Civil Law Cases (Digest)
Civil Law Cases (Digest)
Civil Law Cases (Digest)
SPOUSES ALEXANDER AND JULIE LAM, Doing Business Under the Name
and Style "COLORKWIK LABORATORIES" AND "COLORKWIK PHOTO
SUPPLY" vs. KODAK PHILIPPINES, LTD., G.R. No. 167615, January 11,
2016 LEONEN, J.:
FACTS: On January 8, 1992, the Lam Spouses and Kodak Philippines, Ltd.
entered into an agreement (Letter Agreement) for the sale of three (3) units of
the Kodak Minilab System 22XL6 (Minilab Equipment) in the amount of Php
1,796,000.00 per unit,7 with the following terms:
This confirms our verbal agreement for Kodak Phils., Ltd. To provide Colorkwik
Laboratories, Inc. with three (3) units Kodak Minilab System 22XL . . . for your
proposed outlets in Rizal Avenue (Manila), Tagum (Davao del Norte), and your
existing Multicolor photo counter in Cotabato City under the following terms
and conditions:
1. Said Minilab Equipment packages will avail a total of 19% multiple order
discount based on prevailing equipment price provided said equipment
packages will be purchased not later than June 30, 1992.
2. 19% Multiple Order Discount shall be applied in the form of merchandise
and delivered in advance immediately after signing of the contract.
* Also includes start-up packages worth P61, 000.00.
3. NO DOWNPAYMENT.
4. Minilab Equipment Package shall be payable in 48 monthly installments at
THIRTY FIVE THOUSAND PESOS (P35,000.00) inclusive of 24% interest rate
for the first 12 months; the balance shall be re-amortized for the remaining 36
months and the prevailing interest shall be applied.
5. Prevailing price of Kodak Minilab System 22XL as of January 8, 1992 is at
ONE MILLION SEVEN HUNDRED NINETY SIX THOUSAND PESOS.
6. Price is subject to change without prior notice.
*Secured with PDCs; 1st monthly amortization due 45 days after installation.
However, Kodak Philippines, Ltd. delivered one (1) unit of the Minilab
Equipment in Tagum, Davao Province. The delivered unit was installed by
Noritsu representatives. The Lam Spouses issued postdated checks amounting
to ₱35,000.00 each for 12 months as payment for the first delivered unit, with
the first check due on March 31, 1992. Thereafter, the Lam Spouses requested
that Kodak Philippines, Ltd. not negotiate the checks due to insufficiency of
funds.. However, both checks were negotiated by Kodak Philippines, Ltd. and
were honored by the depository bank. The 10 other checks were subsequently
dishonored after the Lam Spouses ordered the depository bank to stop
payment. Afterwards, Kodak Philippines, Ltd. canceled the sale and demanded
that the Lam Spouses return the unit. The Lam Spouses ignored the demand
but also rescinded the contract through a letter on account of Kodak
Philippines, Ltd.’s failure to deliver the two (2) remaining Minilab Equipment
units. After which, Kodak Philippines, Ltd. filed a Complaint for replevin
and/or recovery of sum of money. The Lam Spouses failed to appear during the
pre-trial conference. Thus, they were declared in default. Kodak Philippines,
Ltd. presented evidence ex-parte, the trial court then, issued the Decision in
favor of Kodak Philippines, Ltd. ordering the seizure of the Minilab Equipment.
Based on this Decision, Kodak Philippines, Ltd. was able to obtain a writ of
seizure for the Minilab Equipment installed at the Lam Spouses’ outlet in
Tagum, Davao Province. The writ was enforced and Kodak Philippines, Ltd.
gained possession of the Minilab Equipment unit, accessories, and the
generator set. The Lam Spouses then filed before the CA a Petition to Set Aside
the Orders issued by the trial court. These Orders were subsequently set aside
by the CA, and the case was remanded to the trial court for pre-trial. In its
Decision, the RTC dismissed the case and ordered the plaintiff to pay Lam
Spouses. Thereafter, the Spouses filed their Notice of Partial Appeal and Kodak
Philippines, Ltd. also filed an appeal. However, the CA dismissed it for Kodak
Philippines, Ltd.’s failure to file its appellant’s brief, without prejudice to the
continuation of the Lam Spouses’ appeal. The Resolution became final and
executory. CA modified the decision of the RTC.
ISSUE: Whether or not upon rescission of the contract, the parties are entitled
to under Article 1190 and Article 1522 of the New Civil Code.
A contract of sale is perfected upon the meeting of minds as to the object and
the price, and the parties may reciprocally demand the performance of their
respective obligations from that point on.
Rescission creates the obligation to return the object of the contract. It can be
carried out only when the one who demands rescission can return whatever he
may be obliged to restore. To rescind is to declare a contract void at its
inception and to put an end to it as though it never was. It is not merely to
terminate it and release the parties from further obligations to each other, but
to abrogate it from the beginning and restore the parties to their relative
positions as if no contract has been made.
When rescission is sought under Article 1191 of the Civil Code, it need not be
judicially invoked because the power to resolve is implied in reciprocal
obligations.
When the loans became due and demandable, appellees failed to pay despite
several demands. Subsequently, the appellant decided to institute foreclosure
proceedings. However, she was prevailed by the appellee Linda not to foreclose
the property because of the cost of litigation and since it would cause her
embarrassment as the proceedings will be announced in public places at the
City Hall, where she has many friends. Instead, appellee Linda offered their
mortgaged property as payment in kind. After the ocular inspection, the parties
agreed to have the property valued at Php 70,000.00. Thereafter, on October
22, 1986, appellee executed a two (2) page Deed of Sale duly signed by her on
the left margin and over printed name. After the execution of the Deed of Sale,
appellant Pen paid the capital gains and real property tax. The title of the
property was transferred to the appellant by the issuance of TCT NO. 364880
on July 17, 1987. A reconstituted title was also issued to the appellants on
July 09, 1994whe the Quezon City Register of Deeds was burned.
In December 1992, Linda Julian offered to pay Adelaida the amount of P150,
000.00 to which the latter refused and demanded that she be paid the amount
of P250, 000.00. Unable to meet the demand, Linda desisted and requested
that she be shown the land title which she conveyed to Adelaida, but was
refused. Upon verification with the Registry of Deeds, she was informed that
the title to the mortgaged property had already been registered in the name of
Adelaida who have been paying the capital gains and required real property
tax. After said discoveries, Julians filed an Affidavit of Adverse Claim claiming
that said Absolute Deed of Sale is void.
HELD: NO. Article 2088 of the Civil Code prohibits the creditor from
appropriating the things given by way of pledge or mortgage, or from disposing
of them; any stipulation to the contrary is null and void.
Dacion en pago is in the nature of a sale because property is alienated in favor
of the creditor in satisfaction of a debt in money.
In a sale, the contract is perfected at the moment when the seller obligates
herself to deliver and to transfer ownership of a thing or right to the buyer for a
price certain, as to which the latter agrees.
Andigan caused the subdivision of Lot 1052-A into five lots, namely: Lot 1052-
A-l, Lot 1052-A-2, Lot 1052-A-3, Lot 1052-A-4 and Lot 1052-A-5. On 18
October 1999, TCT No. T-21405 was cancelled and new certificates were issued
for the subdivided portions. Pertinent to the case are TCT No. T-22374 which
was issued for Lot 1052-A-l, TCT No. T-22375 for Lot 1052-A-2 and TCT No. T-
22376 for Lot 1052-A-3, all in the name of Andigan. Andigan did not turn over
the new TCTs to Magrare, Palcat and Bayombong, and the latter were unaware
of the subdivision.
On 8 May 2000, Andigan mortgaged the same three lots to petitioner and the
latter came into possession of the owner's duplicate copies of TCT Nos. T-
22374, T-22375 and T-22376.
On 22 February 2001, Magrare, Palcat and Bayombong filed before the RTC of
San Jose, Antique a Petition to Compel the Surrender to the Register of Deeds
of Antique the Owner's Duplicate Copies of TCT No. T-22374 Issued for Lot
1052-A-l; TCT No. T-22375 Issued for Lot 1052-A-2; and TCT No. T-22376
Issued for Lot 1052-A-3, all of the San Jose Cadastre against the Spouses
Isagani and Merle Andigan. The case, raffled to Branch 11 and docketed as
Civil Case No. 2001-2-3230, was tried and decided on its merits.
HELD: NO. Under Art. 2085 of the Civil Code, two (2) of the prescribed
requisites for a valid mortgage are, that, the mortgagor be the absolute owner
of the thing mortgaged and, that, he has the free disposal thereof.
One who deals with property registered under the Torrens system need not go
beyond the certificate of title, but only has to rely on the certificate of title.
A purchaser in good faith and for value is one who buys the property of
another without notice that some other person has a right to or interest in
such property and pays a full and fair price for the same at the time of such
purchase, or before he has notice of the claims or interest of some other person
in the property.
FACTS: Petitioner Dulos Realty was the registered owner of certain residential
lots covered by Transfer Certificate of Title (TCT) Nos. S-39767, S-39775, S-
28335, S-39778 and S-29776, located at Airmen's Village Subdivision, Pulang
Lupa II, Las Pinas, Metro Manila. On 20 December 1980, Dulos Realty
obtained a loan from respondent CCC in the amount of P300,000. To secure
the loan, the realty executed a Real Estate Mortgage over the subject properties
in favor of respondent. The mortgage was duly annotated on the certificates of
title on 3 February 1981.
On 29 March 1981, Dulos Realty entered into a Contract to Sell with petitioner
Cahayag over the lot covered by TCT No. S-39775. On 12 August 1981, Dulos
Realty entered into another Contract to Sell, this time with petitioner Rivera
over the lot covered by TCT No. S-28335. Dulos Realty defaulted in the
payment of the mortgage loan, prompting respondent CCC to initiate
extrajudicial foreclosure proceedings. On 17 November 1981, the auction sale
was held, with respondent CCC emerging as the highest bidder. On 23
November 1981, a Certificate of Sale covering the properties, together with all
the buildings and improvements existing thereon, was issued in favor of CCC.
The Certificate of Sale was annotated on the corresponding titles to the
properties on 8 March 1982. Thereafter, or on 13 January 1983, Dulos Realty
entered into a Contract to Sell with petitioner Escalona over the house and lot
covered by TCT No. S-29776.
The purpose of registration is to notify persons other than the parties to the
contract that a transaction concerning the property was entered into.
The general rule is that the purchaser is not required to go beyond the Torrens
title if there is nothing therein to indicate any cloud or vice in the ownership of
the property or any encumbrance thereon; The exception arises when the
purchaser or mortgagee has knowledge of a defect in the vendor’s title or lack
thereof, or is aware of sufficient facts to induce a reasonably prudent person to
inquire into the status of the property under litigation.
There is an established rule under the law on sales that one cannot give what
one does not have.
An innocent purchaser for value is one who “buys the property of another
without notice that some other person has a right to or interest in it, and who
pays a full and fair price at the time of the purchase or before receiving any
notice of another person’s claim.”
FACTS: The Bacus siblings were tbe registered owners of a parcel of land
described as Lot No. 1809-G-2 located in San Roque, Talisay, Cebu with an
area of 1,200 square meters and covered by Transfer Certificate of Title (TCT)
No. 59260. The Bacus siblings inherited the said property from their mother
Matea Bacalso (Matea). On October 15, 1987, the Bacus siblings executed a
Deed of Absolute Sale conveying a portion of Lot No. 1809-G-2 with an area of
271 sq m, described as Lot No. 1809-G-2-C, in favor of their cousin, Timoteo
for and in consideration of the amount of P8,000.00. On March 4, 1988,
however, Timoteo, together with his sisters Lucena and Victoria and some of
his cousins filed a complaint for declaration of nullity of documents, certificates
of title, reconveyance of real property and damages against the Bacus siblings
and four other persons before the RTC of Cebu City, Branch 12, and was
docketed as Civil Case No. CEB-6693. They claimed that they are co-owners of
the three-fourths portion of Lot No. 1809-G (which Lot No. 1809-G-2-C was
originally part of) as Matea had paid for the said property for and in behalf of
her brother Alejandro (father of petitioner Timoteo) and sisters Perpetua and
Liberata, all surnamed Bacalso. On November 29, 1989, the RTC found that
Matea was the sole owner of Lot No. 1809-G and affirmed the validity of the
conveyances of portions of Lot No. 1809-G made by her children. The same was
affirmed by the CA in a Decision dated March 23, 1992 and became final and
executory on April 15, 1992.
ISSUE: Whether or not the Absolute Deed of Sale is null and void ab initio for
failure or want of consideration.
HELD: YES. Well-settled is the rule that where there is no consideration, the
sale is null and void ab initio.
ISSUE: Whether the deed of sale can be used as the basis for the amount of
consideration paid.
HELD: One who pleads payment has the burden of proving it; the burden rests
on the defendant to prove payment, rather than on the plaintiff to prove
nonpayment.
A void or inexistent contract has no force and effect from the very beginning.
Unjust enrichment exists “when a person unjustly retains a benefit at the loss
of another, or when a person retains money or property of another against the
fundamental principles of justice, equity, and good conscience.”
FACTS: Appellant Oscar Villarta filed the complaint a quo for reformation of
contracts, moral damages, and attorney's fees against appellee Gaudioso
Talavera, Jr. He alleged: he owned four parcels of land, all situated in Santiago
City viz: a) 1,243 square meters under TCT No. T-130095, b) 25,000 square
meters under TCT No. T-12142, c) 296 square meters [under] TCT No. T-
53252, and d) 1,475 square meters under TCT No. T-214950; sometime in
1993, he ventured into treasure hunting activites; in order to infuse his much
needed capital, he obtained several loans from appellee who was a distant
relative; as of 1996, his loan already reached P800,000.00, inclusive of 3%
interest per month; he religiously paid the interest, but when the 1997
financial crisis struck, appellee raised the interest to a rate between 7% and
10%; in 1995, appellee employed insidious words and machinations in
convincing him to execute a deed of absolute sale over TCT No. T-130095;
however, the real agreement was that the lot would only serve as security for
the several loans he obtained; in 1997, he was again convinced to execute two
more deeds of conveyance over the two lots under TCTs T-12142 and T-53252,
respectively; in 2001, he was informed that his loan had already reached
P2,000,000.00 and since the 3 parcels of land were no longer sufficient to cover
the loan, he was further convinced to mortgage to Maybank additional real
properties, on top of the 3 parcels of land, to secure a P50 million loan; when
appellee realized that his loan was going to be approved, the former demanded
that he execute a deed of absolute sale over the lot under TCT T-214950, yet,
the real agreement was that the lot would only serve as collateral; TCT T-53252
and T-12142 were returned to him; when he requested appellee to remove the
encumbrance on TCTs T-130095 and T-214950 so that the bank could process
the loan, appellee suddenly demanded P5,000,000.00; when the bank learned
of it, he was advised not to pursue the loan because he would no longer have
the means to pay it; appellee took advantage of the situation and caused the
cancellation of TCT T-214950, by utilizing the deed of absolute sale, contrary to
their real agreement that the property should only serve as collateral; the
Deeds of Absolute Sale dated March 1995 and May 18, 2001 were in reality an
equitable mortgage; the P500,000.00 consideration for the Deed of Absolute
Sale dated May 18, 2001 was grossly inadequate because the actual market
value of the subject land was P5,900,000.00; despite the execution of the two
deeds of absolute sale, he still had possession of the subject lots and and even
leased them to Wellmade Manufacturing Corp.; because of appellee's
fraudulent act of transferring titles of the two lots to his name, he suffered
sleepless nights and serious anxiety; and, he also prayed for attorney's fees
and costs of suit.
ISSUE: The Honorable Court of Appeals erred in holding that the petitioner's
request for recomputation to determine his correct obligation must fail in view
of said Honorable Court's findings that there is no equitable mortgage despite
the clear presence of the circumstances mentioned under Article 1602 of the
Civil Code.
FACTS: Jesus Delos Santos (Jesus) and Rosita Delos Santos Flores (Rosita)
were the judgment awardees of the two-thirds portion or 9,915 square meters
of four adjoining lots designated as Lots 393-A, 393-B, 394-D and 394-E,
measuring 14,771 sq m, located in Boracay Island, Malay, Aldan.5 The award
was embodied in the Decision dated April 29, 1996 of the Regional Trial Court
(RTC) of Kalibo, Aklan in the herein Civil Case No. 3683. The losing parties in
the case, Vicente Delos Santos, et al. (plaintiffs) and Spouses Fred and Joan
Elizalde (appellants), appealed the foregoing judgment to the CA thru petitions
separately docketed as CA-G.R. CV No. 54136 and CA-G.R. SP No. 48475,
respectively. Both appeals were dismissed and considered withdrawn in the CA
Resolution dated May 11, 1999 upon the appellants' motion to withdraw
appeal. In the subsequent CA Resolution dated January 31, 2000, the motion
for reconsideration and motion to reinstate appeal filed by the plaintiffs were
denied for being time-barred as it was filed nine days late. The plaintiffs sought
recourse with the Court via a petition for review on certiorari docketed as G.R.
Nos. 141810 and 141812. In a Decision dated February 2, 2007, the Court
denied the petition on the ground that the plaintiffs already lost their right of
appeal to the CA when they failed to file an appellant's brief during the more
than 180-day extension.9 The Court reiterated its ruling in a Resolution dated
April 23, 2007, which denied reconsideration. An Entry of Judgment in the
case was forthwith issued. The case was then remanded to the RTC of Kalibo,
Aklan for the execution proceedings during which a Motion for Substitution
with a Motion for a Writ of Execution and Demolition11 dated March 14, 2008
was filed by Peña. Peña averred that he is the transferee of Jesus and Rosita's
adjudged allotments over the subject lots. He claimed that he bought the same
from Atty. Romeo Robiso (Atty. Robiso) who in turn, acquired the properties
from Jesus and Rosita through assignment and sale. Atty. Robiso later on sold
Lots No. 393-A and 394-D to Peña on December 15, 2006 thru a Deed of
Absolute Sale. The tax declarations over the said portions were subsequently
registered in Peña's name. The plaintiffs opposed Peña's motion claiming that
the conveyance made by Jesus and Rosita in favor of Atty. Robiso was null and
void for being a prohibited transaction because the latter was their counsel in
the case. Apparently, Atty. Robiso was engaged by Jesus and Rosita to be their
counsel in Civil Case No. 3683 by virtue of an Attorney's Agreement and
Undertaking dated July 11, 1998. Under the agreement, Atty. Robiso bound
himself to render his legal services in connection with Jesus and Rosita's
involvement as party-litigants in Civil Case No. 3683 and to any proceedings
that may arise in connection therewith before the CA and this Court. Atty.
Robiso undertook to advance his own funds for all expenses and costs he may
incur in relation to the case. In consideration thereof, Jesus and Rosita obliged
themselves to give or pay to him as contingent professional fees, 2,000 sq m of
any and all lands that the courts will award to them in the case.
RULING: NONE. Under Article 1409 of the Code, contracts which are expressly
prohibited or declared void by law are considered inexistent and void from the
beginning.
Estoppel is a principle in equity and pursuant to Article 1432 it is adopted
insofar as it is not in conflict with the provisions of the Civil Code and other
laws.
HELD: Article 1484 of the Civil Code governs the sale of personal properties in
installments.
FACTS: The petitioners Rosario Victoria (Rosario) and Elma lived together since
1978 until Rosario left for Saudi Arabia.
In 1984, Elma bought a parcel of land with an area of 201 square meters in
Lucena City and was issued Transfer Certificate of Title (TCT) No. T-50282.2
When Rosario came home, she caused the construction of a house on the lot
but she left again after the house was built. Elma allegedly mortgaged the
house and lot to a certain Thi Hong Villanueva in 1989. When the properties
were about to be foreclosed, Elma allegedly asked for help from her sister-in-
law, Eufemia Pidlaoan (Eufemia), to redeem the property. On her part, Eufemia
called her daughter abroad, Normita, to lend money to Elma. Normita agreed to
provide the funds. Elma allegedly sought to sell the land. When she failed to
find a buyer, she offered to sell it to Eufemia or her daughter. On March 21,
1993, Elma executed a deed of sale entitled "Panananto ng Pagkatanggap ng
Kahustuhang Bayad" transferring the ownership of the lot to Normita. The last
provision in the deed of sale provides that Elma shall eject the person who
erected the house and deliver the lot to Normita. The document was signed by
Elma, Normita, and two witnesses but it was not notarized. When Elma and
Normita were about to have the document notarized, the notary public advised
them to donate the lot instead to avoid capital gains tax. On the next day, Elma
executed a deed of donation in Normita's favor and had it notarized. TCT No. T-
50282 was cancelled and TCT No. T-70990 was issued in Normita's name.
Since then, Normita had been paying the real property taxes over the lot but
Elma continued to occupy the house. Rosario found out about the donation
when she returned to the country a year or two after the transaction. In 1997,
the petitioners filed a complaint for reformation of contract, cancellation of TCT
No. T-70990, and damages with prayer for preliminary injunction against
Eufemia, Normita, and Herminigilda Pidlaoan (respondents).
ISSUE: Whether the transaction between Elma and Normita was an equitable
mortgage
HELD: NO. One who deals with property registered under the Torrens system
has a right to rely on what appears on the face of the certificate of title and
need not inquire further as to the property’s ownership.
The issuance of a certificate of title does not preclude the possibility that
persons not named in the certificate may be co-owners of the real property, or
that the registered owner is only holding the property in trust for another
person.
HELD: NO. Article 1448 of the Civil Code provides in part that there is an
implied trust when property is sold, and the legal estate is granted to one party
but the price is paid by another for the purpose of having the beneficial interest
of the property.
FACTS: On June 23, 1952, Cristino Sibbaluca (Cristino) purchased from one
Pedro Espero a parcel of land with an area of 10.9524 hectares, located in
Bacayan, Baggao, Cagayan. On October 21, 1972, Presidential Decree (PD) No.
278 was promulgated. Under this law, the Operation Land Transfer (OLT) was
launched to implement and enforce the provisions on transferring ownership to
qualified tenant-farmers or farmer beneficiaries of the rice or corn land they are
cultivating under a system of sharecrop or lease tenancy, with the landowner
having retention of not more than seven hectares of agricultural land.
Cristino's property was placed under the coverage of the OLT. On March 21,
1975, Cristino sold seven hectares of the lot covered by Transfer Certificate of
Title (TCT) No. T-1336 to Lito Sibbaluca (Lito); and on October 12, 1976, he
sold the remaining 3.9524 hectare property (property) to petitioner. For the sale
to petitioner, Cristino executed an Affidavit certifying that the property was not
tenanted (Affidavit of Non- Tenancy). On December 4, 1987 and February 19,
1988, Emancipation Patents (EPs) were issued in favor of the farmer-
beneficiaries of the property including Agapito Liban, Cesario Liban, Frederito
Tanguilan, Eustaquio Macanang, Jr., Pacita Vda. De Macanang, Isidro
Natividad, Saturnino Sibbaluca and Isidro Sibbaluca. In a Resolution dated
October 7, 1991, the Provincial Agrarian Reform Office (PARO) recommended
the following: (1) granting the application of Isabel; (2) causing the recall and
cancellation of the Certificate of Land Transfer (CLT) and/or EPs awarded to
the farmer- beneficiaries; and (3) the execution of a leasehold contract between
the landowner and the farmer-beneficiaries. The PARO ruled that the sale of
the property to petitioner does not affect the coverage of the land under the
OLT because the property still belonged to spouses Cristino and Isabel in 1972
when PD No. 27 took effect. In an Order dated January 30, 1995, the DAR
Regional Office (DARRO) OIC Director affirmed the PARO Order and authorized
Isabel to withdraw any amortization deposited by the tenants to the Land Bank
of the Philippines. In addition, he declared the sale between Cristino and
petitioner "null and void, x x x being contrary to the provisions of DAR Memo
Circular No. 8, Series of 1974, which prohibits the transfer of ownership of
tenanted rice/corn lands after October 21, 1972." In the same Order, the
DARRO Director stated that the Municipal Agrarian Reform Office (MARO) of
Baggao, Cagayan placed the land under OLT "finding that [the property] is
devoted to the production of palay and [is] tenanted. The DARRO ruled in
petitioner's favor. Respondents appealed the resolution to the DAR, but the
DAR Secretary dismissed the appeal. Respondents moved for the
reconsideration of the Order, but the DAR Secretary denied their motion for
lack of merit. Respondents filed an appeal with the Office of the President (OP).
In its Decision, the OP granted the appeal and denied the application for
retention of Isabel as substituted by petitioner. Petitioner thus appealed to the
CA. The CA affirmed the OP Decision
HELD: NO. A purchaser m good faith is one who buys a property without
notice that some other person has a right to, or interest in, the property and
pays full and fair price at the time of purchase or before he has notice of the
claim or interest of other persons in the property.
HELD: YES. The consolidation of title prescribed in Article 1607 of the Civil
Code is merely for the purpose of registering and consolidating title to the
property in case of a vendor a retro’s failure to redeem.
It is basic that in a pacto de retro sale, the title and ownership of the property
sold are immediately vested in the vendee a retro.
FACTS: The 1976 Lease Agreement and Option to Purchase almost 40 years
ago or on 6 August 1976, the respondent Keppel Philippines Holdings, Inc.
(Keppel) entered into a lease agreement (the agreement) with Luzon Stevedoring
Corporation (Lusteveco) covering 11 hectares of land located in Bauan,
Batangas. The lease was for a period of 25 years for a consideration of P2.1
million. At the option of Lusteveco, the rental fee could be totally or partially
converted into equity shares in Keppel. At the end of the 25-year Jease period,
Keppel was given the "firm and absolute option to purchase the land for P4.09
million, provided that it had acquired the necessary qualification to own land
under Philippine laws at the time the option is exercised. Apparently, when the
lease agreement was executed, less than 60% of Keppel's shareholding was
Filipino-owned, hence, it was not constitutionally qualified to acquire private
lands in the country. If, at the end of the 25-year lease period (or in 2001),
Keppel remained unqualified to own private lands, the agreement provided that
the lease would be automatically renewed for another 25 years. Keppel was
further allowed to exercise the option to purchase the land up to the 30th year
of the lease (or in 2006), also on the condition that, by then, it would have
acquired the requisite qualification to own land in the Philippines. Together
with Keppel's lease rights and option to purchase, Lusteveco warranted not to
sell the land or assign its rights to the land for the duration of the lease unless
with the prior written consent of Keppel. Accordingly, when the petitioner
Philippine National Oil Corporation (PNOC) acquired the land from Lusteveco
and took over the rights and obligations under the agreement, Keppel did not
object to the assignment so long as the agreement was annotated on PNOC's
title. With PNOC's consent and cooperation, the agreement was recorded as
Entry No. 65340 on PNOC's Transfer of Certificate of Title No. T-50724. To
compel PNOC to comply with the Agreement, Keppel instituted a complaint for
specific performance with the RTC on 26 September 2003 against PNOC. PNOC
countered Keppel's claims by contending that the agreement was illegal for
circumventing the constitutional prohibition against aliens holding lands in the
Philippines. It further asserted that the option contract was void, as it was
unsupported by a separate valuable consideration. It also claimed that it was
not privy to the agreement. After due proceedings, the RTC rendered a decision
in favour of Keppel and ordered PNOC to execute a deed of absolute sale upon
payment by Keppel of the purchase price of P4.09 million. PNOC elevated the
case to the CA to appeal the RTC decision. Affirming the RTC decision in toto,
the CA upheld Keppel's right to acquire the land. It found that since the option
contract was embodied in the agreement - a reciprocal contract - the
consideration was the obligation that each of the contracting party assumed.
Since Keppel was already a Filipino-owned corporation, it satisfied the
condition that entitled it to purchase the land. Failing to secure a
reconsideration of the CA decision, PNOC filed the present Rule 45 petition
before this Court to assail the CA rulings.
ISSUE: Validity of the option contract, i.e., whether the option to purchase the
land given to Keppel is supported by a separate valuable consideration.
The consideration for an option contract does not need to be monetary and
may be anything of value.he When the written agreement itself does not state
the consideration for the option contract, the offeree or promisee bears the
burden of proving the existence of a separate consideration for the option.
After Thelma learned of the second sale of Lot 398-A, she filed against the
respondents a complaint for the Declaration of Nullity of the Second Sale and
TCT No. T-226775 on February 11, 2003, docketed as Civil Case No. 7664. In
support of her claim, Thelma once again presented a deed of absolute sale
executed by Neri in her favor. This time, the deed of sale she presented was
duly signed by her and Neri, witnessed, notarized and dated April 10, 1997.
The respondents countered that they are innocent purchasers for value having
bought Lot 398-A at the time when Thelma's adverse claim was already
cancelled. While they admit Thelma's possession of the subject property, they,
however, qualify that possession is being contested in a separate action for
forcible entry. The respondents also filed a verified answer-in-intervention in
Civil Case No. 7394 (injunction case) contending that they are the present
registered owners of Lot 398-A, and as such, Thelma is not entitled to any
relief.
ISSUE: Whether the transaction between Neri and Thelma is a contract of sale
or a contract to sell.
HELD: The real character of the contract is not the title given, but the intention
of the parties.
A contract to sell, which is a “bilateral contract whereby the prospective seller,
while expressly reserving the ownership of the property despite delivery thereof
to the prospective buyer, binds himself to sell the property exclusively to the
prospective buyer upon fulfillment of the condition agreed upon, i.e., the full
payment of the purchase price.”
The alleged delivery of the property, even if true, is irrelevant considering that
in a contract to sell, ownership is retained by the registered owner in spite of
the partial payment of the purchase price and delivery of possession of the
property.
The RTC granted the Complaint of Bonifacio and Artemio and ordered the
Spouses Serrano to execute and sign the proper Deed of Sale, deliver the
corresponding titles after receiving the P4,000.00 balance. The CA, however,
reversed and set aside the RTC Decision finding that the trial court seemed to
have failed to properly determine the true nature of the agreement between the
parties. This is because by the express terms of the agreement, the title was
reserved and remained with the Spouses Serrano, to be transferred only when
Bonifacio and Artemio paid the last installment of the purchase price in June
1978. The failure by Bonifacio and Artemio to pay prevented the obligation of
the Spouses Serrano to convey the title from acquiring binding force. In the
instant petition, Bonifacio argues that since he did not receive any formal
demand from the Spouses Serrano, he did not incur delay. In addition,
Bonifacio also raises the provisions of Republic Act (RA) No. 6552, otherwise
known as the Realty Installment Buyer Protection Act, insofar as his rights as a
buyer of real property are concerned.
HELD: NO. In a contract of sale, the title to the property passes to the vendee
upon the delivery of the thing sold whereas in a contract to sell, the ownership
is, by agreement, retained by the vendor and is not to pass to the vendee until
full payment of the purchase price.
In conditional sales of all kinds of real estate, Republic Act (RA) No. 6552
recognizes the right of the seller to cancel the contract upon nonpayment of an
installment by the buyer, it also provides for the rights of the buyer in case of
such cancellation.
Failure on the part of the seller to comply with the requirements prescribed by
Republic Act (RA) No. 6552.
FACTS: Sometime in July 1992, Cattleya Land, Inc. (Cattleya) sent its legal
counsel, Atty. Federico C. Cabilao, Jr. (Atty. Cabilao, Jr.), to Tagbilaran City to
investigate at the Office of the Register of Deeds in that city the status of the
properties of spouses Col. Troadio B. Tecson (Col. Tecson) and Asuncion
Tecson (collectively, Tecson spouses), which Cattleya wanted to purchase. One
of these properties, an 8,805-square meter parcel of land located at Doljo,
Panglao, Bohol, is registered in the name of the Tecson spouses, and covered
by Transfer Certificate of Title (TCT) No. 17655 (henceforth, the subject
property). Atty. Cabilao, Jr. found that no encumbrances or liens on the
subject property had been annotated on the TCT thereof, except for an
attachment issued in connection with Civil Case No. 3399 entitled "Tantrade
Corporation vs. Bohol Resort Hotel, Inc., et al."
The writ of attachment on the certificate of title to the subject property was,
however, lifted, after the parties in Civil Case No. 3399 reached an amicable
settlement or compromise agreement. Even then, however, Cattleya did not still
succeed in having the aforementioned Deed of Absolute Sale registered, and in
having title to the subject property transferred to its name, because it could not
surrender the owner's copy of TCT No. 17655, which was in possession of the
Tecson spouses. According to Cattleya, the Tecson spouses could not deliver
TCT No. 17655 to it, because according to the Tecson spouses this certificate of
title had been destroyed in a fire which broke out in Sierra Bullones, Bohol.
This claim by the Tecson spouses turned out to be false, however, because
Atty. Cabilao, Jr. came to know, while following up the registration of the
August 30, 1993 Deed of Absolute Sale at the Office of the Register of Deeds of
Bohol, that the owner's copy of TCT No. 17655 had in fact been presented by
Taina at the Office of the Register of Deeds of Bohol, along with the Deed of
Sale that was executed by the Tecson spouses, in favor of Taina covering the
subject property.
It appears that when Taina's then common-law husband, Michael (Mike) Stone,
visited Bohol sometime in December 1985, he fell in love with the place and
decided to buy a portion of the beach lot in Doljo, Panglao, Bohol. They met
with Col. Tecson, and the latter agreed to sell them a portion of the beach lot
for US$8,805.00. Mike and Taina made an initial downpayment of
US$1,750.00 (or equivalent P35,000.00 at that time) for a portion of a beach
lot, but did not ask for a receipt for this initial downpayment. On June 1, 1987,
a Deed of Absolute Sale covering the subject portion was executed by Col.
Tecson in Taina's favor. Subsequent payments were made by Mike totalling
P40,000.00, as of August 29, 1986, although another payment of P5,000.00
was made sometime in August 1987. The last payment in the amount of
P32,000.00, was made in September 1987.10 In 1990, Troadio Tecson, Jr., the
son of Col. Tecson and Taina's brother-in-law, delivered to Taina the owner's
copy of TCT No. 17655.
Given the fact that the sale by the Tecson spouses to Taina as Mike’s dummy
was totally abhorrent and repugnant to the Philippine Constitution, and is
thus, void ab initio, it stands to reason that there can be no double sale to
speak of here.
FACTS: Privaldo, along with the other heirs of the late Asisclo, has
maintained their occupation and possession of the subject property located in
Boracay Island. The heirs of the late Zosimo claimed ownership over10,000
square meters of said property by a virtue of a Deed of Sale dated February 8,
1975 betweem Zosimo and Asiclo. The heirs of Zosimo filed a case for quieting
of title with recovery of possession and the RTC ruled in their favor. While the
motion for execution was pending, the Supreme Court declared Boracay
Island as government property. The CA ordered the decision of the RTC
granting the motion for execution as null and void and ruled that the Boracay
decision was a supervening event and the RTC erred in not declaring null
and void the sale of unregistered land considering that Boracay Island has
been classified as an inalienable land. The heirs of Zosimo argued that the
Boracay decision is not a supervening event and the settled dispute between
the parties as to who has the better right to the property is distinct and
separate from the issue of titling sought in the Boracay decision.
HELD: NO. The Supreme Court (SC) in The Secretary of the Department of
Environment and Natural Resources (DENR), et al. v. Yap, et al. and Sacay, et
al. v. The Secretary of the DENR, et al., 568 SCRA 164 (2008), ruled that the
entire island of Boracay as state-owned except for lands already covered by
existing titles
All lands that have not been acquired from the government, either by purchase
or by grant, belong to the State as part of the inalienable public domain.
Odrada was the proper party to ask for rescission. The right of rescission is
implied in reciprocal obligations where one party fails to perform what is
incumbent upon him when the other is willing and ready to comply. It was not
proper for Lim to exercise the right of rescission since Odrada had already
complied with the contract of sale by delivering the Montero while Lim
remained delinquent in payment. The defective condition of the Montero was
not a supervening event that would justify the dishonor of the manager's
checks. A manager's check is equivalent to cash and is really the bank's own
check. It may be treated as a promissory note with the bank as maker
constitutes a written promise to pay on demand. Being the party primarily
liable, the trial court ruled that RCBC was liable to Odrada for the value of the
manager's checks. Court of Appeals dismissed the appeal... when RCBC issued
the manager's checks in favor of Odrada, RCBC admitted the existence of the
payee and his then capacity to endorse, and undertook that on due
presentment the checks which were negotiable instruments would be accepted
or paid, or both according to its tenor. RCBC alone filed this petition before the
Court. Thus, the decision of the Court of Appeals became final and executory
as to Lim.
HELD: YES. Under the law on sales, a contract of sale is perfected the moment
there is a meeting of the minds upon the thing which is the object of the
contract and upon the price which is the consideration.
The law fixes the liability of the vendor for hidden defects whether known or
unknown to him at the time of the sale.
The law defines a hidden defect as one which would render the thing sold unfit
for the use for which it is intended, or would diminish its fitness for such use
to such an extent that, had the vendee been aware thereof, he would not have
acquired it or would have given a lower price for it.
FACTS: Ray Burton Development Corp (RBDC) owned and developed Elizabeth
Place, a condominium located at Salcedo Village, Makati City. Universal
International Investment (Universal) and RBDC entered into separate Contracts
to Sell covering the purchase of ten condominium units and ten parking slots.
Universal paid RBDC the full purchase price of the properties amounting to
₱52,836,781.50. Universal demanded RBDC the cancellation of the sale after
RBDC failed to deliver possession of the properties and reneged on its
obligation to transfer the Condominium Certificates o f Title (CCT) to
Universal’s name. Universal subsequently discovered that the mother title to
the lot of Elizabeth Place is mortgaged to China Banking Corporation (China
Bank). The securities were foreclosed by China Bank. Universal filed a
Complaint for Specific Performance or Rescission of Contract and Damages
with the Expanded National Capital Region Field Office (ENCRFO) of the
HLURB. The ENCRFO rendered a decision in favor of Universal. When the case
reached the Court of Appeals (CA), Universal manifested that China Bank had
released the subject properties and Universal had already obtained their CCTs.
When RBDC moved for dismissal of the case, Universal claimed that it is RBDC
is still liable for damages and compensation for property losses supposedly to
cover the depreciation costs and expenses it had incurred for the release of the
properties from China Bank under Section 6 of the Contract to Sell. Section 6
reads: SECTION 6. BREACH AND/OR VIOLATIONS OF THE CONTRACT. This
agreement shall be deemed cancelled, at the option of the BUYER, in the event
that SELLER, for the reasons of force majeure, decide not to continue with the
Project or the Project has been substantially delayed. In such a case, the
BUYER shall be entitled to refund all the payments made with interest at one-
and-a- half (1½) percent per month on the amount paid computed from the
date of cancellation until the payments have been fully refunded. Substantial
delay is defined as six (6) months from date of estimated date of completion.
The parties agree that the estimated date of completion shall be December 31,
1998.
ISSUES:
- Whether the CA gravely erred in denying the demand of petitioner for the
liquidated damages specified in Section 6 of the Contracts to Sell
- Whether petitioner is entitled to damages on account of the contractual
breaches committed by respondent
HELD: If the terms of the contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulations shall
control.
In order to recover damages, the claimant must prove (1) an injury or a wrong
sustained (2) as a consequence of a breach of contract or tort and (3) caused by
the party chargeable with a wrong
In order that the debtor may be held to be in default, the following requisite
conditions must be present: (1) the obligation is demandable and already
liquidated; (2) the debtor delays performance of the obligation; and (3) the
creditor requires the performance judicially or extrajudicially.
Temperate Damages may be recovered when the court finds that some
pecuniary loss has been suffered but the amount cannot be proven with
certainty.
Article 2232 of the Civil Code of the Philippines provides that in contracts, the
court may award exemplary damages if the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner.
SALES 2017
FACTS: The Spouses Villaluz filed a complaint with the Regional Trial Court
(RTC) of Davao City seeking the annulment of the foreclosure sale. They argue
that the Real Estate Mortgage was void because there was no loan yet when the
mortgage contract was executed and that the Special Power of Attorney was
extinguished when Milflores Cooperative assigned its produce and inventory to
Land Bank as additional collateral. In response, Land Bank maintains that the
CA and RTC did not err in applying Article 1892, that the Real Estate Mortgage
can only be extinguished after the amount of the secured loan has been paid,
and that the additional collateral was executed because the deed of assignment
was meant to cover any deficiency in the Real Estate Mortgage.
ISSUE: Whether or not an agent may appoint a substitute if the principal has
not prohibited him from doing so.
HELD: The law creates a presumption that an agent has the power to appoint a
substitute. The consequence of the presumption is that, upon valid
appointment of a substitute by the agent, there ipso jure arises an agency
relationship between the principal and the substitute, i.e., the substitute
becomes the agent of the principal. As a result, the principal is bound by the
acts of the substitute as if these acts had been performed by the principal's
appointed agent. Concomitantly, the substitute assumes an agent's obligations
to act within the scope of authority, to act in accordance with the principal's
instructions, and to carry out the agency, among others. In order to make the
presumption inoperative and relieve himself from its effects, it is incumbent
upon the principal to prohibit the agent from appointing a substitute.
Under Articles 1461 and 1462, things having a potential existence and "future
goods," i.e., those that are yet to be manufactured, raised, or acquired, may be
the objects of contracts of sale.
In order to give effect to Articles 134 7, 1461, and 1462, Article 1409(3) must
be interpreted as referring to contracts whose cause or object is impossible of
existing at the time of the transaction.
"Dation in payment extinguishes the obligation to the extent of the value of the
thing delivered, either as agreed upon by the parties or as may be proved,
unless the parties by agreement-express or implied, or by their silence-consider
the thing as equivalent to the obligation, in which case the obligation is totally
extinguished."
In its defense, GSIS moved for the dismissal of the complaint for lack of cause
of action. It asserted that the deeds of conditional sale were executed between
La Paz and the petitioners only and that its only participation in the
transactions was to grant loans to the petitioners for the purchase of their
respective properties.
ISSUE: Whether or not La Paz should be held liable for the structural defects
on its implied warranty against hidden defects.
HELD: Under the Civil Code, the vendor shall be answerable for warranty
against hidden defects on the thing sold.
For the implied warranty against hidden defects to be applicable, the following
conditions must be met:
a. Defect is Important or Serious
i. The thing sold is unfit for the use which it is intended
ii. Diminishes its fitness for such use or to such an extent that the buyer would
not have acquired it had he been aware thereof
b. Defect is Hidden
c. Defect Exists at the time of the sale
d. Buyer gives Notice of the defect to the seller within reasonable time
One of the purposes of P.D. No. 957, also known as The Subdivision and
Condominium Buyers' Protective Decree, is to discourage and prevent
unscrupulous owners, developers, agents, and sellers from reneging on their
obligations and representations to the detriment of innocent purchasers.
Subsequently, the Spouses Tablada discovered that the subject property was
mortgaged as a security for a loan in the amount of over ₱4,000,000.00 with
Premiere Development Bank as mortgagee and Spring Homes as mortgagor. In
fact, since the loan remained unpaid, extrajudicial proceedings were
instituted. Meanwhile, without waiting for trial on the specific performance
and sum of money complaint, the Spouses Lumbres and Spring Homes entered
into a Compromise Agreement, wherein Spring Homes conveyed the subject
property, as well as several others, to the Spouses Lumbres. By virtue of said
agreement, the Spouses Lumbres were authorized to collect Spring Homes'
account receivables arising from the conditional sales of several properties, as
well as to cancel said sales, in the event of default in the payment by the
subdivision lot buyers. In its capacity as mortgagee, Premiere Development
Bank was included as a party in the Compromise Agreement.
ISSUE: Whether or not the Sps. Lumbres registered their title over the subject
property in bad faith.
HELD: The principle of primus tempore, potior jure (first in time, stronger in
right) gains greater significance in case of a double sale of immovable property.
Knowledge gained by the first buyer of the second sale cannot defeat the first
buyer's rights except only as provided by law, as in cases where the second
buyer first registers in good faith the second sale ahead of the first.
In order for the Spouses Lumbres to obtain priority over the Spouses Tablada,
the law requires a continuing good faith and innocence or lack of knowledge of
the first sale that would enable their contract to ripen into full ownership
through prior registration.
The record showed that as early as 1921, Lot No. 1633 was declared for
taxation purposes in the name of Felipe Obado (Felipe). After Felipe's death,
Paterno Obado (Paterno), whom Felipe treated like his own son, subsequently
occupied Lot No. 1633 and continued to pay the realty taxes of the same.
On the next day following the execution of the said affidavit or on February 24,
1995, Antonio and Elena Ballesteros (Spouses Ballesteros) sold the subject
parcel of land to the petitioners for the sum of P70,000.000 evidenced by a
Deed of Absolute Sale. Thereafter, the petitioners declared the subject lot for
taxation purposes and paid the realty taxes thereon.
Respondents averred that the Spouses Ballesteros were not the owners and
possessors of the subject parcel of land. They maintained that Lot No. 1633
was inherited by their father, Paterno, from its original owner Felipe, and they
have been paying the real property taxes for the entire property. They asserted
that the petitioners are buyers in bad faith since their family had been in
possession of the entire Lot No. 1633 since 1969 and had been in open,
peaceful and uninterrupted possession of the whole property up to the present
or for more than 30 years in the concept of an owner.
ISSUE: Whether or not the petitioners were able to prove ownership over the
subject parcel of land.
HELD: Although tax declarations or realty tax payment of property are not
conclusive evidence of ownership, as in the instant case, they are good indicia
of possession in the concept of owner, for no one in his right mind would be
paying taxes for a property that is not in his actual or constructive possession.
The Court had already ruled that the issue of good faith or bad faith of a buyer
is relevant only where the subject of the sale is a registered land but not where
the property is an unregistered land. One who purchases an unregistered land
does so at his peril.
FACTS: RTC refused to restore to Urban Bank, Eric L. Lee, and Delfin C.
Gonzales, Jr. the actual ownership of their respective club shares on the
pretext that these had already been transferred to third parties.
Aggrieved, he came directly to this Court and asked for the reversal of the
ruling of the trial court's ruling, as well as for the cancellation of the shares in
the name of Vera.
Petitioner points out that Peña obtained the property at a public auction that
has been declared void by this Court. He then asserts that Vera, as successor-
in-interest, has no right over those shares. He further claims that the trial
court erred in concluding that the actual restitution of the club shares to him
was impossible, since the transfer of the property could have simply been
recorded in the club's stock and transfer books.
ACCI claims that because the subject property has been transferred to a third
person, its return to petitioner is no longer possible.
ISSUE: Whether or not the RTC faithfully complied with our directive to restore
to Urban Bank and the latter's officers their properties illegally obtained by
Peña.
HELD: Void transactions do not produce any legal or binding effect, and any
contract directly resulting from that illegality is likewise void and inexistent.
Article 1505 of the Civil Code instructs that "x x x where goods are sold by a
person who is not the owner thereof, and who does not sell them under
authority or with the consent of the owner, the buyer acquires no better title to
the goods than the seller had, unless the owner of the goods is by his conduct
precluded from denying the seller's authority to sell. x x x."
FACTS: Arcaina entered into a contract with Ingram for the sale of the
property, described as follows:
A parcel of land Lot No. 3230, situated at Salvacion, Sto. Domingo, Albay,
Bounded on the NE-by Lot 3184 on the SE-by Seashore on the SW-Lot No.
3914 and on the NW-by Road with an area of SIX THOUSAND TWO
HUNDRED (6,200) sq. meters more or less.
In her Complaint, Ingram alleged that upon discovery of the actual area of the
property, Banta insisted on fencing the portion which she claimed to be
unsold. Ingram further maintained that she is ready to pay the balance of
₱145,000.00 as soon as petitioners recognize her ownership of the whole
property. After all, the sale contemplated the entire property as in fact the
boundaries of the lot were clearly stated in the deeds of sale.
Petitioners assail that the sale of the property was made for a lump sum. They
insist that they sold the property on a per-square-meter basis, at the rate of
₱300.00 per sq. m. They further claim that they were aware that the property
contains more than 6,200 sq. m. According to petitioners, this is the reason
why the area sold is specifically stated in the deeds of sale. Unfortunately, in
the drafting of the deeds, the word "portion" was omitted. They allege that
contemporaneously with the execution of the formal contract of sale, they
delivered the area sold and constructed a fence delineating the unsold portion
of the property. Ingram allegedly recognized the demarcation because she
introduced improvements confined to the area delivered. Since the sale was on
a per-square-meter basis, petitioners argue that it is Article 1539, and not
Article 1542 of the Civil Code, which governs.
ISSUE: Whether or not the sale was made on a lump sum or per-square-meter
basis.
HELD: Where both the area and the boundaries of the immovable are declared
in a sale of real estate for a lump sum, the area covered within the boundaries
of the immovable prevails over the stated area.
In a lump sum contract, a vendor is generally obligated to deliver all the land
covered within the boundaries, regardless of whether the real area should be
greater or smaller than that recited in the deed.
The use of 'more or less' or similar words in designating quantity covers only a
reasonable excess or deficiency.
Malim, Abangan and Macal (Malim, et al.) further averred that on February 11,
2000, they signed the Memorandum of Agreement (MOA) authorizing them to
"look, negotiate, and sell to any prospective buyer" for their properties on a
commission basis; that they were also authorized by the Ticongs to charge an
"overprice" on top of the P900.00 per square meter price; that the subject
properties were eventually sold at P1,460.00 per square meter or for the total
amount of P7,300,000.00; that the sale was made possible due to their efforts
which should entitle them to an overprice commission of P2,800,000.00 based
on the P560.00 per square meter overprice; and that the Ticongs, however,
paid them only P50,000.00 and refused to pay the remaining balance despite
demands.
The Ticongs, on the other hand, stressed that Malim, et al. were not entitled to
the overprice commission; that the MOA was crafted and solely prepared by
Malim, et al. and that they signed the same without comprehending the salient
aspects thereof due to their limited education; that the sale of their properties
prospered through their own active, direct and personal efforts and was
eventually attained when they sued the Buyer; and that Malim, et al. had
received not only the amount of P50,000.00 but a total of P225,000.00. The
Ticongs denied that Malim, et al. offered to sell their properties to the Buyer.
They pointed out that Malim, et al. were not even licensed realty brokers and
considering the questionable and anomalous nature of the MOA, the provision
therein with respect to the overprice commission and 5% finders' fee were not
valid, binding and enforceable against them.
ISSUE: Whether or not Malim, et al. were entitled to the payment of their
brokers' overprice commission for being the procuring cause of the sale.
When there is a close, proximate and causal connection between the agent's
efforts and the sale of the property, the agents are entitled to their commission.
Basic is the principle that a contract (the MOA in this case) is the law between
the parties, and its stipulations are binding on them, unless the contract is
contrary to law, morals, good customs, public order or public policy.
The subject of this petition is a parcel of land designated as Lot No. 480-A,
originally owned by Gregorio Pajulas (Gregorio). He then gave a portion of the
land (Lot No. 480-B) to his granddaughter Lulihala Pajulas who took care of
him; Gregorio died and Pajulas sisters adjudicated the remaining portion of the
land (Lot No. 480-A) equally among themselves; Upon the death of Isabel
(sister), her share was inherited by her heirs, namely: her husband and
children Iluminada Gadiane (Iluminada), Norma Gadiane (Norma) and Maria
Gadiane-Ortiza (Maria) (Gadiane sisters); Norma sold to Spouses Jangas a
portion of her share with an area of 1,462 sq m, which the latter declared in
the name of Petronila; Iluminada and Norma sold to the Spouses Jangas
another portion with an area of 912 sq m, which was later also declared in the
name of Petronila; Thereafter, Iluminada made subsequent sales as follows: (1)
288 sq m to Candelaria Rusiana (Candelaria); (2) 3,243 sq m to Merla
Macalipay-Kitane (Merla); and (3) 288 sq m to Juana Jalandoni (Juana);
Sometime, Bruna sold her one-third-share of Lot No. 480-A to Spouses
Gaudencio Delayco (Gaudencio) and Lucia Amigo-Delayco (Spouses Delayco);
The heirs of Gaudencio, represented by Bridiana Delayco (Bridiana), applied for
and was ·granted a free patent over the entire Lot No. 480-A. Consequently,
OCT under Free Patent was issued in the name of the heirs of Gaudencio;
Subsequently, Bridiana transferred the title over Lot No. 480-A to her name
alone, and was issued TCT; Bridiana sold the subject property to the
petitioner; and TCT was issued to Spouses Tiu, who also had the subject
property declared in their names. Then, Spouses Tiu mortgaged the subject
property with the RBAI.
The trial court dismissed the petitioner's claim of ownership over the subject
property taking note that the sale and transfer effected by Bruna in favor of the
Spouses Delayco was merely her one-third-share of the subject property.
In the instant case, Bruna owned 1/3 of Lot 480-A, the same 1/3 share is what
she can validly transfer to [S]pouses Delayco and not the whole lot. Nemo dat
quad non habet - no one can give what one does not have. Accordingly, one can
sell only what one owns or is authorized to sell, and the buyer can acquire no
more than what the seller can transfer legally. Such being the case, the
Delaycos could not validly transfer the whole of Lot 480-A to themselves and
sell the same to [S]pouses Tiu.
Although the fact of sale of Bruna's share to the [S]pouses Delaycos was not an
issue, this Court however, could not actually determine the extent of the
property sold by Bruna to them as there was no deed of sale found in the
records. Even assuming arguendo that Bruna sold the entire Lot 480-A to the
Delaycos, the said sale is not null and void. This only made the Delaycos co-
owner of the property which pertains to the share of Bruna.
HELD: When a piece of land is in the actual possession of persons other than
the seller, the buyer must be wary and should investigate the rights of those in
possession. Without making such inquiry, one cannot claim that he is a buyer
in good faith.
June 7, 2017
G.R. No. 206008
DELFIN DOMINGO DADIS vs. SPOUSES MAGTANGGOL DE GUZMAN and
NORA Q. DE GUZMAN, and THE REGISTER OF DEEDS OF TALAVERA,
NUEVA ECIJA,
PERALTA, J.:
A person who deliberately ignores a significant fact that could create suspicion
in an otherwise reasonable person is not an innocent mortgagee for value.
The sale (or encumbrance) of conjugal property without the consent of the
husband was not merely voidable but void; hence, it could not be ratified.
Jorge filed cases for ejectment and annulment of sale, reconveyance and
recovery of possession, however, during the pendency of said cases, the subject
property was sold by Jorge and Jacinta to respondents Spouses Cortez under a
Deed of Absolute Sale. At the time of said sale, Dolores was in possession of the
subject property.
Dolores filed the case a quo for annulment of deed of sale and damages against
the Spouses Cortez and the Spouses Leonardo.
Whether or not Spouses Cortez were not buyers in good faith as they knew that
the property was being occupied by other persons.
HELD: The disposition of conjugal property of one spouse sans the written
consent of the other is void.
Article 526 of the Civil Code provides that she is deemed a possessor in good
faith, who is not aware that there exists in her title or mode of acquisition any
flaw that invalidates it.
FACTS: Petitioner is the owner of Lot 5158 located in Vito, Minglanilla, Cebu.
He agreed to sell the subject land to his brothers Nelson Dy (Nelson) and
Sancho Dy, Jr. (Sancho). Nelson found out that the subject land had gone
through a series of anomalous transactions. The owner's duplicate copy of TCT
was declared lost. As a result, a new owner's duplicate copy of the same TCT
was issued and the subject land was subsequently mortgaged.
Mamerto, through his lawyer, sent a letter to the Register of Deeds of Cebu
informing the said office that his owner's duplicate copy was never lost and
that he never mortgaged his property to anyone.
When Mamerto discovered that the subject land was being fenced upon the
instruction of respondent Maria Lourdes Rosell Aldea (Lourdes), he
immediately filed a complaint against the latter before the barangay office of
Minglanilla.
For her part, Lourdes countered that in 2004, a certain Mila Labang (Mila) was
introduced to her by her aunt Luz Aldea (Luz). Mila told her that several
parcels of land in Minglanilla, including the subject land, were purportedly for
sale.
On June 20, 2004, Lourdes met with the person impersonating Mamerto (the
impostor) at a hotel in Cebu City. She gave the impostor P1,010,700.00 as
payment for the 3,369 square meter-portion of the subject land. Thereafter,
they signed the Deed of Sale in the presence of Mila, Fatima and Zenon
Aldea (Zenon), Lourdes' uncle. Afterwards, Lourdes, Fatima and the impostor
went to the office of Atty. Lim to pay the mortgage loan.
HELD: In Spouses Paulino v. CA, the Court reiterated the rule that when the
owner's duplicate certificate of title was not actually lost or destroyed, but is in
fact in the possession of another person, the reconstituted title is void because
the court that rendered the order of reconstitution had no jurisdiction over the
subject matter of the case.
The mirror doctrine provides that every person dealing with registered land
may safely rely on the correctness of the certificate of title issued therefor and
is in no way obliged to go beyond the certificate to determine the condition of
the property.
A Torrens title does not furnish a shield for fraud, notwithstanding the long-
standing rule that registration is a constructive notice of title binding upon the
whole world. The legal principle is that if the registration of the land is
fraudulent, the person in whose name the land is registered holds it as a mere
trustee.
Vargas died with no agreement executed regarding the actual location of the
land conveyed to Terry.
Thereafter, Terry sold other portions of the property to third parties. All the
foregoing transactions left Terry with ownership of only 17 square meters of the
lot.
Terry insisted that the 3,000-square-meter lot was conveyed to him by Vargas.
Terry explained that the property was in fact originally owned by his
grandfather, but incorrectly registered in the name of Fernando Vargas, who
was petitioner's predecessor-in-interest. The original Deed of Absolute Sale was
purportedly executed to rectify the error in registration and restore the property
to its rightful owner. Terry further alleged that he had only signed the
Agreement of Revocation of Sale in consideration of his closeness to the Vargas
family and in order to avoid litigation. He pointed out that petitioner herself
confirmed the validity of the instruments of sale by executing the Partition
Agreement after the death of Vargas.
ISSUE: Whether or not the Revocation Agreement and the Partition Agreement
are invalid.
This lack of consensus as to the price prevented the perfection of the sale.
Martinez noticed that the construction of Las Brisas' fence seemed to encroach
on its land. Martinez sought the services of a licensed geodetic engineer to
survey the boundaries of its land. Martinez filed a Complaint for Quieting of
Title, Cancellation of Title and Recovery of Ownership with Damages against
Las Brisas.
Las Brisas countered that it bought the land from Republic Bank; that it took
possession thereof in good faith that very same year; and that it is actually
Martinez that was encroaching upon its land.
HELD: Although "in overlapping of titles disputes, it has always been the
practice for the trial court to appoint a surveyor from the government land
agencies such as the Land Registration Authority or the DENR to act as
commissioner," this is not mandatory procedure; the trial court may rely on
the parties' respective evidence to resolve the case.
Under Article 452 of the Civil Code, the builder, planter or sower in bad faith is
entitled to reimbursement for the necessary expenses of preservation of the
land. However, in this case, respondent's lands were not preserved: petitioners'
construction and use thereof in fact caused damage, which must be undone or
simply endured by respondent by force of law and circumstance. Respondent
did not in any way benefit from petitioners' occupation of its lands.
HELD: Republic Act No. 6552, the Realty Installment Buyer Act or more
popularly refered to as the Maceda Law, named after its author, the late Sen.
Ernesto Maceda, was adopted with the purpose of "protecting buyers of real
estate on installment payments against onerous and oppressive conditions."
Sections 3 and 4 of the Maceda Law spell out the rights of defaulting buyers on
installment payments, depending on the extent of payments made.
Section 4 governs situations "where less than two years of installments were
paid".
When Section 3 speaks of paying "at least two years of installments," it refers to
the equivalent of the totality of payments diligently or consistently made
throughout a period of two (2) years.
This Court reckons petitioner's satisfaction of the requisite two (2) years' or 24
months' worth of installments using as divisor the monthly amortizations due
from petitioner.
For cancellations under Section 4 to be valid, three (3) requisites must concur.
First, the buyer must have been given a 60-day grace period but failed to utilize
it. Second, the seller must have sent a notice of cancellation or demand for
rescission by notarial act. And third, the cancellation shall take effect only after
30 days of the buyer's receipt of the notice of cancellation
October 4, 2017
G.R. No. 196419
PILIPINAS MAKRO, INC. vs. COCO CHARCOAL PHILIPPINES, INC. and LIM
KIM SAN
MARTIRES, J.:
FACTS: Makro and respondent Coco Charcoal Phils., Inc. executed a notarized
Deed of Absolute Sale for 1,000 square meters parcel of land amounting
₱8,500,000.00. On the same date, Makro entered into another notarized Deed
of Absolute Sale with respondent Lim for the sale of the latter's land, with a
total area of 1,000 square meters for the same consideration.
Coco Charcoal and Lim's parcels of land are contiguous and parallel to each
other. Aside from the technical descriptions of the properties in question, both
deeds of sale contained identical provisions, similar terms, conditions, and
warranties.
It was discovered that 131 square meters of the lot purchased from Coco
Charcoal had been encroached upon by the Department of Public Works and
Highways (DPWH) for its road widening project and construction of a drainage
canal to develop and expand the Davao-Cotabato National Highway. On the
other hand, 130 square meters of the land bought from Lim had been
encroached upon by the same DPWH project.
Makro informed the representatives of Coco Charcoal and Lim about the
supposed encroachment on the parcels of land due to the DPWH project.
Initially, Makro offered a compromise agreement in consideration of a refund of
75% of the value of the encroached portions. Thereafter, Makro sent a final
demand letter to collect the refund of the purchase price corresponding to the
area encroached upon by the road widening project, seeking to recover
₱1,113,500.00 from Coco Charcoal and ₱1,105,000.00 from Lim. Failing to
recover such, Makro filed separate complaints against Coco Charcoal and Lim
to collect the refund sought.
November 8, 2017
G.R. No. 164482
LOURDES J. ESTRELLADO; THE HEIRS OF EUGENIO ESTRELLADO,
represented by LOURDES J. ESTRELLADO; NARCISA T. ESTRELLADO;
THE HEIRS OF NICOLAS ESTRELLADO, represented by CLARITA E.
MAINAR; PILAR E. BARREDO-FUENTES; and THE HEIRS OF VIVINA
ESTRELLADO-BARREDO and ALIPIO BARREDO, represented by PILAR E.
BARREDO-FUENTES vs. THE PRESIDING JUDGE OF THE
MUNICIPALTRIAL COURT IN CITIES, llTH JUDICIAL REGION, BRANCH 3,
DAVAO CITY; J.S. FRANCISCO,AND SONS, INC., represented by its
PRESIDENT, JOSELITO C. FRANCISCO; and THE HEIRS OF DR. JOVITO S.
FRANCISCO, represented by JOSELITO C. FRANCISCO
x-----------------------x
G.R. No. 211320
LOURDES C.FRANCISCO-MADRAZO; ROMEO C. FRANCISCO;
CONCEPCION C. FRANCISCO; GATCHALIAN; and RENE JOSE C.
FRANCISCO vs. PILAR BARREDO-FUENTES; JORGE BARREDO; OSCAR
BARREDO; RODOLFO BARREDO; ERNESTO BARREDO; ARMANDO
BARREDO; DANILO BARREDO; TERESITA BARREDO-MCMAHON; LETICIA
BARREDO-CUARIO; and ESPERANZA BARREDO-TUL-ID
BERSAMIN, J.:
FACTS: These consolidated appeals originated from special civil actions for
forcible entry involving three adjacent parcels of land.
The Spouses Eugenio and Lourdes Estrellado were the former owners of the
parcel of land with an area of 15,465 square meters located in Barangay
Matina-Aplaya, Davao City. The Spouses and Nicolas and Narcisa Estrellado
were the former owners of the parcel of land also located in Barangay Matina-
Aplaya, Davao City with an area of 15,466 square meters. The late Spouses
Alipio and Vivina Barredo were the former owners of the parcel of land
containing an area of 15,465 square meters located in the same area. The
landowners herein mentioned were related to one another either by
consanguinity or by affinity.
The petitioners in G.R. No. 164482 are the successors-in-interest and heirs of
the above-named landowners. The respondents in G.R. No. 211320 are the
heirs of the late Spouses Alipio and Vivina Barredo. For ease of reference, they
are collectively referred herein as the Estrellados unless otherwise indicated.
Each of the three parcels of land herein mentioned was subdivided into two
portions - the smaller portion containing 5,000 square meters, and the bigger
portion with an area of about 10,465 square meters.
Spouses Eugene and Lourdes Estrellado sold their 5,000-square meter lot for
₱l0,000.00 to Dr. Jovito S. Francisco, the owner of J.S. Francisco & Sons, Inc.
and the predecessor-in-interest of the respondents in G.R. No. 164482 and
petitioners in G.R. No. 211320.
Spouses Alipio and Vivina Barredo likewise sold their 5,000- square meter lot
to Dr. Francisco for ₱l0,000.00 under the deed of absolute sale.
After selling the smaller lots to Dr. Francisco, the Estrellados separately sold
the bigger portions of their respective lots to Spouses Eugene and Lourdes
Estrellado; the Spouses Nicolas and Narcisa Estrellado; and the late Spouses
Alipio and Vivina Barredo. Dr. Francisco and his successors-in-interest
(collectively referred to as the Franciscos) immediately started their
uninterrupted possession of the entire landholdings of the Estrellados.
However, the Franciscos could not produce the formal deeds of sale relevant to
the subsequent sales. They only had a book of accounts evidencing their
installments to the Estrellados.
The three bigger lots became the subject of the three forcible entry cases
commenced by J.S. Francisco & Sons, Inc. against the Estrellados. The
Estrellados, as the defendants in the three cases, denied selling the bigger lots
to Dr. Francisco.
ISSUE: Whether or not CA erred in holding that the RTC did not make its own
determination on who owned the property.
HELD: Under Article 1475 of the Civil Code, the contract of sale is perfected at
the moment there is a meeting of minds not only upon the thing that is the
object of the contract but also upon the price.
Despite the document embodying the agreement on the sale not being
acknowledged before a notary public, the nonobservance of the form prescribed
by Article 1358(1) of the Civil Code did not render the sale invalid.
FACTS: Respondent Atty. Jose M. Lachica, Jr. filed a complaint for Annulment
of Void Deeds of Sale, Annulment of Titles, Reconveyance, and Damages
originally against Ricardo Tolentino (Ricardo) and petitioner Emilio Calma, and
later on, Pablo Tumale (Pablo) was impleaded as additional defendant in a
Second Amended Complaint.
Respondent, in his complaint, alleged that he was the absolute owner and
actual physical possessor of the subject property, having acquired the same for
PhP15,000 through sale from Ceferino Tolentino (Ceferino) married to Victoria
Calderon, who are Ricardo's parents. Allegedly, he and his tenant/helper Oscar
Justo (Oscar) has been in actual physical possession and cultivation of the said
land continuously since its acquisition up to present.
Unfortunately, however, the Deed of Sale was allegedly lost. Hence, respondent
and Ceferino agreed to execute another deed of sale. Spouses Tolentino
allegedly took advantage of the situation and demanded an additional
PhP15,000 from respondent to which the latter heeded. Thus, in the new Deed
of Sale executed, the consideration for the sale of the subject property was
increased to PhP30,000.
Respondent argued that the sale between Ceferino and Ricardo was null and
void for being executed with fraud, deceit, breach of trust, and also for lack of
lawful consideration. Respondent emphasized that not only was Ricardo in full
knowledge of the sale of the subject property to him by Ceferino, but also his
adverse claim was evidently annotated in the latter's title and carried over to
Ricardo's title. Respondent also alleged that petitioner is an alien, a full-
blooded Chinese citizen, hence, not qualified to own lands in the Philippines,
and is likewise a buyer in bad faith.
Petitioner is a buyer in good faith and for value, having acquired the subject
property on July 10, 1998 through sale from Ricardo. They argued, among
others, that petitioner, despite merely relying on the correctness of Ricardo's
TCT, is duly protected by the law. It was stated in Ricardo's title that
respondent's adverse claim had already been cancelled more than four years
before the sale or on April 26, 1994. Thus, defendants argued that petitioner
had no notice of any defect in Ricardo's title before purchase of the subject
property.
ISSUE: Who between the petitioner and the respondent has better right over
the subject property.
HELD: Petitioner. Every person dealing with registered land may safely rely on
the correctness of the certificate of title issued therefor and is in no way obliged
to go beyond the certificate to determine the condition of the property.
It is settled that a defective title may still be the source of a completely legal
and valid title in the hands of an innocent purchaser for value.
A seller is generally responsible for warranty against hidden defects of the thing
sold.
A buyer cannot be considered to have agreed "to take possession of the things
sold 'in the condition where they are found and from the place where they are
located" if the critical defect is one which he or she cannot even readily sense.
A person not equipped with technical knowledge and expertise to survey real
property could not reasonably be expected to recognize deficiencies in
measurement at the first instance especially if that property was of "irregular
shape," "neither square nor rectangle," and having a "circular terrace."
PARTNERSHIP
DR. RESTITUTO C. BUENVIAJE vs. SPOUSES JOVITO R. and LYDIA B.
SALONGA, JEBSON HOLDINGS CORPORATION and FERDINAND JUAT
BAÑEZ
G.R. No. 216023 October 5, 2016
FACTS: On May 29, 1997, Jebson, through its Executive Vice President, Bañez,
entered into a Joint Venture Agreement (JVA) with Sps. Salonga. Under the
JVA, Sps. Salonga, who owned three (3) parcels of land situated in Tagaytay,
agreed for Jebson to construct 10 high-end single detached residential units
(Brentwoods).
On June 9, 1997, Jebson entered into a Contract to Sell (CTS) with Buenviaje
over Unit 5 for P10,500,000.00, without the conformity of Sps. Salonga. Out of
the purchase price, P7,800,000.00 was paid through a “swapping arrangement.”
However, despite full payment of the contract price, Jebson was unable to
complete Unit 5 in violation of its contractual stipulation to finish the same
within twelve (12) months from the date of issuance of the building permit.
Thus, Buenviaje demanded the completion and delivery of Unit 5. On May 27,
2002, Buenviaje filed before the HLURB Regional Field Office IV (HLURB-RIV) a
Complaint for Specific Performance against herein respondents, where he
argued that Sps. Salonga may be held solidarily liable with Jebson under
Articles 1822 and 1824 of the Civil Code.
Sps. Salonga averred that they were not liable to the complainants since there
was no privity of contract between them, adding that the contracts to sell were
unenforceable against them as they were entered into by Jebson without their
conformity, in violation of the JVA.
The HLURB-RIV found Sps. Salonga solidarily liable with Jebson and Bañez as
joint venture partners liable to the general buying public. The spouses
appealed to the HLURB-Board of Commissioners (BOC), which reversed the
ruling of the HLURB-RIV, finding no basis to hold Sps. Salonga solidarily liable
with Jebson and Bañez under the subject CTS. Dissatisfied, Buenviaje elevated
the matter to the Office of the President (OP), which affirmed the ruling of the
HLURB-BOC. On petition for review, the CA affirmed the ruling of the OP.
Hence, this present petition.
ISSUE: Whether the spouses Salonga can be held solidarily liable under
Articles 1822 and 1824 of the Civil Code.
Resolution under Article 1191 of the Civil Code will not be permitted for a
slight or casual breach, but only for such substantial and fundamental
violations as would defeat the very object of the parties in making the
agreement.
Under Article 1311of the Civil Code, it is a basic principle in civil law on
relativity of contracts, that contracts can only bind the parties who had entered
into it and it cannot favor or prejudice third persons.
Articles 1822 and 1824 of the Civil Code pertain to the obligations of a
copartner in the event that the partnership to which he belongs is held liable.
Time passed and Gacott did not receive the replacement units as promised.
QSC informed him that there were no available units and that it could not
refund the purchased price. Despite several demands, both oral and written,
Gacott was never given a replacement or a refund. Thus, Gacott filed a
complaint for damages. The RTC ruled in favor of Gacott. During the execution
stage, Gacott learned that QSC was not a corporation, but was in fact a general
partnership registered with the SEC, where Guy was appointed as General
Manager of QSC. Sheriff Felizarte went to the main office of DOTC-LTO and
verified whether Medestomas, QSC and Guy had personal properties registered
therein. Upon learning that Guy had vehicles registered in his name, Gacott
instructed the sheriff to proceed with the attachment of one of the motor
vehicles of Guy based on the certification issued by the DOTC-LTO. Sheriff
Felizarte then attached Guy’s vehicle by virtue of the Notice of
Attachment/Levy upon Personalty served upon the record custodian of the
DOTC-LTO of Mandaluyong City. A similar notice was served to at his
residence.
Guy filed his Motion to Lift Attachment Upon Personalty, arguing that he was
not a judgment debtor and, therefore, his vehicle could not be attached. The
RTC denied Guy’s motion. It explained that considering QSC was not a
corporation, but a registered partnership, Guy should be treated as a general
partner pursuant to Section 21 of the Corporation Code, and he may be held
jointly and severally liable with QSC and Medestomas pursuant to Articles
1822 and 1823 of the Civil Code. On appeal, the CA affirmed the ruling of the
RTC. Hence, this present petition.
ISSUE: Whether petitioner Guy may be held solidarily liable with the
partnership GSC.
HELD: No. Article 1816 provides that the partners’ obligation to third
persons with respect to the partnership liability is pro rata or joint.
CARMELITA T. BORLONGAN vs.BANCO DE ORO (formerly EQUITABLE PCI
BANK)
G.R. No. 217617 April 5, 2017
VELASCO, JR, J.:
FACTS: When Eliseo and his wife Carmelita went to the Registry of Deeds of
Pasig to obtain a copy of the TCT of their property in Pasig in preparation for a
prospective sale of the property, they were surprised that the title contained an
annotation that their property was the subject of an execution sale pending
with the Makati RTC. Carmelita found out that BDO filed a complaint for sum
of money against Tancho Corporation, the principal debtor of loan obligations
obtained from BDO. Also impleaded in the case was Carmelita, who supposedly
signed four (4) security agreements to guarantee the obligations of Tancho
Corporation.
The Makati RTC ruled in favor of BDO, which filed a Motion to Conduct
Auction of the property. The motion was granted by the Makati RTC and the
subject property was sold to BDO, as the highest bidder.
Following the discovery of the sale of their property, Eliseo executed an affidavit
of adverse claim and, filed a Complaint for Annulment of Surety Agreements,
Notice of Levy on Attachment, Auction Sale and Other Documents with the
Pasig RTC, alleging that the subject property is a family home that belongs to
the conjugal partnership of gains he established with his wife. He further
averred that the alleged surety agreements upon which the attachment of the
property was anchored were signed by his wife without his consent and did not
redound to benefit their family. Thus, he prayed that the surety agreements
and all other documents including the attachment, levy and execution sale be
nullified. The RTC of Pasig held in favor of Eliseo.
Carmelita filed a Petition for Annulment of Judgment of the Makati RTC which
ordered the issuance of a Writ of Possession and the issuance of a new TCT
covering the subject property in favor of the BDO. (With Urgent Prayer for
Issuance of TRO) with the CA. The CA denied the same. Hence, this petition.
ISSUE: Whether Eliseo may file a separate and independent action for the
annulment of the levy on their conjugal property.
HELD: In Buado v. Court of Appeals, 586 SCRA 397 (2009), the Supreme
Court (SC) had the opportunity to clarify that, to resolve the issue, it must first
be determined whether the debt had redounded to the benefit of the conjugal
partnership or not. In the negative, the spouse is a stranger to the suit who can
file an independent separate action, distinct from the action in which the writ
was issued.
In Spouses Ching v. Court of Appeals, 423 SCRA 356 (2004), the Supreme
Court (SC) elucidated that there is no presumption that the conjugal
partnership is benefited when a spouse enters into a contract of surety.
FACTS: Saludo, Agpalo, Fernandez and Aquino Law Office (SAFA) entered into
a contract of lease with PNB. When the said contract has expired, SAFA
remained occupying the leased premises but has not paid its payable rentals to
PNB. When SAFA vacated the leased premises, PNB sent a demand letter to
SAFA requiring the firm to pay its rental arrears. In response, SAFA Law Office
sent a letter proposing a settlement by providing a range of suggested
computations of its outstanding rental obligations, with deductions for the
value of improvements it introduced in the premises, professional fees due from
Macroasia Corporation, and the 50% discount allegedly promised by Dr. Lucio
Tan. PNB, however, declined the settlement stating that it was not amenable to
the settlement's terms. PNB then made a final demand for SAFA Law Office to
pay its outstanding rental obligations. Saludo, in his capacity as managing
partner of SAFA Law Office, filed a complaint for accounting and/or
recomputation of unpaid rentals and damages against PNB in relation to the
Contract of Lease. PNB filed a motion to include an indispensable party as
plaintiff, praying that Saludo be ordered to amend his complaint to include
SAFA Law Office as principal plaintiff. PNB argued that the lessee in the
Contract of Lease is not Saludo but SAFA Law Office, and that Saludo merely
signed the Contract of Lease as the managing partner of the law firm. Thus,
SAFA Law Office must be joined as a plaintiff in the complaint because it is
considered an indispensable party under Section 7, Rule 3 of the Rules of
Court.
Saludo filed his motion to dismiss counterclaims arguing that SAFA Law Office
is neither a legal entity nor party litigant, as it is only a relationship or
association of lawyers in the practice of law and a single proprietorship which
may only be sued through its owner or proprietor, no valid counterclaims may
be asserted against it. The RTC of Makati denied PNB’s motion. Upon denial of
its Motion for Reconsideration, PNB filed a Petition for Certiorari with the CA,
which held that a partnership for the practice of law is not a legal entity but a
mere relationship or association for a particular purpose, thus, SAFA Law
Office cannot file an action in court. Hence, this petition.
ISSUE: Whether SAFA is a partnership for the practice of law which, having
acquired a juridical personality, may sue and may be sued in court.
HELD: Article 1767 of the Civil Code provides that by a contract of
partnership, two or more persons bind themselves to contribute money,
property, or industry to a common fund, with the intention of dividing the
profits among themselves. Two or more persons may also form a partnership
for the exercise of a profession. Under Article 1771, a partnership may be
constituted in any form, except where immovable property or real rights are
contributed thereto, in which case a public instrument shall be necessary.
Article 1784, on the other hand, provides that a partnership begins from the
moment of the execution of the contract, unless it is otherwise stipulated.
SAFA Law Office entered into a contract of lease with PNB as a juridical person
to pursue the objectives of the partnership.1awp++i1The terms of the contract
and the manner in which the parties implemented it are a glaring recognition of
SAFA Law Office's juridical personality. Thus, the contract stated that it is
being executed by PNB as the lessor and "SALUDO AGPALO FERNANDEZ &
AQUINO, a partnership organized and existing under the laws of the Republic
of the Philippines," as the lessee.55 It also provided that the lessee, i.e., SAFA
Law Office, shall be liable in case of default. 56 Furthermore, subsequent
communications between the parties have always been made for or on behalf of
PNB and SAFA Law Office, respectively.
In view of the above, we see nothing to support the position of the RTC and the
CA, as well as Saludo, that SAFA Law Office is not a partnership and a legal
entity. Saludo's claims that SAFA Law Office is his sole proprietorship and not
a legal entity fail in light of the clear provisions of the law on partnership. To
reiterate, SAFA Law Office was created as a partnership, and as such, acquired
juridical personality by operation of law. Hence, its rights and obligations, as
well as those of its partners, are determined by law and not by what the
partners purport them to be.
Having settled that SAPA Law Office is a juridical person, we hold that it is also
the real party-in-interest in the case filed by Saludo against PNB.
SAFA Law Office is the party that would be benefited or injured by the
judgment in the suit before the RTC. Particularly, it is the party interested in
the accounting and/or recomputation of unpaid rentals and damages in
relation to the contract of lease. It is also the party that would be liable for
payment to PNB of overdue rentals, if that claim would be proven. This is
because it is the one that entered into the contract of lease with PNB. As an
entity possessed of a juridical personality, it has concomitant rights and
obligations with respect to the transactions it enters into. Equally important,
the general rule under Article 1816 of the Civil Code is that partnership assets
are primarily liable for the contracts entered into in the name of the
partnership and by a person authorized to act on its behalf. All partners,
including industrial ones, are only liable pro rata with all their property after
all the partnership assets have been exhausted.
AGENCY 2016
ISSUE: May a co-owned property be sold in its entirety by one of the co-owners
without the express authority of the other co-owners?
HELD: Article 1317 of the Civil Code provides that no person could
contract in the name of another without being authorized by the latter, or
unless he had by law a right to represent him; the contract entered into in the
name of another by one who has no authority or legal representation, or who
has acted beyond his powers, is unenforceable, unless it is ratified, expressly
or impliedly, by the person on whose behalf it has been executed, before it is
revoked by the other contracting party.
Under the Torrens System, no adverse possession could deprive the registered
owners of their title by prescription; thus, once title is registered, the owner
may rest secure, without the necessity of waiting in the portals of the court, or
sitting on the mirador su casa to avoid the possibility of losing his land.
ISSUE: Whether the RTC is correct in holding SRMO personally liable as agent
of Gerardo for the reimbursement of the widow’s allowances to the estate of
Susano.
HELD:
Under the law of agency, an agent is not personally liable for the
obligations of the principal unless he performs acts outside the scope of his
authority or he expressly binds himself to be personally liable.
The right to support is a purely personal right essential to the life of the
recipient, so that it cannot be subject to attachment or execution.
HELD: No. Under the law, an agent is one who binds himself to render some
service or to do something in representation of another.Laingo is not bound by
the 90-day period. As the main he relationship existing between principal and
agent is a fiduciary one, demanding conditions of trust and confidence.
There is a rationale in the contract of agency, which flows from the “doctrine of
representation,” that notice to the agent is notice to the principal.
She filed a complaint against Castro and PS Bank before the RTC. The RTC
dismissed the complaint but later on reversed its Decision on the ground that
Castro and PS Bank failed to provide withdrawal slips signed by Castro
evidencing the withdrawal of the P7 million. On appeal by respondents, the CA
reversed the RTC’s Decision. Hence, this petition.
ISSUE: Whether Castro may be held liable for damages on account of the fraud
she employed against Oliver.
HELD: Agency can be express or implied from the acts of the principal,
from his silence or lack of action, or his failure to repudiate the agency
knowing that another person is acting on his behalf without authority.
As long as the agent acts within the scope of the authority given by his
principal, the actions of the former shall bind the latter.
AGENCY 2017
Milflores Cooperative was unable to pay its obligations to Land Bank. Thus,
Land Bank filed a petition for extra-judicial foreclosure sale with the Office of
the Clerk of Court of Davao City. The Spouses Villaluz learned that an auction
sale covering their land had been set for October 2, 2003. Land Bank won the
auction sale as the sole bidder.
The Spouses Villaluz filed a complaint with the Regional Trial Court (RTC) of
Davao City seeking the annulment of the foreclosure sale. The sole question
presented before the RTC was whether Agbisit could have validly delegated her
authority as attorney-in-fact to Milflores Cooperative. Citing Article 1892 of the
Civil Code, the RTC held that the delegation was valid since the Special Power
of Attorney executed by the Spouses Villaluz had no specific prohibition against
Agbisit appointing a substitute. Accordingly, the RTC dismissed the complaint.
On appeal, the CA affirmed the RTC Decision. After the CA denied their motion
for reconsideration, the Spouses Villaluz filed this petition for review.
HELD: Yes. The law creates a presumption that an agent has the power to
appoint a substitute. The consequence of the presumption is that, upon valid
appointment of a substitute by the agent, there ipso jure arises an agency
relationship between the principal and the substitute, i.e., the substitute
becomes the agent of the principal.
FACTS:
William Siy alleged that he is the owner of a 2007 model Range Rover which he
purchased from Alberto Lopez III (Lopez) on July 22, 2009; that in 2010, he
entrusted the said vehicle to Ong, a businessman who owned a second-hand
car sales showroom, after the latter claimed that he had a prospective buyer
therefor; that Ong failed to remit the proceeds of the purported sale nor return
the vehicle. Petitioner later found out that the vehicle had been transferred to
Chua; that in December, 2010, petitioner filed a complaint before the Quezon
City Police District's Anti-Carnapping Section; that Ong, upon learning of the
complaint, met with petitioner to arrange the return of the vehicle; that Ong
still failed to surrender the vehicle; that petitioner learned that the vehicle was
being transferred to respondent; and that the vehicle was later impounded and
taken into custody by the PNP-Highway Patrol Group after respondent
attempted to process a PNP clearance of the vehicle with a view to transferring
ownership thereof. Petitioner thus prayed that a writ of replevin be issued for
the return of the vehicle to him. However, respondent claimed that he is the
lawful and registered owner of the subject vehicle, having bought the same and
caused registration thereof in his name on March 7, 2011; that the Complaint
is defective for failing to allege the correct and material facts as to ownership,
possession/detention by defendant, warranty against distraint/levy/seizure,
and actual value of the vehicle.
ISSUE: Whether the Writ of Replevin be issued for the return of the vehicle to
petitioner.
HELD: No. In many cases as well, busy vehicle owners selling their vehicles
actually leave them, together with all the documents of title, spare keys, and
deeds of sale signed in blank, with secondhand car traders they know and
trust, in order for the latter to display these vehicles for actual viewing and
inspection by prospective buyers at their lots, warehouses, garages, or
showrooms, and to enable the traders to facilitate sales on-the-spot, as-is-
where-is, without having to inconvenience the owners with random viewings
and inspections of their vehicles. For this kind of arrangement, an agency
relationship is created between the vehicle owners, as principals, and the car
traders, as agents.
AGENCY 2018
August 1, 2018 G.R. No. 193782
DALE STRICKLAND vs. ERNST & YOUNG LLP
JARDELEZA, J.:
ISSUE: Whether petitioner should return the P3,000,000.00 she received from
respondent spouses for the purchase of the Las Piñas property
TRUST 2016
G.R. No. 185757, March 02, 2016
SPOUSES VIRGILIO DE GUZMAN, JR. [SUBSTITUTED BY HIS WIFE, LYDIA
S. DE GUZMAN, AND CHILDREN, NAMELY, RUEL S. DE GUZMAN, ET AL.
AND LYDIA S. DE GUZMAN v. COURT OF APPEALS, MINDANAO STATION,
LAMBERTO BAJAO, HEIR OF SPOUSES LEONCIO*BAJAO AND ANASTACIA
Z. BAJAO
JARDELEZA, J.:
HELD: No. Article 1456 of the Civil Code provides that a person acquiring
property through mistake or fraud becomes, by operation of law, a trustee of
an implied trust for the benefit of the real owner of the property. An action for
reconveyance based on an implied trust generally prescribes in ten (10) years,
the reckoning point of which is the date of registration of the deed or the date
of issuance of the certificate of title over the property.
THIRD DIVISION
G.R. Nos. 185857-58, June 29, 2016
TRIFONIA D. GABUTAN, DECEASED, HEREIN REPRESENTED BY HER
HEIRS, NAMELY: ERLINDA LLAMES, ELISA ASOK, PRIMITIVO GABUTAN,
VALENTINA YANE; BUNA D. ACTUB, FELISIA TROCIO, CRISANTA D.
UBAUB, AND TIRSO DALONDONAN, DECEASED, HEREIN REPRESENTED
BY HIS HEIRS, NAMELY: MADELYN D. REPOSAR AND JERRY
DALONDONAN, MARY JANE GILIG, ALLAN UBAUB, AND SPOUSES
NICOLAS & EVELYN DAILO v. DANTE D. NACALABAN, HELEN N.
MAANDIG, SUSAN N. SIAO, AND CAGAYAN CAPITOL COLLEGE
FACTS: Godofredo purchased the 800 square meter parcel of land from the
Daamo family. He died and was survived by his wife and children. His wife
issued a certification in favor of her mother, Melecia, allowing to build and
occupy the house. The tax declaration showed that Melecia owned th building
on the land owned by Godofredo. Baldomera died, her children executed an
Extrajudicial Settlement, where they adjudicated unto themselves the property
and sold it to the College. Melecia died and survived by her children, where the
latter occupied the house on the property, where the College demanded to
vacate the premises. However, Gabutan, et al. filed a Complaint for
Reconveyance of Real Property, against Nacalaban, et al. and the College. They
alleged that: (1) Melecia bought the property using her own money but
Godofredo had the Deed of Absolute Sale executed in his name instead of his
mother-in-law; (2) Godofredo and Baldomera were only trustees of the property
in favor of the real owner and beneficiary, Melecia; (3) they only knew about the
Extrajudicial Settlement with Sale upon verification with the Registry of
Deeds; and (4) the College was a buyer in bad faith, being aware they were co-
owners of the property.
HELD: Article 1448 of the Civil Code provides in part that there is an implied
trust when property is sold, and the legal estate is granted to one party but the
price is paid by another for the purpose of having the beneficial interest of the
property.
Whether one is a buyer in good faith and whether due diligence and prudence
were exercised are question of fact.
TRUST 2017
January 30, 2017 G.R. No. 219345
SECURITY BANK CORPORATION vs. GREAT WALL COMMERCIAL PRESS
COMPANY, INC., ALFREDO BURIEL ATIENZA, FREDINO CHENG ATIENZA
and SPS. FREDERICK CHENG ATIENZA and MONICA CU ATIENZA
Mendoza, J.:
ISSUE: Whether the Court of Appeals erred in nullifying the Writ of Preliminary
Attachment issued by the Regional Trial Court.
HELD: Yes. A trust receipt transaction is one where the entrustee has the
obligation to deliver to the entruster the price of the sale, or if the merchandise
is not sold, to return the merchandise to the entruster.
ISSUE: Whether the Sta. Monica property is co-owned by the Bautista siblings.
HELD: There is an implied trust when a property is sold and the legal estate is
granted to one party but the price is paid by another for the purpose of having
the beneficial interest of the property.
FACTS: Petitioner Jose S. Ocampo and respondent Ricardo S. Ocampo are full-
blooded brothers who both lives at the conjugal property of their late parents.
The present case arose from a complaint filed by respondent Ricardo against
petitioner Jose for partition and annulment of Transfer Certificate of Title
alleging that petitioner and his wife, Andrea Mejia Ocampo, conspired in
falsifying his signature on a notarized Extra-Judicial Settlement with Waiver
("ESW"), and effecting the transfer of the property in the name of petitioner.
Based on a finding by the National Bureau of Investigation (NBI) that
respondent's signature was forged, an Information was filed against petitioner,
the notary public, and two others. Respondent requested for partition of the
property, but petitioner refused to do so. The RTC ruled in favor of Ricardo
Ocampo ordering the partition of the property. On appeal, the CA affirmed the
decision of the RTC. Hence, this petition. Petitioner claims that the ESW, being
a notarized document, enjoys a prima facie presumption of authenticity and
due execution. He claims that there was no clear and convincing evidence to
overcome this presumption.
Even assuming that the ESW is void or inexistent, petitioner argues that the
action filed by respondent is barred by the doctrine of estoppel by laches. The
ESW was executed and notarized on September 30, 1970. However, it was only
on July 1, 1992 that respondent filed the present case for partition and
annulment of title, claiming that the ESW was forged. Thus, petitioner argues
that there was an unreasonable delay on respondent's part to assert his rights
and pursue his claims against petitioner.
ISSUE: Whether the action filed by Ricardo should be dismissed on the ground
of prescription.
Quieting of title is a common law remedy for the removal of any cloud, doubt,
or uncertainty affecting title to real property.
Time and again, the Supreme Court (SC) has ruled that courts, under the
principle of equity, will not be guided or bound strictly by the statute of
limitations or the doctrine of laches when to do so, manifest wrong or injustice
would result.
ISSUE: Whether the present suit should be deemed abated by the revocation
by the SEC of the Certificate of Registration issued to Bancom.
It is evident from the foregoing discussion of law and jurisprudence that the
mere revocation of the charter of a corporation does not result in the
abatement of proceedings. Since its directors are considered trustees by legal
implication, the fact that Bancom did not convey its assets to a receiver or
assignee was of no consequence. It must also be emphasized that the
dissolution of a creditor-corporation does not extinguish any right or remedy in
its favor.
The terms of the promissory notes and "Continuing Guaranty" are clear and
unequivocal, leaving no room for interpretation. For not being contrary to law,
morals, good customs, public order and public policy, defendants' obligation
has the force of law and should be complied with in good faith.
FACTS: A Mitsubishi L-300 van was travelling along the east-bound lane on
July 13, 2000, opposite is Jesmariane R. Reyes who was walking along the
west-bound lane of Sampaguita Street, United Parañaque Subdivision IV,
Parañaque City. To avoid an incoming vehicle, the van swerved to its left and
hit Reyes. A witness named Alex Espinosa went to her aid and loaded her in
the back of the van and he told the driver of the van, Jimmy Bautista, to bring
Reyes to the hospital. Instead of doing so, Bautista appeared to have left the
van parked inside a nearby subdivision with Reyes still in the van. Fortunately
for Reyes, an unidentified civilian came to help and drove Reyes to the hospital.
Upon investigation, it was found that the registered owner of the van was
Caravan, a corporation engaged in the business of organizing travels and tours.
Bautista was Caravan's employee assigned to drive the van as its service driver.
Despite medical attendance, Reyes died two (2) days after the accident.
Respondent Ermilinda R. Abejar, Reyes' paternal aunt and the person who
raised her since she was nine (9) years old, filed before the Regional Trial Court
of Parañaque a Complaint for damages against Bautista and Caravan. In her
Complaint, Abejar alleged that Bautista was an employee of Caravan and that
Caravan is the registered owner of the van that hit Reyes. Summons could not
be served on Bautista. Thus, Abejar moved to drop Bautista as a defendant.
The Regional Trial Court granted her Motion. After trial, the Regional Trial
Court found that Bautista was grossly negligent in driving the vehicle. The
Court of Appeals affirmed with modification the Regional Trial Court's July 31,
2003 Decision and October 20, 2003 Order. Caravan filed a Motion for
Reconsideration, but it was denied in the Court of Appeals' assailed November
29, 2005 Resolution. Hence, this petition.
HELD: YES. Article 233 of the Family Code provides for the extent of authority
of persons exercising substitute parental authority, that is, the same as those
of actual parents.
In interpreting Article 1902 of the old Civil Code, which is substantially similar
to the first sentence of Article 2176 of the Civil Code, the Supreme Court (SC)
in The Receiver For North Negros Sugar Company, Inc. v. Ybañez, et al., 24
SCRA 979 (1968), ruled that brothers and sisters may recover damages, except
moral damages, for the death of their sibling.The Civil Article 2180 requires
proof of two (2) things: first, an employment relationship between the driver
and the owner; and second, that the driver acted within the scope of his or her
assigned tasks.
The appropriate approach is that in cases where both the registered-owner rule
and Article 2180 apply, the plaintiff must first establish that the employer is
the registered owner of the vehicle in question.
Given the policy underlying Articles 216 and 220 of the Family Code as well as
the purposes for awarding moral damages, a person exercising substitute
parental authority is rightly considered an ascendant of the deceased, within
the meaning of Article 2206(3) of the Civil Code.
FACTS: In February 2010, St. Luke's sent four (4) of its 4 th year medical
students to the clinic, namely: Spouses Perez's daughter Jessa, Spouses
Quintos' daughter Cecille, Jerillie Ann Murillo and Miguel Rafael Ramos. They
were tasked to complete a four-week clerkship rotation at the clinic and were
housed in the second floor of the clinic. According to Ramos, he and his
groupmates reported for duty at the Cabiao clinic at approximately 10:00AM of
February 8, 2010. When their shift ended at 5:00PM, the group went for a jog
and returned to the clinic in the evening. They again went out at 9:00PM to
buy beverages, cooking oil and other items. Ramos admitted that one of the
beverages they bought was The Bar and he only drank it with Cecille which
they mixed it with the soda but did not consume the whole bottle. Ramos was
awakened sometime between 3:00 and 3:30 AM of February 9, 2010 when he
heard Murillo shouting from the other side of the room that there was a fire.
Ramos immediately ran to the door which led to the living room and when he
opened the same, he saw thick smoke coming from the left portion of the living
room where there was a glow. He also felt extreme heat, prompting him to run
to the bathroom to get a pail of water with which he tried to extinguish the fire.
The girls, who had followed him to the bathroom, stayed behind. When Ramos'
attempt to put out the fire proved to be futile, he went back to the bathroom
and poured water on the girls in an attempt to alleviate the extreme heat
coming from the fire. Unfortunately, the fire resulted in the deaths of the
female medical students, including the daughters of plaintiffs-appellants due to
smoke inhalation resulting" to asphyxia.
The RTC dismissed the complaint for lack of merit. Upon appeal, the CA
reversed the RTC Decision and remanded the case to the RTC for reception of
evidence on the amount of damages to be awarded. Hence, the present petition
for review on certiorari.
ISSUE: Whether or not the school shall be held liable for the breach of contract
through negligence for the death of the medical students.
The victims were in the Cabiao Community Clinic because it was a requirement
of petitioners. The students were complying with an obligation under the
enrollment contract — they were rendering medical services in a community
center as required by petitioners. It was thus incumbent upon petitioners to
comply with their own obligations under the enrollment contract — to ensure
that the community center where they would designate their students is safe
and secure, among others.
As held in Saludaga v. FEU, et al., 553 SCRA 741 (2008), a learning institution
should not be allowed to completely relinquish or abdicate matters of safety
and security to a third party as to do so would result to contracting away its
inherent obligation of ensuring a safe learning environment for its students.
It is settled that in culpa contractual, the mere proof of the existence of the
contract and the failure of its compliance justify, prima facie, a corresponding
right of relief.
The basic principle of relativity of contracts is that contracts can only bind the
parties who entered into it, and cannot favor or prejudice a third person, even
if he is aware of such contract and has acted with knowledge thereof.
Under Article 1314 of the New Civil Code, any third person who induces
another to violate his contract shall be liable for damages to the other
contracting party.
The Supreme Court (SC), in the case of So Ping Bun v. Court of Appeals, et
al., 314 SCRA 751 (1999), laid down the elements of tortious interference with
contractual relations: (1) existence of a valid contract; (2) knowledge on the
part of the third person of the existence of the contract; and (3) interference on
the part of the third person without legal justification or excuse.
CONTRIBUTORY NEGLIGENCE
TRAVEL & TOURS ADVISERS, INCORPORATED v. ALBERTO CRUZ, SR.,
EDGAR HERNANDEZ AND VIRGINIA MUÑOZ
G.R. No. 199282, March 14, 2016
PERALTA, J.:
RTC rendered judgment in favor of the respondents. Petitioner filed its appeal
with the CA, and the appellate court rendered its decision which PARTLY
GRANTED the petition.
The proximate cause of the death of Alberto Cruz, Jr. is the negligence of
petitioner’s bus driver, with the contributory negligence of respondent Edgar
Hernandez, the driver and owner of the jeepney, hence, the heirs of Alberto
Cruz, Jr. shall recover damages of only fifty percent (50%) of the award from
petitioner and its driver.
At about 6:50 a.m. on February 25, 2003, which was then a declared national
holiday, petitioner's bus, which was then being driven toward the direction of
Manila by Sayson, collided head-on with the URC van, which was then being
driven by NURC's Operations Manager, Renante Bicomong. The incident
occurred along Km. 76, Maharlika Highway, Brgy. San Agustin, Alaminos,
Laguna. Bicomong died on the spot, while the colliding vehicles sustained
considerable damage.
On April 4, 2011, the RTC issued its Decision dismissing the complaint.
Petitioners filed an appeal before the CA and the latter affirmed the decision of
RTC. Petitioners filed a Motion for Reconsideration, which the CA denied in its
subsequent December 28, 2012 Resolution. Hence, the present Petition.
ISSUE: Whether or not petitioners can recover damages during the collision
based on the negligence of NURC.
Intergames had full awareness of the higher risks involved in staging the race
alongside running vehicles, and had the option to hold the race in a route
where such risks could be minimized, if not eliminated
Another failing on the part of Intergames was the patent inadequacy of the
personnel to man the routeof Intergames since The evidence presented
undoubtedly established that Intergames’ notion of coordination only involved
informing the cooperating agencies of the date of the race, the starting and
ending points of the route, and the places along the route to man.
Proper coordination in the context of the event did not consist in the mere
presence of the volunteers, but included making sure that they had been
properly instructed on their duties and tasks in order to ensure the safety of
the young runners.
As the Supreme Court (SC) has emphasized in Corliss v. The Manila Railroad
Company, 27 SCRA 674 (1969), where the danger is great, a high degree of
care is necessary, and the failure to observe it is a want of ordinary care under
the circumstances.
In order for liability from negligence to arise, there must be not only proof of
damage and negligence, but also proof that the damage was the consequence of
the negligence.
Proximate cause is “that which, in natural and continuous sequence, unbroken
by any new cause, produces an event, and without which the event would
not have occurred.”
To be considered the proximate cause of the injury, the negligence need not be
the event closest in time to the injury; a cause is still proximate, although
farther in time in relation to the injury, if the happening of it set other
foreseeable events into motion resulting ultimately in the damage.
The negligence of Intergames was the proximate cause of the death of Rommel;
and that the negligence of the jeepney driver was not an efficient intervening
cause.
The doctrine of assumption of risk means that one who voluntarily exposes
himself to an obvious, known and appreciated danger assumes the risk of
injury that may result therefrom.
Cosmos’ mere sponsorship of the race was, legally speaking, too remote to be
the efficient and proximate cause of the injurious consequences.
Article 2231 of the Civil Code stipulates that exemplary damages are to be
awarded in cases of quasi-delict if the defendant acted with gross negligence.
Damages for loss of earning capacity may be awarded to the heirs of a deceased
nonworking victim simply because earning capacity, not necessarily actual
earning, may be lost.
The basis for the computation of earning capacity is not what he would have
become or what he would have wanted to be if not for his untimely death, but
the minimum wage in effect at the time of his death.
Life expectancy is equivalent to two-thirds (2/3) multiplied by the difference of
eighty (80) and the age of the deceased.
Article 2211 of the Civil Code expressly provides that interest, as a part of
damages, may be awarded in crimes and quasi-delicts at the discretion of the
court.
Article 2208 of the Civil Code expressly allows the recovery of attorney’s fees
and expenses of litigation when exemplary damages have been awarded.
MEDICAL NEGLIGENCE; VICARIOUS LIABILITY
There was a delay in the administration of oxygen to the patient, caused by the
delayed response of the nurses of petitioner hospital.
The records also show another instance of negligence, such as the delay in the
removal of Regina’s consumed dextrose, a condition that was already causing
her discomfort.
A failure to act may be the proximate cause if it plays a substantial part in
bringing about an injury.
For the negligence of its nurses, petitioner is thus liable under Article 2180 in
relation to Article 2176 of the Civil Code. Under Article 2180, an employer like
petitioner hospital may be held liable for the negligence of its employees based
on its responsibility under a relationship of patria potestas.
On July 14, 2010, the RTC rendered its Decision ordering respondents to pay
petitioners moral, exemplary damages, attorney’s fees and costs of suit.
Aggrieved, respondents appealed to the CA. The CA reversed and set aside the
RTC Decision.
ISSUE: Whether or not the case of petitioners are entitled to moral and
exemplary damages as well as attorney's fees.
There being neither allegation nor proof that respondents acted in fraud or in
bad faith in performing their duties arising from their contract of carriage, they
are then not liable for moral damages.
Since petitioners are not entitled to either moral, temperate, liquidated, or
compensatory damages, then their claim for exemplary damages is bereft of
merit.
VICARIOUS LIABILITY
Under Article 1170 of the Civil Code, liability for damages arises when those in
the performance of their obligations are guilty of negligence, among others.
EXEMPLARY DAMAGES; MORAL DAMAGES; QUASI DELICTS
COCA-COLA BOTTLERS PHILS., INC., vs. ERNANI GUINGONA MEÑEZ
November 22, 2017 G.R. No. 209906
CAGUIOA, J.:
As early as the case of Picart v. Smith, 37 Phil. 809 (1918), the Supreme Court
(SC) elucidated that “the test by which to determine the existence of negligence
in a particular case is: Did the 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, then he is guilty of negligence.”
VICARIOUS LIABILITY; EXTRAORDINARY DILIGENCE
LINDA CACHO, MINORS SARAH JANE, JACQUELINE, FIRE RINA AND
MARK LOUISE ALL SURNAMED CACHO, ALL REPRESENTED BY THEIR
MOTHER AND GUARDIAN AD LITEM LINDA CACHO v. GERARDO
MANAHAN, DAGUPAN BUS CO., INC., AND RENATO DE VERA DOING
BUSINESS UNDER THE NAME R. M. DE VERA CONSTRUCTION
G.R. No. 203081, January 17, 2018
MARTIRES, J.:
RTC held Dagupan Bus, Manahan, and De Vera jointly and severally liable to
pay the petitioners.
In the assailed decision, the CA reversed the trial court's ruling, effectively
dismissing the complaint for damages against Manahan, Dagupan Bus, and De
Vera.
ISSUE: Whether or not Dagupan Bus and Manangan shall be held jointly and
solidarily liable to petitioners.
HELD: YES. Given the nature of the business and for reasons of public policy,
the common carrier is bound “to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.”
Since the damages imposed were the result of a complaint for damages based
on a quasi-delict, the interest on these awards must be computed from the
date when the Regional Trial Court (RTC) rendered its decision in the civil case,
or on 26 January 2004, as it was at this time that a quantification of the
damages may be deemed to have been reasonably ascertained; To be consistent
with the foregoing, the interest on the monetary awards shall then be fixed at
six percent (6%) per annum, until the damages are fully paid.
HELD: NO. The City of Bacolod has not given its consent to be sued by issuing
licenses. Under the 1987 Constitution, the state cannot be sued without its
consent. This is because government efficiency will suffer if its time and energy
is spent defending itself against suits. The state, as well as its political
subdivisions are open to suit only when they consent to it. Consent may either
be express or implied. An implied form of consent is the state’s or the
subdivision’s exercise of proprietary functions. Unfortunately for PV, while the
LGC, which permits mayors to grant licenses and business permits, vests
LGUs with corporate powers, such as that to be sued, the exercise of the
licensing power is not an exercise of a proprietary powers. Instead, the
licensing power is an exercise of police power. This is because such acts are
essentially regulatory in nature.
The City may put up the defense of lack of consent on appeal. Waiver from
immunity from suit is not lightly inferred as it is a derogation of sovereignty.
Also, the City of Bacolod, as a governmental agency or instrumentality, cannot
be estopped by the omission, mistake, or error of its officials or agents.
Estoppel does not lie against the government or any of its agencies from
unauthorized or illegal acts of public officers.
The City is not liable for damages. Based on the findings of the trial court, it
appears that PV had no clear and unmistakable legal right to operate its Bingo
Operations – respondents failed to establish that it had duly applied for the
proper permit for Bingo operations and not just their old permit referring to
professional services, band, and entertainment (the Claim Stub was found to
be dubious, the aforesaid application wasn’t actually for Bingo operations but
merely a renewal application)
That the claim of PV is dubious is further supported by the fact that they
themselves admit that they only amended their AOI AFTER applying for the
permit to operate Bingo operations.
The City, by imposing its laws, is merely exercising the delegated police power
of the state – Bingo is a form of gambling, and its operation is a mere privilege
and not a right.
DAMAGES
Unfortunately, the checks were all dishonored by the DBP upon presentment
for payment with the reason "Account Under Garnished" stamped at the back
of the checks and as shown by the check return slips. East Oceanic duly
informed Go of the dishonor of said checks and demanded that he make good
or pay the same, but the latter failed to do so.
By reason of the dishonored checks, Go's loan became due and demandable
with an outstanding balance of ₱2,814,054.84, excluding interest and other
charges, based on a Statement of Account dated January 24, 1996.
While the collection case was pending, East Oceanic filed a Complaint for
Damages dated April 14, 1998 with the RTC against Sy, alleging that the
corporation suffered a loss in the amount of ₱3,000,000.00 due to the latter's
false report and recommendation pertaining to the real purpose of Go's loan
application, i.e., to pay off an existing loan to Sto. Nifio de Cebu Finance
Corporation, as well as his financial status. The case was docketed as Civil
Case No. CEB-21918 (damages case).
Upon East Oceanic's motion, and finding the evidence adduced in the
collection case to be likewise pertinent to the damages case, the RTC ordered
the cases to be consolidated.
the RTC rendered judgment as follows:
1) Ordering defendant Theodore Sy to pay plaintiff the following: a)
₱3,000,000.00 as actual damages with 6% interest computed from the time of
the filing of the case; b) ₱300,000.00 as attorney's fees; and, c) ₱30,000.00 as x
x x litigation expenses.
2) Ordering defendant Armando Go to pay plaintiff the sum of ₱2,814,054.84
plus 6% interest to be computed from the time of the filing of the complaint.
Go moved for reconsideration, arguing that the RTC Decision is contrary to law
because it failed to cite any factual and/or legal basis as to his civil liability to
East Oceanic. The RTC, however, denied the motion in its Order dated April 8,
20l3.
As a consequence, Go filed the present Petition for Review on Certiorari before
the Court, assailing the RTC's July 16. 2012 Decision and April 8, 2013 Order.
ISSUE: Whether the assailed RTC Decision is void for having no basis in fact
and in law as regards his civil liability to East Oceanic.
HELD: We find that the assailed Decision is void insofar as the collection case
is concerned, as it contained neither an analysis of the evidence of East
Oceanic and Go as regards the outstanding balance of the latter's loan
obligation, nor a reference to any legal basis in reaching its conclusion as to
Go's civil liability to East Oceanic. Clearly, the RTC failed to meet the standard
set forth in Section 14, Article VIII of the Constitution, and in so doing,
deprived Go of his right to due process "since he was not accorded a fair
opportunity to be heard by a fair and responsible magistrate."
It is significant to note that the present case involves an appeal
by certiorari from the RTC (which rendered the assailed Decision and Order in
the exercise of its original jurisdiction) directly to the Supreme Court under
Section 1, Rule 45 of the Rules of Court. Since the Court's jurisdiction in this
case is limited to resolving only questions of law, or in particular, the issue on
the validity of the assailed RTC Decision and Order insofar as the collection
case is concerned, we cannot rule on the amount of Go's liability to East
Oceanic.
We thus deem it appropriate to remand the case to the R TC for further
proceedings to allow said court to come up with a decision in Civil Case No.
CEB-18366 that fully complies with Section 14, Article VIII of the Constitution,
taking into consideration the evidence on record and its ruling in Civil Case No.
CEB-21918.
RECOVERABLE DAMAGES
METROPOLITAN BANK AND TRUST COMPANY v. JUNNEL'S MARKETING
CORPORATION, PURIFICACION DELIZO, AND BANK OF COMMERCE
G.R. No. 235511, June 20, 2018
Examination of the dorsal portion of the subject checks revealed that all had
been deposited with Bankcom, Dau branch, under Account No. 0015-32987-
7. Upon inquiring with Jardine and Premiere, however, JMC was able to
confirm that neither of the said suppliers owns Bankcom Account No. 0015-
32987-7.
JMC surmised that the subject checks are among the checks purportedly
stolen by Delizo.
On 28 January 2002, JMC filed before the Regional Trial Court (RTC) of Pasay
City a complaint for sum of money against Delizo, Bankcom and Metrobank.
On 28 May 2013, the RTC rendered a decision holding both Bankcom and
Metrobank liable to JMC on a 2/3 to 1/3 ratio, respectively-for the amount of
subject checks plus interest as well as attorney's fees, but absolving Delizo
from any liability. The trial court, in the same decision, also dismissed
Metrobank's cross-claim against Bankcom.
Bankcom and Metrobank filed their respective appeals with the CA.
On 22 March 2017, the CA rendered its decision affirming, albeit with
modification, the decision of the RTC.
ISSUE: Whether or not (1) Metrobank shall be held liable to return the entire
amount of the subject checks plus interest to JMC and whether or not (2)
Bankcom is liable to reimburse Metrobank the same amount plus interest.
HELD: Accordingly, we rule: (1) Metrobank is liable to return to JMC the entire
amount of the subject checks plus interest and (2) Bankcom liable to
reimburse Metrobank the same amount plus interest.
While Metrobank's reliance upon the guarantees of Bankcom does not excuse it
from being liable to JMC, such reliance does enable Metrobank to seek
reimbursement from Bankcom-the collecting bank.
A collecting or presenting bank-i.e., the bank that receives a check for deposit
and that presents the same to the drawee bank for payment-is an indorser of
such check. When a collecting bank presents a check to the drawee bank for
payment, the former thereby assumes the same warranties assumed by an
indorser of a negotiable instrument pursuant to Section 66 of the Negotiable
Instruments Law. These warranties are: (1) that the instrument is genuine and
in all respects what it purports to be; (2) that the indorser has good title to it;
(3) that all prior parties had capacity to contract; and (4) that the instrument
is, at the time of the indorsement, valid and subsisting. If any of the foregoing
warranties turns out to be false, a collecting hank becomes liable to the drawee
bank for payments made under such false warranty.
Record shows that the pieces of evidence presented by JMC, particularly the 11
subject checks were endorsed and were allowed to be encashed by Bankcom,
as indicated in the dorsal portion of the checks where [PCHC] machine's tracer,
or the ID band of Bankcom was stamped. And this stamped tracer ID band of
[Bankcom] signifies that Bankcom certified that the checks were deposited to
Bankcom and Bankcom endorsed these checks and sent them to PCHC.
To begin with, jurisprudence has it that a collecting bank's mere act of
presenting a check for payment to the drawee bank is itself an assertion, on
the part of the former, that it had done its duty to ascertain the validity of prior
indorsements. Hence, in Banco De Oro v. Equitable Banking Corporation, we
stated:
In the present case, all the subject checks have been transmitted by Bankcom
to the PCHC for clearing and presentment to Metrobank. As earlier adverted to,
all of the said checks also bear the PCHC machine sprayed tracer/ID band of
Bankcom. Such circumstances, pursuant to prevailing banking practices as
laid out under the PCHC Rules and Regulations, are enough to fix the liability
of Bankcom as an indorser of the subject checks even sans the stamp "ALL
PRIOR ENDORSEMENTS AND/OR LACK OF ENDORSEMENT GUARANTEED"
and "NON-NEGOTIABLE." As the stamping of such guarantees are not required
before the warranties of an indorser could attach against Bankcom, we find the
latter liable to reimburse Metrobank the value of all the subject checks.
Upon arraignment, Yap entered a plea of not guilty. However, during pre-trial,
he manifested that he invokes self-defense. As a consequence, trial on the
merits ensued whereby the defense presented its evidence-in-chief first.
After trial, the RTC rendered judgment finding Yap guilty as charged. The RTC
ruled that the essential elements of an attempted felony are present in the
instant case and there was intent to kill. The trial court also found the
circumstance of treachery to be present, but ruled that evident premeditation
was absent. Yap filed a Motion for Reconsideration essentially contending that
his conviction was not warranted by the evidence on record. However, the RTC
denied the Motion for Reconsideration in its Order dated May 3, 2016.
Aggrieved by the ruling of the RTC, Yap appealed to the CA arguing that: (1)
treachery was not proven because there was no direct or circumstantial
evidence to establish that he put a sleep-inducing substance in Ang's cup of
coffee; (2) the prosecution failed to prove his guilt beyond reasonable doubt;
and (3) the trial court erred in failing to appreciate his exculpatory theory, as it
constitutes not only self-defense but also denial. 10 Yap was allowed to continue
on provisional liberty under the same bail pending his appeal.
In its assailed Decision, the CA found no merit in Yap's appeal and affirmed the
judgment of the RTC. Yap filed a Motion for Reconsideration, but the CA denied
it in its Resolution of September 22, 2017.
HELD: YES. Under paragraph (1), Article 2219 of the Civil Code, moral
damages may be recovered in a criminal offense resulting in physical injuries.
Moral damages compensate for the mental anguish, serious anxiety, and moral
shock suffered by the victim and his family as being a proximate result of the
wrongful act. An award requires no proof of pecuniary loss. Pursuant to
previous jurisprudence, an award of Five Thousand Pesos (P5,000.00) moral
damages is appropriate for less serious, as well as slight physical injuries.
Subsequently, a labor dispute arose between the respondent bank and the
bank union, to which petitioner Rosalina was a member, which culminated in a
strike staged on December 22, 1993. Petitioner Rosalina, together with other
bank employees, were dismissed from the service for abandonment, among
others. Petitioner Rosalina and the other dismissed employees filed with the
Labor Arbiter (LA) an illegal dismissal case against the respondent bank. The
LA declared the strike illegal and dismissed the complaint. The labor case had
reached us through a petition for review on certiorari filed by the dismissed
concerned employees and had already been decided by us on January 11,
2016. While we declared the strike illegal, we also held that the mere finding of
such did not justify the wholesale termination of the strikers from their
employment. We found that there was illegal dismissal and ordered the bank,
among others, to pay the backwages and separation pay of the 18 employees
named in the decision, which included petitioner Rosalina, in lieu of
reinstatement.
On August 22, 1996, petitioners filed with the Regional Trial Court (RTC) of
Parañaque City, Branch 274, a Complaint for Annulment of Sale with Damages
and Preliminary Injunction against Hongkong and Shanghai Banking
Corporation, Ltd; Manuel S. Estacion; Hongkong and Shanghai Banking
Corporation-Staff Retirement Plan, as represented by Atty. Manuel G.
Montecillo, Mr. Stuart P. Milne and Mr. Alejandro L. Custodio; Leonarda Leilani
Amurao and Benedicta G. Flebron, in their capacities as Clerk of Court/Ex-
Officio Sheriff and Sheriff-in-Charge of the RTC of Parañaque. On March 1,
2005, the RTC rendered its Decision in favor of the petitioners.
Respondent bank filed its appeal. Respondent HSBC-SRP and Estacion filed
their Motion for Reconsideration, which was denied by the RTC in an
Order dated November 8, 2005; thus, they also appealed the decision.
On August 11, 2011, the CA rendered its assailed Decision which grants the
instant appeal. Accordingly, the Decision of the RTC is hereby REVERSED and
SET ASIDE, and the complaint in said case is DISMISSED.
HELD: We find that petitioners are entitled to damages for the invalid
foreclosure of their property. The RTC held respondent bank HSBC-SRP and
Estacion solidarily liable for the payment of damages. However, we only find
respondent HSBC-SRP liable as it was the one which illegally foreclosed
petitioners' mortgaged property. However, respondent HSBC, as correctly
pointed out by the CA, was not a party to the real estate mortgage executed
between respondent HSBC-SRP and petitioners nor it had participation in the
foreclosure proceedings. On the other hand, Estacion was only a trustee of
respondent HSBC-SRP acting within the scope of its authority. The RTC
awarded moral damages, exemplary damages, attorney's fees, plus P2,000.00
for every appearance, and costs of litigation.
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. Petitioner Rosalina has adequately established the factual
basis for the award of moral damages when she testified that she felt shocked
and horrified upon knowing of the foreclosure sale. However, we find the RTC's
award of P2,000,000.00 excessive and unconscionable, and reduce the same to
P100,000.00.
Exemplary damages are imposed by way of example for the public good, in
addition to moral, temperate, liquidated or compensatory damages. We reduce
the RTC's award of P500,000.00 to P30,000.00.
Attorneys fees are allowed when exemplary damages are awarded and when the
party to a suit is compelled to incur expenses to protect his interest. We find
the RTC's award of attorney's fees in the amount of P100,000.00 proper.