al. v. ,erte5 $ales and 6radin', .nc&( G&@& ;o& 1919/>( C!ne .9(
19.0&
Contract; void contracts; e3ect& A void contract is e!ivalent to nothing; it 'rod!ces
no civil e3ect; and it does not create( modif$ or e)ting!ish a %!ridical relation&
Joselito C. !orromeo v. Juan 6. ina( G&@& ;o& .>0/?/( C!ne B( 19.0&
Credit; conc!rrence and 'reference of credit; ta) clearance is not re!ired for the
a''roval of a 'ro%ect of 'artition& The 'osition of the JI@( insisting on 'rior
com'liance "ith the ta) clearance re!irement as a condition for the a''roval of
'g& D
the 'ro%ect of distrib!tion of the assets of a ban+ !nder li!idation( is contrar$ to
both the letter and intent of the la" on li!idation of ban+s b$ the :DIC&
The la" e)'ressl$ 'rovides that debts and liabilities of the ban+ !nder li!idation
are to be 'aid in accordance "ith the r!les on conc!rrence and 'reference of credit
!nder the Civil Code& D!ties( ta)es( and fees d!e the Government en%o$ 'riorit$ onl$
"hen the$ are "ith reference to a s'ecifc movable 'ro'ert$( !nder Article 11?.E.F
of the Civil Code( or immovable 'ro'ert$( !nder Article 11?1E.F of the same Code&
Go"ever( "ith reference to the other real and 'ersonal 'ro'ert$ of the debtor(
sometimes referred to as 2free 'ro'ert$(4 the ta)es and assessments d!e the
;ational Government( other than those in Articles 11?.E.F and 11?1E.F of the Civil
Code( s!ch as the cor'orate income ta)( "ill come onl$ in ninth 'lace in the order of
'reference& *n the other hand( if the JI@=s contention that a ta) clearance be
sec!red frst before the 'ro%ect of distrib!tion of the assets of a ban+ !nder
li!idation ma$ be a''roved( then the ta) liabilities "ill be given absol!te
'reference in all instances( incl!ding those that do not fall !nder Articles 11?.E.F
and 11?1E.F of the Civil Code& In order to sec!re a ta) clearance "hich "ill serve as
'roof that the ta)'a$er had com'letel$ 'aid o3 his ta) liabilities( :DIC "ill be
com'elled to settle and 'a$ frst all ta) liabilities and defciencies of the ban+(
regardless of the order of 'reference !nder the 'ertinent 'rovisions of the Civil
Code& 8ollo"ing the JI@=s stance( therefore( onl$ then ma$ the 'ro%ect of distrib!tion
of the ban+=s assets be a''roved and the other debts and claims thereafter settled(
even tho!gh !nder Article 11?? of the Civil Code s!ch debts and claims en%o$
'reference over ta)es and assessments d!e the ;ational Government& Philippine
)eposit .nsurance Corporation v. !ureau of .nternal Revenue( G&@& ;o& ./1A>1( C!ne
.0( 19.0
Damages; Attorne$=s fees; d!al conce't of attorne$=s fees; an a"ard of attorne$=s
fees !nder Article 119A demands fact!al( legal( and e!itable %!stifcation& Article
119A of the ;e" Civil Code of the :hili''ines states the 'olic$ that sho!ld g!ide the
co!rts "hen a"arding attorne$=s fees to a litigant& As a general r!le( the 'arties
ma$ sti'!late the recover$ of attorne$=s fees& In the absence of s!ch sti'!lation(
this article restrictivel$ en!merates the instances "hen these fees ma$ be
recovered&
In A!$-C!+ !roadcastin' Corp. v. CA( this Co!rt had the occasion to e)'o!nd on the
'olic$ behind the grant of attorne$=s fees as act!al or com'ensator$ damages6
ETFhe la" is clear that in the absence of sti'!lation( attorne$=s fees ma$ be
recovered as act!al or com'ensator$ damages !nder an$ of the circ!mstances
'rovided for in Article 119A of the Civil Code& The general r!le is that attorne$=s fees
cannot be recovered as 'art of damages beca!se of the 'olic$ that no 'remi!m
sho!ld be 'laced on the right to litigate& The$ are not to be a"arded ever$ time a
'art$ "ins a s!it&
The 'o"er of the co!rt to a"ard attorne$=s fees !nder Article 119A demands
fact!al( legal( and e!itable %!stifcation& Even "hen a claimant is com'elled to
litigate "ith third 'ersons or to inc!r e)'enses to 'rotect his rights( still attorne$=s
fees ma$ not be a"arded "here no s!Ncient sho"ing of bad faith co!ld be re,ected
'g& /
in a 'art$=s 'ersistence in a case other than an erroneo!s conviction of the
righteo!sness of his ca!se&
We have consistentl$ held that an a"ard of attorne$=s fees !nder Article 119A
demands fact!al( legal( and e!itable %!stifcation to avoid s'ec!lation and
con%ect!re s!rro!nding the grant thereof& D!e to the s'ecial nat!re of the a"ard of
attorne$=s fees( a rigid standard is im'osed on the co!rts before these fees co!ld be
granted& Gence( it is im'erative that the$ clearl$ and distinctl$ set forth in their
decisions the basis for the a"ard thereof& It is not eno!gh that the$ merel$ state the
amo!nt of the grant in the dis'ositive 'ortion of their decisions& It bears reiteration
that the a"ard of attorne$=s fees is an e)ce'tion rather than the general r!le; th!s(
there m!st be com'elling legal reason to bring the case "ithin the e)ce'tions
'rovided !nder Article 119A of the Civil Code to %!stif$ the a"ard& Philippine
+ational Construction Corporation v. Apac ar&etin' Corporation, represented "y
Cesar . #n', Jr.( G&@& ;o& .>9>B/( C!ne B( 19.0&
Damages; nominal damages; "hen "arranted in labor cases& HWIhile Van Doorn has
a %!st and valid ca!se to terminate the res'ondents= em'lo$ment( it failed to meet
the re!isite 'roced!ral safeg!ards 'rovided !nder Article 1A0 of the Labor Code& In
the termination of em'lo$ment !nder Article 1A0( Van Doorn( as the em'lo$er( is
re!ired to serve a "ritten notice to the res'ondents and to the D*LE of the
intended termination of em'lo$ment at least one month 'rior to the cessation of its
fshing o'erations& :oseidon co!ld have easil$ fled this notice( in the "a$ it
re'resented Van Doorn in its dealings in the :hili''ines& While this omission does
not a3ect the validit$ of the termination of em'lo$ment( it s!b%ects the em'lo$er to
the 'a$ment of indemnit$ in the form of nominal damages& Poseidon .nternational
aritime $ervices, .nc. v. 6ito R. 6amala, et al.( G&@& ;o& .AD?/B( C!ne 1D( 19.0
Damages; tem'erate damages; "hen "arranted& Article 111? of the ;e" Civil Code
'rovides that 2EtFem'erate or moderate damages( "hich are more than nominal b!t
less than com'ensator$ damages ma$ be recovered "hen the co!rt fnds that some
'ec!niar$ loss has been s!3ered b!t its amo!nt cannot( from the nat!re of the
case( 'roved "ith certaint$&4 People of the Philippines v. Re''ie !ernardo( G&@& ;o&
.>A/A>( C!ne 0( 19.0&
Interest rates; a sti'!lated interest of 1?O 'er ann!m is not !nconscionable;
s!rcharge on 'rinci'al loan; a s!rcharge of .O 'er month on the 'rinci'al loan is
valid; s!rcharge or 'enalt$ 'arta+es of the nat!re of li!idated damages; di3erent
from interest 'a$ment& In ,illanueva v. Court of Appeals, "here the iss!e raised "as
"hether the 1?O '&a& sti'!lated interest rate is !nreasonable !nder the
circ!mstances( "e ans"ered in the negative and held6
In $pouses 7acarias !acolor and Catherine !acolor v. !anco 3ilipino $avin's and
ort'a'e !an&, )a'upan City !ranch, this Co!rt held that the interest rate of 1?O
per annum on a loan of :1??(999&99( agreed !'on b$ the 'arties( ma$ not be
considered as !nconscionable and e)cessive& As s!ch( the Co!rt r!led that the
borro"ers cannot renege on their obligation to com'l$ "ith "hat is inc!mbent !'on
them !nder the contract of loan as the said contract is the la" bet"een the 'arties
and the$ are bo!nd b$ its sti'!lations&
'g& A
Also( in 4arcia v. Court of Appeals( this Co!rt s!stained the agreement of the 'arties
to a 1?O per annum interest on an :A(D?>(1B9&99 loan fnding the same to be
reasonable and clearl$ evidenced b$ the amended credit line agreement entered
into b$ the 'arties as "ell as t"o 'romissor$ notes e)ec!ted b$ the borro"er in
favor of the lender&
Jased on the above %!ris'r!dence( the Co!rt fnds that the 1?O per annum interest
rate( 'rovided for in the s!b%ect mortgage contracts for a loan of :11B(999&99( ma$
not be considered !nconscionable& Loreover( considering that the mortgage
agreement "as freel$ entered into b$ both 'arties( the same is the la" bet"een
them and the$ are bo!nd to com'l$ "ith the 'rovisions contained therein&
In Rui8 v. CA( "e held6
The .O s!rcharge on the 'rinci'al loan for ever$ month of defa!lt is valid& This
s!rcharge or 'enalt$ sti'!lated in a loan agreement in case of defa!lt 'arta+es of
the nat!re of li!idated damages !nder Art& 111/ of the ;e" Civil Code( and is
se'arate and distinct from interest 'a$ment& Also referred to as a 'enalt$ cla!se( it
is e)'ressl$ recogni<ed b$ la"& It is an accessor$ !nderta+ing to ass!me greater
liabilit$ on the 'art of an obligor in case of breach of an obligation& The obligor
"o!ld then be bo!nd to 'a$ the sti'!lated amo!nt of indemnit$ "itho!t the
necessit$ of 'roof on the e)istence and on the meas!re of damages ca!sed b$ the
breach&
$pouses 3lorentino 6. allari and Aurea ,. allari v. Prudential !an& of the
Philippines( G&@& ;o& .>/AD.( C!ne B( 19.0
Tort; collateral so!rce r!le; !n%!st enrichment; elements& As 'art of American
'ersonal in%!r$ la"( the collateral so!rce r!le "as originall$ a''lied to tort cases
"herein the defendant is 'revented from benefting from the 'lainti3=s recei't of
mone$ from other so!rces& -nder this r!le( if an in%!red 'erson receives
com'ensation for his in%!ries from a so!rce "holl$ inde'endent of the tortfeasor(
the 'a$ment sho!ld not be ded!cted from the damages "hich he "o!ld other"ise
collect from the tortfeasor& In a recent Decision b$ the Illinois S!'reme Co!rt( the
r!le has been described as 2an established e)ce'tion to the general r!le that
damages in negligence actions m!st be com'ensator$&4 The Co!rt "ent on to
e)'lain that altho!gh the r!le a''ears to allo" a do!ble recover$( the collateral
so!rce "ill have a lien or s!brogation right to 'revent s!ch a do!ble recover$& In
Litchell v& Galdar( the collateral so!rce r!le "as rationali<ed b$ the S!'reme Co!rt
of Dela"are6
The collateral so!rce r!le is P'redicated on the theor$ that a tortfeasor has no
interest in( and therefore no right to beneft from monies received b$ the in%!red
'erson from so!rces !nconnected "ith the defendant=& According to the collateral
so!rce r!le( Pa tortfeasor has no right to an$ mitigation of damages beca!se of
'a$ments or com'ensation received b$ the in%!red 'erson from an inde'endent
so!rce&= The rationale for the collateral so!rce r!le is based !'on the !asi#'!nitive
nat!re of tort la" liabilit$& It has been e)'lained as follo"s6
'g& >
The collateral so!rce r!le is designed to stri+e a balance bet"een t"o com'eting
'rinci'les of tort la"6 E.F a 'lainti3 is entitled to com'ensation s!Ncient to ma+e
him "hole( b!t no more; and E1F a defendant is liable for all damages that
'ro)imatel$ res!lt from his "rong& A 'lainti3 "ho receives a do!ble recover$ for a
single tort en%o$s a "indfall; a defendant "ho esca'es( in "hole or in 'art( liabilit$
for his "rong en%o$s a "indfall& Jeca!se the la" m!st sanction one "indfall and
den$ the other( it favors the victim of the "rong rather than the "rongdoer&
Th!s( the tortfeasor is re!ired to bear the cost for the f!ll val!e of his or her
negligent cond!ct even if it res!lts in a "indfall for the innocent 'lainti3& ECitations
omittedF
As seen( the collateral so!rce r!le a''lies in order to 'lace the res'onsibilit$ for
losses on the 'art$ ca!sing them& Its a''lication is %!stifed so that 2Pthe "rongdoer
sho!ld not beneft from the e)'endit!res made b$ the in%!red 'art$ or ta+e
advantage of contracts or other relations that ma$ e)ist bet"een the in%!red 'art$
and third 'ersons&4 Th!s( it fnds no a''lication to cases involving no#fa!lt
ins!rances !nder "hich the ins!red is indemnifed for losses b$ ins!rance
com'anies( regardless of "ho "as at fa!lt in the incident generating the losses&
To constit!te !n%!st enrichment( it m!st be sho"n that a 'art$ "as !n%!stl$
enriched in the sense that the term !n%!stl$ co!ld mean illegall$ or !nla"f!ll$& A
claim for !n%!st enrichment fails "hen the 'erson "ho "ill beneft has a valid claim
to s!ch beneft& itsu"ishi otors Philippines $alaried 1mployees 0nion v.
itsu"ishi otors Philippines Corporation, G&@& ;o& ./B//0( C!ne ./( 19.0&
-n%!st enrichment; defnition; elements& -n%!st enrichment is a term !sed to de'ict
res!lt or e3ect of fail!re to ma+e rem!neration of or for 'ro'ert$ or benefts
received !nder circ!mstances that give rise to legal or e!itable obligation to
acco!nt for them& To be entitled to rem!neration( one m!st confer beneft b$
mista+e( fra!d( coercion( or re!est& -n%!st enrichment is not itself a theor$ of
reconve$ance& @ather( it is a 'rere!isite for the enforcement of the doctrine of
restit!tion& There is !n%!st enrichment "hen6
.& A 'erson is !n%!stl$ benefted; and
1& S!ch beneft is derived at the e)'ense of or "ith damages to another&
Philippine 6ransmarine Carriers, .nc. v. *eandro *e'aspi( G&@& ;o& 191/>.( C!ne .9(
19.0&
Special Laws
8amil$ Code; s!''ort; in 'ro'ortion to the reso!rces or means of the giver and to
the needs of the reci'ient; s!''ort pendente lite in cases of legal se'aration and
'etitions for declaration of n!llit$ or ann!lment of marriage; %!dicial determination
is g!ided b$ the @!le on :rovisional *rders; s!''ort in arrears; ded!ctions from
accr!ed s!''ort pendente lite9 %!dgment for s!''ort does not become fnal& As a
matter of la"( the amo!nt of s!''ort "hich those related b$ marriage and famil$
'g& .9
relationshi' is generall$ obliged to give each other shall be in 'ro'ortion to the
reso!rces or means of the giver and to the needs of the reci'ient& S!ch s!''ort
com'rises ever$thing indis'ensable for s!stenance( d"elling( clothing( medical
attendance( ed!cation and trans'ortation( in +ee'ing "ith the fnancial ca'acit$ of
the famil$&
-'on recei't of a verifed 'etition for declaration of absol!te n!llit$ of void marriage
or for ann!lment of voidable marriage( or for legal se'aration( and at an$ time
d!ring the 'roceeding( the co!rt( motu proprio or !'on verifed a''lication of an$ of
the 'arties( g!ardian or designated c!stodian( ma$ tem'oraril$ grant s!''ort
pendente lite 'rior to the rendition of %!dgment or fnal order& Jeca!se of its
'rovisional nat!re( a co!rt does not need to delve f!ll$ into the merits of the case
before it can settle an a''lication for this relief& All that a co!rt is tas+ed to do is
determine the +ind and amo!nt of evidence "hich ma$ s!Nce to enable it to %!stl$
resolve the a''lication& It is eno!gh that the facts be established b$ aNdavits or
other doc!mentar$ evidence a''earing in the record&
C!dicial determination of s!''ort pendente lite in cases of legal se'aration and
'etitions for declaration of n!llit$ or ann!lment of marriage are g!ided b$ the
'rovisions of the @!le on :rovisional *rders&
*n the iss!e of crediting of mone$ 'a$ments or e)'enses against accr!ed s!''ort(
"e fnd as relevant the follo"ing r!lings b$ -S co!rts&
In !radford v. 3utrell( a''ellant so!ght revie" of the decision of the Circ!it Co!rt
"hich fo!nd him in arrears "ith his child s!''ort 'a$ments and entered a decree in
favor of a''ellee "ife& Ge com'lained that in determining the arrearage fg!re( he
sho!ld have been allo"ed f!ll credit for all mone$ and items of 'ersonal 'ro'ert$
given b$ him to the children themselves( even tho!gh he referred to them as gifts&
The Co!rt of A''eals of Lar$land r!led that in the s!it to determine amo!nt of
arrears d!e the divorced "ife !nder decree for s!''ort of minor children( the
h!sband Ea''ellantF "as not entitled to credit for chec+s "hich he had clearl$
designated as gifts( nor "as he entitled to credit for an a!tomobile given to the
oldest son or a television set given to the children& Th!s( if the children remain in
the c!stod$ of the mother( the father is not entitled to credit for mone$ 'aid directl$
to the children if s!ch "as 'aid "itho!t an$ relation to the decree&
In artin, Jr. v. artin, the S!'reme Co!rt of Washington held that a father( "ho is
re!ired b$ a divorce decree to ma+e child s!''ort 'a$ments directl$ to the mother(
cannot claim credit for 'a$ments vol!ntaril$ made directl$ to the children& Go"ever(
s'ecial considerations of an e!itable nat!re ma$ %!stif$ a co!rt in crediting s!ch
'a$ments on his indebtedness to the mother( "hen s!ch can be done "itho!t
in%!stice to her&
S!Nce it to state that the matter of increase or red!ction of s!''ort sho!ld be
s!bmitted to the trial co!rt in "hich the action for declaration for n!llit$ of marriage
"as fled( as this Co!rt is not a trier of facts& The amo!nt of s!''ort ma$ be red!ced
or increased 'ro'ortionatel$ according to the red!ction or increase of the
'g& ..
necessities of the reci'ient and the reso!rces or means of the 'erson obliged to
s!''ort& As "e held in Advincula v. Advincula:
C!dgment for s!''ort does not become fnal& The right to s!''ort is of s!ch nat!re
that its allo"ance is essentiall$ 'rovisional; for d!ring the entire 'eriod that a need$
'art$ is entitled to s!''ort( his or her alimon$ ma$ be modifed or altered( in
accordance "ith his increased or decreased needs( and "ith the means of the giver&
It cannot be regarded as s!b%ect to fnal determination&
$usan *im-*ua v. )anilo ;. *ua( G&@& ;os& ./B1/>#A9( C!ne B( 19.0&
8amil$ Code; @!le on Declaration of Absol!te ;!llit$ of Void Larriages and
Ann!lment of Voidable Larriages; not a''licable in an action for recognition of
foreign %!dgment; foreign %!dgment relating to the marital stat!s of a 'erson;
s'ecial 'roceeding for cancellation or correction of entries in the civil registr$ !nder
@!le .9A of the @!les of Co!rt; the frst h!sband has a right to fle the 'etition;
e3ect of a foreign divorce decree to a 8ili'ino s'o!se; Article 1D of the 8amil$ Code&
The @!le on Declaration of Absol!te ;!llit$ of Void Larriages and Ann!lment of
Voidable Larriages EA&L& ;o& 91#..#.9#SCF does not a''l$ in a 'etition to recogni<e
a foreign %!dgment relating to the stat!s of a marriage "here one of the 'arties is a
citi<en of a foreign co!ntr$& Loreover( in Juliano-*lave v. Repu"lic( this Co!rt held
that the r!le in A&L& ;o& 91#..#.9#SC that onl$ the h!sband or "ife can fle a
declaration of n!llit$ or ann!lment of marriage 2does not a''l$ if the reason behind
the 'etition is bigam$&4
A foreign %!dgment relating to the stat!s of a marriage a3ects the civil stat!s(
condition and legal ca'acit$ of its 'arties& Go"ever( the e3ect of a foreign %!dgment
is not a!tomatic& To e)tend the e3ect of a foreign %!dgment in the :hili''ines(
:hili''ine co!rts m!st determine if the foreign %!dgment is consistent "ith domestic
'!blic 'olic$ and other mandator$ la"s& Article .B of the Civil Code 'rovides that
2HlIa"s relating to famil$ rights and d!ties( or to the stat!s( condition and legal
ca'acit$ of 'ersons are binding !'on citi<ens of the :hili''ines( even tho!gh living
abroad&4 This is the r!le of le5 nationalii in 'rivate international la"& Th!s( the
:hili''ine State ma$ re!ire( for e3ectivit$ in the :hili''ines( recognition b$
:hili''ine co!rts of a foreign %!dgment a3ecting its citi<en( over "hom it e)ercises
'ersonal %!risdiction relating to the stat!s( condition and legal ca'acit$ of s!ch
citi<en&
A 'etition to recogni<e a foreign %!dgment declaring a marriage void does not
re!ire relitigation !nder a :hili''ine co!rt of the case as if it "ere a ne" 'etition
for declaration of n!llit$ of marriage& :hili''ine co!rts cannot 'res!me to +no" the
foreign la"s !nder "hich the foreign %!dgment "as rendered& The$ cannot
s!bstit!te their %!dgment on the stat!s( condition and legal ca'acit$ of the foreign
citi<en "ho is !nder the %!risdiction of another state& Th!s( :hili''ine co!rts can
onl$ recogni<e the foreign %!dgment as a fact according to the r!les of evidence&
Since the recognition of a foreign %!dgment onl$ re!ires 'roof of fact of the
%!dgment( it ma$ be made in a s'ecial 'roceeding for cancellation or correction of
entries in the civil registr$ !nder @!le .9A of the @!les of Co!rt& @!le .( Section 0 of
'g& .1
the @!les of Co!rt 'rovides that 2HaI s'ecial 'roceeding is a remed$ b$ "hich a
'art$ see+s to establish a stat!s( a right( or a 'artic!lar fact&4 @!le .9A creates a
remed$ to rectif$ facts of a 'erson=s life "hich are recorded b$ the State '!rs!ant to
the Civil @egister La" or Act ;o& 0/B0& These are facts of '!blic conse!ence s!ch
as birth( death or marriage( "hich the State has an interest in recording& There is no
do!bt that the 'rior s'o!se has a 'ersonal and material interest in maintaining the
integrit$ of the marriage he contracted and the 'ro'ert$ relations arising from it&
There is also no do!bt that he is interested in the cancellation of an entr$ of a
bigamo!s marriage in the civil registr$( "hich com'romises the '!blic record of his
marriage& The interest derives from the s!bstantive right of the s'o!se not onl$ to
'reserve Eor dissolve( in limited instancesF his most intimate h!man relation( b!t
also to 'rotect his 'ro'ert$ interests that arise b$ o'eration of la" the moment he
contracts marriage& These 'ro'ert$ interests in marriage incl!de the right to be
s!''orted 2in +ee'ing "ith the fnancial ca'acit$ of the famil$4 and 'reserving the
'ro'ert$ regime of the marriage&
Section 1EaF of A&L& ;o& 91#..#.9#SC does not 'recl!de a s'o!se of a s!bsisting
marriage to !estion the validit$ of a s!bse!ent marriage on the gro!nd of bigam$&
*n the contrar$( "hen Section 1EaF states that 2HaI 'etition for declaration of
absol!te n!llit$ of void marriage ma$ be fled solely by the husband or the wife4
Qit refers to the h!sband or the "ife of the s!bsisting marriage& -nder Article 0BE?F
of the 8amil$ Code( bigamo!s marriages are void from the beginning& Th!s( the
'arties in a bigamo!s marriage are neither the h!sband nor the "ife !nder the la"&
The h!sband or the "ife of the 'rior s!bsisting marriage is the one "ho has the
'ersonalit$ to fle a 'etition for declaration of absol!te n!llit$ of void marriage
!nder Section 1EaF of A&L& ;o& 91#..#.9#SC&
HAI 8ili'ino citi<en cannot dissolve his marriage b$ the mere e)'edient of changing
his entr$ of marriage in the civil registr$& Go"ever( this does not a''l$ in a 'etition
for correction or cancellation of a civil registr$ entr$ based on the recognition of a
foreign %!dgment ann!lling a marriage "here one of the 'arties is a citi<en of the
foreign co!ntr$& There is neither circ!mvention of the s!bstantive and 'roced!ral
safeg!ards of marriage !nder :hili''ine la"( nor of the %!risdiction of 8amil$ Co!rts
!nder @&A& ;o& A0D>& A recognition of a foreign %!dgment is not an action to n!llif$ a
marriage& It is an action for :hili''ine co!rts to recogni<e the e3ectivit$ of a foreign
%!dgment( which presupposes a case which was already tried and decided
under foreign law. The 'roced!re in A&L& ;o& 91#..#.9#SC does not a''l$ in a
'etition to recogni<e a foreign %!dgment ann!lling a bigamo!s marriage "here one
of the 'arties is a citi<en of the foreign co!ntr$& ;either can @&A& ;o& A0D> defne the
%!risdiction of the foreign co!rt&
Article 1D of the 8amil$ Code confers %!risdiction on :hili''ine co!rts to e)tend the
e3ect of a foreign divorce decree to a 8ili'ino s'o!se "itho!t !ndergoing trial to
determine the validit$ of the dissol!tion of the marriage& The second 'aragra'h of
Article 1D of the 8amil$ Code 'rovides that 2H"Ihere a marriage bet"een a 8ili'ino
citi<en and a foreigner is validl$ celebrated and a divorce is thereafter validl$
obtained abroad b$ the alien s'o!se ca'acitating him or her to remarr$( the 8ili'ino
s'o!se shall have ca'acit$ to remarr$ !nder :hili''ine la"&4 The second 'aragra'h
of Article 1D of the 8amil$ Code onl$ a!thori<es :hili''ine co!rts to ado't the e3ects
'g& .0
of a foreign divorce decree 'recisel$ beca!se the :hili''ines does not allo" divorce&
:hili''ine co!rts cannot tr$ the case on the merits beca!se it is tantamo!nt to
tr$ing a case for divorce& inoru 3u<i&i v. aria Pa8 4alela arinay, et al., 4.R. +o.
=>?@A>, C!ne 1D( 19.0&
8amil$ Co!rts Act of .>>/; Violence Against Women and Children Act of 199?;
8amil$ Co!rts; %!risdiction; a s'ecial co!rt of the same level as @TC; @TCs designated
as famil$ co!rts remain 'ossessed of a!thorit$ as co!rts of general original
%!risdiction& At the o!tset( it m!st be stressed that 8amil$ Co!rts are s'ecial co!rts(
of the same level as @egional Trial Co!rts& -nder @&A& A0D>( other"ise +no"n as the
28amil$ Co!rts Act of .>>/(4 famil$ co!rts have e)cl!sive original %!risdiction to
hear and decide cases of domestic violence against "omen and children& In
accordance "ith said la"( the S!'reme Co!rt designated from among the branches
of the @egional Trial Co!rts at least one 8amil$ Co!rt in each of several +e$ cities
identifed& To achieve harmon$ "ith the frst mentioned la"( Section / of @&A& >1D1
no" 'rovides that @egional Trial Co!rts designated as 8amil$ Co!rts shall have
original and e)cl!sive %!risdiction over cases of VAWC defned !nder the latter la"&
Ins'ite of its designation as a famil$ co!rt( the @TC of Jacolod Cit$ remains
'ossessed of a!thorit$ as a co!rt of general original %!risdiction to 'ass !'on all
+inds of cases "hether civil( criminal( s'ecial 'roceedings( land registration(
g!ardianshi'( nat!rali<ation( admiralt$ or insolvenc$& It is settled that @TCs have
%!risdiction to resolve the constit!tionalit$ of a stat!te( 2this a!thorit$ being
embraced in the general defnition of the %!dicial 'o"er to determine "hat are the
valid and binding la"s b$ the criterion of their conformit$ to the f!ndamental la"&4
The Constit!tion vests the 'o"er of %!dicial revie" or the 'o"er to declare the
constit!tionalit$ or validit$ of a la"( treat$( international or e)ec!tive agreement(
'residential decree( order( instr!ction( ordinance( or reg!lation not onl$ in this
Co!rt( b!t in all @TCs& Jesus C. 4arcia v. 6he (on. Ray Alan 6. )rilon, et al., G&@& ;o&
./>1D/( C!ne 1B( 19.0
Torrens s$stem; '!r'ose& Torrens title; generall$ concl!sive evidence of the
o"nershi' of the land; not s!b%ect to collateral attac+; Land @egistration A!thorit$;
f!nctions& The real '!r'ose of the Torrens s$stem is to !iet title to land and to sto'
forever an$ !estion as to its legalit$& *nce a title is registered( the o"ner ma$ rest
sec!re( "itho!t the necessit$ of "aiting in the 'ortals of the co!rt( or sitting on the
2mirador su casa(4 to avoid the 'ossibilit$ of losing his land& A Torrens title is
generall$ a concl!sive evidence of the o"nershi' of the land referred to therein& A
strong 'res!m'tion e)ists that Torrens titles are reg!larl$ iss!ed and that the$ are
valid&
Section ?A of :residential Decree ;o& .B1>( other"ise +no"n as the :ro'ert$
@egistration Decree( e)'licitl$ 'rovides that 2HaI certifcate of title shall not be
s!b%ect to collateral attac+& It cannot be altered( modifed( or cancelled e)ce't in a
direct 'roceeding in accordance "ith la"&4
The d!t$ of L@A oNcials to iss!e decrees of registration is ministerial in the sense
that the$ act !nder the orders of the co!rt and the decree m!st be in conformit$
"ith the decision of the co!rt and "ith the data fo!nd in the record& The$ have no
'g& .?
discretion in the matter& Go"ever( if the$ are in do!bt !'on an$ 'oint in relation to
the 're'aration and iss!ance of the decree( these oNcials o!ght to see+
clarifcation from the co!rt& The$ act( in this res'ect( as oNcials of the co!rt and not
as administrative oNcials( and their act is the act of the co!rt& The$ are s'ecifcall$
called !'on to 2e)tend assistance to co!rts in ordinar$ and cadastral land
registration 'roceedings&4 )eo'enes #. Rodri'ue8 v. (on. Court of Appeals and
Philippine Chinese Charita"le Association, .nc., G&@& ;o& .A?BA>( C!ne .0( 19.0
Agenc$; a''arent a!thorit$ of an agent based on esto''el; conce't& In %oodchild
(oldin's, .nc. v. Ro5as 1lectric and Construction Company, .nc. the Co!rt stated that
2'ersons dealing "ith an ass!med agenc$( "hether the ass!med agenc$ be a
general or s'ecial one( are bo!nd at their 'eril( if the$ "o!ld hold the 'rinci'al
liable( to ascertain not onl$ the fact of agenc$ b!t also the nat!re and e)tent of
a!thorit$( and in case either is controverted( the b!rden of 'roof is !'on them to
establish it&4 In other "ords( "hen the 'etitioner relied onl$ on the "ords of
res'ondent Ale%andro "itho!t sec!ring a co'$ of the S:A in favor of the latter( the
'etitioner is bo!nd b$ the ris+ accom'an$ing s!ch tr!st on the mere ass!rance of
Ale%andro&
The same %oodchild case stressed that a''arent a!thorit$ based on esto''el can
arise from the 'rinci'al "ho +no"ingl$ 'ermit the agent to hold himself o!t "ith
a!thorit$ and from the 'rinci'al "ho clothe the agent "ith indicia of a!thorit$ that
"o!ld lead a reasonabl$ 'r!dent 'erson to believe that he act!all$ has s!ch
a!thorit$& A''arent a!thorit$ of an agent arises onl$ from 2acts or cond!ct on the
'art of the 'rinci'al and s!ch acts or cond!ct of the 'rinci'al m!st have been
+no"n and relied !'on in good faith and as a res!lt of the e)ercise of reasonable
'r!dence b$ a third 'erson as claimant and s!ch m!st have 'rod!ced a change of
'osition to its detriment&4 In the instant case( the sale to the S'o!ses La%arca and
other transactions "here Ale%andro allegedl$ re'resented a considerable ma%orit$ of
the co#o"ners trans'ired after the sale to the 'etitioner; th!s( the 'etitioner cannot
rel$ !'on these acts or cond!ct to believe that Ale%andro had the same a!thorit$ to
negotiate for the sale of the s!b%ect 'ro'ert$ to him& Reman Recio v. (eirs of
$pouses A'ue'o and aria Altamirano( G&@& ;o&.A10?>( C!l$ 1?( 19.0&
Agenc$; defnition !nder the Civil Code; form of contract& Article .ADA of the Civil
Code defnes a contract of agenc$ as a contract "hereb$ a 'erson 2binds himself to
render some service or to do something in re'resentation or on behalf of another(
"ith the consent or a!thorit$ of the latter&4 It ma$ be e)'ress( or im'lied from the
acts of the 'rinci'al( from his silence or lac+ of action( or his fail!re to re'!diate the
agenc$( +no"ing that another 'erson is acting on his behalf "itho!t a!thorit$&
As a general r!le( a contract of agenc$ ma$ be oral&
Go"ever( it m!st be "ritten "hen the la" re!ires a s'ecifc form& S'ecifcall$(
Article .A/? of the Civil Code 'rovides that the contract of agenc$ m!st be "ritten
for the validit$ of the sale of a 'iece of land or an$ interest therein& *ther"ise( the
sale shall be void& A related 'rovision( Article .A/A of the Civil Code( states that
s'ecial 'o"ers of attorne$ are necessar$ to conve$ real rights over immovable
'g& .B
'ro'erties& $ally ;oshi8a&i v. Joy 6rainin' Center of Aurora, .nc&( G&@& ;o& ./?>/A(
C!l$ 0.( 19.0&
Agenc$; general 'o"er of attorne$; an agenc$ co!ched in general terms com'rises
onl$ acts of administration& The certifcation is a mere general 'o"er of attorne$
"hich com'rises all of Co$ Training=s b!siness& Article .A// of the Civil Code clearl$
states that 2HaIn agenc$ co!ched in general terms com'rises onl$ acts of
administration( even if the principal should state that he withholds no power
or that the agent may execute such acts as he may consider appropriate,
or even though the agency should authorie a general and unlimited
management.! $ally ;oshi8a&i v. Joy 6rainin' Center of Aurora, .nc&( G&@& ;o&
./?>/A( C!l$ 0.( 19.0&
Agenc$; sale of 'ro'ert$ b$ a s!''osed agent is !nenforceable if there is reall$ no
agenc$ to sell s!ch 'ro'ert$; 'ersons dealing "ith an agent m!st ascertain not onl$
the fact of agenc$( b!t also the nat!re and e)tent of the agent=s a!thorit$&
;ecessaril$( the absence of a contract of agenc$ renders the contract of sale
!nenforceable; Co$ Training e3ectivel$ did not enter into a valid contract of sale "ith
the s'o!ses Roshi<a+i& Sall$ cannot also claim that she "as a b!$er in good faith&
She misa''rehended the r!le that 'ersons dealing "ith a registered land have the
legal right to rel$ on the face of the title and to dis'ense "ith the need to in!ire
f!rther( e)ce't "hen the 'art$ concerned has act!al +no"ledge of facts and
circ!mstances that "o!ld im'el a reasonabl$ ca!tio!s man to ma+e s!ch in!ir$&
This r!le a''lies "hen the o"nershi' of a 'arcel of land is dis'!ted and not "hen
the fact of agenc$ is contested& $ally ;oshi8a&i v. Joy 6rainin' Center of Aurora,
.nc&( G&@& ;o& ./?>/A( C!l$ 0.( 19.0&
Agenc$; s'ecial 'o"er of attorne$; m!st e)'ress the 'o"ers of the agent in clear
and !nmista+able lang!age; "hen there is an$ reasonable do!bt that the lang!age
so !sed conve$s s!ch 'o"er( no s!ch constr!ction shall be given the doc!ment& We
!ne!ivocabl$ declared in Cosmic *um"er Corporation v. Court of Appeals that a
s'ecial 'o"er of attorne$ must express the powers of the agent in clear and
unmistakable language for the 'rinci'al to confer the right !'on an agent to sell
real estate& When there is an$ reasonable do!bt that the lang!age so !sed conve$s
s!ch 'o"er( no s!ch constr!ction shall be given the doc!ment& The '!r'ose of the
la" in re!iring a s'ecial 'o"er of attorne$ in the dis'osition of immovable 'ro'ert$
is to 'rotect the interest of an !ns!s'ecting o"ner from being 're%!diced b$ the
!n"arranted act of another and to ca!tion the b!$er to ass!re himself of the
s'ecifc a!thori<ation of the '!tative agent& $ally ;oshi8a&i v. Joy 6rainin' Center of
Aurora, .nc&( G&@& ;o& ./?>/A( C!l$ 0.( 19.0&
Agenc$; s'ecial 'o"er of attorne$ for sale of 'ro'ert$; m!st e)'ressl$ mention a
sale or incl!de a sale as a necessar$ ingredient of the a!thori<ed act& The s'ecial
'o"er of attorne$ mandated b$ la" must be one that expressly mentions a
sale or that includes a sale as a necessary ingredient of the authoried
act. We !ne!ivocabl$ declared in Cosmic *um"er Corporation v. Court of Appeals
that a s'ecial 'o"er of attorne$ must express the powers of the agent in clear
and unmistakable language for the 'rinci'al to confer the right !'on an agent to
'g& .D
sell real estate& When there is an$ reasonable do!bt that the lang!age so !sed
conve$s s!ch 'o"er( no s!ch constr!ction shall be given the doc!ment& The
'!r'ose of the la" in re!iring a s'ecial 'o"er of attorne$ in the dis'osition of
immovable 'ro'ert$ is to 'rotect the interest of an !ns!s'ecting o"ner from being
're%!diced b$ the !n"arranted act of another and to ca!tion the b!$er to ass!re
himself of the s'ecifc a!thori<ation of the '!tative agent& $ally ;oshi8a&i v. Joy
6rainin' Center of Aurora, .nc&( G&@& ;o& ./?>/A( C!l$ 0.( 19.0&
Agenc$; s'ecial 'o"er of attorne$; re!ired for an agent to sell an immovable
'ro'ert$; a!thorit$ m!st be in "riting( other"ise sale is void& In Alcantara v. +ido,
the Co!rt em'hasi<ed the re!irement of an S:A before an agent ma$ sell an
immovable 'ro'ert$& In the said case( @evelen "as the o"ner of the s!b%ect land&
Ger mother( res'ondent Jrigida ;ido acce'ted the 'etitioners= o3er to b!$
@evelen=s land at T"o G!ndred :esos E:199&99F 'er s m& Go"ever( ;ido "as onl$
a!thori<ed verball$ b$ @evelen& Th!s( the Co!rt declared the sale of the said land
n!ll and void !nder Articles .A/? and .A/A of the Civil Code& Reman Recio v. (eirs
of $pouses A'ue'o and aria Altamirano( G&@& ;o&.A10?>( C!l$ 1?( 19.0&
Arrastre o'erator; f!nctions; d!t$ to ta+e good care of goods and to t!rn them over
to the 'art$ entitled to their 'ossession& The f!nctions of an arrastre o'erator
involve the handling of cargo de'osited on the "harf or bet"een the establishment
of the consignee or shi''er and the shi'=s tac+le& Jeing the c!stodian of the goods
discharged from a vessel( an arrastre o'erator=s d!t$ is to ta+e good care of the
goods and to t!rn them over to the 'art$ entitled to their 'ossession& Gandling
cargo is mainl$ the arrastre o'erator=s 'rinci'al "or+ so its driversSo'erators or
em'lo$ees sho!ld observe the standards and meas!res necessar$ to 'revent losses
and damage to shi'ments !nder its c!stod$& Asian 6erminals, .nc. v. Philam
.nsurance Co., .nc. Bnow Chartis Philippines .nsurance .nc.CD Philam .nsurance Co.,
.nc. Bnow Chartis Philippines .nsurance .nc.C v. %estwind $hippin' Corporation and
Asian 6erminals, .nc.D %estwind $hippin' Corporation v. Philam .nsurance Co., .nc.
and Asian 6erminals, .nc., G&@& ;os& .A..D0S.A.1D1S.A.0.>( C!l$ 1?( 19.0&
Attorne$=s fees; d!al conce't& In order to resolve the iss!es in this case( it is
necessar$ to disc!ss the t"o conce'ts of attorne$=s fees K ordinar$ and
e)traordinar$& In its ordinar$ sense( it is the reasonable com'ensation 'aid to a
la"$er b$ his client for legal services rendered& In its e)traordinar$ conce't( it is
a"arded b$ the co!rt to the s!ccessf!l litigant to be 'aid b$ the losing 'art$ as
indemnit$ for damages& 3rancisco *. Rosario, Jr. v. *ellani )e 4u8man, Arleen )e
4u8man, et al., G&@& ;o& .>.1?/( C!l$ .9( 19.0&
Attorne$=s fees for 'rofessional services rendered; ma$ be claimed in the ver$
action itself or in a se'arate action; 'rescri'tion for oral contract of attorne$=s fees
is D $ears; conce't of !ant!m mer!it; g!idelines !nder the Code of :rofessional
@es'onsibilit$& The Co!rt no" addresses t"o im'ortant !estions6 E.F Go" can
attorne$=s fees for 'rofessional services be recovered7 E1F When can an action for
attorne$=s fees for 'rofessional services be fled7 The case of Traders @o$al Jan+
Em'lo$ees -nion#Inde'endent v& ;L@C is instr!ctive6
'g& ./
As an ad%!nctive e'isode of the action for the recover$ of bon!s di3erentials in
;L@C#;C@ Certifed Case ;o& 9?DD( 'rivate res'ondent=s 'resent claim for
attorne$=s fees ma$ be fled before the ;L@C even tho!gh or( better stated(
es'eciall$ after its earlier decision had been revie"ed and 'artiall$ aNrmed& It is
"ell settled that a claim for attorne$=s fees ma$ be asserted either in the ver$
action in "hich the services of a la"$er had been rendered or in a se'arate action&
With res'ect to the frst sit!ation( the remed$ for recovering attorne$=s fees as an
incident of the main action ma$ be availed of onl$ "hen something is d!e to the
client& Attorne$=s fees cannot be determined !ntil after the main litigation has been
decided and the s!b%ect of the recover$ is at the dis'osition of the co!rt& The iss!e
over attorne$=s fees onl$ arises "hen something has been recovered from "hich the
fee is to be 'aid& While a claim for attorne$=s fees ma$ be fled before the %!dgment
is rendered( the determination as to the 'ro'riet$ of the fees or as to the amo!nt
thereof "ill have to be held in abe$ance !ntil the main case from "hich the la"$er=s
claim for attorne$=s fees ma$ arise has become fnal& *ther"ise( the determination
to be made b$ the co!rts "ill be 'remat!re& *f co!rse( a 'etition for attorne$=s fees
ma$ be fled before the %!dgment in favor of the client is satisfed or the 'roceeds
thereof delivered to the client&
It is a''arent from the foregoing disc!ssion that a la"$er has t"o o'tions as to
"hen to fle his claim for 'rofessional fees& Gence( 'rivate res'ondent "as "ell
"ithin his rights "hen he made his claim and "aited for the fnalit$ of the %!dgment
for holida$ 'a$ di3erential( instead of fling it ahead of the a"ard=s com'lete
resol!tion& To declare that a la"$er ma$ fle a claim for fees in the same action onl$
before the %!dgment is revie"ed b$ a higher trib!nal "o!ld de'rive him of his
aforestated o'tions and render ine3ective the foregoing 'rono!ncements of this
Co!rt&
In this case( 'etitioner o'ted to fle his claim as an incident in the main action(
"hich is 'ermitted b$ the r!les& As to the timeliness of the fling( this Co!rt holds
that the !estioned motion to determine attorne$=s fees "as seasonabl$ fled&
The records sho" that the A!g!st A( .>>? @TC decision became fnal and e)ec!tor$
on *ctober 0.( 199/& There is no dis'!te that 'etitioner fled his Lotion to
Determine Attorne$=s 8ees on Se'tember A( 199>( "hich "as onl$ abo!t one E.F
$ear and eleven E..F months from the fnalit$ of the @TC decision& Jeca!se
'etitioner claims to have had an oral contract of attorne$=s fees "ith the deceased
s'o!ses( Article ..?B of the Civil Code.D allo"s him a 'eriod of si) EDF $ears "ithin
"hich to fle an action to recover 'rofessional fees for services rendered&
@es'ondents never asserted or 'rovided an$ evidence that S'o!ses de G!<man
ref!sed 'etitioner=s legal re'resentation& 8or this reason( 'etitioner=s ca!se of action
began to r!n onl$ from the time the res'ondents ref!sed to 'a$ him his attorne$=s
fees( as similarl$ held in the case of Anido v& ;egado&
With res'ect to 'etitioner=s entitlement to the claimed attorne$=s fees( it is the
Co!rt=s considered vie" that he is deserving of it and that the amo!nt sho!ld be
based on !ant!m mer!it& T!ant!m mer!it K literall$ meaning as m!ch as he
deserves K is !sed as basis for determining an attorne$=s 'rofessional fees in the
'g& .A
absence of an e)'ress agreement& The recover$ of attorne$=s fees on the basis of
!ant!m mer!it is a device that 'revents an !nscr!'!lo!s client from r!nning a"a$
"ith the fr!its of the legal services of co!nsel "itho!t 'a$ing for it and also avoids
!n%!st enrichment on the 'art of the attorne$ himself& An attorne$ m!st sho" that
he is entitled to reasonable com'ensation for the e3ort in '!rs!ing the client=s
ca!se( ta+ing into acco!nt certain factors in f)ing the amo!nt of legal fees&
@!le 19&9. of the Code of :rofessional @es'onsibilit$ lists the g!idelines for
determining the 'ro'er amo!nt of attorne$ fees( to "it6
@!le 19&. K A la"$er shall be g!ided b$ the follo"ing factors in determining his fees6
aF The time s'ent and the e)tent of the services rendered or re!ired;
bF The novelt$ and diNc!lt$ of the !estions involved;
cF The im'ortance of the s!b%ect matter;
dF The s+ill demanded;
eF The 'robabilit$ of losing other em'lo$ment as a res!lt of acce'tance of the
'ro3ered case;
fF The c!stomar$ charges for similar services and the sched!le of fees of the IJ:
cha'ter to "hich he belongs;
gF The amo!nt involved in the controvers$ and the benefts res!lting to the client
from the service;
hF The contingenc$ or certaint$ of com'ensation;
iF The character of the em'lo$ment( "hether occasional or established; and
%F The 'rofessional standing of the la"$er&
3rancisco *. Rosario, Jr. v. *ellani )e 4u8man, Arleen )e 4u8man, et al., G&@& ;o&
.>.1?/( C!l$ .9( 19.0&
Attorne$=s fees; recoverable in actions for indemnit$ !nder "or+men=s
com'ensation and em'lo$er=s liabilit$ la"s& Go"ever( the Co!rt fnds that the
'etitioner is entitled to attorne$=s fees '!rs!ant to Article 119AEAF of the Civil Code
"hich states that the a"ard of attorne$=s fees is %!stifed in actions for indemnit$
!nder "or+men=s com'ensation and em'lo$er=s liabilit$ la"s& Camilo A. 1s'uerra v.
0nited Philippines *ines, .nc., et al., G&@& ;o& .>>>01( C!l$ 0( 19.0&
Attorne$=s fees; "hen recoverable& The Co!rt of A''eals rightf!ll$ !'held the
;L@C=s aNrmance of the grant of attorne$=s fees to San Lig!el& Thereb$( the ;L@C
did not commit an$ grave ab!se of its discretion( considering that San Lig!el had
'g& .>
been com'elled to litigate and to inc!r e)'enses to 'rotect his rights and interest&
In :rod!cers Jan+ of the :hili''ines v& Co!rt of A''eals( the Co!rt r!led that
attorne$=s fees co!ld be a"arded to a 'art$ "hom an !n%!stifed act of the other
'art$ com'elled to litigate or to inc!r e)'enses to 'rotect his interest& It "as 'lain
that 'etitioner=s ref!sal to reinstate San Lig!el "ith bac+"ages and other benefts
to "hich he had been legall$ entitled "as !n%!stifed( thereb$ entitling him to
recover attorne$=s fees& 7uelli' 3rei'ht and Car'o $ystems v. +ational *a"or
Relations Commission, et al., G&@& ;o& .B/>99( C!l$ 11( 19.0
Attorne$=s fees; "hen recoverable& With res'ect to the a"ard of attorne$=s fees(
Article 119A of the Civil Code 'rovides( among others( that s!ch fees ma$ be
recovered "hen e)em'lar$ damages are a"arded( "hen the defendant=s act or
omission has com'elled the 'lainti3 to litigate "ith third 'ersons or to inc!r
e)'enses to 'rotect his interest( and "here the defendant acted in gross and
evident bad faith in ref!sing to satisf$ the 'lainti3s= 'lainl$ valid( %!st and
demandable claim& Joyce ,. Ardiente v. $pouses Javier and a. 6heresa Pastofde,
G&@& ;o& .D.>1.( C!l$ ./( 19.0&
Common carriers; e)traordinar$ diligence in vigilance of goods trans'orted; cargoes
"hile being !nloaded generall$ remain !nder the c!stod$ of the carrier& Common
carriers( from the nat!re of their b!siness and for reasons of '!blic 'olic$( are
bo!nd to observe e)traordinar$ diligence in the vigilance over the goods
trans'orted b$ them& S!b%ect to certain e)ce'tions en!merated !nder Article ./0?
of the Civil Code( common carriers are res'onsible for the loss( destr!ction( or
deterioration of the goods& The e)traordinar$ res'onsibilit$ of the common carrier
lasts from the time the goods are !nconditionall$ 'laced in the 'ossession of( and
received b$ the carrier for trans'ortation !ntil the same are delivered( act!all$ or
constr!ctivel$( b$ the carrier to the consignee( or to the 'erson "ho has a right to
receive them& Asian 6erminals, .nc. v. Philam .nsurance Co., .nc. Bnow Chartis
Philippines .nsurance .nc.CD Philam .nsurance Co., .nc. Bnow Chartis Philippines
.nsurance .nc.C v. %estwind $hippin' Corporation and Asian 6erminals, .nc.D
%estwind $hippin' Corporation v. Philam .nsurance Co., .nc. and Asian 6erminals,
.nc., G&@& ;os& .A..D0S.A.1D1S.A.0.>( C!l$ 1?( 19.0&
Contract; absol!tel$ sim!lated contracts; void from the beginning& The Co!rt is in
accord "ith the observation and fndings of the E@TC( Ualibo( A+lanF th!s6
2The am'lit!de of foregoing !ndis'!ted facts and circ!mstances clearl$ sho"s that
the sale of the land in !estion "as '!rel$ sim!lated& It is void from the ver$
beginning EArticle .0?D( ;e" Civil CodeF& If the sale "as legitimate( defendant
Glenda sho!ld have immediatel$ ta+en 'ossession of the land( declared in her name
for ta)ation '!r'oses( registered the sale( 'aid realt$ ta)es( introd!ced
im'rovements therein and sho!ld not have allo"ed 'lainti3 to mortgage the land&
These omissions 'ro'erl$ militated against defendant Glenda=s s!bmission that the
sale "as legitimate and the consideration "as 'aid&
)r. *orna C. 3ormaran v. )r. 4lenda !. #n' and $olomon $. #n'( G&@& ;o& .AD1D?(
C!l$ A( 19.0&
'g& 19
Contract of sale; elements& A valid contract of sale re!ires6 EaF a meeting of minds
of the 'arties to transfer o"nershi' of the thing sold in e)change for a 'rice; EbF the
s!b%ect matter( "hich m!st be a 'ossible thing; and EcF the 'rice certain in mone$
or its e!ivalent& Reman Recio v. (eirs of $pouses A'ue'o and aria Altamirano(
G&@& ;o&.A10?>( C!l$ 1?( 19.0&
Contract to sell; 'a$ment of the 'rice; 'ositive s!s'ension condition; e3ect of fail!re
to 'a$& Clearl$( the @TC arrived at the above#!oted concl!sion based on its
mista+en 'remise that rescission is a''licable to the case& Gence( its determination
of "hether there "as s!bstantial breach& As ma$ be recalled( ho"ever( the CA( in its
assailed Decision( fo!nd the contract bet"een the 'arties as a contract to sell(
s'ecifcall$ of a real 'ro'ert$ on installment basis( and as s!ch categoricall$
declared rescission to be not the 'ro'er remed$& This is considering that in a
contract to sell( 'a$ment of the 'rice is a 'ositive s!s'ensive condition( fail!re of
"hich is not a breach of contract "arranting rescission !nder Article ..>. of the
Civil Code b!t rather %!st an event that 'revents the s!''osed seller from being
bo!nd to conve$ title to the s!''osed b!$er& Also( and as correctl$ r!led b$ the CA(
Article ..>. cannot be a''lied to sales of real 'ro'ert$ on installment since the$
are governed b$ the Laceda La"&
There being no breach to s'ea+ of in case of non#'a$ment of the '!rchase 'rice in a
contract to sell( as in this case( the @TC=s fact!al fnding that Lo!rdes "as "illing
and able to 'a$ her obligation K a concl!sion arrived at in connection "ith the said
co!rt=s determination of "hether the non#'a$ment of the '!rchase 'rice in
accordance "ith the terms of the contract "as a s!bstantial breach "arranting
rescission K therefore loses signifcance& The s'o!ses Jonrostro=s reliance on the
said fact!al fnding is th!s mis'laced& The$ cannot invo+e their readiness and
"illingness to 'a$ their obligation on ;ovember 1?( .>>0 as an e)c!se from being
made liable for interest be$ond the said date& $ps. +ameal and *ourdes !onrostro v.
$ps. Juan and Constacia *una, G&@& ;o&./10?D( C!l$ 1?( 19.0&
Damages; damages for loss of earning ca'acit$; m!st be d!l$ 'roven b$
doc!mentar$ evidence; e)ce'tions& The S!'reme Co!rt agrees "ith the Co!rt of
A''eals "hen it removed the @TC=s a"ard res'ecting the indemnit$ for the loss of
earning ca'acit$& As it has alread$ 'revio!sl$ r!led that damages for loss of earning
ca'acit$ is in the nat!re of act!al damages( "hich as a r!le m!st be d!l$ 'roven b$
doc!mentar$ evidence( not merel$ b$ the self#serving testimon$ of the "ido"&
J$ "a$ of e)ce'tion( damages for loss of earning ca'acit$ ma$ be a"arded des'ite
the absence of doc!mentar$ evidence "hen E.F the deceased is self#em'lo$ed
earning less than the minim!m "age !nder c!rrent labor la"s( and %!dicial notice
ma$ be ta+en of the fact that in the deceased=s line of "or+ no doc!mentar$
evidence is available; or E1F the deceased is em'lo$ed as a dail$ "age "or+er
earning less than the minim!m "age !nder c!rrent labor la"s& People of the
Philippines v. 4arry ,er'ara y #riel and Joseph .ncencio y Paulino( G&@& ;o& .///D0(
C!l$ 0( 19.0
Damages; e)em'lar$ damages; conce't& As for e)em'lar$ damages( Article 111>
'rovides that e)em'lar$ damages ma$ be im'osed b$ "a$ of e)am'le or correction
'g& 1.
for the '!blic good& ;onetheless( e)em'lar$ damages are im'osed not to enrich
one 'art$ or im'overish another( b!t to serve as a deterrent against or as a
negative incentive to c!rb sociall$ deleterio!s actions& In the instant case( the Co!rt
agrees "ith the CA in s!staining the a"ard of e)em'lar$ damages( altho!gh it
red!ced the amo!nt granted( considering that res'ondent s'o!ses "ere de'rived of
their "ater s!''l$ for more than nine E>F months( and s!ch de'rivation "o!ld have
contin!ed "ere it not for the relief granted b$ the @TC& Joyce ,. Ardiente v. $pouses
Javier and a. 6heresa Pastofde, G&@& ;o& .D.>1.( C!l$ ./( 19.0&
Damages; e)em'lar$ damages; a"arded if there is an aggravating circ!mstance(
"hether ordinar$ or !alif$ing& -nli+e the criminal liabilit$ "hich is basicall$ a State
concern( the a"ard of e)em'lar$ damages( ho"ever( is li+e"ise( if not 'rimaril$(
intended for the o3ended 'art$ "ho s!3ers thereb$& It "o!ld ma+e little sense for
an a"ard of e)em'lar$ damages to be d!e the 'rivate o3ended 'art$ "hen the
aggravating circ!mstance is ordinar$ b!t to be "ithheld "hen it is !alif$ing&
Withal( the ordinar$ or !alif$ing nat!re of an aggravating circ!mstance is a
distinction that sho!ld onl$ be of conse!ence to the criminal( rather than to the
civil( liabilit$ of the o3ender& In fne( relative to the civil as'ect of the case( an
aggravating circ!mstance( "hether ordinar$ or !alif$ing( sho!ld entitle the
o3ended 'art$ to an a"ard of e)em'lar$ damages "ithin the !nbridled meaning of
Article 1109 of the Civil Code. People of the Philippines v. 4arry ,er'ara y #riel and
Joseph .ncencio y Paulino, G&@& ;o& .///D0( C!l$ 0( 19.0&
Damages; interest thereon; "here obligation does not constit!te a loan or
forbearance of mone$& The CA erred in im'osing an interest rate of .1O on the
a"ard of damages& -nder Article 119> of the Civil Code( "hen an obligation not
constit!ting a loan or forbearance of mone$ is breached( an interest on the amo!nt
of damages a"arded ma$ be im'osed at the discretion of the co!rt at the rate of
DO 'er ann!m& In the similar case of Jelgian *verseas Chartering and Shi''ing ;V
v& :hili''ine 8irst Ins!rance Co&( lnc&( the Co!rt red!ced the rate of interest on the
damages a"arded to the carrier therein to DO from the time of the fling of the
com'laint !ntil the fnalit$ of the decision& Asian 6erminals, .nc. v. Philam .nsurance
Co., .nc. Bnow Chartis Philippines .nsurance .nc.CD Philam .nsurance Co., .nc. Bnow
Chartis Philippines .nsurance .nc.C v. %estwind $hippin' Corporation and Asian
6erminals, .nc.D %estwind $hippin' Corporation v. Philam .nsurance Co., .nc. and
Asian 6erminals, .nc., G&@& ;os& .A..D0S.A.1D1S.A.0.>( C!l$ 1?( 19.0&
Damages; moral damages; "hen recoverable& In Philippine +ational !an& v.
$pouses Rocamora, the S!'reme Co!rt said that6
Loral damages are not recoverable sim'l$ beca!se a contract has been breached&
The$ are recoverable onl$ if the defendant acted fra!d!lentl$ or in bad faith or in
"anton disregard of his contract!al obligations& The breach m!st be "anton(
rec+less( malicio!s or in bad faith( and o''ressive or ab!sive& Li+e"ise( a breach of
contract ma$ give rise to e)em'lar$ damages onl$ if the g!ilt$ 'art$ acted in a
"anton( fra!d!lent( rec+less( o''ressive or malevolent manner&
Carlos *im, et al. v. )evelopment !an& of the Philippines, G&@& ;o& .//9B9( C!l$ .(
19.0&
'g& 11
Damages; moral damages; a"arded "here the victim of a crime s!3ered a violent
death( even in the absence of 'roof of mental and emotional s!3ering of the
victim=s heirs& The S!'reme Co!rt s!stained the @TC=s a"ard for moral damages in
the amo!nt of :B9(999&99 even in the absence of 'roof of mental and emotional
s!3ering of the victim=s heirs& As borne o!t b$ h!man nat!re and e)'erience( a
violent death invariabl$ and necessaril$ brings abo!t emotional 'ain and ang!ish on
the 'art of the victim=s famil$& While no amo!nt of damages ma$ totall$
com'ensate the s!dden and tragic loss of a loved one it is nonetheless a"arded to
the heirs of the deceased to at least ass!age them& People of the Philippines v.
4arry ,er'ara y #riel and Joseph .ncencio y Paulino, G&@& ;o& .///D0( C!l$ 0( 19.0
Damages; moral and e)em'lar$ damages in claims for disabilit$ benefts; not
recoverable "here em'lo$er "as not negligent in a3ording the em'lo$ee "ith
medical treatment( and em'lo$er did not forsa+e em'lo$ee d!ring the 'eriod of
disabilit$& The CA correctl$ denied an a"ard of moral and e)em'lar$ damages& The
res'ondents "ere not negligent in a3ording the 'etitioner "ith medical treatment
neither did the$ forsa+e him d!ring his 'eriod of disabilit$& Camilo A. 1s'uerra v.
0nited Philippines *ines, .nc., et al., G&@& ;o& .>>>01( C!l$ 0( 19.0&
G!man @elations; ab!se of rights; Article .> of the Civil Code; conce't; damages as
reliefs& The 'rinci'le of ab!se of rights as enshrined in Article .> of the Civil Code
'rovides that ever$ 'erson m!st( in the e)ercise of his rights and in the
'erformance of his d!ties( act "ith %!stice( give ever$one his d!e( and observe
honest$ and good faith&
In this regard( the Co!rt=s r!ling in ;uchen'co v. 6he anila Chronicle Pu"lishin'
Corporation is instr!ctive( to "it6
))))
This 'rovision of la" sets standards "hich m!st be observed in the e)ercise of one=s
rights as "ell as in the 'erformance of its d!ties( to "it6 to act "ith %!stice; give
ever$one his d!e; and observe honest$ and good faith&
In 4lo"e ac&ay Ca"le and Radio Corporation v. Court of Appeals, it "as el!cidated
that "hile Article .> 2la$s do"n a r!le of cond!ct for the government of h!man
relations and for the maintenance of social order( it does not 'rovide a remed$ for
its violation& Generall$( an action for damages !nder either Article 19 or Article 1.
"o!ld be 'ro'er&4 The Co!rt said6
*ne of the more notable innovations of the ;e" Civil Code is the codifcation of
2some basic 'rinci'les that are to be observed for the rightf!l relationshi' bet"een
h!man beings and for the stabilit$ of the social order&4 H@E:*@T *; TGE C*DE
C*LLISSI*; *; TGE :@*:*SED CIVIL C*DE *8 TGE :GILI::I;ES( '& 0>I& The
framers of the Code( see+ing to remed$ the defect of the old Code "hich merel$
stated the e3ects of the la"( b!t failed to dra" o!t its s'irit( incor'orated certain
f!ndamental 'rece'ts "hich "ere 2designed to indicate certain norms that s'ring
from the fo!ntain of good conscience4 and "hich "ere also meant to serve as
'g& 10
2g!ides for h!man cond!ct HthatI sho!ld r!n as golden threads thro!gh societ$( to
the end that la" ma$ a''roach its s!'reme ideal( "hich is the s"a$ and dominance
of %!stice&4 B.d.C 8oremost among these 'rinci'les is that 'rono!nced in Article .> )
) )&
))))
This article( +no"n to contain "hat is commonl$ referred to as the 'rinci'le of ab!se
of rights( sets certain standards "hich m!st be observed not onl$ in the e)ercise of
one=s rights( b!t also in the 'erformance of one=s d!ties& These standards are the
follo"ing6 to act "ith %!stice; to give ever$one his d!e; and to observe honest$ and
good faith& The la"( therefore( recogni<es a 'rimordial limitation on all rights; that in
their e)ercise( the norms of h!man cond!ct set forth in Article .> m!st be observed&
A right( tho!gh b$ itself legal beca!se recogni<ed or granted b$ la" as s!ch( ma$
nevertheless become the so!rce of some illegalit$& When a right is e)ercised in a
manner "hich does not conform "ith the norms enshrined in Article .> and res!lts
in damage to another( a legal "rong is thereb$ committed for "hich the "rongdoer
m!st be held res'onsible& J!t "hile Article .> la$s do"n a r!le of cond!ct for the
government of h!man relations and for the maintenance of social order( it does not
'rovide a remed$ for its violation& Generall$( an action for damages !nder either
Article 19 or Article 1. "o!ld be 'ro'er& Joyce ,. Ardiente v. $pouses Javier and a.
6heresa Pastofde, G&@& ;o& .D.>1.( C!l$ ./( 19.0&
G!man @elations; civil case for fra!d; Article 00 of the Civil Code 'rovides that a
civil case for damages based on fra!d ma$ 'roceed inde'endentl$ of the criminal
case therefor; said civil case "ill not o'erate as a 're%!dicial !estion that "ill
%!stif$ the s!s'ension of a criminal case& It is "ell settled that a civil action based on
defamation( fra!d and 'h$sical in%!ries ma$ be inde'endentl$ instit!ted '!rs!ant to
Article 00 of the Civil Code, and does not o'erate as a 're%!dicial !estion that "ill
%!stif$ the s!s'ension of a criminal case& This "as 'recisel$ the Co!rt=s thr!st in
G&@& ;o& .?A.>0( th!s6
Loreover( neither is there a 're%!dicial !estion if the civil and the criminal action
can( according to la"( 'roceed inde'endentl$ of each other& -nder @!le ...( Section
0 of the @evised @!les on Criminal :roced!re( in the cases 'rovided in Articles 01(
00( 0? and 1./D of the Civil Code( the inde'endent civil action ma$ be bro!ght b$
the o3ended 'art$& It shall 'roceed inde'endentl$ of the criminal action and shall
re!ire onl$ a 're'onderance of evidence& In no case( ho"ever( ma$ the o3ended
'art$ recover damages t"ice for the same act or omission charged in the criminal
action&
In the instant case( Civil Case ;o& >>#>B0A.( for Damages and Attachment on
acco!nt of the alleged fra!d committed b$ res'ondent and his mother in selling the
dis'!ted lot to :JI is an inde'endent civil action !nder Article 00 of the Civil Code&
As s!ch( it "ill not o'erate as a 're%!dicial !estion that "ill %!stif$ the s!s'ension
of the criminal case at bar& Rafael Jose Consin', Jr. v. People of the Philippines, G&@&
;o& .D.9/B( C!l$ .B( 19.0&
'g& 1?
Letter of credit; defnition; nat!re& A letter of credit is a fnancial device develo'ed
b$ merchants as a convenient and relativel$ safe mode of dealing "ith sales of
goods to satisf$ the seemingl$ irreconcilable interests of a seller( "ho ref!ses to
'art "ith his goods before he is 'aid( and a b!$er( "ho "ants to have control of his
goods before 'a$ing& Go"ever( letters of credit are em'lo$ed b$ the 'arties desiring
to enter into commercial transactions( not for the beneft of the iss!ing ban+ b!t
mainl$ for the beneft of the 'arties to the original transaction( in these cases(
;ichimen Cor'oration as the seller and -niversal Lotors as the b!$er& Gence( the
latter( as the b!$er of the ;issan CUD 'arts( sho!ld be regarded as the 'erson
entitled to deliver$ of the goods& Accordingl$( for '!r'oses of rec+oning "hen notice
of loss or damage sho!ld be given to the carrier or its agent( the date of deliver$ to
-niversal Lotors is controlling& Asian 6erminals, .nc. v. Philam .nsurance Co., .nc.
Bnow Chartis Philippines .nsurance .nc.CD Philam .nsurance Co., .nc. Bnow Chartis
Philippines .nsurance .nc.C v. %estwind $hippin' Corporation and Asian 6erminals,
.nc.D %estwind $hippin' Corporation v. Philam .nsurance Co., .nc. and Asian
6erminals, .nc., G&@& ;os& .A..D0S.A.1D1S.A.0.>( C!l$ 1?( 19.0&
Lortgage; incl!des all nat!ral or civil fr!its and im'rovements fo!nd on the
mortgaged 'ro'ert$ "hen the sec!red obligation becomes d!e; in case of non#
'a$ment of the sec!red debt( foreclos!re 'roceedings shall cover not onl$ the
h$'othecated 'ro'ert$ b!t all its accessions and accessories as "ell; indis'ensable
re!isite that mortgagor be the absol!te o"ner of the enc!mbered 'ro'ert$& @ent(
as an accessor$( follo"s the 'rinci'al& In fact( "hen the 'rinci'al 'ro'ert$ is
mortgaged( the mortgage shall incl!de all nat!ral or civil fr!its and im'rovements
fo!nd thereon "hen the sec!red obligation becomes d!e as 'rovided in Article 1.1/
of the Civil Code( vi8:
Art& 1.1/& The mortgage e)tends to the nat!ral accessions( to the im'rovements(
gro"ing fr!its( and the rents or income not $et received "hen the obligation
becomes d!e( and to the amo!nt of the indemnit$ granted or o"ing to the
'ro'rietor from the ins!rers of the 'ro'ert$ mortgaged( or in virt!e of e)'ro'riation
for '!blic !se( "ith the declarations( am'lifcations and limitations established b$
la"( "hether the estate remains in the 'ossession of the mortgagor( or it 'asses
into the hands of a third 'erson&
Conse!entl$( in case of non#'a$ment of the sec!red debt( foreclos!re 'roceedings
shall cover not onl$ the h$'othecated 'ro'ert$ b!t all its accessions and
accessories as "ell& This "as ill!strated in the earl$ case of Cu 0n<ien' e (i<os v.
a"alacat $u'ar Co. "here the Co!rt held6
That a mortgage constit!ted on a s!gar central incl!des not onl$ the land on "hich
it is b!ilt b!t also the b!ildings( machiner$( and accessories installed at the time the
mortgage "as constit!ted as "ell as the b!ildings( machiner$ and accessories
belonging to the mortgagor( installed after the constit!tion thereof ) ) ) H&I
A''l$ing s!ch 'rono!ncement in the s!bse!ent case of $pouses Paderes v. Court
of Appeals, the Co!rt declared that the im'rovements constr!cted b$ the mortgagor
on the s!b%ect lot are covered b$ the real estate mortgage contract "ith the
'g& 1B
mortgagee ban+ and th!s incl!ded in the foreclos!re 'roceedings instit!ted b$ the
latter&
Go"ever( the r!le is not "itho!t !alifcations& In Castro, Jr. v. CA the Co!rt
e)'lained that Article 1.1/ is 'redicated on the 'res!m'tion that the o"nershi' of
accessions and accessories also belongs to the mortgagor as the o"ner of the
'rinci'al& After all( it is an indis'ensable re!isite of a valid real estate mortgage
that the mortgagor be the absol!te o"ner of the enc!mbered 'ro'ert$& Philippine
+ational !an& v. $ps. !ernard and Cresencia ara-on, G&@&;o& .A>0.D( C!l$ .( 19.0&
Lortgage; mortgagee in good faith; right to have mortgage lien carried over and
annotated on the ne" certifcate of title& The 'rotection a3orded to :;J as a
mortgagee in good faith refers to the right to have its mortgage lien carried over
and annotated on the ne" certifcate of title iss!ed to S'o!ses LaraMon as so
ad%!dged b$ the @TC& Thereafter( to enforce s!ch lien thr! foreclos!re 'roceedings
in case of non# 'a$ment of the sec!red debt( as :;J did so '!rs!e& The 'rinci'le(
ho"ever( is not the sing!lar r!le that governs real estate mortgages and
foreclos!res attended b$ fra!d!lent transfers to the mortgagor& Philippine +ational
!an& v. $ps. !ernard and Cresencia ara-on, G&@&;o& .A>0.D( C!l$ .( 19.0&
*bligations; conditions; f!lfllment thereof; deemed f!lflled "hen obligor vol!ntaril$
'revents it f!lfllment; re!isites& The s'o!ses Jonrostro "ant to be relieved from
'a$ing interest on the amo!nt of :1.?(?>1&D1 "hich the s'o!ses L!na 'aid to Jliss
as amorti<ations b$ asserting that the$ "ere 'revented b$ the latter from f!lflling
s!ch obligation& The$ invo+e Art& ..AD of the Civil Code "hich 'rovides that 2the
condition shall be deemed f!lflled "hen the o"li'or vol!ntaril$ 'revents its
f!lfllment&4
Go"ever( the Co!rt fnds Art& ..AD ina''licable to this case& The said 'rovision
e)'licitl$ s'ea+s of a sit!ation "here it is the obligor "ho vol!ntaril$ 'revents
f!lfllment of the condition& Gere( Constancia is not the obligor b!t the obligee&
Loreover( even if this signifcant detail is to be ignored( the mere intention to
'revent the ha''ening of the condition or the mere 'lacing of ine3ective obstacles
to its com'liance( "itho!t act!all$ 'reventing f!lfllment is not s!Ncient for the
a''lication of Art& ..AD& T"o re!isites m!st conc!r for its a''lication( to "it6 E.F
intent to 'revent f!lfllment of the condition; and( E1F act!al 'revention of
com'liance& $ps. +ameal and *ourdes !onrostro v. $ps. Juan and Constacia *una,
G&@& ;o&./10?D( C!l$ 1?( 19.0&
*bligations; constr!ctive f!lfllment; Article ..AD of the Civil Code; re!isites& As
a'tl$ 'ointed o!t b$ the CA( Article ..AD of the Civil Code( "hich states that 2the
condition shall be deemed f!lflled "hen the obligor vol!ntaril$ 'revents its
f!lfllment(4 does not a''l$ in this case( vi8:
Article ..AD en!nciates the doctrine of constr!ctive f!lfllment of s!s'ensive
conditions( "hich a''lies "hen the follo"ing three E0F re!isites conc!r( vi8: E.F The
condition is s!s'ensive; E1F The obligor act!all$ 'revents the f!lfllment of the
condition; and E0F Ge acts vol!ntaril$& S!s'ensive condition is one the ha''ening of
"hich gives rise to the obligation& It "ill be irrational for an$ Jan+ to 'rovide a
'g& 1D
s!s'ensive condition in the :romissor$ ;ote or the @estr!ct!ring Agreement that
"ill allo" the debtor#'romissor to be freed from the d!t$ to 'a$ the loan "itho!t
'a$ing it&
Carlos *im, et al. v. )evelopment !an& of the Philippines, G&@& ;o& .//9B9( C!l$ .(
19.0&
*bligations; if an obligation consists of 'a$ment of mone$( and the debtor inc!rs in
dela$( the indemnit$ for damages( there being no sti'!lation to the contrar$( shall
be the 'a$ment of the interest agreed !'on( and in the absence of sti'!lation( the
legal interest& -nder Article 119> ofthe Civil Code( 2HiIfthe obligation consists in the
'a$ment of a s!m of mone$( and the debtor inc!rs in dela$( the indemnit$ for
damages( there being no sti'!lation to the contrar$( shall be the 'a$ment of the
interestV agreed !'on( and in the absence of sti'!lation( the legal interest ) ) )&4
There being no sti'!lation on interest in case ofdela$ in the 'a$ment
ofamorti<ation( the CA th!s correctl$ im'osed interest at the legal rate "hich is no"
.1O'er annum. $ps. +ameal and *ourdes !onrostro v. $ps. Juan and Constacia
*una, G&@& ;o&./10?D( C!l$ 1?( 19.0&
:enalties and interest rates; 'enalties and interest rates sho!ld be e)'ressl$
sti'!lated in "riting& As to the im'osition of additional interest and 'enalties not
sti'!lated in the :romissor$ ;otes( this sho!ld not be allo"ed& Article .>BD of the
Civil Code s'ecifcall$ states that 2no interest shall be d!e !nless it has been
e)'ressl$ sti'!lated in "riting&4 Th!s( the 'a$ment of interest and 'enalties in loans
is allo"ed onl$ if the 'arties agreed to it and red!ced their agreement in "riting&
Carlos *im, et al. v. )evelopment !an& of the Philippines, G&@& ;o& .//9B9( C!l$ .(
19.0&
:rescri'tion; Article ..?? of the Civil Code& We conc!r "ith the CA=s r!ling that
res'ondent=s action did not $et 'rescribe& The legal 'rovision governing this case
"as not Article ..?D of the Civil Code, b!t Article ..?? of the Civil Code, "hich
states6
Article ..??& The follo"ing actions m!st be bro!ght "ithin ten $ears from the time
the ca!se of action accr!es6
E.F-'on a "ritten contract; E1F -'on an obligation created b$ la"; E0F-'on a
%!dgment&
,ector $hippin' Corporation, et al. v. American (ome Assurance Co., et al.( G&@& ;o&
.B>1.0( C!l$ 0( 19.0&
:ro'ert$; co#o"nershi'; sale of co#o"ned 'ro'ert$; if onl$ one co#o"ner agreed to
the sale( said co#o"ner onl$ sold his ali!ot share in the s!b%ect 'ro'ert$& J!t as
held b$ the a''ellate co!rt( the sale bet"een the 'etitioner and Ale%andro is valid
insofar as the aliquot share of res'ondent Ale%andro is concerned& Jeing a co#o"ner(
Ale%andro can validl$ and legall$ dis'ose of his share even "itho!t the consent of all
the other co#heirs& Since the balance of the f!ll 'rice has not $et been 'aid( the
'g& 1/
amo!nt 'aid shall re'resent as 'a$ment to his aliquot share& This then leaves the
sale of the lot of the Altamiranos to the S'o!ses La%arca valid onl$ insofar as their
shares are concerned( e)cl!sive of the aliquot 'art of Ale%andro( as r!led b$ the CA&
Reman Recio v. (eirs of $pouses A'ue'o and aria Altamirano( G&@& ;o&.A10?>(
C!l$ 1?( 19.0&
:ro'ert$; 'atrimonial 'ro'ert$ and 'ro'ert$ of '!blic dominion; 'atrimonial
'ro'ert$ of the State ma$ be the ob%ect of 'rescri'tion( ho"ever( those intended for
some '!blic service or the develo'ment of national "ealth are 'ro'ert$ of '!blic
dominion( "hich are not s!sce'tible to ac!isition b$ 'rescri'tion; '!blic domain
lands become 'atrimonial 'ro'ert$ onl$ if there is a declaration that these are
alienable or dis'osable( together "ith an e)'ress government manifestation that
the 'ro'ert$ is alread$ 'atrimonial or no longer retained for '!blic service or the
develo'ment of national "ealth& -nder Article ?11 of the Civil Code( '!blic domain
lands become 'atrimonial 'ro'ert$ onl$ if there is a declaration that these are
alienable or dis'osable( together "ith an e)'ress government manifestation that
the 'ro'ert$ is alread$ 'atrimonial or no longer retained for '!blic service or the
develo'ment of national "ealth& *nl$ "hen the 'ro'ert$ has become 'atrimonial
can the 'rescri'tive 'eriod for the ac!isition of 'ro'ert$ of the '!blic dominion
begin to r!n& Also !nder Section .?E1F of :residential Decree E:&D&F ;o& .B1>( it is
'rovided that before ac!isitive 'rescri'tion can commence( the 'ro'ert$ so!ght to
be registered m!st not onl$ be classifed as alienable and dis'osable( it m!st also
be e)'ressl$ declared b$ the State that it is no longer intended for '!blic service or
the develo'ment of the national "ealth( or that the 'ro'ert$ has been converted
into 'atrimonial& Absent s!ch an e)'ress declaration b$ the State( the land remains
to be 'ro'ert$ of '!blic dominion& )ream ,illa'e +ei'h"orhood Association, .nc.,
represented "y its .ncum"ent President 4re' $erie'o v. !ases Conversion
)evelopment Authority( G&@& ;o&.>1A>D( C!l$ 1?( 19.0&
@ent; civil fr!it; rightf!l reci'ient& @ent is a civil fr!it that belongs to the o"ner of the
'ro'ert$ 'rod!cing it b$ right of accession& The rightf!l reci'ient of the dis'!ted
rent in this case sho!ld th!s be the o"ner of the s!b%ect lot at the time the rent
accr!ed& Philippine +ational !an& v. $ps. !ernard and Cresencia ara-on( G&@&;o&
.A>0.D( C!l$ .( 19.0&
S!brogation; basis; defnition& Consistent "ith the 'ertinent la" and %!ris'r!dence(
therefore( E)hibit I "as alread$ eno!gh b$ itself to 'rove the 'a$ment of
:/(?BB(?1.&99 as the f!ll settlement of Calte)=s claim& The 'a$ment made to Calte)
as the ins!red being thereb$ d!l$ doc!mented( res'ondent became s!brogated as a
matter of co!rse '!rs!ant to Article 119/ of the Civil Code. In legal contem'lation(
s!brogation is the 2s!bstit!tion of another 'erson in the 'lace of the creditor( to
"hose rights he s!cceeds in relation to the debt;4 and is 2inde'endent of an$ mere
contract!al relations bet"een the 'arties to be a3ected b$ it( and is broad eno!gh
to cover ever$ instance in "hich one 'art$ is re!ired to 'a$ a debt for "hich
another is 'rimaril$ ans"erable( and "hich in e!it$ and conscience o!ght to be
discharged b$ the latter&4 ,ector $hippin' Corporation, et al. v. American (ome
Assurance Co., et al.( G&@& ;o& .B>1.0( C!l$ 0( 19.0&
'g& 1A
S!brogation in ins!rance cases; accr!es sim'l$ !'on 'a$ment b$ the ins!rance
com'an$ of the ins!rance claim; 'a$ment b$ the ins!rer to the ins!red o'erates as
an e!itable assignment to the ins!rer of all remedies that the ins!red ma$ have
against the third 'art$ "hose negligence or "rongf!l act ca!sed the loss& The Co!rt
holds that 'etitioner :hilam has ade!atel$ established the basis of its claim
against 'etitioners ATI and West"ind& :hilam( as ins!rer( "as s!brogated to the
rights of the consignee( -niversal Lotors Cor'oration( '!rs!ant to the S!brogation
@ecei't e)ec!ted b$ the latter in favor of the former& The right of s!brogation
accr!es sim'l$ !'on 'a$ment b$ the ins!rance com'an$ of the ins!rance claim&
:etitioner :hilam=s action fnds s!''ort in Article 119/ of the Civil Code( "hich
'rovides as follo"s6
Art& 119/& If the 'lainti3=s 'ro'ert$ has been ins!red( and he has received indemnit$
from the ins!rance com'an$ for the in%!r$ or loss arising o!t of the "rong or breach
of contract com'lained of( the ins!rance com'an$ shall be s!brogated to the rights
of the ins!red against the "rongdoer or the 'erson "ho has violated the contract& )
) )&
Ret( even "ith the e)cl!sion of Larine Certifcate ;o& /9A#A99D/./#?( the
S!brogation @ecei't( on its o"n( is ade!ate 'roof that 'etitioner :hilam 'aid the
consignee=s claim on the damaged goods& :etitioners ATI and West"ind failed to
o3er an$ evidence to controvert the same& In Lala$an Ins!rance Co&( Inc& v& Alberto(
the Co!rt e)'lained the e3ect of 'a$ment b$ the ins!rer of the ins!rance claim in
this "ise6
We have held that 'a$ment b$ the ins!rer to the ins!red o'erates as an e!itable
assignment to the ins!rer of all the remedies that the ins!red ma$ have against the
third 'art$ "hose negligence or "rongf!l act ca!sed the loss& The right of
s!brogation is not de'endent !'on( nor does it gro" o!t of( an$ 'rivit$ of contract&
It accr!es sim'l$ !'on 'a$ment b$ the ins!rance com'an$ of the ins!rance claim&
The doctrine of s!brogation has its roots in e!it$& It is designed to 'romote and
accom'lish %!stice; and is the mode that e!it$ ado'ts to com'el the !ltimate
'a$ment of a debt b$ one "ho( in %!stice( e!it$( and good conscience( o!ght to
'a$& Asian 6erminals, .nc. v. Philam .nsurance Co., .nc. Bnow Chartis Philippines
.nsurance .nc.CD Philam .nsurance Co., .nc. Bnow Chartis Philippines .nsurance .nc.C v.
%estwind $hippin' Corporation and Asian 6erminals, .nc.D %estwind $hippin'
Corporation v. Philam .nsurance Co., .nc. and Asian 6erminals, .nc., G&@& ;os&
.A..D0S.A.1D1S.A.0.>( C!l$ 1?( 19.0&
Tender of 'a$ment; conce't; tender of 'a$ment( if ref!sed "itho!t %!st ca!se( "ill
discharge the debtor onl$ after a valid consignation "ith the co!rt; "hen tender of
'a$ment is not accom'anied b$ the means of 'a$ment( and the debtor did not ta+e
an$ immediate ste' to ma+e a consignation( then interest is not s!s'ended from
the time of s!ch tender& Tender of 'a$ment 2is the manifestation b$ the debtor of a
desire to com'l$ "ith or 'a$ an obligation& If ref!sed "itho!t %!st ca!se( the tender
of 'a$ment "ill discharge the debtor of the obligation to 'a$ b!t onl$ after a valid
consignation of the s!m d!e shall have been made "ith the 'ro'er co!rt&4
2Consignation is the de'osit of the H'ro'er amo!nt "ith a %!dicial a!thorit$I in
accordance "ith r!les 'rescribed b$ la"( after the tender of 'a$ment has been
'g& 1>
ref!sed or beca!se of circ!mstances "hich render direct 'a$ment to the creditor
im'ossible or inadvisable&4
2Tender of 'a$ment( "itho!t more( 'rod!ces no e3ect&4 2HTIo have the e3ect of
'a$ment and the conse!ent e)ting!ishment of the obligation to 'a$( the la"
re!ires the com'anion acts of tender of 'a$ment and consignation&4
As to the e3ect of tender of 'a$ment on interest( noted civilist Art!ro L& Tolentino
e)'lained as follo"s6
When a tender of 'a$ment is made in s!ch a form that the creditor co!ld have
immediatel$ reali<ed 'a$ment if he had acce'ted the tender( follo"ed b$ a 'rom't
attem't of the debtor to de'osit the means of 'a$ment in co!rt b$ "a$ of
consignation( the accr!al of interest on the obligation "ill be s!s'ended from the
date of s!ch tender& "ut when the tender of payment is not accompanied by
the means of payment, and the debtor did not take any immediate step to
make a consignation, then interest is not suspended from the time of such
tender. ) ) ) ) EEm'hasis s!''liedF $ps. +ameal and *ourdes !onrostro v. $ps.
Juan and Constacia *una, G&@& ;o&./10?D( C!l$ 1?( 19.0&
Special Laws
Act ;o& 0.0B; foreclos!re sale; 'ersonal notice to the mortgagor in e)tra%!dicial
foreclos!re 'roceedings is necessar$ "here there is a sti'!lation to this e3ect( and
fail!re to com'l$ "ith the sti'!lated notice re!irement is a contract!al breach
s!Ncient to render the foreclos!re sale n!ll and void& It has been consistentl$ held
that !nless the 'arties sti'!late( 2'ersonal notice to the mortgagor in e)tra%!dicial
foreclos!re 'roceedings is not necessar$4 beca!se Section 0../ of Act 0.0B onl$
re!ires the 'osting of the notice of sale in three '!blic 'laces and the '!blication
of that notice in a ne"s'a'er of general circ!lation&
In this case( the 'arties sti'!lated in 'aragra'h .. of the Lortgage that6
..& All corres'ondence relative to this mortgage( incl!ding demand letters(
s!mmons( s!b'oenas( or notifcation of an$ %!dicial or e)tra#%!dicial action shall be
sent to the Lortgagor at ))) or at the address that ma$ hereafter be given in
"riting b$ the Lortgagor or the Lortgagee;
Go"ever( no notice of the e)tra%!dicial foreclos!re "as sent b$ DJ: to 'etitioners
abo!t the foreclos!re sale sched!led on C!l$ ..( .>>?& The letters dated Can!ar$ 1A(
.>>? and Larch ..( .>>? advising 'etitioners to immediatel$ 'a$ their obligation to
avoid the im'ending foreclos!re of their mortgaged 'ro'erties are not the notices
re!ired in 'aragra'h .. of the Lortgage& The fail!re of DJ: to com'l$ "ith their
contract!al agreement "ith 'etitioners( i&e&( to send notice( is a breach s!Ncient to
invalidate the foreclos!re sale& Carlos *im, et al. v. )evelopment !an& of the
Philippines, G&@& ;o& .//9B9( C!l$ .( 19.0&
Jases Conversion Develo'ment A!thorit$ EJCDAF; JCDA holds title to 8ort Jonifacio;
Dream Village sits on the abandoned C#B @oad( "hich lies o!tside the areas
'g& 09
declared in :roclamation ;os& 1?/D and ./1 as alienable and dis'osable& That the
JCDA has title to 8ort Jonifacio has long been decided "ith fnalit$& In $amahan n'
asan' Pilipino sa a&ati, .nc. v. !C)A, it "as categoricall$ r!led as follo"s6
8irst( it is !ne!ivocal that the :hili''ine Government( and no" the JCDA( has title
and o"nershi' over 8ort Jonifacio& The case of Actin' Re'istrars of *and 6itles and
)eeds of Pasay City, Pasi' and a&ati is fnal and concl!sive on the o"nershi' of
the then (acienda de Laricaban estate b$ the @e'!blic of the :hili''ines& Clearl$(
the iss!e on the o"nershi' of the s!b%ect lands in 8ort Jonifacio is laid to rest& *ther
than their vie" that the -SA is still the o"ner of the s!b%ect lots( 'etitioner has not
'!t for"ard an$ claim of o"nershi' or interest in them& )ream ,illa'e
+ei'h"orhood Association, .nc., represented "y its .ncum"ent President 4re'
$erie'o v. !ases Conversion )evelopment Authority( G&@& ;o&.>1A>D( C!l$ 1?( 19.0&
Common Carrier; Carriage of Goods b$ Sea Act EC*GSAF; 'rescri'tive 'eriod for
fling an action for loss or damage of goods& The 'rescri'tive 'eriod for fling an
action for the loss or damage of the goods !nder the C*GSA is fo!nd in 'aragra'h
EDF( Section 0( th!s6
EDF -nless notice of loss or damage and the general nat!re of s!ch loss or damage
be given in "riting to the carrier or his agent at the 'ort of discharge before or at
the time of the removal of the goods into the c!stod$ of the 'erson entitled to
deliver$ thereof !nder the contract of carriage( s!ch removal shall be 'rima facie
evidence of the deliver$ b$ the carrier of the goods as described in the bill of lading&
If the loss or damage is not a''arent( the notice m!st be given "ithin three da$s of
the deliver$& Said notice of loss or damage ma$be endorsed !'on the recei't for the
goods given b$ the 'erson ta+ing deliver$ thereof& The notice in "riting need not be
given if the state of the goods has at the time of their recei't been the s!b%ect of
%oint s!rve$ or ins'ection&
In an$ event the carrier and the shi' shall be discharged from all liabilit$ in res'ect
of loss or damage !nless s!it is bro!ght "ithin one $ear after deliver$ of the goods
or the date "hen the goods sho!ld have been delivered6 :rovided( That if a notice of
loss or damage( either a''arent or concealed( is not given as 'rovided for in this
section( that fact shall not a3ect or 're%!dice the right of the shi''er to bring s!it
"ithin one $ear after the deliver$ of the goods or the date "hen the goods sho!ld
have been delivered& Asian 6erminals, .nc. v. Philam .nsurance Co., .nc. Bnow Chartis
Philippines .nsurance .nc.CD Philam .nsurance Co., .nc. Bnow Chartis Philippines
.nsurance .nc.C v. %estwind $hippin' Corporation and Asian 6erminals, .nc.D
%estwind $hippin' Corporation v. Philam .nsurance Co., .nc. and Asian 6erminals,
.nc., G&@& ;os& .A..D0S.A.1D1S.A.0.>( C!l$ 1?( 19.0&
Common Carrier; Carriage of Goods b$ Sea Act EC*GSAF; 'rescri'tive 'eriod for
fling an action for loss or damage of goods& The 'rescri'tive 'eriod for fling an
action for the loss or damage of the goods !nder the C*GSA is fo!nd in 'aragra'h
EDF( Section 0( th!s6
EDF -nless notice of loss or damage and the general nat!re of s!ch loss or damage
be given in "riting to the carrier or his agent at the 'ort of discharge before or at
'g& 0.
the time of the removal of the goods into the c!stod$ of the 'erson entitled to
deliver$ thereof !nder the contract of carriage( s!ch removal shall be 'rima facie
evidence of the deliver$ b$ the carrier of the goods as described in the bill of lading&
If the loss or damage is not a''arent( the notice m!st be given "ithin three da$s of
the deliver$& Said notice of loss or damage ma$be endorsed !'on the recei't for the
goods given b$ the 'erson ta+ing deliver$ thereof& The notice in "riting need not be
given if the state of the goods has at the time of their recei't been the s!b%ect of
%oint s!rve$ or ins'ection&
In an$ event the carrier and the shi' shall be discharged from all liabilit$ in res'ect
of loss or damage !nless s!it is bro!ght "ithin one $ear after deliver$ of the goods
or the date "hen the goods sho!ld have been delivered6 :rovided( That if a notice of
loss or damage( either a''arent or concealed( is not given as 'rovided for in this
section( that fact shall not a3ect or 're%!dice the right of the shi''er to bring s!it
"ithin one $ear after the deliver$ of the goods or the date "hen the goods sho!ld
have been delivered& Asian 6erminals, .nc. v. Philam .nsurance Co., .nc. Bnow
Chartis Philippines .nsurance .nc.CD Philam .nsurance Co., .nc. Bnow Chartis
Philippines .nsurance .nc.C v. %estwind $hippin' Corporation and Asian 6erminals,
.nc.D %estwind $hippin' Corporation v. Philam .nsurance Co., .nc. and Asian
6erminals, .nc., G&@& ;os& .A..D0S.A.1D1S.A.0.>( C!l$ 1?( 19.0&
8amil$ Code; marriage; void ab initio for lac+ of a marriage license; no inconsistenc$
in fnding the marriage n!ll and void ab initio and( at the same time( non#e)istent;
contracts "hich are absol!tel$ sim!lated or fctitio!s are ine)istent and void from
the beginning& There is no inconsistenc$ in fnding the marriage bet"een Jen%amin
and Sall$ n!ll and void a" initio and( at the same time( non#e)istent& -nder Article
0B of the 8amil$ Code( a marriage solemni<ed "itho!t a license( e)ce't those
covered b$ Article 0? "here no license is necessar$( 2shall be void from the
beginning&4 In this case( the marriage bet"een Jen%amin and Sall$ "as solemni<ed
"itho!t a license& It "as d!l$ established that no marriage license "as iss!ed to
them and that Larriage License ;o& ;#9/BDA did not match the marriage license
n!mbers iss!ed b$ the local civil registrar of :asig Cit$ for the month of 8ebr!ar$
.>A1& The case clearl$ falls !nder Section 0 of Article 0B19 "hich made their
marriage void a" initio. The marriage bet"een Jen%amin and Sall$ "as also non#
e)istent& A''l$ing the general r!les on void or ine)istent contracts !nder Article
.?9> of the Civil Code( contracts "hich are absol!tel$ sim!lated or fctitio!s are
2ine)istent and void from the beginning&4 Th!s( the Co!rt of A''eals did not err in
s!staining the trial co!rt=s r!ling that the marriage bet"een Jen%amin and Sall$ "as
n!ll and void a" initio and non#e)istent& $ally 4o-!an'ayan v. !en<amin !an'ayan,
Jr.( G&@& ;o& 19.9D.( C!l$ 0( 19.0&
8amil$ Code; marriage license; certifcation from the local civil registrar is ade!ate
to 'rove the non#iss!ance of a marriage license and( absent an$ s!s'icio!s
circ!mstance( the certifcation en%o$s 'robative val!e& The certifcation from the
local civil registrar is ade!ate to 'rove the non#iss!ance of a marriage license and
absent an$ s!s'icio!s circ!mstance( the certifcation en%o$s 'robative val!e( being
iss!ed b$ the oNcer charged !nder the la" to +ee' a record of all data relative to
the iss!ance of a marriage license& $ally 4o-!an'ayan v. !en<amin !an'ayan, Jr.(
G&@& ;o& 19.9D.( C!l$ 0( 19.0&
'g& 01
8amil$ Code; 'ro'ert$ relations in cases of cohabitation "itho!t the beneft of
marriage; r!les& The Co!rt of A''eals correctl$ r!led that the 'ro'ert$ relations of
Jen%amin and Sall$ is governed b$ Article .?A of the 8amil$ Code "hich states6
Art& .?A& In cases of cohabitation not falling !nder the 'receding Article( onl$ the
'ro'erties ac!ired b$ both of the 'arties thro!gh their act!al %oint contrib!tion of
mone$( 'ro'ert$( or ind!str$ shall be o"ned b$ them in common in 'ro'ortion to
their res'ective contrib!tions& In the absence of 'roof to the contrar$( their
contrib!tions and corres'onding shares are 'res!med to be e!al& The same r!le
and 'res!m'tion shall a''l$ to %oint de'osits of mone$ and evidences of credit&
If one of the 'arties is validl$ married to another( his or her share in the co#
o"nershi' shall accr!e to the absol!te comm!nit$ of con%!gal 'artnershi' e)isting
in s!ch valid marriage& If the 'art$ "ho acted in bad faith is not validl$ married to
another( his or her share shall be forfeited in the manner 'rovided in the last
'aragra'h of the 'receding Article&
The foregoing r!les on forfeit!re shall li+e"ise a''l$ even if both 'arties are in bad
faith&
Jen%amin and Sall$ cohabitated "itho!t the beneft of marriage& Th!s( onl$ the
'ro'erties ac!ired b$ them thro!gh their act!al %oint contrib!tion of mone$(
'ro'ert$( or ind!str$ shall be o"ned b$ them in common in 'ro'ortion to their
res'ective contrib!tions& $ally 4o-!an'ayan v. !en<amin !an'ayan, Jr.( G&@& ;o&
19.9D.( C!l$ 0( 19.0&
Land o"nershi'; decree of registration for "hich an *CT "as iss!ed is accorded
greater "eight as against ta) declarations and ta) recei'ts in the name of another;
ta) declarations and ta) recei'ts onl$ become the basis of a claim of o"nershi'
"hen co!'led "ith 'roof of act!al 'ossession of 'ro'ert$& In the case of 3errer-
*ope8 v. CA, the Co!rt r!led that as against an arra$ of 'roofs consisting of ta)
declarations andSor ta) recei'ts "hich are not concl!sive evidence of o"nershi' nor
'roof of the area covered therein( an original certifcate of title( "hich indicates tr!e
and legal o"nershi' b$ the registered o"ners over the dis'!ted 'remises( m!st
'revail& Accordingl$( res'ondents= Decree ;o& >A>>1 for "hich an original certifcate
of title "as iss!ed sho!ld be accorded greater "eight as against the ta)
declarations and ta) recei'ts 'resented b$ 'etitioners in this case& Jesides( ta)
declarations and ta) recei'ts ma$ onl$ become the basis of a claim for o"nershi'
"hen the$ are co!'led "ith 'roof of act!al 'ossession of the 'ro'ert$& (eirs of
Ale<andra )elfn, namely, *eopoldo )elfn, et al. v. Avelina Ra"adon( G&@& ;o&
.DB9.?( C!l$ 0.( 19.0&
Land registration; decree of registration bars all claims and rights "hich arose or
ma$ have e)isted 'rior to the decree of registration& It is an elemental r!le that a
decree of registration bars all claims and rights "hich arose or ma$ have e)isted
'rior to the decree of registration& J$ the iss!ance of the decree( the land is bo!nd
and title thereto !ieted( s!b%ect onl$ to certain e)ce'tions !nder the 'ro'ert$
registration decree& (eirs of Ale<andra )elfn, namely, *eopoldo )elfn, et al. v.
Avelina Ra"adon( G&@& ;o& .DB9.?( C!l$ 0.( 19.0&
'g& 00
@e'!blic Act ;o& 1D; reconstit!tion of title; nat!re of 'roceeding; Torrens s$stem;
so!rces of reconstit!tion; mandator$ re!irements of '!blication( 'osting( and
notice& At the o!tset( the Co!rt notes that the 'resent amended 'etition for
reconstit!tion is anchored on the o"ner=s d!'licate co'$ of TCT ;o& A1?9 K a so!rce
for reconstit!tion of title !nder Section 0EaF1> of @A 1D "hich( in t!rn( is governed
b$ the 'rovisions of Section .9 in relation to Section > of @A 1D "ith res'ect to the
'!blication( 'osting( and notice re!irements& Section .9 reads6
SEC& .9& ;othing hereinbefore 'rovided shall 'revent an$ registered o"ner or
'erson in interest from fling the 'etition mentioned in section fve of this Act
directl$ "ith the 'ro'er Co!rt of 8irst Instance( based on so!rces en!merated in
sections 1EaF( 1EbF( 0EaF( 0EbF( andSor ?EaF of this Act6 :rovided( ho"ever( That the
co!rt shall ca!se a notice of the 'etition( before hearing and granting the same( to
be '!blished in the manner stated in section nine hereof6 And( 'rovided( f!rther(
That certifcates of title reconstit!ted '!rs!ant to this section shall not be s!b%ect to
the enc!mbrance referred to in section seven of this Act&
Corollaril$( Section > reads in 'art6
SEC& >& ) ) ) There!'on( the co!rt shall ca!se a notice of the 'etition to be
'!blished( at the e)'ense of the 'etitioner( t"ice in s!ccessive iss!es of the *Ncial
Ga<ette( and to be 'osted on the main entrance of the 'rovincial b!ilding and of the
m!nici'al b!ilding of the m!nici'alit$ or cit$ in "hich the land lies( at least thirt$
da$s 'rior to the date of hearing( and after hearing( shall determine the 'etition and
render s!ch %!dgment as %!stice and e!it$ ma$ re!ire& ) ) )&
The foregoing 'rovisions( therefore( clearl$ re!ire that EaF notice of the 'etition
sho!ld be '!blished in t"o E1F s!ccessive iss!es of the *Ncial Ga<ette; and EbF
'!blication sho!ld be made at least thirt$ E09F da$s 'rior to the date of hearing&
S!bstantial com'liance "ith this %!risdictional re!irement is not eno!gh; it bears
stressing that the ac!isition of %!risdiction over a reconstit!tion case is hinged on a
strict com'liance "ith the re!irements of the la"& Repu"lic of the Philippines v.
Ricordito +. )e Asis, Jr., G&@& ;o& .>0A/?( C!l$ 1?( 19.0&
Torrens s$stem; the iss!e on the validit$ of title necessitates a remand of the case&
The Co!rt recogni<es the im'ortance of 'rotecting the co!ntr$=s Torrens s$stem
from fa+e land titles and deeds& Considering that there is an iss!e on the validit$ of
the title of 'etitioner VSD( "hich title is alleged to be traceable to #$% No. &&'
registered on (pril )&, )&)*, "hich mother title "as held to be ine)istent in
Manotok Realty, Inc. v. CLT Realty Development Corporation, in the interest
of %!stice( and to safeg!ard the correct titling of 'ro'erties( a remand is 'ro'er to
determine "hich of the 'arties derived valid title from the legitimate #$% No. &&'
registered on +ay ,, )&)*. Since this Co!rt is not a trier of facts and not
ca'acitated to a''reciate evidence of the frst instance( the Co!rt ma$ remand this
case to the Co!rt of A''eals for f!rther 'roceedings( as it has been similarl$ tas+ed
in Manotok Realty, Inc. v. CLT Realty Development Corporation. ,$) Realty
E )evelopment Corporation v. 0niwide $ales, .nc. and )olores !aello 6e<ada, G&@&
;o& ./9D//( C!l$ 0.( 19.0
'g& 0?
Torrens s$stem; Torrens title; lands !nder a Torrens title cannot be ac!ired b$
'rescri'tion or adverse 'ossession& Loreover( it is a settled r!le that lands !nder a
Torrens title cannot be ac!ired b$ 'rescri'tion or adverse 'ossession& Section ?/ of
:&D& ;o& .B1>( the :ro'ert$ @egistration Decree( e)'ressl$ 'rovides that no title to
registered land in derogation of the title of the registered o"ner shall be ac!ired b$
'rescri'tion or adverse 'ossession& And( altho!gh the registered lando"ner ma$
still lose his right to recover the 'ossession of his registered 'ro'ert$ b$ reason of
laches, no"here has Dream Village alleged or 'roved laches, "hich has been
defned as s!ch neglect or omission to assert a right( ta+en in con%!nction "ith la'se
of time and other circ!mstances ca!sing 're%!dice to an adverse 'art$( as "ill
o'erate as a bar in e!it$& :!t an$ "a$( it is a dela$ in the assertion of a right "hich
"or+s disadvantage to another beca!se of the ine!it$ fo!nded on some change in
the condition or relations of the 'ro'ert$ or 'arties& It is based on '!blic 'olic$
"hich( for the 'eace of societ$( ordains that relief "ill be denied to a stale demand
"hich other"ise co!ld be a valid claim& )ream ,illa'e +ei'h"orhood Association,
.nc., represented "y its .ncum"ent President 4re' $erie'o v. !ases Conversion
)evelopment Authority( G&@& ;o&.>1A>D( C!l$ 1?( 19.0&
Com'ensation; Conce't; @e!isites& Com'ensation is a mode of e)ting!ishing to the
conc!rrent amo!nt( the debts of 'ersons "ho in their o"n right are creditors and
debtors of each other& The ob%ect of com'ensation is the 'revention of !nnecessar$
s!its and 'a$ments thro!gh the m!t!al e)tinction b$ o'eration of la" of conc!rring
debts& Article .1/> of the Civil Code 'rovides for the re!isites for com'ensation to
ta+e e3ect6
Article .1/>& In order that com'ensation ma$ be 'ro'er( it is necessar$6
E.FThat each one of the obligors be bo!nd 'rinci'all$( and that he be at the same
time a 'rinci'al creditor of the other;
E1FThat both debts consist in a s!m of mone$( or if the things d!e are cons!mable(
the$ be of the same +ind( and also of the same !alit$ if the latter has been stated;
E0FThat the t"o debts be d!e;
E?FThat the$ be li!idated and demandable;
EBFThat over neither of them there be an$ retention or controvers$( commenced b$
third 'ersons and comm!nicated in d!e time to the debtor&
Adelaida $oriano v. People of the Philippines( G&@& ;o& .A.D>1( A!g!st .?( 19.0&
Com'ensation; "hen both debts are li!idated and demandable& A debt is
li!idated "hen the amo!nt is +no"n or is determinable b$ ins'ection of the terms
and conditions of relevant doc!ments& Adelaida $oriano v. People of the Philippines(
G&@& ;o& .A.D>1( A!g!st .?( 19.0&
'g& 0B
Contracts; determination of nat!re of contract& In determining the nat!re of a
contract( co!rts are not bo!nd b$ the title or name given b$ the 'arties& The
decisive factor in eval!ating s!ch agreement is the intention of the 'arties( as
sho"n not necessaril$ b$ the terminolog$ !sed in the contract b!t b$ their cond!ct(
"ords( actions and deeds 'rior to( d!ring and immediatel$ after e)ec!ting the
agreement& As s!ch( therefore( doc!mentar$ and 'arol evidence ma$ be s!bmitted
and admitted to 'rove s!ch intention& (ur 6in ;an' v. People of the Philippines( G&@&
;o& .>B../( A!g!st .?( 19.0&
Co#o"nershi'; rights of co#o"ners& Gaving s!cceeded to the 'ro'ert$ as heirs of
Gregoria and @omana( 'etitioners and res'ondents became co#o"ners thereof& As
co#o"ners( the$ ma$ !se the 'ro'ert$ o"ned in common( 'rovided the$ do so in
accordance "ith the '!r'ose for "hich it is intended and in s!ch a "a$ as not to
in%!re the interest of the co#o"nershi' or 'revent the other co#o"ners from !sing it
according to their rights& The$ have the f!ll o"nershi' of their 'arts and of the fr!its
and benefts 'ertaining thereto( and ma$ alienate( assign or mortgage them( and
even s!bstit!te another 'erson in their en%o$ment( e)ce't "hen 'ersonal rights are
involved& Each co#o"ner ma$ demand at an$ time the 'artition of the thing o"ned
in common( insofar as his share is concerned& 8inall$( no 'rescri'tion shall r!n in
favor of one of the co#heirs against the others so long as he e)'ressl$ or im'liedl$
recogni<es the co#o"nershi'& Antipolo .nin' BdeceasedC, survived "y anuel
,illanueva, 6eodora ,illanueva-3rancisco, Camilo 3rancisco, Adolfo 3rancisco,
*ucimo 3rancisco, Jr., ila'ros 3rancisco,Celedonio 3rancisco, (ermini'ildo
3rancisco9 Ramon 6resvalles, Ro"erto 6a<onera, +atividad .nin'-."ea BdeceasedC
survived "y 1dil"erto ."ea, Josefa ."ea, artha ."ea, Carmen ."ea, Amparo ."ea-
3ernande8, (enry Rui8, 1u'enio Rui8 and Pastor Rui89 )olores .nin'-Rimon
BdeceasedC survived "y Jesus Rimon, Cesaria Rimon 4on8ales and Remedios Rimon
Cordero9 and Pedro .nin' BdeceasedC survived "y 1lisa 6an .nin' BwifeC and Pedro
.nin', Jr. v. *eonardo R. ,e'a, su"stituted "y *ourdes ,e'a, Restonilo .. ,e'a,
Crispulo . ,e'a, il"uena ,e'a-Restituto and *enard ,e'a( G&@& ;o& ./?/1/(
A!g!st .1( 19.0&
Co#o"nershi'; 'rescri'tion; for 'rescri'tion to set in( the re'!diation m!st be done
b$ a co#o"ner; re!isites& Time and again( it has been held that 2a co#o"ner cannot
ac!ire b$ 'rescri'tion the share of the other co#o"ners( absent an$ clear
re'!diation of the co#o"nershi'& In order that the title ma$ 'rescribe in favor of a
co#o"ner( the follo"ing re!isites m!st conc!r6 E.F the co#o"ner has 'erformed
!ne!ivocal acts of re'!diation amo!nting to an o!ster of the other co#o"ners; E1F
s!ch 'ositive acts of re'!diation have been made +no"n to the other co#o"ners;
and E0F the evidence thereof is clear and convincing&4 In fne( since none of the co#
o"ners made a valid re'!diation of the e)isting co#o"nershi'( Leonardo co!ld see+
'artition of the 'ro'ert$ at an$ time& Antipolo .nin' BdeceasedC, survived "y anuel
,illanueva, 6eodora ,illanueva-3rancisco, Camilo 3rancisco, Adolfo 3rancisco,
*ucimo 3rancisco, Jr., ila'ros 3rancisco,Celedonio 3rancisco, (ermini'ildo
3rancisco9 Ramon 6resvalles, Ro"erto 6a<onera, +atividad .nin'-."ea BdeceasedC
survived "y 1dil"erto ."ea, Josefa ."ea, artha ."ea, Carmen ."ea, Amparo ."ea-
3ernande8, (enry Rui8, 1u'enio Rui8 and Pastor Rui89 )olores .nin'-Rimon
BdeceasedC survived "y Jesus Rimon, Cesaria Rimon 4on8ales and Remedios Rimon
Cordero9 and Pedro .nin' BdeceasedC survived "y 1lisa 6an .nin' BwifeC and Pedro
.nin', Jr. v. *eonardo R. ,e'a, su"stituted "y *ourdes ,e'a, Restonilo .. ,e'a,
'g& 0D
Crispulo . ,e'a, il"uena ,e'a-Restituto and *enard ,e'a( G&@& ;o& ./?/1/(
A!g!st .1( 19.0&
Damages; act!al damages; re!ires com'etent 'roof of the act!al amo!nt of loss&
To %!stif$ an a"ard for act!al damages( there m!st be com'etent 'roof of the act!al
amo!nt of loss& Credence can be given onl$ to claims d!l$ s!''orted b$ recei'ts&
@es'ondents did not s!bmit an$ doc!mentar$ 'roof( li+e recei'ts( to s!''ort their
claim for act!al damages& Comsavin's !an& Bnow 4$.$ 3amily !an&C v. $ps. )anilo
and 1strella Capistrano, G&@& ;o& ./9>?1( A!g!st 1A( 19.0&
Damages; attorne$=s fees; allo"ed "hen e)em'lar$ damages are a"arded or "here
the 'lainti3 has inc!rred e)'enses to 'rotect his interest b$ reason of defendant=s
act or omission& Article 119A of the Civil Code allo"s recover$ of attorne$=s fees
"hen e)em'lar$ damages are a"arded or "here the 'lainti3 has inc!rred e)'enses
to 'rotect his interest b$ reason of defendant=s act or omission& Considering that
e)em'lar$ damages "ere 'ro'erl$ a"arded here( and that res'ondents hired a
'rivate la"$er to litigate its ca!se( the S!'reme Co!rt agrees "ith the @TC and CA
that the :09(999&99 allo"ed as attorne$=s fees "ere a''ro'riate and reasonable&
Comsavin's !an& Bnow 4$.$ 3amily !an&C v. $ps. )anilo and 1strella Capistrano,
G&@& ;o& ./9>?1( A!g!st 1A( 19.0&
Damages; A"ard of attorne$=s fees and litigation e)'enses and costs; %!stifed "hen
there is bad faith& Even granting that Att$& Sabitsana has ceased to act as the
L!erteg!i famil$=s la"$er( he still o"ed them his lo$alt$& The termination of
attorne$#client relation 'rovides no %!stifcation for a la"$er to re'resent an interest
adverse to or in con,ict "ith that of the former client on a matter involving
confdential information "hich the la"$er ac!ired "hen he "as co!nsel& The
client=s confdence once re'osed sho!ld not be divested b$ mere e)'iration of
'rofessional em'lo$ment& This is !nderscored b$ the fact that Att$& Sabitsana
obtained information from Carmen "hich he !sed to his advantage and to the
detriment of his client&
H8Irom the foregoing dis!isition( it can be seen that 'etitioners are g!ilt$ of bad
faith in '!rs!ing the sale of the lot des'ite being a''rised of the 'rior sale in
res'ondent=s favor& Loreover( 'etitioner Att$& Sabitsana has e)hibited a lac+ of
lo$alt$ to"ard his clients( the L!erteg!is( and b$ his acts( %eo'ardi<ed their
interests instead of 'rotecting them& *ver and above the trial co!rt=s and the CA=s
fndings( this 'rovides f!rther %!stifcation for the a"ard of attorne$=s fees( litigation
e)'enses and costs in favor of the res'ondent& $pouses Celemencio C. $a"itsana, Jr.
and a. Rosario . $a"itsana v. Juanito 3. uerte'ui, represented "y his attorney-in-
fact, )omin'o A. uerte'ui, Jr., G&@& ;o& .A.0B>( A!g!st B( 19.0&
Damages; Attorne$=s fees; "hat constit!te bad faith& There "as no gross and
evident bad faith on the 'art of Asian Constr!ction in fling its com'laint against
S!mitomo since it "as merel$ see+ing 'a$ment of its !n'aid "or+s done '!rs!ant
to the Agreement& ;either can its s!bse!ent ref!sal to acce't S!mitomo=s o3ered
com'romise be classifed as a badge of bad faith since it "as "ithin its right to
either acce't or re%ect the same o"ing to its contract!al nat!re& Absent an$ other
'g& 0/
%!st or e!itable reason to r!le other"ise( these incidents are clearl$ o3#tangent
"ith a fnding of gross and evident bad faith "hich altogether negates S!mitomo=s
entitlement to attorne$=s fees& Asian Construction and )evelopment Corporation v.
$umitomo Corporation D $umitomo Corporation v. Asia Construction and
)evelopment Corporation( G&@& ;o& .>D/10 S G&@& ;o& .>D/1A( A!g!st 1A( 19.0&
Damages; Attorne$=s fees; "hen a"arded& C!ris'r!dence dictates that in the
absence of a governing sti'!lation( attorne$=s fees ma$ be a"arded onl$ in case the
'lainti3=s action or defendant=s stand is so !ntenable as to amo!nt to gross and
evident bad faith& This is embodied in Article 119A of the Civil Code "hich states6
Article 119A& In the absence of sti'!lation( attorne$=s fees and e)'enses of
litigation( other than %!dicial costs( cannot be recovered( e)ce't6
) ) ) )
EBF Where the defendant acted in gross and evident bad faith in ref!sing to satisf$
the 'lainti3=s 'lainl$ valid( %!st and demandable claim;
) ) ) )
Asian Construction and )evelopment Corporation v. $umitomo Corporation D
$umitomo Corporation v. Asia Construction and )evelopment Corporation( G&@& ;o&
.>D/10 S G&@& ;o& .>D/1A( A!g!st 1A( 19.0&
Damages; E)em'lar$ damages; the la" allo"s the grant of e)em'lar$ damages to
set an e)am'le for the '!blic good& The la" allo"s the grant of e)em'lar$ damages
to set an e)am'le for the '!blic good& The b!siness of a ban+ is a3ected "ith '!blic
interest; th!s( it ma+es a s"orn 'rofession of diligence and metic!lo!sness ingiving
irre'roachable service& 8or this reason( the ban+ sho!ld g!ard against in%!r$
attrib!table to negligence or bad faith on its 'art& The ban+ing sector m!st at all
times maintain a high level of metic!lo!sness& The grant of e)em'lar$ damages is
%!stifed b$ the initial carelessness of 'etitioner( aggravated b$ its lac+ of
'rom'tness in re'airing its error& Comsavin's !an& Bnow 4$.$ 3amily !an&C v. $ps.
)anilo and 1strella Capistrano, G&@& ;o& ./9>?1( A!g!st 1A( 19.0&
Damages; Loral damages; recoverable for acts or actions referred to in Article 19 of
the Civil Code& In their amended com'laint( res'ondents claimed that the acts of
GCJ J!ilders and Comsavings Jan+ had ca!sed them to s!3er slee'less nights(
"orries and an)ieties& The claim "as "ell fo!nded& Danilo "or+ed in Sa!di Arabia in
order to 'a$ the loan !sed for the constr!ction of their famil$ home& Gis an)iet$ and
ang!ish over the incom'lete and defective constr!ction of their ho!se( as "ell as
the inconvenience he and his "ife e)'erienced beca!se of this s!it "ere not easil$
'robable& *n her 'art( Estrella "as a mere ho!se"ife( b!t "as the attorne$#in#fact
of Danilo in matters concerning the loan transaction& With Danilo "or+ing abroad(
she "as alone in overseeing the ho!se constr!ction and the 'rogress of the 'resent
case& Given her sit!ation( she defnitel$ e)'erienced "orries and slee'less nights&
The a"ard of moral damages of :.99(999&99 a"arded b$ the CA as e)em'lar$
'g& 0A
damages is 'ro'er& Comsavin's !an& Bnow 4$.$ 3amily !an&C v. $ps. )anilo and
1strella Capistrano, G&@& ;o& ./9>?1( A!g!st 1A( 19.0&
Damages; Tem'erate damages; ma$ be recovered "hen the co!rt fnds that some
'ec!niar$ loss "as s!3ered b!t its amo!nt cannot be 'roved "ith certaint$&
;onetheless( it cannot be denied that the$ had s!3ered s!bstantial losses& Article
111? of the Civil Code allo"s the recover$ of tem'erate damages "hen the co!rt
fnds that some 'ec!niar$ loss "as s!3ered b!t its amo!nt cannot be 'roved "ith
certaint$& In lie! of act!al damages( therefore( tem'erate damages of :1B(999&99
are a"arded& S!ch amo!nt( in the co!rt=s vie"( is reasonable !nder the
circ!mstances& Comsavin's !an& Bnow 4$.$ 3amily !an&C v. $ps. )anilo and 1strella
Capistrano, G&@& ;o& ./9>?1( A!g!st 1A( 19.0&
Damages; Interests; Eastern Shi''ing Lines g!idelines as modifed b$ JS:#LJ
Circ!lar ;o& />>& The S!'reme Co!rt set o!t the follo"ing g!idelines on damages
and interest d!e6
.& When an obligation( regardless of its so!rce( i&e&( la"( contracts( !asi#contracts(
delicts or !asi#delicts is breached( the contravenor can be held liable for damages&
The 'rovisions !nder Title WVIII on 2Damages4 of the Civil Code govern in
determining the meas!re of recoverable damages&
1& With regard 'artic!larl$ to an a"ard of interest in the conce't of act!al and
com'ensator$ damages( the rate of interest( as "ell as the accr!al thereof( is
im'osed( as follo"s6
EaF When the obligation is breached( and it consists in the 'a$ment of a s!m of
mone$( i&e&( a loan or forbearance of mone$( the interest d!e sho!ld be that "hich
ma$ have been sti'!lated in "riting& 8!rthermore( the interest d!e shall itself earn
legal interest from the time it is %!diciall$ demanded& In the absence of of
sti'!lation( the rate of interest shall be DO 'er ann!m to be com'!ted from defa!lt(
i&e&( from %!dicial or e)tra%!dicial demand !nder and s!b%ect to the 'rovisions of
Article ..D> the Civil Code&
EbF When an obligation( not constit!ting a loan or forbearance of mone$( is
breached( an interest on the amo!nt of damages a"arded ma$ be im'osed at the
discretion of the co!rt at the rate of DO 'er ann!m& ;o interest( ho"ever( shall be
ad%!dged on !nli!idated claims or damages( e)ce't "hen or !ntil the demand can
be established "ith reasonable certaint$& Accordingl$( "here the demand is
established "ith reasonable certaint$( the interest shall begin to r!n from the time
the claim is made %!diciall$ or e)tra%!diciall$ EArt& ..D>( Civil CodeF( b!t "hen s!ch
certaint$ cannot be so reasonabl$ established at the time the demand is made( the
interest shall begin to r!n onl$ from the date the %!dgment of the co!rt is made Eat
"hich time the !antifcation of damages ma$ be deemed to have been reasonabl$
ascertainedF& The act!al base for the com'!tation of legal interest shall( in an$
case( be on the amo!nt fnall$ ad%!dged&
'g& 0>
EcF When the %!dgment of the co!rt a"arding a s!m of mone$ becomes fnal and
e)ec!tor$( the rate of legal interest( "hether the case falls !nder 'aragra'h . or
'aragra'h 1( above( shall be DO 'er ann!m from s!ch fnalit$ !ntil its satisfaction(
this interim 'eriod being deemed to be b$ then an e!ivalent to a forbearance of
credit& )ario +acar v. 4allery 3rames andDor 3elipe !orde, Jr., G&@& ;o& .A>A/.(
A!g!st .0( 19.0&
Gross negligence; conce't& Jased on the 'rovisions( a ban+ing instit!tion li+e
Comsavings Jan+ is obliged to e)ercise the highest degree of diligence as "ell as
high standards of integrit$ and 'erformance in all its transactions beca!se its
b!siness is imb!ed "ith '!blic interest& As a'tl$ declared in Philippine +ational
!an& v. Pi&e6 2HTIhe stabilit$ of ban+s largel$ de'ends on the confdence of the
'eo'le in the honest$ and eNcienc$ of ban+s&4 Gross negligence connotes "ant of
care in the 'erformance of one=s d!ties; it is a negligence characteri<ed b$ the "ant
of even slight care( acting or omitting to act in a sit!ation "here there is d!t$ to act(
not inadvertentl$ b!t "illf!ll$ and intentionall$( "ith a conscio!s indi3erence to
conse!ences insofar as other 'ersons ma$ be a3ected& It evinces a tho!ghtless
disregard of conse!ences "itho!t e)erting an$ e3ort to avoid them& Comsavin's
!an& Bnow 4$.$ 3amily !an&C v. $ps. )anilo and 1strella Capistrano, G&@& ;o&
./9>?1( A!g!st 1A( 19.0&
Interest; Legal rate of interest e3ective C!l$ .( 19.0; '!rs!ant to JS: Circ!lar />>(
series of 19.0( the legal rate of interest shall be DO 'er ann!m& The Co!rt held that
2H:I!rs!ant to Circ!lar ;o& />>( series of 19.0 of the !an'&o $entral n' Pilipinas
"hich too+ e3ect C!l$ .( 19.0( the amo!nt of :D(999&99( erroneo!sl$ 'aid b$
:etitioner to the ban+( shall earn interest at the rate of DO per annum com'!ted
from the fling of the :etition in Civil Case ;o& BB0B !' to its f!ll satisfaction&4
,ir'inia . ,en8on v. Rural !an& of !uenavista, .nc., represented "y *ourdesita 1.
Para<es( G&@& ;o& ./A90.( A!g!st 1A( 19.0&
Interest; legal rate of interest; interest at DO 'er ann!m im'osed on a"ard in favor
of illegall$ dismissed em'lo$ees& Interest at the rate of DO 'er ann!m m!st be
im'osed on the a"ard for se'aration 'a$( bac+ "ages( and attorne$=s fees to
illegall$ dismissed em'lo$ees in accordance "ith Circ!lar ;o& />>( Series of 19.0 of
the Jang+o Sentral ng :ili'inas "hich too+ e3ect C!l$ .( 19.0& ,icente An' v.
$eferino $an Joaquin, Jr., and )iosdado 3ernande8( G&@& ;o& .ABB?>( A!g!st /( 19.0&
Interest; legal interest; "here obligation constit!tes a loan or forbearance of mone$(
goods or credit; legal rate allo"ed in %!dgments& In the absence of an e)'ress
sti'!lation as to the rate of interest that "o!ld govern the 'arties( the rate of legal
interest for loans or forbearance of an$ mone$( goods or credits and the rate
allo"ed in %!dgments shall no longer be .1O 'er ann!m& As re,ected in the case of
1astern $hippin' *ines and S!bsection W09B&. of the Lan!al of @eg!lations for
Jan+s and Sections ?09BT&.( ?09BS&0 and ?090:&. of the Lan!al of @eg!lations for
;on#Jan+ 8inancial Instit!tions( before its amendment b$ JS:#LJ Circ!lar ;o& />>(
the interest rate "ill no" be DO 'er ann!m e3ective C!l$ .( 19.0& )ario +acar v.
4allery 3rames andDor 3elipe !orde, Jr., G&@& ;o& .A>A/.( A!g!st .0( 19.0&
'g& ?9
Interest; Legal interest; 'ros'ective a''lication& It sho!ld be noted that the ne" rate
co!ld onl$ be a''lied 'ros'ectivel$ and not retroactivel$& Conse!entl$( the .1O
'er ann!m legal interest shall a''l$ onl$ !ntil C!ne 09( 19.0& Come C!l$ .( 19.0 the
ne" rate of DO 'er ann!m shall be the 'revailing rate of interest "hen a''licable&
;onetheless( "ith regard to those %!dgments that have become fnal and e)ec!tor$
'rior to C!l$ .( 19.0( said %!dgments shall not be dist!rbed and shall contin!e to be
im'lemented a''l$ing the rate of interest f)ed therein& )ario +acar v. 4allery
3rames andDor 3elipe !orde, Jr., 4.R. +o. =F>FG=, Au'ust =H, I@=H&
Laches; defnition& The Co!rt observes that laches had alread$ set in( thereb$
'recl!ding the Andrades from '!rs!ing their claim& Case la" defnes laches as the
2fail!re to assert a right for an !nreasonable and !ne)'lained length of time(
"arranting a 'res!m'tion that the 'art$ entitled to assert it has either abandoned
or declined to assert it&4 !o""y 6an v. 4race Andrade, et al.D4race Andrade, et al. v.
!o""y 6an, G&@& ;os& ./.>9? X ./19./( A!g!st /( 19.0&
T!asi#contracts; solutio inde"iti ; conce't& In a controvers$ over 'a$ment made after
the foreclos!re of the mortgaged 'ro'ert$( the Co!rt held6 2Since res'ondent "as
not entitled to receive the said amo!nt( as it is deemed f!ll$ 'aid from the
foreclos!re of 'etitioner=s 'ro'ert$ since its bid 'rice at the a!ction sale covered all
that 'etitioner o"ed it b$ "a$ of 'rinci'al( interest( attorne$=s fees and charges( it
m!st ret!rn the same to 'etitioner& PIf something is received "hen there is no right
to demand it( and it "as !nd!l$ delivered thro!gh mista+e( the obligation to ret!rn
it arises&=4 ,ir'inia . ,en8on v. Rural !an& of !uenavista, .nc., represented "y
*ourdesita 1. Para<es( G&@& ;o& ./A90.( A!g!st 1A( 19.0&
Sales; do!ble sale involving !nregistered land; Article .B?? of the Civil Code does
not a''l$; 'rior sale( even if made thro!gh an !nnotari<ed deed of sale( 'revails;
registration of second sale is !navailing as registration does not vest title; -nder Act
00??( registration if instr!ments a3ecting !nregistered lands is "itho!t 're%!dice to
a third 'art$ "ith a better right; act!al and 'rior +no"ledge of the frst sale ma+es
the s!bse!ent b!$ers '!rchasers in bad faith& Article .B?? of the Civil Code does
not a''l$ to sales involving !nregistered land& Joth the trial co!rt and the CA are(
ho"ever( "rong in a''l$ing Article .B?? of the Civil Code& Joth co!rts seem to have
forgotten that the 'rovision does not a''l$ to sales involving !nregistered land&
S!Nce it to state that the iss!e of the b!$er=s good or bad faith is relevant onl$
"here the s!b%ect of the sale is registered land( and the '!rchaser is b!$ing the
same from the registered o"ner "hose title to the land is clean& In s!ch case( the
'!rchaser "ho relies on the clean title of the registered o"ner is 'rotected if he is a
'!rchaser in good faith for val!e&
The sale to res'ondent C!anito "as e)ec!ted on Se'tember 1( .>A. via an
!nnotari<ed deed of sale( "hile the sale to 'etitioners "as made via a notari<ed
doc!ment onl$ on *ctober ./( .>>.( or ten $ears thereafter& Th!s( C!anito "ho "as
the frst b!$er has a better right to the lot( "hile the s!bse!ent sale to 'etitioners
'g& ?.
is n!ll and void( beca!se "hen it "as made( the seller Garcia "as no longer the
o"ner of the lot& +emo dat quod non ha"et&
The fact that the sale to C!anito "as not notari<ed does not alter an$thing( since the
sale bet"een him and Garcia remains valid nonetheless& ;otari<ation( or the
re!irement of a '!blic doc!ment !nder the Civil Code( is onl$ for convenience( and
not for validit$ or enforceabilit$& And beca!se it remained valid as bet"een C!anito
and Garcia( the latter no longer had the right to sell the lot to 'etitioners( for his
o"nershi' thereof had ceased&
;or can 'etitioners= registration of their '!rchase have an$ e3ect on C!anito=s
rights& The mere registration of a sale in one=s favor does not give him an$ right
over the land if the vendor "as no longer the o"ner of the land( having 'revio!sl$
sold the same to another even if the earlier sale "as !nrecorded& ;either co!ld it
validate the '!rchase thereof b$ 'etitioners( "hich is n!ll and void& @egistration
does not vest title; it is merel$ the evidence of s!ch title& *!r land registration la"s
do not give the holder an$ better title than "hat he act!all$ has&
-nder Act ;o& 00??( registration of instr!ments a3ecting !nregistered lands is
P"itho!t 're%!dice to a third 'art$ "ith a better right&= The afore!oted 'hrase has
been held b$ the Co!rt to mean that the mere registration of a sale in one=s favor
does not give him an$ right over the land if the vendor "as not an$more the o"ner
of the land having 'revio!sl$ sold the same to somebod$ else even if the earlier
sale "as !nrecorded&
:etitioners= defense of 'rescri'tion( laches and esto''el are !navailing since their
claim is based on a n!ll and void deed of sale& The fact that the L!erteg!is failed to
inter'ose an$ ob%ection to the sale in 'etitioners= favor does not change an$thing(
nor co!ld it give rise to a right in their favor; their '!rchase remains void and
ine3ective as far as the L!erteg!is are concerned& $pouses Celemencio C.
$a"itsana, Jr. and a. Rosario . $a"itsana v. Juanito 3. uerte'ui, represented "y
his attorney-in-fact, )omin'o A. uerte'ui, Jr., G&@& ;o& .A.0B>( A!g!st B( 19.0&
Sales; act!al and 'rior +no"ledge of the frst sale ma+es the s!bse!ent b!$ers
'!rchasers in bad faith& :etitioners= act!al and 'rior +no"ledge of the frst sale to
C!anito ma+es them '!rchasers in bad faith& It also a''ears that 'etitioner Att$&
Sabitsana "as remiss in his d!ties as co!nsel to the L!erteg!i famil$& Instead of
advising the L!erteg!is to register their '!rchase as soon as 'ossible to forestall
an$ legal com'lications that accom'an$ !nregistered sales of real 'ro'ert$( he did
e)actl$ the o''osite6 ta+ing advantage of the sit!ation and the information he
gathered from his in!iries and investigation( he bo!ght the ver$ same lot and
immediatel$ ca!sed the registration thereof ahead of his clients( thin+ing that his
'!rchase and 'rior registration "o!ld 'revail& The Co!rt cannot tolerate this
mercenar$ attit!de& Instead of 'rotecting his client=s interest( Att$& Sabitsana
'racticall$ 're$ed on him& $pouses Celemencio C. $a"itsana, Jr. and a. Rosario .
$a"itsana v. Juanito 3. uerte'ui, represented "y his attorney-in-fact, )omin'o A.
uerte'ui, Jr., G&@& ;o& .A.0B>( A!g!st B( 19.0&
'g& ?1
S!ccession; siblings are heirs of decedent "ho died "itho!t iss!e& Since Leon died
"itho!t iss!e( his heirs are his siblings( @omana and Gregoria( "ho th!s inherited
the 'ro'ert$ in e!al shares& In t!rn( @omana=s and Gregoria=s heirs K the 'arties
herein K became entitled to the 'ro'ert$ !'on the sisters= 'assing& -nder Article
/// of the Civil Code( the rights to the s!ccession are transmitted from the moment
of death& Antipolo .nin' BdeceasedC, survived "y anuel ,illanueva, 6eodora
,illanueva-3rancisco, Camilo 3rancisco, Adolfo 3rancisco, *ucimo 3rancisco, Jr.,
ila'ros 3rancisco,Celedonio 3rancisco, (ermini'ildo 3rancisco9 Ramon 6resvalles,
Ro"erto 6a<onera, +atividad .nin'-."ea BdeceasedC survived "y 1dil"erto ."ea, Josefa
."ea, artha ."ea, Carmen ."ea, Amparo ."ea-3ernande8, (enry Rui8, 1u'enio Rui8
and Pastor Rui89 )olores .nin'-Rimon BdeceasedC survived "y Jesus Rimon, Cesaria
Rimon 4on8ales and Remedios Rimon Cordero9 and Pedro .nin' BdeceasedC survived
"y 1lisa 6an .nin' BwifeC and Pedro .nin', Jr. v. *eonardo R. ,e'a, su"stituted "y
*ourdes ,e'a, Restonilo .. ,e'a, Crispulo . ,e'a, il"uena ,e'a-Restituto and
*enard ,e'a( G&@& ;o& ./?/1/( A!g!st .1( 19.0&
Special Laws
Correction of name; adversar$ 'roceeding; im'leading and notice to a3ected and
interested 'arties; "hen fail!re to im'lead and notif$ is c!red b$ '!blication of
notice of hearing; strict com'liance "ith the @!les of Co!rt mandated "hen 'etition
involves s!bstantial and controversial alterations& @es'ondent=s birth certifcate
sho"s that her f!ll name is Anita S$( that she is a Chinese citi<en and a legitimate
child of S$ Ton and Sotera L!gsana$& In fling the 'etition( ho"ever( she see+s the
correction of her frst name and s!rname( her stat!s from 2legitimate4 to
2illegitimate4 and her citi<enshi' from 2Chinese4 to 28ili'ino&4 Th!s( res'ondent
sho!ld have im'leaded and notifed not onl$ the Local Civil @egistrar b!t also her
'arents and siblings as the 'ersons "ho have interest and are a3ected b$ the
changes or corrections res'ondent "anted to ma+e&
The fact that the notice of hearing "as '!blished in a ne"s'a'er of general
circ!lation and notice thereof "as served !'on the State "ill not change the nat!re
of the 'roceedings ta+en& A reading of Sections ? and B( @!le .9A of the @!les of
Co!rt sho"s that the @!les mandate t"o sets of notices to di3erent 'otential
o''ositors6 one given to the 'ersons named in the 'etition and another given to
other 'ersons "ho are not named in the 'etition b!t nonetheless ma$ be
considered interested or a3ected 'arties& S!mmons m!st( therefore( be served not
for the '!r'ose of vesting the co!rts "ith %!risdiction b!t to com'l$ "ith the
re!irements of fair 'la$ and d!e 'rocess to a3ord the 'erson concerned the
o''ort!nit$ to 'rotect his interest if he so chooses&
While there ma$ be cases "here the Co!rt held that the fail!re to im'lead and
notif$ the a3ected or interested 'arties ma$ be c!red b$ the '!blication of the
notice of hearing( earnest e3orts "ere made b$ 'etitioners in bringing to co!rt all
'ossible interested 'arties& S!ch fail!re "as li+e"ise e)c!sed "here the interested
'arties themselves initiated the corrections 'roceedings; "hen there is no act!al or
'res!m'tive a"areness of the e)istence of the interested 'arties; or "hen a 'art$ is
inadvertentl$ left o!t&
'g& ?0
It is clear from the foregoing disc!ssion that "hen a 'etition for cancellation or
correction of an entr$ in the civil register involves s!bstantial and controversial
alterations( incl!ding those on citi<enshi'( legitimac$ of 'aternit$ or fliation( or
legitimac$ of marriage( a strict com'liance "ith the re!irements of @!le .9A ofthe
@!les of Co!rt is mandated& If the entries in the civil register co!ld be corrected or
changed thro!gh mere s!mmar$ 'roceedings and not thro!gh a''ro'riate action
"herein all 'arties "ho ma$ be a3ected b$ the entries are notifed or re'resented(
the door to fra!d or other mischief "o!ld be set o'en( the conse!ence of "hich
might be detrimental and far reaching& Repu"lic of the Philppines v. )r. +orma $.
*u'sanay 0y( G&@& ;o& .>A9.9( A!g!st .1( 19.0&
Correction of name; A''ro'riate adversar$ 'roceeding; defnition& What is meant b$
2a''ro'riate adversar$ 'roceeding74 Jlac+=s La" Dictionar$ defnes 2adversar$
'roceeding4 as follo"s6
*ne having o''osing 'arties; contested( as disting!ished from an e) 'arte
a''lication( one of "hich the 'art$ see+ing relief has given legal "arning to the
other 'art$( and a3orded the latter an o''ort!nit$ to contest it& E)cl!des an
ado'tion 'roceeding& Repu"lic of the Philppines v. )r. +orma $. *u'sanay 0y( G&@&
;o& .>A9.9( A!g!st .1( 19.0&
Correction of name; errors in a civil registr$ and facts established in an a''ro'riate
adversar$ 'roceeding& It has been settled in a n!mber of cases starting "ith
Repu"lic v. ,alencia that even s!bstantial errors in a civil registr$ ma$ be corrected
and the tr!e facts established 'rovided the 'arties aggrieved b$ the error avail
themselves of the a''ro'riate adversar$ 'roceeding& The 'rono!ncement of the
Co!rt in that case is ill!minating6
2It is !ndo!btedl$ tr!e that if the s!b%ect matter of a 'etition is not for the
correction of clerical errors of a harmless and innoc!o!s nat!re( b!t one involving
nationalit$ or citi<enshi'( "hich is indis'!tabl$ s!bstantial as "ell as controverted(
aNrmative relief cannot be granted in a 'roceeding s!mmar$ in nat!re& Go"ever( it
is also tr!e that a right in la" ma$ be enforced and a "rong ma$ be remedied as
long as the a''ro'riate remed$ is !sed& This Co!rt adheres to the 'rinci'le that
even s!bstantial errors in a civil registr$ ma$ be corrected and the tr!e facts
established 'rovided the 'arties aggrieved b$ the error avail themselves of the
a''ro'riate adversar$ 'roceeding&4 Repu"lic of the Philppines v. )r. +orma $.
*u'sanay 0y( G&@& ;o& .>A9.9( A!g!st .1( 19.0&
8amil$ @elations; Con%!gal 'ro'ert$; 'res!m'tion that all 'ro'ert$ of the marriage is
'res!med to belong to the con%!gal 'artnershi'( !nless it be 'roved that it 'ertains
e)cl!sivel$ to the h!sband or to the "ife; for 'res!m'tion to a''l$( 'art$ invo+ing
the same m!st 'reliminaril$ 'rove that the 'ro'ert$ "as indeed ac!ired d!ring the
marriage; 'res!m'tion cannot a''l$ "here there is no sho"ing as to "hen the
'ro'ert$ alleged to be con%!gal "as ac!ired& :ertinent to the resol!tion of this
second iss!e is Article .D9 of the Civil Code "hich states that 2HaIll 'ro'ert$ of the
marriage is 'res!med to belong to the con%!gal 'artnershi'( !nless it be 'roved that
it 'ertains e)cl!sivel$ to the h!sband or to the "ife&4 8or this 'res!m'tion to a''l$(
'g& ??
the 'art$ invo+ing the same m!st( ho"ever( 'reliminaril$ 'rove that the 'ro'ert$
"as indeed ac!ired d!ring the marriage& As held in Go v& Ramane6
) ) As a condition sine !a non for the o'eration of HArticle .D9I in favor of the
con%!gal 'artnershi'( the 'art$ "ho invo+es the 'res!m'tion m!st frst 'rove that
the 'ro'ert$ "as ac!ired d!ring the marriage&
In other "ords( the 'res!m'tion in favor of con%!galit$ does not o'erate if there is
no sho"ing of "hen the 'ro'ert$ alleged to be con%!gal "as ac!ired& Loreover(
the 'res!m'tion ma$ be reb!tted onl$ "ith strong( clear( categorical and
convincing evidence& There m!st be strict 'roof of the e)cl!sive o"nershi' of one of
the s'o!ses( and the b!rden of 'roof rests !'on the 'art$ asserting it&
In this case( there is no evidence to indicate "hen the 'ro'ert$ "as ac!ired b$
'etitioner Cosefna& Th!s( "e agree "ith 'etitioner Cosefna=s declaration in the deed
of absol!te sale she e)ec!ted in favor of the res'ondent that she "as the absol!te
and sole o"ner of the 'ro'ert$& !o""y 6an v. 4race Andrade, et al.D4race Andrade,
et al. v. !o""y 6an, G&@& ;os& ./.>9? X ./19./( A!g!st /( 19.0&
8amil$ relations& -nder the 8amil$ Code( famil$ relations( "hich is the 'rimar$ basis
for s!ccession( e)cl!de relations b$ aNnit$& Antipolo .nin' BdeceasedC, survived "y
anuel ,illanueva, 6eodora ,illanueva-3rancisco, Camilo 3rancisco, Adolfo
3rancisco, *ucimo 3rancisco, Jr., ila'ros 3rancisco,Celedonio 3rancisco,
(ermini'ildo 3rancisco9 Ramon 6resvalles, Ro"erto 6a<onera, +atividad .nin'-."ea
BdeceasedC survived "y 1dil"erto ."ea, Josefa ."ea, artha ."ea, Carmen ."ea,
Amparo ."ea-3ernande8, (enry Rui8, 1u'enio Rui8 and Pastor Rui89 )olores .nin'-
Rimon BdeceasedC survived "y Jesus Rimon, Cesaria Rimon 4on8ales and Remedios
Rimon Cordero9 and Pedro .nin' BdeceasedC survived "y 1lisa 6an .nin' BwifeC and
Pedro .nin', Jr. v. *eonardo R. ,e'a, su"stituted "y *ourdes ,e'a, Restonilo .. ,e'a,
Crispulo . ,e'a, il"uena ,e'a-Restituto and *enard ,e'a( G&@& ;o& ./?/1/(
A!g!st .1( 19.0&
Land titles; indefeasibilit$ of certifcate of title to '!blic land iss!ed '!rs!ant to a
grant or 'atent; false statement e)ce'tion; reversion of land& The certifcate of title
iss!ed '!rs!ant to an$ grant or 'atent involving '!blic lands is as concl!sive and
indefeasible as an$ other certifcate of title iss!ed to 'rivate lands in the ordinar$ or
cadastral registration 'roceedings& It is not s!b%ect to collateral attac+& Go"ever(
Section >. of Common"ealth Act ;o& .?. EThe :!blic Land ActF 'rovides for the
cancellation of the concession( title or 'ermit granted for an$ false statement in the
a''lication or omission of facts in the a''lication&
*nce a 'atent is registered and the corres'onding certifcate of title is iss!ed( the
land covered b$ it ceases to be 'art of the '!blic domain and becomes 'rivate
'ro'ert$( and the Torrens Title iss!ed '!rs!ant to the 'atent becomes indefeasible
!'on the e)'iration of one $ear from the date of iss!ance of s!ch 'atent& Go"ever(
as held in 6he )irector of *ands v. )e *una, et al.( even after the la'se of one $ear(
the State ma$ still bring an action !nder Section .9. of Common"ealth Act ;o& .?.
for the reversion to the '!blic domain of land "hich has been fra!d!lentl$ granted
to 'rivate individ!als& The b!rden of 'roof rests on the 'art$ "ho asserts the
'g& ?B
aNrmative of an iss!e& Repu"lic of the Philippines v. An'eles !ellate, and $pouses
Jesus Ca"anto and arieta Juanerio( G&@& ;o& ./BDAB( A!g!st /( 19.0&
Land titles; 8ra!d in an a''lication for grant of title to '!blic land or 'atent;
defnition& It "as held on *i"udan v. 4il that 2HtIhe fra!d m!st consist in an
intentional omission of facts re!ired b$ la" to be stated in the a''lication or a
"illf!l statement of a claim against the tr!th& It m!st sho" some s'ecifc acts
intended to deceive and de'rive another of his right& The fra!d m!st be act!al and
e)trinsic( not merel$ constr!ctive or intrinsic; the evidence thereof m!st be clear(
convincing and more than merel$ 're'onderant( beca!se the 'roceedings "hich are
assailed as having been fra!d!lent are %!dicial 'roceedings "hich b$ la"( are
'res!med to have been fair and reg!lar&4 Repu"lic of the Philippines v. An'eles
!ellate, and $pouses Jesus Ca"anto and arieta Juanerio( G&@& ;o& ./BDAB( A!g!st
/( 19.0&
Tr!st recei'ts; '!r'ose& To em'hasi<e( the Tr!st @ecei'ts La" "as created to 2to aid
in fnancing im'orters and retail dealers "ho do not have s!Ncient f!nds or
reso!rces to fnance the im'ortation or '!rchase of merchandise( and "ho ma$ not
be able to ac!ire credit e)ce't thro!gh !tili<ation( as collateral( of the merchandise
im'orted or '!rchased& (ur 6in ;an' v. People of the Philippines( G&@& ;o& .>B../(
A!g!st .?( 19.0&
Tr!st recei'ts; "hen not a tr!st recei'ts transaction& ;onetheless( "hen both 'arties
enter into an agreement +no"ing f!ll$ "ell that the ret!rn of the goods s!b%ect of
the tr!st recei't is not 'ossible even "itho!t an$ fa!lt on the 'art of the tr!stee( it
is not a tr!st recei't transaction 'enali<ed !nder Sec& .0 of :D ..B in relation to
Art& 0.B( 'ar& .EbF of the @:C( as the onl$ obligation act!all$ agreed !'on b$ the
'arties "o!ld be the ret!rn of the 'roceeds of the sale transaction& This transaction
becomes a mere loan( "here the borro"er is obligated to 'a$ the ban+ the amo!nt
s'ent for the '!rchase of the goods& (ur 6in ;an' v. People of the Philippines( G&@&
;o& .>B../( A!g!st .?( 19.0&
Civil registr$; nat!re of civil register boo+s; boo+s ma+ing !' the civil register and
all doc!ments relating thereto are '!blic doc!ments and shall be 'rima facie
evidence of the facts therein contained; as '!blic doc!ments( the$ are admissible in
evidence even "itho!t f!rther 'roof of their d!e e)ec!tion and gen!ineness&There
is no !estion that the doc!mentar$ evidence s!bmitted b$ 'etitioner are all '!blic
doc!ments& As 'rovided in the Civil Code6
A@T& ?.9& The boo+s ma+ing !' the civil register and all doc!ments relating thereto
shall be considered '!blic doc!ments and shall be prima facie evidence of the facts
therein contained&
As '!blic doc!ments( the$ are admissible in evidence even "itho!t f!rther 'roof of
their d!e e)ec!tion and gen!ineness& Th!s( the @TC erred "hen it disregarded said
doc!ments on the sole gro!nd that the 'etitioner did not 'resent the records
c!stodian of the ;S* "ho iss!ed them to testif$ on their a!thenticit$ and d!e
'g& ?D
e)ec!tion since 'roof of a!thenticit$ and d!e e)ec!tion "as not an$more necessar$&
Loreover( not onl$ are said doc!ments admissible( the$ deserve to be given
evidentiar$ "eight beca!se the$ constit!te prima facie evidence of the facts stated
therein& And in the instant case( the facts stated therein remain !nreb!tted since
neither the 'rivate res'ondent nor the '!blic 'rosec!tor 'resented evidence to the
contrar$& In ;asuo .wasawa v. 3elisa Custodio 4an'an Ba.&.a. J3elisa 4an'an
Aram"uloK and J3elisa 4an'an .wasawaKC, et al., 4.R. +o. I@A=?>, $eptem"er ==,
I@=H.
Contracts; contract to sell disting!ished from contract of sale; in a contract to sell(
o"nershi' remains "ith the vendor and does not 'ass to the vendee !ntil f!ll
'a$ment of the '!rchase 'rice; a deed of sale is absol!te "hen there is no
sti'!lation in the contract that title to the 'ro'ert$ remains "ith the seller !ntil the
f!ll 'a$ment of the '!rchase 'rice& In a conditional sale( as in a contract to sell(
o"nershi' remains "ith the vendor and does not 'ass to the vendee !ntil f!ll
'a$ment of the '!rchase 'rice& The f!ll 'a$ment of the '!rchase 'rice 'arta+es of a
s!s'ensive condition( and non#f!lfllment of the condition 'revents the obligation to
sell from arising& To di3erentiate( a deed of sale is absol!te "hen there is no
sti'!lation in the contract that title to the 'ro'ert$ remains "ith the seller !ntil f!ll
'a$ment of the '!rchase 'rice& Ramos v. (eruela held that Articles ..>. and .B>1
of the Civil Code are a''licable to contracts of sale( "hile @&A& ;o& DBB1 a''lies to
contracts to sell& anuel 0y E $ons, .nc. v. ,al"ueco, .ncorporated( G&@& ;o& ./>B>?(
Se'tember ..( 19.0&
Contracts; lease contracts; lease contracts s!rvive the death of the 'arties and
contin!e to bind the heirs e)ce't if the contract states other"ise; the 'rovision in
the lease contract stating that 2this contract is nontransferable !nless 'rior "ritten
consent of the lessor is obtained in "riting4 refers to transfers inter vivos and not
transmissions mortis ca!sa& The S!'reme Co!rt has 'revio!sl$ r!led that lease
contracts( b$ their nat!re( are not 'ersonal& The general r!le( therefore( is lease
contracts s!rvive the death of the 'arties and contin!e to bind the heirs e)ce't if
the contract states other"ise& In $ui an (ui Chan v. Court of Appeals( "e held that6
2A lease contract is not essentiall$ 'ersonal in character& Th!s( the rights and
obligations therein are transmissible to the heirs& The general r!le( therefore( is that
heirs are bo!nd b$ contracts entered into b$ their 'redecessors#in#interest e)ce't
"hen the rights and obligations arising therefrom are not transmissible b$ E.F their
nat!re( E1F sti'!lation or E0F 'rovision of la"& In the s!b%ect Contract of Lease( not
onl$ "ere there no sti'!lations 'rohibiting an$ transmission of rights( b!t its ver$
terms and conditions e)'licitl$ 'rovided for the transmission of the rights of the
lessor and of the lessee to their res'ective heirs and s!ccessors& The contract is the
la" bet"een the 'arties& The death of a 'art$ does not e)c!se non'erformance of a
contract( "hich involves a 'ro'ert$ right( and the rights and obligations there!nder
'ass to the s!ccessors or re'resentatives of the deceased& Similarl$(
non'erformance is not e)c!sed b$ the death of the 'art$ "hen the other 'art$ has
a 'ro'ert$ interest in the s!b%ect matter of the contract&4 Section D of the lease
contract 'rovides that 2HtIhis contract is nontransferable !nless 'rior consent of the
lessor is obtained in "riting&4 Section D refers to transfers inter vivos and not
transmissions mortis causa. What Section D see+s to avoid is for the lessee to
s!bstit!te a third 'art$ in 'lace of the lessee "itho!t the lessor=s consent& anuel
0y E $ons, .nc. v. ,al"ueco, .ncorporated( G&@& ;o& ./>B>?( Se'tember ..( 19.0&
'g& ?/
Contracts; lease contracts; s!blease arrangement; conce't& Assignment or transfer
of lease( "hich is covered b$ Article .D?> of the Civil Code( is di3erent from a
s!blease arrangement( "hich is governed b$ Article .DB9 of the same Code& In a
s!blease( the lessee becomes in t!rn a lessor to a s!b#lessee& The s!b#lessee then
becomes liable to 'a$ rentals to the original lessee& Go"ever( the %!ridical relation
bet"een the lessor and lessee is not dissolved& The 'arties contin!e to be bo!nd b$
the original lease contract& Th!s( in a s!blease arrangement( there are at least three
'arties and t"o distinct %!ridical relations& anuel 0y E $ons, .nc. v. ,al"ueco,
.ncorporated( G&@& ;o& ./>B>?( Se'tember ..( 19.0&
Contracts; lease contracts; lessee=s right !'on the termination of the lease to EaF
claim reimb!rsement from the lessor for half the val!e of the !sef!l im'rovements
introd!ced b$ the lessee in good faith( or to EbF demolish of s!ch im'rovements&
The CA erred in not a''l$ing Article .D/A of the Civil Code "hich 'rovides6 2Art&
.D/A& If the lessee ma+es( in good faith( !sef!l im'rovements "hich are s!itable to
the !se for "hich the lease is intended( "itho!t altering the form or s!bstance of
the 'ro'ert$ leased( the lessor !'on the termination of the lease shall 'a$ the
lessee one#half of the val!e of the im'rovements at that time& Sho!ld the lessor
ref!se to reimb!rse said amo!nt( the lessee ma$ remove the im'rovements( even
tho!gh the 'rinci'al thing ma$ s!3er damage thereb$& Ge shall not( ho"ever( ca!se
an$ more im'airment !'on the 'ro'ert$ leased than is necessar$& With regard to
ornamental e)'enses( the lessee shall not be entitled to an$ reimb!rsement( b!t he
ma$ remove the ornamental ob%ects( 'rovided no damage is ca!sed to the 'rinci'al
thing( and the lessor does not choose to retain them b$ 'a$ing their val!e at the
time the lease is e)ting!ished&4
The foregoing 'rovision a''lies if the im'rovements "ere6 E.F introd!ced in good
faith; E1F !sef!l; and E0F s!itable to the !se for "hich the lease is intended( "itho!t
altering the form and s!bstance& We fnd that the aforementioned re!isites are
satisfed in this case& The b!ildings "ere constr!cted before German=s demise(
d!ring the s!bsistence of a valid contract of lease& It does not a''ear that GDSC
'rohibited German from constr!cting the b!ildings& Th!s( GDSC sho!ld have
reimb!rsed German Eor his estateF half of the val!e of the im'rovements as of
199.& If GDSC is not "illing to reimb!rse the Inocencios( then the latter sho!ld
be allo"ed to demolish the b!ildings& anuel 0y E $ons, .nc. v. ,al"ueco,
.ncorporated( G&@& ;o& ./>B>?( Se'tember ..( 19.0&
Contracts; tortio!s interference; elements; e)ce'tion& As correctl$ 'ointed o!t b$
the Inocencios( tortio!s interference has the follo"ing elements6 E.F e)istence of a
valid contract; E1F +no"ledge on the 'art of the third 'erson of the e)istence of the
contract; and E0F interference of the third 'erson "itho!t legal %!stifcation or
e)c!se& In $o Pin' !un v. Court of Appeals, "e held that there "as no tortio!s
interference if the intr!sion "as im'elled b$ '!rel$ economic motives& In $o Pin'
!un, "e e)'lained that6 2A!thorities debate on "hether interference ma$ be
%!stifed "here the defendant acts for the sole '!r'ose of f!rthering his o"n
fnancial or economic interest& *ne vie" is that( as a general r!le( %!stifcation for
interfering "ith the b!siness relations of another e)ists "here the actor=s motive is
to beneft himself& S!ch %!stifcation does not e)ist "here his sole motive is to ca!se
harm to the other& Added to this( some a!thorities believe that it is not necessar$
'g& ?A
that the interferer=s interest o!t"eighs that of the 'art$ "hose rights are invaded(
and that an individ!al acts !nder an economic interest that is s!bstantial( not
merel$ de minimis( s!ch that "rongf!l and malicio!s motives are negatived( for he
acts in self#'rotection& Loreover( %!stifcation for 'rotecting one=s fnancial 'osition
sho!ld not be made to de'end on a com'arison of his economic interest in the
s!b%ect matter "ith that of others& It is s!Ncient if the im'et!s of his cond!ct lies in
a 'ro'er b!siness interest rather than in "rongf!l motives&4 Analita P. .nocencion,
su"stitutin' for Ramon .nocencion BdeceasedC v. (ospicio de $an Jose, G&@& ;o&
19./A/( Se'tember 1B( 19.0&
Damages; loss of earning ca'acit$; com'ensation for lost income is in the nat!re of
damages and as s!ch re!ires d!e 'roof of the damages s!3ered; there m!st be
!nbiased 'roof of the deceased=s income& In :eo'le v& Caraig( the S!'reme Co!rt
had dra"n t"o e)ce'tions to the r!le that 2doc!mentar$ evidence sho!ld be
'resented to s!bstantiate the claim for damages for loss of earning ca'acit$(4 and
have th!s a"arded damages "here there is testimon$ that the victim "as either E.F
self#em'lo$ed earning less than the minim!m "age !nder c!rrent labor la"s( and
%!dicial notice ma$ be ta+en of the fact that in the victim=s line of "or+ no
doc!mentar$ evidence is available; or E1F em'lo$ed as a dail$#"age "or+er earning
less than the minim!m "age !nder c!rrent labor la"s&4 In People of the Philippines
v. 1dwin ."ane8 y Al"ante, et al., G&@& ;o& .>/A.0( Se'tember 1B( 19.0&
Esto''el; re!isites& 8or esto''el to ta+e e3ect( there m!st be +no"ledge of the real
facts b$ the 'art$ so!ght to be esto''ed and reliance b$ the 'art$ claiming
esto''el on the re'resentation made b$ the former& In this case( 'etitioner cannot
be esto''ed from as+ing for the ret!rn of the vessel in the condition that it had
been at the time it "as sei<ed b$ res'ondent beca!se he had not +no"n of the
deteriorated condition of the shi'& 1rnesto )y v. (on. 4ina . !i"at-Palamos, in her
capacity as Presidin' Jud'e of the R6C, !ranch ?A, a&ati City, and #ri5 etro
*easin' and 3inance Corporation, G&@& ;o& .>D199( Se'tember ..( 19.0&
Interest; C!dgment a"ard; im'osition of interests; !nder JS: Circ!lar ;o& />>(
e3ective on C!l$ .( 19.0( the interest rate to be im'osed for a loan or forbearance
of mone$( goods or credits and the rate allo"ed in %!dgments in the absence of
sti'!lation thereon( "as changed from .1O to DO& ;otice m!st be ta+en that in
@esol!tion ;o& />D dated La$ .D( 19.0( the Lonetar$ Joard of the Jang+o Sentral
ng :ili'inas a''roved the revision of the interest rate to be im'osed for the loan or
forbearance of an$ mone$( goods or credits and the rate allo"ed in %!dgments( in
the absence of an e)'ress contract as to s!ch rate of interest& Th!s( !nder JS:
Circ!lar ;o& />>( iss!ed on C!ne 1.( 19.0 and e3ective on C!l$ .( 19.0( the said rate
of interest is no" bac+ at si) 'ercent EDOF( $.C. e'aworld Construction and
)evelopment Corporation v. 1n'r. *uis 0. Parada, represented "y 1n'r. *eonardo A.
Parada of 4enlite .ndustries, G&@& ;o& .A0A9?( Se'tember ..( 19.0&
Laches; conce't; the !estion of laches is addressed to the so!nd discretion of the
co!rt and( being an e!itable doctrine( its a''lication is controlled b$ e!itable
considerations& Laches has been defned as the fail!re or neglect for an
!nreasonable and !ne)'lained length of time to do that "hich( b$ e)ercising
'g& ?>
d!e diligence( co!ld or sho!ld have been done earlier( th!s( giving rise to a
'res!m'tion that the 'art$ entitled to assert it either has abandoned or declined to
assert it&
*n this score( it is a "ell#settled 'rinci'le of la" that laches is a reco!rse in e!it$(
"hich is( a''lied onl$ in the absence of stat!tor$ la"& And tho!gh laches a''lies
even to im'rescri'tible actions( its elements m!st be 'roved 'ositivel$& -ltimatel$(
the !estion of laches is addressed to the so!nd discretion of the co!rt and( being
an e!itable doctrine( its a''lication is controlled b$ e!itable considerations&
Citi"an&, +.A. and the Citi'roup Private !an& v. 1ster (. 6anco-4a"aldon, et al.D
Carol *im v. 1ster (. 6anco-4a"aldon, et al.( G&@& ;o& .>A???SG&@& ;o& .>A?D>#/9(
Se'tember ?( 19.0&
*bligations; novation; conce't; elements& In novation( a s!bse!ent obligation
e)ting!ishes a 'revio!s one thro!gh s!bstit!tion either b$ changing the ob%ect or
'rinci'al conditions( b$ s!bstit!ting another in 'lace of the debtor( or b$
s!brogating a third 'erson into the rights of the creditor& ;ovation re!ires EaF the
e)istence of a 'revio!s valid obligation; EbF the agreement of all 'arties to the ne"
contract; EcF the e)ting!ishment of the old contract; and EdF the validit$ of the ne"
one& There cannot be novation in this case since the 'ro'osed s!bstit!ted 'arties
did not agree to the :@A=s s!''osed assignment of its obligations !nder the
contract for the electrical and light "or+s at Geritage :ar+ to the G:LC& The latter
defnitel$ and clearl$ re%ected the :@A=s assignment of its liabilit$ !nder that
contract to the G:LC& Philippine Reclamation Authority Bformerly &nown as the
Pu"lic 1states Authority v. Roma'o, .nc.DRoma'o, .nc. ,s. Philippine Reclamation
Authority, G&@& ;os& ./?DDB and ./B11.( Se'tember .A( 19.0&
*bligations; novation as a mode of e)ting!ishing an obligation; conce't; novation is
never 'res!med b!t m!st be clearl$ and !ne!ivocall$ sho"n& ;ovation is a mode
of e)ting!ishing an obligation b$ changing its ob%ects or 'rinci'al obligations( b$
s!bstit!ting a ne" debtor in 'lace of the old one( or b$ s!brogating a third 'erson to
the rights of the creditor& It is 2the s!bstit!tion of a ne" contract( debt( or obligation
for an e)isting one bet"een the same or di3erent 'arties&4 The settled r!le is that
novation is never 'res!med( b!t m!st be clearl$ and !ne!ivocall$ sho"n& In order
for a ne" agreement to s!'ersede the old one( the 'arties to a contract m!st
e)'ressl$ agree that the$ are abrogating their old contract in favor of a ne" one&
Th!s( the mere s!bstit!tion of debtors "ill not res!lt in novation( and the fact that
the creditor acce'ts 'a$ments from a third 'erson( "ho has ass!med the obligation(
"ill res!lt merel$ in the addition of debtors and not novation( and the creditor ma$
enforce the obligation against both debtors& If there is no agreement as to solidarit$(
the frst and ne" debtors are considered obligated %ointl$& Philippine Reclamation
Authority Bformerly &nown as thePu"lic 1states Authority v. Roma'o, .nc.DRoma'o,
.nc. ,s. Philippine Reclamation Authority,G&@& ;os& ./?DDB and ./B11.( Se'tember
.A( 19.0&
S-.$/(L L(0S
Land registration; an a''licant "ho see+s to have a land registered in his name has
the b!rden of 'roving that he is its o"ner in fee sim'le& As held in Repu"lic v. *ee6
'g& B9
The most basic r!le in land registration cases is that 2no 'erson is entitled to have
land registered !nder the Cadastral or Torrens s$stem !nless he is the o"ner in fee
sim'le of the same( even tho!gh there is no o''osition 'resented against s!ch
registration b$ third 'ersons& ) ) ) In order that the 'etitioner for the registration of
his land shall be 'ermitted to have the same registered( and to have the beneft
res!lting from the certifcate of title( fnall$( iss!ed( the b!rden is !'on him to sho"
that he is the real and absol!te o"ner( in fee sim'le&
In 3irst 4as Power Corporation v. Repu"lic of the Philippines, Represented "y the
#fce of the $olicitor 4eneral, G&@& ;o& .D>?D.( Se'tember 1( 19.0.
Land registration; ;at!re of land registration 'roceedings; land registration
'roceedings are in rem in nat!re and( hence( b$ virt!e of the '!blication
re!irement( all claimants and occ!'ants of the s!b%ect 'ro'ert$ are deemed to be
notifed of the e)istence of a cadastral case involving the s!b%ect lots; 'arties are
'recl!ded from re#litigating the same iss!es alread$ determined b$ fnal %!dgment&
In this case( records disclose that 'etitioner itself manifested d!ring the
'roceedings before the @TC that there s!bsists a decision in a 'revio!s cadastral
case( i.e.( Cad& Case ;o& 0/( "hich covers the same lots it a''lied a''rised of the
e)istence of the foregoing decision even before the rendition of the @TC Decision
and Amended *rder thro!gh the L@A @e'ort dated as earl$ as ;ovember 1?( .>>A
"hich( as above#!oted( states that the s!b%ect lots 2"ere 'revio!sl$ a''lied for
registration of title in the HcIadastral 'roceedings and "ere both decided !nder
HCad& Case ;o& 0/I( GL@* @ecord ;o& .>D>( and are s!b%ect to the follo"ing
annotation ) ) )6 PLots .1>A E?B#.F HandI .0.B ED.#.F :te& ;!eva doc&=4 Since it had
been d!l$ notifed of an e)isting decision "hich binds over the s!b%ect lots( it "as
inc!mbent !'on 'etitioner to 'rove that the said decision "o!ld not a3ect its
claimed stat!s as o"ner of the s!b%ect lots in fee sim'le& In 3irst 4as Power
Corporation v. Repu"lic of the Philippines, Represented "y the #fce of the $olicitor
4eneral, G&@& ;o& .D>?D.( Se'tember 1( 19.0.
Land registration 'roceedings; nat!re; being a 'roceeding in rem( there is no need
to give 'ersonal notice to the o"ners or claimants of the land so!ght to be
registered in order to vest the co!rts "ith 'o"er and a!thorit$ over the res& Since
no iss!e "as raised as to Antonia Victorino=s com'liance "ith the 'rere!isites of
notice and '!blication( she is deemed to have follo"ed s!ch re!irements& As a
conse!ence( 'etitioner is deemed s!Ncientl$ notifed of the hearing of Antonia=s
a''lication& Gence( she cannot claim that she is denied d!e 'rocess& In Crisanta
4uido-1nrique8 v. Alicia .. ,ictorino, et al., G&@& ;o& .A9?1/( Se'tember 09( 19.0&
Land registration; re!irement that the a''lication for land registration m!st state
the f!ll names and addresses of all occ!'ants of the land and those of the ad%oining
o"ners( if +no"n( and if not +no"n( it m!st state the e)tent of the search made to
fnd them& As to the alleged denial of 'etitioner=s right to d!e 'rocess d!e to
Antonia Victorino=s fail!re to identif$ 'etitioner as indis'ensable 'art$ in her
a''lication for registration( as "ell as to serve her "ith act!al and 'ersonal notice(
'g& B.
Section .B of :residential Decree ;o& .B1> sim'l$ re!ires that the a''lication for
registration shall 2state the f!ll names and addresses of all occ!'ants of the land
and those of the ad%oining o"ners( if +no"n( and( if not +no"n( it shall state the
e)tent of the search made to fnd them&4 A 'er!sal of Antonia Victorino=s A''lication
sho"s that she en!merated the ad%oining o"ners& She also indicated therein that( to
the best of her +no"ledge( no 'erson has an$ interest or is in 'ossession of the
s!b%ect land& The fact that she did not identif$ 'etitioner as an occ!'ant or an
ad%oining o"ner is not tantamo!nt to denial of 'etitioner=s right to d!e 'rocess and
does not n!llif$ the @TC Decision granting s!ch a''lication& In Crisanta 4uido-
1nrique8 v. Alicia .. ,ictorino, et al., G&@& ;o& .A9?1/( Se'tember 09( 19.0&
Land @egistration; Torrens title; concl!sive evidence of o"nershi' of the land; the
'hrase 2married to4 is merel$ descri'tive of the civil stat!s of the registered o"ner&
A Torrens title is generall$ a concl!sive evidence of the o"nershi' of the land
referred to( beca!se there is a strong 'res!m'tion that it is valid and reg!larl$
iss!ed&1B The 'hrase 2married to4 is merel$ descri'tive of the civil stat!s of the
registered o"ner& .n Juan $evilla $alas, Jr. v. 1den ,illena A'uil, G&@& ;o& 1910/9(
Se'tember 10( 19.0&
Larriage; 'ro'ert$ regimes for marriages that are s!bse!entl$ declared void !nder
Article 0D of the 8amil$ Code; 'ro'ert$ ac!ired d!ring the marriage is 'res!med to
have been obtained thro!gh the co!'le=s %oint e3orts and governed b$ the r!les on
co#o"nershi'& In )i-o v. )i-o( the S!'reme Co!rt held that Article .?/ of the 8amil$
Code a''lies to the !nion of 'arties "ho are legall$ ca'acitated and not barred b$
an$ im'ediment to contract marriage( b!t "hose marriage is nonetheless declared
void !nder Article 0D of the 8amil$ Code( as in this case& Article .?/ of the 8amil$
Code 'rovides6
A@T& .?/& When a man and a "oman "ho are ca'acitated to marr$ each other( live
e)cl!sivel$ "ith each other as h!sband and "ife "itho!t the beneft of marriage or
!nder a void marriage( their "ages and salaries shall be o"ned b$ them in e!al
shares and the property ac1uired by both of them through their work or
industry shall be governed by the rules on coownership.
/n the absence of proof to the contrary, properties ac1uired while they
lived together shall be presumed to have been obtained by their 2oint
e3orts, work or industry, and shall be owned by them in e1ual shares. 8or
'!r'oses of this Article( a 'art$ "ho did not 'artici'ate in the ac!isition b$ the
other 'art$ of an$ 'ro'ert$ shall be deemed to have contrib!ted %ointl$ in the
ac!isition thereof if the former=s e3orts consisted in the care and maintenance of
the famil$ and of the ho!sehold&
;either 'art$ can enc!mber or dis'ose b$ acts inter vivos of his or her share in the
'ro'ert$ ac!ired d!ring cohabitation and o"ned in common( "itho!t the consent
of the other( !ntil after the termination of their cohabitation&
'g& B1
When onl$ one of the 'arties to a void marriage is in good faith( the share of the
'art$ in bad faith in the co#o"nershi' shall be forfeited in favor of their common
children& In case of defa!lt of or "aiver b$ an$ or all of the common children or their
descendants( each vacant share shall belong to the res'ective s!rviving
descendants& In the absence of descendants( s!ch share shall belong to the
innocent 'art$& In all cases( the forfeit!re shall ta+e 'lace !'on termination of the
cohabitation& EEm'hasis s!''liedF
-nder this 'ro'ert$ regime( 'ro'ert$ ac!ired d!ring the marriage is prima facie
'res!med to have been obtained thro!gh the co!'le=s %oint e3orts and governed b$
the r!les on co#o"nershi'& In Juan $evilla $alas, Jr. v. 1den ,illena A'uil, G&@& ;o&
1910/9( Se'tember 10( 19.0&
Larriage; n!llit$ of marriage; a %!dicial declaration of n!llit$ is re!ired before a
valid s!bse!ent marriage can be contracted( or else( "hat trans'ires is a bigamo!s
marriage& The S!'reme Co!rt has consistentl$ held that a %!dicial declaration of
n!llit$ is re!ired before a valid s!bse!ent marriage can be contracted; or else(
"hat trans'ires is a bigamo!s marriage( "hich is void from the beginning as
'rovided in Article 0BE?F of the 8amil$ Code of the :hili''ines& In ;asuo .wasawa v.
3elisa Custodio 4an'an Ba.&.a. J3elisa 4an'an Aram"uloK and J3elisa 4an'an
.wasawaKC, et al., 4.R. +o. I@A=?>, $eptem"er ==, I@=H.
@ealt$ Installment J!$er Act; right of b!$er to ref!nd on installments in case he
defa!lts in the 'a$ments of s!cceeding installments accr!es onl$ "hen he has 'aid
at least t"o $ears of installments& -nder @&A& ;o& DBB1( the right of the b!$er to
ref!nd accr!es onl$ "hen he has 'aid at least t"o $ears of installments& In this
case( res'ondent has 'aid less than t"o $ears of installments; hence( it is not
entitled to a ref!nd& anuel 0y E $ons, .nc. v. ,al"ueco, .ncorporated( G&@& ;o&
./>B>?( Se'tember ..( 19.0&
Contracts; binding e3ect& It is hornboo+ doctrine in the la" on contracts that the
'arties are bo!nd b$ the sti'!lations( cla!ses( terms and conditions the$ have
agreed to 'rovided that s!ch sti'!lations( cla!ses( terms and conditions are not
contrar$ to la"( morals( '!blic order or '!blic 'olic$& Consolidated .ndustrial 4ases,
.nc. v. Ala"an' edical Center( G&@& ;o& .A.>A0( ;ovember .0( 19.0&
Contracts; breach of; "hen moral damages ma$ be a"arded& In 3rancisco v.
3errer(this Co!rt r!led that moral damages ma$ be a"arded on the follo"ing bases6
To recover moral damages in an action for breach of contract( the breach m!st be
'al'abl$ "anton( rec+less( malicio!s( in bad faith( o''ressive or ab!sive&
-nder the 'rovisions of this la"( in c!l'a contract!al or breach of contract( moral
damages ma$ be recovered "hen the defendant acted in bad faith or "as g!ilt$ of
gross negligence Eamo!nting to bad faithF or in "anton disregard of his contract!al
obligation and( e)ce'tionall$( "hen the act of breach of contract itself is constit!tive
of tort res!lting in 'h$sical in%!ries&
'g& B0
Loral damages ma$ be a"arded in breaches of contracts "here the defendant
acted fra!d!lentl$ or in bad faith&
Jad faith does not sim'l$ connote bad %!dgment or negligence( it im'orts a
dishonest '!r'ose or some moral obli!it$ and conscio!s doing of a "rong( a
breach of +no"n d!t$ thro!gh some motive or interest or ill "ill that 'arta+es of the
nat!re of fra!d&
The 'erson claiming moral damages m!st 'rove the e)istence of bad faith b$ clear
and convincing evidence for the la" al"a$s 'res!mes good faith& It is not eno!gh
that one merel$ s!3ered slee'less nights( mental ang!ish( serio!s an)iet$ as the
res!lt of the act!ations of the other 'art$& Invariabl$ s!ch action m!st be sho"n to
have been "illf!ll$ done in bad faith or "ill ill motive& Lere allegations of
besmirched re'!tation( embarrassment and slee'less nights are ins!Ncient to
"arrant an a"ard for moral damages& It m!st be sho"n that the 'ro)imate ca!se
thereof "as the !nla"f!l act or omission of the H'rivate res'ondentI 'etitioners&
An a"ard of moral damages "o!ld re!ire certain conditions to be met( to "it6 E.F
frst( there m!st be an in%!r$( "hether 'h$sical( mental or 's$chological( clearl$
s!stained b$ the claimant; E1F second( there m!st be c!l'able act or omission
fact!all$ established; E0F third( the "rongf!l act or omission of the defendant is the
'ro)imate ca!se of the in%!r$ s!stained b$ the claimant; and E?F fo!rth( the a"ard
of damages is 'redicated on an$ of the cases stated in Article 11.> of the Civil
Code& Ale<andro ,. 6an&eh v. )evelopment !an& of the Philippines, et al&( G&@& ;o&
./.?1A( ;ovember ..( 19.0&
Contracts; breach of; damages; e)em'lar$ damages; conce't& E)em'lar$ damages
are disc!ssed in Article 111> of the Civil Code( as follo"s6
A@T& 111>& E)em'lar$ or corrective damages are im'osed( b$ "a$ of e)am'le or
correction of the '!blic good( in addition to moral( tem'erate( li!idated or
com'ensator$ damages&
E)em'lar$ damages are f!rther disc!ssed in Articles 1100 and 110?( 'artic!larl$
regarding the 're#re!isites of ascertaining moral damages and the fact that it is
discretionar$ !'on this Co!rt to a"ard them or not6
A@T& 1100& E)em'lar$ damages cannot be recovered as a matter of right; the co!rt
"ill decide "hether or not the$ sho!ld be ad%!dicated&
A@T& 110?& While the amo!nt of the e)em'lar$ damages need not be 'roven( the
'lainti3 m!st sho" that he is entitled to moral( tem'erate or com'ensator$
damages before the co!rt ma$ consider the !estion of "hether or not e)em'lar$
damages sho!ld be a"arded ) ) )
The '!r'ose of e)em'lar$ damages is to serve as a deterrent to f!t!re and
s!bse!ent 'arties from the commission of a similar o3ense& The case of People v.
Rante citing People v. )alisay held that6
'g& B?
Also +no"n as P'!nitive= or Pvindictive= damages( e)em'lar$ or corrective damages
are intended to serve as a deterrent to serio!s "rong doings( and as a vindication of
!nd!e s!3erings and "anton invasion of the rights of an in%!red or a '!nishment for
those g!ilt$ of o!trageo!s cond!ct& These terms are generall$( b!t not al"a$s( !sed
interchangeabl$& In common la"( there is 'reference in the !se of e)em'lar$
damages "hen the a"ard is to acco!nt for in%!r$ to feelings and for the sense of
indignit$ and h!miliation s!3ered b$ a 'erson as a res!lt of an in%!r$ that has been
malicio!sl$ and "antonl$ in,icted( the theor$ being that there sho!ld be
com'ensation for the h!rt ca!sed b$ the highl$ re'rehensible cond!ct of the
defendantYassociated "ith s!ch circ!mstances as "illf!lness( "antonness( malice(
gross negligence or rec+lessness( o''ression( ins!lt or fra!d or gross fra!dYthat
intensifes the in%!r$& The terms '!nitive or vindictive damages are often !sed to
refer to those s'ecies of damages that ma$ be a"arded against a 'erson to '!nish
him for his o!trageo!s cond!ct& In either case( these damages are intended in good
meas!re to deter the "rongdoer and others li+e him from similar cond!ct in the
f!t!re&
To %!stif$ an a"ard for e)em'lar$ damages( the "rongf!l act m!st be accom'anied
b$ bad faith( and an a"ard of damages "o!ld be allo"ed onl$ if the g!ilt$ 'art$
acted in a "anton( fra!d!lent( rec+less or malevolent manner& Ale<andro ,. 6an&eh
v. )evelopment !an& of the Philippines, et al&( G&@& ;o& ./.?1A( ;ovember ..(
19.0&
Contracts; fra!d; conce't; dolo incidente disting!ished from dolo ca!sante& In
$olid"an& Corporation v. indanao 3erroalloy Corporation, et al.(this Co!rt
elaborated on the distinction bet"een dolo ca!sante and dolo incidente6 8ra!d
refers to all +inds of dece'tion Y "hether thro!gh insidio!s machination(
mani'!lation( concealment or misre'resentation Y that "o!ld lead an ordinaril$
'r!dent 'erson into error after ta+ing the circ!mstances into acco!nt& In contracts(
a fra!d +no"n as dolo ca!sante or ca!sal fra!d is basicall$ a dece'tion !sed b$ one
'art$ 'rior to or sim!ltaneo!s "ith the contract( in order to sec!re the consent of
the other& ;eedless to sa$( the deceit em'lo$ed m!st be serio!s& In
contradistinction( onl$ some 'artic!lar or accident of the obligation is referred to b$
incidental fra!d or dolo incidente( or that "hich is not serio!s in character and
"itho!t "hich the other 'art$ "o!ld have entered into the contract an$"a$&
Ale<andro ,. 6an&eh v. )evelopment !an& of the Philippines, et al&( G&@& ;o& ./.?1A(
;ovember ..( 19.0&
Contracts; fra!d; dolo incidente and dolo ca!sante; e3ect on contracts&The
distinction bet"een fra!d as a gro!nd for rendering a contract voidable or as basis
for an a"ard of damages is 'rovided in Article .0??6 In order that fra!d ma$ ma+e a
contract voidable( it sho!ld be serio!s and sho!ld not have been em'lo$ed b$ both
contracting 'arties& Incidental fra!d onl$ obliges the 'erson em'lo$ing it to 'a$
damages& E.1/9F There are t"o t$'es of fra!d contem'lated in the 'erformance of
contracts6 dolo incidente or incidental fra!d and dolo ca!sante or fra!d serio!s
eno!gh to render a contract voidable&
This fra!d or dolo "hich is 'resent or em'lo$ed at the time of birth or 'erfection of
a contract ma$ either be dolo ca!sante or dolo incidente& The frst( or ca!sal fra!d
'g& BB
referred to in Article .00A( are those dece'tions or misre'resentations of a serio!s
character em'lo$ed b$ one 'art$ and "itho!t "hich the other 'art$ "o!ld not have
entered into the contract& Dolo incidente( or incidental fra!d "hich is referred to in
Article .0??( are those "hich are not serio!s in character and "itho!t "hich the
other 'art$ "o!ld still have entered into the contract& Dolo ca!sante determines or
is the essential ca!se of the consent( "hile dolo incidente refers onl$ to some
'artic!lar or accident of the obligation& The e3ects of dolo ca!sante are the n!llit$
of the contract and the indemnifcation of damages( and dolo incidente also obliges
the 'erson em'lo$ing it to 'a$ damages&

Ale<andro ,. 6an&eh v. )evelopment !an&
of the Philippines, et al&( G&@& ;o& ./.?1A( ;ovember ..( 19.0&
Contracts; fra!d; !ant!m of evidence re!ired to 'rove e)istence of; clear and
convincing evidence& ;either la" nor %!ris'r!dence disting!ishes "hether it is dolo
incidente or dolo ca!sante that m!st be 'roven b$ clear and convincing evidence& It
stands to reason that both dolo incidente and dolo ca!sante m!st be 'roven b$
clear and convincing evidence& The onl$ !estion is "hether this fra!d( "hen
'roven( ma$ be the basis for ma+ing a contract voidable Edolo ca!santeF( or for
a"arding damages Edolo incidenteF( or both&
The standard of 'roof re!ired is clear and convincing evidence& This standard of
'roof is derived from American common la"& It is less than 'roof be$ond reasonable
do!bt Efor criminal casesF b!t greater than 're'onderance of evidence Efor civil
casesF& The degree of believabilit$ is higher than that of an ordinar$ civil case& Civil
cases onl$ re!ire a 're'onderance of evidence to meet the re!ired b!rden of
'roof& Go"ever( "hen fra!d is alleged in an ordinar$ civil case involving contract!al
relations( an entirel$ di3erent standard of 'roof needs to be satisfed& The
im'!tation of fra!d in a civil case re!ires the 'resentation of clear and convincing
evidence& Lere allegations "ill not s!Nce to s!stain the e)istence of fra!d& The
b!rden of evidence rests on the 'art of the 'lainti3 or the 'art$ alleging fra!d& The
!ant!m of evidence is s!ch that fra!d m!st be clearl$ and convincingl$ sho"n&
Ale<andro ,. 6an&eh v. )evelopment !an& of the Philippines, et al&( G&@& ;o& ./.?1A(
;ovember ..( 19.0&
Contracts; @eci'rocal obligations; conce't; for failing to 'erform all its correlative
obligation !nder the reci'rocal contract( a 'art$ cannot !nilaterall$ demand
'erformance b$ the other 'art$& @eci'rocal obligations are those "hich arise from
the same ca!se( and in "hich each 'art$ is a debtor and a creditor of the other(
s!ch that the obligation of one is de'endent !'on the obligation of the other& The$
are to be 'erformed sim!ltaneo!sl$( so that the 'erformance of one is conditioned
!'on the sim!ltaneo!s f!lfllment of the other&4 In reci'rocal obligations( neither
'art$ inc!rs in dela$ if the other does not com'l$ or is not read$ to com'l$ in a
'ro'er manner "ith "hat is inc!mbent !'on him& 8rom the moment one of the
'arties f!lflls his obligation( dela$ b$ the other begins&
In reci'rocal obligations( before a 'art$ can demand the 'erformance of the
obligation of the other( the former m!st also 'erform its o"n obligation&
Consolidated .ndustrial 4ases, .nc. v. Ala"an' edical Center( G&@& ;o& .A.>A0(
;ovember .0( 19.0&
'g& BD
Contracts; rescission; gro!nds& @escission of a contract "ill not be 'ermitted for a
slight or cas!al breach( b!t onl$ for s!ch s!bstantial and f!ndamental violations as
"o!ld defeat the ver$ ob%ect of the 'arties in ma+ing the agreement& Whether a
breach is s!bstantial is largel$ determined b$ the attendant circ!mstances&
Consolidated .ndustrial 4ases, .nc. v. Ala"an' edical Center( G&@& ;o& .A.>A0(
;ovember .0( 19.0&
Damages; act!al damages; conce't; "hen a"arded& 8or damages to be recovered(
the best evidence obtainable b$ the in%!red 'art$ m!st be 'resented& Act!al or
com'ensator$ damages cannot be 'res!med( b!t m!st be 'roved "ith reasonable
degree of certaint$& The Co!rt cannot rel$ on s'ec!lation( con%ect!re or g!ess"or+
as to the fact and amo!nt of damages( b!t m!st de'end !'on com'etent 'roof that
the$ have been s!3ered and on evidence of the act!al amo!nt& If the 'roof is ,ims$
and !ns!bstantial( no damages "ill be a"arded& Consolidated .ndustrial 4ases, .nc.
v. Ala"an' edical Center( G&@& ;o& .A.>A0( ;ovember .0( 19.0&
Esto''el; cannot be made to a''l$ against the government& Granting that the
'ersons re'resenting the government "as negligent( the doctrine of esto''el
cannot be ta+en against the @e'!blic& It is a "ell#settled r!le that the @e'!blic or its
government is not esto''ed b$ mista+e or error on the 'art of its oNcials or agents&
In an$ case( even granting that the said oNcial "as negligent( the doctrine of
esto''el cannot o'erate against the State& 2It is a "ell#settled r!le in o!r %!risdiction
that the @e'!blic or its government is !s!all$ not esto''ed b$ mista+e or error on
the 'art of its oNcials or agents ELanila Lodge ;o& /D. vs& CA( /0 SC@A .DD( .AD;
@e'!blic vs& Larcos( B1 SC@A 10A( 1??; L!ciano vs& Estrella( 0? SC@A /D>F& Repu"lic
of the Philippines v. Antonio !acas, et al&( G&@& ;o& .A1>.0( ;ovember 19( 19.0&
Sales; sale of real 'ro'ert$; a!thorit$ of the agent m!st be in "riting; other"ise the
sale is n!ll and void& Articles .A/? of the Civil Code 'rovides6
Art& .A/?& When a sale of a 'iece of land or an$ interest therein is thro!gh an agent(
the a!thorit$ of the latter shall be in "riting; other"ise( the sale shall be void&
Li+e"ise( Article .A/A 'aragra'h B of the Civil Code s'ecifcall$ mandates that the
a!thorit$ of the agent to sell a real 'ro'ert$ m!st be conferred in "riting( to "it6
Art& .A/A& S'ecial 'o"ers of attorne$ are necessar$ in the follo"ing cases6
E.F ) ) )
) ) )
EBF To enter into an$ contract b$ "hich the o"nershi' of an immovable is
transmitted or ac!ired either grat!ito!sl$ or for a val!able consideration;
) ) )&
'g& B/
The foregoing 'rovisions e)'licitl$ re!ire a "ritten a!thorit$ "hen the sale of a
'iece of land is thro!gh an agent( "hether the sale is grat!ito!sl$ or for a val!able
consideration& Absent s!ch a!thorit$ in "riting( the sale is n!ll and void& $pouses
1liseo R. !autista and 1mperatri8 C. !autista v. $pouses ila Jalandoni and Antonio
Jalandoni and anila Credit Corporation( G&@& ;o& ./.?D?SG&@& ;o& .>>0?.(
;ovember 1/( 19.0&
Sales; sale of real 'ro'ert$; b!$er in good faith; conditions to 'rove good faith;
fail!re to verif$ e)tent and nat!re of agent=s a!thorit$& A b!$er in good faith is one
"ho b!$s the 'ro'ert$ of another "itho!t notice that some other 'erson has a right
to or interest in s!ch 'ro'ert$& Ge is a b!$er for val!e if he 'a$s a f!ll and fair 'rice
at the time of the '!rchase or before he has notice of the claim or interest of some
other 'erson in the 'ro'ert$& 2Good faith connotes an honest intention to abstain
from ta+ing !nconscientio!s advantage of another&4To 'rove good faith( the
follo"ing conditions m!st be 'resent6 EaF the seller is the registered o"ner of the
land; EbF the o"ner is in 'ossession thereof; and E0F at the time of the sale( the
b!$er "as not a"are of an$ claim or interest of some other 'erson in the 'ro'ert$(
or of an$ defect or restriction in the title of the seller or in his ca'acit$ to conve$
title to the 'ro'ert$& All these conditions m!st be 'resent( other"ise( the b!$er is
!nder obligation to e)ercise e)tra ordinar$ diligence b$ scr!tini<ing the certifcates
of title and e)amining all fact!al circ!mstances to enable him to ascertain the
seller=s title and ca'acit$ to transfer an$ interest in the 'ro'ert$& $pouses 1liseo R.
!autista and 1mperatri8 C. !autista v. $pouses ila Jalandoni and Antonio Jalandoni
and anila Credit Corporation( G&@& ;o& ./.?D?SG&@& ;o& .>>0?.( ;ovember 1/(
19.0&
Sales; sale of real 'ro'ert$ on installment; grace 'eriod& Section 0EaF of @&A& DBB1
'rovides that the total grace 'eriod corres'onds to one month for ever$ one $ear of
installment 'a$ments made( 'rovided that the b!$er ma$ e)ercise this right onl$
once in ever$ fve $ears of the life of the contract and its e)tensions& The b!$er=s
fail!re to 'a$ the installments d!e at the e)'iration of the grace 'eriod allo"s the
seller to cancel the contract after 09 da$s from the b!$er=s recei't of the notice of
cancellation or demand for rescission of the contract b$ a notarial act&
Sale of real 'ro'ert$ on installment; cash s!rrender val!e; "hen the b!$er is
entitled thereto& @e'!blic Act ;o& DBB1( also +no"n as the Laceda La"( or the
@ealt$ Installment J!$er :rotection Act( has the declared '!blic 'olic$ of 2'rotecting
b!$ers of real estate on installment 'a$ments against onero!s and o''ressive
conditions&4
Section 0 of @&A& DBB1 'rovides for the rights of a b!$er "ho has 'aid at least t"o
$ears of installments b!t defa!lts in the 'a$ment of s!cceeding installments&
Section 0 'rovides that in all transactions or contracts involving the sale or
fnancing of real estate on installment 'a$ments( incl!ding residential condomini!m
a'artments b!t e)cl!ding ind!strial lots( commercial b!ildings and sales to tenants
!nder @&A& ;o& 0A??( as amended b$ @&A& ;o& D0A>( "here the b!$er has 'aid at
least t"o $ears of installments( the b!$er is entitled to the follo"ing rights in case
he defa!lts in the 'a$ment of s!cceeding installments6
'g& BA
EaF To 'a$( "itho!t additional interest( the !n'aid installments d!e "ithin the total
grace 'eriod earned b$ him "hich is hereb$ f)ed at the rate of one month grace
'eriod for ever$ one $ear of installment 'a$ments made6 :rovided( That this right
shall be e)ercised b$ the b!$er onl$ once in ever$ fve $ears of the life of the
contract and its e)tensions( if an$&
EbF If the contract is cancelled( the seller shall ref!nd to the b!$er the cash
s!rrender val!e of the 'a$ments on the 'ro'ert$ e!ivalent to fft$ 'er cent of the
total 'a$ments made( and( after fve $ears of installments( an additional fve 'er
cent ever$ $ear b!t not to e)ceed ninet$ 'er cent of the total 'a$ments made6
:rovided( That the act!al cancellation of the contract shall ta+e 'lace after thirt$
da$s from recei't b$ the b!$er of the notice of cancellation or the demand for
rescission of the contract b$ a notarial act and !'on f!ll 'a$ment of the cash
s!rrender val!e to the b!$er&
Do"n 'a$ments( de'osits or o'tions on the contract shall be incl!ded in the
com'!tation of the total n!mber of installment 'a$ments made& 4atchalian Realty,
.nc. v. 1velyn An'eles( G&@& ;o& 1910BA( ;ovember 1/( 19.0&
Sales; sale of real 'ro'ert$ on installment; cancellation of; t"in re!irements of a
notari<ed notice of cancellation and a ref!nd of the cash s!rrender val!e& The Co!rt
has been consistent in r!ling that a valid and e3ective cancellation !nder @&A& DBB1
m!st com'l$ "ith the mandator$ t"in re!irements of a notari<ed notice of
cancellation and a ref!nd of the cash s!rrender val!e&
In #lympia (ousin', .nc. v. Panasiatic 6ravel Corp&( the Co!rt r!led that the notarial
act of rescission m!st be accom'anied b$ the ref!nd of the cash s!rrender val!e&
The act!al cancellation of the contract can onl$ be deemed to ta+e 'lace !'on the
e)'ir$ of a 09#da$ 'eriod follo"ing the recei't b$ the b!$er of the notice of
cancellation or demand for rescission b$ a notarial act and the f!ll 'a$ment of the
cash s!rrender val!e&
In Pa'talunan v. )ela Cru8 ,da. )e an8ano( the Co!rt r!led that there is no valid
cancellation of the Contract to Sell in the absence of a ref!nd of the cash s!rrender
val!e& It stated that 2Sec& 0 EbF of @&A& ;o& DBB1 re!ires ref!nd of the cash
s!rrender val!e of the 'a$ments on the 'ro'ert$ to the b!$er before cancellation of
the contract& The 'rovision does not 'rovide a di3erent re!irement for contracts to
sell "hich allo" 'ossession of the 'ro'ert$ b$ the b!$er !'on e)ec!tion of the
contract li+e the instant case& Gence( 'etitioner cannot insist on com'liance "ith
the re!irement b$ ass!ming that the cash s!rrender val!e 'a$able to the b!$er
had been a''lied to rentals of the 'ro'ert$ after res'ondent failed to 'a$ the
installments d!e&4 4atchalian Realty, .nc. v. 1velyn An'eles( G&@& ;o& 1910BA(
;ovember 1/( 19.0&
S-.$/(L L(0S
Land registration; a''lication for land registration re!ires that the names and
addresses of all ad%oining o"ners and occ!'ants be stated( if +no"n( and if not
+no"n( to state the search made to fnd them; omission thereof constit!tes fra!d&
'g& B>
The governing r!le in the a''lication for registration of lands at that time "as
Section 1. of Act ?>D "hich 'rovided for the form and content of an a''lication for
registration( and it 'rovides that the a''lication shall be in "riting( signed and
s"orn to b$ a''licant( or b$ some 'erson d!l$ a!thori<ed in his behalf& It shall also
state the name in f!ll and the address of the a''licant( and also the names and
addresses of all ad%oining o"ners and occ!'ants( if +no"n; and( if not +no"n( it shall
state "hat search has been made to fnd them&
The reason behind the la" "as e)'lained in the case of 3ew&es vs. ,asque8("here it
"as noted that !nder Section 1. of the Land @egistration Act an a''lication for
registration of land is re!ired to contain( among others( a descri'tion of the land
s!b%ect of the 'roceeding( the name( stat!s and address of the a''licant( as "ell as
the names and addresses of all occ!'ants of the land and of all ad%oining o"ners( if
+no"n( or if !n+no"n( of the ste's ta+en to locate them& When the a''lication is set
b$ the co!rt for initial hearing( it is then that notice Eof the hearingF( addressed to
all 'ersons a''earing to have an interest in the lot being registered and the
ad%oining o"ners( and indicating the location( bo!ndaries and technical descri'tion
of the land being registered( shall be '!blished in the *Ncial Ga<ette for t"o
consec!tive times& It is this '!blication of the notice of hearing that is considered
one of the essential bases of the %!risdiction of the co!rt in land registration cases(
for the 'roceedings being in rem( it is onl$ "hen there is constr!ctive sei<!re of the
land( e3ected b$ the '!blication and notice( that %!risdiction over the res is vested
on the co!rt& 8!rthermore( it is s!ch notice and '!blication of the hearing that "o!ld
enable all 'ersons concerned( "ho ma$ have an$ rights or interests in the 'ro'ert$(
to come for"ard and sho" to the co!rt "h$ the a''lication for registration thereof is
not to be granted&Repu"lic of the Philippines v. Antonio !acas, et al&( G&@& ;o&
.A1>.0( ;ovember 19( 19.0&
Land registration; an$ title to inalienable '!blic land is void ab initio; all 'roceedings
of the Land @egistration Co!rt involving the s!ch 'ro'ert$ is "itho!t legal e3ect(
hence cannot attain fnalit$& In Collado v. Court of Appeals and the Repu"lic, the
Co!rt declared that an$ title to an inalienable '!blic land is void ab initio& An$
'roced!ral infrmities attending the fling of the 'etition for ann!lment of %!dgment
are immaterial since the L@C never ac!ired %!risdiction over the 'ro'ert$& All
'roceedings of the L@C involving the 'ro'ert$ are n!ll and void and( hence( did not
create an$ legal e3ect& A %!dgment b$ a co!rt "itho!t %!risdiction can never attain
fnalit$& The Land @egistration Co!rt has no %!risdiction over non#registrable
'ro'erties( s!ch as '!blic navigable rivers "hich are 'arts of the '!blic domain( and
cannot validl$ ad%!dge the registration of title in favor of 'rivate a''licant& Repu"lic
of the Philippines v. Antonio !acas, et al&( G&@& ;o& .A1>.0( ;ovember 19( 19.0&
Land registration; confrmation and registration of im'erfect and incom'lete title;
!alifcations& C&A& ;o& .?. governs the classifcation and dis'osition of lands of the
'!blic domain& Section .. of C&A& ;o& .?. 'rovides( as one of the modes of
dis'osing '!blic lands that are s!itable for agric!lt!re( the 2confrmation of
im'erfect or incom'lete titles&4 Section ?A( on the other hand( en!merates those
"ho are considered to have ac!ired an im'erfect or incom'lete title over '!blic
lands and( therefore( entitled to confrmation and registration !nder the Land
@egistration Act&
'g& D9
As amended b$ :&D& ;o& .9/0 on Can!ar$ 1B( .>//( Section ?AEbF of C&A& ;o& .?.
'rovides6
Section ?A& The follo"ing described citi<ens of the :hili''ines( occ!'$ing lands of
the '!blic domain or claiming to o"n an$ s!ch lands or an interest therein( b!t
"hose titles have not been 'erfected or com'leted( ma$ a''l$ to the Co!rt of 8irst
Instance Hno" @egional Trial Co!rtI of the 'rovince "here the land is located for
confrmation of their claims and the iss!ance of a certifcate of title therefor( !nder
the Land @egistration Act( to "it6
) ) ) )
EbF Those "ho b$ themselves or thro!gh their 'redecessors#in#interest have been in
o'en( contin!o!s( e)cl!sive( and notorio!s 'ossession and occ!'ation of
agric!lt!ral lands of the '!blic domain( !nder a bona fde claim of ac!isition or
o"nershi'( since C!ne .1( .>?B( or earlier( immediatel$ 'receding the fling of the
a''lication for confrmation of title e)ce't "hen 'revented b$ "ar or force ma%e!re&
These shall be concl!sivel$ 'res!med to have 'erformed all the conditions essential
to a Government grant and shall be entitled to a certifcate of title !nder the
'rovisions of this cha'ter&
:rior to the amendment introd!ced b$ :&D& ;o& .9/0( Section ?AEbF of C&A& ;o& .?.(
then o'erated !nder the @e'!blic Act E@&A&F ;o& .>?1 EC!ne 11( .>B/F amendment(
"hich reads6
EbF Those "ho b$ themselves or thro!gh their 'redecessors#in#interest have been in
o'en( contin!o!s( e)cl!sive and notorio!s 'ossession and occ!'ation of agric!lt!ral
lands of the '!blic domain( !nder a bona fde claim of ac!isition or o"nershi'( for
at least thirt$ $ears( immediatel$ 'receding the fling of the a''lication for
confrmation of title e)ce't "hen 'revented b$ "ar or force ma%e!re& These shall be
concl!sivel$ 'res!med to have 'erformed all the conditions essential to a
Government grant and shall be entitled to a certifcate of title !nder the 'rovisions
of this cha'ter&
)))
In relation to C&A& ;o& .?.( Section .? of :residential Decree :&D&F ;o& .B1> or the
:ro'ert$ @egistration Decree s'ecifes those "ho are !alifed to register their
incom'lete title over an alienable and dis'osable '!blic land !nder the Torrens
s$stem& :&D& ;o& .B1>( "hich "as a''roved on C!ne ..( .>/A( s!'erseded and
codifed all la"s relative to the registration of 'ro'ert$&
The 'ertinent 'ortion of Section .? of :&D& ;o& .B1> reads6
Section .?& Who ma$ a''l$& The follo"ing 'ersons ma$ fle in the 'ro'er Co!rt of
8irst Instance Hno" @egional Trial Co!rtI an a''lication for registration of title to
land( "hether 'ersonall$ or thro!gh their d!l$ a!thori<ed re'resentatives6
'g& D.
E.F Those "ho b$ themselves or thro!gh their 'redecessors#in#interest have been in
o'en( contin!o!s( e)cl!sive and notorio!s 'ossession and occ!'ation of alienable
and dis'osable lands of the '!blic domain !nder a bona fde claim of o"nershi'
since C!ne .1( .>?B( or earlier&
Roman Catholic Arch"ishop of anila v. Cresencia $ta. 6eresa Ramos, assisted "y
her hus"and, Ponciano 3rancisco( G&@& ;o& ./>.A.( ;ovember .A( 19.0&
Land registration; confrmation and registration of im'erfect and incom'lete title;
o'en( contin!o!s( e)cl!sive and notorio!s 'ossession& The 'ossession contem'lated
b$ Section ?AEbF of C&A& ;o& .?. is act!al( not fctional or constr!ctive& In Carlos v
Repu"lic of the Philippines(the Co!rt e)'lained the character of the re!ired
'ossession( as follo"s6
The la" s'ea+s of 'ossession and occ!'ation& Since these "ords are se'arated b$
the con%!nction and( the clear intention of the la" is not to ma+e one s$non$mo!s
"ith the other& :ossession is broader than occ!'ation beca!se it incl!des
constr!ctive 'ossession& When( therefore( the la" adds the "ord occ!'ation( it
see+s to delimit the all#encom'assing e3ect of constr!ctive 'ossession& Ta+en
together "ith the "ords o'en( contin!o!s( e)cl!sive and notorio!s( the "ord
occ!'ation serves to highlight the fact that for an a''licant to !alif$( his
'ossession m!st not be a mere fction& Act!al 'ossession of a land consists in the
manifestation of acts of dominion over it of s!ch a nat!re as a 'art$ "o!ld nat!rall$
e)ercise over his o"n 'ro'ert$&
:roof of act!al 'ossession of the 'ro'ert$ at the time of the fling of the a''lication
is re!ired beca!se the 'hrase adverse( contin!o!s( o'en( '!blic( and in conce't of
o"ner(4 the @CAL !sed to describe its alleged 'ossession( is a concl!sion of la"(not
an allegation of fact& :ossession is o'en "hen it is 'atent( visible( a''arent HandI
notorio!s ) ) ) contin!o!s "hen !ninterr!'ted( !nbro+en and not intermittent or
occasional; e)cl!sive "hen Hthe 'ossession is characteri<ed b$ acts manifestingI
e)cl!sive dominion over the land and an a''ro'riation of it to Hthe a''licantZsI o"n
!se and beneft; and notorio!s "hen it is so cons'ic!o!s that it is generall$ +no"n
and tal+ed of b$ the '!blic or the 'eo'le in the neighborhood&4Roman Catholic
Arch"ishop of anila v. Cresencia $ta. 6eresa Ramos, assisted "y her hus"and,
Ponciano 3rancisco( G&@& ;o& ./>.A.( ;ovember .A( 19.0&
Land registration; lands forming 'art of a militar$ reservation are inalienable( hence
not registrable& The la" governing the a''lications "as Common"ealth Act EC&A&F
;o& .?.(as amended b$ @A .>?1( 'artic!larl$ Sec& ?AEbF "hich 'rovided that those
"ho b$ themselves or thro!gh their 'redecessors in interest have been in o'en(
contin!o!s( e)cl!sive and notorio!s 'ossession and occ!'ation of agric!lt!ral lands
of the '!blic domain( !nder a bona fde claim of ac!isition of o"nershi'( for at
least thirt$ $ears immediatel$ 'receding the fling of the a''lication for confrmation
of title e)ce't "hen 'revented b$ "ar or force ma%e!re& These shall be concl!sivel$
'res!med to have 'erformed all the conditions essential to a Government grant and
shall be entitled to a certifcate of title !nder the 'rovisions of this cha'ter&
As can be gleaned therefrom( the necessar$ re!irements for the grant of an
a''lication for land registration are the follo"ing6
'g& D1
.& The a''licant m!st( b$ himself or thro!gh his 'redecessors#in#interest( have been
in 'ossession and occ!'ation of the s!b%ect land;
1& The 'ossession and occ!'ation m!st be o'en( contin!o!s( e)cl!sive and
notorio!s;
0& The 'ossession and occ!'ation m!st be !nder a bona fde claim of o"nershi' for
at least thirt$ $ears immediatel$ 'receding the fling of the a''lication; and
?& The s!b%ect land m!st be an agric!lt!ral land of the '!blic domain& As earlier
stated( in .>0A( :resident T!e<on iss!ed :residential :roclamation ;o& 1DB( "hich
too+ e3ect on Larch 0.( .>0A( reserving for the !se of the :hili''ine Arm$ 'arcels
of the '!blic domain sit!ated in the barrios of J!l!a and Carmen( then L!nici'alit$
of Caga$an( Lisamis *riental& The s!b%ect 'arcels of land "ere "ithdra"n from sale
or settlement or reserved for militar$ '!r'oses( 2s!b%ect to 'rivate rights( if an$
there be&4
S!ch 'o"er of the :resident to segregate lands "as 'rovided for in Section D?EeF of
the old @evised Administrative Code and C&A& ;o& .?. or the :!blic Land Act& Later(
the 'o"er of the :resident "as restated in Section .?( Cha'ter ?( Joo+ III of the
.>A/ Administrative Code& When a 'ro'ert$ is oNciall$ declared a militar$
reservation( it becomes inalienable and o!tside the commerce of man&It ma$ not be
the s!b%ect of a contract or of a com'romise agreement& A 'ro'ert$ contin!es to be
'art of the '!blic domain( not available for 'rivate a''ro'riation or o"nershi'( !ntil
there is a formal declaration on the 'art of the government to "ithdra" it from
being s!ch& In the case of Repu"lic v. Court of Appeals and )e Jesus( it "as even
stated that
Lands covered b$ reservation are not s!b%ect to entr$( and no la"f!l settlement on
them can be ac!ired&The claims of 'ersons "ho have settled on( occ!'ied( and
im'roved a 'arcel of '!blic land "hich is later incl!ded in a reservation are
considered "orth$ of 'rotection and are !s!all$ res'ected( b!t "here the :resident(
as a!thori<ed b$ la"( iss!es a 'roclamation reserving certain lands and "arning all
'ersons to de'art therefrom( this terminates an$ rights 'revio!sl$ ac!ired in s!ch
lands b$ a 'erson "ho "as settled thereon in order to obtain a 'referential right of
'!rchase& And 'atents for lands "hich have been 'revio!sl$ granted( reserved from
sale( or a''ro'riate( are void& Repu"lic of the Philippines v. Antonio !acas, et al&(
G&@& ;o& .A1>.0( ;ovember 19( 19.0&
Trademar+ registration; not a mode of ac!iring o"nershi' b!t merel$ creates
'res!m'tion of the validit$ of the registration( of the registrant=s o"nershi' of the
trademar+ and of the e)cl!sive right to the !se thereof& It m!st be em'hasi<ed that
registration of a trademar+( b$ itself( is not a mode of ac!iring o"nershi'&If the
a''licant is not the o"ner of the trademar+( he has no right to a''l$ for its
registration& @egistration merel$ creates a 'rima facie 'res!m'tion of the validit$ of
the registration( of the registrant=s o"nershi' of the trademar+( and of the e)cl!sive
right to the !se thereof& S!ch 'res!m'tion( %!st li+e the 'res!m'tive reg!larit$ in
the 'erformance of oNcial f!nctions( is reb!ttable and m!st give "a$ to evidence to
the contrar$&
'g& D0
Clearl$( it is not the a''lication or registration of a trademar+ that vests o"nershi'
thereof( b!t it is the o"nershi' of a trademar+ that confers the right to register the
same& A trademar+ is an ind!strial 'ro'ert$ over "hich its o"ner is entitled to
'ro'ert$ rights "hich cannot be a''ro'riated b$ !nscr!'!lo!s entities that( in one
"a$ or another( ha''en to register s!ch trademar+ ahead of its tr!e and la"f!l
o"ner& The 'res!m'tion of o"nershi' accorded to a registrant m!st then
necessaril$ $ield to s!'erior evidence of act!al and real o"nershi' of a trademar+&
The Co!rt=s 'rono!ncement in !erris A'ricultural Co., .nc. v. A"yadan' is instr!ctive
on this 'oint6
The o"nershi' of a trademar+ is ac!ired b$ its registration and its act!al !se b$
the man!fact!rer or distrib!tor of the goods made available to the '!rchasing
'!blic& ) ) ) A certifcate of registration of a mar+( once iss!ed( constit!tes 'rima
facie evidence of the validit$ of the registration( of the registrant=s o"nershi' of the
mar+( and of the registrant=s e)cl!sive right to !se the same in connection "ith the
goods or services and those that are related thereto s'ecifed in the certifcate& ) )
) In other "ords( the 'rima facie 'res!m'tion bro!ght abo!t b$ the registration of a
mar+ ma$ be challenged and overcome in an a''ro'riate action( ) ) ) b$ evidence
of 'rior !se b$ another 'erson( i&e& ( it "ill controvert a claim of legal a''ro'riation
or of o"nershi' based on registration b$ a s!bse!ent !ser& This is beca!se a
trademar+ is a creation of !se and belongs to one "ho frst !sed it in trade or
commerce&
!ir&enstoc& #rthopaedi 4m!( and Co. /', etc. v. Philippine $hoe 15po ar&etin'
Corp&( G&@& ;o& .>?09/( ;ovember 19( 19.0&
$ivil $ode
Contracts; conce't of contracts& A contract is "hat the la" defnes it to be( ta+ing
into consideration its essential elements( and not "hat the contracting 'arties call
it& The real nat!re of a contract ma$ be determined from the e)'ress terms of the
"ritten agreement and from the contem'oraneo!s and s!bse!ent acts of the
contracting 'arties& Go"ever( in the constr!ction or inter'retation of an instr!ment(
the intention of the 'arties is 'rimordial and is to be '!rs!ed& The denomination or
title given b$ the 'arties in their contract is not concl!sive of the nat!re of its
contents& AC1 3oods, .nc. v. icro Pacifc 6echnolo'ies Co., *td., G&@& ;o& 199D91(
December ..( 19.0&
Contracts; contract of loan; interest sti'!lated; red!ced for being ini!ito!s and
!nconscionable& :arties to a loan contract have "ide latit!de to sti'!late on an$
interest rate in vie" of the Central Jan+ Circ!lar ;o& >9B s& .>A1 "hich s!s'ended
the -s!r$ La" ceiling on interest e3ective Can!ar$ .( .>A0& It is( ho"ever( "orth
stressing that interest rates "henever !nconscionable ma$ still be declared illegal&
There is nothing in the circ!lar "hich grants lenders carte "lanche a!thorit$ to raise
interest rates to levels "hich "ill either enslave their borro"ers or lead to a
hemorrhaging of their assets&In enchave8 v. !ermude8( the interest rate of BO 'er
month( "hich "hen s!mmed !' "o!ld reach D9O 'er ann!m( is n!ll and void for
'g& D?
being e)cessive( ini!ito!s( !nconscionable and e)orbitant( contrar$ to morals( and
the la"& 3lorpina !envide8 v. +estor $alvador, G&@& ;o& ./000.( December ..( 19.0&
Damages; a"ard of costs; "hen entitled& Costs shall be allo"ed to the 'revailing
'art$ as a matter of co!rse !nless other"ise 'rovided in the @!les of Co!rt& The
costs @amire< ma$ recover are those stated in Section .9( @!le .?1 of the @!les of
Co!rt& 8or instance( @amire< ma$ recover the la"f!l fees he 'aid in doc+eting his
action for ann!lment of sale before the trial co!rt& The co!rt adds thereto the
amo!nt of :0(B09 or the amo!nt of doc+et and la"f!l fees 'aid b$ @amire< for fling
this 'etition before this Co!rt& 0BE0BF The co!rt deleted the a"ard of moral and
e)em'lar$ damages; hence( the restriction !nder Section /( @!le .?1 of the @!les of
Co!rt"o!ld have 'revented @amire< to recover an$ cost of s!it& J!t the co!rt
certifes( in accordance "ith said Section /( that @amire<=s action for ann!lment of
sale involved a s!bstantial and im'ortant right s!ch that he is entitled to an a"ard
of costs of s!it& ;eedless to stress( the '!r'ose of 'aragra'h ; of the real estate
mortgage is to a''rise the mortgagor( @amire<( of an$ action that the mortgagee#
ban+ might ta+e on the s!b%ect 'ro'erties( th!s according him the o''ort!nit$ to
safeg!ard his rights& Jose 6. Ramire8 v. 6he anila !an&in' Corporation, G&@& ;o&
.>AA99( December ..( 19.0&
Damages; e)em'lar$ damages; "hen entitled& ;o e)em'lar$ damages can be
a"arded since there is no basis for the a"ard of moral damages and there is no
a"ard of tem'erate( li!idated or com'ensator$ damages&E)em'lar$ damages are
im'osed b$ "a$ of e)am'le for the '!blic good( in addition to moral( tem'erate(
li!idated or com'ensator$ damages& Jose 6. Ramire8 v. 6he anila !an&in'
Corporation, G&@& ;o& .>AA99( December ..( 19.0&
Damages; moral damages; "hen entitled& ;othing s!''orts the trial co!rt=s a"ard
of moral damages& There "as no testimon$ of an$ 'h$sical s!3ering( mental
ang!ish( fright( serio!s an)iet$( besmirched re'!tation( "o!nded feelings( moral
shoc+( social h!miliation( and similar in%!r$ s!3ered b$ @amire<& The a"ard of moral
damages m!st be anchored on a clear sho"ing that @amire< act!all$ e)'erienced
mental ang!ish( besmirched re'!tation( slee'less nights( "o!nded feelings or
similar in%!r$& @amire<=s testimon$ is also "anting as to the moral damages he
s!3ered& Jose 6. Ramire8 v. 6he anila !an&in' Corporation, G&@& ;o& .>AA99(
December ..( 19.0&
8oreclos!re; e)tra%!dicial foreclos!re; notice of e)tra%!dicial foreclos!re 'roceedings
not necessar$ !nless sti'!lated b$ the 'arties& In Carlos *im, et al. v. )evelopment
!an& of the Philippines( the co!rt held that !nless the 'arties sti'!late( 'ersonal
notice to the mortgagor in e)tra%!dicial foreclos!re 'roceedings is not necessar$
beca!se Section 0 of Act ;o& 0.0B onl$ re!ires the 'osting of the notice of sale in
three '!blic 'laces and the '!blication of that notice in a ne"s'a'er of general
circ!lation& In this case( the 'arties sti'!lated in 'aragra'h ; of the real estate
mortgage that all corres'ondence relative to the mortgage incl!ding notifcations of
e)tra%!dicial actions shall be sent to mortgagor @amire< at his given address&
@es'ondent had no choice b!t to com'l$ "ith this contract!al 'rovision it has
entered into "ith @amire<& The contract is the la" bet"een them& Gence( the co!rt
cannot agree "ith the ban+ that 'aragra'h ; of the real estate mortgage does not
'g& DB
im'ose an additional obligation !'on it to 'rovide 'ersonal notice of the
e)tra%!dicial foreclos!re sale to the mortgagor @amire<& Jose 6. Ramire8 v. 6he
anila !an&in' Corporation, G&@& ;o& .>AA99( December ..( 19.0&
8oreclos!re of mortgage; 'roceeds; obligations covered& The 'etitioner contends
that there "as no e)cess or s!r'l!s that needs to be ret!rned to the res'ondent
beca!se her other o!tstanding obligations and those of her attorne$#in#fact "ere
'aid o!t of the 'roceeds&
The relevant 'rovision( Section ? of @!le DA of the @!les of Civil :roced!re(
mandates that6
Section ?& )isposition of proceeds of sale. Y The amo!nt reali<ed from the
foreclos!re sale of the mortgaged 'ro'ert$ shall( after ded!cting the costs of the
sale( be 'aid to the 'erson foreclosing the mortgage( and "hen there shall be an$
balance or resid!e( after 'a$ing o3 the mortgage debt d!e( the same shall be 'aid
to %!nior enc!mbrancers in the order of their 'riorit$( to be ascertained b$ the co!rt(
or if there be no s!ch enc!mbrancers or there be a balance or resid!e after
'a$ment to them( then to the mortgagor or his d!l$ a!thori<ed agent( or to the
'erson entitled to it&
Th!s( in the absence of an$ evidence sho"ing that the mortgage also covers the
other obligations of the mortgagor( the 'roceeds from the sale sho!ld not be
a''lied to them& Philippine !an& of Communication v. ary Ann #. ;eun', G&@& ;o&
./>D>.( December ?( 19.0&
Laches; conce't of& Well settled is the r!le that the elements of laches m!st be
'roven 'ositivel$& Laches is evidentiar$ in nat!re( a fact that cannot be established
b$ mere allegations in the 'leadings and cannot be resolved in a motion to dismiss&
At this stage therefore( the dismissal of the com'laint on the gro!nd of laches is
'remat!re& Those iss!es m!st be resolved at the trial of the case on the merits(
"herein both 'arties "ill be given am'le o''ort!nit$ to 'rove their res'ective
claims and defenses& odesto $anche8 v. Andrew $anche8, G&@& ;o& .A/DD.(
December ?( 19.0 .
Lortgage; redem'tion 'eriod; rec+oning of the 'eriod of redem'tion b$ the
mortgagor or his s!ccessor#in#interest starts from the registration of the sale in the
@egister of Deeds& The rec+oning of the 'eriod of redem'tion b$ the mortgagor or
his s!ccessor#in#interest starts from the registration of the sale in the @egister of
Deeds& Altho!gh Section D of Act ;o& 0.0B( as amended( s'ecifes that the 'eriod of
redem'tion starts from and after the date of the sale( %!ris'r!dence has since
settled that s!ch 'eriod is more a''ro'riatel$ rec+oned from the date of
registration&0nited Coconut Planters !an& v. Christopher *um"o and ila'ros
*um"o, G&@& ;o& .D1/B/( December ..( 19.0&
*bligations; force ma%e!re; conce't of force ma%e!re& Anent 'etitioners= reliance on
force ma<eure( s!Nce it to state that :ea+star=s breach of its obligations to Letro
Concast arising from the LoA cannot be classifed as a fort!ito!s event !nder
%!ris'r!dential form!lation&
'g& DD
8ort!ito!s events b$ defnition are e)traordinar$ events not foreseeable or
avoidable& It is therefore( not eno!gh that the event sho!ld not have been foreseen
or antici'ated( as is commonl$ believed b!t it m!st be one im'ossible to foresee or
to avoid& The mere diNc!lt$ to foresee the ha''ening is not im'ossibilit$ to foresee
the same&
To constit!te a fort!ito!s event( the follo"ing elements m!st conc!r6 EaF the ca!se
of the !nforeseen and !ne)'ected occ!rrence or of the fail!re of the debtor to
com'l$ "ith obligations m!st be inde'endent of h!man "ill; EbF it m!st be
im'ossible to foresee the event that constit!tes the caso fortuito or( if it can be
foreseen( it m!st be im'ossible to avoid; EcF the occ!rrence m!st be s!ch as to
render it im'ossible for the debtor to f!lfll obligations in a normal manner; and( EdF
the obligor m!st be free from an$ 'artici'ation in the aggravation of the in%!r$ or
loss& etro Concast $teel Corp., $pouses Jose $. )ychiao and 6iu #h ;an, et al. v.
Allied !an& Corporation, G&@& ;o& .//>1.( December ?( 19.0&
*bligations; modes of e)ting!ishment& Article .10. of the Civil Code states that
obligations are e)ting!ished either b$ 'a$ment or 'erformance( the loss of the thing
d!e( the condonation or remission of the debt( the conf!sion or merger of the rights
of creditor and debtor( com'ensation or novation& etro Concast $teel Corp.,
$pouses Jose $. )ychiao and 6iu #h ;an, et al. v. Allied !an& Corporation, G&@& ;o&
.//>1.( December ?( 19.0&
*bligations; novation; e)tinctive novation disting!ished from modifcator$
novation&To be s!re( novation( in its broad conce't( ma$ either be e)tinctive or
modifcator$& It is e)tinctive "hen an old obligation is terminated b$ the creation of
a ne" obligation that ta+es the 'lace of the former; it is merel$ modifcator$ "hen
the old obligation s!bsists to the e)tent it remains com'atible "ith the amendator$
agreement& In either case( ho"ever( novation is never 'res!med( and the animus
novandi( "hether totall$ or 'artiall$( m!st a''ear b$ e)'ress agreement of the
'arties( or b$ their acts that are too clear and !ne!ivocal to be mista+en& AC1
3oods, .nc. v. icro Pacifc 6echnolo'ies Co., *td., G&@& ;o& 199D91( December ..(
19.0&
:ro'ert$; action for reconve$ance; 'rescri'tive 'eriod; e)ce'tion& The Co!rt li+e"ise
ta+es note that :arag!$a=s com'laint is li+e"ise in the nat!re of an action for
reconve$ance beca!se it also 'ra$ed for the trial co!rt to order S's& Cr!cillo to
2s!rrender o"nershi' and 'ossession of the 'ro'erties in !estion to H:arag!$aI(
vacating them altogether & & & &4 Des'ite this( :arag!$a=s com'laint remains
dismissible on the same gro!nd beca!se the 'rescri'tive 'eriod for actions for
reconve$ance is ten E.9F $ears rec+oned from the date of iss!ance of the certifcate
of title( e)ce't "hen the o"ner is in 'ossession of the 'ro'ert$( in "hich case the
action for reconve$ance becomes im'rescri'tible& *aura 3. Para'uya v. $ps. Alma
1scurel-Crucillo and 1meterio Crucillo and the Re'ister of )eeds of $orso'on, G&@&
;o& 1991DB( December 1( 19.0&
:ro'ert$; 'ossessor in good faith; reimb!rsement of necessar$ and !sef!l e)'enses&
Dionisio "as "ell a"are that this tem'orar$ arrangement ma$ be terminated at an$
time& @es'ondents cannot no" ref!se to vacate the 'ro'ert$ or event!all$ demand
'g& D/
reimb!rsement of necessar$ and !sef!l e)'enses !nder Articles ??A and B?D of the
;e" Civil Code( beca!se the 'rovisions a''l$ onl$ to a 'ossessor in good faith( i.e.(
one "ho b!ilds on land "ith the belief that he is the o"ner thereof& :ersons "ho
occ!'$ land b$ virt!e of tolerance of the o"ners are not 'ossessors in good faith&
(eirs of Cipriano 6ra8ona, et al. v. (eirs of )ionisio Ca-ada, et al.( G&@& ;o& ./BA/?(
December ..( 19.0&
:ro'ert$; S'anish titles can no longer be !sed as evidence of o"nershi' after si) EDF
months from the e3ectivit$ of :D A>1& Jased on Section . of :D A>1( entitled
2Discontin!ance of the S'anish Lortgage S$stem of @egistration and of the -se of
S'anish Titles as Evidence in Land @egistration :roceedings(4 S'anish titles can no
longer be !sed as evidence of o"nershi' after si) EDF months from the e3ectivit$ of
the la"( or starting A!g!st .D( .>/D& *aura 3. Para'uya v. $ps. Alma 1scurel-Crucillo
and 1meterio Crucillo and the Re'ister of )eeds of $orso'on( G&@& ;o& 1991DB(
December 1( 19.0&
:ro'ert$; "aiver of interest; "hen absol!te and !nconditional&L!cila did not sa$( 2to
'!t ever$thing in 'ro'er order( I 'romise to "aive m$ right4 to the 'ro'ert$( "hich
is a f!t!re !nderta+ing( one that is demandable onl$ "hen ever$thing is '!t in
'ro'er order& J!t she instead said( 2to '!t ever$thing in 'ro'er order( I hereb$
"aive4 etc& The 'hrase 2hereb$ "aive4 means that L!cila "as( b$ e)ec!ting the
aNdavit( alread$ "aiving her right to the 'ro'ert$( irreversibl$ divesting herself of
her e)isting right to the same& After he and his co#o"ner Emelinda acce'ted the
donation( Isabelo became the o"ner of half of the s!b%ect 'ro'ert$ having the right
to demand its 'artition&.sa"elo C. )ela Cru8 v. *ucila C. )ela Cru8, G&@& ;o& .>10A0(
December ?( 19.0&
T!asi#contract; !n%!st enrichment; conce't of; elements&In light of the foregoing( it
is !nfair to den$ 'etitioner a ref!nd of all his contrib!tions to the car 'lan& -nder
Article 11 of the Civil Code( 2HeIver$ 'erson "ho thro!gh an act of 'erformance b$
another( or an$ other means( ac!ires or comes into 'ossession of something at the
e)'ense of the latter "itho!t %!st or legal gro!nd( shall ret!rn the same to him&4
Antonio *ocsin .. v. e&eni 3ood Corporation( G&@& ;o& .>1.9B( December >( 19.0&
T!asi#contract; conce't of !asi#contract& Article 1.?1 of the same Code li+e"ise
clarifes that there are certain la"f!l( vol!ntar$ and !nilateral acts "hich give rise to
the %!ridical relation of !asi#contract( to the end that no one shall be !n%!stl$
enriched or benefted at the e)'ense of another& In the absence of s'ecifc terms
and conditions governing the car 'lan arrangement bet"een the 'etitioner and
Le+eni( a !asi#contract!al relation "as created bet"een them& Antonio *ocsin .. v.
e&eni 3ood Corporation( G&@& ;o& .>1.9B( December >( 19.0&
T!asi#delict; elements& Article 1./D of the Civil Code 'rovides that 2H"Ihoever b$
act or omission ca!ses damage to another( there being fa!lt or negligence( is
obliged to 'a$ for the damage done& S!ch fa!lt or negligence( if there is no 're#
e)isting contract!al relation bet"een the 'arties( is a !asi#delict&4 -nder this
'rovision( the elements necessar$ to establish a !asi#delict case are6 E.F damages
to the 'lainti3; E1F negligence( b$ act or omission( of the defendant or b$ some
'erson for "hose acts the defendant m!st res'ond( "as g!ilt$; and E0F the
'g& DA
connection of ca!se and e3ect bet"een s!ch negligence and the damages& These
elements sho" that the so!rce of obligation in a !asi#delict case is the breach or
omission of m!t!al d!ties that civili<ed societ$ im'oses !'on its members( or "hich
arise from non#contract!al relations of certain members of societ$ to others& )ra.
*eila A. )ela *lana v. Re"ecca !ion', doin' "usiness under the name and style of
Pon'&ay 6radin'( G&@& ;o& .A10BD( December ?( 19.0&
T!asi#delict; !ant!m of 'roof; 're'onderance of evidence& Jased on these
re!isites( Dra& dela Llana m!st frst establish b$ 're'onderance of evidence the
three elements of !asi#delict before "e determine @ebecca=s liabilit$ as Coel=s
em'lo$er& She sho!ld sho" the chain of ca!sation bet"een Coel=s rec+less driving
and her "hi'lash in%!r$& *nl$ after she has laid this fo!ndation can the 'res!m'tion
Y that @ebecca did not e)ercise the diligence of a good father of a famil$ in the
selection and s!'ervision of Coel Y arise&*nce negligence( the damages and the
'ro)imate ca!sation are established( this Co!rt can then 'roceed "ith the
a''lication and the inter'retation of the ffth 'aragra'h of Article 1.A9 of the Civil
Code& -nder Article 1./D of the Civil Code( in relation "ith the ffth 'aragra'h of
Article 1.A9( 2an action 'redicated on an em'lo$ee=s act or omission ma$ be
instit!ted against the em'lo$er "ho is held liable for the negligent act or omission
committed b$ his em'lo$ee&4The rationale for these grad!ated levels of anal$ses is
that it is essentiall$ the "rongf!l or negligent act or omission itself "hich creates
the vinc!l!m %!ris in e)tra#contract!al obligations& )ra. *eila A. )ela *lana v.
Re"ecca !ion', doin' "usiness under the name and style of Pon'&ay 6radin'( G&@&
;o& .A10BD( December ?( 19.0&
Sales; car 'lan beneft; contrib!tions as installment 'a$ments disting!ished from
rental 'a$ments& 8rom the evidence on record( it is seen that the Le+eni car 'lan
o3ered to 'etitioner "as s!b%ect to no other term or condition than that Le+eni
shall cover one#half of its val!e( and 'etitioner shall in t!rn 'a$ the other half
thro!gh ded!ctions from his monthl$ salar$& Le+eni has not sho"n( b$ doc!mentar$
evidence or other"ise( that there are other terms and conditions governing its car
'lan agreement "ith 'etitioner& There is no evidence to s!ggest that if 'etitioner
failed to com'letel$ cover one#half of the cost of the vehicle( then all the ded!ctions
from his salar$ going to the cost of the vehicle "ill be treated as rentals for his !se
thereof "hile "or+ing "ith Le+eni( and shall not be ref!nded& Indeed( there is no
s!ch sti'!lation or arrangement bet"een them& Th!s( the CA=s reliance on 1lisco
6ool is "itho!t basis( and its concl!sions arrived at in the !estioned decision are
manifestl$ mista+en& To re'eat "hat "as said in 1lisco 6ool, JL:Ietitioner does not
den$ that 'rivate res'ondent @olando Lantan ac!ired the vehicle in !estion !nder
a car 'lan for e)ec!tives of the Eli<alde gro!' of com'anies& -nder a t$'ical car
'lan( the com'an$ advances the '!rchase 'rice of a car to be 'aid bac+ b$ the
em'lo$ee thro!gh monthl$ ded!ctions from his salar$& The com'an$ retains
o"nershi' of the motor vehicle !ntil it shall have been f!ll$ 'aid for& Go"ever(
retention of registration of the car in the com'an$=s name is onl$ a form of a lien on
the vehicle in the event that the em'lo$ee "o!ld abscond before he has f!ll$ 'aid
for it& There are also sti'!lations in car 'lan agreements to the e3ect that sho!ld
the em'lo$ment of the em'lo$ee concerned be terminated before all installments
are f!ll$ 'aid( the vehicle "ill be ta+en b$ the em'lo$er and all installments 'aid
shall be considered rentals 'er agreement&2
'g& D>
It "as made clear in this 'rono!ncement that installments made on the car 'lan
ma$ be treated as rentals onl$ "hen there is an e)'ress sti'!lation in the car 'lan
agreement to s!ch e3ect& It "as therefore 'atent error for the a''ellate co!rt to
ass!me that( even in the absence of e)'ress sti'!lation( 'etitioner=s 'a$ments&
Antonio *ocsin .. v. e&eni 3ood Corporation( G&@& ;o& .>1.9B( December >( 19.0&
Sales; contract of sale; elements; disting!ished from contract to sell& Corollar$
thereto( a contract of sale is classifed as a consens!al contract( "hich means that
the sale is 'erfected b$ mere consent& ;o 'artic!lar form is re!ired for its validit$&
-'on 'erfection of the contract( the 'arties ma$ reci'rocall$ demand 'erformance(
i.e.( the vendee ma$ com'el transfer of o"nershi' of the ob%ect of the sale( and the
vendor ma$ re!ire the vendee to 'a$ the thing sold&
In contrast( a contract to sell is defned as a bilateral contract "hereb$ the
'ros'ective seller( "hile e)'ressl$ reserving the o"nershi' of the 'ro'ert$ des'ite
deliver$ thereof to the 'ros'ective b!$er( binds himself to sell the 'ro'ert$
e)cl!sivel$ to the 'ros'ective b!$er !'on f!lfllment of the condition agreed !'on(
i.e.( the f!ll 'a$ment of the '!rchase 'rice& A contract to sell ma$ not even be
considered as a conditional contract of sale "here the seller ma$ li+e"ise reserve
title to the 'ro'ert$ s!b%ect of the sale !ntil the f!lfllment of a s!s'ensive
condition( beca!se in a conditional contract of sale( the frst element of consent is
'resent( altho!gh it is conditioned !'on the ha''ening of a contingent event "hich
ma$ or ma$ not occ!r& AC1 3oods, .nc. v. icro Pacifc 6echnolo'ies Co., *td., G&@&
;o& 199D91( December ..( 19.0&
Sales; contract to sell; conce't of&Veril$( in a contract to sell( the 'ros'ective seller
binds himself to sell the 'ro'ert$ s!b%ect of the agreement e)cl!sivel$ to the
'ros'ective b!$er !'on f!lfllment of the condition agreed !'on "hich is the f!ll
'a$ment of the '!rchase 'rice b!t reserving to himself the o"nershi' of the s!b%ect
'ro'ert$ des'ite deliver$ thereof to the 'ros'ective b!$er&The f!ll 'a$ment of the
'!rchase 'rice in a contract to sell is a s!s'ensive condition( the non#f!lfllment of
"hich 'revents the 'ros'ective seller=s obligation to conve$ title from becoming
e3ective( as in this case& #ptimum )evelopment !an& v. $pouses !eni'no v.
Jovellanos and *ourdes R. Jovellanos( G&@& ;o& .A>.?B( December ?( 19.0&
Sales; contract to sell; real 'ro'ert$ in installments; covered b$ @ealt$ Installment
J!$er :rotection Act& 8!rther( it is signifcant to note that given that the Contract to
Sell in this case is one "hich has for its ob%ect real 'ro'ert$ to be sold on an
installment basis( the said contract is es'eciall$ governed b$ Y and th!s( m!st be
e)amined !nder the 'rovisions of Y @A DBB1( or the 2@ealt$ Installment J!$er
:rotection Act4( "hich 'rovides for the rights of the b!$er in case of his defa!lt in
the 'a$ment of s!cceeding installments& #ptimum )evelopment !an& v. $pouses
!eni'no v. Jovellanos and *ourdes R. Jovellanos( G&@& ;o& .A>.?B( December ?(
19.0&
S-.$/(L L(0S
:ro'ert$ @egistration Decree; alienable lands of '!blic domain; 'roof of; to 'rove
that the land s!b%ect of an a''lication for registration is alienable( an a''licant
'g& /9
m!st establish the e)istence of a 'ositive act of the Government& The b!rden of
'roof in overcoming the 'res!m'tion of State o"nershi' of lands of the '!blic
domain is on the 'erson a''l$ing for registration( or in this case( for homestead
'atent& The a''licant m!st sho" that the land s!b%ect of the a''lication is alienable
or dis'osable& It m!st be stressed that incontrovertible evidence m!st be 'resented
to establish that the land s!b%ect of the a''lication is alienable or dis'osable&
As the co!rt 'rono!nced in Repu"lic of the Phils. v. 6ri-Plus Corporation, to 'rove
that the land s!b%ect of an a''lication for registration is alienable( an a''licant
m!st establish the e)istence of a 'ositive act of the Government s!ch as a
'residential 'roclamation or an e)ec!tive order( an administrative action(
investigation re'orts of J!rea! of Lands investigators( and a legislative act or
stat!te& The a''licant ma$ also sec!re a certifcation from the Government that the
lands a''lied for are alienable and dis'osable& Repu"lic of the Philippines-!ureau of
3orest )evelopment v. ,icente Ro5as, et al.DProvident 6ree 3arms, .nc. v. ,icente
Ro5as, et al., G&@& ;os& .B/>AAS.D9D?9( December ..( 19.0&
:ro'ert$ @egistration Decree; esto''el; the 'rinci'le of esto''el does not o'erate
against the Government for the act of its agents& ;either can res'ondent @o)as
s!ccessf!ll$ invo+e the doctrine of esto''el against 'etitioner @e'!blic& While it is
tr!e that res'ondent @o)as "as granted Gomestead :atent ;o& ...B>A and *CT ;o&
:#BAAB onl$ after !ndergoing a''ro'riate administrative 'roceedings( the
Government is not no" esto''ed from !estioning the validit$ of said homestead
'atent and certifcate of title& It is( after all( hornboo+ la" that the 'rinci'le of
esto''el does not o'erate against the Government for the act of its agents& And
"hile there ma$ be circ!mstances "hen e!itable esto''el "as a''lied against
'!blic a!thorities( i&e&( "hen the Government did not !nderta+e an$ act to contest
the title for an !nreasonable length of time and the lot "as alread$ alienated to
innocent b!$ers for val!e( s!ch are not 'resent in this case& Lore im'ortantl$( "e
cannot !se the e!itable 'rinci'le of esto''el to defeat the la"& Repu"lic of the
Philippines-!ureau of 3orest )evelopment v. ,icente Ro5as, et al.DProvident 6ree
3arms, .nc. v. ,icente Ro5as, et al., G&@& ;os& .B/>AAS.D9D?9( December ..( 19.0&
:ro'ert$ @egistration Decree; homestead 'atent; once registered( the certifcate of
title iss!ed b$ virt!e of said 'atent has the force and e3ect of a Torrens title iss!ed
!nder said registration la"s; 'rovided that the land covered b$ said certifcate is a
dis'osable '!blic land "ithin the contem'lation of the :!blic Land La"&It is tr!e that
once a homestead 'atent granted in accordance "ith the :!blic Land Act is
registered '!rs!ant to Act ?>D( other"ise +no"n as The Land @egistration Act( or
:residential Decree ;o& .B1>( other"ise +no"n as The :ro'ert$ @egistration Decree(
the certifcate of title iss!ed b$ virt!e of said 'atent has the force and e3ect of a
Torrens title iss!ed !nder said registration la"s&We e)'o!nded in RbaMe< v&
Intermediate A''ellate Co!rt that6
The certifcate of title serves as evidence of an indefeasible title to the 'ro'ert$ in
favor of the 'erson "hose name a''ears therein& After the e)'iration of the one E.F
$ear 'eriod from the iss!ance of the decree of registration !'on "hich it is based( it
becomes incontrovertible& The settled r!le is that a decree of registration and the
certifcate of title iss!ed '!rs!ant thereto ma$ be attac+ed on the gro!nd of act!al
'g& /.
fra!d "ithin one E.F $ear from the date of its entr$ and s!ch an attac+ m!st be
direct and not b$ a collateral 'roceeding& The validit$ of the certifcate of title in this
regard can be threshed o!t onl$ in an action e)'ressl$ fled for the '!r'ose&
It m!st be em'hasi<ed that a certifcate of title iss!ed !nder an administrative
'roceeding '!rs!ant to a homestead 'atent( as in the instant case( is as
indefeasible as a certifcate of title iss!ed !nder a %!dicial registration 'roceeding(
'rovided the land covered b$ said certifcate is a dis'osable '!blic land "ithin the
contem'lation of the :!blic Land La"& Repu"lic of the Philippines-!ureau of 3orest
)evelopment v. ,icente Ro5as, et al.DProvident 6ree 3arms, .nc. v. ,icente Ro5as, et
al., G&@& ;os& .B/>AAS.D9D?9( December ..( 19.0&
:ro'ert$ @egistration Decree; reversion; nat!re of; gro!nds& We do not fnd evidence
indicating that res'ondent @o)as committed fra!d "hen he a''lied for homestead
'atent over the s!b%ect 'ro'ert$& It does not a''ear that he +no"ingl$ and
intentionall$ misre'resented in his a''lication that the s!b%ect 'ro'ert$ "as
alienable and dis'osable agric!lt!ral land& ;onetheless( "e recogni<ed in Repu"lic
of the Phils. v. an'otara that there are instances "hen "e granted reversion for
reasons other than fra!d6
@eversion is an action "here the !ltimate relief so!ght is to revert the land bac+ to
the government !nder the @egalian doctrine& Considering that the land s!b%ect of
the action originated from a grant b$ the government( its cancellation is a matter
bet"een the grantor and the grantee& In Estate of the Late Ces!s S& R!%!ico v&
@e'!blic ER!%!ico caseF( reversion "as defned as an action "hich see+s to restore
'!blic land fra!d!lentl$ a"arded and dis'osed of to 'rivate individ!als or
cor'orations to the mass of '!blic domain& It bears to 'oint o!t( tho!gh( that the
Co!rt also allo"ed the resort b$ the Government to actions for reversion to cancel
titles that "ere void for reasons other than fra!d( i&e&( violation b$ the grantee of a
'atent of the conditions im'osed b$ la"; and lac+ of %!risdiction of the Director of
Lands to grant a 'atent covering inalienable forest land or 'ortion of a river( even
"hen s!ch grant "as made thro!gh mere oversight& In @e'!blic v& G!errero( the
Co!rt gave a more general statement that the remed$ of reversion can be availed
of 2onl$ in cases of fra!d!lent or !nla"f!l incl!sion of the land in 'atents or
certifcates of title&4 Repu"lic of the Philippines-!ureau of 3orest )evelopment v.
,icente Ro5as, et al.DProvident 6ree 3arms, .nc. v. ,icente Ro5as, et al., G&@& ;os&
.B/>AAS.D9D?9( December ..( 19.0&
:ro'ert$ @egistration Decree; Torrens certifcate of title is not concl!sive 'roof of
o"nershi'& It is an established r!le that a Torrens certifcate of title is not concl!sive
'roof of o"nershi'& Veril$( a 'art$ ma$ see+ its ann!lment on the basis of fra!d or
misre'resentation& Go"ever( s!ch action m!st be seasonabl$ fled( else the same
"o!ld be barred& *aura 3. Para'uya v. $ps. Alma 1scurel-Crucillo and 1meterio
Crucillo and the Re'ister of )eeds of $orso'on( G&@& ;o& 1991DB( December 1( 19.0&
:ro'ert$ @egistration Decree; Torrens certifcate of title is not concl!sive 'roof of
o"nershi' becomes incontrovertible and indefeasible after one E.F $ear from the
date of its entr$& In this relation( Section 01 of :D .B1> 'rovides that the 'eriod to
contest a decree of registration shall be one E.F $ear from the date of its entr$ and
'g& /1
that( after the la'se of the said 'eriod( the Torrens certifcate of title iss!ed thereon
becomes incontrovertible and indefeasible( vi8.6
Sec& 01& Review of decree of re'istration9 .nnocent purchaser for value.Y The
decree of registration shall not be reo'ened or revised b$ reason of absence(
minorit$( or other disabilit$ of an$ 'erson adversel$ a3ected thereb$( nor b$ an$
'roceeding in an$ co!rt for reversing %!dgments( s!b%ect( ho"ever( to the right of
an$ 'erson( incl!ding the government and the branches thereof( de'rived of land or
of an$ estate or interest therein b$ s!ch ad%!dication or confrmation of title
obtained b$ act!al fra!d( to fle in the 'ro'er Co!rt of 8irst Instance a 'etition for
reo'ening and revie" of the decree of registration not later than one $ear from and
after the date of the entr$ of s!ch decree of registration( b!t in no case shall s!ch
'etition be entertained b$ the co!rt "here an innocent '!rchaser for val!e has
ac!ired the land or an interest therein( "hose rights ma$ be 're%!diced& Whenever
the 'hrase 2innocent '!rchaser for val!e4 or an e!ivalent 'hrase occ!rs in this
Decree( it shall be deemed to incl!de an innocent lessee( mortgagee( or other
enc!mbrancer for val!e&
-'on the e)'iration of said 'eriod of one $ear( the decree of registration and the
certifcate of title iss!ed shall become incontrovertible& An$ 'erson aggrieved b$
s!ch decree of registration in an$ case ma$ '!rs!e his remed$ b$ action for
damages against the a''licant or an$ other 'ersons res'onsible for the fra!d&
EEm'hases and !nderscoring s!''liedF *aura 3. Para'uya v. $ps. Alma 1scurel-
Crucillo and 1meterio Crucillo and the Re'ister of )eeds of $orso'on, G&@& ;o&
1991DB( December 1( 19.0&
Jad faith cannot be 'res!med; it is a !estion of fact that m!st be 'roven b$ clear
and convincing evidence& It is "orth stressing at this 'oint that bad faith cannot be
'res!med& 2It is a !estion of fact that m!st be 'roven4 b$ clear and convincing
evidence& 2HTIhe b!rden of 'roving bad faith rests on the one alleging it&4 Sadl$(
s'o!ses Vilbar failed to add!ce the necessar$ evidence& Th!s( this Co!rt fnds no
error on the 'art of the CA "hen it did not fnd bad faith on the 'art of Goros'e( Sr&
$ps. !ernadette and Rodulfo ,il"ar v. An'elito *. #pinion( G&@& ;o& ./D9?0& Can!ar$
.B( 19.?&
Jan+s; e)ercise the highest degree of diligence( as "ell as to observe the high
standards of integrit$ and 'erformance in all its transactions beca!se its b!siness
"as imb!ed "ith '!blic interest& Jeing a ban+ing instit!tion( DJ: o"ed it to G!ariMa
Cor'oration to e)ercise the highest degree of diligence( as "ell as to observe the
high standards of integrit$ and 'erformance in all its transactions beca!se its
b!siness "as imb!ed "ith '!blic interest& The high standards "ere also necessar$
to ens!re '!blic confdence in the ban+ing s$stem( for( according to Philippine
+ational !an& v. Pi&e6 2The stabilit$ of ban+s largel$ de'ends on the confdence of
the 'eo'le in the honest$ and eNcienc$ of ban+s&4 )evelopment !an& of the
Philippines B)!PC v. 4uari-a A'ricultural and Realty )evelopment Corporation( G&@&
;o& .D9/BA& Can!ar$ .B( 19.?
Common carrier; cargoes "hile being !nloaded generall$ remain !nder the c!stod$
of the carrier& It is settled in maritime la" %!ris'r!dence that cargoes "hile being
'g& /0
!nloaded generall$ remain !nder the c!stod$ of the carrier& As hereinbefore fo!nd
b$ the @TC and aNrmed b$ the CA based on the evidence 'resented( the goods
"ere damaged even before the$ "ere t!rned over to ATI& S!ch damage "as even
com'o!nded b$ the negligent acts of 'etitioner and ATI "hich both mishandled the
goods d!ring the discharging o'erations& 1astern $hippin' *ines, .nc. v. !P.D$
.nsurance Corp., and itsui $umitomo .nsurance Co., *td.,G&@& ;o& .>0>AD( Can!ar$
.B( 19.?&
Common carrier; e)traordinar$ diligence&Common carriers( from the nat!re of their
b!siness and for reasons of '!blic 'olic$( are bo!nd to observe e)traordinar$
diligence in the vigilance over the goods trans'orted b$ them& S!b%ect to certain
e)ce'tions en!merated !nder Article ./0? of the Civil Code( common carriers are
res'onsible for the loss( destr!ction( or deterioration of the goods& The
e)traordinar$ res'onsibilit$ of the common carrier lasts from the time the goods are
!nconditionall$ 'laced in the 'ossession of( and received b$ the carrier for
trans'ortation !ntil the same are delivered( act!all$ or constr!ctivel$( b$ the carrier
to the consignee( or to the 'erson "ho has a right to receive them& *"ing to this
high degree of diligence re!ired of them( common carriers( as a general r!le( are
'res!med to have been at fa!lt or negligent if the goods the$ trans'orted
deteriorated or got lost or destro$ed& That is( !nless the$ 'rove that the$ e)ercised
e)traordinar$ diligence in trans'orting the goods& In order to avoid res'onsibilit$ for
an$ loss or damage( therefore( the$ have the b!rden of 'roving that the$ observed
s!ch high level of diligence& 1astern $hippin' *ines, .nc. v. !P.D$ .nsurance Corp.,
and itsui $umitomo .nsurance Co., *td.,G&@& ;o& .>0>AD( Can!ar$ .B( 19.?&
Contracts; breach of contract; 'etitioner is g!ilt$ of breach of contract "hen it
!n%!stifabl$ ref!sed to release res'ondents= de'osit des'ite demand; liable for
damages& In cases of breach of contract( moral damages ma$ be recovered onl$ if
the defendant acted fra!d!lentl$ or in bad faith( or is 2g!ilt$ of gross negligence
amo!nting to bad faith( or in "anton disregard of his contract!al obligations&4
In this case( a revie" of the circ!mstances s!rro!nding the iss!ance of the 2Gold
*!t4 order reveals that 'etitioner iss!ed the 2Gold *!t4 order in bad faith& 8irst of
all( the order "as iss!ed "itho!t an$ legal basis& Second( 'etitioner did not inform
res'ondents of the reason for the 2Gold *!t&4 Third( the order "as iss!ed 'rior to
the fling of the criminal com'laint& @ecords sho" that the 2Gold *!t4 order "as
iss!ed on C!l$ 0.( 1990( "hile the criminal com'laint "as fled onl$ on Se'tember 0(
1990& All these ta+en together lead !s to concl!de that 'etitioner acted in bad faith
"hen it breached its contract "ith res'ondents& As "e see it then( res'ondents are
entitled to moral damages& etropolitan !an& E 6rust Company v. Ana 4race
Rosales and ;o ;u& 6o( G&@& ;o& .A019?( Can!ar$ .0( 19.?&
Contracts; b!$er in good faith& It is settled that a 'art$ dealing "ith a registered
land does not have to in!ire be$ond the Certifcate of Title in determining the tr!e
o"ner thereof( and in g!arding or 'rotecting his interest( for all that he has to loo+
into and rel$ on are the entries in the Certifcate of Title&
Inarg!abl$( *'inion acted in good faith in dealing "ith the registered o"ners of the
'ro'erties& Ge relied on the titles 'resented to him( "hich "ere confrmed b$ the
'g& /?
@egistr$ of Deeds to be a!thentic( iss!ed in accordance "ith the la"( and "itho!t
an$ liens or enc!mbrances& $ps. !ernadette and Rodulfo ,il"ar v. An'elito *.
#pinion( G&@& ;o& ./D9?0& Can!ar$ .B( 19.?&
Contracts; Doctrine of in pari delicto ; e)ce'tion& According to Article .?.1 E.F of the
Civil Code( the g!ilt$ 'arties to an illegal contract cannot recover from one another
and are not entitled to an aNrmative relief beca!se the$ are in pari delicto or in
e!al fa!lt& The doctrine of in pari delicto is a !niversal doctrine that holds that no
action arises( in e!it$ or at la"( from an illegal contract; no s!it can be maintained
for its s'ecifc 'erformance( or to recover the 'ro'ert$ agreed to be sold or
delivered( or the mone$ agreed to be 'aid( or damages for its violation; and "here
the 'arties are in pari delicto( no aNrmative relief of an$ +ind "ill be given to one
against the other&
;onetheless( the a''lication of the doctrine of in pari delicto is not al"a$s rigid& An
acce'ted e)ce'tion arises "hen its a''lication contravenes "ell#established '!blic
'olic$& In this %!risdiction( '!blic 'olic$ has been defned as 2that 'rinci'le of the la"
"hich holds that no s!b%ect or citi<en can la"f!ll$ do that "hich has a tendenc$ to
be in%!rio!s to the '!blic or against the '!blic good&4 )omin'o 4on8alo v. John
6arnate, Jr&( G&@& ;o& .D9D99( Can!ar$ .B( 19.?&
Contracts; Gold#o!t cla!se; a''lies onl$ if there is a valid and e)isting obligation
arising from an$ of the so!rces of obligation en!merated in Article ..B/&
Considering that res'ondent @osales is not liable !nder an$ of the fve so!rces of
obligation( there "as no legal basis for 'etitioner to iss!e the 2Gold *!t4 order&
The 2Gold *!t4 cla!se a''lies onl$ if there is a valid and e)isting obligation arising
from an$ of the so!rces of obligation en!merated in Article ..B/ of the Civil Code(
to "it6 la"( contracts( !asi#contracts( delict( and !asi#delict& In this case(
'etitioner failed to sho" that res'ondents have an obligation to it !nder an$ la"(
contract( !asi#contract( delict( or !asi#delict& And altho!gh a criminal case "as
fled b$ 'etitioner against res'ondent @osales( this is not eno!gh reason for
'etitioner to iss!e a 2Gold *!t4 order as the case is still 'ending and no fnal
%!dgment of conviction has been rendered against res'ondent @osales& In fact( it is
signifcant to note that at the time 'etitioner iss!ed the 2Gold *!t4 order( the
criminal com'laint had not $et been fled& Th!s( considering that res'ondent
@osales is not liable !nder an$ of the fve so!rces of obligation( there "as no legal
basis for 'etitioner to iss!e the 2Gold *!t4 order& etropolitan !an& E 6rust
Company v. Ana 4race Rosales and ;o ;u& 6o( G&@& ;o& .A019?( Can!ar$ .0( 19.?&
Contracts; Lortgage; nat!re of mortgage& It is tr!e that loans are often sec!red b$ a
mortgage constit!ted on real or 'ersonal 'ro'ert$ to 'rotect the creditor=s interest
in case of the defa!lt of the debtor& J$ its nat!re( ho"ever( a mortgage remains an
accessor$ contract de'endent on the 'rinci'al obligation( s!ch that enforcement of
the mortgage contract "ill de'end on "hether or not there has been a violation of
the 'rinci'al obligation& While a creditor and a debtor co!ld reg!late the order in
"hich the$ sho!ld com'l$ "ith their reci'rocal obligations( it is 'res!''osed that in
a loan the lender sho!ld 'erform its obligation K the release of the f!ll loan amo!nt
K before it co!ld demand that the borro"er re'a$ the loaned amo!nt& )evelopment
'g& /B
!an& of the Philippines B)!PC v. 4uari-a A'ricultural and Realty )evelopment
Corporation( G&@& ;o& .D9/BA& Can!ar$ .B( 19.?&
Contracts; mortgagee in good faith& Ass!ming arg!endo that the Goros'es= titles to
the s!b%ect 'ro'erties ha''ened to be fra!d!lent( '!blic 'olic$ considers *'inion to
still have ac!ired legal title as a mortgagee in good faith& As held in Cavite
)evelopment !an& v. $pouses *im6
There is( ho"ever( a sit!ation "here( des'ite the fact that the mortgagor is not the
o"ner of the mortgaged 'ro'ert$( his title being fra!d!lent( the mortgage contract
and an$ foreclos!re sale arising therefrom are given e3ect b$ reason of '!blic
'olic$& This is the doctrine of Pthe mortgagee in good faith= based on the r!le that all
'ersons dealing "ith 'ro'ert$ covered b$ a Torrens Certifcate of Title( as b!$ers or
mortgagees( are not re!ired to go be$ond "hat a''ears on the face of the title&
The '!blic interest in !'holding the indefeasibilit$ of a certifcate of title( as
evidence of the la"f!l o"nershi' of the land or of an$ enc!mbrance thereon(
'rotects a b!$er or mortgagee "ho( in good faith( relied !'on "hat a''ears on the
face of the certifcate of title&
$ps. !ernadette and Rodulfo ,il"ar v. An'elito *. #pinion( G&@& ;o& ./D9?0& Can!ar$
.B( 19.?&
Sales; 'roof ca'acit$ of seller; di3erence "hen there is a s'ecial 'o"er of attorne$
and "hen there is none&The strength of the b!$er=s in!ir$ on the seller=s ca'acit$
or legal a!thorit$ to sell de'ends on the 'roof of ca'acit$ of the seller& If the 'roof of
ca'acit$ consists of a s'ecial 'o"er of attorne$ d!l$ notari<ed( mere ins'ection of
the face of s!ch '!blic doc!ment alread$ constit!tes s!Ncient in!ir$& If no s!ch
s'ecial 'o"er of attorne$ is 'rovided or there is one b!t there a''ears to be ,a"s in
its notarial ac+no"ledgment( mere ins'ection of the doc!ment "ill not do; the b!$er
m!st sho" that his investigation "ent be$ond the doc!ment and into the
circ!mstances of its e)ec!tion& 6he (eirs of ,ictorino $arili, namely, .sa"el A. $arili,
et al. v. Pedro 3. *a'rosa, represented in this act "y his Attorney-in-3act, *ourdes
*a"ios o<ica( G&@& ;o& .>0B./( Can!ar$ .B( 19.?&
Contracts; :rinci'le of quantum merit ; "hen allo"ed& Case la" instr!cts that !nder
this 'rinci'le Equantum meruitC( a contractor is allo"ed to recover the reasonable
val!e of the thing or services rendered des'ite the lac+ of a "ritten contract( in
order to avoid !n%!st enrichment& Muantum meruit means that( in an action for "or+
and labor( 'a$ment shall be made in s!ch amo!nt as the 'lainti3 reasonabl$
deserves& The meas!re of recover$ sho!ld relate to the reasonable val!e of the
services 'erformed beca!se the 'rinci'le aims to 'revent !nd!e enrichment based
on the e!itable 'ost!late that it is !n%!st for a 'erson to retain an$ beneft "itho!t
'a$ing for it& Rivelisa Realty, .nc., represented "y Ricardo P. ,enturina v. 3irst $ta.
Clara !uilders Corporation, represented "y Ramon A. Pan'ilinan, as President( G&@&
;o& .A>D.A& Can!ar$ .B( 19.?&
Contracts; rescission; 'ro'er "hen there is non#'erformance of obligation& Article
..>.& The 'o"er to rescind obligations is im'lied in reci'rocal ones( in case one of
the obligors sho!ld not com'l$ "ith "hat is inc!mbent !'on him& The in%!red 'art$
'g& /D
ma$ choose bet"een the f!lfllment and the rescission of the obligation( "ith
'a$ment of damages in either case& Ge ma$ also see+ rescission( even after he has
chosen f!lfllment( if the latter sho!ld become im'ossible& 3il-1state Properties, .nc.
and 3il-1state +etwor&, .nc. v. $pouses Conrado and aria ,ictoria Ronquillo( G&@&
;o& .AB/>A( Can!ar$ .0( 19.?&
Contracts; void contract; e3ects& -nder Article .?9> E.F of the Civil Code( a contract
"hose ca!se( ob%ect or '!r'ose is contrar$ to la" is a void or ine)istent contract& As
s!ch( a void contract cannot 'rod!ce a valid one& To the same e3ect is Article .?11
of the Civil Code( "hich declares that 2a contract( "hich is the direct res!lt of a
'revio!s illegal contract( is also void and ine)istent&4 )omin'o 4on8alo v. John
6arnate, Jr&( G&@& ;o& .D9D99( Can!ar$ .B( 19.?&
Damages; moral damages; "hen a"arded&HSI!Nce it to sa$ that the dis'!te over
the s!b%ect 'ro'ert$ had ca!sed res'ondent serio!s an)iet$( mental ang!ish and
slee'less nights( thereb$ %!stif$ing the aforesaid a"ard& Li+e"ise( since res'ondent
"as constrained to engage the services of co!nsel to fle this s!it and defend his
interests( the a"ards of attorne$=s fees and litigation e)'enses are also s!stained&
6he (eirs of ,ictorino $arili, namely, .sa"el A. $arili, et al. v. Pedro 3. *a'rosa,
represented in this act "y his Attorney-in-3act, *ourdes *a"ios o<ica( G&@& ;o&
.>0B./( Can!ar$ .B( 19.?&
Damages; moral damages; "hen a"arded& Ever$ 'erson is entitled to the 'h$sical
integrit$ of his bod$& Altho!gh "e have long advocated the vie" that an$ 'h$sical
in%!r$( li+e the loss or dimin!tion of the !se of an$ 'art of one=s bod$( is not
e!atable to a 'ec!niar$ loss( and is not s!sce'tible of e)act monetar$ estimation(
civil damages sho!ld be assessed once that integrit$ has been violated& The
assessment is b!t an im'erfect estimation of the tr!e val!e of one=s bod$& The !s!al
'ractice is to a"ard moral damages for the 'h$sical in%!ries s!stained& )r.
1ncarnacion C. *umantas v. (an8 Calapi8, represented "y his parents, (ilario
Calapi8, Jr. and (elita Calapi8( G&@& ;o& .D0/B0& Can!ar$ .B( 19.?&
8oreclos!re; 'remat!re foreclos!re; order of restoration of 'ossession and 'a$ment
of reasonable rentals& Gaving fo!nd and 'rono!nced that the e)tra%!dicial
foreclos!re b$ DJ: "as 'remat!re( and that the ens!ing foreclos!re sale "as void
and ine3ect!al( the Co!rt aNrms the order for the restoration of 'ossession to
G!arifa Cor'oration and the 'a$ment of reasonable rentals for the !se of the
resort& The CA 'ro'erl$ held that the 'remat!re and invalid foreclos!re had !n%!stl$
dis'ossessed G!arifa Cor'oration of its 'ro'erties& Conse!entl$( the restoration of
'ossession and the 'a$ment of reasonable rentals "ere in accordance "ith Article
BD. of the Civil Code( "hich e)'ressl$ states that one "ho recovers( according to
la"( 'ossession !n%!stl$ lost shall be deemed for all '!r'oses "hich ma$ redo!nd to
his beneft to have en%o$ed it "itho!t interr!'tion& )evelopment !an& of the
Philippines B)!PC v. 4uari-a A'ricultural and Realty )evelopment Corporation( G&@&
;o& .D9/BA& Can!ar$ .B( 19.?&
8oreclos!re; '!rchaser in foreclos!re sale ma$ ta+e 'ossession of the 'ro'ert$ even
before the e)'iration of the redem'tion 'eriod& A "rit of 'ossession is a "rit of
e)ec!tion em'lo$ed to enforce a %!dgment to recover the 'ossession of land& It
'g& //
commands the sheri3 to enter the land and give 'ossession of it to the 'erson
entitled !nder the %!dgment& It ma$ be iss!ed in case of an e)tra%!dicial foreclos!re
of a real estate mortgage !nder Section / of Act ;o& 0.0B( as amended b$ Act ;o&
?..A&
-nder said 'rovision( the "rit of 'ossession ma$ be iss!ed to the '!rchaser in a
foreclos!re sale either "ithin the one#$ear redem'tion 'eriod !'on the fling of a
bond( or after the la'se of the redem'tion 'eriod( "itho!t need of a bond&
We have consistentl$ held that the d!t$ of the trial co!rt to grant a "rit of
'ossession is ministerial& S!ch "rit iss!es as a matter of co!rse !'on the fling of
the 'ro'er motion and the a''roval of the corres'onding bond& ;o discretion is left
to the trial co!rt& An$ !estion regarding the reg!larit$ and validit$ of the sale( as
"ell as the conse!ent cancellation of the "rit( is to be determined in a s!bse!ent
'roceeding as o!tlined in Section A of Act ;o& 0.0B& S!ch !estion cannot be raised
to o''ose the iss!ance of the "rit( since the 'roceeding is e) 'arte& The reco!rse is
available even before the e)'iration of the redem'tion 'eriod 'rovided b$ la" and
the @!les of Co!rt& *7/ (oldin's and )evelopment Corporation v. Planters
)evelopment !an&( G&@& ;o& .A/>/0( Can!ar$ 19( 19.?&
Interest; legal interest; interest rate 'egged at DO regardless of the so!rce of
obligation& The res!lting modifcation of the a"ard of legal interest is( also( in line
"ith o!r recent r!ling in +acar v. 4allery 3rames( embod$ing the amendment
introd!ced b$ the Jang+o Sentral ng :ili'inas Lonetar$ Joard in JS:#LJ Circ!lar
;o& />> "hich 'egged the interest rate at DO regardless of the so!rce of obligation&
3il-1state Properties, .nc. and 3il-1state +etwor&, .nc. v. $pouses Conrado and aria
,ictoria Ronquillo( G&@& ;o& .AB/>A( Can!ar$ .0( 19.?&
Interest; legal interest; 'ro'er rate& In 1astern $hippin'( it "as observed that the
commencement of "hen the legal interest sho!ld start to r!n varies de'ending on
the fact!al circ!mstances obtaining in each case& As a r!le of th!mb( it "as
s!ggested that 2"here the demand is established "ith reasonable certaint$( the
interest shall begin to r!n from the time the claim is made %!diciall$ or
e)tra%!diciall$ EArt& ..D>( Civil CodeF b!t "hen s!ch certaint$ cannot be so
reasonabl$ established at the time the demand is made( the interest shall begin to
r!n onl$ from the date the %!dgment of the co!rt is made Eat "hich time the
!antifcation of damages ma$ be deemed to have been reasonabl$ ascertainedF&4
D!ring the 'endenc$ of this case( ho"ever( the Lonetar$ Joard iss!ed @esol!tion
;o& />D dated La$ .D( 19.0( stating that in the absence of e)'ress sti'!lation
bet"een the 'arties( the rate of interest in loan or forbearance of an$ mone$( goods
or credits and the rate allo"ed in %!dgments shall be DO 'er ann!m& Said @esol!tion
is embodied in Jang+o Sentral ng :ili'inas Circ!lar ;o& />>( Series of19.0( "hich
too+ e3ect on C!l$ .( 19.0& Gence( the .1O ann!al interest mentioned above shall
a''l$ onl$ !' to C!ne 09( 19.0& Thereafter( or starting C!l$ .( 19.0( the a''licable
rate of interest for both the debited amo!nt and !ndoc!mented "ithdra"als shall
be DO 'er ann!m com'o!nded ann!all$( !ntil f!ll$ 'aid& *and !an& of the
Philippines v. 1mmanuel C. #-ate( G&@& ;o& .>10/.( Can!ar$ .B( 19.?&
'g& /A
Interest; legal interest; rate& The legal interest rate to be im'osed from 8ebr!ar$ ..(
.>>0( the time of the e)tra%!dicial demand b$ res'ondent( sho!ld be DO 'er ann!m
in the absence of an$ sti'!lation in "riting in accordance "ith Article 119> of the
Civil Code( "hich 'rovides6
Article 119>& If the obligation consists in the 'a$ment of a s!m of mone$( and the
debtor inc!rs in dela$( the indemnit$ for damages( there being no sti'!lation to the
contrar$( shall be the 'a$ment of the interest agreed !'on( and in the absence of
sti'!lation( the legal interest( "hich is si) 'er cent 'er ann!m& 3irst 0nited
Constructors Corporation, et al. v. !ayanihan Automotive Corporation( G&@& ;o&
.D?>AB( Can!ar$ .B( 19.?&
Interest; legal interest; "hen a"arded& Lan$ $ears have gone b$ since Gan<
s!3ered the in%!r$& Interest of DO 'er ann!m sho!ld then be im'osed on the a"ard
as a sincere means of ad%!sting the val!e of the a"ard to a level that is not onl$
reasonable b!t %!st and commens!rate& -nless "e ma+e the ad%!stment in the
'ermissible manner b$ 'rescribing legal interest on the a"ard( his s!3erings "o!ld
be !nd!l$ com'o!nded& 8or that '!r'ose( the rec+oning of interest sho!ld be from
the fling of the criminal information on A'ril . /( .>>/( the ma+ing of the %!dicial
demand for the liabilit$ of the 'etitioner& )r. 1ncarnacion C. *umantas v. (an8
Calapi8, represented "y his parents, (ilario Calapi8, Jr. and (elita Calapi8( G&@& ;o&
.D0/B0& Can!ar$ .B( 19.?&
*bligations; defa!lt; borro"er "o!ld not be in defa!lt "itho!t demand to 'a$&
Considering that it had $et to release the entire 'roceeds of the loan( DJ: co!ld not
$et ma+e an e3ective demand for 'a$ment !'on G!ariMa Cor'oration to 'erform its
obligation !nder the loan& According to )evelopment !an& of the Philippines v.
*icuanan( it "o!ld onl$ be "hen a demand to 'a$ had been made and "as
s!bse!entl$ ref!sed that a borro"er co!ld be considered in defa!lt( and the lender
co!ld obtain the right to collect the debt or to foreclose the mortgage& )evelopment
!an& of the Philippines B)!PC v. 4uari-a A'ricultural and Realty )evelopment
Corporation( G&@& ;o& .D9/BA& Can!ar$ .B( 19.?&
*bligations; e)ting!ishment of obligations; com'ensation; re!isites& Com'ensation
is defned as a mode of e)ting!ishing obligations "hereb$ t"o 'ersons in their
ca'acit$ as 'rinci'als are m!t!al debtors and creditors of each other "ith res'ect to
e!all$ li!idated and demandable obligations to "hich no retention or controvers$
has been timel$ commenced and comm!nicated b$ third 'arties&
B0
The re!isites
therefor are 'rovided !nder Article .1/> of the Civil Code "hich reads as follo"s6
Art& .1/>& In order that com'ensation ma$ be 'ro'er( it is necessar$6
E.F That each one of the obligors be bo!nd 'rinci'all$( and that he be at the same
time a 'rinci'al creditor of the other;
E1F That both debts consist in a s!m of mone$( or if the things d!e are cons!mable(
the$ be of the same +ind( and also of the same !alit$ if the latter has been stated;
E0F That the t"o debts be d!e;
'g& />
E?F That the$ be li!idated and demandable;
EBF That over neither of them there be an$ retention or controvers$( commenced b$
third 'ersons and comm!nicated in d!e time to the debtor&
The r!le on legal com'ensation is stated in Article .1>9 of the Civil Code "hich
'rovides that 2H"Ihen all the re!isites mentioned in Article .1/> are 'resent(
com'ensation ta+es e3ect b$ o'eration of la"( and e)ting!ishes both debts to the
conc!rrent amo!nt( even tho!gh the creditors and debtors are not a"are of the
com'ensation&4 0nion !an& of the Philippines v. )evelopment !an& of the
Philippines( G&@& ;o& .>.BBB( Can!ar$ 19( 19.?&
*bligations; legal com'ensation; re!isites& Legal com'ensation ta+es 'lace "hen
the re!irements set forth in Article .1/A and Article .1/> of the Civil Code are
'resent( to "it6
Article .1/A& Com'ensation shall ta+e 'lace "hen t"o 'ersons( in their o"n right(
are creditors and debtors of each other&4
Article .1/>& In order that com'ensation ma$ be 'ro'er( it is necessar$6
E.F That each of the obligors be bo!nd 'rinci'all$( and that he be at the same time
a 'rinci'al creditor of the other;
E1F That both debts consists in a s!m of mone$( or if the things d!e are cons!mable(
the$ be of the same +ind( and also of the same !alit$ if the latter has been stated;
E0F That the t"o debts be d!e;
E?F That the$ be li!idated and demandable;
EBF That over neither of them there be an$ retention or controvers$( commenced b$
third 'ersons and comm!nicated in d!e time to the debtor&
3irst 0nited Constructors Corporation, et al. v. !ayanihan Automotive Corporation(
G&@& ;o& .D?>AB( Can!ar$ .B( 19.?&
:ro'ert$; b!ilder in good faith; conce't of& To be deemed a b!ilder in good faith( it is
essential that a 'erson asserts title to the land on "hich he b!ilds( i&e& ( that he be a
'ossessor in conce't of o"ner( and that he be !na"are that there e)ists in his title
or mode of ac!isition an$ ,a" "hich invalidates it& Good faith is an intangible and
abstract !alit$ "ith no technical meaning or stat!tor$ defnition( and it
encom'asses( among other things( an honest belief( the absence of malice and the
absence of design to defra!d or to see+ an !nconscionable advantage& It im'lies
honest$ of intention( and freedom from +no"ledge of circ!mstances "hich o!ght to
'!t the holder !'on in!ir$& 6he (eirs of ,ictorino $arili, namely, .sa"el A. $arili, et
al. v. Pedro 3. *a'rosa, represented in this act "y his Attorney-in-3act, *ourdes
*a"ios o<ica( G&@& ;o& .>0B./( Can!ar$ .B( 19.?&
'g& A9
:ro'ert$; o"nershi'; accession; accessor$ follo"s the 'rinci'al; e)ce'tion& While it
is a hornboo+ doctrine that the accessor$ follo"s the 'rinci'al( that is( the
o"nershi' of the 'ro'ert$ gives the right b$ accession to ever$thing "hich is
'rod!ced thereb$( or "hich is incor'orated or attached thereto( either nat!rall$ or
artifciall$( s!ch r!le is not "itho!t e)ce'tion& In cases "here there is a clear and
convincing evidence to 'rove that the 'rinci'al and the accessor$ are not o"ned b$
one and the same 'erson or entit$( the 'res!m'tion shall not be a''lied and the
act!al o"nershi' shall be !'held& In a n!mber of cases( "e recogni<ed the se'arate
o"nershi' of the land from the b!ilding and br!shed aside the r!le that accessor$
follo"s the 'rinci'al& a'dalena 6. ,illasi v. 3ilomena 4arcia, su"stituted "y his
heirs, namely, 1rmelinda (. 4arcia, et al.( G&@& ;o& .>9.9D( Can!ar$ .B( 19.?&
T!asi#contracts; -n%!st enrichment& -n%!st enrichment e)ists( according to (ulst v.
PR !uilders, .nc.( 2"hen a 'erson !n%!stl$ retains a beneft at the loss of another( or
"hen a 'erson retains mone$ or 'ro'ert$ of another against the f!ndamental
'rinci'les of %!stice( e!it$ and good conscience&4 The 'revention of !n%!st
enrichment is a recogni<ed '!blic 'olic$ of the State( for Article 11 of the Civil Code
e)'licitl$ 'rovides that 2HeIver$ 'erson "ho thro!gh an act of 'erformance b$
another( or an$ other means( ac!ires or comes into 'ossession of something at the
e)'ense of the latter "itho!t %!st or legal gro!nd( shall ret!rn the same to him&4
)omin'o 4on8alo v. John 6arnate, Jr&( G&@& ;o& .D9D99( Can!ar$ .B( 19.?&
Sales; Article .B>> of the Civil Code; reco!'ment; defnition of; "hen entitled&
@eco!'ment EreconvencionF is the act of rebating or reco!'ing a 'art of a claim
!'on "hich one is s!ed b$ means of a legal or e!itable right res!lting from a
co!nterclaim arising o!t of the same transaction& It is the setting !' of a demand
arising from the same transaction as the 'lainti3=s claim( to abate or red!ce that
claim&
The legal basis for reco!'ment b$ the b!$er is the frst 'aragra'h of Article .B>> of
the Civil Code( vi<6
Article .B>>& Where there is a breach of "arrant$ b$ the seller( the b!$er ma$( at
his election6
E.F Acce't or +ee' the goods and set !' against the seller( the breach of "arrant$
b$ "a$ of reco!'ment in dimin!tion or e)tinction of the 'rice;
) ) ) )
3irst 0nited Constructors Corporation, et al. v. !ayanihan Automotive Corporation(
G&@& ;o& .D?>AB( Can!ar$ .B( 19.?&
Sales; sale of a 'iece of land or an$ interest therein is thro!gh an agent; a!thorit$ of
the agent shall be in "riting; other"ise( the sale shall be void& The d!e e)ec!tion
and a!thenticit$ of the s!b%ect S:A are of great signifcance in determining the
validit$ of the sale entered into b$ Victorino and @amon since the latter onl$ claims
to be the agent of the '!r'orted seller Ei&e&( res'ondentF& Article .A/? of the Civil
Code 'rovides that 2H"Ihen a sale of a 'iece of land or an$ interest therein is
'g& A.
thro!gh an agent( the a!thorit$ of the latter shall be in "riting; other"ise( the sale
shall be void&4 In other "ords( if the s!b%ect S:A "as not 'roven to be d!l$ e)ec!ted
and a!thentic( then it cannot be said that the foregoing re!irement had been
com'lied "ith; hence( the sale "o!ld be void& 6he (eirs of ,ictorino $arili, namely,
.sa"el A. $arili, et al. v. Pedro 3. *a'rosa, represented in this act "y his Attorney-in-
3act, *ourdes *a"ios o<ica( G&@& ;o& .>0B./( Can!ar$ .B( 19.?&
S-.$/(L L(0S
Section 10 of :residential Decree ;o& >B/; non#forfeit!re of 'a$ments& Section 10 of
:residential Decree ;o& >B/( the r!le governing the sale of condomini!ms( "hich
'rovides6 ;o installment 'a$ment made b$ a b!$er in a s!bdivision or condomini!m
'ro%ect for the lot or !nit he contracted to b!$ shall be forfeited in favor of the
o"ner or develo'er "hen the b!$er( after d!e notice to the o"ner or develo'er(
desists from f!rther 'a$ment d!e to the fail!re of the o"ner or develo'er to
develo' the s!bdivision or condomini!m 'ro%ect according to the a''roved 'lans
and "ithin the time limit for com'l$ing "ith the same& S!ch b!$er ma$( at his
o'tion( be reimb!rsed the total amo!nt 'aid incl!ding amorti<ation interests b!t
e)cl!ding delin!enc$ interests( "ith interest thereon at the legal rate& 3il-1state
Properties, .nc. and 3il-1state +etwor&, .nc. v. $pouses Conrado and aria ,ictoria
Ronquillo( G&@& ;o& .AB/>A( Can!ar$ .0( 19.?&
Section D of :residential Decree ;o& .B>?; right of assignment and s!bcontract&
There is no !estion that ever$ contractor is 'rohibited from s!bcontracting "ith or
assigning to another 'erson an$ contract or 'ro%ect that he has "ith the D:WG
!nless the D:WG Secretar$ has a''roved the s!bcontracting or assignment& This is
'!rs!ant to Section D of :residential Decree ;o& .B>?( "hich 'rovides that 2HTIhe
contractor shall not assign( transfer( 'ledge( s!bcontract or ma+e an$ other
dis'osition of the contract or an$ 'art or interest therein e)ce't "ith the a''roval of
the Linister of :!blic Wor+s( Trans'ortation and Comm!nications( the Linister of
:!blic Gigh"a$s( or the Linister of Energ$( as the case ma$ be& A''roval of the
s!bcontract shall not relieve the main contractor from an$ liabilit$ or obligation
!nder his contract "ith the Government nor shall it create an$ contract!al relation
bet"een the s!bcontractor and the Government&4 )omin'o 4on8alo v. John
6arnate, Jr&( G&@& ;o& .D9D99( Can!ar$ .B( 19.?&
8amil$ la"; con%!gal 'ro'ert$; all 'ro'ert$ of the marriage is 'res!med to be
con%!gal( !nless it is sho"n that it is o"ned e)cl!sivel$ b$ the h!sband or the "ife&
There is a 'res!m'tion that all 'ro'ert$ of the marriage is con%!gal( !nless it is
sho"n that it is o"ned e)cl!sivel$ b$ the h!sband or the "ife; this 'res!m'tion is
not overcome b$ the fact that the 'ro'ert$ is registered in the name of the h!sband
or the "ife alone; and the consent of both s'o!ses is re!ired before a con%!gal
'ro'ert$ ma$ be mortgaged& Go"ever( "e fnd it ini!ito!s to a''l$ the foregoing
'res!m'tion es'eciall$ since the nat!re of the mortgaged 'ro'ert$ "as never
raised as an iss!e before the @TC( the CA( and even before this Co!rt& In fact(
'etitioner never alleged in his Com'laint that the said 'ro'ert$ "as con%!gal in
nat!re& Gence( res'ondent had no o''ort!nit$ to reb!t the said 'res!m'tion&
3rancisco *im v. 1quita"le PC. !an&, now &nown as !anco )e #ro 0ni"an&, .nc&( G&@&
;o& .A0>.A& Can!ar$ .B( 19.?&
'g& A1
8amil$ la"; e)cl!sive 'ro'ert$ of s'o!se; "hen the 'ro'ert$ is registered in the
name of a s'o!se onl$ and there is no sho"ing as to "hen the 'ro'ert$ "as
ac!ired b$ said s'o!se( this is an indication that the 'ro'ert$ belongs e)cl!sivel$
to said s'o!se& Article .D9 of the Civil Code 'rovides as follo"s6 All 'ro'ert$ of the
marriage is 'res!med to belong to the con%!gal 'artnershi'( !nless it be 'roved that
it 'ertains e)cl!sivel$ to the h!sband or to the "ife&4
The 'res!m'tion a''lies to 'ro'ert$ ac!ired d!ring the lifetime of the h!sband
and "ife& In this case( it a''ears on the face of the title that the 'ro'erties "ere
ac!ired b$ Donata Lontema$or "hen she "as alread$ a "ido"& When the 'ro'ert$
is registered in the name of a s'o!se onl$ and there is no sho"ing as to "hen the
'ro'ert$ "as ac!ired b$ said s'o!se( this is an indication that the 'ro'ert$ belongs
e)cl!sivel$ to said s'o!se& And this 'res!m'tion !nder Article .D9 of the Civil Code
cannot 'revail "hen the title is in the name of onl$ one s'o!se and the rights of
innocent third 'arties are involved& 3rancisco *im v. 1quita"le PC. !an&, now &nown
as !anco )e #ro 0ni"an&, .nc&( G&@& ;o& .A0>.A& Can!ar$ .B( 19.?&
Torrens s$stem; certifcate of title; a certifcate of title serves as evidence of an
indefeasible and incontrovertible title to the 'ro'ert$ in favor of the 'erson "hose
name a''ears therein& 2HAI certifcate of title serves as evidence of an indefeasible
and incontrovertible title to the 'ro'ert$ in favor of the 'erson "hose name a''ears
therein&4 Gaving no certifcate of title iss!ed in their names( s'o!ses Vilbar have no
indefeasible and incontrovertible title over Lot 19 to s!''ort their claim& 8!rther( it
is an established r!le that 2registration is the o'erative act "hich gives validit$ to
the transfer or creates a lien !'on the land&4 2An$ b!$er or mortgagee of realt$
covered b$ a Torrens certifcate of title ) ) ) is charged "ith notice onl$ of s!ch
b!rdens and claims as are annotated on the title&4 8ailing to annotate the deed for
the event!al transfer of title over Lot 19 in their names( the s'o!ses Vilbar cannot
claim a greater right over *'inion( "ho ac!ired the 'ro'ert$ "ith clean title in
good faith and registered the same in his name b$ going thro!gh the legall$
re!ired 'roced!re& $ps. !ernadette and Rodulfo ,il"ar v. An'elito *. #pinion( G&@&
;o& ./D9?0& Can!ar$ .B( 19.?&
Torrens s$stem; Torrens title; a 'erson dealing "ith a registered land has a right to
rel$ !'on the face of the Torrens certifcate of title; e)ce'tions& The "ell#+no"n r!le
in this %!risdiction is that a 'erson dealing "ith a registered land has a right to rel$
!'on the face of the torrens certifcate of title and to dis'ense "ith the need of
in!iring f!rther( e)ce't "hen the 'art$ concerned has act!al +no"ledge of facts
and circ!mstances that "o!ld im'el a reasonabl$ ca!tio!s man to ma+e s!ch
in!ir$&
A torrens title concl!des all controvers$ over o"nershi' of the land covered b$ a
fnal decree of registration& *nce the title is registered the o"ner ma$ rest ass!red
"itho!t the necessit$ of ste''ing into the 'ortals of the co!rt or sitting in the
mirador de su casa to avoid the 'ossibilit$ of losing his land& 3rancisco *im v.
1quita"le PC. !an&, now &nown as !anco )e #ro 0ni"an&, .nc&( G&@& ;o& .A0>.A&
Can!ar$ .B( 19.?&
'g& A0
Torrens title; a 'erson dealing "ith a registered land has a right to rel$ !'on the
face of the Torrens certifcate of title; e)ce'tion in the case of a 'erson "ho b!$s
from a 'erson "ho is not the registered o"ner&The general r!le is that ever$ 'erson
dealing "ith registered land ma$ safel$ rel$ on the correctness of the certifcate of
title iss!ed therefor and the la" "ill in no "a$ oblige him to go be$ond the
certifcate to determine the condition of the 'ro'ert$& Where there is nothing in the
certifcate of title to indicate an$ clo!d or vice in the o"nershi' of the 'ro'ert$( or
an$ enc!mbrance thereon( the '!rchaser is not re!ired to e)'lore f!rther than
"hat the Torrens Title !'on its face indicates in !est for an$ hidden defects or
inchoate right that ma$ s!bse!entl$ defeat his right thereto&
Go"ever( a higher degree of 'r!dence is re!ired from one "ho b!$s from a 'erson
"ho is not the registered o"ner( altho!gh the land ob%ect of the transaction is
registered& In s!ch a case( the b!$er is e)'ected to e)amine not onl$ the certifcate
of title b!t all fact!al circ!mstances necessar$ for him to determine if there are an$
,a"s in the title of the transferor& The b!$er also has the d!t$ to ascertain the
identit$ of the 'erson "ith "hom he is dealing "ith and the latter=s legal a!thorit$
to conve$ the 'ro'ert$& 6he (eirs of ,ictorino $arili, namely, .sa"el A. $arili, et al. v.
Pedro 3. *a'rosa, represented in this act "y his Attorney-in-3act, *ourdes *a"ios
o<ica( G&@& ;o& .>0B./( Can!ar$ .B( 19.?&
Torrens s$stem;even if the 'roc!rement of a certifcate of title "as tainted "ith
fra!d and misre'resentation( s!ch defective title ma$ be the so!rce of a com'letel$
legal and valid title in the hands of an innocent '!rchaser for val!e& It is "ell#settled
that even if the 'roc!rement of a certifcate of title "as tainted "ith fra!d and
misre'resentation( s!ch defective title ma$ be the so!rce of a com'letel$ legal and
valid title in the hands of an innocent '!rchaser for val!e& Where innocent third
'ersons( rel$ing on the correctness of the certifcate of title th!s iss!ed( ac!ire
rights over the 'ro'ert$( the co!rt cannot disregard s!ch rights and order the total
cancellation of the certifcate& The e3ect of s!ch an o!tright cancellation "o!ld be
to im'air '!blic confdence in the certifcate of title( for ever$one dealing "ith
'ro'ert$ registered !nder the Torrens s$stem "o!ld have to in!ire in ever$
instance "hether the title has been reg!larl$ or irreg!larl$ iss!ed& This is contrar$ to
the evident '!r'ose of the la"& 6he (eirs of ,ictorino $arili, namely, .sa"el A. $arili,
et al. v. Pedro 3. *a'rosa, represented in this act "y his Attorney-in-3act, *ourdes
*a"ios o<ica( G&@& ;o& .>0B./( Can!ar$ .B( 19.?&
Torrens s$stem; lev$ on attachment( d!l$ registered( ta+es 'reference over a 'rior
!nregistered sale&4HTIhe settled r!le that lev$ on attachment( d!l$ registered( ta+es
'reference over a 'rior !nregistered sale& This res!lt is a necessar$ conse!ence of
the fact that the H'ro'ertiesI involved H"ereI d!l$ covered b$ the Torrens s$stem
"hich "or+s !nder the f!ndamental 'rinci'le that registration is the o'erative act
"hich gives validit$ to the transfer or creates a lien !'on the land&4 $ps. !ernadette
and Rodulfo ,il"ar v. An'elito *. #pinion( G&@& ;o& ./D9?0& Can!ar$ .B( 19.?&
Contract la"; 'rinci'le of relativit$& The basic 'rinci'le of relativit$ of contracts is
that contracts can onl$ bind the 'arties "ho entered into it( and cannot favor or
're%!dice a third 'erson( even if he is a"are of s!ch contract and has acted "ith
+no"ledge thereof 2Where there is no 'rivit$ of contract( there is li+e"ise no
'g& A?
obligation or liabilit$ to s'ea+ abo!t&4 Philippine +ational !an& v. 6eresita 6an )ee,
et al., G&@& ;o& .A1.1A( 8ebr!ar$ .>( 19.?&
Contract of sale; obligations of the 'arties; there is nothing in the decision of the
GL-@J( as aNrmed b$ the *: and the CA( "hich sho"s that the 'etitioner is being
ordered to ass!me the obligation of an$ of the res'ondents&In a contract of sale( the
'arties= obligations are 'lain and sim'le& The la" obliges the vendor to transfer the
o"nershi' of and to deliver the thing that is the ob%ect of sale& *n the other hand(
the 'rinci'al obligation of a vendee is to 'a$ the f!ll '!rchase 'rice at the agreed
time& Philippine +ational !an& v. 6eresita 6an )ee, et al., G&@& ;o& .A1.1A( 8ebr!ar$
.>( 19.?&
Contract to sell; o"nershi'; right to mortgage the 'ro'ert$ b$ the o"ner& ;ote that
at the time :E:I mortgaged the 'ro'ert$ to the 'etitioner( the 'revailing contract
bet"een res'ondents :E:I and Dee "as still the Contract to Sell( as Dee "as $et to
f!ll$ 'a$ the '!rchase 'rice of the 'ro'ert$& *n this 'oint( :E:I "as acting f!ll$ "ell
"ithin its right "hen it mortgaged the 'ro'ert$ to the 'etitioner( for in a contract to
sell( o"nershi' is retained b$ the seller and is not to 'ass !ntil f!ll 'a$ment of the
'!rchase 'rice& In other "ords( at the time of the mortgage( :E:I "as still the o"ner
of the 'ro'ert$& Th!s( in China Jan+ing Cor'oration v& S'o!ses Lo<ada the Co!rt
aNrmed the right of the o"nerSdevelo'er to mortgage the 'ro'ert$ s!b%ect of
develo'ment( to "it6 2H:&D&I ;o& >B/ cannot totall$ 'revent the o"ner or develo'er
from mortgaging the s!bdivision lot or condomini!m !nit "hen the title thereto still
resides in the o"ner or develo'er a"aiting the f!ll 'a$ment of the '!rchase 'rice b$
the installment b!$er&4 Philippine +ational !an& v. 6eresita 6an )ee, et al., G&@& ;o&
.A1.1A( 8ebr!ar$ .>( 19.?&
)acion en pa'o ; conce't of&Dacion en 'ago or dation in 'a$ment is the deliver$ and
transmission of o"nershi' of a thing b$ the debtor to the creditor as an acce'ted
e!ivalent of the 'erformance of the obligation& It is a mode of e)ting!ishing an
e)isting obligation and 'arta+es the nat!re of sale as the creditor is reall$ b!$ing
the thing or 'ro'ert$ of the debtor( the 'a$ment for "hich is to be charged against
the debtor=s debt& Dation in 'a$ment e)ting!ishes the obligation to the e)tent of
the val!e of the thing delivered( either as agreed !'on b$ the 'arties or as ma$ be
'roved( !nless the 'arties b$ agreement K e)'ress or im'lied( or b$ their silence K
consider the thing as e!ivalent to the obligation( in "hich case the obligation is
totall$ e)ting!ished&Philippine +ational !an& v. 6eresita 6an )ee, et al., G&@& ;o&
.A1.1A( 8ebr!ar$ .>( 19.?&
Co#o"nershi'; "hen 'resent&Art& ?A?& There is co#o"nershi' "henever the
o"nershi' of an !ndivided thing or right belongs to di3erent 'ersons& Art& .9/A&
When there are t"o or more heirs( the "hole estate of the decedent is( before its
'artition( o"ned in common b$ s!ch heirs( s!b%ect to the 'a$ment of debts of the
deceased& 6eodoro $. 6eodoro, et al. v. )anilo 1spino, et al., G&@& ;o& .A>1?A(
8ebr!ar$ B( 19.?&
Co#o"nershi'; right of 'ossession&Certainl$( and as fo!nd b$ the trial co!rts( the
"hole of Lot ;o& 1?/D incl!ding the 'ortion no" litigated is( o"ing to the fact that it
has remained registered in the name of Genaro "ho is the common ancestor of both
'g& AB
'arties herein( co#o"ned 'ro'ert$& All( or both Teodoro Teodoro and res'ondents are
entitled to e)ercise the right of 'ossession as co#o"ners& ;either 'art$ can e)cl!de
the other from 'ossession& Altho!gh the 'ro'ert$ remains !n'artitioned( the
res'ondents in fact 'ossess s'ecifc areas& Teodoro Teodoro can li+e"ise 'oint to a
s'ecifc area( "hich is that "hich "as 'ossessed b$ :etra& Teodoro Teodoro cannot
be dis'ossessed of s!ch area( not onl$ b$ virt!e of :etra=s be!eathal in his favor
b!t also beca!se of his o"n right of 'ossession that comes from his co#o"nershi' of
the 'ro'ert$& 6eodoro $. 6eodoro, et al. v. )anilo 1spino, et al., G&@& ;o& .A>1?A(
8ebr!ar$ B( 19.?&
Alienable and dis'osable land; to 'rove that the land s!b%ect of an a''lication for
registration is alienable( an a''licant m!st establish the e)istence of a 'ositive act
of the government; annotation in the s!rve$ 'lan is not s!Ncient& Go"ever( Corte<=
reliance on the foregoing annotation in the s!rve$ 'lan is amiss; it does not
constit!te incontrovertible evidence to overcome the 'res!m'tion that the s!b%ect
'ro'ert$ remains 'art of the inalienable '!blic domain& In @e'!blic of the :hili''ines
v& Tri#:l!s Cor'oration( the Co!rt clarifed that( the a''licant m!st at the ver$ least
s!bmit a certifcation from the 'ro'er government agenc$ stating that the 'arcel of
land s!b%ect of the a''lication for registration is indeed alienable and dis'osable(
vi<6 It m!st be stressed that incontrovertible evidence m!st be 'resented to
establish that the land s!b%ect of the a''lication is alienable or dis'osable& In the
'resent case( the onl$ evidence to 'rove the character of the s!b%ect lands as
re!ired b$ la" is the notation a''earing in the Advance :lan stating in e3ect that
the said 'ro'erties are alienable and dis'osable& Go"ever( this is hardl$ the +ind of
'roof re!ired b$ la"& To 'rove that the land s!b%ect of an a''lication for
registration is alienable( ana''licant m!st establish the e)istence of a 'ositive act
of the government s!ch as a 'residential 'roclamation or an e)ec!tive order( an
administrative action( investigation re'orts of J!rea! of Lands investigators( and a
legislative act or stat!te& The a''licant ma$ also sec!re a certifcation from the
Government that the lands a''lied for are alienable and dis'osable& Repu"lic of the
Philippines v. 1mmanuel C. Corte8, G&@& ;o& .ADD0>& 8ebr!ar$ B( 19.?&
:atrimonial 'ro'ert$; s!sce'tible to ac!isitive 'rescri'tion; start of the r!nning of
the 'rescri'tive 'eriod&The Civil Code ma+es it clear that 'atrimonial 'ro'ert$ of the
State ma$ be ac!ired b$ 'rivate 'ersons thro!gh 'rescri'tion& This is bro!ght
abo!t b$ Article ...0( "hich states that 2HaIll things "hich are "ithin the commerce
of man are s!sce'tible to 'rescri'tion(4 and that H'Iro'ert$ of the State or an$ of its
s!bdivisions not 'atrimonial in character shall not be the ob%ect of
'rescri'tion&4;onetheless( Article ?11 of the Civil Code states that 2H'Iro'ert$ of
'!blic dominion( "hen no longer intended for '!blic !se or for '!blic service( shall
form 'art of the 'atrimonial 'ro'ert$ of the State&4 It is this 'rovision that controls
ho" '!blic dominion 'ro'ert$ ma$ be converted into 'atrimonial 'ro'ert$
s!sce'tible to ac!isition b$ 'rescri'tion& After all( Article ?19E1F ma+es clear that
those 'ro'ert$ 2"hich belong to the State( "itho!t being for '!blic !se( and are
intended for some '!blic service or for the develo'ment of the national "ealth4 are
'!blic dominion 'ro'ert$& 8or as long as the 'ro'ert$ belongs to the State( altho!gh
alread$ classifed as alienable or dis'osable( it remains 'ro'ert$ of the '!blic
dominion if "hen it is 2intended for some '!blic service or for the develo'ment of
the national "ealth&4 Accordingl$( there m!st be an e)'ress declaration b$ the State
that the '!blic dominion 'ro'ert$ is no longer intended for '!blic service or the
'g& AD
develo'ment of the national "ealth or that the 'ro'ert$ has been converted into
'atrimonial& Witho!t s!ch e)'ress declaration( the 'ro'ert$( even if classifed as
alienable or dis'osable( remains 'ro'ert$ of the '!blic dominion( '!rs!ant to Article
?19E1F( and th!s inca'able of ac!isition b$ 'rescri'tion& It is onl$ "hen s!ch
alienable and dis'osable lands are e)'ressl$ declared b$ the State to be no longer
intended for '!blic service or for the develo'ment of the national "ealth that the
'eriod of ac!isitive 'rescri'tion can begin to r!n& S!ch declaration shall be in the
form of a la" d!l$ enacted b$ Congress or a :residential :roclamation in cases
"here the :resident is d!l$ a!thori<ed b$ la"& Repu"lic of the Philippines v.
1mmanuel C. Corte8,G&@& ;o& .ADD0>& 8ebr!ar$ B( 19.?&
Sale; "arranties of sellers&Indeed( this Co!rt is convinced K from an e)amination of
the evidence and b$ the conc!rring o'inions of the co!rts belo" K that Jigna$
'!rchased the 'ro'ert$ "itho!t +no"ledge of the 'ending Civil Case ;o& T#B1/91&
-nion Jan+ is therefore ans"erable for its e)'ress !nderta+ing !nder the December
19( .>A> deed of sale to 2defend its title to the :arcelSs of Land "ith im'rovement
thereon against the claims of an$ 'erson "hatsoever&4 J$ this "arrant$( -nion
Jan+ re'resented to Jigna$ that it had title to the 'ro'ert$( and b$ ass!ming the
obligation to defend s!ch title( it 'romised to do so at least in good faith and "ith
s!Ncient 'r!dence( if not to the best of its abilities& !i'nay 1N-. Philippines, .nc. v.
0nion !an& of the Philippines D 0nion !an& of the Philippines v. !i'nay 1N-.
Philippines, .nc., G&@& ;o& ./.B>9 X G&@& ;o& ./.B>A( 8ebr!ar$ .1( 19.?&
Jreach of contract; gross negligence&The record reveals( ho"ever( that -nion Jan+
"as grossl$ negligent in the handling and 'rosec!tion of Civil Case ;o& T#B1/91& Its
a''eal of the December .1( .>>. Decision in said case "as dismissed b$ the CA for
fail!re to fle the re!ired a''ellant=s brief& ;e)t( the ens!ing :etition for @evie" on
Certiorari fled "ith this Co!rt "as li+e"ise denied d!e to late fling and 'a$ment of
legal fees& 8inall$( the ban+ so!ght the ann!lment of the December .1( .>>.
%!dgment( $et again( the CA dismissed the 'etition for its fail!re to com'l$ "ith
S!'reme Co!rt Circ!lar ;o& 1A#>.& As a res!lt( the December .1( .>>. Decision
became fnal and e)ec!tor$( and Jigna$ "as evicted from the 'ro'ert$& S!ch
negligence in the handling of the case is far from coincidental; it is decidedl$
glaring( and amo!nts to bad faith& 2H;Iegligence ma$ be occasionall$ so gross as to
amo!nt tomalice Hor bad faithI&4 Indeed( in c!l'a contract!al or breach of contract(
gross negligence of a 'art$ amo!nting to bad faith is a gro!nd for the recover$ of
Damages b$ the in%!red 'art$&!i'nay 1N-. Philippines, .nc. v. 0nion !an& of the
Philippines D 0nion !an& of the Philippines v. !i'nay 1N-. Philippines, .nc., G&@& ;o&
./.B>9 X G&@& ;o& ./.B>A( 8ebr!ar$ .1( 19.?&
-nenforceable contract; entering into a contract "itho!t or be$ond a!thorit$; sale
of 'ro'ert$ des'ite ob%ection of la$men=s committee&The Co!rt fnds it erroneo!s for
the CA to ignore the fact that the la$men=s committee ob%ected to the sale of the lot
in !estion& The Canons re!ire that ALL the ch!rch entities listed in Article IV EaF
thereof sho!ld give its a''roval to the transaction& Th!s( "hen the S!'reme Jisho'
e)ec!ted the contract of sale of 'etitioner=s lot des'ite the o''osition made b$ the
la$men=s committee( he acted be$ond his 'o"ers& This case clearl$ falls !nder the
categor$ of !nenforceable contracts mentioned in Article .?90( 'aragra'h E.F of the
Civil Code( "hich 'rovides( th!s6 Art& .?90& The follo"ing contracts are
'g& A/
!nenforceable( !nless the$ are ratifed6 E.F Those entered into in the name of
another 'erson b$ one "ho has been given no a!thorit$ or legal re'resentation( or
"ho has acted be$ond his 'o"ers; In Lercado v& Allied Jan+ing Cor'oration( the
Co!rt e)'lained that6 ) ) ) -nenforceable contracts are those "hich cannot be
enforced b$ a 'ro'er action in co!rt( !nless the$ are ratifed( beca!se either the$
are entered into "itho!t or in e)cess of a!thorit$ or the$ do not com'l$ "ith the
stat!te of fra!ds or both of the contracting 'arties do not 'ossess the re!ired legal
ca'acit$& ) ) )& .'lesia 3elipina .ndependiente v. (eirs of !ernardino 6ae8a,G&@& ;o&
./>B>/( 8ebr!ar$ 0( 19.?&
-nenforceable contract; analogo!s cases& Closel$ analogo!s cases of !nenforceable
contracts are those "here a 'erson signs a deed of e)tra%!dicial 'artition in behalf
of co#heirs "itho!t the latter=s a!thorit$; "here a mother as %!dicial g!ardian of her
minor children( e)ec!tes a deed of e)tra%!dicial 'artition "herein she favors one
child b$ giving him more than his share of the estate to the 're%!dice of her other
children; and "here a 'erson( holding a s'ecial 'o"er of attorne$( sells a 'ro'ert$
of his 'rinci'al that is not incl!ded in said s'ecial 'o"er of attorne$& .'lesia 3elipina
.ndependiente v. (eirs of !ernardino 6ae8a,G&@& ;o& ./>B>/( 8ebr!ar$ 0( 19.?&
Article .?BD( Civil Code; im'lied tr!st; ac!iring 'ro'ert$ thro!gh mista+e& In the
'resent case( ho"ever( res'ondents= 'redecessor#in#interest( Jernardino Tae<a( had
alread$ obtained a transfer certifcate of title in his name over the 'ro'ert$ in
!estion& Since the 'erson s!''osedl$ transferring o"nershi' "as not a!thori<ed
to do so( the 'ro'ert$ had evidentl$ been ac!ired b$ mista+e& In Vda& de Esconde
v& Co!rt ofA''eals( the Co!rt aNrmed the trial co!rt=s r!ling that the a''licable
'rovision of la" in s!ch cases is Article .?BD of the Civil Code "hich states that 2HiIf
'ro'ert$ is ac!ired thro!gh mista+e or fra!d( the 'erson obtaining it is( b$ force of
la"( considered a tr!stee of an im'lied tr!st for the beneft of the 'erson from
"hom the 'ro'ert$ comes&4 .'lesia 3elipina .ndependiente v. (eirs of !ernardino
6ae8a,G&@& ;o& ./>B>/( 8ebr!ar$ 0( 19.?&
Constr!ctive tr!st; conce't of& A dee'er anal$sis of Article .?BD reveals that it is not
a tr!st in the technical sense for in a t$'ical tr!st( confdence is re'osed in one
'erson "ho is named a tr!stee for the beneft of another "ho is called the cest!i
!e tr!st( res'ecting 'ro'ert$ "hich is held b$ the tr!stee for the beneft of the
cest!i !e tr!st& A constr!ctive tr!st( !nli+e an e)'ress tr!st( does not emanate
from( or generate a fd!ciar$ relation& While in an e)'ress tr!st( a benefciar$ and a
tr!stee are lin+ed b$ confdential or fd!ciar$ relations( in a constr!ctive tr!st( there
is neither a 'romise nor an$ fd!ciar$ relation to s'ea+ of and the so#called tr!stee
neither acce'ts an$ tr!st nor intends holding the 'ro'ert$ for the benefciar$&
.'lesia 3elipina .ndependiente v. (eirs of !ernardino 6ae8a,G&@& ;o& ./>B>/(
8ebr!ar$ 0( 19.?&
Constr!ctive tr!st; 'rescri'tive 'eriod&A constr!ctive tr!st having been constit!ted
b$ la" bet"een res'ondents as tr!stees and 'etitioner as benefciar$ of the s!b%ect
'ro'ert$( ma$ res'ondents ac!ire o"nershi' over the said 'ro'ert$7 The Co!rt
held in the same case of A<nar( that !nli+e in e)'ress tr!sts and res!lting im'lied
tr!sts "here a tr!stee cannot ac!ire b$ 'rescri'tion an$ 'ro'ert$ entr!sted to him
!nless he re'!diates the tr!st( in constr!ctive im'lied tr!sts( the tr!stee ma$
'g& AA
ac!ire the 'ro'ert$ thro!gh 'rescri'tion even if he does not re'!diate the
relationshi'& It is then inc!mbent !'on the benefciar$ to bring an action for
reconve$ance before 'rescri'tion bars the same&An action for reconve$ance based
on an im'lied or constr!ctive tr!st m!st 'erforce 'rescribe in ten $ears and not
other"ise& A long line of decisions of this Co!rt( and of ver$ recent vintage at that(
ill!strates this r!le& -ndo!btedl$( it is no" "ell#settled that an action for
reconve$ance based on an im'lied or constr!ctive tr!st 'rescribes in ten $ears from
the iss!ance of the Torrens title over the 'ro'ert$& It has also been r!led that the
ten#$ear 'rescri'tive 'eriod begins to r!n from the date of registration of the deed
or the date of the iss!ance of the certifcate of title over the 'ro'ert$( .'lesia
3elipina .ndependiente v. (eirs of !ernardino 6ae8a, G&@& ;o& ./>B>/( 8ebr!ar$ 0(
19.?&
S!ret$; conce't of& A s!ret$ is considered in la" as being the same 'art$ as the
debtor in relation to "hatever is ad%!dged to!ching the obligation of the latter( and
their liabilities are inter"oven as to be inse'arable& Altho!gh the contract of a
s!ret$ is in essence secondar$ onl$ to a valid 'rinci'al obligation( his liabilit$ to the
creditor is direct( 'rimar$ and absol!te; he becomes liable for the debt and d!t$ of
another altho!gh he 'ossesses no direct or 'ersonal interest over the obligations
nor does he receive an$ beneft therefrom& 6rade and .nvestment )evelopment
Corporation of the Philippines B3ormerly Philippine 15port and 3orei'n *oan
4uarantee CorporationC v. Asia Paces Corporation, et al., G&@& ;o& .A/?90& 8ebr!ar$
.1( 19.?&
S!ret$; solidar$ debtor& The f!ndamental reason therefor is that a contract of
s!ret$shi' e3ectivel$ binds the s!ret$ as a solidar$ debtor& This is 'rovided !nder
Article 19?/ of the Civil Code "hich states6 J$ g!arant$ a 'erson( called the
g!arantor( binds himself to the creditor to f!lfll the obligation of the 'rinci'al
debtor in case the latter sho!ld fail to do so& If a 'erson binds himself solidaril$ "ith
the 'rinci'al debtor( the 'rovisions of Section ?( Cha'ter 0( Title I of this Joo+ shall
be observed& In s!ch case the contract is called a s!ret$shi'& Th!s( since the s!ret$
is a solidar$ debtor( it is not necessar$ that the original debtor frst failed to 'a$
before the s!ret$ co!ld be made liable; it is eno!gh that a demand for 'a$ment is
made b$ the creditor for the s!ret$=s liabilit$ to attach& 6rade and .nvestment
)evelopment Corporation of the Philippines B3ormerly Philippine 15port and 3orei'n
*oan 4uarantee CorporationC v. Asia Paces Corporation, et al., G&@& ;o& .A/?90&
8ebr!ar$ .1( 19.?&
S!ret$; disting!ished from g!arantor& Com'aring a s!ret$=s obligations "ith that of
a g!arantor( the Co!rt( in the case of :almares v& CA( ill!mined that a s!ret$ is
res'onsible for the debt=s 'a$ment at once if the 'rinci'al debtor ma+es defa!lt(
"hereas a g!arantor 'a$s onl$ if the 'rinci'al debtor is !nable to 'a$( vi<& 6 A s!ret$
is an ins!rer of the debt( "hereas a g!arantor is an ins!rer of the solvenc$ of the
debtor& A s!ret$shi' is an !nderta+ing that the debt shall be 'aid; a g!arant$( an
!nderta+ing that the debtor shall 'a$& Stated di3erentl$( a s!ret$ 'romises to 'a$
the 'rinci'al=s debt if the 'rinci'al "ill not 'a$( "hile a g!arantor agrees that the
creditor( after 'roceeding against the 'rinci'al( ma$ 'roceed against the g!arantor
if the 'rinci'al is !nable to 'a$& A s!ret$ binds himself to 'erform if the 'rinci'al
does not( "itho!t regard to his abilit$ to do so& A g!arantor( on the other hand( does
'g& A>
not contract that the 'rinci'al "ill 'a$( b!t sim'l$ that he is able to do so& In other
"ords( a s!ret$ !nderta+es directl$ for the 'a$ment and is so res'onsible at once if
the 'rinci'al debtor ma+es defa!lt( "hile a g!arantor contracts to 'a$ if( b$ the !se
of d!e diligence( the debt cannot be made o!t of the 'rinci'al debtor& 6rade and
.nvestment )evelopment Corporation of the Philippines B3ormerly Philippine 15port
and 3orei'n *oan 4uarantee CorporationC v. Asia Paces Corporation, et al., G&@& ;o&
.A/?90& 8ebr!ar$ .1( 19.?&
S!ret$; e)tension given to debtor "itho!t consent of g!arantor; e3ect of& Des'ite
these distinctions( the Co!rt in Coching$an( Cr& v& @XJ S!ret$ X Ins!rance Co&( Inc&(
and later in the case of Sec!rit$ Jan+( held that Article 19/> of the Civil Code( "hich
'ertinentl$ 'rovides that 2HaIn e)tension granted to the debtor b$ the creditor
"itho!t the consent of the g!arantor e)ting!ishes the g!arant$(4 e!all$ a''lies to
bothcontracts of g!arant$ and s!ret$shi'& The rationale therefor "as e)'lained b$
the Co!rt as follo"s6 The theor$ behind Article 19/> is that an e)tension of time
given to the 'rinci'al debtor b$ the creditor "itho!t the s!ret$=s consent "o!ld
de'rive the s!ret$ of his right to 'a$ the creditor and to be immediatel$ s!brogated
to the creditor=s remedies against the 'rinci'al debtor !'on the mat!rit$ date& The
s!ret$ is said to be entitled to 'rotect himself against the contingenc$ of the
'rinci'al debtor or the indemnitors becoming insolvent d!ring the e)tended 'eriod&
6rade and .nvestment )evelopment Corporation of the Philippines B3ormerly
Philippine 15port and 3orei'n *oan 4uarantee CorporationC v. Asia Paces
Corporation, et al., G&@& ;o& .A/?90& 8ebr!ar$ .1( 19.?&
S!ret$; e)tension given to debtor "itho!t consent of g!arantor; the 'a$ment
e)tensions granted b$ Jan!e Indos!e< and :CI Ca'ital to TIDC*@: !nder the
@estr!ct!ring Agreement did not have the e3ect of e)ting!ishing the bonding
com'anies= obligations to TIDC*@: !nder the S!ret$ Jonds( not"ithstanding the
fact that said e)tensions "ere made "itho!t their consent& This is beca!se Article
19/> of the Civil Code refers to a 'a$ment e)tension granted b$ the creditor to the
'rinci'al debtor "itho!t the consent of the g!arantor or s!ret$& In this case( the
S!ret$ Jonds are s!ret$shi' contracts "hich sec!re the debt of AS:AC( the 'rinci'al
debtor( !nder the Deeds of -nderta+ing to 'a$ TIDC*@:( the creditor( the damages
and liabilities it ma$ inc!r !nder the Letters of G!arantee( "ithin the bo!nds of the
bonds= res'ective coverage 'eriods and amo!nts& ;o 'a$ment e)tension "as(
ho"ever( granted b$ TIDC*@: in favor of AS:AC in this regard; hence( Article 19/>
of the Civil Code sho!ld not be a''lied "ith res'ect to the bonding com'anies=
liabilities to TIDC*@: !nder the S!ret$ Jonds&
The 'a$ment e)tensions granted b$ Jan!e Indos!e< and :CI Ca'ital 'ertain to
TIDC*@:=s o"n debt !nder the Letters of G!arantee "herein it ETIDC*@:F
irrevocabl$ and !nconditionall$ g!aranteed f!ll 'a$ment of AS:AC=s loan obligations
to the ban+s in the event of its EAS:ACF defa!lt& In other "ords( the Letters of
G!arantee sec!red AS:AC=s loan agreements to the ban+s& -nder this arrangement(
TIDC*@: therefore acted as a g!arantor( "ith AS:AC as the 'rinci'al debtor( and
the ban+s as creditors& 6rade and .nvestment )evelopment Corporation of the
Philippines B3ormerly Philippine 15port and 3orei'n *oan 4uarantee CorporationC v.
Asia Paces Corporation, et al., G&@& ;o& .A/?90& 8ebr!ar$ .1( 19.?&
'g& >9
Deed of mortgage; e3ect "hen the a!thori<ed agent failed to indicate in the
mortgage that she "as acting for and on behalf of her 'rinci'al& Similarl$( in this
case( the a!thori<ed agent failed to indicate in the mortgage that she "as acting for
and on behalf of her 'rinci'al& The @eal Estate Lortgage( e)'licitl$ sho"s on its
face( that it "as signed b$ Conce'cion in her o"n name and in her o"n 'ersonal
ca'acit$& In fact( there is nothing in the doc!ment to sho" that she "as acting or
signing as an agent of 'etitioner& Th!s( consistent "ith the la" on agenc$ and
established %!ris'r!dence( 'etitioner cannot be bo!nd b$ the acts of Conce'cion&
+icanora 4. v. Rural !an& of 1l $alvador, .nc. et al., G&@& ;o& ./>D1B& 8ebr!ar$ 1?(
19.?&
Jan+; negligence of& At this 'oint( "e fnd it signifcant to mention that res'ondent
ban+ has no one to blame b!t itself& ;ot onl$ did it act "ith !nd!e haste "hen it
granted and released the loan in less than three da$s( it also acted negligentl$ in
're'aring the @eal Estate Lortgage as it failed to indicate that Conce'cion "as
signing it for and on behalf of 'etitioner& We need not belabor that the "ords 2as
attorne$#in#fact of(4 2as agent of(4 or 2for and on behalf of(4 are vital in order for the
'rinci'al to be bo!nd b$ the acts of his agent& Witho!t these "ords( an$ mortgage(
altho!gh signed b$ the agent( cannot bind the 'rinci'al as it is considered to have
been signed b$ the agent in his 'ersonal ca'acit$& +icanora 4. v. Rural !an& of 1l
$alvador, .nc. et al., G&@& ;o& ./>D1B& 8ebr!ar$ 1?( 19.?&
Agent; liabilit$ "hen deed of mortgage is signed in 'ersonal ca'acit$& Conce'cion(
on the other hand( is liable to 'a$ res'ondent ban+ her !n'aid obligation !nder the
:romissor$ ;ote dated C!ne ..( .>A1( "ith interest& As "e have said( Conce'cion
signed the :romissor$ ;ote in her o"n 'ersonal ca'acit$; th!s( she cannot esca'e
liabilit$& She is also liable to reimb!rse res'ondent ban+ for all damages( attorne$s=
fees( and costs the latter is ad%!dged to 'a$ 'etitioner in this case& +icanora 4. v.
Rural !an& of 1l $alvador, .nc. et al., G&@& ;o& ./>D1B& 8ebr!ar$ 1?( 19.?&
Article .09A of the Civil Code; 'rinci'le of m!t!alit$ of contracts& The credit
agreement e)ec!ted s!ccinctl$ sti'!lated that the loan "o!ld be s!b%ected to
interest at a rate 2determined b$ the Jan+ to be its 'rime rate 'l!s a''licable
s'read( 'revailing at the c!rrent month&4 This sti'!lation "as carried over to or
ado'ted b$ the s!bse!ent rene"als of the credit agreement& :;J thereb$
arrogated !nto itself the sole 'rerogative to determine and increase the interest
rates im'osed on the S'o!ses Lanalo& S!ch a !nilateral determination of the
interest rates contravened the 'rinci'le of m!t!alit$ of contracts embodied in
Article .09A of the Civil Code&Philippine +ational !an& v. $ps. 1nrique analo E
Rosalinda Jacinto, et al., 4.5. No. )*'',,, 6ebruary 7', 78)'.
Contracts; a contract "here there is no m!t!alit$ bet"een the 'arties 'arta+es of
the nat!re of a contract of adhesion& The Co!rt has declared that a contract "here
there is no m!t!alit$ bet"een the 'arties 'arta+es of the nat!re of a contract of
adhesion( and an$ obsc!rit$ "ill be constr!ed against the 'art$ "ho 're'ared the
contract( the latter being 'res!med the stronger 'art$ to the agreement( and "ho
ca!sed the obsc!rit$& :;J sho!ld then s!3er the conse!ences of its fail!re to
s'ecifcall$ indicate the rates of interest in the credit agreement& We s'o+e clearl$
on this in :hili''ine Savings Jan+ v& Castillo( to "it6 The !nilateral determination
'g& >.
and im'osition of the increased rates is violative of the 'rinci'le of m!t!alit$ of
contracts !nder Article .09A of the Civil Code( "hich 'rovides that PHtIhe contract
m!st bind both contracting 'arties; its validit$ or com'liance cannot be left to the
"ill of one of them&= A 'er!sal of the :romissor$ ;ote "ill readil$ sho" that the
increase or decrease of interest rates hinges solel$ on the discretion of 'etitioner& It
does not re!ire the conformit$ of the ma+er before a ne" interest rate co!ld be
enforced& An$ contract "hich a''ears to be heavil$ "eighed in favor of one of the
'arties so as to lead to an !nconscionable res!lt( th!s 'arta+ing of the nat!re of a
contract of adhesion( is void& An$ sti'!lation regarding the validit$ or com'liance of
the contract left solel$ to the "ill of one of the 'arties is li+e"ise invalid& Philippine
+ational !an& v. $ps. 1nrique analo E Rosalinda Jacinto, et al., G&@& ;o& ./??00(
8ebr!ar$ 1?( 19.?&
Interest; interest sho!ld be com'!ted from the time of the %!dicial or e)tra%!dicial
demand; r!le "hen there is no demand& Indeed( the Co!rt said in Eastern Shi''ing
Lines( Inc& v& Co!rt of A''eals that interest sho!ld be com'!ted from the time of the
%!dicial or e)tra%!dicial demand& Go"ever( this case 'resents a 'ec!liar sit!ation(
the 'ec!liarit$ being that the S'o!ses Lanalo did not demand interest either
%!diciall$ or e)tra%!diciall$& In the @TC( the$ s'ecifcall$ so!ght as the main reliefs
the n!llifcation of the foreclos!re 'roceedings bro!ght b$ :;J( acco!nting of the
'a$ments the$ had made to :;J( and the conversion of their loan into a long term
one& In its %!dgment( the @TC even !'held the validit$ of the interest rates im'osed
b$ :;J& In their a''ellant=s brief( the S'o!ses Lanalo again so!ght the n!llifcation
of the foreclos!re 'roceedings as the main relief& It is evident( therefore( that the
S'o!ses Lanalo made no %!dicial or e)tra%!dicial demand from "hich to rec+on the
interest on an$ amo!nt to be ref!nded to them& S!ch demand co!ld onl$ be
rec+oned from the 'rom!lgation of the CA=s decision beca!se it "as there that the
right to the ref!nd "as frst %!diciall$ recogni<ed& ;evertheless( '!rs!ant to Eastern
Shi''ing Lines( Inc& v& Co!rt of A''eals( the amo!nt to be ref!nded and the interest
thereon sho!ld earn interest to be com'!ted from the fnalit$ of the %!dgment !ntil
the f!ll ref!nd has been made&Philippine +ational !an& v. $ps. 1nrique analo E
Rosalinda Jacinto, et al., G&@& ;o& ./??00( 8ebr!ar$ 1?( 19.?&
Interest; Lonetar$ Joard Circ!lar ;o& />> red!ced the interest rates from .1O 'er
ann!m to DO 'er ann!m& Anent the correct rates of interest to be a''lied on the
amo!nt to be ref!nded b$ :;J( the Co!rt( in ;acar v& Galler$ 8rames and S&C&
Lega"orld Constr!ction v& :arada( alread$ a''lied Lonetar$ Joard Circ!lar ;o& />>
b$ red!cing the interest rates allo"ed in %!dgments from .1O 'er ann!m to DO 'er
ann!m& Philippine +ational !an& v. $ps. 1nrique analo E Rosalinda Jacinto, et al.,
G&@& ;o& ./??00( 8ebr!ar$ 1?( 19.?&
Interest; 'ros'ective a''lication of Lonetar$ Joard Circ!lar ;o& />>& According to
;acar v& Galler$ 8rames( LJ Circ!lar ;o& />> is a''lied 'ros'ectivel$( and
%!dgments that became fnal and e)ec!tor$ 'rior to its e3ectivit$ on C!l$ .( 19.0 are
not to be dist!rbed b!t contin!e to be im'lemented a''l$ing the old legal rate of
.1O 'er ann!m& Gence( the old legal rate of .1O 'er ann!m a''lied to %!dgments
becoming fnal and e)ec!tor$ 'rior to C!l$ .( 19.0( b!t the ne" rate of DO 'er
ann!m a''lies to %!dgments becoming fnal and e)ec!tor$ after said date&
'g& >1
Philippine +ational !an& v. $ps. 1nrique analo E Rosalinda Jacinto, et al., G&@& ;o&
./??00( 8ebr!ar$ 1?( 19.?&
Lortgagee in good faith; doctrine of& In Jan+ of Commerce v& San :ablo( Cr&( the
doctrine of mortgagee in good faith "as e)'lained6There is( ho"ever( a sit!ation
"here( des'ite the fact that the mortgagor is not the o"ner of the mortgaged
'ro'ert$( his title being fra!d!lent( the mortgage contract and an$ foreclos!re sale
arising there from are given e3ect b$ reason of '!blic 'olic$& This is the doctrine of
2the mortgagee in good faith4 based on the r!le that all 'ersons dealing "ith
'ro'ert$ covered b$ the Torrens Certifcates of Title( as b!$ers or mortgagees( are
not re!ired to go be$ond "hat a''ears on the face of the title& The '!blic interest
in !'holding indefeasibilit$ of a certifcate of title( as evidence of la"f!l o"nershi'
of the land or of an$ enc!mbrance thereon( 'rotects a b!$er or mortgagee "ho( in
good faith( relied !'on "hat a''ears on the face of the certifcate of title&
(omeowners $avin's and *oan !an& v. Asuncion P. 3elonia and *ydia C. )e
4u8man, rep. "y ari"el 3rias, et al., G&@& ;o& .A>?//& 8ebr!ar$ 1D( 19.?&
Lortgagee in good faith; GSLJ( as a mortgagee( had a right to rel$ in good faith on
Delgado=s title( and in the absence of an$ sign that might aro!se s!s'icion( GSLJ
had no obligation to !nderta+e f!rther investigation&When the 'ro'ert$ "as
mortgaged to GSLJ( the registered o"ner of the s!b%ect 'ro'ert$ "as Delgado "ho
had in her name TCT ;o& ??A?A& Th!s( GSLJ cannot be fa!lted in rel$ing on the face
of Delgado=s title& The records indicate that Delgado "as at the time of the
mortgage in 'ossession of the s!b%ect 'ro'ert$ and Delgado=s title did not contain
an$ annotation that "o!ld aro!se GSLJ=s s!s'icion& GSLJ( as a mortgagee( had a
right to rel$ in good faith on Delgado=s title( and in the absence of an$ sign that
might aro!se s!s'icion( GSLJ had no obligation to !nderta+e f!rther investigation&
As held b$ this Co!rt in Ceb! International 8inance Cor'& v& CA6 The 'revailing
%!ris'r!dence is that a mortgagee has a right to rel$ in good faith on the certifcate
of title of the mortgagor of the 'ro'ert$ given as sec!rit$ and in the absence of an$
sign that might aro!se s!s'icion( has no obligation to !nderta+e f!rther
investigation& Gence( even if the mortgagor is not the rightf!l o"ner of( or does not
have a valid title to( the mortgaged 'ro'ert$( the mortgagee or transferee in good
faith is nonetheless entitled to 'rotection& (omeowners $avin's and *oan !an& v.
Asuncion P. 3elonia and *ydia C. )e 4u8man, rep. "y ari"el 3rias, et al., G&@& ;o&
.A>?//& 8ebr!ar$ 1D( 19.?&
:!rchaser in good faith; doctrine of; d!t$ of a 'ros'ective b!$er& '!rchaser in good
faith is defned as one "ho b!$s a 'ro'ert$ "itho!t notice that some other 'erson
has a right to( or interest in( the 'ro'ert$ and 'a$s f!ll and fair 'rice at the time of
'!rchase or before he has notice of the claim or interest of other 'ersons in the
'ro'ert$&When a 'ros'ective b!$er is faced "ith facts and circ!mstances as to
aro!se his s!s'icion( he m!st ta+e 'reca!tionar$ ste's to !alif$ as a '!rchaser in
good faith& In S'o!ses Latha$ v& CA( "e determined the d!t$ of a 'ros'ective
b!$er6 Altho!gh it is a recogni<ed 'rinci'le that a 'erson dealing on a registered
land need not go be$ond its certifcate of title( it is also a frml$ settled r!le that
"here there are circ!mstances "hich "o!ld '!t a 'art$ on g!ard and 'rom't him to
investigate or ins'ect the 'ro'ert$ being sold to him( s!ch as the 'resence of
occ!'antsStenants thereon( it is of co!rse( e)'ected from the '!rchaser of a val!ed
'g& >0
'iece of land to in!ire frst into the stat!s or nat!re of 'ossession of the occ!'ants(
i&e&( "hether or not the occ!'ants 'ossess the land en conce'to de d!eMo( in the
conce't of the o"ner& As is the common 'ractice in the real estate ind!str$( an
oc!lar ins'ection of the 'remises involved is a safeg!ard a ca!tio!s a nd 'r!dent
'!rchaser !s!all$ ta+es& Sho!ld he fnd o!t that the land he intends to b!$ is
occ!'ied b$ an$bod$ else other than the seller "ho( as in this case( is not in act!al
'ossession( it "o!ld then be inc!mbent !'on the '!rchaser to verif$ the e)tent of
the occ!'ant=s 'ossessor$ rights& The fail!re of a 'ros'ective b!$er to ta+e s!ch
'reca!tionar$ ste's "o!ld mean negligence on his 'art and "o!ld thereb$ 'recl!de
him from claiming or invo+ing the rights of a '!rchaser in good faith& (omeowners
$avin's and *oan !an& v. Asuncion P. 3elonia and *ydia C. )e 4u8man, rep. "y
ari"el 3rias, et al., G&@& ;o& .A>?//& 8ebr!ar$ 1D( 19.?&
;otice of lis pendens ; defnition of; '!r'ose of& Lis 'endens is a Latin term "hich
literall$ means( 2a 'ending s!it or a 'ending litigation4 "hile a notice of lis 'endens
is an anno!ncement to the "hole "orld that a real 'ro'ert$ is in litigation( serving
as a "arning that an$one "ho ac!ires an interest over the 'ro'ert$ does so at
hisSher o"n ris+( or that heSshe gambles on the res!lt of the litigation over the
'ro'ert$& It is a "arning to 'ros'ective b!$ers to ta+e 'reca!tions and investigate
the 'ending litigation&
The '!r'ose of a notice of lis 'endens is to 'rotect the rights of the registrant "hile
the case is 'ending resol!tion or decision& With the notice of lis 'endens d!l$
recorded and remaining !ncancelled( the registrant co!ld rest sec!re that heSshe
"ill not lose the 'ro'ert$ or an$ 'art thereof d!ring litigation& (omeowners $avin's
and *oan !an& v. Asuncion P. 3elonia and *ydia C. )e 4u8man, rep. "y ari"el 3rias,
et al., G&@& ;o& .A>?//& 8ebr!ar$ 1D( 19.?&
;otice of lis pendens ; e3ect of act!al +no"ledge of the annotated ;otice of *is
Pendens & Indeed( at the time GSLJ bo!ght the s!b%ect 'ro'ert$( GSLJ had act!al
+no"ledge of the annotated ;otice of Lis :endens& Instead of heeding the same(
GSLJ contin!ed "ith the '!rchase +no"ing the legal re'erc!ssions a notice of lis
'endens entails& GSLJ too+ !'on itself the ris+ that the ;otice of Lis :endens leads
to& As correctl$ fo!nd b$ the CA( 2the notice of lis 'endens "as annotated on .?
Se'tember .>>B( "hereas the foreclos!re sale( "here the a''ellant "as declared as
the highest bidder( too+ 'lace sometime in .>>/& There is no do!bt that at the time
a''ellant '!rchased the s!b%ect 'ro'ert$( it "as a"are of the 'ending litigation
concerning the same 'ro'ert$ and th!s( the title iss!ed in its favor "as s!b%ect to
the o!tcome of said litigation&4 (omeowners $avin's and *oan !an& v. Asuncion P.
3elonia and *ydia C. )e 4u8man, rep. "y ari"el 3rias, et al., G&@& ;o& .A>?//&
8ebr!ar$ 1D( 19.?&
Lortgage; mortgagor m!st be absol!te o"ner of the thing mortgaged& That the
mortgagor be the absol!te o"ner of the thing mortgaged is an essential re!isite of
a contract of mortgage& Article 19AB E1F of the Civil Code s'ecifcall$ sa$s so6 Art&
19AB& The follo"ing re!isites are essential to the contracts of 'ledge and
mortgage6 ) ) ) ) E1F That the 'ledgor or mortagagor be the absol!te o"ner of the
thing 'ledged or mortgaged& S!ccinctl$( for a valid mortgage to e)ist( o"nershi' of
the 'ro'ert$ is an essential re!isite& @e$es v& De Leon cited the case of :hili''ine
'g& >?
;ational Jan+ v& @ocha "here it "as 'rono!nced that 2a mortgage of real 'ro'ert$
e)ec!ted b$ one "ho is not an o"ner thereof at the time of the e)ec!tion of the
mortgage is "itho!t legal e)istence&4 S!ch that( according to DJ: v& :r!dential
Jan+( there being no valid mortgage( there co!ld also be no valid foreclos!re or
valid a!ction sale& (omeowners $avin's and *oan !an& v. Asuncion P. 3elonia and
*ydia C. )e 4u8man, rep. "y ari"el 3rias, et al., G&@& ;o& .A>?//& 8ebr!ar$ 1D(
19.?&
S-.$/(L L(0S
:&D& ;o& >B/; s!bdivision lots; a ban+ dealing "ith a 'ro'ert$ that is alread$ s!b%ect
of a contract to sell and is 'rotected b$ the 'rovisions of :&D& ;o& >B/( is bo!nd b$
the contract to sell&Th!s( in L!<on Develo'ment Jan+ v& Enri!e<( the Co!rt
reiterated the r!le that a ban+ dealing "ith a 'ro'ert$ that is alread$ s!b%ect of a
contract to sell and is 'rotected b$ the 'rovisions of :&D& ;o& >B/( is bo!nd b$ the
contract to sell& Go"ever( the transferee JA;U is bo!nd b$ the Contract to Sell and
has to res'ect Enri!e<=s rights there!nder& This is beca!se the Contract to Sell(
involving a s!bdivision lot( is covered and 'rotected b$ :D >B/& ) ) )& ) ) ) ) ) ) )
-nder these circ!mstances( the JA;U +ne" or sho!ld have +no"n of the 'ossibilit$
and ris+ that the assigned 'ro'erties "ere alread$ covered b$ e)isting contracts to
sell in favor of s!bdivision lot b!$ers& As observed b$ the Co!rt in another case
involving a ban+ regarding a s!bdivision lot that "as alread$ s!b%ect of a contract to
sell "ith a third 'art$62HThe Jan+I sho!ld have considered that it "as dealing "ith a
'ro'ert$ s!b%ect of a real estate develo'ment 'ro%ect& A reasonable 'erson(
'artic!larl$ a fnancial instit!tion ) ) )( sho!ld have been a"are that( to fnance the
'ro%ect( f!nds other than those obtained from the loan co!ld have been !sed to
serve the '!r'ose( albeit 'artiall$& Gence( there "as a need to verif$ "hether an$
'art of the 'ro'ert$ "as alread$ intended to be the s!b%ect of an$ other contract
involving b!$ers or 'otential b!$ers& In granting the loan( Hthe Jan+I sho!ld not
have been content merel$ "ith a clean title( considering the 'resence of
circ!mstances indicating the need for a thoro!gh investigation of the e)istence of
b!$ers ) ) )& Wanting in care and 'r!dence( the HJan+I cannot be deemed to be an
innocent mortgagee& ) ) )4 Philippine +ational !an& v. 6eresita 6an )ee, et al., G&@&
;o& .A1.1A( 8ebr!ar$ .>( 19.?&
Section .? of :&D& ;o& .B1>; original registration of title to land; "ho ma$ a''l$&
A''licants for original registration of title to land m!st establish com'liance "ith the
'rovisions of Section .? of :&D& ;o& .B1>( "hich 'ertinentl$ 'rovides that6 Sec&.?&
Who ma$ a''l$& The follo"ing 'ersons ma$ fle in the 'ro'er Co!rt of 8irst Instance
an a''lication for registration of title to land( "hether 'ersonall$ or thro!gh their
d!l$ a!thori<ed re'resentatives6E.F Those "ho b$ themselves or thro!gh their
'redecessors#in interest have been in o'en( contin!o!s( e)cl!sive and notorio!s
'ossession and occ!'ation of alienable and dis'osable lands of the '!blic domain
!nder a bona fde claim of o"nershi' since C!ne .1( .>?B( or earlier& E1F Those "ho
have ac!ired o"nershi' of 'rivate lands b$ 'rescri'tion !nder the 'rovision of
e)isting la"s&Repu"lic of the Philippines v. 1mmanuel C. Corte8, G&@& ;o& .ADD0>&
8ebr!ar$ B( 19.?&
'g& >B
Section .? of :&D& ;o& .B1>; original registration of title to land; re!isites&Section
.?E.F of :&D& ;o& .B1> refers to the %!dicial confrmation of im'erfect or incom'lete
titles to '!blic land ac!ired !nder Section ?AEbFof C&A& ;o&.?.( as amended b$ :&D&
;o& .9/0& 2-nder Section .?E.F Hof :&D& ;o& .B1>I( a''licants for registration of title
m!st s!Ncientl$ establish frst( that the s!b%ect land forms 'art of the dis'osable
and alienable lands of the '!blic domain; second( that the a''licant and his
'redecessors#in#interest have been in o'en( contin!o!s( e)cl!sive( and notorio!s
'ossession and occ!'ation of the same; and third( that it is !nder a bona fde claim
of o"nershi' since C!ne .1( .>?B( or earlier&4 Repu"lic of the Philippines v.
1mmanuel C. Corte8, G&@& ;o& .ADD0>& 8ebr!ar$ B( 19.?&
:s$chological inca'acit$; conce't of; characteri<ations& 2:s$chological inca'acit$(4
as a gro!nd to n!llif$ a marriage !nder Article 0D of the 8amil$ Code( sho!ld refer to
no less than a mental K not merel$ 'h$sical K inca'acit$ that ca!ses a 'art$ to be
tr!l$ incognitive of the basic marital covenants that concomitantl$ m!st be
ass!med and discharged b$ the 'arties to the marriage "hich( as so e)'ressed in
Article DA of the 8amil$ Code( among others( incl!de their m!t!al obligations to live
together( observe love( res'ect and fdelit$ and render hel' and s!''ort&There is
hardl$ an$ do!bt that the intendment of the la" has been to confne the meaning of
2's$chological inca'acit$4 to the most serio!s cases of 'ersonalit$ disorders clearl$
demonstrative of an !tter insensitivit$ or inabilit$ to give meaning and signifcance
to the marriage& Repu"lic of the Philippines v. Rodolfo #. )e 4racia, G&@& ;o&
./.BB/& 8ebr!ar$ .1( 19.?&
:s$chological inca'acit$; emotional immat!rit$( irres'onsibilit$( or even se)!al
'romisc!it$( cannot be e!ated "ith 's$chological inca'acit$&Uee'ing "ith these
'rinci'les( the Co!rt( in Dedel v& CA( held that therein res'ondent=s emotional
immat!rit$ and irres'onsibilit$ co!ld not be e!ated "ith 's$chological inca'acit$
as it "as not sho"n that these acts are manifestations of a disordered 'ersonalit$
"hich ma+e her com'letel$ !nable to discharge the essential marital obligations of
the marital state( not merel$ d!e to her $o!th( immat!rit$ or se)!al 'romisc!it$&
Repu"lic of the Philippines v. Rodolfo #. )e 4racia, G&@& ;o& ./.BB/& 8ebr!ar$ .1(
19.?&
:s$chological inca'acit$; altho!gh e)'ert o'inions f!rnished b$ 's$chologists
regarding the 's$chological tem'erament of 'arties are !s!all$ given considerable
"eight b$ the co!rts( the e)istence of 's$chological inca'acit$ m!st still be 'roven
b$ inde'endent evidence& Veril$( altho!gh e)'ert o'inions f!rnished b$
's$chologists regarding the 's$chological tem'erament of 'arties are !s!all$ given
considerable "eight b$ the co!rts( the e)istence of 's$chological inca'acit$ m!st
still be 'roven b$ inde'endent evidence& Repu"lic of the Philippines v. Rodolfo #. )e
4racia, G&@& ;o& ./.BB/& 8ebr!ar$ .1( 19.?.
:s$chological inca'acit$; ref!sal to live "ith @odolfo and to ass!me her d!ties as
"ife and mother as "ell as her emotional immat!rit$( irres'onsibilit$ and infdelit$
do not rise to the level of 's$chological inca'acit$ that "o!ld %!stif$ the n!llifcation
of the 'arties= marriage& To the Co!rt=s mind( ;atividad=s ref!sal to live "ith @odolfo
and to ass!me her d!ties as "ife and mother as "ell as her emotional immat!rit$(
irres'onsibilit$ and infdelit$ do not rise to the level of 's$chological inca'acit$ that
'g& >D
"o!ld %!stif$ the n!llifcation of the 'arties= marriage& Indeed( to be declared
clinicall$ or medicall$ inc!rable is one thing; to ref!se or be rel!ctant to 'erform
one=s d!ties is another& To har+ bac+ to "hat has been earlier disc!ssed(
's$chological inca'acit$ refers onl$ to the most serio!s cases of 'ersonalit$
disorders clearl$ demonstrative of an !tter insensitivit$ or inabilit$ to give meaning
and signifcance to the marriage& Repu"lic of the Philippines v. Rodolfo #. )e 4racia,
G&@& ;o& ./.BB/& 8ebr!ar$ .1( 19.?&
Section .? E.F( :residential Decree ;o& .B1>; %!dicial confrmation of im'erfect or
incom'lete titles to '!blic land; re!isites& Section .?E.F of :&D& ;o& .B1> refers to
the %!dicial confrmation of im'erfect or incom'lete titles to '!blic land ac!ired
!nder Section ?AEbF of Common"ealth Act EC&A&F ;o& .?.( or the :!blic Land Act( as
amended b$ :&D& ;o& .9/0& -nder Section .?E.F of :&D& ;o& .B1>( a''licants for
registration of title m!st s!Ncientl$ establish6 frst( that the s!b%ect land forms 'art
of the dis'osable and alienable lands of the '!blic domain; second( that the
a''licant and his 'redecessors#in#interest have been in o'en( contin!o!s( e)cl!sive(
and notorio!s 'ossession and occ!'ation of the same; and third( that it is !nder a
bona fde claim of o"nershi' since C!ne .1( .>?B( or earlier& Repu"lic of the
Philippines v. Remman 1nterprises, .nc. represented "y Ronnie P. .nocencio, G&@& ;o&
.>>0.9& 8ebr!ar$ .>( 19.?.
:roof that land is alienable and dis'osable; certifcations ins!Ncient& Go"ever( the
said certifcations 'resented b$ the res'ondent are ins!Ncient to 'rove that the
s!b%ect 'ro'erties are alienable and dis'osable& In @e'!blic of the :hili''ines v&
T&A&;& :ro'erties( Inc&( the Co!rt clarifed that( in addition to the certifcation iss!ed
b$ the 'ro'er government agenc$ that a 'arcel of land is alienable and dis'osable(
a''licants for land registration m!st 'rove that the DE;@ Secretar$ had a''roved
the land classifcation and released the land of '!blic domain as alienable and
dis'osable& The$ m!st 'resent a co'$ of the original classifcation a''roved b$ the
DE;@ Secretar$ and certifed as tr!e co'$ b$ the legal c!stodian of the records&
Repu"lic of the Philippines v. Remman 1nterprises, .nc. represented "y Ronnie P.
.nocencio, G&@& ;o& .>>0.9& 8ebr!ar$ .>( 19.?&
:ossession and occ!'ation; 'roof of s'ecifc acts of o"nershi' m!st be 'resented to
s!bstantiate the claim of o'en( contin!o!s( e)cl!sive( and notorio!s 'ossession and
occ!'ation of the land s!b%ect of the a''lication& 8or '!r'oses of land registration
!nder Section .?E.F of :&D& ;o& .B1>( 'roof of s'ecifc acts of o"nershi' m!st be
'resented to s!bstantiate the claim of o'en( contin!o!s( e)cl!sive( and notorio!s
'ossession and occ!'ation of the land s!b%ect of the a''lication& A''licants for land
registration cannot %!st o3er general statements "hich are mere concl!sions of la"
rather than fact!al evidence of 'ossession& Act!al 'ossession consists in the
manifestation of acts of dominion over it of s!ch a nat!re as a 'art$ "o!ld act!all$
e)ercise over his o"n 'ro'ert$& Repu"lic of the Philippines v. Remman 1nterprises,
.nc. represented "y Ronnie P. .nocencio, G&@& ;o& .>>0.9& 8ebr!ar$ .>( 19.?&
:ossession and occ!'ation; mere cas!al c!ltivation of 'ortions of the land b$ the
claimant does not constit!te 'ossession !nder claim of o"nershi'& Altho!gh
Cer!ena testifed that the res'ondent and its 'redecessors#in#interest c!ltivated
the s!b%ect 'ro'erties( b$ 'lanting di3erent cro's thereon( his testimon$ is bereft of
'g& >/
an$ s'ecifcit$ as to the nat!re of s!ch c!ltivation as to "arrant the concl!sion that
the$ have been indeed in 'ossession and occ!'ation of the s!b%ect 'ro'erties in the
manner re!ired b$ la"& There "as no sho"ing as to the n!mber of cro's that are
'lanted in the s!b%ect 'ro'erties or to the vol!me of the 'rod!ce harvested from
the cro's s!''osedl$ 'lanted thereon& 8!rther( ass!ming e) gratia arg!menti that
the res'ondent and its 'redecessors#in#interest have indeed 'lanted cro's on the
s!b%ect 'ro'erties( it does not necessaril$ follo" that the s!b%ect 'ro'erties have
been 'ossessed and occ!'ied b$ them in the manner contem'lated b$ la"& The
s!''osed 'lanting of cro's in the s!b%ect 'ro'erties ma$ onl$ have amo!nted to
mere cas!al c!ltivation( "hich is not the 'ossession and occ!'ation re!ired b$ la"&
2A mere cas!al c!ltivation of 'ortions of the land b$ the claimant does not
constit!te 'ossession !nder claim of o"nershi'& 8or him( 'ossession is not e)cl!sive
and notorio!s so as to give rise to a 'res!m'tive grant from the state& The
'ossession of '!blic land( ho"ever long the 'eriod thereof ma$ have e)tended(
never confers title thereto !'on the 'ossessor beca!se the stat!te of limitations
"ith regard to '!blic land does not o'erate against the state( !nless the occ!'ant
can 'rove 'ossession and occ!'ation of the same !nder claim of o"nershi' for the
re!ired n!mber of $ears&4 Repu"lic of the Philippines v. Remman 1nterprises, .nc.
represented "y Ronnie P. .nocencio, G&@& ;o& .>>0.9& 8ebr!ar$ .>( 19.?&
Action for !ieting of title; trial co!rt had no %!risdiction to determine "ho among
the 'arties have better right over the dis'!ted 'ro'ert$ "hich is admittedl$ still 'art
of the '!blic domain& Gaving established that the dis'!ted 'ro'ert$ is '!blic land(
the trial co!rt "as therefore correct in dismissing the com'laint to !iet title for lac+
of %!risdiction& The trial co!rt had no %!risdiction to determine "ho among the
'arties have better right over the dis'!ted 'ro'ert$ "hich is admittedl$ still 'art of
the '!blic domain& As held in )a<unos v. 6andaya' EG&@& ;os& L#01DB.#B1( 0. A!g!st
.>/.( ?9 SC@A ??>F6
) ) ) The Tar!cs= action "as for 2!ieting of title4 and necessitated determination of
the res'ective rights of the litigants( both claimants to a free 'atent title( over a
'iece of 'ro'ert$( admittedl$ '!blic land& The la"( administration( dis'osition and
alienation of '!blic lands "ith the Director of Lands s!b%ect( of co!rse( to the control
of the Secretar$ of Agric!lt!re and ;at!ral @eso!rces&
In s!m( the decision rendered in Civil Case ;o& .1.A on *ctober 1A( .>DA is a 'atent
n!llit$& The lo"er co!rt did not have 'o"er to determine "ho Ethe 8irmalos or the
Tar!csF "ere entitled to an a"ard of free 'atent title over that 'iece of 'ro'ert$ that
$et belonged to the '!blic domain& ;either did it have 'o"er to ad%!dge the Tar!cs
as entitled to the 2tr!e e!itable o"nershi'4 thereof( the latter=s e3ect being the
same6 the e)cl!sion of the 8irmalos in favor of the Tar!cs& (eirs of Pacifco Pocido,
et al. v. Arsenia Avila and 1melinda Chua( G&@& ;o& .>>.?D( Larch .>( 19.?&
Action for !ieting of title& In an action for !ieting of title( the com'lainant is
see+ing for 2an ad%!dication that a claim of title or interest in 'ro'ert$ adverse to
the claimant is invalid( to free him from the danger of hostile claim( and to remove a
clo!d !'on or !iet title to land "here stale or !nenforceable claims or demands
e)ist&4 (eirs of Pacifco Pocido, et al. v. Arsenia Avila and 1melinda Chua, G&@& ;o&
.>>.?D( Larch .>( 19.?&
'g& >A
Action for !ieting of title; t"o indis'ensable re!isites& -nder Articles ?/D and ?//
of the Civil Code( the t"o indis'ensable re!isites in an action to !iet title are6 E.F
that the 'lainti3 has a legal or e!itable title to or interest in the real 'ro'ert$
s!b%ect of the action; and E1F that there is a clo!d on his title b$ reason of an$
instr!ment( record( deed( claim( enc!mbrance or 'roceeding( "hich m!st be sho"n
to be in fact invalid or ino'erative des'ite its 'rima facie a''earance of validit$&
(eirs of Pacifco Pocido, et al. v. Arsenia Avila and 1melinda Chua, G&@& ;o& .>>.?D(
Larch .>( 19.?&
Co#o"nershi'; Article ?>0 of the Civil Code; rights of a co#o"ner of a certain
'ro'ert$; each one of the co#o"ners "ith f!ll o"nershi' of their 'arts can sell their
f!ll$ o"ned 'art& Article ?>0 of the Code defnes the o"nershi' of the co#o"ner(
clearl$ establishing that each co#o"ner shall have f!ll o"nershi' of his 'art and of
its fr!its and benefts& :ertinent to this case( Article ?>0 dictates that each one of
the 'arties herein as co#o"ners "ith f!ll o"nershi' of their 'arts can sell their f!ll$
o"ned 'art& The sale b$ the 'etitioners of their 'arts shall not a3ect the f!ll
o"nershi' b$ the res'ondents of the 'art that belongs to them& Their 'art "hich
'etitioners "ill sell shall be that "hich ma$ be a''ortioned to them in the division
!'on the termination of the co#o"nershi'& With the f!ll o"nershi' of the
res'ondents remaining !na3ected b$ 'etitioners= sale of their 'arts( the nat!re of
the 'ro'ert$( as co#o"ned( li+e"ise sta$s& In lie! of the 'etitioners( their vendees
shall be co#o"ners "ith the res'ondents& The te)t of Article ?>0 sa$s so& Raul ,.
Aram"ulo and 6eresita )ela Cru8 v. 4enaro +olasco and Jeremy $pencer +olasco,
G&@& ;o& .A>?19( Larch 1D( 19.?&
Co#o"nershi'; Article ?>? of the Civil Code; 'artition& Article ?>? of the Civil Code
'rovides that no co#o"ner shall be obliged to remain in the co#o"nershi'( and that
each co#o"ner ma$ demand at an$ time 'artition of the thing o"ned in common
insofar as his share is concerned& Raul ,. Aram"ulo and 6eresita )ela Cru8 v. 4enaro
+olasco and Jeremy $pencer +olasco, G&@& ;o& .A>?19( Larch 1D( 19.?&
Co#o"nershi'; Article ?>A of the Civil Code; "hen this ma$ be resorted to& Article
?>A of the Civil Code states that "henever the thing is essentiall$ indivisible and
the co#o"ners cannot agree that it be allotted to one of them "ho shall indemnif$
the others( it shall be sold and its 'roceeds accordingl$ distrib!ted& This is resorted
to EaF "hen the right to 'artition the 'ro'ert$ is invo+ed b$ an$ of the co#o"ners
b!t beca!se of the nat!re of the 'ro'ert$( it cannot be s!bdivided or its
s!bdivision "o!ld 're%!dice the interests of the co#o"ners( and EbF the co#o"ners
are not in agreement as to "ho among them shall be allotted or assigned the entire
'ro'ert$ !'on 'ro'er reimb!rsement of the co#o"ners& Raul ,. Aram"ulo and
6eresita )ela Cru8 v. 4enaro +olasco and Jeremy $pencer +olasco, G&@& ;o& .A>?19(
Larch 1D( 19.?&
Damages; act!al or com'ensator$ damages& Article 1.>> of the Civil Code states
that 2HeI)ce't as 'rovided b$ la" or b$ sti'!lation( one is entitled to an ade!ate
com'ensation onl$ for s!ch 'ec!niar$ loss s!3ered b$ him a he has d!l$ 'roved&
S!ch com'ensation is referred to as act!al or com'ensator$ damages&4 2Act!al
damages are com'ensation for an in%!r$ that "ill '!t the in%!red 'art$ in the
'osition "here it "as before the in%!r$& The$ 'ertain to s!ch in%!ries or losses that
'g& >>
are act!all$ s!stained and s!sce'tible of meas!rement& E)ce't as 'rovided b$ la"
or b$ sti'!lation( a 'art$ is entitled to ade!ate com'ensation onl$ for s!ch
'ec!niar$ loss as is d!l$ 'roven& Jasic is the r!le that to recover act!al damages(
not onl$ m!st the amo!nt of loss be ca'able of 'roof; it m!st also be act!all$
'roven "ith a reasonable degree of certaint$( 'remised !'on com'etent 'roof or
the best evidence obtainable&4 .nternational Container 6erminal $ervices, .nc. v.
Celeste . Chua, G&@& ;o& .>B90.( Larch 1D( 19.?&
Damages; Attorne$=s fees; "hen allo"ed& Article 119A of the Civil Code does not
'rohibit recover$ of attorne$=s fees if there is a sti'!lation in the contract for
'a$ment of the same& Th!s( in Asian Construction and )evelopment Corporation v.
Cathay Pacifc $teelCorporation BCAPA$C#C( the Co!rt( citing 6itan
ConstructionCorporation v. 0ni-3ield 1nterprises, .nc.( noted that the la" allo"s a
'art$ to recover attorne$=s fees !nder a "ritten agreement& In !arons ar&etin'
Corporation v. Court of Appeals( the Co!rt r!led that attorne$=s fees are in the
nat!re of li!idated damages and the sti'!lation therefor is a'tl$ called a 'enal
cla!se& It has been said that so long as s!ch sti'!lation does not contravene la"(
morals( or '!blic order( it is strictl$ binding !'on defendant& The attorne$=s fees so
'rovided area"arded in favor of the litigant( not his co!nsel&*n the other hand( the
la" also allo"s 'arties to a contract tosti'!late on li!idated damages to be 'aid in
case of breach& A sti'!lationon li!idated damages is a 'enalt$ cla!se "here the
obligor ass!mes agreater liabilit$ in case of breach of an obligation& The obligor is
bo!nd to'a$ the sti'!lated amo!nt "itho!t need for 'roof on the e)istence and
onthe meas!re of damages ca!sed b$ the breach& Go"ever( even if s!ch attorne$=s
fees are allo"ed b$ la"( the co!rts still have the 'o"er to red!ce the same if it is
!nreasonable& ariano *im v. $ecurity !an& Corporation(G&@& ;o& .AAB0>( Larch .1(
19.?&
Damages; Attorne$=s fees; "hen 'ro'er& An a"ard of attorne$=s fees has al"a$s
been the e)ce'tion rather than the r!le and there m!st be some com'elling legal
reason to bring the case "ithin the e)ce'tion and %!stif$ the a"ard& In this case(
none of the e)ce'tions a''lies& 2Attorne$=s fees are not a"arded ever$ time a 'art$
'revails in a s!it& The 'olic$ of the Co!rt is that no 'remi!m sho!ld be 'laced on the
right to litigate&4 2Even "hen a claimant is com'elled to litigate "ith third 'ersons
or to inc!r e)'enses to 'rotect his rights( still( attorne$=s fees ma$ not be a"arded
"here no s!Ncient sho"ing of bad faith co!ld be re,ected in a 'art$=s 'ersistence
in a case other than an erroneo!s conviction of the righteo!sness of his ca!se&4
.nternational Container 6erminal $ervices, .nc. v. Celeste . Chua, G&@& ;o& .>B90.(
Larch 1D( 19.?&
Damages; moral damages& Certainl$( an a"ard of moral damages m!st be anchored
on a clear sho"ing that the 'art$ claiming the same act!all$ e)'erienced
mental ang!ish( besmirched re'!tation( slee'less nights( "o!nded feelings( or
similar in%!r$& In the case herein !nder consideration( the records are bereft of an$
'roof that res'ondent in fact s!3ered moral damages as contem'lated in the afore#
!oted 'rovision of the Civil Code& The r!ling of the trial co!rt 'rovides sim'l$ that6
2H:etitioner=sI o!tright denial and !n%!st ref!sal to heed Hres'ondent=sI claim for
'a$ment of the val!e of her lostSdamaged shi'ment ca!sHedI the latter to s!3er
serio!s an)iet$( mental ang!ish and "o!nded feelings "arranting the a"ard of
'g& .99
moral damages ) ) )&4 The testimon$ of res'ondent( on the other hand( merel$
states that "hen she failed to recover damages from 'etitioner( she 2"as saddened(
had slee'less nights and an)iet$4 "itho!t 'roviding s'ecifc details of the s!3ering
she allegedl$ "ent thro!gh& 2Since an a"ard of moral damages is 'redicated on a
categorical sho"ing b$ the claimant that she act!all$ e)'erienced emotional and
mental s!3erings( it m!st be disallo"ed absent an$ evidence thereon&4
.nternational Container 6erminal $ervices, .nc. v. Celeste . Chua, G&@& ;o& .>B90.(
Larch 1D( 19.?&
Damages; ;ominal damages; "hen a"arded; ;et"or+ Jan+ did not violate an$ of
Jaric=s rights&;ominal damages are recoverable "here a legal right is technicall$
violated and m!st be vindicated against an invasion that has 'rod!ced no act!al
'resent loss of an$ +ind or "here there has been a breach of contract and no
s!bstantial in%!r$ or act!al damages "hatsoever have been or can be sho"n&
-nder Article 111. of the Civil Code( nominal damages ma$ be a"arded to a
'lainti3 "hose right has been violated or invaded b$ the defendant( for the '!r'ose
of vindicating or recogni<ing that right( not for indemnif$ing the 'lainti3 for an$ loss
s!3ered& ;ominal damages are not for indemnifcation of loss s!3ered b!t for the
vindication or recognition of a right violated or invaded&
;et"or+ Jan+ did not violate an$ of Jaric=s rights; it "as merel$ a '!rchaser or
transferee of the 'ro'ert$& S!rel$( it is not 'rohibited from ac!iring the 'ro'ert$
even "hile the forcible entr$ case "as 'ending( beca!se as the registered o"ner of
the s!b%ect 'ro'ert$( :alado ma$ transfer his title at an$ time and the lease merel$
follo"s the 'ro'ert$ as a lien or enc!mbrance& An$ invasion or violation of Jaric=s
rights as lessee "as committed solel$ b$ :alado( and ;et"or+ Jan+ ma$ not be
im'licated or fo!nd g!ilt$ !nless it act!all$ too+ 'art in the commission of illegal
acts( "hich does not a''ear to be so from the evidence on record& *n the contrar$(
it a''ears that Jarie "as o!sted thro!gh :alado=s acts even before ;et"or+ Jan+
ac!ired the s!b%ect 'ro'ert$ or came into the 'ict!re& Th!s( it "as error to hold the
ban+ liable for nominal damages& #ne +etwor& Rural !an&, .nc. v. )anilo 4.
!aric(G&@& ;o& .>0DA?( Larch B( 19.?&
Damages; Tem'erate damages& In the absence of com'etent 'roof on the amo!nt
of act!al damages s!3ered( a 'art$ is entitled to receive tem'erate damages&
Article 111? of the ;e" Civil Code 'rovides that6 2Tem'erate or moderate damages(
"hich are more than nominal b!t less than com'ensator$ damages( ma$ be
recovered "hen the co!rt fnds that some 'ec!niar$ loss has been s!3ered b!t its
amo!nt cannot( from the nat!re of the case( be 'roved "ith certaint$&4 The amo!nt
thereof is !s!all$ left to the so!nd discretion of the co!rts b!t the same sho!ld be
reasonable( bearing in mind that tem'erate damages sho!ld be 2more than nominal
b!t less than com'ensator$&4 .nternational Container 6erminal $ervices, .nc. v.
Celeste . Chua, G&@& ;o& .>B90.( Larch 1D( 19.?&
8ra!d; conce't of; Article .00A of the Civil Code& According to Article .00A of the
Civil Code( there is fra!d "hen one of the contracting 'arties( thro!gh insidio!s
"ords or machinations( ind!ces the other to enter into the contract that( "itho!t the
ind!cement( he "o!ld not have agreed to& Ret( fra!d( to vitiate consent( m!st be the
'g& .9.
ca!sal Edolo causanteF( not merel$ the incidental Edolo incidenteF( ind!cement to
the ma+ing of the contract& In $amson v. Court of Appeals EG&@& ;o& .9A1?B(
;ovember 1B( .>>?( 10A SC@A 0>/F( ca!sal fra!d is defned as 2a dece'tion
em'lo$ed b$ one 'art$ 'rior to or sim!ltaneo!s to the contract in order to sec!re
the consent of the other&4
8ra!d cannot be 'res!med b!t m!st be 'roved b$ clear and convincing evidence&
Whoever alleges fra!d a3ecting a transaction m!st s!bstantiate his allegation(
beca!se a 'erson is al"a$s 'res!med to ta+e ordinar$ care of his concerns( and
'rivate transactions are similarl$ 'res!med to have been fair and reg!lar& To be
remembered is that mere allegation is defnitel$ not evidence; hence( it m!st be
'roved b$ s!Ncient evidence& etropolitan 3a"rics, .nc., et al. v. Prosperity Credit
Resources, .nc. et al., G&@& ;o& .B?0>9( Larch ./( 19.?&
8ra!d; Article .0>9( in relation to Article .0>. of the Civil Code; consent obtained
thro!gh fra!d; action for ann!lment; 'rescri'tive 'eriod& Article .0>9( in relation to
Article .0>. of the Civil Code( 'rovides that if the consent of the contracting 'arties
"as obtained thro!gh fra!d( the contract is considered voidable and ma$ be
ann!lled "ithin fo!r $ears from the time of the discover$ of the fra!d& etropolitan
3a"rics, .nc., et al. v. Prosperity Credit Resources, .nc. et al., G&@& ;o& .B?0>9( Larch
./( 19.?&
Lortgage; a higher degree of 'r!dence m!st be e)ercised b$ the mortgagee in
cases "here he does not directl$ deal "ith the registered o"ner of real 'ro'ert$& In
!an& of Commerce v. $pouses $an Pa"lo, Jr. EBB9 :hil& A9B( A1. E199/FF( the co!rt
declared that a mortgagee has a right to rel$ in good faith on the certifcate of title
of the mortgagor of the 'ro'ert$ o3ered as sec!rit$( and in the absence of an$ sign
that might aro!se s!s'icion( the mortgagee has no obligation to !nderta+e f!rther
investigation&
Go"ever( in !an& of Commerce v. $pouses $an Pa"lo, Jr& EBB9 :hil& A9B( A1.
E199/FF( the co!rt also r!led that 2HiIn cases "here the mortgagee does not directl$
deal "ith the registered o"ner of real 'ro'ert$( the la" re!ires that a higher
degree of 'r!dence be e)ercised b$ the mortgagee&4 S'ecifcall$( the co!rt cited
A"ad v. $ps. 4uim"a EB90 :hil& 01.( 00.#001 E199BFF( "here it held(
2) ) ) While one "ho b!$s from the registered o"ner does not need to loo+ behind
the certifcate of title( one "ho b!$s from one "ho is not the registered o"ner is
e)'ected to e)amine not onl$ the certifcate of title b!t all fact!al circ!mstances
necessar$ for HoneI to determine if there are an$ ,a"s in the title of the transferor(
or in HtheI ca'acit$ to transfer the land&4
Altho!gh the instant case does not involve a sale b!t onl$ a mortgage( the same
r!le a''lies inasm!ch as the la" itself incl!des a mortgagee in the term
2'!rchaser&4
Th!s( "here the mortgagor is not the registered o"ner of the 'ro'ert$ b!t is merel$
an attorne$#in#fact of the same( it is inc!mbent !'on the mortgagee to e)ercise
greater care and a higher degree of 'r!dence in dealing "ith s!ch mortgagor&
'g& .91
acaria Ar'uelles and the (eirs of the )eceased Petronio Ar'uelles v. alarayat
Rural !an&, .nc., G&@& ;o& 199?DA( Larch .>( 19.?&
Lortgage; ban+s are en%oined to e)ert a higher degree of diligence( care( and
'r!dence than individ!als in handling real estate transactions; it cannot rel$ merel$
on the certifcate of title& In 0rsal v. Court of Appeals EB9> :hil& D1A( D?1 E199BFF( the
co!rt held that "here the mortgagee is a ban+( it cannot rel$ merel$ on the
certifcate of title o3ered b$ the mortgagor in ascertaining the stat!s of mortgaged
'ro'erties& Since its b!siness is im'ressed "ith '!blic interest( the mortgagee#ban+
is d!t$#bo!nd to be more ca!tio!s even in dealing "ith registered lands& Indeed( the
r!le that 'erson dealing "ith registered lands can rel$ solel$ on the certifcate of
title does not a''l$ to ban+s& Th!s( before a''roving a loan a''lication( it is a
standard o'erating 'ractice for these instit!tions to cond!ct an oc!lar ins'ection of
the 'ro'ert$ o3ered for mortgage and to verif$ the gen!ineness of the title to
determine the real o"ners thereof& The a''arent '!r'ose of an oc!lar ins'ection is
to 'rotect the 2tr!e o"ner4 of the 'ro'ert$ as "ell as innocent third 'arties "ith a
right( interest or claim thereon from a !s!r'er "ho ma$ have ac!ired a fra!d!lent
certifcate of title thereto& acaria Ar'uelles and the (eirs of the )eceased Petronio
Ar'uelles v. alarayat Rural !an&, .nc., G&@& ;o& 199?DA( Larch .>( 19.?&
.& ;egligence( the Co!rt said in La$!gan v& Intermediate A''ellate Co!rt EG&@&
;o& L#/0>>A( ;ovember .?( .>AAF( is 2the omission to do something "hich a
reasonable man( g!ided b$ those considerations "hich ordinaril$ reg!late the
cond!ct of h!man a3airs( "o!ld do( or the doing of something "hich a
'r!dent and reasonable man "o!ld not do( or as C!dge Coole$ defnes it(
PEtFhe fail!re to observe for the 'rotection of the interests of another 'erson(
that degree of care( 'reca!tion( and vigilance "hich the circ!mstances %!stl$
demand( "hereb$ s!ch other 'erson s!3ers in%!r$&=4 In order that a 'art$
ma$ be held liable for damages for an$ in%!r$ bro!ght abo!t b$ the
negligence of another( the claimant m!st 'rove that the negligence "as the
immediate and 'ro)imate ca!se of the in%!r$& !J)C Construction,
represented "y its ana'erDProprieto Janet $. )ela Cru8 v. +ena 1. *anu8o, et
al., G&@& ;o& .D..B.( Larch 1?( 19.?&
;egligence; Ledical negligence; fo!r elements the 'lainti3 m!st 'rove b$
com'etent evidence& An action !'on medical negligence K "hether criminal( civil or
administrative K calls for the 'lainti3 to 'rove b$ com'etent evidence each of the
follo"ing fo!r elements( namel$6 EaF the d!t$ o"ed b$ the 'h$sician to the 'atient(
as created b$ the 'h$sician#'atient relationshi'( to act in accordance "ith the
s'ecifc norms or standards established b$ his 'rofession; EbF the breach of the d!t$
b$ the 'h$sician=s failing to act in accordance "ith the a''licable standard of care;
E0F the ca!sation( i.e&( there m!st be a reasonabl$ close and ca!sal connection
bet"een the negligent act or omission and the res!lting in%!r$; and E?F the damages
s!3ered b$ the'atient& )r. 3ernando P. $olidum v. People of the Philippines(G&@& ;o&
.>1.10( Larch .9( 19.?&
;egligence; Ledical ;egligence; standard of care of the medical 'rofession;
standard of care observed b$ other members of the 'rofession in good standing
!nder similar circ!mstances& ;egligence is defned as the fail!re to observe for the
'g& .90
'rotection of the interests of another 'erson that degree of care( 'reca!tion( and
vigilance that the circ!mstances %!stl$ demand( "hereb$ s!ch other 'erson s!3ers
in%!r$& @ec+less im'r!dence( on the other hand( consists of vol!ntaril$ doing or
failing to do( "itho!t malice( an act from "hich material damage res!lts b$ reason
of an ine)c!sable lac+ of 'reca!tion on the 'art of the 'erson 'erforming or failing
to 'erform s!ch act&
The Co!rt a'tl$ e)'lained in Cru8 v. Court of Appeals that6 Whether or not a
'h$sician has committed an 2ine)c!sable lac+ of 'reca!tion4 in the treatment of his
'atient is to be determined according to the standard of care observed b$ other
members of the 'rofession in good standing !nder similar circ!mstances bearing in
mind the advanced state of the 'rofession at the time of treatment or the 'resent
state of medical science& In the recent case of *eonila 4arcia-Rueda v. %ilfred *.
Pacasio,et. al&( this Co!rt stated that in acce'ting a case( a doctor in e3ect
re'resents that( having the needed training and s+ill 'ossessed b$ 'h$sicians and
s!rgeons 'racticing in the same feld( he "ill em'lo$ s!ch training( care and s+ill in
the treatment of his 'atients& Ge therefore has a d!t$ to !se at least the same level
of care that an$ other reasonabl$ com'etent doctor "o!ld !se to treat a condition
!nder the same circ!mstances& It is in this as'ect of medical mal'ractice that
e)'ert testimon$ is essential to establish not onl$ the standard of care of the
'rofession b!t also that the 'h$sician=s cond!ct in the treatment and care falls
belo" s!ch standard& 8!rther( inasm!ch as the ca!ses of the in%!ries involved in
mal'ractice actions are determinable onl$ in the light of scientifc +no"ledge( it has
been recogni<ed that e)'ert testimon$ is !s!all$ necessar$ to s!''ort the
concl!sion as to ca!sation& )r. 3ernando P. $olidum v. People of the Philippines(G&@&
;o& .>1.10( Larch .9( 19.?&
;egligence; Ledical negligence; standard of care; an ob%ective standard b$ "hich
the cond!ct of a 'h$sician s!ed for negligence or mal'ractice ma$ be meas!red&In
the medical 'rofession( s'ecifc norms or standards to 'rotect the 'atient against
!nreasonable ris+( commonl$ referred to as standards of care( set the d!t$ of the
'h$sician to act in res'ect of the 'atient& -nfort!natel$( no clear defnition of the
d!t$ of a 'artic!lar 'h$sician in a 'artic!lar case e)ists& Jeca!se most medical
mal'ractice cases are highl$ technical( "itnesses "ith s'ecial medical !alifcations
m!st 'rovide g!idance b$ giving the +no"ledge necessar$ to render a fair and %!st
verdict& As a res!lt( the standard of medical care of a prudent physician m!st be
determined from e)'ert testimon$ in most cases; and in the case of a s'ecialist Eli+e
an anesthesiologistF( the standard of care b$ "hich the s'ecialist is %!dged is the
care and s+ill commonly possessed and e5ercised "y similar specialists under
similar circumstances& The s'ecialt$ standard ofcare ma$ be higher than that
re!ired of the general 'ractitioner& )r. 3ernando P. $olidum v. People of the
Philippines(G&@& ;o& .>1.10( Larch .9( 19.?&
;egligence( test to determine its e)istence& The test b$ "hich the e)istence of
negligence in a 'artic!lar case is determined is a'tl$ stated in the leading case of
:icart v& Smith EG&@& ;o& .11.>( Larch .B( .>.AF&
According to this case( the test b$ "hich to determine the e)istence of negligence in
a 'artic!lar case ma$ be stated as follo"s6
'g& .9?
2Did the defendant in doing the alleged negligent act !se that reasonable care
and ca!tion "hich an ordinaril$ 'r!dent 'erson "o!ld have !sed in the same
sit!ation7 If not( then he is g!ilt$ of negligence& The la" here in e3ect ado'ts the
standard s!''osed to be s!''lied b$ the imaginar$ cond!ct of the discreet
'aterfamilias of the @oman la"& The e)istence of negligence in a given case is not
determined b$ reference to the 'ersonal %!dgment of the actor in the sit!ation
before him& The la" considers "hat "o!ld be rec+less( blame"orth$( or negligent in
the man of ordinar$ intelligence and 'r!dence and determines liabilit$ b$ that&
The !estion as to "hat "o!ld constit!te the cond!ct of a 'r!dent man in a given
sit!ation m!st of co!rse be al"a$s determined in the light of h!man e)'erience and
in vie" of the facts involved in the 'artic!lar case& Abstract s'ec!lation cannot here
be of m!ch val!e b!t this m!ch can be 'roftabl$ said6 @easonable men govern
their cond!ct b$ the circ!mstances "hich are before them or +no"n to them&
The$ are not( and are not s!''osed to be( omniscient of the f!t!re& Gence the$ can
be e)'ected to ta+e care onl$ "hen there is something before them to s!ggest or
"arn of danger& Co!ld a 'r!dent man( in the case !nder consideration( foresee harm
as a res!lt of the co!rse act!all$ '!rs!ed7 If so( it "as the d!t$ of the actor to
ta+e 'reca!tions to g!ard against that harm& @easonable foresight of harm(
follo"ed b$ the ignoring of the s!ggestion born of this 'revision( is al"a$s
necessar$ before negligence can be held to e)ist& Stated in these terms( the 'ro'er
criterion for determining the e)istence of negligence in a given case is this6 Cond!ct
is said to be negligent "hen a 'r!dent man in the 'osition of the tortfeasor "o!ld
have foreseen that an e3ect harmf!l to another "as s!Ncientl$ 'robable to "arrant
his foregoing the cond!ct or g!arding against its conse!ences&4 !J)C
Construction, represented "y its ana'erDProprieto Janet $. )ela Cru8 v. +ena 1.
*anu8o, et al.,G&@& ;o& .D..B.( Larch 1?( 19.?&
:ro'ert$; @ecover$ of 'ossession of real 'ro'ert$; three +inds of actions available&
In $ps. !onifacio R. ,alde8, Jr. et al. vs. (on. Court of Appeals, et al. EB10 :hil& 0>
E199DFF( the Co!rt is instr!ctive anent the three +inds of actions available to recover
'ossession of real 'ro'ert$( vi<6 EaF accion interdictal; EbF accion pu"liciana; and EcF
accion reivindicatoria&
Accion interdictal com'rises t"o distinct ca!ses of action( namel$( forcible entr$
EdetentacionF and !nla"f!l detainer EdesahuicoF HsicI& In forcible entr$( one is
de'rived of 'h$sical 'ossession of real 'ro'ert$ b$ means of force( intimidation(
strateg$( threats( or stealth "hereas in !nla"f!l detainer( one illegall$ "ithholds
'ossession after the e)'iration or termination of his right to hold 'ossession !nder
an$ contract( e)'ress or im'lied& The t"o are disting!ished from each other in that
in forcible entr$( the 'ossession of the defendant is illegal from the beginning( and
that the iss!e is "hich 'art$ has 'rior de facto 'ossession "hile in !nla"f!l
detainer( 'ossession of the defendant is originall$ legal b!t became illegal d!e to
the e)'iration or termination of the right to 'ossess&
The %!risdiction of these t"o actions( "hich are s!mmar$ in nat!re( lies in the
'ro'er m!nici'al trial co!rt or metro'olitan trial co!rt& Joth actions m!st be bro!ght
"ithin one $ear from the date of act!al entr$ on the land( in case of forcible entr$(
'g& .9B
and from the date of last demand( in case of !nla"f!l detainer& The iss!e in said
cases is the right to 'h$sical 'ossession&
Accion pu"liciana is the 'lenar$ action to recover the right of 'ossession "hich
sho!ld be bro!ght in the 'ro'er regional trial co!rt "hen dis'ossession has lasted
for more than one $ear& It is an ordinar$ civil 'roceeding to determine the better
right of 'ossession of realt$ inde'endentl$ of title& In other "ords( if at the time of
the fling of the com'laint more than one $ear had ela'sed since defendant had
t!rned 'lainti3 o!t of 'ossession or defendant=s 'ossession had become illegal( the
action "ill be( not one of the forcible entr$ or illegal detainer( b!t an accion
pu"liciana& *n the other hand( accion reivindicatoria is an action to recover
o"nershi' also bro!ght in the 'ro'er regional trial co!rt in an ordinar$ civil
'roceeding& Carmencita $uare8 v. r. and rs. 3eli5 1. 1m"oy, Jr. and arilou P.
1m"oy-)elantar, G&@& ;o& .A/>??( Larch .1( 19.?&
@es i'sa lo!itor; a mode of 'roof or a mere 'roced!ral convenience&In Jarcia, Jr. v.
People, the co!rt has !nderscored that the doctrine is not a r!le of s!bstantive la"(
b!t merel$ a mode of 'roof or a mere 'roced!ral convenience& The doctrine( "hen
a''licable to the facts and circ!mstances of a given case( is not meant to and does
not dis'ense "ith the re!irement of 'roof of c!l'able negligence against the 'art$
charged& It merel$ determines and reg!lates "hat shall be prima facie evidence
thereof( and hel's the 'lainti3 in 'roving a breach of the d!t$& The doctrine can be
invo+ed "hen and onl$ "hen( !nder the circ!mstances involved( direct evidence is
absent and not readil$ available& )r. 3ernando P. $olidum v. People of the
Philippines(G&@& ;o& .>1.10( Larch .9( 19.?&
@es i'sa lo!itor; a''licabilit$ in medical negligence cases& The a''licabilit$ of the
doctrine of res ipsa loquitur in medical negligence cases "as signifcantl$ and
e)ha!stivel$ e)'lained in Ramos v. Court of Appeals( "here the Co!rt saidKLedical
mal'ractice cases do not esca'e the a''lication of this doctrine& Th!s( res ipsa
loquitur has been a''lied "hen the circ!mstances attendant !'on the harm are
themselves of s!ch a character as to %!stif$ an inference of negligence as the ca!se
of that harm& The a''lication of resipsa loquitur in medical negligence cases
'resents a !estion of la" since it is a %!dicial f!nction to determine "hether a
certain set of circ!mstances does( as a matter of la"( 'ermit a given inference&
Altho!gh generall$( e)'ert medical testimon$ is relied !'on in mal'ractice s!its to
'rove that a 'h$sician has done a negligent act or that he has deviated from the
standard medical 'roced!re( "hen the doctrine of res ipsa loquitur is availed b$ the
'lainti3( the need for e)'ert medical testimon$ is dis'ensed "ith beca!se the in%!r$
itself 'rovides the 'roof of negligence& The reason is that the general r!le on the
necessit$ of e)'ert testimon$ a''lies onl$ to s!ch matters clearl$ "ithin the domain
of medical science( and not to matters that are "ithin the common +no"ledge of
man+ind "hich ma$ be testifed to b$ an$one familiar "ith the facts& *rdinaril$( onl$
'h$sicians and s!rgeons of s+ill and e)'erience are com'etent to testif$ as to
"hether a 'atient has been treated or o'erated !'on "ith a reasonable degree of
s+ill and care& Go"ever( testimon$ as to the statements and acts of 'h$sicians and
s!rgeons( e)ternal a''earances( and manifest conditions "hich are observable b$
an$ one ma$ be given b$ non#e)'ert "itnesses& Gence( in cases "here the res ipsa
loquitur is a''licable( the co!rt is 'ermitted to fnd a 'h$sician negligent !'on
'g& .9D
'ro'er 'roof of in%!r$ to the 'atient( "itho!t the aid of e)'ert testimon$( "here the
co!rt from its f!nd of common +no"ledge can determine the 'ro'er standard of
care& Where common +no"ledge and e)'erience teach that a res!lting in%!r$ "o!ld
not have occ!rred to the 'atient if d!e care had been e)ercised( an inference of
negligence ma$ be dra"n giving rise to an a''lication of the doctrine of res ipsa
loquitur "itho!t medical evidence( "hich is ordinaril$ re!ired to sho" not onl$
"hat occ!rred b!t ho" and "h$ it occ!rred& When the doctrine is a''ro'riate( all
that the 'atient m!st do is 'rove a ne)!s bet"een the 'artic!lar act or omission
com'lained of and the in%!r$ s!stained "hile !nder the c!stod$ and management of
the defendant "itho!t need to 'rod!ce e)'ert medical testimon$ to establish the
standard of care& @esort to res ipsa loquitur is allo"ed beca!se there is no other
"a$( !nder !s!al and ordinar$ conditions( b$ "hich the 'atient can obtain redress
for in%!r$ s!3ered b$ him& )r. 3ernando P. $olidum v. People of the Philippines(G&@&
;o& .>1.10( Larch .9( 19.?&
@es i'sa lo!it!r; a''lied in con%!nction "ith the doctrine of common +no"ledge&It
is sim'l$ 2a recognition of the 'ost!late that( as a matter of common +no"ledge
and e)'erience( the ver$ nat!re of certain t$'es of occ!rrences ma$ %!stif$ an
inference of negligence on the 'art of the 'erson "ho controls the instr!mentalit$
ca!sing the in%!r$ in the absence of some e)'lanation b$ the defendant "ho is
charged "ith negligence& It is gro!nded in the s!'erior logic of ordinar$ h!man
e)'erience and on the basis of s!ch e)'erience or common +no"ledge( negligence
ma$ be ded!ced from the mere occ!rrence of the accident itself& Gence( res ipsa
loquitur is a''lied in con%!nction "ith the doctrine ofcommon +no"ledge&4 )r.
3ernando P. $olidum v. People of the Philippines(G&@& ;o& .>1.10( Larch .9( 19.?&
@es i'sa lo!itor& Res ipsa loquitur is literall$ translated as 2the thing or the
transaction s'ea+s for itself&4 The doctrine res ipsa loquitur means that 2"here the
thing "hich ca!ses in%!r$ is sho"n to be !nder the management of the defendant(
and the accident is s!ch as in the ordinar$ co!rse of things does not ha''en if those
"ho have the management !se 'ro'er care( it a3ords reasonable evidence( in the
absence of an e)'lanation b$ the defendant( thatthe accident arose from "ant of
care&4 )r. 3ernando P. $olidum v. People of the Philippines(G&@& ;o& .>1.10( Larch
.9( 19.?&
@es i'sa lo!it!r& The doctrine of res i'sa lo!it!r is 2based on the theor$ that the
defendant either +no"s the ca!se of the accident or has the best o''ort!nit$ of
ascertaining it and the 'lainti3( having no +no"ledge thereof( is com'elled to
allege negligence in general terms& In s!ch instance( the 'lainti3 relies on 'roof
of the ha''ening of the accident alone to establish negligence&4 The 'rinci'le(
f!rthermore( 'rovides a means b$ "hich a 'lainti3 can hold liable a defendant "ho(
if innocent( sho!ld be able to 'rove that he e)ercised d!e care to 'revent the
accident com'lained of from ha''ening& It is( conse!entl$( the defendant=s
res'onsibilit$ to sho" that there "as no negligence on his 'art& .nternational
Container 6erminal $ervices, .nc. v. Celeste . Chua, G&@& ;o& .>B90.( Larch 1D(
19.?&
@es i'sa lo!it!r; conce't of; re!irements for the doctrine to a''l$& In 6an v. JA
6ransit, .nc& EG&@& ;o& .A0.>A( ;ovember 1B( 199>F( the Co!rt noted that res ipsa
'g& .9/
loquitur is a Latin 'hrase that literall$ means 2the thing or the transaction s'ea+s
for itself&4 It is a ma)im for the r!le that the fact of the occ!rrence of an in%!r$(
ta+en "ith the s!rro!nding circ!mstances( ma$ 'ermit an inference or raise a
'res!m'tion of negligence( or ma+e o!t a 'lainti3=s 'rima facie case( and 'resent a
!estion of fact for defendant to meet "ith an e)'lanation& Where the thing that
ca!sed the in%!r$ com'lained of is sho"n to be !nder the management of the
defendant or his servants; and the accident( in the ordinar$ co!rse of things( "o!ld
not ha''en if those "ho had management or control !sed 'ro'er care( it
a3ords reasonable evidenceYin the absence of a s!Ncient( reasonable and logical
e)'lanation b$ defendantYthat the accident arose from or "as ca!sed b$ the
defendant=s "ant of care& This r!le is gro!nded on the s!'erior logic of ordinar$
h!man e)'erience( and it is on the basis of s!ch e)'erience or common +no"ledge
that negligence ma$ be ded!ced from the mere occ!rrence of the accident itself&
Gence( the r!le is a''lied in con%!nction "ith the doctrine of common +no"ledge&4
8or the doctrine to a''l$( the follo"ing re!irements m!st be sho"n to e)ist(
namel$6 EaF the accident is of a +ind that ordinaril$ does not occ!r in the absence
of someone=s negligence; EbF it is ca!sed b$ an instr!mentalit$ "ithin the
e)cl!sive control of the defendant or defendants; and EcF the 'ossibilit$ of
contrib!ting cond!ct that "o!ld ma+e the 'lainti3 res'onsible is eliminated& !J)C
Construction, represented "y its ana'erDProprieto Janet $. )ela Cru8 v. +ena 1.
*anu8o, et al., G&@& ;o& .D..B.( Larch 1?( 19.?&
@es i'sa lo!itor; doctrine does not a!tomaticall$ a''l$ to all cases of medical
negligence as to mechanicall$ shift the b!rden of 'roof to the defendant&Des'ite the
fact that the sco'e of res ipsa loquitur has been meas!rabl$ enlarged( it does not
a!tomaticall$ a''l$ to all cases of medical negligence as to mechanicall$ shift the
b!rden of 'roof to the defendant to sho" that he is not g!ilt$ of the ascribed
negligence& Res ipsa loquitur is not a rigid or ordinar$ doctrine to be 'erf!nctoril$
!sed b!t a r!le to be ca!tio!sl$ a''lied( de'ending !'on the circ!mstances of each
case& It is generall$ restricted to sit!ations in mal'ractice cases "here a la$man is
able to sa$( as a matter of common +no"ledge and observation( that the
conse!ences of 'rofessional care "ere not as s!ch as "o!ld ordinaril$ have
follo"ed if d!e care had been e)ercised& A distinction m!st be made bet"een the
fail!re to sec!re res!lts( and the occ!rrence of something more !n!s!al and not
ordinaril$ fo!nd if the service or treatment rendered follo"ed the !s!al 'roced!re of
those s+illed in that 'artic!lar 'ractice& It m!st be conceded that the doctrine of res
ipsa loquitur can have no a''lication in a s!it against a 'h$sician or s!rgeon "hich
involves the merits of a diagnosis or of a scientifc treatment& The 'h$sician or
s!rgeon is not re!ired at his 'eril to e)'lain "h$ an$ 'artic!lar diagnosis "as not
correct( or "h$ an$ 'artic!lar scientifc treatment did not 'rod!ce the desired
res!lt& Th!s( res ipsa loquitur is not available in a mal'ractice s!it if the onl$
sho"ing is that the desired res!lt of an o'eration or treatment "as not
accom'lished& The real !estion( therefore( is "hether or not in the 'rocess of the
o'eration an$ e)traordinar$ incident or !n!s!al event o!tside of the ro!tine
'erformance occ!rred "hich is be$ond the reg!lar sco'e of c!stomar$ 'rofessional
activit$ in s!ch o'erations( "hich( if !ne)'lained "o!ld themselves reasonabl$
s'ea+ to the average man as the negligent ca!se or ca!ses of the !nto"ard
conse!ence& If there "as s!ch e)traneo!s intervention( the doctrine of res ipsa
loquitur ma$ be !tili<ed and the defendant is called!'on to e)'lain the matter( b$
'g& .9A
evidence of e)c!l'ation( if he co!ld& )r. 3ernando P. $olidum v. People of the
Philippines(G&@& ;o& .>1.10( Larch .9( 19.?&
@es i'sa lo!itor; essential re!isites&In order to allo" resort to the doctrine(
therefore( the follo"ing essential re!isites m!st frst be satisfed( to "it6 E.F the
accident "as of a +ind that does not ordinaril$ occ!r !nless someone is negligent;
E1F the instr!mentalit$ or agenc$ that ca!sed the in%!r$ "as !nder the e)cl!sive
control of the 'erson charged; and E0F the in%!r$ s!3ered m!st not have been d!e
to an$ vol!ntar$ action or contrib!tion of the 'erson in%!red& )r. 3ernando P.
$olidum v. People of the Philippines(G&@& ;o& .>1.10( Larch .9( 19.?&
@es i'sa lo!it!r; "hen ma$ be invo+ed& The doctrine 2can be invo+ed "hen and
onl$ "hen( !nder the circ!mstances involved( direct evidence is absent and not
readil$ available&4 Gere( there "as no evidence as to ho" or "h$ the fre in the
container $ard of 'etitioner started; hence( it "as !' to 'etitioner to satisfactoril$
'rove that it e)ercised the diligence re!ired to 'revent the fre from ha''ening&
.nternational Container 6erminal $ervices, .nc. v. Celeste . Chua, G&@& ;o& .>B90.(
Larch 1D( 19.?&
S!ret$shi'; Contin!ing s!ret$shi'; nat!re of; e)am'le of&A Contin!ing S!ret$shi'(
"hich the Co!rt described in $aludo, Jr. v. $ecurity !an& Corporation as follo"s6
The essence of a contin!ing s!ret$ has been highlighted in the case of 6otanes v.
China !an&in' Corporation in this "ise6 Com'rehensive or contin!ing s!ret$
agreements are( in fact( !ite common'lace in 'resent da$ fnancial and
commercial 'ractice& A ban+ or fnancing com'an$"hich antici'ates entering into a
series of credit transactions "ith a 'artic!lar com'an$( normall$re!ires the
'ro%ected 'rinci'al debtor to e)ec!te acontin!ing s!ret$ agreement along "ith its
s!reties& J$e)ec!ting s!ch an agreement( the 'rinci'al 'laces itselfn a 'osition to
enter into the 'ro%ected series oftransactions "ith its creditor; "ith s!ch
s!ret$shi'agreement( there "o!ld be no need to e)ec!te a se'arates!ret$ contract
or bond for each fnancing or creditaccommodation e)tended to the 'rinci'al
debtor&
The terms of the Contin!ing S!ret$shi' e)ec!ted b$ 'etitioner are ver$ clear& It
states that 'etitioner( as s!ret$( shall( "itho!t need for an$ notice( demand or an$
other act or deed( immediatel$ become liable and shall 'a$ 2all credit
accommodations e)tended b$ the Jan+ to the Debtor( incl!ding increases(
rene"als( roll#overs( e)tensions( restr!ct!rings( amendments or novations thereof(
as "ell as Ei9 all obligations of the:ebtor presently or hereafter owing to
the "ank, as appears in the accounts, books and records of the "ank,
whether direct or indirect, and EiiF an$ and all e)'enses "hich the Jan+ ma$
inc!r in enforcing an$ of its rights( 'o"ers and remedies !nder the Credit
Instr!ments as defned hereinbelo"&4 ariano *im v. $ecurity !an& Corporation(G&@&
;o& .AAB0>( Larch .1( 19.?&
S!ret$shi'& A contract of s!ret$shi' is an agreement "hereb$ a 'art$( called the
s!ret$( g!arantees the 'erformance b$ another 'art$( called the 'rinci'al or obligor(
of an obligation or !nderta+ing in favor of another 'art$( called the obligee&
'g& .9>
Altho!gh the contract of a s!ret$ is secondar$ onl$ to a valid 'rinci'al obligation(
the s!ret$ becomes liable for the debt or d!t$ of another altho!gh it 'ossesses no
direct or 'ersonal interest over the obligations nor does it receive an$ beneft
therefrom& This "as e)'lained in the case of $tron'hold .nsurance Company, .nc. v.
Repu"lic-Asahi 4lass Corporation( "here it "as "ritten6 The s!ret$=s obligation is
not an original and direct one for the 'erformance of his o"n act( b!t merel$
accessor$ or collateral to the obligation contracted b$ the 'rinci'al& ;evertheless(
although the contract of a suretyis in essence secondary only to a valid
principalobligation, his liability to the creditor or promisee of theprincipal
is said to be direct, primary and absolute; inother words, he is directly and
e1ually bound with theprincipal.
Th!s( s!ret$shi' arises !'on the solidar$ binding of a 'erson deemed the s!ret$
"ith the 'rinci'al debtor for the '!r'ose of f!lflling an obligation& ( surety is
considered in law as being the same party asthe debtor in relation to
whatever is ad2udged touching the obligationof the latter, and their
liabilities are interwoven as to be inseparable& ariano *im v. $ecurity !an&
Corporation(G&@& ;o& .AAB0>( Larch .1( 19.?&
S-.$/(L L(0S
Com'rehensive Agrarian @eform La" ECA@LF; Section DB of @&A& DDB/; DA@ is
em'o"ered to a!thori<e( !nder certain conditions( the reclassifcation or
conversion of agric!lt!ral lands& -nder Section DB of @&A& ;o& DDB/( the DA@ is
em'o"ered to a!thori<e( !nder certain conditions( the reclassifcation or conversion
of agric!lt!ral lands& :!rs!ant to this a!thorit$ and in the e)ercise of its r!lema+ing
'o"er !nder Section ?> of @&A& ;o& DDB/( the DA@ iss!ed Administrative *rder ;o&
.1( series of .>>? EDA@ A&*& .1#>?F Ethe then 'revailing administrative orderF(
'roviding the r!les and 'roced!re governing agric!lt!ral land conversion& Item VII of
DA@ A&*& .1#>? en!merates the doc!mentar$ re!irements for a''roval of an
a''lication for land conversion&0B ;otabl$( Item VI#E 'rovides that no a''lication for
conversion shall be given d!e co!rse if6 E.F the DA@ has iss!ed a ;otice of
Ac!isition !nder the com'!lsor$ ac!isition 'rocess; E1F a Vol!ntar$ *3er to Sell
covering the s!b%ect 'ro'ert$ has been received b$ the DA@; or E0F there is alread$
a 'erfected agreement bet"een the lando"ner and the benefciaries !nder
Vol!ntar$ Land Transfer& (eirs of 6eresita ontoya, et al. v. +ational (ousin'
Authority, et al., G&@& ;o& .A.9BB( Larch .>( 19.?&
Com'rehensive Agrarian @eform La" ECA@LF; Section D of @&A& DDB/; retention
limits& Section D of @&A& ;o& DDB/ s'ecifcall$ governs retention limits& -nder its last
'aragra'h( 2an$ sale( dis'osition( lease( management( contract or transfer of
'ossession of 'rivate lands e)ec!ted b$ the original lando"ner in violation of H@&A&
;o& DDB/I4 is considered n!ll and void& A 'lain reading of the last 'aragra'h
a''ears to im'l$ that the CA@L absol!tel$ 'rohibits sales or dis'ositions of 'rivate
agric!lt!ral lands& The inter'retation or constr!ction of this 'rohibitor$ cla!se(
ho"ever( sho!ld be made "ithin the conte)t of Section D( follo"ing the basic r!le in
stat!tor$ constr!ction that ever$ 'art of the stat!te be 2inter'reted "ith reference
to the conte)t( i&e&( that ever$ 'art of the stat!te m!st be considered together "ith
the other 'arts( and +e't s!bservient to the general intent of the "hole enactment&4
'g& ..9
;otabl$( nothing in this 'aragra'h( "hen read "ith the entire section( discloses an$
legislative intention to absol!tel$ 'rohibit the sale or other transfer agreements of
'rivate agric!lt!ral lands after the e3ectivit$ of the Act&
In other "ords( therefore( the sale( dis'osition( etc& of 'rivate lands that Section D of
@&A& ;o& DDB/ conte)t!all$ 'rohibits and considers as n!ll and void are those "hich
the original o"ner e)ec!tes in violation of this 'rovision( i&e&( sales or dis'ositions
e)ec!ted "ith the intention of circ!mventing the retention limits set b$ @&A& ;o&
DDB/& Consistent "ith this inter'retation( the 'roscri'tion in Section D on sales or
dis'ositions of 'rivate agric!lt!ral lands does not a''l$ to those that do not violate
or "ere not intended to circ!mvent the CA@L=s retention limits& (eirs of 6eresita
ontoya, et al. v. +ational (ousin' Authority, et al., G&@& ;o& .A.9BB( Larch .>(
19.?&
Emanci'ation of Tenants; :&D& 1/; CLT; legal e3ects of iss!ance; tenant#farmer does
not ac!ire f!ll o"nershi' of the covered landholding sim'l$ b$ the iss!ance of a
CLT& A CLT is a doc!ment that the government iss!es to a tenant#farmer of an
agric!lt!ral land 'rimaril$ devoted to rice and corn 'rod!ction 'laced !nder the
coverage of the government=s *LT 'rogram '!rs!ant to :&D& ;o& 1/& It serves as the
tenant#farmer=s Egrantee of the certifcateF 'roof of inchoate right over the land
covered thereb$&
A CLT does not a!tomaticall$ grant a tenant#farmer absol!te o"nershi' of the
covered landholding& -nder :D ;o& 1/( land transfer is e3ected in t"o stages6 E.F
iss!ance of the CLT to the tenant#farmer in recognition that said 'erson is a
2deemed o"ner4; and E1F iss!ance of an Emanci'ation :atent EE:F as 'roof of f!ll
o"nershi' !'on the tenant#farmer=s f!ll 'a$ment of the ann!al amorti<ations or
lease rentals&
As a 'reliminar$ ste'( therefore( the iss!ance of a CLT merel$ evinces that the
grantee thereof is !alifed to avail of the stat!tor$ mechanism for the ac!isition of
o"nershi' of the land tilled b$ him( as 'rovided !nder :&D& ;o& 1/& The CLT is not a
m!niment of title that vests in the tenant#farmer absol!te o"nershi' of his tillage& It
is onl$ after com'liance "ith the conditions "hich entitle the tenant#farmer to an E:
that the tenant#farmer ac!ires the vested right of absol!te o"nershi' in the
landholding& Stated other"ise( the tenant#farmer does not ac!ire f!ll o"nershi' of
the covered landholding sim'l$ b$ the iss!ance of a CLT& The tenant#farmer m!st
frst com'l$ "ith the 'rescribed conditions and 'roced!res for ac!iring f!ll
o"nershi' b!t !ntil then( the title remains "ith the lando"ner& (eirs of 6eresita
ontoya, et al. v. +ational (ousin' Authority, et al., G&@& ;o& .A.9BB( Larch .>(
19.?&
Land registration; Classifcation of land; evidence of a 'ositive act from the
government reclassif$ing the lot as alienable and dis'osable agric!lt!ral land of the
'!blic domain& Accordingl$( %!ris'r!dence has re!ired that an a''licant for
registration of title ac!ired thro!gh a '!blic land grant m!st 'resent
incontroverti"le evidence that the land s!b%ect of the a''lication is alienable or
dis'osable b$ establishing the e)istence of a positive act of the 'overnment, s!ch
as a 'residential 'roclamation or an e)ec!tive order; an administrative action;
'g& ...
investigation re'orts of J!rea! of Lands investigators; and a legislative act or a
stat!te& $ps. Antonio 3ortuna and 1rlinda 3ortuna v. Repu"lic of the Philippines(G&@&
;o& ./0?10( Larch B( 19.?&
Land registration; Classifcation of land; E)ec!tive 'rerogative&-nder Section D of
the :!blic Land Act( the classifcation and the reclassifcation of '!blic lands are the
'rerogative of the E)ec!tive De'artment& The :resident( thro!gh a 'residential
'roclamation or e)ec!tive order( can classif$ or reclassif$ a land to be incl!ded or
e)cl!ded from the '!blic domain& The De'artment of Environment and ;at!ral
@eso!rces Secretar$ is li+e"ise em'o"ered b$ la" to a''rove a land classifcation
and declare s!ch land as alienable and dis'osable& $ps. Antonio 3ortuna and 1rlinda
3ortuna v. Repu"lic of the Philippines(G&@& ;o& ./0?10( Larch B( 19.?&
Land registration; it is essential for an$ a''licant for registration of title to land
derived thro!gh a '!blic grant to establish foremost the alienable and dis'osable
nat!re of the land& The Constit!tion declares that all lands of the '!blic domain are
o"ned b$ the State& *f the fo!r classes of '!blic land( i.e.( agric!lt!ral lands( forest
or timber lands( mineral lands( and national 'ar+s( onl$ agric!lt!ral lands ma$ be
alienated& :!blic land that has not been classifed as alienable agric!lt!ral land
remains 'art of the inalienable '!blic domain& Th!s( it is essential for any
applicant for registration of title toland derived through a public grant to
establish foremost the alienableand disposable nature of the land& The
:!blic Land Act 'rovisions on the grant and dis'osition of alienable '!blic lands(
s'ecifcall$( Sections .. and ?AEbF( "ill fnd a''lication onl$ from the time that a
'!blic land has been classifed as agric!lt!ral and declared as alienable and
dis'osable& $ps. Antonio 3ortuna and 1rlinda 3ortuna v. Repu"lic of the
Philippines(G&@& ;o& ./0?10( Larch B( 19.?&
Land registration; C!dicial confrmation of im'erfect or incom'lete title; c!t#o3 date
for a''lications& As mentioned( the :!blic Land Act is the la" that governs the grant
and dis'osition of alienable agric!lt!ral lands& -nder Section .. of the :LA(
alienable lands of the '!blic domain ma$ be dis'osed of( among others( b$ 2udicial
confrmation of imperfect or incomplete title& This mode of ac!isition of title
is governed b$ Section ?AEbF of the :LA( the ori'inal version of "hich states6
Sec& ?A& The follo"ing#described citi<ens of the :hili''ines( occ!'$ing lands of the
'!blic domain or claiming to o"n an$ s!ch lands or an interest therein( b!t "hose
titles have not been 'erfected or com'leted( ma$ a''l$ to the Co!rt of 8irst
Instance of the 'rovince "here the land is located for confrmation of their claims
and the iss!ance of a certifcate of title therefor( !nder the Land @egistration Act( to
"it6
) ) ) )
EbF Those "ho b$ themselves or thro!gh their 'redecessors#in#interest have been in
o'en( contin!o!s( e)cl!sive( and notorio!s 'ossession and occ!'ation of
agric!lt!ral lands of the '!blic domain( !nder a bona fde claim of ac!isition or
o"nershi'( e)ce't as against the Government( since <uly twenty-sixth, eighteen
hundred and ninety-four( e)ce't "hen 'revented b$ "ar or force ma%e!re& These
'g& ..1
shall be concl!sivel$ 'res!med to have 'erformed all the conditions essential to a
government grant and shall be entitled to a certifcate of title !nder the 'rovisions
of this cha'ter& Hem'hasis s!''liedI
*n C!ne 11( .>B/( the c!t#o3 date of C!l$ 1D( .A>? "as re'laced b$ a 09#$ear 'eriod
of 'ossession !nder @A ;o& .>?1& Section ?AEbF of the :LA( as amended b$ @A ;o&
.>?1( read6
EbF Those "ho b$ themselves or thro!gh their 'redecessors in interest have been in
o'en( contin!o!s( e)cl!sive and notorio!s 'ossession and occ!'ation of agric!lt!ral
lands of the '!blic domain( !nder a bona fde claim of ac!isition of o"nershi'( for
at least thirty years immediatel$ 'receding the fling of the a''lication for
confrmation of title( e)ce't "hen 'revented b$ "ar or force ma%e!re&
*n Can!ar$ 1B( .>//( :D ;o& .9/0 re'laced the 09#$ear 'eriod of 'ossession b$
re!iring 'ossession since C!ne .1( .>?B& Section ? of :D ;o& .9/0 reads6
SEC& ?& The 'rovisions of Section ?AEbF and Section ?AEcF( Cha'ter VIII of the :!blic
Land Act are hereb$ amended in the sense that these 'rovisions shall a''l$ onl$ to
alienable and dis'osable lands of the '!blic domain "hich have been in o'en(
contin!o!s( e)cl!sive and notorio!s 'ossession and occ!'ation b$ the a''licant
himself or thr! his 'redecessor#in#interest( !nder a bona fde claim of ac!isition of
o"nershi'( since <une )7, )&'=&
-nder the :&D& ;o& .9/0 amendment( 'ossession of at least 32 years K from .>?B
!' to its enactment in .>// K is re!ired& This e3ectivel$ im'airs the vested rights
of a''licants "ho had com'lied "ith the 09#$ear 'ossession re!ired !nder the @A
;o& .>?1 amendment( b!t "hose 'ossession commenced onl$ after the c!t#o3 date
of C!ne .1( .>?B "as established b$ the :D ;o& .9/0 amendment& To remed$ this(
the Co!rt r!led in A"e<aron v. +a"asa that 28ili'ino citi<ens "ho b$ themselves or
their 'redecessors#in#interest have been( prior to the efectivity of P.D. !"3on
#an$ary 2%, &""( in o'en( contin!o!s( e)cl!sive and notorio!s 'ossession and
occ!'ation of agric!lt!ral lands of the '!blic domain( !nder a "ona fde claim of
ac!isition of o"nershi'( for at least ,8 years, or atleast since <anuary 7',
)&'* ma$ a''l$ for %!dicial confrmation of their im'erfect or incom'lete title !nder
Sec& ?AEbF of the H:LAI&4 <anuary 7',)&'* was considered as the cut o3 date
as this was exactly ,8 yearscounted backward from <anuary 7=, )&** > the
e3ectivity date of -:No. )8*,.
It a''ears( ho"ever( that <anuary 7=, )&** was the date -: No. )8*, was
enacte'( based on the certifcation from the ;ational :rinting*Nce( -: No. )8*,
was p$)lishe' in ?ol. *,, No. )& of the #@cial 4aette( months later than its
enactment or on +ay &, )&**. This!ncontroverted fact materiall$ a3ects the c!t#
o3 date for a''lications for%!dicial confrmation of incom'lete title !nder Section
?AEbF of the :LA&Altho!gh Section D of :D ;o& .9/0 states that 2HtheI Decree
shallta+e e3ect !'on its 'rom!lgation(4 the Co!rt has declared in 6a-ada, et al.v.
(on. 6uvera, etc., et al. that the '!blication of la"s is an indis'ensablere!irement
for its e3ectivit$& 2HAIll stat!tes( incl!ding those of locala''lication and 'rivate la"s(
shall be '!blished as a condition for theire3ectivit$( "hich shall begin ffteen da$s
'g& ..0
after '!blication !nless a di3erente3ectivit$ date is f)ed b$ the legislat!re&4
Accordingl$( Section D of :D;o& .9/0 sho!ld be !nderstood to mean that the decree
too+ e3ect onl$!'on its '!blication( or on La$ >( .>//& This( therefore( moves the
cut-o3 date for applications for 2udicial confrmation of imperfect or
incomplete title under Section 'ABb9 of the -L( to +ay A, )&'*. In
other"ords( applicants m$st prove that they have )een in open,
contin$o$s,e*cl$sive an' notorio$s possession an' occ$pation of
a+ric$lt$ral lan's ofthe p$)lic 'omain, $n'er a )ona ,'e claim of
ac-$isition of o.nership,for at least 3! years, or at least since May /,
&0". $ps. Antonio 3ortuna and 1rlinda 3ortuna v. Repu"lic of the Philippines(G&@&
;o& ./0?10( Larch B( 19.?&
Land registration; :ossession; as a re!irement for the a''lication for registration of
title&;otabl$( Section ?AEbF of the :LA s'ea+s of 'ossession an' occ!'ation& 2Since
these "ords are se'arated b$ the con%!nction and( the clear intention of the la" is
not to ma+e one s$non$mo!s "ith the other& :ossession is broader than occ!'ation
beca!se it incl!des constr!ctive 'ossession& When( therefore( the la" adds the "ord
occupation( it see+s to delimit the all#encom'assing e3ect of constr!ctive
'ossession& Ta+en together "ith the "ords o'en( contin!o!s( e)cl!sive and
notorio!s( the "ord occupation serves to highlight the fact that for an a''licant to
!alif$( his 'ossession m!st not be a mere fction&4 ;othing in Ta) Declaration ;o&
A0DD sho"s that :astora e)ercised acts of 'ossession and occ!'ation s!ch as
c!ltivation of or fencing o3 the land& Indeed( the lot "as described as 2cogonal&4
$ps. Antonio 3ortuna and 1rlinda 3ortuna v. Repu"lic of the Philippines(G&@& ;o&
./0?10( Larch B( 19.?&
:!blic Land Act; Sec ?AEbF( as amended b$ :&D& .9/0; re!irements for %!dicial
confrmation of title& The re!irements for %!dicial confrmation of im'erfect title are
fo!nd in Section ?AEbF of the :!blic Land Act( as amended b$ :residential Decree
;o& .9/0( as follo"s6
2Sec& ?A& The follo"ing described citi<ens of the :hili''ines( occ!'$ing lands of the
'!blic domain or claiming to o"n an$ s!ch lands or an interest therein( b!t "hose
titles have not been 'erfected or com'leted( ma$ a''l$ to the Co!rt of 8irst
Instance of the 'rovince "here the land is located for confrmation of their claims
and the iss!ance of a certifcate of title therefor( !nder the Land @egistration Act( to
"it6
) ) ) )
EbF Those "ho b$ themselves or thro!gh their 'redecessors in interest have been in
the o'en( contin!o!s( e)cl!sive( and notorio!s 'ossession and occ!'ation of
alienable and dis'osable lands of the '!blic domain( !nder a bona fde claim of
ac!isition or o"nershi'( since C!ne .1( .>?B( or earlier( immediatel$ 'receding the
fling of the a''lication for confrmation of title e)ce't "hen 'revented b$ "ar or
force ma%e!re& These shall be concl!sivel$ 'res!med to have 'erformed all the
conditions essential to a Government grant and shall be entitled to a certifcate of
title !nder the 'rovisions of this cha'ter&4
'g& ..?
Repu"lic of the Philippines represented "y A&lan +ational Colle'es of 3isheries
BA+C3C and )r. 1lenita R. Adrade, in her capacity as A+C3 $uperintendent v. (eirs of
a5ima *achica $in, namely: $alvacion *. $in, Rosario $. 1nrique8, 3rancisco *. $in,
aria $. ;uchintat, anuel *. $in, Jaime Cardinal $in, Ramon *. $in, and Ceferina $.
,ita,G&@& ;o& .B/?AB( Larch 1D( 19.?&
@egalian Doctrine; all lands of the '!blic domain belong to the State and that lands
not a''earing to be clearl$ "ithin 'rivate o"nershi' are 'res!med to belong to the
State& As this Co!rt held in the fairl$ recent case of Valiao v& @e'!blic EG&@& ;o&
./9/B/( ;ovember 1A( 19..(F6 2-nder the @egalian doctrine( "hich is embodied in
o!r Constit!tion( all lands of the '!blic domain belong to the State( "hich is the
so!rce of an$ asserted right to an$ o"nershi' of land& All lands not a''earing to be
clearl$ "ithin 'rivate o"nershi' are 'res!med to belong to the State& Accordingl$(
'!blic lands not sho"n to have been reclassifed or released as alienable
agric!lt!ral land or alienated to a 'rivate 'erson b$ the State remain 'art of the
inalienable '!blic domain& -nless '!blic land is sho"n to have been reclassifed as
alienable or dis'osable to a 'rivate 'erson b$ the State( it remains 'art of the
inalienable '!blic domain& :ro'ert$ of the '!blic domain is be$ond the commerce of
man and not s!sce'tible of 'rivate a''ro'riation and ac!isitive 'rescri'tion&
*cc!'ation thereof in the conce't of o"ner no matter ho" long cannot ri'en into
o"nershi' and be registered as a title& The b!rden of 'roof in overcoming the
'res!m'tion of State o"nershi' of the lands of the '!blic domain is on the 'erson
a''l$ing for registration Eor claiming o"nershi'F( "ho m!st 'rove that the land
s!b%ect of the a''lication is alienable or dis'osable& To overcome this 'res!m'tion(
incontrovertible evidence m!st be established that the land s!b%ect of the
a''lication Eor claimF is alienable or dis'osable&4 Repu"lic of the Philippines
represented "y A&lan +ational Colle'es of 3isheries BA+C3C and )r. 1lenita R.
Adrade, in her capacity as A+C3 $uperintendent v. (eirs of a5ima *achica $in,
namely: $alvacion *. $in, Rosario $. 1nrique8, 3rancisco *. $in, aria $. ;uchintat,
anuel *. $in, Jaime Cardinal $in, Ramon *. $in, and Ceferina $. ,ita, G&@& ;o&
.B/?AB( Larch 1D( 19.?&
:!blic Land Act; t"o re!isites for %!dicial confrmation of title& The t"o re!isites
for %!dicial confrmation of im'erfect or incom'lete title !nder CA ;o& .?.( namel$6
E.F o'en( contin!o!s( e)cl!sive( and notorio!s 'ossession and occ!'ation of the
s!b%ect land b$ himself or thro!gh his 'redecessors#in#interest !nder a bona fde
claim of o"nershi' since time immemorial or from C!ne .1( .>?B; and E1F the
classifcation of the land as alienable and dis'osable land of the '!blic domain&
Repu"lic of the Philippines represented "y A&lan +ational Colle'es of 3isheries
BA+C3C and )r. 1lenita R. Adrade, in her capacity as A+C3 $uperintendent v. (eirs of
a5ima *achica $in, namely: $alvacion *. $in, Rosario $. 1nrique8, 3rancisco *. $in,
aria $. ;uchintat, anuel *. $in, Jaime Cardinal $in, Ramon *. $in, and Ceferina $.
,ita, G&@& ;o& .B/?AB( Larch 1D( 19.?&
@egalian Doctrine; fail!re of @e'!blic to sho" com'etent evidence that the s!b%ect
land "as declared a timberland before its formal classifcation as s!ch in .>D9 does
not lead to the 'res!m'tion that said land "as alienable and dis'osable 'rior to
said date& Accordingl$( in the case at bar( the fail!re of 'etitioner @e'!blic to sho"
com'etent evidence that the s!b%ect land "as declared a timberland before its
'g& ..B
formal classifcation as s!ch in .>D9 does not lead to the 'res!m'tion that
said land "as alienable and dis'osable 'rior to said date& *n the contrar$( the
'res!m'tion is that !nclassifed lands are inalienable '!blic lands& It is therefore
the res'ondents "hich have the b!rden to identif$ a 'ositive act of the government(
s!ch as an oNcial 'roclamation( declassif$ing inalienable '!blic land into dis'osable
land for agric!lt!ral or other '!r'oses& Since res'ondents failed to do so( the
alleged 'ossession b$ them and b$ their 'redecessors#in#interest is inconse!ential
and co!ld never ri'en into o"nershi'& Repu"lic of the Philippines represented "y
A&lan +ational Colle'es of 3isheries BA+C3C and )r. 1lenita R. Adrade, in her
capacity as A+C3 $uperintendent v. (eirs of a5ima *achica $in, namely: $alvacion
*. $in, Rosario $. 1nrique8, 3rancisco *. $in, aria $. ;uchintat, anuel *. $in, Jaime
Cardinal $in, Ramon *. $in, and Ceferina $. ,ita, G&@& ;o& .B/?AB( Larch 1D( 19.?&
'g& ..D