Sie sind auf Seite 1von 15

January 2014 Philippine Supreme Court Decisions on Civil Law

Posted on February 19, 2014 Posted in Civil Law, Philippines - Cases,


Philippines - Law
Here are selet !anuary 2014 rulin"s o# the $upre%e Court o# the Philippines on
ivil law&
Civil Code
'ad #aith annot be presu%ed( it is a )uestion o# #at that %ust be proven by lear
and onvinin" evidene* +t is worth stressin" at this point that bad #aith annot be
presu%ed* ,+t is a )uestion o# #at that %ust be proven- by lear and onvinin"
evidene* ,./0he burden o# provin" bad #aith rests on the one alle"in" it*- $adly,
spouses 1ilbar #ailed to addue the neessary evidene* /hus, this Court #inds no
error on the part o# the C2 when it did not #ind bad #aith on the part o# 3orospe,
$r* Sps. Bernadette and Rodulfo Vilbar v. Angelito L. Opinion, 3*4* 5o* 167048*
!anuary 19, 2014*
'an:s( e;erise the hi"hest de"ree o# dili"ene, as well as to observe the hi"h
standards o# inte"rity and per#or%ane in all its transations beause its business
was i%bued with publi interest * 'ein" a ban:in" institution, <'P owed it to
3uari=a Corporation to e;erise the hi"hest de"ree o# dili"ene, as well as to
observe the hi"h standards o# inte"rity and per#or%ane in all its transations
beause its business was i%bued with publi interest* /he hi"h standards were also
neessary to ensure publi on#idene in the ban:in" syste%, #or, aordin" to
Philippine National Bank v. Pike& ,/he stability o# ban:s lar"ely depends on the
on#idene o# the people in the honesty and e##iieny o# ban:s*- Development
Bank of the Philippines DBP! v. "uari#a Agri$ultural and Realt% Development
&orporation, 3*4* 5o* 17069>* !anuary 19, 2014
Co%%on arrier( ar"oes while bein" unloaded "enerally re%ain under the ustody
o# the arrier* +t is settled in %ariti%e law ?urisprudene that ar"oes while bein"
unloaded "enerally re%ain under the ustody o# the arrier* 2s hereinbe#ore #ound
by the 4/C and a##ir%ed by the C2 based on the evidene presented, the "oods
were da%a"ed even be#ore they were turned over to 2/+* $uh da%a"e was even
o%pounded by the ne"li"ent ats o# petitioner and 2/+ whih both %ishandled
the "oods durin" the dishar"in" operations* 'astern Shipping Lines( )n$. v.
BP)*+S )nsuran$e &orp.( and +itsui Sumitomo )nsuran$e &o.( Ltd.(3*4* 5o*
1989>7, !anuary 19, 2014*
Co%%on arrier( e;traordinary dili"ene*Co%%on arriers, #ro% the nature o#
their business and #or reasons o# publi poliy, are bound to observe e;traordinary
dili"ene in the vi"ilane over the "oods transported by the%* $ub?et to ertain
e;eptions enu%erated under 2rtile 1684 o# the Civil Code, o%%on arriers are
responsible #or the loss, destrution, or deterioration o# the "oods* /he
e;traordinary responsibility o# the o%%on arrier lasts #ro% the ti%e the "oods
are unonditionally plaed in the possession o#, and reeived by the arrier #or
transportation until the sa%e are delivered, atually or onstrutively, by the arrier
to the onsi"nee, or to the person who has a ri"ht to reeive the%* @win" to this
hi"h de"ree o# dili"ene re)uired o# the%, o%%on arriers, as a "eneral rule, are
presu%ed to have been at #ault or ne"li"ent i# the "oods they transported
deteriorated or "ot lost or destroyed* /hat is, unless they prove that they e;erised
e;traordinary dili"ene in transportin" the "oods* +n order to avoid responsibility
#or any loss or da%a"e, there#ore, they have the burden o# provin" that they
observed suh hi"h level o# dili"ene* 'astern Shipping Lines( )n$. v. BP)*+S
)nsuran$e &orp.( and +itsui Sumitomo )nsuran$e &o.( Ltd.(3*4* 5o* 1989>7,
!anuary 19, 2014*
Contrats( breah o# ontrat( petitioner is "uilty o# breah o# ontrat when it
un?usti#iably re#used to release respondentsA deposit despite de%and( liable #or
da%a"es* +n ases o# breah o# ontrat, %oral da%a"es %ay be reovered only i#
the de#endant ated #raudulently or in bad #aith, or is ,"uilty o# "ross ne"li"ene
a%ountin" to bad #aith, or in wanton disre"ard o# his ontratual obli"ations*-
+n this ase, a review o# the iru%stanes surroundin" the issuane o# the ,Hold
@ut- order reveals that petitioner issued the ,Hold @ut- order in bad #aith* First o#
all, the order was issued without any le"al basis* $eond, petitioner did not in#or%
respondents o# the reason #or the ,Hold @ut*- /hird, the order was issued prior to
the #ilin" o# the ri%inal o%plaint* 4eords show that the ,Hold @ut- order was
issued on !uly 81, 2008, while the ri%inal o%plaint was #iled only on $epte%ber
8, 2008* 2ll these ta:en to"ether lead us to onlude that petitioner ated in bad
#aith when it breahed its ontrat with respondents* 2s we see it then, respondents
are entitled to %oral da%a"es* +etropolitan Bank , -rust &ompan% v. Ana "ra$e
Rosales and .o .uk -o, 3*4* 5o* 1>8204, !anuary 18, 2014*
Contrats( buyer in "ood #aith* +t is settled that a party dealin" with a re"istered
land does not have to in)uire beyond the Certi#iate o# /itle in deter%inin" the true
owner thereo#, and in "uardin" or protetin" his interest, #or all that he has to loo:
into and rely on are the entries in the Certi#iate o# /itle*
+nar"uably, @pinion ated in "ood #aith in dealin" with the re"istered owners o#
the properties* He relied on the titles presented to hi%, whih were on#ir%ed by
the 4e"istry o# <eeds to be authenti, issued in aordane with the law, and
without any liens or enu%branes* Sps. Bernadette and Rodulfo Vilbar v. Angelito
L. Opinion, 3*4* 5o* 167048* !anuary 19, 2014*
Contrats( <otrine o# in pari deli$to ( e;eption * 2ordin" to 2rtile 1412 B1C o#
the Civil Code, the "uilty parties to an ille"al ontrat annot reover #ro% one
another and are not entitled to an a##ir%ative relie# beause they are in pari deli$to
or in e)ual #ault* /he dotrine o# in pari deli$to is a universal dotrine that holds
that no ation arises, in e)uity or at law, #ro% an ille"al ontrat( no suit an be
%aintained #or its spei#i per#or%ane, or to reover the property a"reed to be
sold or delivered, or the %oney a"reed to be paid, or da%a"es #or its violation( and
where the parties are in pari deli$to, no a##ir%ative relie# o# any :ind will be "iven
to one a"ainst the other*
5onetheless, the appliation o# the dotrine o# in pari deli$to is not always ri"id*
2n aepted e;eption arises when its appliation ontravenes well-established
publi poliy* +n this ?urisdition, publi poliy has been de#ined as ,that priniple
o# the law whih holds that no sub?et or itiDen an law#ully do that whih has a
tendeny to be in?urious to the publi or a"ainst the publi "ood*- Domingo
"on/alo v. 0ohn -arnate( 0r*, 3*4* 5o* 170700, !anuary 19, 2014*
Contrats( Hold-out lause( applies only i# there is a valid and e;istin" obli"ation
arisin" #ro% any o# the soures o# obli"ation enu%erated in 2rtile 1196*
Considerin" that respondent 4osales is not liable under any o# the #ive soures o#
obli"ation, there was no le"al basis #or petitioner to issue the ,Hold @ut- order*
/he ,Hold @ut- lause applies only i# there is a valid and e;istin" obli"ation
arisin" #ro% any o# the soures o# obli"ation enu%erated in 2rtile 1196 o# the
Civil Code, to wit& law, ontrats, )uasi-ontrats, delit, and )uasi-delit* +n this
ase, petitioner #ailed to show that respondents have an obli"ation to it under any
law, ontrat, )uasi-ontrat, delit, or )uasi-delit* 2nd althou"h a ri%inal ase
was #iled by petitioner a"ainst respondent 4osales, this is not enou"h reason #or
petitioner to issue a ,Hold @ut- order as the ase is still pendin" and no #inal
?ud"%ent o# onvition has been rendered a"ainst respondent 4osales* +n #at, it is
si"ni#iant to note that at the ti%e petitioner issued the ,Hold @ut- order, the
ri%inal o%plaint had not yet been #iled* /hus, onsiderin" that respondent
4osales is not liable under any o# the #ive soures o# obli"ation, there was no le"al
basis #or petitioner to issue the ,Hold @ut- order* +etropolitan Bank , -rust
&ompan% v. Ana "ra$e Rosales and .o .uk -o, 3*4* 5o* 1>8204, !anuary 18,
2014*
Contrats( Eort"a"e( nature o# %ort"a"e* +t is true that loans are o#ten seured by a
%ort"a"e onstituted on real or personal property to protet the reditorAs interest
in ase o# the de#ault o# the debtor* 'y its nature, however, a %ort"a"e re%ains an
aessory ontrat dependent on the prinipal obli"ation, suh that en#ore%ent o#
the %ort"a"e ontrat will depend on whether or not there has been a violation o#
the prinipal obli"ation* Fhile a reditor and a debtor ould re"ulate the order in
whih they should o%ply with their reiproal obli"ations, it is presupposed that
in a loan the lender should per#or% its obli"ation G the release o# the #ull loan
a%ount G be#ore it ould de%and that the borrower repay the loaned a%ount*
Development Bank of the Philippines DBP! v. "uari#a Agri$ultural and Realt%
Development &orporation, 3*4* 5o* 17069>* !anuary 19, 2014*
Contrats( %ort"a"ee in "ood #aith* 2ssu%in" ar"uendo that the 3orospesA titles to
the sub?et properties happened to be #raudulent, publi poliy onsiders @pinion
to still have a)uired le"al title as a %ort"a"ee in "ood #aith* 2s held in &avite
Development Bank v. Spouses Lim&
/here is, however, a situation where, despite the #at that the %ort"a"or is not the
owner o# the %ort"a"ed property, his title bein" #raudulent, the %ort"a"e ontrat
and any #orelosure sale arisin" there#ro% are "iven e##et by reason o# publi
poliy* /his is the dotrine o# Hthe %ort"a"ee in "ood #aithA based on the rule that
all persons dealin" with property overed by a /orrens Certi#iate o# /itle, as
buyers or %ort"a"ees, are not re)uired to "o beyond what appears on the #ae o#
the title* /he publi interest in upholdin" the inde#easibility o# a erti#iate o# title,
as evidene o# the law#ul ownership o# the land or o# any enu%brane thereon,
protets a buyer or %ort"a"ee who, in "ood #aith, relied upon what appears on the
#ae o# the erti#iate o# title*
Sps. Bernadette and Rodulfo Vilbar v. Angelito L. Opinion, 3*4* 5o* 167048*
!anuary 19, 2014*
$ales( proo# apaity o# seller( di##erene when there is a speial power o# attorney
and when there is none*/he stren"th o# the buyerAs in)uiry on the sellerAs apaity
or le"al authority to sell depends on the proo# o# apaity o# the seller* +# the proo#
o# apaity onsists o# a speial power o# attorney duly notariDed, %ere inspetion
o# the #ae o# suh publi dou%ent already onstitutes su##iient in)uiry* +# no
suh speial power o# attorney is provided or there is one but there appears to be
#laws in its notarial a:nowled"%ent, %ere inspetion o# the dou%ent will not do(
the buyer %ust show that his investi"ation went beyond the dou%ent and into the
iru%stanes o# its e;eution* -he 1eirs of Vi$torino Sarili( namel%( )sabel A.
Sarili( et al. v. Pedro 2. Lagrosa( represented in this a$t b% his Attorne%3in32a$t(
Lourdes Labios +o4i$a, 3*4* 5o* 198916, !anuary 19, 2014*
Contrats( Priniple o# 5uantum merit ( when allowed * Case law instruts that under
this priniple B5uantum meruit!, a ontrator is allowed to reover the reasonable
value o# the thin" or servies rendered despite the la: o# a written ontrat, in
order to avoid un?ust enrih%ent* 6uantum meruit %eans that, in an ation #or
wor: and labor, pay%ent shall be %ade in suh a%ount as the plainti## reasonably
deserves* /he %easure o# reovery should relate to the reasonable value o# the
servies per#or%ed beause the priniple ai%s to prevent undue enrih%ent based
on the e)uitable postulate that it is un?ust #or a person to retain any bene#it without
payin" #or it* Rivelisa Realt%( )n$.( represented b% Ri$ardo P. Venturina v. 2irst
Sta. &lara Builders &orporation( represented b% Ramon A. Pangilinan( as
President, 3*4* 5o* 1>971>* !anuary 19, 2014*
Contrats( resission( proper when there is non-per#or%ane o# obli"ation* 2rtile
1191* /he power to resind obli"ations is i%plied in reiproal ones, in ase one o#
the obli"ors should not o%ply with what is inu%bent upon hi%* /he in?ured
party %ay hoose between the #ul#ill%ent and the resission o# the obli"ation, with
pay%ent o# da%a"es in either ase* He %ay also see: resission, even a#ter he has
hosen #ul#ill%ent, i# the latter should beo%e i%possible* 2il3'state Properties(
)n$. and 2il3'state Net7ork( )n$. v. Spouses &onrado and +aria Vi$toria
Ron5uillo, 3*4* 5o* 1>969>, !anuary 18, 2014*
Contrats( void ontrat( e##ets* Inder 2rtile 1409 B1C o# the Civil Code, a
ontrat whose ause, ob?et or purpose is ontrary to law is a void or ine;istent
ontrat* 2s suh, a void ontrat annot produe a valid one* /o the sa%e e##et is
2rtile 1422 o# the Civil Code, whih delares that ,a ontrat, whih is the diret
result o# a previous ille"al ontrat, is also void and ine;istent*- Domingo "on/alo
v. 0ohn -arnate( 0r*, 3*4* 5o* 170700, !anuary 19, 2014*
<a%a"es( %oral da%a"es( when awarded*.$0u##ie it to say that the dispute over
the sub?et property had aused respondent serious an;iety, %ental an"uish and
sleepless ni"hts, thereby ?usti#yin" the a#oresaid award* Li:ewise, sine respondent
was onstrained to en"a"e the servies o# ounsel to #ile this suit and de#end his
interests, the awards o# attorneyAs #ees and liti"ation e;penses are also sustained*
-he 1eirs of Vi$torino Sarili( namel%( )sabel A. Sarili( et al. v. Pedro 2. Lagrosa(
represented in this a$t b% his Attorne%3in32a$t( Lourdes Labios +o4i$a, 3*4* 5o*
198916, !anuary 19, 2014*
<a%a"es( %oral da%a"es( when awarded* Jvery person is entitled to the physial
inte"rity o# his body* 2lthou"h we have lon" advoated the view that any physial
in?ury, li:e the loss or di%inution o# the use o# any part o# oneAs body, is not
e)uatable to a peuniary loss, and is not suseptible o# e;at %onetary esti%ation,
ivil da%a"es should be assessed one that inte"rity has been violated* /he
assess%ent is but an i%per#et esti%ation o# the true value o# oneAs body* /he
usual pratie is to award %oral da%a"es #or the physial in?uries sustained* Dr.
'n$arna$ion &. Lumantas v. 1an/ &alapi/( represented b% his parents( 1ilario
&alapi/( 0r. and 1elita &alapi/, 3*4* 5o* 178698* !anuary 19, 2014*
Forelosure( pre%ature #orelosure( order o# restoration o# possession and pay%ent
o# reasonable rentals* Havin" #ound and pronouned that the e;tra?udiial
#orelosure by <'P was pre%ature, and that the ensuin" #orelosure sale was void
and ine##etual, the Court a##ir%s the order #or the restoration o# possession to
3uari#ia Corporation and the pay%ent o# reasonable rentals #or the use o# the
resort* /he C2 properly held that the pre%ature and invalid #orelosure had
un?ustly dispossessed 3uari#ia Corporation o# its properties* Conse)uently, the
restoration o# possession and the pay%ent o# reasonable rentals were in aordane
with 2rtile 971 o# the Civil Code, whih e;pressly states that one who reovers,
aordin" to law, possession un?ustly lost shall be dee%ed #or all purposes whih
%ay redound to his bene#it to have en?oyed it without interruption* Development
Bank of the Philippines DBP! v. "uari#a Agri$ultural and Realt% Development
&orporation, 3*4* 5o* 17069>* !anuary 19, 2014*
Forelosure( purhaser in #orelosure sale %ay ta:e possession o# the property
even be#ore the e;piration o# the rede%ption period* 2 writ o# possession is a writ
o# e;eution e%ployed to en#ore a ?ud"%ent to reover the possession o# land* +t
o%%ands the sheri## to enter the land and "ive possession o# it to the person
entitled under the ?ud"%ent* +t %ay be issued in ase o# an e;tra?udiial #orelosure
o# a real estate %ort"a"e under $etion 6 o# 2t 5o* 8189, as a%ended by 2t 5o*
411>*
Inder said provision, the writ o# possession %ay be issued to the purhaser in a
#orelosure sale either within the one-year rede%ption period upon the #ilin" o# a
bond, or a#ter the lapse o# the rede%ption period, without need o# a bond*
Fe have onsistently held that the duty o# the trial ourt to "rant a writ o#
possession is %inisterial* $uh writ issues as a %atter o# ourse upon the #ilin" o#
the proper %otion and the approval o# the orrespondin" bond* 5o disretion is le#t
to the trial ourt* 2ny )uestion re"ardin" the re"ularity and validity o# the sale, as
well as the onse)uent anellation o# the writ, is to be deter%ined in a subse)uent
proeedin" as outlined in $etion > o# 2t 5o* 8189* $uh )uestion annot be
raised to oppose the issuane o# the writ, sine the proeedin" is e; parte* /he
reourse is available even be#ore the e;piration o# the rede%ption period provided
by law and the 4ules o# Court* L89 1oldings and Development &orporation v.
Planters Development Bank, 3*4* 5o* 1>6968, !anuary 20, 2014*
+nterest( le"al interest( interest rate pe""ed at 7K re"ardless o# the soure o#
obli"ation* /he resultin" %odi#iation o# the award o# le"al interest is, also, in line
with our reent rulin" in Na$ar v. "aller% 2rames, e%bodyin" the a%end%ent
introdued by the 'an":o $entral n" Pilipinas Eonetary 'oard in '$P-E'
Cirular 5o* 699 whih pe""ed the interest rate at 7K re"ardless o# the soure o#
obli"ation* 2il3'state Properties( )n$. and 2il3'state Net7ork( )n$. v. Spouses
&onrado and +aria Vi$toria Ron5uillo, 3*4* 5o* 1>969>, !anuary 18, 2014*
+nterest( le"al interest( proper rate* +n 'astern Shipping, it was observed that the
o%%ene%ent o# when the le"al interest should start to run varies dependin" on
the #atual iru%stanes obtainin" in eah ase* 2s a rule o# thu%b, it was
su""ested that ,where the de%and is established with reasonable ertainty, the
interest shall be"in to run #ro% the ti%e the lai% is %ade ?udiially or
e;tra?udiially B2rt* 1179, Civil CodeC but when suh ertainty annot be so
reasonably established at the ti%e the de%and is %ade, the interest shall be"in to
run only #ro% the date the ?ud"%ent o# the ourt is %ade Bat whih ti%e the
)uanti#iation o# da%a"es %ay be dee%ed to have been reasonably asertainedC*-
<urin" the pendeny o# this ase, however, the Eonetary 'oard issued 4esolution
5o* 697 dated Eay 17, 2018, statin" that in the absene o# e;press stipulation
between the parties, the rate o# interest in loan or #orbearane o# any %oney, "oods
or redits and the rate allowed in ?ud"%ents shall be 7K per annu%* $aid
4esolution is e%bodied in 'an":o $entral n" Pilipinas Cirular 5o* 699, $eries
o#2018, whih too: e##et on !uly 1, 2018* Hene, the 12K annual interest
%entioned above shall apply only up to !une 80, 2018* /herea#ter, or startin" !uly
1, 2018, the appliable rate o# interest #or both the debited a%ount and
undou%ented withdrawals shall be 7K per annu% o%pounded annually, until
#ully paid* Land Bank of the Philippines v. 'mmanuel &. O#ate, 3*4* 5o* 192861,
!anuary 19, 2014*
+nterest( le"al interest( rate* /he le"al interest rate to be i%posed #ro% February 11,
1998, the ti%e o# the e;tra?udiial de%and by respondent, should be 7K per annu%
in the absene o# any stipulation in writin" in aordane with 2rtile 2209 o# the
Civil Code, whih provides&
2rtile 2209* +# the obli"ation onsists in the pay%ent o# a su% o# %oney, and the
debtor inurs in delay, the inde%nity #or da%a"es, there bein" no stipulation to the
ontrary, shall be the pay%ent o# the interest a"reed upon, and in the absene o#
stipulation, the le"al interest, whih is si; per ent per annu%* 2irst :nited
&onstru$tors &orporation( et al. v. Ba%anihan Automotive &orporation, 3*4* 5o*
1749>9, !anuary 19, 2014*
+nterest( le"al interest( when awarded* Eany years have "one by sine HanD
su##ered the in?ury* +nterest o# 7K per annu% should then be i%posed on the award
as a sinere %eans o# ad?ustin" the value o# the award to a level that is not only
reasonable but ?ust and o%%ensurate* Inless we %a:e the ad?ust%ent in the
per%issible %anner by presribin" le"al interest on the award, his su##erin"s would
be unduly o%pounded* For that purpose, the re:onin" o# interest should be #ro%
the #ilin" o# the ri%inal in#or%ation on 2pril 1 6, 1996, the %a:in" o# the ?udiial
de%and #or the liability o# the petitioner* Dr. 'n$arna$ion &. Lumantas v. 1an/
&alapi/( represented b% his parents( 1ilario &alapi/( 0r. and 1elita &alapi/, 3*4*
5o* 178698* !anuary 19, 2014*
@bli"ations( de#ault( borrower would not be in de#ault without de%and to pay*
Considerin" that it had yet to release the entire proeeds o# the loan, <'P ould
not yet %a:e an e##etive de%and #or pay%ent upon 3uari=a Corporation to
per#or% its obli"ation under the loan* 2ordin" to Development Bank of the
Philippines v. Li$uanan, it would only be when a de%and to pay had been %ade
and was subse)uently re#used that a borrower ould be onsidered in de#ault, and
the lender ould obtain the ri"ht to ollet the debt or to #orelose the %ort"a"e*
Development Bank of the Philippines DBP! v. "uari#a Agri$ultural and Realt%
Development &orporation, 3*4* 5o* 17069>* !anuary 19, 2014*
@bli"ations( e;tin"uish%ent o# obli"ations( o%pensation( re)uisites*
Co%pensation is de#ined as a %ode o# e;tin"uishin" obli"ations whereby two
persons in their apaity as prinipals are %utual debtors and reditors o# eah
other with respet to e)ually li)uidated and de%andable obli"ations to whih no
retention or ontroversy has been ti%ely o%%ened and o%%uniated by third
parties*
98
/he re)uisites there#or are provided under 2rtile 1269 o# the Civil Code
whih reads as #ollows&
2rt* 1269* +n order that o%pensation %ay be proper, it is neessary&
B1C /hat eah one o# the obli"ors be bound prinipally, and that he be at the sa%e
ti%e a prinipal reditor o# the other(
B2C /hat both debts onsist in a su% o# %oney, or i# the thin"s due are onsu%able,
they be o# the sa%e :ind, and also o# the sa%e )uality i# the latter has been stated(
B8C /hat the two debts be due(
B4C /hat they be li)uidated and de%andable(
B9C /hat over neither o# the% there be any retention or ontroversy, o%%ened by
third persons and o%%uniated in due ti%e to the debtor*
/he rule on le"al o%pensation is stated in 2rtile 1290 o# the Civil Code whih
provides that ,.w0hen all the re)uisites %entioned in 2rtile 1269 are present,
o%pensation ta:es e##et by operation o# law, and e;tin"uishes both debts to the
onurrent a%ount, even thou"h the reditors and debtors are not aware o# the
o%pensation*- :nion Bank of the Philippines v. Development Bank of the
Philippines, 3*4* 5o* 191999, !anuary 20, 2014*
@bli"ations( le"al o%pensation( re)uisites* Le"al o%pensation ta:es plae when
the re)uire%ents set #orth in 2rtile 126> and 2rtile 1269 o# the Civil Code are
present, to wit&
2rtile 126>* Co%pensation shall ta:e plae when two persons, in their own ri"ht,
are reditors and debtors o# eah other*-
2rtile 1269* +n order that o%pensation %ay be proper, it is neessary&
B1C /hat eah o# the obli"ors be bound prinipally, and that he be at the sa%e ti%e
a prinipal reditor o# the other(
B2C /hat both debts onsists in a su% o# %oney, or i# the thin"s due are
onsu%able, they be o# the sa%e :ind, and also o# the sa%e )uality i# the latter has
been stated(
B8C /hat the two debts be due(
B4C /hat they be li)uidated and de%andable(
B9C /hat over neither o# the% there be any retention or ontroversy, o%%ened by
third persons and o%%uniated in due ti%e to the debtor*
2irst :nited &onstru$tors &orporation( et al. v. Ba%anihan Automotive
&orporation, 3*4* 5o* 1749>9, !anuary 19, 2014*
Property( builder in "ood #aith( onept o#* /o be dee%ed a builder in "ood #aith, it
is essential that a person asserts title to the land on whih he builds, i*e* , that he be
a possessor in onept o# owner, and that he be unaware that there e;ists in his title
or %ode o# a)uisition any #law whih invalidates it* 3ood #aith is an intan"ible
and abstrat )uality with no tehnial %eanin" or statutory de#inition, and it
eno%passes, a%on" other thin"s, an honest belie#, the absene o# %alie and the
absene o# desi"n to de#raud or to see: an unonsionable advanta"e* +t i%plies
honesty o# intention, and #reedo% #ro% :nowled"e o# iru%stanes whih ou"ht
to put the holder upon in)uiry* -he 1eirs of Vi$torino Sarili( namel%( )sabel A.
Sarili( et al. v. Pedro 2. Lagrosa( represented in this a$t b% his Attorne%3in32a$t(
Lourdes Labios +o4i$a, 3*4* 5o* 198916, !anuary 19, 2014*
Property( ownership( aession( aessory #ollows the prinipal( e;eption* Fhile
it is a hornboo: dotrine that the aessory #ollows the prinipal, that is, the
ownership o# the property "ives the ri"ht by aession to everythin" whih is
produed thereby, or whih is inorporated or attahed thereto, either naturally or
arti#iially, suh rule is not without e;eption* +n ases where there is a lear and
onvinin" evidene to prove that the prinipal and the aessory are not owned by
one and the sa%e person or entity, the presu%ption shall not be applied and the
atual ownership shall be upheld* +n a nu%ber o# ases, we reo"niDed the separate
ownership o# the land #ro% the buildin" and brushed aside the rule that aessory
#ollows the prinipal* +agdalena -. Villasi v. 2ilomena "ar$ia( substituted b% his
heirs( namel%( 'rmelinda 1. "ar$ia( et al., 3*4* 5o* 190107, !anuary 19, 2014*
Luasi-ontrats( In?ust enrih%ent* In?ust enrih%ent e;ists, aordin" to 1ulst
v. PR Builders( )n$., ,when a person un?ustly retains a bene#it at the loss o#
another, or when a person retains %oney or property o# another a"ainst the
#unda%ental priniples o# ?ustie, e)uity and "ood onsiene*- /he prevention o#
un?ust enrih%ent is a reo"niDed publi poliy o# the $tate, #or 2rtile 22 o# the
Civil Code e;pliitly provides that ,.e0very person who throu"h an at o#
per#or%ane by another, or any other %eans, a)uires or o%es into possession o#
so%ethin" at the e;pense o# the latter without ?ust or le"al "round, shall return the
sa%e to hi%*- Domingo "on/alo v. 0ohn -arnate( 0r*, 3*4* 5o* 170700, !anuary
19, 2014*
$ales( 2rtile 1999 o# the Civil Code( reoup%ent( de#inition o#( when entitled*
4eoup%ent BreonvenionC is the at o# rebatin" or reoupin" a part o# a lai%
upon whih one is sued by %eans o# a le"al or e)uitable ri"ht resultin" #ro% a
ounterlai% arisin" out o# the sa%e transation* +t is the settin" up o# a de%and
arisin" #ro% the sa%e transation as the plainti##As lai%, to abate or redue that
lai%*
/he le"al basis #or reoup%ent by the buyer is the #irst para"raph o# 2rtile 1999
o# the Civil Code, viD&
2rtile 1999* Fhere there is a breah o# warranty by the seller, the buyer %ay, at
his eletion&
B1C 2ept or :eep the "oods and set up a"ainst the seller, the breah o# warranty
by way o# reoup%ent in di%inution or e;tintion o# the prie(
; ; ; ;
2irst :nited &onstru$tors &orporation( et al. v. Ba%anihan Automotive
&orporation, 3*4* 5o* 1749>9, !anuary 19, 2014*
$ales( sale o# a piee o# land or any interest therein is throu"h an a"ent( authority
o# the a"ent shall be in writin"( otherwise, the sale shall be void* /he due e;eution
and authentiity o# the sub?et $P2 are o# "reat si"ni#iane in deter%inin" the
validity o# the sale entered into by 1itorino and 4a%on sine the latter only
lai%s to be the a"ent o# the purported seller Bi*e*, respondentC* 2rtile 1>64 o# the
Civil Code provides that ,.w0hen a sale o# a piee o# land or any interest therein is
throu"h an a"ent, the authority o# the latter shall be in writin"( otherwise, the sale
shall be void*- +n other words, i# the sub?et $P2 was not proven to be duly
e;euted and authenti, then it annot be said that the #ore"oin" re)uire%ent had
been o%plied with( hene, the sale would be void* -he 1eirs of Vi$torino Sarili(
namel%( )sabel A. Sarili( et al. v. Pedro 2. Lagrosa( represented in this a$t b% his
Attorne%3in32a$t( Lourdes Labios +o4i$a, 3*4* 5o* 198916, !anuary 19, 2014*
SPECIL L!S
$etion 28 o# Presidential <eree 5o* 996( non-#or#eiture o# pay%ents* $etion 28
o# Presidential <eree 5o* 996, the rule "overnin" the sale o# ondo%iniu%s,
whih provides& 5o install%ent pay%ent %ade by a buyer in a subdivision or
ondo%iniu% pro?et #or the lot or unit he ontrated to buy shall be #or#eited in
#avor o# the owner or developer when the buyer, a#ter due notie to the owner or
developer, desists #ro% #urther pay%ent due to the #ailure o# the owner or
developer to develop the subdivision or ondo%iniu% pro?et aordin" to the
approved plans and within the ti%e li%it #or o%plyin" with the sa%e* $uh buyer
%ay, at his option, be rei%bursed the total a%ount paid inludin" a%ortiDation
interests but e;ludin" delin)ueny interests, with interest thereon at the le"al rate*
2il3'state Properties( )n$. and 2il3'state Net7ork( )n$. v. Spouses &onrado and
+aria Vi$toria Ron5uillo, 3*4* 5o* 1>969>, !anuary 18, 2014*
$etion 7 o# Presidential <eree 5o* 1994( ri"ht o# assi"n%ent and subontrat*
/here is no )uestion that every ontrator is prohibited #ro% subontratin" with or
assi"nin" to another person any ontrat or pro?et that he has with the <PFH
unless the <PFH $eretary has approved the subontratin" or assi"n%ent* /his is
pursuant to $etion 7 o# Presidential <eree 5o* 1994, whih provides that ,./0he
ontrator shall not assi"n, trans#er, pled"e, subontrat or %a:e any other
disposition o# the ontrat or any part or interest therein e;ept with the approval
o# the Einister o# Publi For:s, /ransportation and Co%%uniations, the Einister
o# Publi Hi"hways, or the Einister o# Jner"y, as the ase %ay be* 2pproval o# the
subontrat shall not relieve the %ain ontrator #ro% any liability or obli"ation
under his ontrat with the 3overn%ent nor shall it reate any ontratual relation
between the subontrator and the 3overn%ent*- Domingo "on/alo v. 0ohn
-arnate( 0r*, 3*4* 5o* 170700, !anuary 19, 2014*
Fa%ily law( on?u"al property( all property o# the %arria"e is presu%ed to be
on?u"al, unless it is shown that it is owned e;lusively by the husband or the
wi#e* /here is a presu%ption that all property o# the %arria"e is on?u"al, unless it
is shown that it is owned e;lusively by the husband or the wi#e( this presu%ption
is not overo%e by the #at that the property is re"istered in the na%e o# the
husband or the wi#e alone( and the onsent o# both spouses is re)uired be#ore a
on?u"al property %ay be %ort"a"ed* However, we #ind it ini)uitous to apply the
#ore"oin" presu%ption espeially sine the nature o# the %ort"a"ed property was
never raised as an issue be#ore the 4/C, the C2, and even be#ore this Court* +n
#at, petitioner never alle"ed in his Co%plaint that the said property was on?u"al
in nature* Hene, respondent had no opportunity to rebut the said presu%ption*
2ran$is$o Lim v. '5uitable P&) Bank( no7 kno7n as Ban$o De Oro :nibank( )n$*,
3*4* 5o* 1>891>* !anuary 19, 2014*
Fa%ily law( e;lusive property o# spouse( when the property is re"istered in the
na%e o# a spouse only and there is no showin" as to when the property was
a)uired by said spouse, this is an indiation that the property belon"s e;lusively
to said spouse* 2rtile 170 o# the Civil Code provides as #ollows& 2ll property o#
the %arria"e is presu%ed to belon" to the on?u"al partnership, unless it be proved
that it pertains e;lusively to the husband or to the wi#e*-
/he presu%ption applies to property a)uired durin" the li#eti%e o# the husband
and wi#e* +n this ase, it appears on the #ae o# the title that the properties were
a)uired by <onata Eonte%ayor when she was already a widow* Fhen the
property is re"istered in the na%e o# a spouse only and there is no showin" as to
when the property was a)uired by said spouse, this is an indiation that the
property belon"s e;lusively to said spouse* 2nd this presu%ption under 2rtile
170 o# the Civil Code annot prevail when the title is in the na%e o# only one
spouse and the ri"hts o# innoent third parties are involved* 2ran$is$o Lim v.
'5uitable P&) Bank( no7 kno7n as Ban$o De Oro :nibank( )n$*, 3*4* 5o*
1>891>* !anuary 19, 2014*
/orrens syste%( erti#iate o# title( a erti#iate o# title serves as evidene o# an
inde#easible and inontrovertible title to the property in #avor o# the person whose
na%e appears therein* ,.20 erti#iate o# title serves as evidene o# an inde#easible
and inontrovertible title to the property in #avor o# the person whose na%e appears
therein*- Havin" no erti#iate o# title issued in their na%es, spouses 1ilbar have
no inde#easible and inontrovertible title over Lot 20 to support their lai%*
Further, it is an established rule that ,re"istration is the operative at whih "ives
validity to the trans#er or reates a lien upon the land*- ,2ny buyer or %ort"a"ee o#
realty overed by a /orrens erti#iate o# title ; ; ; is har"ed with notie only o#
suh burdens and lai%s as are annotated on the title*- Failin" to annotate the deed
#or the eventual trans#er o# title over Lot 20 in their na%es, the spouses 1ilbar
annot lai% a "reater ri"ht over @pinion, who a)uired the property with lean
title in "ood #aith and re"istered the sa%e in his na%e by "oin" throu"h the le"ally
re)uired proedure* Sps. Bernadette and Rodulfo Vilbar v. Angelito L. Opinion,
3*4* 5o* 167048* !anuary 19, 2014*
/orrens syste%( /orrens title( a person dealin" with a re"istered land has a ri"ht to
rely upon the #ae o# the /orrens erti#iate o# title( e;eptions* /he well-:nown
rule in this ?urisdition is that a person dealin" with a re"istered land has a ri"ht to
rely upon the #ae o# the torrens erti#iate o# title and to dispense with the need o#
in)uirin" #urther, e;ept when the party onerned has atual :nowled"e o# #ats
and iru%stanes that would i%pel a reasonably autious %an to %a:e suh
in)uiry*
2 torrens title onludes all ontroversy over ownership o# the land overed by a
#inal deree o# re"istration* @ne the title is re"istered the owner %ay rest assured
without the neessity o# steppin" into the portals o# the ourt or sittin" in the
mirador de su $asa to avoid the possibility o# losin" his land* 2ran$is$o Lim v.
'5uitable P&) Bank( no7 kno7n as Ban$o De Oro :nibank( )n$*, 3*4* 5o*
1>891>* !anuary 19, 2014*
/orrens title( a person dealin" with a re"istered land has a ri"ht to rely upon the
#ae o# the /orrens erti#iate o# title( e;eption in the ase o# a person who buys
#ro% a person who is not the re"istered owner*/he "eneral rule is that every person
dealin" with re"istered land %ay sa#ely rely on the orretness o# the erti#iate o#
title issued there#or and the law will in no way obli"e hi% to "o beyond the
erti#iate to deter%ine the ondition o# the property* Fhere there is nothin" in the
erti#iate o# title to indiate any loud or vie in the ownership o# the property, or
any enu%brane thereon, the purhaser is not re)uired to e;plore #urther than
what the /orrens /itle upon its #ae indiates in )uest #or any hidden de#ets or
inhoate ri"ht that %ay subse)uently de#eat his ri"ht thereto*
However, a hi"her de"ree o# prudene is re)uired #ro% one who buys #ro% a
person who is not the re"istered owner, althou"h the land ob?et o# the transation
is re"istered* +n suh a ase, the buyer is e;peted to e;a%ine not only the
erti#iate o# title but all #atual iru%stanes neessary #or hi% to deter%ine i#
there are any #laws in the title o# the trans#eror* /he buyer also has the duty to
asertain the identity o# the person with who% he is dealin" with and the latterAs
le"al authority to onvey the property* -he 1eirs of Vi$torino Sarili( namel%(
)sabel A. Sarili( et al. v. Pedro 2. Lagrosa( represented in this a$t b% his Attorne%3
in32a$t( Lourdes Labios +o4i$a, 3*4* 5o* 198916, !anuary 19, 2014*
/orrens syste%(even i# the proure%ent o# a erti#iate o# title was tainted with
#raud and %isrepresentation, suh de#etive title %ay be the soure o# a o%pletely
le"al and valid title in the hands o# an innoent purhaser #or value* +t is well-
settled that even i# the proure%ent o# a erti#iate o# title was tainted with #raud
and %isrepresentation, suh de#etive title %ay be the soure o# a o%pletely le"al
and valid title in the hands o# an innoent purhaser #or value* Fhere innoent
third persons, relyin" on the orretness o# the erti#iate o# title thus issued,
a)uire ri"hts over the property, the ourt annot disre"ard suh ri"hts and order
the total anellation o# the erti#iate* /he e##et o# suh an outri"ht anellation
would be to i%pair publi on#idene in the erti#iate o# title, #or everyone dealin"
with property re"istered under the /orrens syste% would have to in)uire in every
instane whether the title has been re"ularly or irre"ularly issued* /his is ontrary
to the evident purpose o# the law* -he 1eirs of Vi$torino Sarili( namel%( )sabel A.
Sarili( et al. v. Pedro 2. Lagrosa( represented in this a$t b% his Attorne%3in32a$t(
Lourdes Labios +o4i$a, 3*4* 5o* 198916, !anuary 19, 2014*
/orrens syste%( levy on attah%ent, duly re"istered, ta:es pre#erene over a prior
unre"istered sale*-./0he settled rule that levy on attah%ent, duly re"istered, ta:es
pre#erene over a prior unre"istered sale* /his result is a neessary onse)uene o#
the #at that the .properties0 involved .were0 duly overed by the /orrens syste%
whih wor:s under the #unda%ental priniple that re"istration is the operative at
whih "ives validity to the trans#er or reates a lien upon the land*- Sps.
Bernadette and Rodulfo Vilbar v. Angelito L. Opinion, 3*4* 5o* 167048* !anuary
19, 2014*
Rose thanks Anna 9atarina Rodrigue/ and Amirah Pendatun for their assistan$e
in the preparation of this post.!