CIVIL

LAW

SC rulings penned by Lucas P. Bersamin, J.

GENERAL PRINCIPLES
Effect and Application of Laws; Conflict of Laws
The first marriage between Atty. Luna and Eugenia, both Filipinos, was solemnized in the
Philippines on September 10, 1947. The law in force at the time of the solemnization was
the Spanish Civil Code, which adopted the nationality rule. The Civil Code continued to
follow the nationality rule, to the effect that Philippine laws relating to family rights and
duties, or to the status, condition and legal capacity of persons were binding upon citizens
of the Philippines, although living abroad. Pursuant to the nationality rule, Philippine laws
governed this case by virtue of both Atty. Luna and Eugenio having remained Filipinos
until the death of Atty. Luna on July 12, 1997 terminated their marriage. (Lavadia vs. Heirs
of Luna, 730 SCRA 376, G.R. No. 171914, July 23, 2014).
From the time of the celebration of the first marriage on September 10, 1947 until the
present, absolute divorce between Filipino spouses has not been recognized in the
Philippines. The non-recognition of absolute divorce between Filipinos has remained even
under the Family Code, even if either or both of the spouses are residing abroad. Indeed,
the only two types of defective marital unions under our laws have been the void and the
voidable marriages. As such, the remedies against such defective marriages have been
limited to the declaration of nullity of the marriage and the annulment of the marriage.
(Lavadia vs. Heirs of Luna, 730 SCRA 376, G.R. No. 171914, July 23, 2014).
Divorce between Filipinos is void and ineffectual under the nationality rule adopted by
Philippine law. Hence, any settlement of property between the parties of the first
marriage involving Filipinos submitted as an incident of a divorce obtained in a foreign
country lacks competent judicial approval, and cannot be enforceable against the assets
of the husband who contracts a subsequent marriage. (Lavadia vs. Heirs of Luna, 730 SCRA
376, G.R. No. 171914, July 23, 2014).
Human Relations (Arts. 19-22, Civil Code)
Although the act is not illegal, liability for damages may arise should there be an abuse of
rights, like when the act is performed without prudence or in bad faith. xxx. There is no
hard and fast rule that can be applied to ascertain whether or not the principle of abuse
of rights is to be invoked. The resolution of the issue depends on the circumstances of
each case. (Sesbreo vs. Court of Appeals, 720 SCRA 57, G.R. No. 160689, March 26, 2014).
Article 21 of the Civil Code, in conjunction with Article 19 of the Civil Code, is part of the
cause of action known in this jurisdiction as abuse of rights. The elements of abuse of
rights are: (a) there is a legal right or duty; (b) exercised in bad faith; and (c) for the sole
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intent of prejudicing or injuring another. (Sps. Andrada vs. Pilhino Sales Corporation, 644
SCRA 1, G.R. No. 156448, February 23, 2011).
To stress, the concept of abuse of rights prescribes that a person should not use his right
unjustly or in bad faith; otherwise, he may be liable to another who suffers injury. The
rationale for the concept is to present some basic principles to be followed for the rightful
relationship between human beings and the stability of social order. Moreover, according
to a commentator,1 the exercise of right ends when the right disappears, and it
disappears when it is abused, especially to the prejudice of others[;] [i]t cannot be said
that a person exercises a right when he unnecessarily prejudices another. Article 19 of
the Civil Code sets the standards to be observed in the exercise of ones rights and in the
performance of ones duties, namely: (a) to act with justice; (b) to give everyone his due;
and (c) to observe honesty and good faith. The law thereby recognizes the primordial
limitation on all rights that in the exercise of the rights, the standards under Article 19
must be observed. (Sesbreo vs. Court of Appeals, 720 SCRA 57, G.R. No. 160689, March
26, 2014).

PERSONS AND FAMILY RELATIONS
Family Code; Marriage
The non-recognition of absolute divorce in the Philippines is a manifestation of the
respect for the sanctity of the marital union especially among Filipino citizens. It affirms
that the extinguishment of a valid marriage must be grounded only upon the death of
either spouse, or upon a ground expressly provided by law. For as long as this public policy
on marriage between Filipinos exists, no divorce decree dissolving the marriage between
them can ever be given legal or judicial recognition and enforcement in this jurisdiction.
(Lavadia vs. Heirs of Luna, 730 SCRA 376, G.R. No. 171914, July 23, 2014).
We have time and again held that psychological incapacity should refer to no less than a
mental, not physical, incapacity that causes a party to be truly incognitive of the basic
marital covenants that must concomitantly be assumed and discharged by the parties to
the marriage that, as so expressed by Article 68 of the Family Code, include their mutual
obligations to live together, to observe love, respect and fidelity, and to render help and
support. We have also held that the intendment of the law has been to confine the
meaning of psychological incapacity to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability to give meaning and significance
to the marriage. To qualify as psychological incapacity as a ground for nullification of
marriage, a persons psychological affliction must be grave and serious as to indicate an
utter incapacity to comprehend and comply with the essential objects of marriage,
including the rights and obligations between husband and wife. The affliction must be

1 Dean Pineda, Persons and Human Relations, 2010, p. 76.

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shown to exist at the time of marriage, and must be incurable. (Mendoza vs. Republic,
685 SCRA 16, G.R. No. 157649, November 12, 2012).
Psychological incapacity as a ground for the nullity of marriage under Article 36 of the
Family Code refers to a serious psychological illness afflicting a party even prior to the
celebration of the marriage that is permanent as to deprive the party of the awareness of
the duties and responsibilities of the matrimonial bond he or she was about to assume.
Although the Family Code has not defined the term psychological incapacity, the Court
has usually looked up its meaning by reviewing the deliberations of the sessions of the
Family Code Revision Committee that had drafted the Family Code in order to gain an
insight on the provision. It appeared that the members of the Family Code Revision
Committee were not unanimous on the meaning, and in the end they decided to adopt
the provision with less specificity than expected in order to have the law allow some
resiliency in its application. (Kalaw vs. Fernandez, 745 SCRA 512, G.R. No. 166357,
January 14, 2015).
Illustrative of the less specificity than expected has been the omission by the Family
Code Revision Committee to give any examples of psychological incapacity that would
have limited the applicability of the provision conformably with the principle of ejusdem
generis, because the Committee desired that the courts should interpret the provision on
a case-to-case basis, guided by experience, the findings of experts and researchers in
psychological disciplines, and the decisions of church tribunals that had persuasive effect
by virtue of the provision itself having been taken from the Canon Law. (Kalaw vs.
Fernandez, 745 SCRA 512, G.R. No. 166357, January 14, 2015).
To entitle petitioner spouse to a declaration of the nullity of his or her marriage, the
totality of the evidence must sufficiently prove that respondent spouses psychological
incapacity was grave, incurable and existing prior to the time of the marriage. (Mendoza
vs. Republic, 685 SCRA 16, G.R. No. 157649, November 12, 2012).
Article 36 of the Family Code must not be so strictly and too literally read and applied
given the clear intendment of the drafters to adopt its enacted version of less specificity
obviously to enable some resiliency in its application. Instead, every court should
approach the issue of nullity not on the basis of a priori assumptions, predilections or
generalizations, but according to its own facts in recognition of the verity that no case
would be on all fours with the next one in the field of psychological incapacity as a
ground for the nullity of marriage; hence, every trial judge must take pains in examining
the factual milieu and the appellate court must, as much as possible, avoid substituting
its own judgment for that of the trial court. (Kalaw vs. Fernandez, 745 SCRA 512, G.R.
No. 166357, January 14, 2015).
The totality of the evidence proving such incapacity at and prior to the time of the
marriage was the crucial consideration, as the Court has reminded in Ting vs. Velez-Ting,
582 SCRA 694 (2009): By the very nature of cases involving the application of Article 36,
it is logical and understandable to give weight to the expert opinions furnished by
psychologists regarding the psychological temperament of parties in order to determine

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the root cause, juridical antecedence, gravity and incurability of the psychological
incapacity. However, such opinions, while highly advisable, are not conditions sine qua
non in granting petitions for declaration of nullity of marriage. At best, courts must treat
such opinions as decisive but not indispensable evidence in determining the merits of a
given case. In fact, if the totality of evidence presented is enough to sustain a finding of
psychological incapacity, then actual medical or psychological examination of the person
concerned need not be resorted to. The trial court, as in any other given case presented
before it, must always base its decision not solely on the expert opinions furnished by the
parties but also on the totality of evidence adduced in the course of the proceedings.
(Mendoza vs. Republic, 685 SCRA 16, G.R. No. 157649, November 12, 2012).
The frequency of the respondents mahjong playing should not have delimited our
determination of the presence or absence of psychological incapacity. Instead, the
determinant should be her obvious failure to fully appreciate the duties and
responsibilities of parenthood at the time she made her marital vows. Had she fully
appreciated such duties and responsibilities, she would have known that bringing along
her children of very tender ages to her mahjong sessions would expose them to a culture
of gambling and other vices that would erode their moral fiber. Nonetheless, the long
term effects of the respondents obsessive mahjong playing surely impacted on her family
life, particularly on her very young children. We do find to be revealing the disclosures
made by Valerio Teodoro Kalaw the parties eldest son in his deposition, whereby
the son confirmed the claim of his father that his mother had been hooked on playing
mahjong. (Kalaw vs. Fernandez, 745 SCRA 512, G.R. No. 166357, January 14, 2015).
The burden of proof to show the nullity of the marriage rests upon petitioner. The Court
is mindful of the policy of the 1987 Constitution to protect and strengthen the family as
the basic autonomous social institution and marriage as the foundation of the family.
Thus, any doubt should be resolved in favor of the validity of the marriage. (Mendoza vs.
Republic, 685 SCRA 16, G.R. No. 157649, November 12, 2012).
It is not enough reason to ignore the findings and evaluation by the trial court and
substitute our own as an appellate tribunal only because the Constitution and the Family
Code regard marriage as an inviolable social institution. We have to stress that the
fulfilment of the constitutional mandate for the State to protect marriage as an inviolable
social institution only relates to a valid marriage. No protection can be accorded to a
marriage that is null and void ab initio, because such a marriage has no legal existence. In
declaring a marriage null and void ab initio, therefore, the Courts really assiduously
defend and promote the sanctity of marriage as an inviolable social institution. The
foundation of our society is thereby made all the more strong and solid. (Kalaw vs.
Fernandez, 745 SCRA 512, G.R. No. 166357, January 14, 2015).
In this case, the marriage never existed from the beginning because the respondent was
afflicted with psychological incapacity at and prior to the time of the marriage. Hence, the
Court should not hesitate to declare the nullity of the marriage between the parties. To
stress, our mandate to protect the inviolability of marriage as the basic foundation of our

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society does not preclude striking down a marital union that is ill-equipped to promote
family life. (Kalaw vs. Fernandez, 745 SCRA 512, G.R. No. 166357, January 14, 2015).
The courts are justified in declaring a marriage null and void under Article 36 of the Family
Code regardless of whether it is the petitioner or the respondent who imputes the
psychological incapacity to the other as long as the imputation is fully substantiated with
proof. (Kalaw vs. Fernandez, 745 SCRA 512, G.R. No. 166357, January 14, 2015).
Indeed, psychological incapacity may exist in one party alone or in both of them, and if
psychological incapacity of either or both is established, the marriage has to be deemed
null and void. (Kalaw vs. Fernandez, 745 SCRA 512, G.R. No. 166357, January 14, 2015).
The Court has stressed in Marcos vs. Marcos, 343 SCRA 755 (2000), that there is no
requirement for one to be declared psychologically incapacitated to be personally
examined by a physician, because what is important is the presence of evidence that
adequately establishes the partys psychological incapacity. Hence, if the totality of
evidence presented is enough to sustain a finding of psychological incapacity, then actual
medical examination of the person concerned need not be resorted to. (Kalaw vs.
Fernandez, 745 SCRA 512, G.R. No. 166357, January 14, 2015).
The findings of the Regional Trial Court (RTC) on the existence or nonexistence of a partys
psychological incapacity should be final and binding for as long as such findings and
evaluation of the testimonies of witnesses and other evidence are not shown to be clearly
and manifestly erroneous. (Kalaw vs. Fernandez, 745 SCRA 512, G.R. No. 166357, January
14, 2015).
In the task of ascertaining the presence of psychological incapacity as a ground for the
nullity of marriage, the courts, which are concededly not endowed with expertise in the
field of psychology, must of necessity rely on the opinions of experts in order to inform
themselves on the matter, and thus enable themselves to arrive at an intelligent and
judicious judgment. Indeed, the conditions for the malady of being grave, antecedent and
incurable demand the in-depth diagnosis by experts. (Kalaw vs. Fernandez, 745 SCRA 512,
G.R. No. 166357, January 14, 2015).
Family Code; Property Relations of the Spouses
The petitioners submit that Article 173 of the Civil Code, not Article 124 of the Family
Code, governed the property relations of the respondents because they had been married
prior to the effectivity of the Family Code. xxx We do not subscribe to the petitioners
submissions.
To start with, Article 254 of the Family Code has expressly repealed several titles under
the Civil Code, among them the entire Title VI in which the provisions on the property
relations between husband and wife, Article 173 included, are found.
Secondly, the sale was made on March 18, 1991, or after August 3, 1988, the effectivity
of the Family Code. The proper law to apply is, therefore, Article 124 of the Family Code,

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for it is settled that any alienation or encumbrance of conjugal property made during the
effectivity of the Family Code is governed by Article 124 of the Family Code.
xxx xxx xxx
Thirdly, according to Article 256 of the Family Code, the provisions of the Family Code
may apply retroactively provided no vested rights are impaired. In Tumlos vs. Fernandez,
330 SCRA 718 (2000), the Court rejected the petitioners argument that the Family Code
did not apply because the acquisition of the contested property had occurred prior to the
effectivity of the Family Code, and pointed out that Article 256 provided that the Family
Code could apply retroactively if the application would not prejudice vested or acquired
rights existing before the effectivity of the Family Code. Herein, however, the petitioners
did not show any vested right in the property acquired prior to August 3, 1988 that
exempted their situation from the retroactive application of the Family Code. (Sps.
Aggabao vs. Parulan, Jr., 629 SCRA 562, G.R. No. 165803, September 1, 2010).
The petitioners insistence that Atty. Parulans making of a counter-offer during the
March 25, 1991 meeting ratified the sale merits no consideration. Under Article 124 of
the Family Code, the transaction executed sans the written consent of [the other spouse]
or the proper court order was void; hence, ratification did not occur, for a void contract
could not be ratified.
On the other hand, we agree with [respondent husband] Dionisio that the void sale was
a continuing offer from the petitioners and [the consenting spouse] that Dionisio had the
option of accepting or rejecting before the offer was withdrawn xxx. The last sentence of
the second paragraph of Article 124 of the Family Code makes this clear, stating that in
the absence of the other spouses consent, the transaction should be construed as a
continuing offer on the part of the consenting spouse and the third person, and may be
perfected as a binding contract upon the acceptance by the other spouse or upon
authorization by the court before the offer is withdrawn by either or both offerors. (Sps.
Aggabao vs. Parulan, Jr., 629 SCRA 562, G.R. No. 165803, September 1, 2010).
Family Code; Paternity and Filiation
Under the Family Code, the classification of children is limited to either legitimate or
illegitimate. Illegitimate filiation is proved in accordance with Article 175 of the Family
Code xxx. On the other hand, legitimate filiation is established in accordance with Articles
172 and 173 of the Family Code. (Arado vs. Alcoran, 762 SCRA 37, G.R. No. 163362, July 8,
2015).
Considering that Nicolas, the putative father, had a direct hand in the preparation of the
birth certificate, reliance on the birth certificate of Anacleto as evidence of his paternity
was fully warranted. (Arado vs. Alcoran, 762 SCRA 37, G.R. No. 163362, July 8, 2015).
Anacletos baptismal certificate (Exhibit 7) was of no consequence in determining his
filiation. We have already held in Cabatania vs. Court of Appeals that while a baptismal
certificate may be considered a public document, it can only serve as evidence of the

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administration of the sacrament on the date specified but not the veracity of the entries
with respect to the childs paternity; and that baptismal certificates were per se
inadmissible in evidence as proof of filiation, and thus cannot be admitted indirectly as
circumstantial evidence to prove [filiation]. Hence, we attach no probative value to the
baptismal certificate as proof of the filiation of Anacleto. (Arado vs. Alcoran, 762 SCRA 37,
G.R. No. 163362, July 8, 2015).
A birth certificate, being a public document, offers prima facie evidence of filiation and a
high degree of proof is needed to overthrow the presumption of truth contained in such
public document. This is pursuant to the rule that entries in official records made in the
performance of his duty by a public officer are prima facie evidence of the facts therein
stated. The evidentiary nature of such document must, therefore, be sustained in the
absence of strong, complete and conclusive proof of its falsity or nullity. (Makati Shangri-
La Hotel and Resort, Inc. vs. Harper, 679 SCRA 444, G.R. No. 189998, August 29, 2012 citing
Heirs of Cabais vs. Court of Appeals, 316 SCRA 338, G.R. Nos. 106314-15, October 8, 1999).
The baptismal certificates presented in evidence by private respondents are public
documents. Parish priests continue to be the legal custodians of the parish records and
are authorized to issue true copies, in the form of certificates, of the entries contained
therein. xxx. It may be argued that baptismal certificates are evidence only of the
administration of the sacrament, but in this case, there were four (4) baptismal
certificates which, when taken together, uniformly show that Lourdes, Josefina, Remedios
and Luis had the same set of parents, as indicated therein. Corroborated by the
undisputed testimony of Adelaida Sampayo that with the demise of Lourdes and her
brothers Manuel, Luis and sister Remedios, the only sibling left was Josefina Sampayo
Reyes, such baptismal certificates have acquired evidentiary weight to prove filiation.
(Makati Shangri-La Hotel and Resort, Inc. vs. Harper, 679 SCRA 444, G.R. No. 189998,
August 29, 2012 citing Heirs of Conti vs. Court of Appeals, 300 SCRA 345, 356-358, G.R.
No. 118464, December 21, 1998).
A baptismal certificate has evidentiary value to prove filiation if considered alongside
other evidence of filiation. As such, a baptismal certificate alone is not sufficient to resolve
a disputed filiation. (Makati Shangri-La Hotel and Resort, Inc. vs. Harper, 679 SCRA 444,
G.R. No. 189998, August 29, 2012).

PROPERTY
Classification
Land, which is an immovable property, may be classified as either of public dominion or
of private ownership. Land is considered of public dominion if it either: (a) is intended for
public use; or (b) belongs to the State, without being for public use, and is intended for
some public service or for the development of the national wealth. Land belonging to the
State that is not of such character, or although of such character but no longer intended
for public use or for public service forms part of the patrimonial property of the State.

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Land that is other than part of the patrimonial property of the State, provinces, cities and
municipalities is of private ownership if it belongs to a private individual. (Heirs of
Malabanan vs. Republic of the Philippines, 704 SCRA 561, G.R. No. 179987, September 3,
2013).
We now observe the following rules relative to the disposition of public land or lands of
the public domain, namely: (1) As a general rule and pursuant to the Regalian Doctrine,
all lands of the public domain belong to the State and are inalienable. Lands that are not
clearly under private ownership are also presumed to belong to the State and, therefore,
may not be alienated or disposed; (2) The following are excepted from the general rule,
to wit: (a) Agricultural lands of the public domain are rendered alienable and disposable
through any of the exclusive modes enumerated under Section 11 of the Public Land Act.
If the mode is judicial confirmation of imperfect title under Section 48(b) of the Public
Land Act, the agricultural land subject of the application needs only to be classified as
alienable and disposable as of the time of the application, provided the applicants
possession and occupation of the land dated back to June 12, 1945, or earlier. Thereby, a
conclusive presumption that the applicant has performed all the conditions essential to a
government grant arises, and the applicant becomes the owner of the land by virtue of
an imperfect or incomplete title. By legal fiction, the land has already ceased to be part
of the public domain and has become private property. (b) Lands of the public domain
subsequently classified or declared as no longer intended for public use or for the
development of national wealth are removed from the sphere of public dominion and are
considered converted into patrimonial lands or lands of private ownership that may be
alienated or disposed through any of the modes of acquiring ownership under the Civil
Code. If the mode of acquisition is prescription, whether ordinary or extraordinary, proof
that the land has been already converted to private ownership prior to the requisite
acquisitive prescriptive period is a condition sine qua non in observance of the law (Article
1113, Civil Code) that property of the State not patrimonial in character shall not be the
object of prescription.. (Heirs of Malabanan vs. Republic of the Philippines, 704 SCRA 561,
G.R. No. 179987, September 3, 2013).
Under the Regalian doctrine, all lands not otherwise appearing to be clearly within private
ownership are presumed to belong to the State. No public land can be acquired by private
persons without any grant, express or implied, from the Government. It is indispensable,
there-fore, that there is a showing of a title from the State. Occupation of public land in
the concept of owner, no matter how long, cannot ripen into ownership and be registered
as a title. (Republic vs. Santos III, 685 SCRA 51, G.R. No. 160453, November 12, 2012).
Article 419 of the Civil Code distinguishes property as being either of public dominion or
of private ownership. Article 420 of the Civil Code lists the properties considered as part
of public dominion, namely: (a) those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and
others of similar character; and (b) those which belong to the State, without being for
public use, and are intended for some public service or for the development of the
national wealth. As earlier mentioned, Article 502 of the Civil Code declares that rivers

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and their natural beds are of public dominion. (Republic vs. Santos III, 685 SCRA 51, G.R.
No. 160453, November 12, 2012).
Ownership
It is beyond question under the law that the owner has not only the right to enjoy and
dispose of a thing without other limitations than those established by law, but also the
right of action against the holder and possessor of the thing in order to recover it. He may
exclude any person from the enjoyment and disposal of the thing, and, for this purpose,
he may use such force as may be reasonably necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of his property. (Abobon vs. Abobon,
678 SCRA 399, G.R. No. 155830, August 15, 2012).
Possession is an essential attribute of ownership. Whoever owns the property has the
right to possess it. Adjudication of ownership includes the delivery of possession if the
defeated party has not shown any right to possess the land independently of her rejected
claim of ownership. (Pascual vs. Daquioag, 720 SCRA 230, G.R. No. 162063, March 31,
2014).
The writ of execution issued upon a final judgment adjudicating the ownership of land to
a party may authorize putting her in possession although the judgment does not
specifically direct such act. xxx. In Nazareno vs. Court of Appeals, 326 SCRA 338 (2000),
the Court affirmed the writ of execution awarding possession of land, notwithstanding
that the decision sought to be executed did not direct the delivery of the possession of
the land to the winning parties. xxx. With the clear recognition of Almazan-Villamors
ownership, and in default of any credible showing by Pascual of any valid justification for
her to continue in possession of the properties despite the denial of her free patent
application, possession must be restored to Almazan-Villamor as the rightful owner and
possessor of the properties. (Pascual vs. Daquioag, 720 SCRA 230, G.R. No. 162063, March
31, 2014).
According to Caezo vs. Bautista, an accion reivindicatoria seeks the recovery of
ownership and includes the jus utendi and the jus fruendi brought in the proper regional
trial court. Accion reivindicatoria is an action whereby plaintiff alleges ownership over a
parcel of land and seeks recovery of its full possession. (Arado vs. Alcoran, 762 SCRA 37,
G.R. No. 163362, July 8, 2015).
Accession
[Article 448 of the Civil Code] contemplates a person building, or sowing, or planting in
good faith on land owned by another. The law presupposes that the land and the building
or plants are owned by different persons, like here. The RTC and CA found and declared
Angeles to be a builder in good faith. We cannot veer away from their unanimous
conclusion, which can easily be drawn from the fact that Angeles insists until now that he
built his house entirely on his own lot. Good faith consists in the belief of the builder that
the land he is building on is his and in his ignorance of a defect or flaw in his title. (Angeles
vs. Pascual, 658 SCRA 23, G.R. No. 157150, September 21, 2011).

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With the unassailable finding that Angeles house straddled the lot of Pascual, and that
Angeles had built his house in good faith, Article 448 of the Civil Code, which spells out
the rights and obligations of the owner of the land as well as of the builder, is
unquestionably applicable. Consequently, the land being the principal and the building
the accessory, preference is given to Pascual as the owner of the land to make the choice
as between appropriating the building or obliging Angeles as the builder to pay the value
of the land. (Angeles vs. Pascual, 658 SCRA 23, G.R. No. 157150, September 21, 2011).
Accretion is the process whereby the soil is deposited along the banks of rivers. The
deposit of soil, to be considered accretion, must be: (a) gradual and imperceptible; (b)
made through the effects of the current of the water; and (c) taking place on land adjacent
to the banks of rivers. Accordingly, respondents should establish the concurrence of the
elements of accretion to warrant the grant of their application for land registration.
(Republic vs. Santos III, 685 SCRA 51, G.R. No. 160453, November 12, 2012).
The RTC and the CA grossly erred in treating the dried-up river bed as an accretion that
became respondents property pursuant to Article 457 of the Civil Code. That land was
definitely not an accretion. The process of drying up of a river to form dry land involved
the recession of the water level from the river banks, and the dried-up land did not equate
to accretion, which was the gradual and imperceptible deposition of soil on the river
banks through the effects of the current. In accretion, the water level did not recede and
was more or less maintained. Hence, respondents as the riparian owners had no legal
right to claim ownership of Lot 4998-B. Considering that the clear and categorical
language of Article 457 of the Civil Code has confined the provision only to accretion, we
should apply the provision as its clear and categorical language tells us to. xxx. The State
exclusively owned Lot 4998-B and may not be divested of its right of ownership. Article
502 of the Civil Code expressly declares that rivers and their natural beds are public
dominion of the State. It follows that the river beds that dry up, like Lot 4998-B, continue
to belong to the State as its property of public dominion, unless there is an express law
that provides that the dried-up river beds should belong to some other person. (Republic
vs. Santos III, 685 SCRA 51, G.R. No. 160453, November 12, 2012).
The principle that the riparian owner whose land receives the gradual deposits of soil
does not need to make an express act of possession, and that no acts of possession are
necessary in that instance because it is the law itself that pronounces the alluvium to
belong to the riparian owner from the time that the deposit created by the current of the
water becomes manifest has no applicability herein. This is simply because Lot 4998-B
was not formed through accretion. Hence, the ownership of the land adjacent to the river
bank by respondents predecessor-in-interest did not translate to possession of Lot 4998-
B that would ripen to acquisitive prescription in relation to Lot 4998-B. (Republic vs.
Santos III, 685 SCRA 51, G.R. No. 160453, November 12, 2012).
Quieting of Title to or Interest in, and Removal or
Prevention of Cloud over Title or Interest in Real Property

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This case involves an action for quieting of title, a common-law remedy for the removal
of any cloud or doubt or uncertainty on the title to real property by reason of any
instrument, record, claim, encumbrance, or proceeding that is apparently valid or
effective, but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and
may be prejudicial to said title. (Heirs of Prodon vs. Heirs of Alvarez, 704 SCRA 465, G.R.
No. 170604, September 2, 2013).
In the action, the competent court is tasked to determine the respective rights of the
plaintiff and the other claimants, not only to put things in their proper places, and make
the claimant, who has no rights to the immovable, respect and not disturb the one so
entitled, but also for the benefit of both, so that whoever has the right will see every cloud
of doubt over the property dissipated, and he can thereafter fearlessly introduce any
desired improvements, as well as use, and even abuse the property. (Dare Adventure
Farm Corporation vs. Court of Appeals, 681 SCRA 580, G.R. No. 161122, September 24,
2012).
For an action to quiet title to prosper, two indispensable requisites must concur, namely:
(a) the plaintiff or complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (b) the deed, claim, encumbrance, or proceeding
claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy. (Heirs of Prodon vs. Heirs
of Alvarez, 704 SCRA 465, G.R. No. 170604, September 2, 2013).
The action for quieting of title may be based on the fact that a deed is invalid, ineffective,
voidable, or unenforceable. The terms of the writing may or may not be material to an
action for quieting of title, depending on the ground alleged by the plaintiff. (Heirs of
Prodon vs. Heirs of Alvarez, 704 SCRA 465, G.R. No. 170604, September 2, 2013).
Co-ownership
In a co-ownership, the undivided thing or right belong to different persons, with each of
them holding the property pro indiviso and exercising her rights over the whole property.
Each co-owner may use and enjoy the property with no other limitation than that he shall
not injure the interests of his co-owners. The underlying rationale is that until a division
is actually made, the respective share of each cannot be determined, and every co-owner
exercises, together with his co-participants, joint ownership of the pro indiviso property,
in addition to his use and enjoyment of it. (Quijano vs. Atty. Amante, 737 SCRA 552, G.R.
No. 164277, October 8, 2014).
In order that a co-owners possession may be deemed adverse to that of the cestui que
trust or the other co-owners, the following elements must concur: The co-owner has
performed unequivocal acts of repudiation of the co-ownership amounting to an ouster
of the cestui que trust or the other co-owners; Such positive acts of repudiation have been
made known to the cestui que trust or the other co-owners; The evidence on the
repudiation is clear and conclusive; and His possession is open, continuous, exclusive, and
notorious. (Heirs of Reyes, Jr. vs. Reyes, 626 SCRA 758, G.R. No. 158377, August 4, 2010).

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Prescription; Definition
Prescription, in general, is a mode of acquiring or losing ownership and other real rights
through the lapse of time in the manner and under the conditions laid down by law. (Oo
vs. Lim, 614 SCRA 514, G.R. No. 154270, March 9, 2010).
Prescription; Instances when prescription is not allowed
Yet, even conceding, for the sake of argument, that respondents possessed Lot 4998-B
for more than thirty years in the character they claimed, they did not thereby acquire the
land by prescription or by other means without any competent proof that the land was
already declared as alienable and disposable by the Government. Absent that declaration,
the land still belonged to the State as part of its public dominion. xxx. Whether the dried-
up river bed may be susceptible to acquisitive prescription or not was a question that the
Court resolved in favor of the State in Celestial vs. Cachopero, 413 SCRA 469 (2003) a case
involving the registration of land found to be part of a dried-up portion of the natural bed
of a creek. There the Court held: Since property of public dominion is outside the
commerce of man and not susceptible to private appropriation and acquisitive
prescription, the adverse possession which may be the basis of a grant of title in the
confirmation of an imperfect title refers only to alienable or disposable portions of the
public domain. It is only after the Government has declared the land to be alienable and
disposable agricultural land that the year of entry, cultivation and exclusive and adverse
possession can be counted for purposes of an imperfect title. A creek, like the Salunayan
Creek, is a recess or arm extending from a river and participating in the ebb and flow of
the sea. As such, under Articles 420(1) and 502(1) of the Civil Code, the Salunayan Creek,
including its natural bed, is property of the public domain which is not susceptible to
private appropriation and acquisitive prescription. And, absent any declaration by the
government, that a portion of the creek has dried-up does not, by itself, alter its
inalienable character. (Republic vs. Santos III, 685 SCRA 51, G.R. No. 160453, November
12, 2012).
Subject to the exceptions defined in Article 461 of the Civil Code (which declares river
beds that are abandoned through the natural change in the course of the waters as ipso
facto belonging to the owners of the land occupied by the new course, and which gives
to the owners of the adjoining lots the right to acquire only the abandoned river beds not
ipso facto belonging to the owners of the land affected by the natural change of course
of the waters only after paying their value), all river beds remain property of public
dominion and cannot be acquired by acquisitive prescription unless previously declared
by the Government to be alienable and disposable. Considering that Lot 4998-B was not
shown to be already declared to be alienable and disposable, respondents could not be
deemed to have acquired the property through prescription. (Republic vs. Santos III, 685
SCRA 51, G.R. No. 160453, November 12, 2012).
Prescription; Prescription or limitation of actions

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Under Article 1144, Civil Code, an action upon an obligation created by law must be
brought within 10 years from the time the right of action accrues. Consequently, an action
for reconveyance based on implied or constructive trust prescribes in 10 years. (Dico, Sr.
vs. Vizcaya Management Corporation, 701 SCRA 367, G.R. No. 161211, July 17, 2013).
Subrogation under Article 2207 of the Civil Code gives rise to a cause of action created by
law. For purposes of the law on the prescription of actions, the period of limitation is ten
years. (Vector Shipping Corporation vs. American Home Assurance Company, 700 SCRA
385, G.R. No. 159213, July 3, 2013).
We concur with the CAs ruling that respondents action did not yet prescribe. The legal
provision governing this case was not Article 1146 of the Civil Code, but Article 1144 of
the Civil Code, which states: Article 1144. The following actions must be brought within
ten years from the time the cause of action accrues: (1) Upon a written contract; (2)
Upon an obligation created by law; (3) Upon a judgment. We need to clarify, however,
that we cannot adopt the CAs characterization of the cause of action as based on the
contract of affreightment between Caltex and Vector, with the breach of contract being
the failure of Vector to make the M/T Vector seaworthy, as to make this action come
under Article 1144 (1). Instead, we find and hold that that the present action was not
upon a written contract, but upon an obligation created by law. Hence, it came under
Article 1144 (2) of the Civil Code. This is because the subrogation of respondent to the
rights of Caltex as the insured was by virtue of the express provision of law embodied in
Article 2207 of the Civil Code. (Vector Shipping Corporation vs. American Home Assurance
Company, 700 SCRA 385, G.R. No. 159213, July 3, 2013).

OBLIGATIONS AND CONTRACTS
Obligations; Nature and Effects of Obligation
Fraud cannot be presumed but must be proved by clear and convincing evidence.
Whoever alleges fraud affecting a transaction must substantiate his allegation, because a
person is always presumed to take ordinary care of his concerns, and private transactions
are similarly presumed to have been fair and regular. To be remembered is that mere
allegation is definitely not evidence; hence, it must be proved by sufficient evidence.
(Metropolitan Fabrics, Inc. vs. Prosperity Credit Resources, Inc., 719 SCRA 260, G.R. No.
154390, March 17, 2014).
Negligence is defined as the omission to do something which a reasonable man, guided
by those considerations which ordinarily regulate the conduct of human affairs, would
do, or the doing of some-thing which a prudent and reasonable man would not do. The
Supreme Court likewise ruled that negligence is want of care required by the
circumstances. It is a relative or comparative, not an absolute, term and its application
depends upon the situation of the parties and the degree of care and vigilance which the
circumstances reasonably require. In determining whether or not there is negligence on
the part of the parties in a given situation, jurisprudence has laid down the following test:

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Did defendant, in doing the alleged negligent act, use that reasonable care and caution
which an ordinarily prudent person would have used in the same situation? If not, the
person is guilty of negligence. The law, in effect, adopts the standard supposed to be
supplied by the imaginary conduct of the discreet pater familias of the Roman law.
(Makati Shangri-La Hotel and Resort, Inc. vs. Harper, 679 SCRA 444, G.R. No. 189998,
August 29, 2012).
Gross negligence connotes want of care in the performance of ones duties; it is a
negligence characterized by the want of even slight care, acting or omitting to act in a
situation where there is duty to act, not inadvertently but willfully and intentionally, with
a conscious indifference to consequences insofar as other persons may be affected. It
evinces a thoughtless disregard of consequences without exerting any effort to avoid
them. (Comsavings Bank [now GSIS Family Bank] vs. Capistrano, 704 SCRA 72, G.R. No.
170942, August 28, 2013).
Article 1191 of the Civil Code did not prohibit the parties from entering into an agreement
whereby a violation of the terms of the contract would result to its cancellation. In
Pangilinan vs. Court of Appeals, the Court upheld the vendors right in a contract to sell
to extrajudicially cancel the contract upon failure of the vendee to pay the installments
and even to retain the sums already paid. (Calilap-Asmeron vs. Development Bank of the
Philippines, 661 SCRA 54, G.R. No. 157330, November 23, 2011).
Article 1191 of the Civil Code makes it available to the injured party alternative remedies
such as the power to rescind or enforce fulfillment of the contract, with damages in either
case if the obligor does not comply with what is incumbent upon him. There is nothing in
this law which prohibits the parties from entering into an agreement that a violation of
the terms of the contract would cause its cancellation even without court intervention.
The rationale for the foregoing is that in contracts providing for automatic revocation,
judicial intervention is necessary not for purposes of obtaining a judicial declaration
rescinding a contract already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to determine whether or not
the rescission was proper. Where such propriety is sustained, the decision of the court
will be merely declaratory of the revocation, but it is not itself the revocatory act.
Moreover, the vendors right in contracts to sell with reserved title to extrajudicially
cancel the sale upon failure of the vendee to pay the stipulated installments and retain
the sums and installments already received has long been recognized by the well-
established doctrine of 39 years standing. The validity of the stipulation in the contract
providing for automatic rescission upon non-payment cannot be doubted. It is in the
nature of an agreement granting a party the right to rescind a contract unilaterally in case
of breach without need of going to court. Thus, rescission under Article 1191 was
inevitable due to petitioners failure to pay the stipulated price within the original period
fixed in the agreement. (Calilap-Asmeron vs. Development Bank of the Philippines, 661
SCRA 54, G.R. No. 157330, November 23, 2011 citing Pangilinan vs. Court of Appeals, 279
SCRA 590, 597-598, G.R. No. 83588, September 29, 1997).

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The injured party may choose between specific performance or rescission with damages.
As presently worded, Article 1191 speaks of the remedy of rescission in reciprocal
obligations within the context of Article 1124 of the former Civil Code which used the
term resolution. The remedy of resolution applied only to reciprocal obligations, such that
a partys breach of the contract equated to a tacit resolutory condition that entitled the
injured party to rescission. The present article, as in the former one, contemplates
alternative remedies for the injured party who is granted the option to pursue, as
principal actions, either the rescission or the specific performance of the obligation, with
payment of damages in either case. (San Miguel Properties, Inc. vs. Perez, 705 SCRA 38,
G.R. No. 166836, September 4, 2013).
An action for specific performance is the remedy to demand the exact performance of a
contract in the specific form in which it was made, or according to the precise terms
agreed upon by a party bound to fulfill it. Evidently, before the remedy of specific
performance is availed of, there must first be a breach of the contract. The remedy has
its roots in Article 1191 of the Civil Code, which reads: Article 1191. The power to rescind
obligations is implied in reciprocal ones, in case one of the obligors should not comply
with what is incumbent upon him. The injured party may choose between the fulfillment
and the rescission of the obligation, with the payment of damages in either case. He may
also seek rescission, even after he has chosen fulfillment, if the latter should become
impossible. xxx. (San Miguel Properties, Inc. vs. Perez, 705 SCRA 38, G.R. No. 166836,
September 4, 2013).
Obligations; Extinguishment of Obligations; Payment or
Performance
As a general rule, all obligations shall be paid in Philippine currency. However, the
contracting parties may stipulate that foreign currencies may be used for settling
obligations. This is pursuant to Republic Act No. 8183, which provides as follows: Section
1. All monetary obligations shall be settled in the Philippine currency which is legal tender
in the Philippines. However, the parties may agree that the obligation or transaction shall
be settled in any other currency at the time of payment. (Netlink Computer Incorporated
vs. Delmo, 726 SCRA 531, G.R. No. 160827, June 18, 2014).
We remarked in C.F. Sharp & Co. vs. Northwest Airlines, Inc., 381 SCRA 314 (2002), that
the repeal of Republic Act No. 529 had the effect of removing the prohibition on the
stipulation of currency other than Philippine currency, such that obligations or
transactions could already be paid in the currency agreed upon by the parties. However,
both Republic Act No. 529 and Republic Act No. 8183 did not stipulate the applicable rate
of exchange for the conversion of foreign currency-incurred obligations to their peso
equivalent. It follows, therefore, that the jurisprudence established under Republic Act
No. 529 with regard to the rate of conversion remains applicable. In C.F. Sharp, the Court
cited Asia World Recruitment, Inc. v. NLRC, 313 SCRA 1 (1999), to the effect that the real
value of the foreign ex-change-incurred obligation up to the date of its payment should

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be preserved. (Netlink Computer Incorporated vs. Delmo, 726 SCRA 531, G.R. No. 160827,
June 18, 2014).
Obligations; Extinguishment of Obligations; Loss of the
Thing Due
Considering that the petitioners unilateral suspension of the construction of the
amenities was intended to save itself from costs, its plea for relief from its contractual
obligations was properly rejected because it would thereby gain a position of advantage
at the expense of the lot owners like the respondent. Its invocation of Article 1267 of the
Civil Code, which provides that (w)hen the service has become so difficult as to be
manifestly beyond the contemplation of the parties, the obligor may also be released
therefrom in whole or in part, was factually unfounded. For Article 1267 to apply, the
following conditions should concur, namely: (a) the event or change in circumstances
could not have been foreseen at the time of the execution of the contract; (b) it makes
the performance of the contract extremely difficult but not impossible; (c) it must not be
due to the act of any of the parties; and (d) the contract is for a future prestation. The
requisites did not concur herein because the difficulty of performance under Article 1267
of the Civil Code should be such that one party would be placed at a disadvantage by the
unforeseen event. Mere inconvenience, or unexpected impediments, or increased
expenses did not suffice to relieve the debtor from a bad bargain. (Tagaytay Realty Co.,
Inc. vs. Gacutan, 761 SCRA 87, G.R. No. 160033, July 1, 2015).
Obligations; Extinguishment of Obligations; Novation
There is novation when there is an irreconcilable incompatibility between the old and the
new obligations. There is no novation in case of only slight modifications; hence, the old
obligation prevails. (Heirs of Franco vs. Sps. Gonzales, 675 SCRA 96, G.R. No.159709, June
27, 2012).
A novation arises when there is a substitution of an obligation by a subsequent one that
extinguishes the first, either by changing the object or the principal conditions, or by
substituting the person of the debtor, or by subrogating a third person in the rights of the
creditor. (Heirs of Franco vs. Sps. Gonzales, 675 SCRA 96, G.R. No.159709, June 27, 2012).
For a valid novation to take place, there must be, therefore: (a) a previous valid obligation;
(b) an agreement of the parties to make a new contract; (c) an extinguishment of the old
contract; and (d) a valid new contract. In short, the new obligation extinguishes the prior
agreement only when the substitution is unequivocally declared, or the old and the new
obligations are incompatible on every point. A compromise of a final judgment operates
as a novation of the judgment obligation upon compliance with either of these two
conditions. (Heirs of Franco vs. Sps. Gonzales, 675 SCRA 96, G.R. No.159709, June 27,
2012).
Degaoss claim was again factually unwarranted and legally devoid of basis, because the
partial payments he made and his purported agreement to pay the remaining obligations
did not equate to a novation of the original contractual relationship of agency to one of

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sale. As we see it, he misunderstands the nature and the role of novation in a criminal
prosecution. Novation is the extinguishment of an obligation by the substitution or
change of the obligation by a subsequent one that terminates the first, either by (a)
changing the object or principal conditions; or (b) substituting the person of the debtor;
or (c) subrogating a third person in the rights of the creditor. In order that an obligation
may be extinguished by another that substitutes the former, it is imperative that the
extinguishment be so declared in unequivocal terms, or that the old and the new
obligations be on every point incompatible with each other. Obviously, in case of only
slight modifications, the old obligation still prevails. (Degaos vs. People, 707 SCRA 438,
G.R. No. 162826, October 14, 2013).
According to California Bus Lines, Inc. vs. State Investment House, Inc., 418 SCRA 297
(2003): The extinguishment of the old obligation by the new one is a necessary element
of novation which may be effected either expressly or impliedly. The term expressly
means that the contracting parties incontrovertibly disclose that their object in executing
the new contract is to extinguish the old one. Upon the other hand, no specific form is
required for an implied novation, and all that is prescribed by law would be an
incompatibility between the two contracts. While there is really no hard and fast rule to
determine what might constitute to be a sufficient change that can bring about novation,
the touchstone for contrariety, however, would be an irreconcilable incompatibility
between the old and the new obligations. (Heirs of Franco vs. Sps. Gonzales, 675 SCRA
96, G.R. No.159709, June 27, 2012).
To be clear, novation is not presumed. This means that the parties to a contract should
expressly agree to abrogate the old contract in favor of a new one. In the absence of the
express agreement, the old and the new obligations must be incompatible on every point.
(Heirs of Franco vs. Sps. Gonzales, 675 SCRA 96, G.R. No.159709, June 27, 2012).
Novation is not a mode of extinguishing criminal liability under the penal laws of the
country. Only the State may validly waive the criminal action against an accused. Novation
is relevant only to determine if the parties have meanwhile altered the nature of the
obligation prior to the commencement of the criminal prosecution in order to prevent
the incipient criminal liability of the accused. (Degaos vs. People, 707 SCRA 438, G.R. No.
162826, October 14, 2013).
Novation is not a ground under the law to extinguish criminal liability. Article 89 (on total
extinguishment) and Article 94 (on partial extinguishment) of the Revised Penal Code list
down the various grounds for the extinguishment of criminal liability. Not being included
in the list, novation is limited in its effect only to the civil aspect of the liability, and, for
that reason, is not an efficient defense in estafa. This is because only the State may validly
waive the criminal action against an accused. The role of novation may only be either to
prevent the rise of criminal liability, or to cast doubt on the true nature of the original
basic transaction, whether or not it was such that the breach of the obligation would not
give rise to penal responsibility, as when money loaned is made to appear as a deposit,

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or other similar disguise is resorted to. (Degaos vs. People, 707 SCRA 438, G.R. No.
162826, October 14, 2013).
Contracts
A contract is the law between the parties. (Calilap-Asmeron vs. Development Bank of the
Philippines, 661 SCRA 54, G.R. No. 157330, November 23, 2011).
Absent any allegation and proof that the contract is contrary to law, morals, good
customs, public order or public policy, it should be complied with in good faith. As such,
the petitioner, being one of the parties in the deed of conditional sale, could not be
allowed to conveniently renounce the stipulations that she had knowingly and freely
agreed to. (Calilap-Asmeron vs. Development Bank of the Philippines, 661 SCRA 54, G.R.
No. 157330, November 23, 2011)
Contracts; Interpretation of Contracts
If the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control. In determining
their intention, their contemporaneous and subsequent acts shall be principally
considered. (Dela Cruz vs. Planters Products, Inc., 691 SCRA 28, G.R. No. 158649, February
18, 2013).
Our ruling in Benguet Corporation, et al. vs. Cesar Cabildo is instructive: The cardinal rule
in the interpretation of contracts is embodied in the first paragraph of Article 1370 of the
Civil Code: [i]f the terms of a contract are clear and leave no doubt upon the intention
of the contracting parties, the literal meaning of its stipulations shall control. This
provision is akin to the plain meaning rule applied by Pennsylvania courts, which
assumes that the intent of the parties to an instrument is embodied in the writing itself,
and when the words are clear and unambiguous the intent is to be discovered only from
the express language of the agreement. It also resembles the four corners rule, a
principle which allows courts in some cases to search beneath the semantic surface for
clues to meaning. A courts purpose in examining a contract is to interpret the intent of
the contracting parties, as objectively manifested by them. The process of interpreting a
contract requires the court to make a preliminary inquiry as to whether the contract
before it is ambiguous. A contract provision is ambiguous if it is susceptible of two
reasonable alternative interpretations. Where the written terms of the contract are not
ambiguous and can only be read one way, the court will interpret the contract as a matter
of law. If the contract is determined to be ambiguous, then the interpretation of the
contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.
(Forest Hills Golf and Country Club, Inc. vs. Gardpro, Inc., 739 SCRA 28, G.R. No. 164686,
October 22, 2014).
The CA was also guided by Article 1374 of the Civil Code, which declares that [t]he various
stipulations of a contract shall be interpreted together, attributing to the doubtful ones
that sense which may result from all of them taken jointly. Verily, all stipulations of the
contract are considered and the whole agreement is rendered valid and enforceable,

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instead of treating some provisions as superfluous, void, or inoperable. (Forest Hills Golf
and Country Club, Inc. vs. Gardpro, Inc., 739 SCRA 28, G.R. No. 164686, October 22, 2014).
In Pilipino Telephone Corporation vs. Tecson, 428 SCRA 378 (2004), for instance, the Court
said that contracts of adhesion were valid but might be occasionally struck down only if
there was a showing that the dominant bargaining party left the weaker party without
any choice as to be completely deprived of an opportunity to bargain effectively. That
exception did not apply here for, verily, Marcos, being a lawyer, could not have been the
weaker party. As the tenor of the acknowledgment indicated, he was fully aware of the
meaning and sense of every written word or phrase, as well as of the legal effect of his
confirmation thereby of his agents act. It is axiomatic that a mans act, conduct and
declaration, wherever made, if voluntary, are admissible against him, for the reason that
it is fair to presume that they correspond with the truth, and it is his fault if they do not..
(Prieto vs. Court of Appeals, 673 SCRA 371, G.R. No. 158597, June 18, 2012).
Contracts; Essential Requisites
According to Article 1338 of the Civil Code, there is fraud when one of the contracting
parties, through insidious words or machinations, induces the other to enter into the
contract that, without the inducement, he would not have agreed to. Yet, fraud, to vitiate
consent, must be the causal (dolo causante), not merely the incidental (dolo incidente),
inducement to the making of the contract. In Samson v. Court of Appeals, 238 SCRA 397
(1994), causal fraud is defined as a deception employed by one party prior to or
simultaneous to the contract in order to secure the consent of the other. (Metropolitan
Fabrics, Inc. vs. Prosperity Credit Resources, Inc., 719 SCRA 260, G.R. No. 154390, March
17, 2014).
Contracts; Reformation of Instruments
Neither did the petitioners failure to initiate an action for reformation within ten years
from the execution of the Kasulatan ng Biling Mabibiling Muli bar them from insisting on
their rights in the property. The records show that the parties in the Kasulatan ng Biling
Mabibiling Muli had abided by their true agreement under the deed xxx. Hence, an action
for reformation of the Kasulatan ng Biling Mabibiling Muli was unnecessary, if not
superfluous, considering that the reason underlying the requirement for an action for
reformation of instrument has been to ensure that the parties to a contract abide by their
true intended agreement. (Heirs of Reyes, Jr. vs. Reyes, 626 SCRA 758, G.R. No. 158377,
August 4, 2010).
Contracts; Voidable Contracts
Contrary to their modified defense of absence of consent, Vicky Angs testimony tended
at best to prove the vitiation of their consent through insidious words, machinations or
misrepresentations amounting to fraud, which showed that the contract was voidable.
Where the consent was given through fraud, the contract was voidable, not void ab initio.
This is because a voidable or annullable contract is existent, valid and binding, although it
can be annulled due to want of capacity or because of the vitiated consent of one of the

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parties. (Metropolitan Fabrics, Inc. vs. Prosperity Credit Resources, Inc., 719 SCRA 260,
G.R. No. 154390, March 17, 2014).
Article 1390, in relation to Article 1391 of the Civil Code, provides that if the consent of
the contracting parties was obtained through fraud, the contract is considered voidable
and may be annulled within four years from the time of the discovery of the fraud. The
discovery of fraud is reckoned from the time the document was registered in the Register
of Deeds in view of the rule that registration was notice to the whole world. Thus, because
the mortgage involving the seven lots was registered on September 5, 1984, they had
until September 5, 1988 within which to assail the validity of the mortgage. But their
complaint was instituted in the RTC only on October 10, 1991. Hence, the action, being
by then already prescribed, should be dismissed. (Metropolitan Fabrics, Inc. vs. Prosperity
Credit Resources, Inc., 719 SCRA 260, G.R. No. 154390, March 17, 2014).
Estoppel
There are three kinds of estoppels, to wit: (1) estoppel in pais; (2) estoppel by deed; and
(3) estoppel by laches. Under the first kind, a person is considered in estoppel if by his
conduct, representations, admissions or silence when he ought to speak out, whether
intentionally or through culpable negligence, causes another to believe certain facts to
exist and such other rightfully relies and acts on such belief, as a consequence of which
he would be prejudiced if the former is permitted to deny the existence of such facts.
Under estoppel by deed, a party to a deed and his privies are precluded from denying any
material fact stated in the deed as against the other party and his privies. Under estoppel
by laches, an equitable estoppel, a person who has failed or neglected to assert a right
for an unreasonable and unexplained length of time is presumed to have abandoned or
otherwise declined to assert such right and cannot later on seek to enforce the same, to
the prejudice of the other party, who has no notice or knowledge that the former would
assert such rights and whose condition has so changed that the latter cannot, without
injury or prejudice, be restored to his former state. (Go vs. Bangko Sentral ng Pilipinas,
762 SCRA 344, G.R. No. 202262, July 8, 2015).
Estoppel is applied when the following elements concur, namely: xxx first, the actor who
usually must have knowledge, notice or suspicion of the true facts, communicates
something to another in a misleading way, either by words, conduct or silence; second,
the other in fact relies, and relies reasonably or justifiably, upon that communication;
third, the other would be harmed materially if the actor is later permitted to assert any
claim inconsistent with his earlier conduct; and fourth, the actor knows, expects or
foresees that the other would act upon the information given or that a reasonable person
in the actors position would expect or foresee such action. xxx The established
circumstances of the case rendered the doctrine of estoppel absolutely inapplicable.
There was no question that the petitioner had not been misled by any misrepresentation
on the status of tenancy on the lands. The submission of the affidavit of non-tenancy by
the respondents had been at the behest of its president who was then acting in its behalf.
It is plain, moreover, that because its business of rural banking involved the duty and the

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responsibility to investigate the conditions of the lands being tendered as collaterals, the
petitioner should have discovered the presence of the tenants in due time and quickly
enough by its exercise of due diligence. (Rural Bank of Malasiqui, Inc. vs. Ceralde, 775
SCRA 445, G.R. No. 162032, November 25, 2015).
Laches is the failure of or neglect for an unreasonable and un-explained length of time to
do that which by exercising due diligence could or should have been done earlier, or to
assert a right within a reasonable time. It warrants a presumption that the party entitled
thereto has either abandoned it or declined to assert it. The CA correctly declared that
laches did not set in to bar the claim of the respondent because he had made periodic
written demands upon the petitioner that indicated that he had not abandoned or
declined to assert the claim. In 1979, he manifested the intention to avail himself of his
right to suspend the payment of his amortizations pursuant to the undertaking. Since then
until 1984, he had continuously requested the petitioner for updates on the progress of
the construction of the amenities so that he could resume his amortizations. The
petitioner did not respond to his requests. His efforts to have the petitioner construct the
amenities so that he would already pay for the lot demonstrated his prudence and alacrity
in insisting on his rights, negating any hint of bad faith or of lack of diligence on his part.
(Tagaytay Realty Co., Inc. vs. Gacutan, 761 SCRA 87, G.R. No. 160033, July 1, 2015).
Similarly, the petitioners argument that the respondents were already barred by laches
had no substance. It would be wrong and unjust to bar the respondents from recovering
what was rightfully and legally theirs. In this regard, we adopt with approval the CAs
declaration to the effect that the rule on laches, being an equitable doctrine whose
application was controlled by equitable considerations, could not be applied to defeat
justice or to perpetrate fraud. Indeed, the Court should implement the better rule, which
is that the courts, under the principle of equity, are not to be guided strictly by the statute
of limitations or the doctrine of laches when a manifest wrong or injustice would result
from doing so. (Rural Bank of Malasiqui, Inc. vs. Ceralde, 775 SCRA 445, G.R. No. 162032,
November 25, 2015).

SALES
Nature and Form of Contract
Based on the express terms and tenor of the Kasunduan at Katibayan, Degaos received
and accepted the items under the obligation to sell them in behalf of the complainants
(ang mga hiyas (jewelries) na natatala sa ibaba nito upang ipagbili ko sa kapakanan ng
nasabing Ginang), and he would be compensated with the overprice as his commission
(Ang bilang kabayaran o pabuya sa akin ay ano mang halaga na aking mapalabis na mga
halagang nakatala sa ibaba nito.). Plainly, the transaction was a consignment under the
obligation to account for the proceeds of sale, or to return the unsold items. As such, he
was the agent of the complainants in the sale to others of the items listed in the
Kasunduan at Katibayan. In contrast, according to the first paragraph of Article 1458 of

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the Civil Code, one of the contracting parties in a contract of sale obligates himself to
transfer the ownership of and to deliver a determinate thing, while the other party
obligates himself to pay therefor a price certain in money or its equivalent. Contrary to
the contention of Degaos, there was no sale on credit to him because the ownership of
the items did not pass to him. (Degaos vs. People, 707 SCRA 438, G.R. No. 162826,
October 14, 2013).
Obligations of the Vendee
The standard is that for one to be a purchaser in good faith in the eyes of the law, he
should buy the property of another without notice that some other person has a right to,
or interest in, such property, and should pay a full and fair price for the same at the time
of such purchase, or before he has notice of the claim or interest of some other persons
in the property. He buys the property with the belief that the person from whom he
receives the property was the owner and could convey title to the property. (Uy vs. Fule,
727 SCRA 456, G.R. No. 164961, June 30, 2014).
A purchaser cannot close his eyes to facts that should put a reasonable man on his guard
and still claim he acted in good faith. (Sps. Aggabao vs. Parulan, Jr., 629 SCRA 562, G.R.
No. 165803, September 1, 2010).
The foregoing circumstances negated the third element of good faith cited in Bautista vs.
Silva, 502 SCRA 334 (2006), i.e., that at the time of sale, the buyer was not aware of any
claim or interest of some other person in the property, or of any defect or restriction in
the title of the seller or in his capacity to convey title to the property. As we have ruled
in Bautista v. Silva, the absence of the third condition put the petitioner on notice and
obliged him to exercise a higher degree of diligence by scrutinizing the certificates of title
and examining all factual circumstances in order to determine the sellers title and
capacity to transfer any interest in the lots. Consequently, it is not sufficient for him to
insist that he relied on the face of the certificates of title, for he must further show that
he exercised reasonable precaution by inquiring beyond the certificates of title. Failure to
exercise such degree of precaution rendered him a buyer in bad faith. It is a well-settled
rule that a purchaser cannot close his eyes to facts which should put a reasonable man
upon his guard, and then claim that he acted in good faith under the belief that there was
no defect in the title of the vendor. (Uy vs. Fule, 727 SCRA 456, G.R. No. 164961, June 30,
2014).
The status of a buyer in good faith is never presumed but must be proven by the person
invoking it. (Sps. Aggabao vs. Parulan, Jr., 629 SCRA 562, G.R. No. 165803, September 1,
2010).
The buyers of conjugal property must observe two kinds of requisite diligence, namely:
(a) the diligence in verifying the validity of the title covering the property; and (b) the
diligence in inquiring into the authority of the transacting spouse to sell conjugal property
in behalf of the other spouse. (Sps. Aggabao vs. Parulan, Jr., 629 SCRA 562, G.R. No.
165803, September 1, 2010).

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Breach of Contract
The Court reiterates the right of the installment buyer of a subdivision lot to withhold
payment of his amortizations for the duration that the subdivision developer has not
complied with its contractual undertaking to build the promised amenities in the
subdivision. (Tagaytay Realty Co., Inc. vs. Gacutan, 761 SCRA 87, G.R. No. 160033, July 1,
2015).
Under Tamayo vs. Huang, 480 SCRA 156 (2006), the buyer has the option to demand the
reimbursement of the total amounts paid, or to await the further development of the
subdivision; when the buyer opts for the latter alternative, he may suspend the payment
of his installments until the time when the developer has fulfilled its obligation to him;
should the developer persist in refusing to complete the facilities, the National Housing
Authority may take over or cause the development and completion of the subdivision at
the expense of the developer. In this case, the respondent initially opted to suspend the
payment of his amortizations, but then offered to complete the payment upon realizing
that the petitioner did not anymore intend to build the amenities. His payments from
October 6, 1976 to October 6, 1979 corresponded to 36 monthly amortizations totaling
P14,974.20, leaving 48 installments unpaid totaling P19,965.60. (Tagaytay Realty Co., Inc.
vs. Gacutan, 761 SCRA 87, G.R. No. 160033, July 1, 2015).
Extinguishment of Sale; Conventional Redemption
The CA correctly concluded that the true agreement of the parties vis--vis the Kasulatan
ng Biling Mabibiling Muli was an equitable mortgage, not a pacto de retro sale. There was
no dispute that the purported vendors had continued in the possession of the property
even after the execution of the agreement; and that the property had remained declared
for taxation purposes under Leoncias name, with the realty taxes due being paid by
Leoncia, despite the execution of the agreement. Such established circumstances are
among the badges of an equitable mortgage enumerated in Article 1602, paragraphs 2
and 5 of the Civil Code, to wit: Art. 1602. The contract shall be presumed to be an
equitable mortgage, in any of the following cases: x x x (2) When the vendor remains in
possession as lessee or otherwise; x x x (5) When the vendor binds himself to pay the
taxes on the thing sold; x x x The existence of any one of the conditions enumerated under
Article 1602 of the Civil Code, not a concurrence of all or of a majority thereof, suffices to
give rise to the presumption that the contract is an equitable mortgage. Consequently,
the contract between the vendors and vendees (Spouses Francia) was an equitable
mortgage. (Heirs of Reyes, Jr. vs. Reyes, 626 SCRA 758, G.R. No. 158377, August 4, 2010).
The acceptance of the payments even beyond the 10-year period of redemption estopped
the mortgagees heirs from insisting that the period to redeem the property had already
expired. Their actions impliedly recognized the continued existence of the equitable
mortgage. The conduct of the original parties as well as of their successors-in-interest
manifested that the parties to the Kasulatan ng Biling Mabibiling Muli really intended
their transaction to be an equitable mortgage, not a pacto de retro sale. (Heirs of Reyes,
Jr. vs. Reyes, 626 SCRA 758, G.R. No. 158377, August 4, 2010).

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The provisions of the Civil Code governing equitable mortgages disguised as sale
contracts, like the one herein, are primarily de-signed to curtail the evils brought about
by contracts of sale with right to repurchase, particularly the circumvention of the usury
law and pactum commissorium. Courts have taken judicial notice of the well-known fact
that contracts of sale with right to repurchase have been frequently resorted to in order
to conceal the true nature of a contract, that is, a loan secured by a mortgage. It is a reality
that grave financial distress renders persons hard-pressed to meet even their basic needs
or to respond to an emergency, leaving no choice to them but to sign deeds of absolute
sale of property or deeds of sale with pacto de retro if only to obtain the much-needed
loan from unscrupulous money lenders. This reality precisely explains why the pertinent
provision of the Civil Code includes a peculiar rule concerning the period of redemption,
to wit: Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of
the following cases: x x x (3) When upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or granting a new period is
executed; x x x. (Heirs of Reyes, Jr. vs. Reyes, 626 SCRA 758, G.R. No. 158377, August 4,
2010).

LEASE
Lease of Rural and Urban Lands
The lease of an agricultural land can be either a civil law or an agricultural lease. In the
civil law lease, one of the parties binds himself to give to another the enjoyment or use
of a thing for a price certain, and for a period that may be definite or indefinite. In the
agricultural lease, also termed as a leasehold tenancy, the physical possession of the land
devoted to agriculture is given by its owner or legal possessor (landholder) to another
(tenant) for the purpose of production through labor of the latter and of the members of
his immediate farm household, in consideration of which the latter agrees to share the
harvest with the landholder, or to pay a price certain or ascertainable, either in produce
or in money, or in both. Specifically, in Gabriel vs. Pangilinan, 58 SCRA 590 (1974), this
Court differentiated between a leasehold tenancy and a civil law lease in the following
manner, namely: (1) the subject matter of a leasehold tenancy is limited to agricultural
land, but that of a civil law lease may be rural or urban property; (2) as to attention and
cultivation, the law requires the leasehold tenant to personally attend to and cultivate
the agricultural land; the civil law lessee need not personally cultivate or work the thing
leased; (3) as to purpose, the landholding in leasehold tenancy is devoted to agriculture;
in civil law lease, the purpose may be for any other lawful pursuits; and (4) as to the law
that governs, the civil law lease is governed by the Civil Code, but the leasehold tenancy
is governed by special laws. (Jusayan vs. Sombilla, 746 SCRA 437, G.R. No. 163928, January
21, 2015).
It can be gleaned that in both civil law lease of an agricultural land and agricultural lease,
the lessor gives to the lessee the use and possession of the land for a price certain.
Although the purpose of the civil law lease and the agricultural lease may be agricultural

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cultivation and production, the distinctive attribute that sets a civil law lease apart from
an agricultural lease is the personal cultivation by the lessee. An agricultural lessee
cultivates by himself and with the aid of those of his immediate farm household.
Conversely, even when the lessee is in possession of the leased agricultural land and
paying a consideration for it but is not personally cultivating the land, he or she is a civil
law lessee. (Jusayan vs. Sombilla, 746 SCRA 437, G.R. No. 163928, January 21, 2015).

AGENCY
Nature, Form and Kinds of Agency; Acts of administration
In agency, the agent binds himself to render some service or to do something in
representation or on behalf of the principal, with the consent or authority of the latter.
The basis of the civil law relationship of agency is representation, the elements of which
are, namely: (a) the relationship is established by the parties consent, express or implied;
(b) the object is the execution of a juridical act in relation to a third person; (c) the agent
acts as representative and not for himself; and (d) the agent acts within the scope of his
authority. (Jusayan vs. Sombilla, 746 SCRA 437, G.R. No. 163928, January 21, 2015).
Whether or not an agency has been created is determined by the fact that one is
representing and acting for another. The law does not presume agency; hence, proving
its existence, nature and extent is incumbent upon the person alleging it. (Jusayan vs.
Sombilla, 746 SCRA 437, G.R. No. 163928, January 21, 2015).
To enable the extrajudicial foreclosure of the real estate mortgage (REM) of the
petitioners, the special power to sell should have been either inserted in the REM itself
or embodied in a separate instrument attached to the REM. xxx. The requirement for the
special power or authority to sell finds support in the civil law. To begin with, because the
sale of the property by virtue of the extrajudicial foreclosure would be made through the
sheriff by the respondent spouses as the mortgagees acting as the agents of the
petitioners as the mortgagors-owners, there must be a written authority from the latter
in favor of the former as their agents; otherwise, the sale would be void. And secondly,
considering that, pursuant to Article 1878(5), of the Civil Code, a special power of attorney
was necessary for entering into any contract by which the ownership of an immovable is
transmitted or acquired either gratuitously or for a valuable consideration, the written
authority must be a special power of attorney to sell. Contrary to the CAs opinion,
therefore, the power or authority to sell by virtue of the extrajudicial foreclosure of the
REM could not be necessarily implied from xxx the petitioners [express] agreement to
the extrajudicial foreclosure. (Baysa vs. Plantilla, 762 SCRA 433, G.R. No. 159271, July 13,
2015).
We stress that the power of administration does not include acts of disposition or
encumbrance, which are acts of strict ownership. As such, an authority to dispose cannot
proceed from an authority to administer, and vice versa, for the two powers may only be
exercised by an agent by following the provisions on agency of the Civil Code (from Article

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1876 to Article 1878). Specifically, the apparent authority of Atty. Parulan, being a special
agency, was limited to the sale of the property in question, and did not include or extend
to the power to administer the property. (Sps. Aggabao vs. Parulan, Jr., 629 SCRA 562,
G.R. No. 165803, September 1, 2010).
Obligations of the Agents
Ratification or confirmation may validate an act done in behalf of another without
authority from the latter. The effect is as if the latter did the act himself. xxx. Under Article
1898 of the Civil Code, the acts of an agent done beyond the scope of his authority do not
bind the principal unless the latter expressly or impliedly ratifies the same. In agency,
ratification is the adoption or confirmation by one person of an act performed on his
behalf by another without authority. The substance of ratification is the confirmation
after the act, amounting to a substitute for a prior authority. (Prieto vs. Court of Appeals,
673 SCRA 371, G.R. No. 158597, June 18, 2012).

TRUST
Kinds of Trust; Implied Trust
The CA correctly pointed out that under Article 1456 of the Civil Code, the person
obtaining property through mistake or fraud is considered by force of law a trustee of an
implied trust for the benefit of the person from whom the property comes. (Dico, Sr. vs.
Vizcaya Management Corporation, 701 SCRA 367, G.R. No. 161211, July 17, 2013).
The prescription of actions for the reconveyance of real property based on implied trust
is 10 years. (Dico, Sr. vs. Vizcaya Management Corporation, 701 SCRA 367, G.R. No.
161211, July 17, 2013).

CREDIT TRANSACTIONS
Deposit
The hotel business is imbued with public interest. Catering to the public, hotelkeepers are
bound to provide not only lodging for their guests but also security to the persons and
belongings of their guests. The twin duty constitutes the essence of the business.
Applying by analogy Article 2000, Article 2001 and Article 2002 of the Civil Code (all of
which concerned the hotelkeepers degree of care and responsibility as to the personal
effects of their guests), we hold that there is much greater reason to apply the same if
not greater degree of care and responsibility when the lives and personal safety of their
guests are involved. Otherwise, the hotelkeepers would simply stand idly by as strangers
have unrestricted access to all the hotel rooms on the pretense of being visitors of the
guests, without being held liable should anything untoward befall the unwary guests. That
would be absurd, something that no good law would ever envision. (Makati Shangri-La
Hotel and Resort, Inc. vs. Harper, 679 SCRA 444, G.R. No. 189998, August 29, 2012).
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Guaranty and Suretyship
It is apparent that the courts below, as well as the petitioner, interchangeably used the
terms guaranty and surety in characterizing the undertakings of Jesus under the
continuing guaranties. The terms are distinct from each other, however, and the
distinction is expressly delineated in the Civil Code, to wit: Article 2047. By guaranty a
person, called the guarantor, binds himself to the creditor to fulfill the obligation of the
principal debtor in case the latter should fail to do so. If a person binds himself solidarily
with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall
be observed. In such case the contract is called a surety-ship. Thus, in guaranty, the
guarantor binds himself to the creditor to fulfill the obligation of the principal debtor in
case the latter should fail to do so. The liability of the guarantor is secondary to that of
the principal debtor because he cannot be compelled to pay the creditor unless the latter
has exhausted all the property of the debtor, and has resorted to all the legal remedies
against the debtor. In contrast, the surety is solidarily bound to the obligation of the
principal debtor. (Allied Banking Corporation vs. Yujuico, 760 SCRA 397, G.R. No. 163116,
June 29, 2015).
A contract of surety is an accessory promise by which a person binds himself for another
already bound, and agrees with the creditor to satisfy the obligation if the debtor does
not. A contract of guaranty, on the other hand, is a collateral undertaking to pay the debt
of another in case the latter does not pay the debt. (Allied Banking Corporation vs. Yujuico,
760 SCRA 397, G.R. No. 163116, June 29, 2015).
A contract of surety is an accessory promise by which a person binds himself for another
already bound, and agrees with the creditor to satisfy the obligation if the debtor does
not. A contract of guaranty, on the other hand, is a collateral undertaking to pay the debt
of another in case the latter does not pay the debt. Strictly speaking, guaranty and surety
are nearly related, and many of the principles are common to both. However, under our
civil law, they may be distinguished thus: A surety is usually bound with his principal by
the same instrument, executed at the same time, and on the same consideration. He is
an original promissor and debtor from the beginning, and is held, ordinarily, to know
every default of his principal. Usually, he will not be discharged, either by the mere
indulgence of the creditor to the principal, or by want of notice of the default of the
principal, no matter how much he may be injured thereby. On the other hand, the
contract of guaranty is the guarantors own separate undertaking, in which the principal
does not join. It is usually entered into before or after that of the principal, and is often
supported on a separate consideration from that supporting the contract of the principal.
The original contract of his principal is not his contract, and he is not bound to take notice
of its nonperformance. He is often discharged by the mere indulgence of the creditor to
the principal, and is usually not liable unless notified of the default of the principal. Simply
put, a surety is distinguished from a guaranty in that a guarantor is the insurer of the
solvency of the debtor and thus binds himself to pay if the principal is unable to pay while
a surety is the insurer of the debt, and he obligates himself to pay if the principal does not

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pay. (Allied Banking Corporation vs. Yujuico, 760 SCRA 397, G.R. No. 163116, June 29,
2015).
Although the first part of the continuing guaranties showed that Jesus as the signatory
had agreed to be bound either as guarantor or otherwise, the usage of term guaranty
or guarantee in the caption of the documents, or of the word guarantor in the contents
of the documents did not conclusively characterize the nature of the obligations assumed
therein. What properly characterized and defined the undertakings were the contents of
the documents and the intention of the parties. xxx With the stipulations in the continuing
guaranties indicating that he was the surety of the credit line extended to YLTC, Jesus was
solidarily liable to Genbank for the indebtedness of YLTC. In other words, he thereby
rendered himself directly and primarily responsible with YLTC, without reference to
the solvency of the principal. (Allied Banking Corporation vs. Yujuico, 760 SCRA 397, G.R.
No. 163116, June 29, 2015).
Mortgage
The Kasulatan ng Pagmeme-ari executed by Alejandro on August 21, 1970 was ineffectual
to predicate the exclusion of the petitioners and their predecessors in interest from
insisting on their claim to the property. Alejandros being an assignee of the mortgage did
not authorize him or his heirs to appropriate the mortgaged property for himself without
violating the prohibition against pactum commissorium contained in Article 2088 of the
Civil Code, to the effect that [t]he creditor cannot appropriate the things given by way
of pledge or mortgage, or dispose of them[;] [a]ny stipulation to the contrary is null and
void. Aptly did the Court hold in Montevirgen vs. Court of Appeals, 112 SCRA 641 (1982):
The declaration, therefore, in the decision of July 1, 1971 to the effect that absolute
ownership over the subject premises has become consolidated in the respondents upon
failure of the petitioners to pay their obligation within the specified period, is a nullity, for
consolidation of ownership is an improper and inappropriate remedy to enforce a
transaction declared to be one of mortgage. It is the duty of respondents, as mortgagees,
to foreclose the mortgage if he wishes to secure a perfect title to the mortgaged property
if he buys it in the foreclosure sale. (Heirs of Reyes, Jr. vs. Reyes, 626 SCRA 758, G.R. No.
158377, August 4, 2010).

SUCCESSION
Testamentary Succession / Wills
Anacleto could not inherit from the estate of Joaquina by virtue of the latters last will
and testament. Article 838 of the Civil Code dictates that no will shall pass either real or
personal property unless the same is proved and allowed in accordance with the Rules of
Court. We have clarified in Gallanosa vs. Arcangel that in order that a will may take effect,
it has to be probated, legalized or allowed in the proper testamentary proceeding. The
probate of the will is mandatory. It appears that such will remained ineffective
considering that the records are silent as to whether it had ever been presented for

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probate, and had been allowed by a court of competent jurisdiction. (Arado vs. Alcoran,
762 SCRA 37, G.R. No. 163362, July 8, 2015).
Legal or Intestate Succession
When Nicolas died in 1954, the Civil Code of the Philippines was already in effect. Under
Article 1000 thereof, the heirs entitled to inherit from Nicolass estate were Joaquina (his
mother), Florencia (his surviving spouse), and Anacleto (his acknowledged illegitimate
son). Said heirs became co-owners of the properties comprising the entire estate of
Nicolas prior to the estates partition in accordance with Article 1078 of the Civil Code.
(Arado vs. Alcoran, 762 SCRA 37, G.R. No. 163362, July 8, 2015).
To start with, Anacleto could not inherit from Joaquina by right of representation of
Nicolas, the legitimate son of Joaquina. Under Article 992 of the Civil Code, an illegitimate
child has no right to inherit ab intestato from the legitimate children and relatives of his
father or mother; in the same manner, such children or relatives shall not inherit from the
illegitimate child. As certified in Diaz vs. Intermediate Appellate Court, the right of
representation is not available to illegitimate descendants of legitimate children in the
inheritance of a legitimate grandparent. (Arado vs. Alcoran, 762 SCRA 37, G.R. No.
163362, July 8, 2015).

LAND TITLES AND DEEDS
Torrens System; General Principles
Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept first introduced into the
country from the West by Spain through the Laws of the Indies and the Royal Cedulas, all
lands of the public domain belong to the State. This means that the State is the source of
any asserted right to ownership of land, and is charged with the conservation of such
patrimony. All lands not appearing to be clearly under private ownership are presumed
to belong to the State. Also, public lands remain part of the inalienable land of the public
domain unless the State is shown to have reclassified or alienated them to private
persons. (Heirs of Malabanan vs. Republic of the Philippines, 704 SCRA 561, G.R. No.
179987, September 3, 2013).
A fundamental principle in land registration under the Torrens system is that a certificate
of title serves as evidence of an indefeasible and incontrovertible title to the property in
favor of the person whose name appears therein. The certificate of title thus becomes
the best proof of ownership of a parcel of land; hence, anyone who deals with property
registered under the Torrens system may rely on the title and need not go beyond the
title. This reliance on the certificate of title rests on the doctrine of indefeasibility of the
land title, which has long been well-settled in this jurisdiction. It is only when the
acquisition of the title is attended with fraud or bad faith that the doctrine of
indefeasibility finds no application. (Abobon vs. Abobon, 678 SCRA 399, G.R. No. 155830,
August 15, 2012).

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Lim successfully discharged his burden of proof as the plaintiff. He established by
preponderant evidence that he had a superior right and title to the property. In contrast,
the petitioners did not present any proof of their better title other than their copy of the
reconstituted certificate of title. Such proof was not enough, because the registration of
a piece of land under the Torrens system did not create or vest title, such registration not
being a mode of acquiring ownership. The petitioners need to be reminded that a
certificate of title is merely an evidence of ownership or title over the particular property
described therein. Its issuance in favor of a particular person does not foreclose the
possibility that the real property may be co-owned with persons not named in the
certificate, or that it may be held in trust for another person by the registered owner.
(Oo vs. Lim, 614 SCRA 514, G.R. No. 154270, March 9, 2010).
It is true that a buyer of registered land needs only to show that he has relied on the face
of the certificate of title to the property, for he is not required to explore beyond what
the certificate indicates on its face. xxx Yet, it ought to be plain enough to the petitioners
that the issue [is] whether or not they had diligently inquired into the authority of [one
spouse] to convey the [conjugal] property, not whether or not the TCT had been valid and
authentic, as to which there was no doubt. (Sps. Aggabao vs. Parulan, Jr., 629 SCRA 562,
G.R. No. 165803, September 1, 2010).
An action or proceeding is deemed an attack on a title when its objective is to nullify the
title, thereby challenging the judgment pursuant to which the title was decreed. The
attack is direct when the objective is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or collateral when, in an action to
obtain a different relief, an attack on the judgment is nevertheless made as an incident
thereof. (Oo vs. Lim, 614 SCRA 514, G.R. No. 154270, March 9, 2010).
The other proper remedy the CA suggested was an action for reconveyance of property.
According to Vda. de Recinto vs. Inciong, 77 SCRA 196 (1977), the remedy belongs to the
landowner whose property has been wrongfully or erroneously registered in another
persons name, and such landowner demands the reconveyance of the property in the
proper court of justice. If the property has meanwhile passed into the hands of an
innocent purchaser for value, the landowner may seek damages. In either situation, the
landowner respects the decree as incontrovertible and no longer open to review provided
the one-year period from the land coming under the operation of the Torrens System of
land registration already passed. (Dare Adventure Farm Corporation vs. Court of Appeals,
681 SCRA 580, G.R. No. 161122, September 24, 2012).
Original Registration
There are three requisites for the filing of an application for registration of title under
Section 14(1) of PD 1529 (The Property Registration Decree of 1978), namely: (1) that the
property in question is alienable and disposable land of the public domain; (2) that the
applicant by himself or through his predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation; and (3) that such
possession is under a bona fide claim of ownership since June 12, 1945, or earlier. In short,

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the right to file the application for original registration derives from a bona fide claim of
ownership dating back to June 12, 1945, or earlier, by reason of the claimants open,
continuous, exclusive and notorious possession of alienable and disposable land of the
public domain. (Republic vs. Alba, 767 SCRA 385, G.R. No. 169710, August 19, 2015).
In Republic vs. Alconaba, this Court has explained that the intent behind the laws use of
the terms possession and occupation is to emphasize the need for actual and not just
constructive or fictional possession, thus: The law speaks of possession and occupation.
Since these words are separated by the conjunction and, the clear intention of the law is
not to make one synonymous with the other. Possession is broader than occupation
because it includes constructive possession. When, therefore, the law adds the word
occupation, it seeks to delimit the all encompassing effect of constructive possession.
Taken together with the words open, continuous, exclusive and notorious, the word
occupation serves to highlight the fact that for an applicant to qualify, his possession must
not be a mere fiction. Actual possession of a land consists in the manifestation of acts of
dominion over it of such a nature as a party would naturally exercise over his own
property. (Republic vs. Alba, 767 SCRA 385, G.R. No. 169710, August 19, 2015).
The respondents claim of ownership on the basis of the tax declarations alone did not
also suffice. In Cequea vs. Bolante, the Court has pointed out that only when tax
declarations were coupled with proof of actual possession of the property could they
become the basis of a claim of ownership. Indeed, in the absence of actual public and
adverse possession, the declaration of the land for tax purposes did not prove ownership.
It is well-settled that tax declarations are not conclusive proof of possession or ownership,
and their submission will not lend support in proving the nature of the possession
required by the law. (Republic vs. Alba, 767 SCRA 385, G.R. No. 169710, August 19, 2015).
Firstly, the payment of realty taxes did not conclusively prove the payors ownership of
the land the taxes were paid for, the tax declarations and payments being mere indicia
of a claim of ownership; and, secondly, the causing of surveys of the property involved
was not itself an of continuous, open, public and adverse possession. (Republic vs. Santos
III, 685 SCRA 51, G.R. No. 160453, November 12, 2012).
Section 17 of Presidential Decree No. 1529 provides: Section 17. What and where to
file.The application for land registration shall be filed with the Court of First Instance of
the province or city where the land is situated. The applicant shall file, together with the
application, all original muniments of titles or copies thereof and a survey plan of the land
approved by the Bureau of Lands. The clerk of court shall not accept any application
unless it is shown that the applicant has furnished the Director of Lands with a copy of
the application and all annexes. Section 17 shows, indeed, that it is mandatory for the
applicant for original registration to submit to the trial court not only the original or
duplicate copies of the muniments of title but also the copy of the duly approved survey
plan of the land sought to be registered. The survey plan is crucial because it provides
reference of the propertys exact identity and location. (Republic vs. Alba, 767 SCRA 385,
G.R. No. 169710, August 19, 2015).

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Did the respondents submission of the approved plan and technical description, both of
which had been approved by Regional Technical Director of the Land Management
Services, satisfy the requirement [of Section 17 of Presidential Decree No. 1529]? The
answer is in the affirmative. In Republic vs. Guinto-Aldana, this Court has relaxed the
requirement for the submission of the tracing cloth plan by holding that: Yet if the reason
for requiring an applicant to adduce in evidence the original tracing cloth plan is merely
to provide a convenient and necessary means to afford certainty as to the exact identity
of the property applied for registration and to ensure that the same does not overlap with
the boundaries of the adjoining lots, there stands to be no reason why a registration
application must be denied for failure to present the original tracing cloth plan, especially
where it is accompanied by pieces of evidence such as a duly executed blueprint of the
survey plan and a duly executed technical description of the property which may
likewise substantially and with as much certainty prove the limits and extent of the
property sought to be registered. To the same effect were the rulings in Republic vs.
Court of Appeals, Recto vs. Republic and Republic vs. Hubilla, where the Court has
pointed out that although the best means to identify a piece of land for registration
purposes is the original tracing cloth plan approved by the Bureau of Lands (now the Lands
Management Services of the Department of Environment and Natural Resources), other
evidence could provide sufficient identification. xxx. Here, the submission of the approved
plan and technical description of Lot No. 9100 constituted a substantial compliance with
the legal requirement of ascertaining the identity or location of the lands subject of the
application for registration. The plan and technical description had been approved by the
Regional Technical Director of the Land Management Services, and were subsequently
identified, marked, and offered in evidence during the trial. (Republic vs. Alba, 767 SCRA
385, G.R. No. 169710, August 19, 2015).
Respondents as the applicants for land registration carried the burden of proof to
establish the merits of their application by a preponderance of evidence, by which is
meant such evidence that is of greater weight, or more convincing than that offered in
opposition to it. They would be held entitled to claim the property as their own and apply
for its registration under the Torrens system only if they established that, indeed, the
property was an accretion to their land. (Republic vs. Santos III, 685 SCRA 51, G.R. No.
160453, November 12, 2012).
The judicial reconstitution of a Torrens title under Republic Act No. 26 means the
restoration in the original form and condition of a lost or destroyed Torrens certificate
attesting the title of a person to registered land. The purpose of the reconstitution is to
enable, after observing the procedures prescribed by law, the reproduction of the lost or
destroyed Torrens certificate in the same form and in exactly the same way it was at the
time of the loss or destruction. (Republic vs. Mancao, 763 SCRA 475, G.R. No. 174185, July
22, 2015).
Under Section 12 of Republic Act No. 26, the law on the judicial reconstitution of a Torrens
title, the Regional Trial Court (as the successor of the Court of First Instance) had the
original and exclusive jurisdiction to act on the petition for judicial reconstitution of title.

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Hence, the RTC neither lacked nor exceeded its authority in acting on and dismissing the
petition. (Saint Mary Crusade to Alleviate Poverty of Brethren Foundation, Inc. vs. Riel,
745 SCRA 60, G.R. No. 176508, G.R. No. 176508).
It is essential that the person initiating the petition for reconstitution must have an
interest in the property. (Republic vs. Mancao, 763 SCRA 475, G.R. No. 174185, July 22,
2015).
There is no gainsaying the need for all courts to proceed with extreme caution in
proceedings for reconstitution of titles to land under Republic Act No. 26. Experience has
shown that such proceedings have many times been misused as the means of divesting
property owners of the title to their properties. The owners wake up one day to discover
that their certificates of title had been cancelled and replaced by reconstituted titles in
other persons names through fraudulent reconstitution proceedings. To prevent the
fraud, the courts should not only require strict compliance with the requirements of
Republic Act No. 26 but should also ascertain the identities of the persons who file
petitions for reconstitution of title to land. The filing of petitions by persons other than
the registered owners should already raise a red flag that should signal to the courts to
spare no effort to assure themselves of the authenticity and due execution of the
petitioners authority to institute the proceedings. (Republic vs. Mancao, 763 SCRA 475,
G.R. No. 174185, July 22, 2015).
No petition for the judicial reconstitution of a Torrens title that does not strictly adhere
to the requirements of Republic Act No. 26, albeit unopposed, should be granted even on
the pretext that the reconstitution would not affect the ownership or possession of the
property. (Republic vs. Mancao, 763 SCRA 475, G.R. No. 174185, July 22, 2015).
Non-Registrable Properties
Whether or not land of the public domain is alienable and disposable primarily rests on
the classification of public lands made under the Constitution. (Heirs of Malabanan vs.
Republic of the Philippines, 704 SCRA 561, G.R. No. 179987, September 3, 2013).
Alienable and disposable lands of the State fall into two categories, to wit: (a) patrimonial
lands of the State, or those classified as lands of private ownership under Article 425 of
the Civil Code, without limitation; and (b) lands of the public domain, or the public lands
as provided by the Constitution, but with the limitation that the lands must only be
agricultural. Consequently, lands classified as forest or timber, mineral, or national parks
are not susceptible of alienation or disposition unless they are reclassified as agricultural.
A positive act of the Government is necessary to enable such reclassification, and the
exclusive prerogative to classify public lands under existing laws is vested in the Executive
Department, not in the courts. If, however, public land will be classified as neither
agricultural, forest or timber, mineral or national park, or when public land is no longer
intended for public service or for the development of the national wealth, thereby
effectively removing the land from the ambit of public dominion, a declaration of such
conversion must be made in the form of a law duly enacted by Congress or by a

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Presidential proclamation in cases where the President is duly authorized by law to that
effect. Thus, until the Executive Department exercises its prerogative to classify or
reclassify lands, or until Congress or the President declares that the State no longer
intends the land to be used for public service or for the development of national wealth,
the Regalian Doctrine is applicable. (Heirs of Malabanan vs. Republic of the Philippines,
704 SCRA 561, G.R. No. 179987, September 3, 2013).
Absent proof that the land is already classified as agricultural land of the public domain,
the Regalian Doctrine applies, and overcomes the presumption that the land is alienable
and disposable as laid down in Section 48(b) of the Public Land Act. (Heirs of Malabanan
vs. Republic of the Philippines, 704 SCRA 561, G.R. No. 179987, September 3, 2013).
To prove that the land subject of an application for registration is alienable, an applicant
must conclusively establish the existence of a positive act of the Government, such as a
presidential proclamation, executive order, administrative action, investigation reports of
the Bureau of Lands investigator, or a legislative act or statute. Until then, the rules on
confirmation of imperfect title do not apply. As to the proofs that are admissible to
establish the alienability and disposability of public land, we said in Secretary of the
Department of Environment and Natural Resources vs. Yap that: The burden of proof in
overcoming the presumption of State ownership of the lands of the public domain is on
the person applying for registration (or claiming ownership), who must prove that the
land subject of the application is alienable or disposable. To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application (or
claim) is alienable or disposable. There must still be a positive act declaring land of the
public domain as alienable and disposable. To prove that the land subject of an
application for registration is alienable, the applicant must establish the existence of a
positive act of the government such as a presidential proclamation or an executive order;
an administrative action; investigation reports of Bureau of Lands investigators; and a
legislative act or a statute. The applicant may also secure a certification from the
government that the land claimed to have been possessed for the required number of
years is alienable and disposable. (Republic vs. Santos III, 685 SCRA 51, G.R. No. 160453,
November 12, 2012).
Section 11 of the Public Land Act (CA No. 141) provides the manner by which alienable
and disposable lands of the public domain, i.e., agricultural lands, can be disposed of, to
wit: Section 11. Public lands suitable for agricultural purposes can be disposed of only as
follows, and not otherwise: (1) For homestead settlement; (2) By sale; (3) By lease; and
(4) By confirmation of imperfect or incomplete titles; (a) By judicial legalization; or (b) By
administrative legalization (free patent). (Heirs of Malabanan vs. Republic of the
Philippines, 704 SCRA 561, G.R. No. 179987, September 3, 2013).

TORTS AND DAMAGES
Classification of Torts

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In view of MMTCs admission in its pleadings that it had remained the registered owner
of the bus at the time of the incident, it could not escape liability for the personal injuries
and property damage suffered by the Cuevases. This is because of the registered-owner
rule, whereby the registered owner of the motor vehicle involved in a vehicular accident
could be held liable for the consequences. The registered-owner rule has remained good
law in this jurisdiction considering its impeccable and timeless rationale, as enunciated in
the 1957 ruling in Erezo, et al. v. Jepte, 102 Phil. 103. (Metro Manila Transit Corporation
vs. Cuevas, 757 SCRA 311, G.R. No. 167797, June 15, 2015).
The registered owner of a motor vehicle whose operation causes injury to another is
legally liable to the latter. But it is error not to allow the registered owner to recover
reimbursement from the actual and present owner by way of its cross-claim. (Metro
Manila Transit Corporation vs. Cuevas, 757 SCRA 311, G.R. No. 167797, June 15, 2015).
Although the registered-owner rule might seem to be unjust towards MMTC, the law did
not leave it without any remedy or recourse. According to Filcar Transport Services vs.
Espinas, 674 SCRA 117 (2012), MMTC could recover from Minas Transit, the actual
employer of the negligent driver, under the principle of unjust enrichment, by means of
a cross-claim seeking reimbursement of all the amounts that it could be required to pay
as damages arising from the drivers negligence. A cross-claim is a claim by one party
against a co-party arising out of the transaction or occurrence that is the subject matter
either of the original action or of a counterclaim therein, and may include a claim that the
party against whom it is asserted is or may be liable to the cross-claimant for all or part
of a claim asserted in the action against the cross-claimant. (Metro Manila Transit
Corporation vs. Cuevas, 757 SCRA 311, G.R. No. 167797, June 15, 2015).
Torts; The Tortfeasor
In an action for breach of contract of carriage commenced by a passenger against his
common carrier, the plaintiff can recover damages from a third-party defendant brought
into the suit by the common carrier upon a claim based on tort or quasi-delict. The liability
of the third-party defendant is independent from the liability of the common carrier to
the passenger. (Philtranco Service Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R. No.
161909, April 25, 2012).
The nature of the obligation of the co-conspirators in the commission of the crime
requires solidarity, and each debtor may be compelled to pay the entire obligation. As a
co-conspirator, then, Inoveros civil liability was similar to that of a joint tortfeasor under
the rules of the civil law. Joint tortfeasors are those who command, instigate, promote,
encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or
who approve of it after it is done, if done for their benefit. They are also referred to as
those who act together in committing wrong or whose acts, if independent of each other,
unite in causing a single injury. Under Article 2194 of the Civil Code, joint tortfeasors are
solidarily liable for the resulting damage. In other words, joint tortfeasors are each liable
as principals, to the same extent and in the same manner as if they had performed the

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wrongful act themselves. (People vs. Inovero, 727 SCRA 257, G.R. No. 195668, June 25,
2014).
It would not be an excuse for any of the joint tortfeasors to assert that her individual
participation in the wrong was insignificant as compared to those of the others. Joint
tortfeasors are not liable pro rata. The damages cannot be apportioned among them,
except by themselves. They cannot insist upon an apportionment, for the purpose of each
paying an aliquot part. They are jointly and severally liable for the whole amount. (People
vs. Inovero, 727 SCRA 257, G.R. No. 195668, June 25, 2014).
Damages; General provisions
Under Article 2211 of the Civil Code, the courts are vested with the discretion to impose
interest as a part of the damages in crimes and quasi-delicts. In that regard, the moral
damages of P20,000.00 shall earn interest of 6% per annum reckoned from the finality of
this decision until full payment. (Cruz vs. People, 737 SCRA 567, G.R. No. 166441, October
8, 2014).
It is noted, of course, that the Usury Law allowed the parties in a loan agreement to
exercise discretion on the interest rate to be charged. Once a judicial demand for payment
has been made, however, Article 2212 of the Civil Code should apply, that is: Interest
due shall earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point. (Dela Cruz vs. Planters Products, Inc., 691 SCRA
28, G.R. No. 158649, February 18, 2013).
Damages; Actual damages
To justify an award for actual damages, there must be competent proof of the actual
amount of loss. (Comsavings Bank [now GSIS Family Bank] vs. Capistrano, 704 SCRA 72,
G.R. No. 170942, August 28, 2013).
Actual damages, to be recoverable, must not only be capable of proof, but must actually
be proved with a reasonable degree of certainty. The reason is that the court cannot
simply rely on speculation, conjecture or guesswork in determining the fact and amount
of damages, but there must be competent proof of the actual amount of loss, credence
can be given only to claims which are duly supported by receipts. (Philtranco Service
Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R. No. 161909, April 25, 2012).
Actual and moral damages are different in nature and purpose. To start with, different
laws govern their grant, with the amounts allowed as actual damages being dependent
on proof of the loss to a degree of certainty, while the amounts allowed as moral damages
being discretionary on the part of the court. Secondly, actual damages address the actual
losses caused by the crime to the heirs of the victim; moral damages assuage the spiritual
and emotional sufferings of the heirs of the victim of the crime. On the civil indemnity for
death, law and jurisprudence have fixed the value to compensate for the loss of human
life. Thirdly, actual damages may not be granted without evidence of actual loss; moral
damages and death indemnity are always granted in homicide, it being assumed by the

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law that the loss of human life absolutely brings moral and spiritual losses as well as a
definite loss. (Barut vs. People, 736 SCRA 313, G.R. No. 167454, September 24, 2014).
According to Article 2205 (1), of the Civil Code, damages may be recovered for loss or
impairment of earning capacity in cases of temporary or permanent personal injury.
Indeed, indemnification for damages comprehends not only the loss suffered (actual
damages or damnum emergens) but also the claimants lost profits (compensatory
damages or lucrum cessans). Even so, the formula that has gained acceptance over time
has limited recovery to net earning capacity; hence, the entire amount of P72,000.00 is
not allowable. The premise is obviously that net earning capacity is the persons capacity
to acquire money, less the necessary expense for his own living. To simplify the
determination, therefore, the net earning capacity of Paras during the 9-month period of
his confinement, surgeries and consequential therapy is pegged at only half of his
unearned monthly gross income of P8,000.00 as a trader, or a total of P36,000.00 for the
9-month period, the other half being treated as the necessary expense for his own living
in that period. (Philtranco Service Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R. No.
161909, April 25, 2012).
It is relevant to clarify that awarding the temperate damages (for the substantial
pecuniary losses corresponding to Parass surgeries and rehabilitation and for the
irreparability of Inlands damaged bus) and the actual damages to compensate lost
earnings and costs of medicines give rise to no incompatibility. These damages cover
distinct pecuniary losses suffered by Paras and Inland, and do not infringe the statutory
prohibition against recovering damages twice for the same act or omission. (Philtranco
Service Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R. No. 161909, April 25, 2012).
Damages; Actual damages; Attorneys fees
It is well accepted in this jurisdiction that no premium should be placed on the right to
litigate and that not every winning party is entitled to an automatic grant of attorneys
fees. (Sps. Andrada vs. Pilhino Sales Corporation, 644 SCRA 1, G.R. No. 156448, February
23, 2011).
It was only under the present Civil Code that the right to collect attorneys fees in the
cases mentioned in Article 2208 of the Civil Code came to be recognized. Such fees are
now included in the concept of actual damages. (Abobon vs. Abobon, 678 SCRA 399, G.R.
No. 155830, August 15, 2012).
Article 2208 of the Civil Code allows recovery of attorneys fees when exemplary damages
are awarded or where the plaintiff has incurred expenses to protect his interest by reason
of defendants act or omission. (Comsavings Bank [now GSIS Family Bank] vs. Capistrano,
704 SCRA 72, G.R. No. 170942, August 28, 2013).
But, as noted by the Court in Morales vs. Court of Appeals, the award of attorneys fees
is the exception rather than the rule. The power of a court to award attorneys fees under
Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis
cannot be left to speculation and conjecture. The general rule is that attorneys fees

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cannot be recovered as part of damages because of the policy that no premium should
be placed on the right to litigate. (Sps. Andrada vs. Pilhino Sales Corporation, 644 SCRA 1,
G.R. No. 156448, February 23, 2011).
Although it is a sound policy not to set a premium on the right to litigate, we consider the
grant to Paras and Inland of reasonable attorneys fees warranted. Their entitlement to
attorneys fees was by virtue of their having been compelled to litigate or to incur
expenses to protect their interests, as well as by virtue of the Court now further deeming
attorneys fees to be just and equitable. In view of the lapse of a long time in the
prosecution of the claim, the Court considers it reasonable and proper to grant attorneys
fees to each of Paras and Inland equivalent to 10% of the total amounts hereby awarded
to them, in lieu of only P20,000.00 for that purpose granted to Paras. (Philtranco Service
Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R. No. 161909, April 25, 2012).
Damages; Moral damages
Moral damages are meant to compensate the claimant for any physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock,
social humiliation and similar injuries unjustly caused. (Comsavings Bank [now GSIS Family
Bank] vs. Capistrano, 704 SCRA 72, G.R. No. 170942, August 28, 2013).
To be recoverable, moral damages must be capable of proof and must be actually proved
with a reasonable degree of certainty. xxx What we have was only the allegation on moral
damages, with the complaint stating that the respondents had been forced to litigate, and
that they had suffered mental anguish, serious anxiety and wounded feelings from the
petitioners refusal to restore the possession of the land in question to them. The
allegation did not suffice, for allegation was not proof of the facts alleged. (Abobon vs.
Abobon, 678 SCRA 399, G.R. No. 155830, August 15, 2012).
As a general rule, indeed, moral damages are not recoverable in an action predicated on
a breach of contract. This is because such action is not included in Article 2219 of the Civil
Code as one of the actions in which moral damages may be recovered. By way of
exception, moral damages are recoverable in an action predicated on a breach of
contract: (a) where the mishap results in the death of a passenger, as provided in Article
1764, in relation to Article 2206 (3) of the Civil Code; and (b) where the common carrier
has been guilty of fraud or bad faith, as provided in Article 2220 of the Civil Code.
(Philtranco Service Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R. No. 161909, April 25,
2012).
In acts of lasciviousness, the victim suffers moral injuries because the offender violates
her chastity by his lewdness. Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendants wrongful
act for omission. Indeed, Article 2219(3), of the Civil Code expressly recognizes the right

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of the victim in acts of lasciviousness to recover moral damages. (Cruz vs. People, 737
SCRA 567, G.R. No. 166441, October 8, 2014).
Alexander as the victim in frustrated homicide suffered moral injuries because the
offender committed violence that nearly took away the victims life. Moral damages
include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable
of pecuniary computation, moral damages may be recovered if they are the proximate
result of the defendants wrongful act for omission. (De Guzman, Jr. vs. People, 742 SCRA
501, G.R. No. 178512, November 26, 2014).
Damages; Temperate or Moderate Damages
Respondents did not submit any documentary proof, like receipts, to support their claim
for actual damages. Nonetheless, it cannot be denied that they had suffered substantial
losses. Article 2224 of the Civil Code allows the recovery of temperate damages when the
court finds that some pecuniary loss was suffered but its amount cannot be proved with
certainty. (Comsavings Bank [now GSIS Family Bank] vs. Capistrano, 704 SCRA 72, G.R. No.
170942, August 28, 2013).
There is no question that Article 2224 of the Civil Code expressly authorizes the courts to
award temperate damages despite the lack of certain proof of actual damages, to wit:
Article 2224. Temperate or moderate damages, which are more than nominal but less
than compensatory damages, may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty. (Philtranco Service Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R.
No. 161909, April 25, 2012).
The rationale for Article 2224 has been stated in Premiere Development Bank vs. Court
of Appeals, 427 SCRA 686 (2004) in the following manner: xxx The Code Commission, in
explaining the concept of temperate damages under Article 2224, makes the following
comment: In some States of the American Union, temperate damages are allowed. There
are cases where from the nature of the case, definite proof of pecuniary loss cannot be
offered, although the court is convinced that there has been such loss. For instance, injury
to ones commercial credit or to the goodwill of a business firm is often hard to show with
certainty in terms of money. Should damages be denied for that reason? The judge should
be empowered to calculate moderate damages in such cases, rather than that the plaintiff
should suffer, without redress from the defendants wrongful act. (Philtranco Service
Enterprises, Inc. vs. Paras, 671 SCRA 24, G.R. No. 161909, April 25, 2012).
Damages; Exemplary or Corrective Damages
The law allows the grant of exemplary damages to set an example for the public good.
The business of a bank is affected with public interest; thus, it makes a sworn profession
of diligence and meticulousness in giving irreproachable service. For this reason, the bank
should guard against injury attributable to negligence or bad faith on its part. The banking
sector must at all times maintain a high level of meticulousness. The grant of exemplary

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damages is justified by the initial carelessness of petitioner, aggravated by its lack of
promptness in repairing its error. (Comsavings Bank [now GSIS Family Bank] vs.
Capistrano, 704 SCRA 72, G.R. No. 170942, August 28, 2013 citing Solidbank Corporation
vs. Arrieta, 451 SCRA 711, 722, G.R. No. 152720, February 17, 2005).
Article 2230 of the Civil Code authorizes the grant of exemplary damages as part of the
civil liability in crimes only when one or more aggravating circumstances were present in
the commission of the crime. With the conceded absence of any aggravating
circumstance in the commission of the crime, therefore, we delete the P200,000.00 as
exemplary damages for lack of legal basis. (Fransdilla vs. People, 756 SCRA 164, G.R. No.
197562, April 20, 2015).
Pursuant to Article 2229 and Article 2230 of the Civil Code, exemplary damages are to be
granted to the victim of a crime when at least one aggravating circumstance was
attendant. AAA was entitled to exemplary damages of P30,000.00 due to the attendance
of the aggravating circumstances of nighttime and the use of the deadly weapon in the
commission of the rape. (People vs. Belgar, 734 SCRA 347, G.R. No. 182794, September 8,
2014).
The term aggravating circumstances as used by the Civil Code should be understood in
its broad or generic sense, not in the sense of prescribing a heavier punishment on the
offender; hence, the ordinary or qualifying nature of an aggravating circumstance should
be a distinction that was of consequence only to the criminal, as contrasted from the civil,
liability, thereby entitling the offended party or victim to an award of exemplary damages
regardless of whether the aggravating circumstance was ordinary or qualifying. (People
vs. Taguibuya, 658 SCRA 685, G.R. No. 180497, October 5, 2011).
In criminal suits, exemplary damages are justified regardless of whether or not the generic
or qualifying aggravating circumstances are alleged in the information, considering that
the grant of such damages pursuant to Article 2230 of the Civil Code is intended for the
sole benefit of the victim and does not affect the criminal liability, the exclusive concern
of the State. (People vs. Reyes, 701 SCRA 455, G.R. No. 173307, July 17, 2013).
Damages; Damages in case of death
It is again timely to raise the civil indemnity for death arising from crime or quasi-delict.
We start by reminding that human life, which is not a commodity, is priceless. The value
of human life is incalculable, for no loss of life from crime or quasi-delict can ever be justly
measured. xxx. On April 5, 2016, the Court promulgated its decision in People v. Jugueta
(G.R. No. 202124), whereby it adopted certain guidelines on fixing the civil liabilities in
crimes resulting in the death of the victims taking into proper consideration the stages of
execution and gravity of the offenses, as well as the number of victims in composite
crimes. Other factors were weighed by the Court. In the case of murder where the
appropriate penalty is reclusion perpetna, the Court has thereby fixed P75,000.00 for
moral damages, P75,000.00 for exemplary damages, and P75,000.00 for civil indemnity
as the essential civil liabilities,- in addition to others as the records of each case will

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 CIVIL LAW
substantiate. Hence, we impose herein the same amounts for such items of damages in
each count of murder. (People vs. Oandasan, Jr., G.R. No. 194605, June 14, 2016).
We declare that the surviving heirs of Bolanon were entitled by law to more than such
indemnity, because the damages to be awarded when death occurs due to a crime may
include: (a) civil indemnity ex delicto for the death of the victim (which was granted
herein); (b) actual or compensatory damages; (c) moral damages; (d) exemplary damages;
and (e) temperate damages. (People vs. Salafranca, 666 SCRA 501, G.R. No. 173476,
February 22, 2012).
The death indemnity and moral damages are fixed at P75,000.00 each in view of homicide
being a gross offense. (Barut vs. People, 736 SCRA 313, G.R. No. 167454, September 24,
2014).
We hold that the CA and the RTC should have further granted moral damages which were
different from the death indemnity. The death indemnity compensated the loss of life
due to crime, but appropriate and reasonable moral damages would justly assuage the
mental anguish and emotional sufferings of the surviving family of the victim. (People vs.
Salafranca, 666 SCRA 501, G.R. No. 173476, February 22, 2012).
Moral damages and death indemnity require neither pleading nor evidence simply
because death through crime always occasions moral sufferings on the part of the victims
heirs. (Barut vs. People, 736 SCRA 313, G.R. No. 167454, September 24, 2014).
Also in accordance with People vs. Jugueta, supra, temperate damages of P50,000.00
should further be granted to the heirs of Montegrico and Tamanu considering that they
were presumed to have spent for the interment of each of the deceased. It would be
unjust to deny them recovery in the form of temperate damages just because they did
not establish with certainty the actual expenditure for the interment of their late-
lamented family members. (People vs. Oandasan, Jr., G.R. No. 194605, June 14, 2016).
In this respect, we mention that Article 2230 of the Civil Code authorizes the grant of
exemplary damages if at least one aggravating circumstance attended the commission of
the crime. For this purpose, exemplary damages of P75,000.00 are granted to the heirs of
Montegrico and Tamanu, respectively, based on the attendant circumstance of treachery.
Whether treachery was a qualifying or attendant circumstance did not matter. (People vs.
Oandasan, Jr., G.R. No. 194605, June 14, 2016).
On his part, Paleg, being the victim of frustrated murder, is entitled to P50,000.00 as
moral damages, P50,000.00 as civil indemnity, and P50,000.00 as exemplary damages,
P25,000.00 as temperate damages (for his hospitalization and related expenses). (People
vs. Oandasan, Jr., G.R. No. 194605, June 14, 2016).
In line with pertinent jurisprudence, interest of 6% per annum shall be charged on all the
items of civil liability imposed herein, computed from the date of the finality of this
decision until fully paid. (People vs. Oandasan, Jr., G.R. No. 194605, June 14, 2016).

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