1
CIVIL LAW NOTES
Case Law
Book 1
Effectivity of Laws
After conducting preliminary investigation, a panel
composed of state prosecutors from the DOJ
charged Sen. Gregorio Honasan, together with
others, with a violation of Art. 134-A of the RPC for
the offense of coup d'etat. Honasan questions the
authority and jurisdiction of the DOJ prosecutors to
conduct the preliminary investigation on the
ground that the Office of the Ombudsman has no
authority and jurisdiction to conduct the same, he
being a Senator of the Republic with a salary
grade of 31, and that ultimately, the
Sandiganbayan has jurisdiction over his case, not
the DOJ. DOJ asserts that pursuant to OMB-DOJ
Joint Circular No., it has jurisdiction to investigate
the case against him, concurrent with the Office of
the Ombudsman. Honasan counters that said
circular is ineffective as it was never published.
Q: Is OMB-DOJ Circular No. 95-001 ineffective
because it was not published?
A: No. OMB-DOJ Circular No. 95-001 is merely an
internal circular between the two offices which
outlines the authority and responsibilities among
prosecutors of the DOJ and of the Office of the
Ombudsman in the conduct of preliminary
investigations. It does not contain any penal
provision nor prescribe a mandatory act or prohibit
any under pain of penalty. Further, it does not
regulate the conduct of persons or the public, in
general. As such therefore, it need not be
published, consistent with the Supreme Court's
earlier pronouncements in Tanada v. Tuvera (146
SCRA 453 and Peo. v. Que Po Lay (94 Phil. 640).
(Honasan, II v. The Panel of Investigating
Prosecutors of the Department of Justice, 427
SCRA 46)
Renvoi Doctrine
Edward is an American citizen who was domiciled
in the Philippines for quite some time. He met
Bernardina, became common law spouses and
had 2 daughters with her, Helen and Lucy. They
separated before the effectivity of the NCC.
Shortly after he executed his will, he went back to
America and stayed there until his demise. When
Edward’s will was probated, it was opposed
because Helen, his illegitimate natural child, was
allegedly preterited, leaving only a sum of money
in a bank to her while Lucy, his illegitimate
acknowledged natural child was given the whole of
his estate. Helen claims that under Art. 16 par. 2
of the civil code, where there is succession, the
national law of the deceased should govern, that
is, the civil code of California. Art. 946 of the civil
code of California provides that if a Californian not
domiciled in California dies, the law of his domicile
must govern. Lucy, on the otherhand, counters
that under art. 16 par. 2 of the civil code, the
national law of the deceased should apply.
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
ADVISER:
Q: Which law should be applied – Philippine law or
Californian Law?
A: Philippine Law should be applied. Where the
testator (Edward) was a citizen of California, and
domiciled in the Philippines, the amount of
successional rights should be governed by his
national law. However, the conflict of law rules of
California provides that in cases of citizens who
are residents of another country, the law of the
country of domicile should apply, hence, Philippine
law on legitimes should be applied. This is so
because California law itself refers the case back
to the Philippines. The Philippine court has no
other alternative but to accept the referring back,
for to do otherwise, might result again in its
referring back to the Philippines, which would give
rise to a sort of an “international football”. (Aznar
v. Garcia, 61 O.G. No. 46, p. 7303, 1963)
Natural Persons , Art. 41 NCC
Nita came to know Antonio Geluz. She became
pregnant before they were legally married. In order
to conceal her pregnancy from her parents, she
had herself aborted. After her marriage with the
Antonio, she again became pregnant. As she was
employed in the COMELEC and her pregnancy
proved to be inconvenient, she had herself
aborted again by the same person who had her
aborted before. Less than 2 years later, she again
became pregnant and again repaired to the same
clinic. Nita was again aborted of a 2-month old
foetus, in consideration of the sum of P50. It is this
third and last abortion that constitutes Antonio’s
basis in filing this action and award of damages.
Trial court and Court of Appeals predicated the
award of damages upon the provisions of the
initial par. of Art. 2206 of the NCC.
Q: May Antonio recover damages from the
physician who caused the abortion of Nita?
A: No. Fixing an award for the death of a person
does not cover the case of an unborn fetus that is
not endowed w/ personality. Parents of unborn
fetus cannot sue for damages on its behalf. A
husband of a woman who voluntarily procured her
abortion could not recover damages from the
physician who caused the same. Since an action
for pecuniary damages on account of personal
injury or death pertains primarily to the injured, no
such right of action could derivatively accrue to the
parents or heirs of an unborn child. In fact, even if
a cause of action did accrue on behalf of the
unborn child, the same was extinguished by its
pre-natal death, since no transmission to anyone
can take place from one that lacked juridical
personality. It is no answer to invoke the
provisional personality of a conceived child
(conceptus pro nato habetur) under Article 40 of
the Civil Code, because that same article
expressly limits such provisional personality by
imposing the condition that the child should be
subsequently born alive. In the present case, there
is no dispute that the child was dead when
separated from its mother's womb.
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2007 Team Bar-Ops Civil Law Committee
However, this is not to say that the parents are not
entitled to collect any damages at all. But such
damages must be those inflicted directly upon
them. Because the parents cannot expect either
help, support or services from an unborn child,
they would normally be limited to moral damages
for the illegal arrest of the normal development of
the foetus, (Art. 2217, CC), as well as to
exemplary damages, if the circumstances should
warrant them (Art. 2230, CC).
But in this case, there is no basis for an award of
moral damages, evidently because the husband's
indifference to the previous abortions clearly
indicates that he was unconcerned with the
frustration of his parental hopes and affection.
(Geluz v. CA, 2 S 801, 1961)
Human Relations
Using the wire services of RCPI, Grace Verchez
sent a telegram to her siblings that read; "Send
check money Mommy hospital." It took twenty five
days however for the telegram to reach them due
to the negligence of RCPI' s employees. The
mother died eventually, although there was no
showing that RCPI's negligence contributed to it.
RCPI was sued for damages.
Q: Is RCPI liable for damages although there was
no showing that its employees’ negligence
contributed to the death of respondents’ mother?
A: RCPI's tort liability is clear under Art. 2219, par.
10 thereof, in relation to Art. 26. Under the latter
provision, every person shall respect, among
others, the peace of mind of his fellowmen. RCPI's
negligence in not promptly performing its
obligation undoubtedly disturbed the peace of
mind of the Verchezes. It disrupted the "filial
tranquility" among them as they blamed each
other "for failing to respond swiftly to the
emergency." (RCPI v. Verchez, et al., GR No.
164349, 31 Jan. 2006)
Roberto was in Nikko Hotel when he bumped into
a friend who was then on her way to a wedding
reception being held in said hotel. Roberto alleged
that he was then invited by his friend to join her at
the wedding reception and carried the basket full
of fruits which she was bringing to the affair. At the
reception, the wedding coordinator of the hotel
noticed him and asked him, allegedly in a loud
voice, to leave as he was not in the guest list. He
retorted that he had been invited to the affair by
his friend, who however denied doing so. Deeply
embarrassed by the incident, Roberto then sued
the hotel for damages under Articles 19 and 21 of
the Civil Code.
Q: Will Roberto’s action prosper?
A: No. It was held that the version of the hotel
coordinator was more credible considering that
she has been in the hotel business for 20 years
wherein being polite and discreet are virtues to be
emulated. Consequently, the employer hotel is not
liable for damages. Art. 19, known to contain what
is commonly referred to as the principle of abuse
of rights, is not a panacea for all human hurts and
social grievances. The elements for this principle
to apply are:
University of Santo Tomas
1) There is an act which is legal;
2) But it is contrary to morals, good
custom, public order, or public policy; and
3) It is done with intent to injure.
A common theme runs through Articles 19 and 21
and that is, the act complained of must be
intentional. In this case, there was no showing at
all that the wedding coordinator had acted with ill--
motives. Without such evidence, her act cannot
amount to abuse of rights. (Nikko Hotel Manila
Garden v. Reyes, a.k.a. "Amay Bisaya" , 452
SCRA 532 )
GF Equity, Inc., which maintains Alaska Basketball
Team in the PBA engaged the services of Arturo
Valenzona as coach of its team for a period of two
years, with the stipulation that “If at anytime during
the contract, the Coach, in the sole opinion of the
Corporation, fails to exhibit sufficient skill or
competitive ability to coach the team, the
corporation may terminate this contract.” After
Alaska placed third in two conferences during the
1988 season, Valenzona received a notice from
GF Equity terminating his services as coach. Six
years later, he filed a complaint for damages
praying for payment of his compensation arising
from the alleged arbitrary and unilateral
termination of his employment.
Q: Is GF Equity liable for damages arising from
the unilateral termination of Valenzona’s
employment despite said stipulation in his
contract?
A: Yes. The stipulation clearly transgressed the
principle of mutuality of contracts under Art. 1308
of the CC. It leaves the determination and
judgment of whether Valenzona failed to exhibit
sufficient skill or competitive ability to coach the
Alaska team solely to the opinion of GF Equity.
This constitutes an unbridled prerogative to pre-
terminate the contract irrespective of the
soundness, fairness, or reasonableness, or even
lack of basis of its opinion. Since the pre-
termination of the agreement was predicated on
an illegal ground, hence contrary to law, GF Equity
failed to exercise in a legitimate manner its right to
pre-terminate the contract, thereby abusing the
right of Valenzona and entitling him to damages
under Art. 19, in relation to Art. 20. (GF Equity,
Inc. v. Valenzona, GR No. 156841, 30 June
2005)
HSBC failed to pay the value of the checks issued
in Catalan’s favor even after the drawer had
repeatedly directed the bank to pay the value
thereof. Catalan filed a complaint for damages
under Art. 19 of the CC against HSBC. The bank
invokes the defense that under the Negotiable
Instruments Law, a check of itself does not
operate as an assignment of the funds to the
credit of the drawer with the bank, which is
supposed to be not liable to the holder unless and
until it accepts or certifies the check.
Q: Will Catalan’s action for damages under Art. 19
prosper?
A: Yes. HSBC is liable for damages on account of
the unreasonable manner in which it dealt with
Catalan. When a right is exercised in a manner

CIVIL LAW NOTES
which does not conform with the norms enshrined
in Art. 19 of the CC and results in damage to
another, a legal wrong is thereby committed for
which the wrongdoer must be held responsible. A
person should be protected only when he acts in
the legitimate exercise of his right, that is, when he
acts with prudence and in good faith; but not when
he acts with negligence or abuse. (HSBC
International Trustee, Ltd. v. Catalan, 440
SCRA 498)
Marriage
This is an action for support by G (wife) against R
(husband). After 1 month of marriage, R
repeatedly demanded from G to perform
"unchaste and lascivious acts on R's genitals."
Because of G's refusal, R maltreated G by word
and deed, inflicting bodily injuries on G. To escape
R's lewd designs and avoid further harm, G left the
conjugal home and took refuge in her parent's
house.
G filed an action for support w/ the trial court which
was dismissed on the ground that R could not be
compelled to give support if G lived outside of the
conjugal home, unless there was legal separation.
G appealed.
Q: Was the trial court correct in dismissing her
action for support?
A: No. The law provides that R, who is obliged to
support the wife, may fulfill this obligation either by
paying her a fixed pension or by maintaining her in
his own home at his option. However, the option
given by law is not absolute. The law will not
permit R to evade or terminate his obligation to
support his wife if the wife is driven away from the
conjugal home because of the R’s own wrongful
acts. In this case, where G was forced to leave the
conjugal abode because of the lewd designs and
physical assaults of R, she may claim support
from him for separate maintenance even outside
of the conjugal home. (Goitia v. Campos Rueda,
35 Phil 252)
Marriage as a Social Institution
Jaime filed a petition for nullity of his marriage to
Carmelita on the ground of lack or absence of a
marriage license. To support his claim, he
presented a certification issued by the local civil
registrar to the effect that "they failed to locate the
book wherein marriage license 2770792 is
registered," for the reason that "the employee
handling is already retired."
Q: Is their marriage void ab initio for failure of the
local civil registrar to locate the book wherein their
marriage license is registered hence their
marriage was solemnized without a marriage
license?
A: No. It is a policy in our Constitution to protect
and strengthen the family as the basic social
institution and marriage as the foundation of the
family. Thus, any doubt shall be resolved in favor
of the validity of marriage. Semper praesumitor
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
3
ADVISER:
pro matrimonio - Always presume marriage.
Moreover, in order for a certification by the civil
registrar to be given probative value, it must
categorically state that despite diligent search, a
particular document does not exist in his office or
that a particular entry of a specified tenor was not
to be found in the register. In this latter instance,
such certification would then be sufficient proof of
lack or absence of record as stated in Sec. 28,
Rule 132 of the Rules of Court. Hence, their
marriage is valid. (Sevilla v. CA , GR No.
167684, 31 July 2006 )
Soledad, a court interpreter, was administratively
charged with disgraceful and immoral conduct for
living with a man not her husband, and for having
borne a child within this live-in arrangement. It
happened that the man with whom she cohabited
was also married to another woman. She
interposed a defense that said arrangement is in
conformity with her and her partner's religious
beliefs as members of the Jehovah's Witnesses
and the Watch Tower Bible Society. Both she and
her partner had individually executed a
"Declaration of Pledging Faithfulness." For
Jehovah's Witnesses, this declaration allows
members of their congregation who have been
abandoned by their spouses to enter into marital
relations, and it makes the resulting union moral
and binding within the congregation all over the
world except in countries where divorce is allowed.
Q: Is their cohabitation valid?
A: Yes. No disgraceful and immoral conduct may
be attributed to Soledad given her religious beliefs.
In resolving claims involving religious freedom, our
Constitution adheres to the benevolent neutrality
or accommodation approach.
Under the benevolent neutrality approach, the
"wall of separation" between church and state is
meant to protect the state from the church. It
recognizes that religion plays an important role in
the lives of individuals. Thus, accommodation of
religion may be allowed, not to promote the
government's favored form of religion, but to allow
individuals and groups to exercise their religion
without hindrance; What is sought under the
theory of accommodation is not a declaration of
unconstitutionality of a facially neutral law, but an
exemption from its application or its "burdensome
effects," whether by the legislature or the courts.
The Supreme Court recognized that state interests
must be upheld in order that freedoms - including
religious freedom - may be enjoyed. In the area of
religious freedom, however, man stands
accountable to an authority higher than the state,
and so the state interest sought to be upheld must
be so compelling that its violation will erode the
very fabric of the state that will also protect the
freedom. In the absence of a showing that such
interest exists, as in this case, man must be
allowed to subscribe to the Infinite. (Estrada v.
Escritor, AM No. P-02-1651, 22 June 2006)
During his lifetime and while he was married to
Epifania de la Cruz, Joseph Goyanko acquired a
piece of land which he then subsequently
conveyed, by way of a purported deed of sale, to
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2007 Team Bar-Ops Civil Law Committee
his other woman, Maria Ching. After Joseph died,
all of his legitimate children learned about the sale
to his mistress and they thus sought its
reconveyance in their favor.
Q: Is the sale of the piece of land by Joseph to his
mistress proper?
A: No. The proscription against the sale of
property between spouses under Art. 1490 applies
even to common law relationships. In an earlier
ruling, the Supreme Court nullified a sale made by
a husband in favor of a concubine, after he had
abandoned his family and left the conjugal home
where his wife and children lived and from whence
they derived their support, for being contrary to
morals and public policy. The sale was regarded
by the court as subversive of the stability of the
family, a basic social institution which public policy
cherishes and protects. (Ching v. CA, GR No.
165879, 10 Nov. 2006)
Guillermo proposed marriage to Josefa, but as to
whether they married each other is disputed. It
was averred that the two eventually lived together
as husband and wife but were never married. This
is borne out by the fact that no record of the
marriage existed in the civil registry. On the other
hand, it was maintained that the two in fact
married each other and lived as husband and wife
for more than half a century and this was known
by their relatives and friends.
Q: Is Guillermo Rustia married to Josefa Delgado?
A: They are presumed to be married. In this
jurisdiction, every intendment of the law leans
toward legitimizing matrimony. Persons dwelling
together apparently in marriage are presumed to
be in fact married. This is the usual order of things
in society and, if the parties are not what they hold
themselves out to be, they would be living in
constant violation of the common rules of law and
propriety. Semper praesumitur pro matrimonio.
Always presume marriage. Although a marriage
contract is considered a primary evidence of
marriage, its absence is not always proof that no
marriage took place. (Delgado Vda. De la Rosa,
et al. v. Heirs of Marciana Rustia Vda. De
Damian, et al., 480 SCRA 334)
Marriage License
Complainants allege that respondent judge
solemnized marriages even without the requisite
marriage license. Thus, several couples were able
to get married by the simple expedient of paying
the marriage fees to Baroy, Clerk of Court of the
MTC despite the absence of a marriage license.
As a consequence, their marriage contracts did
not reflect any marriage license. In addition,
respondent Judge did not sign their marriage
contracts and did not indicate the date of
solemnization the reason being that he allegedly
had to wait for the marriage license to be
submitted by the parties which was usually several
days after the ceremony. Indubitably, the marriage
contracts were not filed w/ the local civil registrar.
Q: Is there a need for a marriage license?
University of Santo Tomas
A: Yes. On the charge regarding illegal marriages,
the FC pertinently provides that the formal
requisites of marriage, inter alia, a valid marriage
license except in the cases provided for therein.
Complementarily, it declares that the absence of
any of the essential or formal requisites shall
generally render the marriage void ab initio and
that, while an irregularity in the formal requisites
shall not affect the validity of the marriage, the
party or parties responsible for the irregularity shall
be civilly, criminally and administratively liable.
(Cosca v. Palaypayon, Jr., 237 SCRA 249)
Marriage Contract
The signing of the marriage contract is a formal
requirement of evidentiary value, the omission of
which does not render the marriage a nullity. It
was required by the statute simply for the purpose
of evidencing the act and to prevent fraud. No
statutory provision or court ruling has been cited
making it an essential requisite - not the formal
requirement of evidentiary value, which we believe
it is. The fact of marriage is one thing; the proof by
which it may be established is quite another.
(Loria v. Felix, 104 Phil 1)
Art. 26, Family Code; Nationality Principle (Lex
Nationalii)
Cipriano and Lady Miros married each other. Lady
Miros then left for the US and there, she obtained
American citizenship. Cipriano later learned all
about this including the fact that Lady Miros had
divorced him in America and that she had
remarried there. He then filed a petition for
authority to remarry, invoking par. 2, Art. 26 of the
FC.
Q: Is Cipriano capacitated to re-marry by virtue of
the divorce decree obtained by his Filipino spouse
who was later naturalized as an American citizen?
A: Yes. The reckoning point for Art. 26 par. 2 of
the FC to apply is not the citizenship of the parties
at the time of the celebration of their marriage but
their citizenship at the time that a valid divorce is
obtained abroad by the alien spouse capacitating
him or her to re-marry. Although said provision
only provides for divorce obtained abroad by the
foreign spouse in a valid mixed marriage, the
legislative intent would be rendered nugatory if this
provision would not be applied to a situation where
there is a valid marriage between two Filipino
citizens, one of whom thereafter is naturalized as
a foreign citizen and obtains a valid divorce decree
capacitating him or her to remarry, as in this case.
To rule otherwise would be to sanction absurdity
and injustice.
**The clear legislative intent in the case of par. 2,
Art. 26 (the origin of which can be traced to Van
Dorn v. Romillo, Jr., 139 SCRA 139) of the FC is
to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who,
after obtaining a divorce, is no longer married to
the Filipino spouse. This is so notwithstanding
that, on its face, the said provision does not

CIVIL LAW NOTES
appear to govern the situation presented by the
case at hand. (Republic v. Orbecido III, 472
SCRA 114)
NOTE: The naturalization of one of the parties, as
well as the divorce decree obtained by him or her,
must be proven as a fact under our rules on
Evidence. The foreign law under which the divorce
was obtained must likewise be proven as our
courts cannot take judicial notice of foreign laws.
It was also in the case of Quita v. CA and Dandan
where the court hinted by way of obiter dictum,
that a Filipino divorced by his naturalized foreign
spouse is no longer married under Philippine law
and can thus re-marry.
Divorce Decree Obtained Abroad
Alice Reyes Van Dorn is a citizen of the
Philippines while Richard Upton is a US citizen.
They were married in HongKong. After the
marriage, they established their residence in the
Philippines and begot 2 children. They were
divorced in Nevada and Alice remarried.
In 1983, Upton filed a suit against Alice in the
RTC-Pasay, stating that her business in Ermita,
Manila is conjugal property and asking that she be
ordered to render an accounting of that business,
and that Upton be declared as having the right to
manage the conjugal property.
Q: Is the divorce decree in Nevada recognizable
here in the Philippines?
A: Yes. There can be no question as to the validity
of that Nevada divorce in any of the States of the
U.S. The decree is binding on Alice as an
American citizen. For instance, Alice cannot sue
Richard, as her husband in any State of the Union.
What he is contending in this case is that the
divorce is not valid and binding in this jurisdiction,
the same being contrary to local law and public
policy.
It is true that owing to the nationality principle
embodied in Art. 16 of the NCC, only Philippine
nationals are covered by the policy against
absolute divorces the same being considered
contrary to our concept of public policy and
morality. However, aliens may obtain divorces
abroad, which may be recognized in the
Philippines, provided they are valid according to
their national law. In this case, the divorce in
Nevada released Richard from the marriage from
the standards of American law, under which
divorce dissolves the marriage, the existing status
or domestic relation of husband and wife, and to
free them both from the bond. The marriage tie,
when thus severed as to one party, ceases to bind
either. A husband without a wife, or a wife without
a husband, is unknown to the law. (Van Dorn v.
Romillo, Jr., GR No. L-68470, 08 October 1985)
Q: Does Richard have the right to exercise control
over conjugal assets despite the fact that his
marriage with Alice was terminated by a divorce
decree obtained abroad?
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
5
ADVISER:
A: No. While it is true that owing to the nationality
principle embodied in Art. 13, NCC, only Phil.
nationals are covered by the policy against
absolute divorce the same being considered
contrary to our concept of public policy and
morality. However, aliens may obtain divorces
abroad, which may be recognized in the
Philippines, provided they are valid according to
their national law. In this case, the divorce in
Nevada released Richard Upton from the marriage
based on American law under w/c divorce
dissolves the marriage.
Thus, pursuant to his national law, Upton is no
longer the husband of Alice. He would have no
standing to sue in the case below as Alice’s
husband entitled to exercise control over conjugal
assets. To maintain that under our laws, Alice has
to be considered still married to him and still
subject to a wife's obligations under the NCC
cannot be just. Upton should not continue to be
one of her heirs w/ possible rights to conjugal
property. She should not be discriminated against
in her own country if the ends of justice are to be
observed. (Van Dorn v. Romillo, 139 SCRA 139)
Fe Quita and Arturo Padlan, both Filipinos, were
married in the Philippines. They were not however
blessed with children. Somewhere along the way
their relationship soured. Eventually Fe sought for
a divorce decree in U.S.A. She submitted in the
divorce proceedings a private writing evidencing
their agreement to live separately from each other
and a settlement of their conjugal properties. She
obtained a final judgment of divorce. Three weeks
thereafter she married a certain Tupaz in the same
locality but their relationship also ended in a
divorce. Still in the U.S.A., she married for the third
time, to a certain Wernimont.
In 1972 Arturo died leaving no will. Inciong filed a
petition with the RTC for issuance of letters of
administration concerning the estate of Arturo in
favor of the Philippine Trust Company. Dandan
claims to be the surviving spouse of Arturo, and
the surviving children of Arturo, opposed the
petition and prayed for the appointment instead of
Atty. Cabasal, which was later replaced by
Castillon. Blandina and the Pad Ian children
submitted certified photocopies of the private
writing and the final judgment of divorce between
petitioner and Arturo. Later Ruperto Padlan,
claiming to be the sole surviving brother of the
deceased Arturo, intervened.
Petitioner Fe Quita moved for the immediate
declaration of heirs of the decedent and the
distribution of his estate.
Q: Was there a valid divorce between Fe and
Arturo?
A: We deduce that the finding on their citizenship
pertained solely to the time of their marriage as
the trial court was not supplied with a basis to
determine petitioners citizenship at the time of
their divorce. The doubt persisted as to whether
she was still a Filipino citizen when their divorce
was decreed. The trial curt must have overlooked
the materiality of this aspect. Once proven hat she
was no longer a Filipino citizen at the time of their
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2007 Team Bar-Ops Civil Law Committee
divorce, Van Dorn would become applicable and
petitioner could very well lose her right to inherit
from Arturo.
When asked whether she was an American citizen
petitioner answered that she was since 1954.
Significantly, the decree of divorce of petitioner
and Arturo was obtained in the same year.
Petitioner, however, did not bother to file a reply
memorandum to erase the uncertainty about her
citizenship at the time of their divorce, a factual
issue requiring hearings to be conducted by the
trial court. Consequently, respondent appellate
court did not err in ordering the case returned to
the trial court for further proceedings. (Quita v.
CA, GR. No. 124862. 22 December 1998)
Crasus and Fely Iyoy were married. Fely left for
the USA, leaving behind Crasus and their five
children. Shortly thereafter she requested Crasus
to sign divorce papers but which the latter ignored.
According to Fely, after she secured a divorce
decree, she married an American citizen and
acquired American citizenship.
Q: Is the divorce decree obtained by Fely valid?
A: No. By its plain and literal interpretation, Art. 26
(2) of the FC cannot be applied to the case of
Crasus and Fely because at the time that Fely
obtained her divorce in the USA, she was still a
Filipino citizen. . (Republic v. Crasus L. Iyoy, 470
SCRA 508)
Note: The authority of the Solicitor General to
intervene in proceedings for annulment and
declaration of nullity of marriage, while not
expressly conferred by Art. 48 of the FC, is
nonetheless recognized under EO No. 292
(Administrative Code of 1987) and AM No. 02-11-
10-SC (Rule on Declaration of Absolute Nullity of
Void Marriages and Annulment of Voidable
Marriages) which became effective on 15 March
2003.
Legal Capacity to Contract Marriage
Recio, a Filipino, was married to Samson, an
Australian citizen, in Malabon. They lived together
as husband and wife in Australia. Then a decree
of divorce, purportedly dissolving the marriage,
was issued by an Australian family court.
Recio became an Australian citizen, as shown by
a "Certificate of Australian Citizenship" issued by
the Australian government. Petitioner Garcia-- a
Filipina -- and Recio were married in Cabanatuan
City. In their application for a marriage license,
respondent was declared as "single" and
"Filipino."
Afterwards, petitioner and respondent lived
separately without prior judicial dissolution of their
marriage. While the two were still in Australia, their
conjugal assets were divided in accordance with
their Statutory Declarations secured in Australia.
Petitioner Garcia then filed a Complaint for
Declaration of Nullity of Marriage in the Philippine
court, on the ground of bigamy -- respondent
allegedly had a prior subsisting marriage at the
time he married her. She claimed that she learned
of respondent's marriage to Editha Samson.
University of Santo Tomas
Q: Is the respondent legally capacitated to marry
the petitioner?
A: The divorce decree between respondent and
Editha Samson appears to be an authentic one
issued by an Australian family court. However,
appearance is not sufficient; compliance with the
aforementioned rules on evidence (§24 and §25 of
Rule 132) must be demonstrated.
The burden of proof lies with "the party who
alleges the existence of a fact or thing necessary
in the prosecution or defense of an action." Since
the divorce was a defense raised by respondent,
the burden of proving the pertinent Australian law
validating it falls squarely upon him. Courts cannot
take judicial notice of foreign laws. The power of
judicial notice must be exercised with caution, and
every reasonable doubt upon the subject should
be resolved in the negative.
The certificate of legal capacity mentioned in Art.
21 of the FC, would have been sufficient to
establish the legal capacity of respondent, had he
duly presented it in court. A duly authenticated
and admitted certificate is prima facie evidence of
legal capacity to marry on the part of the alien
applicant for a marriage license.
Based on the above records, we cannot conclude
that respondent, who was then a naturalized
Australian citizen, was legally capacitated to marry
petitioner on January 12, 1994. Neither can we
grant petitioner's prayer to declare her marriage to
respondent null and void on the ground of bigamy.
After all, it may turn out that under Australian law,
he was really capacitated to marry petitioner as a
direct result of the divorce decree. (Garcia v.
Recio, GR. No. 138322, 02 October 2001)
Art. 36, Family Code re: Psychological
Inacapacity
In her petition for declaration of nullity of her
marriage, Ma. Armida alleged that her husband,
Brix spent most of his time with his band mates
and that he began to withdraw from her,
particularly when she noticed calls from other
women to him. She also alleged that Brix suffered
from, among others, epilepsy, and would become
violent during bouts of the illness. The psychiatrist
presented by Ma. Armida testified that indeed Brix
was psychologically incapacitated to perform the
essential marital obligations.
Q: Is Brix psychologically incapacitated to perform
the essential marital obligations thus rendering
their marriage void ab initio?
A: No. Brix’s alleged mixed personality disorder,
his "leaving-the-house" attitude whenever the
couple quarreled, the violent tendencies during
epileptic attacks, sexual infidelity, etc. were not
shown to be rooted on some debilitating
psychological condition but a mere refusal or
unwillingness to assume the essential marital
obligations. Art. 36 of the FC requires that the
psychological incapacity must refer to a serious
psychological illness afflicting a party even before
the celebration of the marriage; a malady so grave
and permanent as to deprive one of awareness of
the duties and responsibilities of the matrimonial
bond that one is about to assume and not a mere

CIVIL LAW NOTES
refusal to do so. There is no showing that Brix's
so-called defects were already present at the
inception of the marriage, or that those were
incurable. Although Ma. Armida presented a
psychiatrist to bolster her case, the findings of the
physician are insufficient in establishing the
alleged psychological incapacity of the
respondent. (Perez-Ferraris v. Ferraris, GR No.
162368, 17 July 2006)
Norma sought the nullity of her marriage to
Eulogio on the ground of his psychological
incapacity to comply with essential marital
obligations. Norma attributed immaturity, habitual
alcoholism, extremely jealousy, maltreatment,
inherent laziness and abandonment of family on
her husband's part as the reason. The evidence
consisted solely of Norma's testimony. Thereafter,
the trial court decreed the nullity of their marriage.
Q: Is the trial court’s decision correct?
A: No. In Santos v. CA, 240 SCRA 20, it was held
that the alleged personality disorder amounting to
psychological incapacity must have been
characterized by:
a) Gravity;
b) Juridical antecedence; and
c) Incurability.
Norma alone testified in support of her petition.
Her testimony failed to establish the fact that at the
time of her marriage to Eulogio, the latter was
already suffering from a psychological defect
which deprived him of the ability to assume the
essential duties of marriage. The Court cannot
presume psychological defect from the mere fact
of Eulogio's immaturity, habitual alcoholism, etc.
Such acts must be shown to be manifestations of
a disordered personality within the contemplation
of Art. 36 of the FC. While medical or clinical
evidence is not a condition sine qua non in nullity
cases, its presentation would have helped
Norma's petition for nullity. In sum, the totality of
the evidence presented by Norma was completely
insufficient to sustain the finding that Eulogio was
indeed psychologically incapacitated. (Republic v.
Melgar, et al., 486 SCRA 177 )
Leonilo commenced a petition for declaration of
nullity of his marriage to Ivonne due to her
supposed psychological incapacity. Leonilo
alleged that the Ivonne lied to him about her
personal circumstances. She even concealed from
him the fact that she had previously given birth to
an illegitimate child and exhibited extreme
insecurities and fits of jealousy. On account of
these, Leonilo left her for good. The physicians’
conclusion was that Ivonne was indeed
psychologically incapacitated to perform her
essential marital obligations.
Q: Is Marie Ivonne psychologically incapacitated
to perform the essential obligations of marriage
thus rendering their marriage void ab initio?
A: Yes. The totality of the evidence presented by
Leonilo had sufficiently overcome the burden of
proving psychological incapacity of the Ivonne.
The root cause of her incapacity was medically or
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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7
ADVISER:
clinically identified and was shown as incurable.
Further, her incapacity was established as already
existing prior to and at the time of the celebration
of the marriage. The lies attributed to her indicate
a failure on her part to distinguish truth from fiction
or at least abide by the truth. A person unable to
distinguish between fantasy and reality would be
unable to comprehend the legal nature of the
marital bond, much less its psychic meaning and
the corresponding obligations to marriage,
including parenting. One unable to adhere to
reality cannot be expected to adhere as well to
any legal or emotional commitment.
NOTE: Significantly, the judgment of the Roman
Rota of the Vatican appended a restrictive clause
in its sentence of nullity prohibiting Ivonne from
contracting another marriage without the tribunal's
consent. This means that a person deemed
psychologically incapacitated and whose marriage
is thus dissolved on account thereof, may
nonetheless remarry, since there is no such thing
as "absolute psychological incapacity." It is only
relative, in the sense that one may be
incapacitated with respect to one partner, but not
necessarily with respect to all. (Antonio v. Reyes,
484 SCRA 353 )
Q: Is the annulment of their marriage by the
Metropolitan Tribunal of the Archdiocese of
Manila, as well as the National Appellate
Matrimonial Tribunal and the Roman Rota of the
Vatican binding upon our courts?
A: No. Interpretations given by the National
Appellate Matrimonial Tribunal of the Catholic
Church of the Philippines, are not controlling, BUT
should be given weight and respect by the courts.
This is one of the guidelines in determining the
propriety of a petition for nullity based on Art. 36 of
the FC laid down by the Supreme Court in the
case of Republic v. CA and Molina. (Antonio v.
Reyes, 484 SCRA 353 )
Psychological incapacity was defined by the
Supreme Court as “no less than a mental (not
physical) incapacity that causes a party to be truly
incognitive of the basic marital covenants that
concomitantly must be assumed and discharged
by the parties to the marriage.” The intendment of
the law has been to confine the meaning of
"psychological incapacity" to the most serious
cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to
give meaning and significance to the marriage.
(Santos v. CA, 240 SCRA 20)
Noel filed a petition for declaration of nullity of his
marriage on the ground of the alleged
psychological incapacity of his wife, Isabel. Trial
court decreed the nullity of their marriage and
further ordered Noel to pay Isabel moral as well as
exemplary damages, attorney's fees and
expenses of litigation plus costs.
Q: Is the award of moral and exemplary damages,
attorney’s fees and expenses of litigation correct?
A: By declaring petitioner as psychologically
8
2007 Team Bar-Ops Civil Law Committee
incapacitated, the possibility of awarding moral
damages was negated, which should have been
proved by specific evidence that it was done
deliberately. Thus, as the grant of moral damages
was not proper, it follows that the grant of
exemplary damages cannot stand since the Civil
Code provides that exemplary damages are
imposed in addition to moral, temperate, liquidated
or compensatory damages. Finally, since the
award of moral and exemplary damages is no
longer justified, the award of attorney's fees and
expenses of litigation is left without basis.
(Buenaventura v. CA, 454 SCRA 261)
Lolita married a Japanese national, Hamano. After
the marriage celebration, Hamano failed in his
duty to live with, care for and support the family.
He eventually abandoned them and so she filed a
petition for declaration of nullity of her marriage on
the ground of psychological incapacity of Hamano.
The sole evidence presented by her is her
testimony.
Q: Will her action prosper?
A: No. The totality of the evidence presented by
the wife fell far short of the proof required to
establish psychological incapacity of her husband.
Although his act of abandonment was doubtless
irresponsible, there was no allegation that it was
due to a psychological illness. Except for her
testimony, she did not adduce any other evidence
to buttress her allegation of psychological
incapacity. Thus, while as a rule there was no
need for an actual medical examination, the
petition would have been helped by evidence that
medically or clinically identified his illness and this
could have consisted of the testimony of an expert
witness. She failed in this regard. (Republic v.
Quintero-Hamano, 428 SCRA 735)
Court of Appeals held that the three requirements
(Gravity, Juridical Antecedence & Incurability) do
not apply in this case because their marriage is a
mixed one, Hamano being a Japanese national
and Lolita being a Filipino citizen.
Q: Is the CA correct in its declaration?
A: No. The appellate court's holding that the
requirements in Molina and Santos do not apply
here because the case a “mixed marriage” is
erroneous. In proving psychological incapacity,
there is no distinction between an alien spouse
and a Filipino spouse. Courts should not be lenient
in the application of the rules merely because the
spouse alleged to be psychologically incapacitated
happens to be a foreign national. The medical and
clinical rules to determine psychological incapacity
were formulated on the basis of studies of human
behavior in general. Hence, the norms used for
determining psychological incapacity should apply
to any person regardless of nationality. (Republic
v. Quintero-Hamano, 428 SCRA 735)
NOTE: The guidelines in Rep. v. CA and Molina
earlier mandated in Santos v. CA incorporate
three basic requirements, namely: 1) gravity; 2)
juridical antecedence; and 3) incurability. The
foregoing guidelines do not require that a
physician examine the person alleged to have
University of Santo Tomas
psychological incapacity, although the root cause
may be "medically or clinically identified." As long
as the totality of the evidence presented is enough
to sustain a finding of psychological incapacity,
then actual medical examination of the person
concerned need not be resorted to (Marcos v.
Marcos, 343 SCRA 755).
Veronico married Hilda. Four years later, he
married a second time, this time to Leticia with
whom he then lived. In 1991, Verenico divulged to
Leticia about his first marriage and that he was
going back to his first wife, Hilda. Thereafter, the
marriage with Leticia was declared void on the
ground of psychological incapacity. Veronico
married a third time, this time with Nilda. Leticia
learned about this and commenced a criminal
case for bigamy against Veronico.
Veronico invokes the defense that effects of the
nullity of his marriage with Leticia retroacts to the
date when it was contracted, hence, he is not
guilty of bigamy for want of an essential element,
that of the existence of a valid previous marriage.
Q: Is Veronico correct in invoking the nullity of his
marriage with Leticia as his defense in the bigamy
case?
A: No. Article 349 of the RPC penalizes the mere
act of contracting a second or subsequent
marriage during the subsistence of a previous
valid marriage. Here, as soon as the second
marriage to Leticia was celebrated, the crime of
bigamy had already been consummated as the
second marriage was contracted during the
subsistence of the valid first marriage.
NOTE: Although the judicial declaration of nullity
of a marriage on the ground of psychological
incapacity retroacts to the date of the celebration
of the marriage insofar as the vinculum between
the parties is concerned, it must be noted that the
marriage is not without legal consequences or
effects. One such consequence or effect is the
incurring of criminal liability for bigamy. To hold
otherwise would be to render nugatory the State's
penal laws on bigamy as it would allow individuals
to deliberately ensure that each marital contract be
flawed in some manner, and to thus escape the
consequences of contracting multiple marriages.
(Tenebro v. CA, 423 SCRA 272)
David and Sharon got married twice, the first in a
civil wedding and the second, in a church
wedding. On account of abandonment, alleged
sexual infidelity, immaturity and irresponsible
behavior of his wife, David filed a petition for
declaration of nullity of their marriage under Art. 36
of the FC. The evidence adduced by David
showed that Sharon had illicit relations with a
number of men. She left him for a foreigner. The
psychiatrist presented by the David testified that
the wife suffered from an anti-social personality
disorder which amounted to psychological
incapacity on her part. The trial court granted the
prayer for nullity and issued the corresponding
decree of nullity, not only of the civil marriage of
the parties but also of the Church-sanctioned
marriage which had joined them in the Holy
Sacrament of matrimony.

CIVIL LAW NOTES
Q: Was the trial court correct in declaring the
marriage as null and void?
A: No. In Santos v. CA (1995), the Supreme Court
said that the disorder should refer to no less than
a mental (not) physical incapacity that causes a
party to be truly incognitive of the basic marital
covenants that concomitantly must be assumed
and discharged by the parties. In this case, the
wife's sexual infidelity does not amount to a mental
or psychological illness such that she could not
have known the obligations she was assuming, or
knowing them, could have given a valid
assumption thereof (Rep. v. Dagdag, 356 SCRA
425). It must also be shown that her promiscuity
existed prior to or at the inception of the marriage,
unfortunately in this case there is no showing that
it existed prior to the marriage as required.
Moreover, her abandonment, immaturity and
irresponsible behavior cannot be equated with
psychological incapacity (Pesca v. Pesca, 356
SCRAS 425). There was no showing that these
acts were manifestations of a disordered
personality which made her completely unable to
discharge the essential marital obligations
(Hernandez v. CA, 320 SCRA 76). At best, the
circumstances relied upon by the petitioner are
grounds for legal separation (Marcos v. Marcos,
343 SCRA 755). (Dedel v. CA, 421 SCRA 461)
Q: May the trial court dissolve their second
marriage which was Church-sanctioned?
A: No. The trial court has no jurisdiction to
dissolve the church marriage of the parties. The
authority to do so in this case is exclusively lodged
with the Ecclesiastical Court of the Roman
Catholic Church. (Dedel v. CA, 421 SCRA 461)
Article 40, FC; Bigamy
On the belief that his first wife, whom he had not
seen in more than twenty years, was already
dead, Eduardo remarried. A falling out between
him and his second wife led to the discovery, by
the latter, of her husband's first marriage. She now
charges Eduardo with bigamy. Eduardo invokes
good faith.
Q: Will this make him liable for bigamy?
A: Yes. Eduardo is liable for bigamy. Bigamy is
consummated when a person marries another
during the subsistence of a previous valid
marriage. In this case, Eduardo did not secure a
decree of presumptive death relative to his first
wife before he remarried, hence the second
marriage was contracted during the subsistence of
the previous one. Eduardo is presumed to have
acted with malice or evil intent when he contracted
the second marriage. Eduardo should have
adduced a decree of presumptive death of his first
wife, as required by Art. 349 of the RPC, in
relation to Art. 41 of the FC. Such a judicial
declaration would have established good faith on
his part. (Manuel v. People of the Philippines,
GR No. 165842, 29 Nov. 2005)
During the subsistence of his first marriage,
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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ADVISER:
Salvador contracted a second marriage. Upon
being charged with bigamy, he raised the defense
that he had obtained a decree of nullity of his first
marriage when he entered into the second
marriage, hence, he is not liable for bigamy.
Moreover, he argued that the action for annulment
or declaration of nullity of his marriage was a
prejudicial question to the charge of bigamy.
Q: Is Salvador’s contention that an action for
declaration of nullity a prejudicial question to a
charge of bigamy?
A: No, it is not a prejudicial question. The outcome
of the civil case for annulment of the petitioner's
first marriage has no bearing to the determination
of his innocence or guilt in the criminal case for
bigamy since all that is required for the charge of
bigamy to prosper is that the first marriage be
subsisting at the time that the second marriage
was contracted (Te v. CA). In other words, the
subsequent judicial declaration of nullity of the first
marriage is immaterial because prior to the
declaration of nullity, the crime had already been
consummated (Mercado v. Tan). (Abunado v.
People of the Philippines, 426 SCRA 562)
NOTE: Under Art. 40 of the FC, before one can
contract a second marriage on the ground of
nullity of the first marriage, there must first be a
final judgment declaring the first marriage void. If a
party fails to secure a judicial declaration of nullity
of the first marriage, he or she runs the risk of
being charged with bigamy as the marital bond or
vinculum in the first nuptial subsists (Mercado v.
Tan; Te v. CA).
Justice Jose C. Vitug: The general rule is that if
the marriage is void ab initio, it is ipso facto void
without need of any judicial declaration of nullity.
The exception is found in Art. 40 of the FC
wherein, for purposes of remarriage, the nullity of
the first marriage must first be decreed in a final
judgment.
Lucio married his first wife without a marriage
ceremony taking place. What transpired was the
mere signing of the marriage contract without the
presence of a solemnizing officer. He was then
divorced by his wife in Canada. Lucio remarried
although the first marriage was nullified on the
ground of lack of marriage ceremony only after the
celebration of his second marriage.
Charged with bigamy, Lucio invokes good faith in
contracting the second marriage, and his lack of
criminal intent therefore negated any criminal
liability on his part.
Q: Is Lucio liable for bigamy?
A: No, he is not liable for bigamy. One of the
elements of bigamy is the subsistence of a
previous valid marriage, which is lacking in the
case at bar. Since Lucio’s first marriage was only
done by their signing a marriage contract, two
formal elements of marriage are absent namely: a
solemnizing officer and a marriage ceremony, this
renders their marriage as void ab initio pursuant to
Art. 4 of the FC.
10
2007 Team Bar-Ops Civil Law Committee
In this case, there is no marriage to speak of. The
mere private act of signing a marriage contract
bears no semblance to a valid or ostensibly valid
marriage and thus needs no judicial declaration of
nullity. What Art. 40 of the Family Code
contemplates as a void marriage which must first
be judicially nullified before a party can remarry is
one which must exist although it is void. This is so
because in such a case, even if it is void, it is a
legal impediment to marry, such that a person can
be charged and convicted of bigamy if he
contracts a subsequent marriage without first
securing a declaration of nullity of the prior
marriage. (Morigo v. People of the Philippines,
422 SCRA 376)
NOTE: While this case is analogous to Mercado v.
Tan (337 SCRA 122), it must be distinguished
therefrom. In Mercado, the judicial declaration of
nullity of the first marriage was likewise obtained
after the second marriage had been celebrated.
However, the first marriage in said case was in
fact solemnized not once, but twice: first before a
judge, and the second before a priest in religious
rites. Ostensibly therefore, there was at least a
first marriage which appeared to have been
entered into, albeit later declared void ab initio.
Articles 41 and 42, FC
Declaration of Presumptive Death, Art. 41, FC
*The declaration of presumptive death under Art.
41, FC is available only for the purpose of
remarriage.
Gregorio Nolasco was a seaman. During one of
the calls of his ship to England, he met Janet
Monica Parker, a British subject. When Nolasco's
contract expired, Janet went with him in returning
home to San Jose, Antique. Nolasco then married
Janet. After the marriage, he obtained another
employment contract as a seaman, leaving his
pregnant wife with his parents. While working
overseas, Nolasco received a letter from his
mother informing him that Janet had already given
birth to his son and that she left after giving birth. 5
years after the disappearance of Janet, Nolasco
filed an action for the declaration of presumptive
death of his wife Janet under Art. 41 of the FC,
claiming that all his efforts to look for her proved
fruitless. Trial court granted the petition.
Q: Was the trial court correct in granting Nolasco’s
action for the declaration of presumptive death of
Janet?
A: No. There are 4 requisites for the declaration of
presumptive death under Art. 41:
1. That the absent spouse has been missing
for 4 consecutive years, or 2 consecutive yrs. if the
disappearance occurred where there is a danger
of death under the circumstances laid down in Art.
391.
2. That the spouse present wishes to remarry
3. That the spouse present has a well-
founded belief that the absentee is dead.
4. That the present spouse files a summary
proceeding for the declaration of presumptive
death of the absentee.
University of Santo Tomas
In this case, there is no showing that Nolasco
conducted a search for his missing wife w/ such
diligence as to give rise to a "well-founded belief"
that she is dead. Also, a petition to declare an
absent spouse presumptively dead may not be
granted in the absence of any allegation that the
spouse present will remarry. The four requisites
not having concurred, his action for the declaration
of presumptive death of his wife should be denied.
(Republic v. Nolasco, 220 SCRA 20)
Teresita filed a claim for death benefits with the
SSS when her husband died. This was granted by
the SSS but later had it withdrawn when an
alleged daughter of the deceased wrote the SSS
to protest the release of the death benefits to the
Teresita. According to this daughter, the deceased
contracted three marriages during his lifetime and
that she is the product of decedent's third union.
When the SSS investigated the matter, it found
that the decedent had secured a decree of
presumptive death of his first wife for being absent
for fifteen years. He then married a second time,
and this was to Teresita. However, it appeared
that the first wife was still alive and that the
decedent had supposedly secured the decree of
presumptive death through fraud. On the basis of
its findings, the Social Security Commission
issued an order decreeing the nullity of the second
marriage of the decedent for being bigamous, and
henceforth withdrew the pension that it had earlier
granted to the respondent.
Q: Does the SSC have the authority to issue an
order decreeing the nullity of the second marriage
for being bigamous?
A: No. Although the SSC is empowered to settle
disputes involving claims under said law, it cannot
review, much less reverse decisions rendered by
regular courts of law as it did in this case. In
interfering with and passing upon the CFI decree,
the SSC acted as an appellate court. The law
does not give the SSC discretion to trifle with the
orders of regular courts in the exercise of its
authority to determine the beneficiaries of the
SSS. (SSS v. Jarque Vda. De Bailon, 485 SCRA
376)
Q: Is a judicial proceeding required to annul the
subsequent marriage contracted under Art. 41 of
the FC?
A: No. In Art. 42 of the FC, no judicial proceeding
to annul a subsequent marriage contracted under
Art. 41 is necessary. Also, the termination of the
subsequent marriage by affidavit provided for in
Art. 42 does not preclude the filing of an action in
court to prove the reappearance of the absentee
and obtain a declaration of dissolution or
termination of the subsequent marriage. (SSS v.
Jarque Vda. De Bailon, 485 SCRA 376)
Q: Does the mere reappearance of the absent
spouse terminate the subsequent marriage?
A: No. If the absentee reappears, but no step is
taken to terminate the subsequent marriage, either
by affidavit or by court action, such absentee's
mere reappearance, even if made known to the
spouses in the subsequent marriage, will not
terminate such marriage. (SSS v. Jarque Vda. De

CIVIL LAW NOTES
Bailon, 485 SCRA 376)
Q: Is Teresita the rightful claimant to the SSS
benefits?
A: Yes. Since the second marriage has been
contracted because of a presumption that the
former spouse is dead, such presumption
continues in spite of the spouse's physical
reappearance, and by fiction of law, he or she
must still be regarded as legally an absentee until
the subsequent marriage is terminated as
provided by law. In this case, Teresita enjoys the
presumption of validity of her marriage to the
decedent, hence, she is the rightful claimant to the
SSS benefits.
NOTE: Under Art. 83 of the CC, a subsequent
marriage contracted during the lifetime of the first
spouse is illegal and void ab initio unless the prior
marriage is first annulled or dissolved or
contracted under any of the three exceptional
circumstances therein. It bears noting that the
marriage under any of the exceptional
circumstances therein is deemed valid unless
declared void by a competent court. In the case at
bar, as found by the CFI, the first wife had been
absent for fifteen years and thus it granted the
decree of presumptive death which was sought by
the decedent. This judicial declaration was not
even a requirement for purposes of remarriage
under the Civil Code. (SSS v. Jarque Vda. De
Bailon, 485 SCRA 376)
Physical Incapacity as ground for annulment of
marriage [Art. 45 (5), FC]
JJ, the husband, filed a complaint for annulment of
marriage on the ground of physical incapacity of
his wife, RC, for copulation, her genitals being too
small for penetration. His sole testimony is his
basis as RC refuses to participate in the case.
Q: May their marriage be annulled solely on the
basis of JJ’s testimony as to RC’s supposed
incapacity?
A: No. The sole testimony of the husband as to
the incapacity of his wife is not sufficient basis for
annulment. The presumption is in favor of potency.
Hence, RC should submit to a physical
examination. A physical examination in this case is
not self- incriminating, since she is not being
charged of any crime. (Jimenez v. Canizares,
109 Phil 273)
Annulment of Marriage on the Ground of Fraud
[Art. 45 and 46, FC]
Where there has been no misrepresentation or
fraud, that is, when the husband at the time of the
marriage knew that the wife was pregnant, the
marriage cannot be annulled. Here, the child was
born less than 3 months after the celebration of
the marriage. Supreme Court refused to annul the
marriage for the reason that the woman was at an
advance stage of pregnancy at the time of the
marriage and such condition must have been
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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ADVISER:
patent to the husband. (Buccat V. Buccat, 72 Phil
19)
Aurora prayed for the annulment of her marriage
with Fernando on the ground of fraud in obtaining
her consent after having learned that several
months prior to their marriage, Fernando had pre-
marital relationship with a close relative of his.
According to her the "non-divulgement to her of
such pre-marital secret" constituted fraud in
obtaining her consent w/in the contemplation of
no. 4 of Art. 85, NCC.
Q: Is the concealment by the husband of a pre-
marital relationship with another woman a ground
for annulment of marriage?
A: No. The non-disclosure to a wife by her
husband of his pre-marital relationship with
another woman is not a ground for annulment of
marriage. For fraud as a vice of consent in
marriage, which may be a cause for its annulment,
comes under Art. 85, No. 4 of the NCC. This fraud,
as vice of consent, is limited exclusively by law to
those kinds or species of fraud enumerated in Art.
86.
NOTE: The intention of Congress to confine the
circumstances that can constitute fraud as ground
for annulment of marriage to the 3 cases therein
may be deduced from the fact that, of all the
causes of nullity enumerated in Art. 85, fraud is
the only one given special treatment in a
subsequent article within the chapter on void and
voidable marriages. If its intention were otherwise,
Congress would have stopped at Art. 85, for
anyway, fraud in general is already mentioned
therein as a cause for annulment. (Anaya v.
Palaroan, 36 SCRA 97)
Legal Separation
In an action for legal separation on the ground of
adultery filed by the husband, even though the
defendant wife did not interpose the defense of
prescription, nevertheless, the courts can take
cognizance thereof, because actions seeking a
decree of legal separation or annulment of
marriage, involve public interest, and it is the
policy of our law that no such decree be issued if
any legal obstacles thereto appear upon the
record. Also, the husband was guilty of
commission of the same offense by living with
another woman.
This is an exception to the Rules of Court
provision that defenses not raised in the pleadings
will not be considered since provisions on
marriage are substantive in nature. (Brown v.
Yambao, 54 O.G. 1827)
Lucita left the conjugal dwelling and filed a petition
for legal separation due to the physical violence,
threats, intimidation and grossly abusive conduct
she had suffered at the hands of Wiliam, her
husband. William denied heaping the abuses
alleged by the wife and that her real motive in filing
the petition is that so she would gain control of the
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2007 Team Bar-Ops Civil Law Committee
numerous properties that the couple had acquired
during the marriage, all of which were acquired
due to his efforts. Moreover, he claims that since it
was Lucita who had left the conjugal abode, then
the decree of legal separation should not be
granted, following Art.56 (4) of the FC which
provides that legal separation shall be denied
when both parties have given ground for legal
separation.
Q: Should Legal Separation be denied on the
basis of William’s claim of Mutual Guilt?
A: No. Art. 56 (4) of the FC does not apply since
the abandonment that is a ground for legal
separation is abandonment without justifiable
cause for more than one year. In this case, Lucita
left William due to his abusive conduct. Such act
does not constitute the abandonment
contemplated in the said provision. Since this is
so, there is no mutual guilt between them as there
is only one erring spouse. (Ong Eng Kiam a.k.a.
William Ong v. CA, GR No. 153206, 23 Oct.
2006)
Q: What is the effect of the death of plaintiff-
spouse before a decree of legal separation?
A: The death of plaintiff before a decree of legal
separation abates such action. Being personal in
character, it follows that the death of one party to
the action causes the death of the action itself -
actio personalis moritur cum persona. Even if
property rights are involved, because these rights
are mere effects of the decree of legal separation,
being rights in expectation, these rights do not
come into existence as a result of the death of a
party. Also under the Rules of court, an action for
legal separation or annulment of marriage is not
one which survives the death of spouse.
NOTE: An action for legal separation which
involves nothing more than bed-and board
separation of the spouses is purely personal. The
Civil Code recognizes this (1) by allowing only the
innocent spouse and no one else to claim legal
separation; (2) by providing that the spouses can,
by their reconciliation, stop or abate the
proceedings and even rescind a decree of legal
separation already granted. (Lapuz v. Eufemio,
43 SCRA 177)
Cohabitation
Defendant is under obligation both moral and
legal, to return to the common home and cohabit
with plaintiff. But the great weight of authorities,
however, is strongly convincing that it is not within
the province of the courts to compel anyone of the
spouses to cohabit with and render conjugal rights
to the other. (Arroyo v. Vasque, 42 Phil 54)
The courts can make a judicial declaration of
abandonment without sufficient justification but it
cannot compel cohabitation, consortium being a
purely personal right. However, the courts can
impose economic sanctions or such unjustified
departure from the conjugal dwelling. (Arroyo v.
Arroyo, 42 SCRA 54)
Marital Property Relations
University of Santo Tomas
The husband, without the wife's consent, executed
a special power of attorney in favor of a third
person in order to secure a loan with the use of a
conjugal property as security. The loan was
thereafter obtained, with the conjugal property as
security therein. When the loan was not satisfied,
the mortgage on the property was foreclosed and
a certificate of sale was issued in favor of the
winning bidder. Upon failure to redeem, the
ownership to the property was consolidated under
the name of the mortgagee Homeowners Savings.
The wife then sought to nullify the mortgage and
sale as void invoking Art. 124 of the FC.
Q: Will the wife’s action prosper?
A: Yes. The settled rule is that the sale or
encumbrance of a conjugal property requires the
consent of both the husband and the wife (Guiang
vs CA, 353 Phil. 578). In applying Art. 124 of the
FC, Supreme Court declared that the absence of
the consent of one renders the entire sale or
encumbrance null and void, including the portion
of the conjugal property pertaining to the husband
who contracted the sale.
NOTE: Neither would the conjugal partnership be
liable for the loan on the ground that it redounded
to the benefit of the family. The sweeping
conclusion that the loan was obtained by the
husband in order to finance the construction of
housing units, without however adducing adequate
proof, does not persuade. (Homeowners Savings
& Loan Bank v. Dailo, 453 SCRA 283)
David conveyed to Melki, by way of a deed of
absolute sale, a piece of land that he and his wife
owned. Lorenza, David’s wife, who witnessed the
sale, however signed on the page reserved for
witnesses to the deed. When the buyer sought to
register the sale, it was denied by the Register of
Deeds on account of lack of the wife's consent to
the sale.
Q: Was the Register of Deeds correct in denying
registration of the sale?
A: No. A wife, by affixing her signature to a deed
of sale on the space provided for witnesses, is
deemed to have given her implied consent to the
contract of sale. The consent need not always be
explicit or set forth in any particular document so
long as it is shown by acts of the wife that such
consent or approval was in fact given. (Pelayo v.
Perez, 459 SCRA 475)
NOTE: In this case, it will be noted that the sale
was entered into prior to the effectivity of the FC.
Because of such, Art. 173, in relation to Art. 166 of
the Civil Code, would have applied if there was a
finding of lack of the wife's consent. Under said
provisions, the sale would have been merely
voidable, and not void.
Francisco and Erminda’s marriage was nullified by
the trial court due Francisco’s psychological
incapacity. He did not contest the decree of nullity
but he assailed the division in the properties
between the spouses which was contained in the
decree. He asserted that the properties were

CIVIL LAW NOTES
acquired through his efforts and that Erminda had
no contribution whatsoever in their acquisition and
maintenance; hence, she should not be entitled to
a joint share in their properties.
Q: Is Francisco’s contention correct?
A: No. The property relation between the parties is
governed by Art. 147 of the FC. Under this article,
there is a presumption that the properties which
they acquired during their cohabitation were
acquired through their joint efforts, work or
industry. It further provides that a party who did
not participate in the acquisition thereof shall be
deemed to have contributed jointly in the
acquisition thereof if his or her efforts consisted in
the care and maintenance of the family and of the
household.
NOTE: In this case, Francisco himself testified that
his wife was not a plain housewife but one who
helped him in managing the family's business.
Hence, Erminda is rightfully entitled to a joint
share in their properties. (Gonzales v. Gonzales,
478 SCRA 327)
Through an absolute deed of sale, the husband
sold a piece of land belonging to the conjugal
partnership to a third person. It appeared that the
wife signed a document entitled "Marital Consent"
contained in a jurat days before the sale giving her
assent to the conveyance. This document was
then sworn to before the same notary public who
notarized the deed of sale, and then appended to
the deed of sale itself.
Q: Is the conveyance valid?
A: It depends. The use of the jurat, instead of an
acknowledgment, does not elevate the Marital
Consent into the level of a public document but
instead consigns it to the status of a private writing
hence it is still subject to proof under rules of
evidence.
NOTE: The fact that the document contains a
jurat, and not an acknowledgment, should not
affect its genuineness or that of the related
document of conveyance itself, the Deed of
Absolute Sale. In this instance, a jurat suffices as
the document only embodies the manifestation of
the spouse's consent, a mere appendage to the
main document. (Pan Pacific Industrial Sales
Co., Inc. v. CA, 482 SCRA 164)
A piece of land which Yamane asserted belonged
to the conjugal partnership of him and his late wife
was levied upon by the sheriff as a result of a
motion for execution of a charging lien filed by the
lawyer of Yamane's departed wife. At the auction,
spouses Josehine and Henry were the successful
bidders. The trial court acted apparently on the
belief that the property was the paraphernal
property of Yamane's wife since the appearance of
his (Yamane) name on the title was deemed to be
merely descriptive of the civil status of the
registered owner, his late wife. The purchase took
place prior to the advent of the Family Code.
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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ADVISER:
Q: Is the property conjugal or paraphernal?
A: Conjugal. In this case the provisions of the Civil
Code would apply for the purchase took place
before the FC took effect. Under Art. 160 of the
NCC, all property of the marriage is presumed to
belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband
or the wife. In this case, there was no proof that
the property had been acquired exclusively by
Yamane's late wife. The mere registration of a
property in the name of one spouse does not
destroy its conjugal nature in the absence of
strong, clear and convincing evidence that it was
acquired using the exclusive funds of said spouse.
Hence, the presumption that it is conjugal property
stands. (Go v. CA, 489 SCRA 107)
During their marriage, Dolores alleges that she
and her husband, Albert, acquired a piece of
agricultural land. She avers that her husband
conveyed this property to Patenio without her
consent. She now seeks its recovery on the
ground that it formed part of their conjugal
properties and presented as evidence their
marriage contract and the initial tax declaration
over the property.
Q: Is the piece of agricultural land part of their
conjugal properties?
A: No. The rule is all property of the marriage is
presumed to be conjugal in nature. However, for
this presumption to apply, the party who invokes it
must first prove that it was acquired during the
marriage. Here, Dolores's evidence consisted of
her marriage contract and the initial tax declaration
over the property. She did not identify when she
and her husband first occupied and possessed the
land. Neither did she present any witness to prove
that they first occupied the property during their
marriage and that they both, worked on the land.
(Pintiano-Anno v. Anno, 480 SCRA 419)
Eduardo’s spouse, Josefina, purchased two
parcels of land using, according to her, her own
funds. Although the titles to the lots were issued in
the names of the spouses, the dorsal portions
thereof contained an entry showing that Eduardo
had waived any right over the properties as they
were bought out of the savings of Josefina. The
lots were eventually levied upon when a complaint
for a sum of money was filed against Eduardo and
prospered. Even though Josefina had filed a third-
party claim with the sheriff, the properties were
sold at auction. The wife then filed an action for
nullity of the sale. She also commenced a petition
for nullity of her marriage to Eduardo on the
ground that the latter had a previous marriage.
This was granted.
She now asserts that since her marriage to
Eduardo is void, their property relations is to be
governed by the rules on co-ownership under Art.
148 of the FC and not by Art. 144 of the Civil
Code. In this regime, Eduardo has no share at all
in the properties since no proof was adduced by
him as regards his participation in their purchase.
However, she did not prove that she acquired the
properties using her personal funds and prior to
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2007 Team Bar-Ops Civil Law Committee
her cohabitation with Eduardo.
Q: Is her contention correct?
A: No. Since Josefina failed to prove that she
acquired the properties with her personal funds
before her cohabitation with Eduardo, it should be
presumed and considered as belonging to the
conjugal partnership. Art. 105 of the FC, which
provides that the Code shall apply to conjugal
partnerships established before it took effect,
without prejudice to vested rights already acquired
under the New Civil Code or other laws, applies in
this case. There was no evidence adduced by
Josefina showing that she had acquired a vested
right in this regard. Thus, as it appears that the
properties were acquired during the subsistence of
the marriage of Josefina and Eduardo, under
normal circumstances, the same should be
presumed to be conjugal property.
NOTE: Art. 148 of the FC does not apply since, in
said article, a co-ownership may ensue in case of
cohabitation where, for instance, one party has a
pre-existing valid marriage, provided that the
parties prove their actual joint contribution of
money, property or industry and only to the extent
of their proportionate interest thereon. (Francisco
v. Master Iron Works Construction Corp., 451
SCRA 494)
John and Juliet lived together as husband and wife
without the benefit of marriage. During their
cohabitation, the couple acquired a two-story
residential house. The house was later renovated
and a sari-sari store was put up as annex thereat.
Juliet managed the store after her return from
working abroad. When the two had a serious
falling out, they executed a memorandum of
agreement, wherein John agreed to leave the
house subject to payment by Juliet of his entire
share in their properties. She failed to pay all of
John's share in their properties. John demanded
that she vacate the structure housing the store but
which she ignored. Thus, John sued her for
ejectment which the court granted.
Q: Was the court correct in granting the same?
A: No. Under Art. 147 of the FC, the property is
co-owned by the parties. Under said provision, in
the absence of proof to the contrary, any property
acquired by common-law spouses during their
cohabitation is presumed to have been obtained
thru their joint efforts and is owned by them in
equal shares. Their property relationship in such a
case is essentially governed by the rules on co-
ownership. Thus, John cannot seek the ejectment
of Juliet therefrom. As a co-owner, she is as much
entitled to enjoy its possession and ownership as
him. (Abing v. CA, GR No. 146294, 31 July 2006)
Elena, a Filipina, got married to Helmut, a German
national and the two then lived in Germany in the
house of Helmut's parents. The couple eventually
decided to relocate to the Philippines, during
which time, Helmut inherited his parents' house
and had it sold. He used the proceeds of the sale
in purchasing a piece of land in Antipolo, Rizal (the
title to which was placed in the name of Elena)
and in constructing a house thereon. The marriage
University of Santo Tomas
of the spouses however deteriorated due to
incompatibility and the womanizing, drinking, and
maltreatment by Helmut of Elena. Helmut then
filed in court a petition for separation of properties
which was granted. Partition was henceforth
ordered but the court held that with respect to the
property in Antipolo, Rizal, Helmut cannot seek
reimbursement from Elena of the funds that he
used in buying the lot and constructing the house
considering that the land was purchased in
violation of Sec. 7, Art. XII of the Constitution.
Q: Was the court correct in holding so?
A: Yes. Aliens, whether individuals or
corporations, are disqualified from acquiring lands
of the public domain under Sec. 7, Art. XII of the
Constitution. Hence, they are also disqualified
from acquiring private lands. The primary purpose
of this constitutional proscription is the
conservation of the national patrimony (Krivenko v.
Register of Deeds, 79 Phil. 461). Helmut himself
was well aware of this constitutional prohibition
when he had the title to the Antipolo property
placed under Elena's name. Save for hereditary
succession, Helmut's disqualification from owning
lands in the Philippines is absolute. Not even an
ownership in trust is allowed for where the
purchase is made in violation of a law and in
evasion of its express provision, no trust can result
in favor of the party who is guilty of the fraud. To
hold otherwise would allow circumvention of the
constitutional prohibition. Further, to allow
reimbursement would in effect permit Helmut to
enjoy the fruits of a property which he is not
allowed to own. (In re: Petition for Separation of
Property, Elena Buenaventura Muller v. Helmut
Muller, GR No. 149615, 29 Aug. 2006)
Family Members in Articles 150 and 151 of
FC
Spouses Manolo and Lucila Martinez filed a
complaint for ejectment against Rodolfo, brother of
Manolo. Said complaint was filed after a demand
letter to vacate from the said spouses was
rebuffed by Rodolfo. The latter filed a motion to
dismiss on the ground of failure to comply with a
condition precedent, which is, that earnest efforts
for an amicable settlement among the parties had
been exerted but that none was reached. Rodolfo
also pointed out that the dispute had not been
referred to the barangay before the complaint was
filed.
Q: Is there a violation of Art. 151 of the FC?
A: No. There was in fact substantial compliance
with Art. 151 of the Family Code since the
spouses alleged in the complaint for ejectment
that the case "xxx passed through the Barangay
and no settlement was forged between the
plaintiffs and defendant as a result of which
Certification to File Action was issued by Barangay
97, Zone 8, District I, Tondo, Manila xxx". It bears
stressing that under Sec. 412 (a) of Rep. Act No.
7160, no complaint involving any matter within the
authority of the Lupon shall be instituted or filed
directly in court for adjudication unless there has
been a confrontation between the parties and no
settlement was reached.

CIVIL LAW NOTES
Moreover, the phrase "members of the
same family" found in Art. 151 of the Family Code
must be construed in relation to Art. 150 thereof.
NOTE: A sister-in-law or a brother-in-law is not
covered by these two provisions. Being an
exception to the general rule, Art. 151 must be
strictly construed. (Gayon v. Gayon, 36 SCRA
104). (Martinez, et al. v. Martinez, 461 SCRA
562)
The Family Home
Hinahon incurred debts arising from her failure to
account for the produce of a piece of agricultural
land which she was tasked to manage. As a result,
a complaint for damages was filed against her,
which prospered, and subsequently, a house and
lot that she owned was levied upon to satisfy the
damages awarded. The property was
subsequently sold at a public auction. Hinahon is
now assailing the levy and sale of the property on
the ground that the same was her family home
and therefore exempt from execution.
Q: Is the property exempt from execution?
A: No. Under Art. 155 of the FC, the family home
shall be exempt from execution, forced sale, or
attachment except for, among other things, debts
incurred prior to the constitution of the family
home. In the case at bar, there is no showing that
the house and lot was constituted as a family
home, whether judicially or extra-judicially, at the
time that the debtor incurred her debts. Under
prevailing jurisprudence, it is deemed constituted
as such by operation of law only upon the
effectivity of the Family Code on August 3, 1988,
thus, the debts were incurred before the
constitution of the family home. (Gomez-Salcedo,
et al. v. Sta. Ines, et al., 473 SCRA 25)
Paternity and Filiation
In an action for partition of estate, the trial court
dismissed it on the ground that the respondent, on
the basis of her birth certificate, was in fact the
illegitimate child of the deceased and therefore the
latter's sole heir, to the exclusion of petitioners.
However, trial court failed to see that in said birth
certificate, she was listed therein as “adopted”.
Q: Was the trial court correct in dismissing the
action for partition?
A: No. The trial court erred in relying upon the
said birth certificate in pronouncing the filiation of
the respondent. However, since she was listed
therein as “adopted”, she should therefore have
presented evidence of her adoption in view of the
contents of her birth certificate. In this case, there
is no showing that she undertook such. It is well-
settled that a record of birth is merely prima facie
evidence of the facts contained therein. It is not
conclusive evidence of the truthfulness of the
statements made there by the interested parties.
(Rivera, et al. v. Heirs of Romulado Villanueva,
GR No. 141501, 21 July 2006)
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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Civil Law Committee Chairperson:
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Members:
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ADVISER:
Rosanna, as surviving spouse, filed a claim for
death benefits with the SSS upon the death of her
husband, Pablo. She indicated in her claim that
the decedent is also survived by their minor child,
Jeylynn, who was born in 1991. The SSS granted
her claim but this was withdrawn after
investigation, when a sister of the decedent
informed the system that Pablo could not have
sired a child during his lifetime because he was
infertile. However in Jeylynn’s birth certificate,
Pablo affixed his signature and he did not impugn
Jeylynn’s legitimacy during his lifetime.
Q: Was the SSS correct in withdrawing the death
benefits?
A: No. Under Art. 164 of the FC, children
conceived or born during the marriage of the
parents are legitimate. This presumption becomes
conclusive in the absence of proof that there is
physical impossibility of access under Art. 166.
Further, upon the expiration of the periods for
impugning legitimacy under Art. 170, and in the
proper cases under Art. 171, of the FC, the action
to impugn would no longer be legally feasible and
the status conferred by the presumption becomes
fixed and unassailable. In this case, there is no
showing that Pablo, who has the right to impugn
the legitimacy of Jeylynn, challenged her status
during his lifetime. Furthermore, there is adequate
evidence to show that the child was in fact his
child, and this is the birth certificate where he
affixed his signature. (SSS v. Aguas, et al., GR
No. 165546, 27 February 2006)
In a petition for issuance of letters of
administration, Aleli alleged that she is the sole
legitimate daughter of decedent, Francisco and
Genoveva Mercado. Belen, the decedent's second
wife, opposed the petition and questioned the
legitimate filiation of Aleli to the decedent. Belen
asserted that the birth certificate of Aleli was not
signed by Francisco and that she had not
presented the marriage contract between her
alleged parents which would have supported her
claim.
In said birth certificate, it was indicated that her
birth was recorded as the legitimate child of
Francisco Angeles and Genoveva Mercado, and
contains as well the word "married" to reflect the
union between the two. However, it was not
signed by Francisco and Genoveva. It was merely
signed by the attending physician, who certified to
having attended to the birth of a child.
Q: Does the presumption of legitimacy apply to
Aleli?
A: No. Since the birth certificate was not signed by
Aleli's alleged parents but was merely signed by
the attending physician, such a certificate,
although a public record of a private document is,
under Section 23, Rule 132 of the Rules of Court,
evidence only of the fact which gave rise to its
execution, which is, the fact of birth of a child. A
birth certificate, in order to be considered as
validating proof of paternity and as an instrument
of recognition, must be signed by the father and
mother jointly, or by the mother alone if the father
16
2007 Team Bar-Ops Civil Law Committee
refuses. There having been no convincing proof of
respondent's supposed legitimate relations with
respect to the decedent, the presumption of
legitimacy under the law did not therefore arise in
her favor. (Angeles v. Angeles-Maglaya, 469
SCRA 363)
Arnel was named as defendant in an action for
support that was filed by Fe Angela, representing
her minor son Martin Jose. Fe alleged that Arnel is
the biological father of Martin and that he had
signed the birth certificate of the child as the
latter's father. Arnel however asserted that his
signature was a forgery. Thereafter, Fe Angela
moved for an order from the trial court directing
the parties to submit themselves to DNA testing.
Q: Can DNA testing be ordered in a proceeding
for support without violating Arnel's constitutional
right to privacy against self-incrimination?
A: Yes. In People v. Yatar (428 SCRA 504), the
Supreme Court had already upheld the
constitutionality of compulsory DNA testing and
the admissibility of the results thereof as evidence.
Moreover, it has mostly been in the areas of
legality of searches and seizure and in the
infringement of privacy of communication where
the constitutional right to privacy has been
critically at issue.
Arnel's case involves neither. If, in a criminal case,
an accused whose very life is at stake can be
compelled to submit to DNA testing, so much
more so may a party in a civil case, who does not
face such dire consequences, be likewise
compelled. DNA testing and its results is now
acceptable as object evidence without running
afoul self-incrimination rights of a person.
(Agustin v. CA, 460 SCRA 315)
Q: Did the order of the court convert the claim for
support into a petition for recognition?
A: No. The assailed order did not convert the
action for support into one for recognition but
merely allowed Fe Angela to prove their cause of
action. But even if the order effectively integrated
an action to compel recognition with an action for
support, such was valid and in accordance with
jurisprudence. In Tayag v. Court of Appeals (209
SCRA 665), the Supreme Court allowed the
integration of an action to compel recognition with
an action to claim one's inheritance. A separate
action will only result in a multiplicity of suits.
Furthermore, the declaration of filiation is entirely
appropriate to the action for support. (Agustin v.
CA, 460 SCRA 315)
NOTE: It is not enough to state that the child's
DNA profile matches that of the putative father. A
complete match between the child's and alleged
father's DNA profiles does not necessarily
establish paternity. Trial courts should require at
least 99.9% as a minimum value of the Probability
of Paternity (W) prior to a paternity suit. DNA
testing that excludes the putative father from
paternity should be conclusive proof of non-
paternity. If the value of W is less than 99.9%, the
results of the DNA analysis should be considered
as corroborative evidence. If the value of W is
99.9% or higher, then there is rebuttable
University of Santo Tomas
presumption of paternity. This refutable
presumption of paternity should be subjected to
the Vallejo standards. (Herrera v. Alba, et al., GR
No. 148220, 15 June 2005)
On the basis of the physical presentation of the
plaintiff-minor before it and the fact that the
alleged father had admitted having sexual
intercourse with the child's mother, the trial court,
in an action to prove filiation with support, held that
the plaintiff-minor is the child of the defendant with
the plaintiff-minor's mother.
Q: Was the trial court correct in holding such?
A: No. In this age of genetic profiling and DNA
analysis, the extremely subjective test of physical
resemblance or similarity of features will not
suffice as evidence to prove paternity and filiation
before courts of law. This only shows the very high
standard of proof that a child must present in order
to establish filiation.
NOTE: The birth certificate that was presented by
the plaintiff-minor appears to have been prepared
without the knowledge or consent of the putative
father. It is therefore not a competent piece of
evidence on paternity. The local civil registrar in
this case has no authority to record the paternity of
an illegitimate child on the information of a third
person. Similarly, a baptismal certificate, while
considered a public document, can only serve as
evidence of the administration of the sacrament on
the date specified therein but not the veracity of
the entries with respect to the child's paternity
(Macadangdang v. CA, 100 SCRA 73). Thus,
certificates issued by the local civil registrar and
baptismal certificates are per se inadmissible in
evidence as proof of filiation and they cannot be
admitted indirectly as circumstantial evidence to
prove the same (Jison v. CA, 350 Phil. 138).
(Cabatania v. CA, 441 SCRA 96)
In a complaint for partition and accounting with
damages, Ma. Theresa alleged that she is the
illegitimate daughter of Vicente, and therefore
entitled to a share in the estate left behind by the
latter. As proof, she presented her birth certificate
which Vicente himself signed thereby
acknowledging that she is his daughter.
Q: Is the proof presented by Ma. Theresa
sufficient to prove her claim that she is an
illegitimate child of Vicente?
A: Yes. Citing the earlier case of De Jesus v.
Estate of Juan Dizon, (366 SCRA 499), the
Supreme Court held that the Ma. Theresa was
able to establish that Vicente was in fact her
father. The due recognition of an illegitimate child
in a record of birth, a will, a statement before a
court of record, or in any authentic writing is, in
itself, a consummated act of acknowledgment of
the child, and no further court action is required.
The rule is, any authentic writing is treated not just
as a ground for compulsory recognition; it is in
itself a voluntary recognition that does not require
a separate action for judicial approval. (Eceta v.
Eceta, 428 SCRA 782)
Gerardo filed a complaint for bigamy against Ma.

CIVIL LAW NOTES
Theresa. He alleged that Ma. Theresa had a
previous subsisting marriage when she married
him. The trial court nullified their marriage and
declared that the son who was born during their
marriage and was registered as their son as
illegitimate.
Q: What is the status of the child?
A: The first marriage being found to be valid and
subsisting, whereas that between Gerardo and
Ma. Theresa was void and non-existent, the child
should be regarded as a legitimate child out of the
first marriage. This is so because the child's best
interest should be the primordial consideration in
this case. Moreover, the admission of the parties
that the child was their son was in the nature of a
compromise. The rule is that the status and
filiation of a child cannot be compromised. Art. 164
of the FC is clear that a child who is conceived or
born during the marriage of his parents is
legitimate. (Concepcion v. CA, 468 SCRA 438)
Q: What is the effect of Ma. Theresa’s claim that
the child is her illegitimate child with her second
husband to the status of the child?
A: None. This declaration - an avowal by the
mother that her child is illegitimate - is the very
declaration that is proscribed by Art. 167 of the
Family Code. This proscription is in consonance
with, among others, the intention of the law to lean
towards the legitimacy of children. (Concepcion
v. CA, 468 SCRA 438)
Q: Considering the child’s status, whose surname
should he bear?
A: Being the legitimate son of Ma. Theresa and
her first husband, the child must bear their
surnames. Since he was registered as the son of
Gerardo and Ma. Theresa, then the corresponding
change of name of the child must be undertaken in
an appropriate separate proceeding.
(Concepcion v. CA, 468 SCRA 438)
Adoption
Diwata filed a petition for adoption of the three
minor children of her late brother, Manuel. She
alleged that when her brother died, the children
were left to the care of their paternal grandmother,
Amelia, who went to Italy. This grandmother died
however, and so she filed the petition for adoption.
The minors gave their written consent to the
adoption and so did all of her own grown-up
children. The trial court granted the decree of
adoption even though the written consent of the
biological mother of the children was not adduced
by Diwata.
Q: Was the trial court correct in granting the
decree of adoption?
A: No. The rule is, adoption statutes must be
liberally construed in order to give spirit to their
humane and salutary purpose which is to uplift the
lives of unfortunate, needy or orphaned children.
However, the discretion to approve adoption
proceedings on the part of the courts should not to
be anchored solely on those principles, but with
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
17
ADVISER:
due regard likewise to the natural rights of the
parents over the child. The written consent of the
biological parents is indispensable for the validity
of the decree of adoption. Indeed, the natural right
of a parent to his child requires that his consent
must be obtained before his parental rights and
duties may be terminated and vested in the
adoptive parents. In this case, since the minors'
paternal grandmother had taken custody of them,
her consent should have been secured instead in
view of the absence of the biological mother. This
is so under Sec. 9 (b) of Rep. Act No. 8552,
otherwise known as the Domestic Adoption Act of
1998. Diwata failed in this respect, thus
necessitating the dismissal of her petition for
adoption. (Landingin v. Republic, 493 SCRA
415)
Honorato filed a petition to adopt his minor
illegitimate child Stephanie, alleging that
Stephanie's mother is Gemma Astorga Garcia;
that Stephanie has been using her mother's
middle name and surname; and that he is now a
widower and qualified to be her adopting parent
He prayed that Stephanie's middle name be
changed from "Astorga" to "Garcia," which is her
mother's surname and that her surname "Garcia"
be changed to "Catindig," which is his surname.
The trial court denied.
Q: Was the trial court correct in denying
Honorato’s request for Stephanie’s use of her
mother’s surname as her middle name?
A: No. The name of an individual has two parts -
the given name or proper name and the surname
of family name. The given name may be freely
selected by the parents for the child, but the
surname to which the child is entitled is fixed by
law. The Civil Code (Arts. 364 to 380) is silent as
to the use of a middle name. Even Art. 176 of the
FC, as amended by Rep. Act No. 9255 (An Act
Allowing Illegitimate Children To Use The
Surname of Their Father) is silent as to what
middle name a child may use.
An adopted child is entitled to all the rights
provided by law to a legitimate child without
discrimination of any kind, including the right to
bear the surname of her father and her mother. As
she had become a legitimate child on account of
her adoption, it follows that Stephanie is entitled to
utilize the surname of her father, Honorato
Catindig, and that of her mother, Gemma Garcia.
Since there is no law prohibiting an illegitimate
child adopted by her natural father, like Stepnanie,
to use, as middle name her mother's surname, the
High Court found no reason why she should not
be allowed to do so.
NOTE: The Supreme Court, in granting the
petition, predicated its ruling upon the statutory
principle that adoption statutes, being humane and
salutary, should be liberally construed to carry out
the beneficent purposes of adoption. The modern
trend is to consider adoption not merely as an act
to establish a relationship of paternity and filiation,
but also as an act which endows a child with
legitimate status. (In the Matter of the Adoption
18
2007 Team Bar-Ops Civil Law Committee
of Stephanie Nathy Astorga Garcia, 454 SCRA
541)
Support
Maowee and Maonaa are the legitimate daughters
of Edward whom he abandoned when they were
minors. The mother of the girls, Lea, had to
support them into adulthood largely through her
own efforts and the financial help of a brother,
Noel. Although Edward extended support to the
girls, these came far and few and meager. After 19
years from the time Edward left them, the
daughters, through their mother finally sued him
for support. The court granted it and ordered him
to pay them more than P2 Million by way of
support in arrears. Edward now assails the grant
of the support in arrears as erroneous since under
Art. 203 of the FC, there was never any demand,
judicial or extra-judicial, from the respondents for
him to give support.
Q: Is Edward’s contention correct?
A: No. Edward could not possibly expect his
daughters to demand support from him
considering their tender years at the time that he
abandoned them. In any event, the mother of the
girls had made the requisite demand for material
support although this was not in the standard form
of a formal written demand. Asking one to give
support owing to the urgency of the situation is no
less a demand just because it came by way of a
request or a plea. (Lacson v. Lacson, et al., GR
No. 150644, 28 Aug. 2006)
Q: May Noel seek reimbursement of his
contributions? If yes, from whom may he do so?
A: Yes. Pursuant to Art. 207 of the FC, Noel can
rightfully exact reimbursement from Edward. This
provision reads that "[W]hen the person obliged to
support another unjustly refuses or fails to give
support when urgently needed by the latter, any
third person may furnish support to the needy
individual, with right of reimbursement from the
person obliged to give support." The resulting
juridical relationship between the Edward and Noel
is a quasi-contract, an equitable principle enjoining
one from unjustly enriching himself at the expense
of another. (Lacson v. Lacson, et al., GR No.
150644, 28 Aug. 2006)
Belen, in behalf of her minor children, instituted a
petition for declaration of legitimacy and support
against Federico, their alleged father, and
Francisco, father of Federico. It appears that the
marriage of the two was annulled due to the
minority of Federico.
Q: May Francisco be ordered to give support?
A: Yes. There appears to be no dispute that the
children are indeed the daughters of Federico by
Belen. Under Art. 199 of the FC, “Whenever two or
more persons are obliged to give support, the
liability shall devolve upon the following persons in
the following order herein provided: 1) The
spouse; 2) The descendants in the nearest
degree; 3) The ascendants in the nearest degree:
and 4) The brothers and sisters. The obligation to
give support rests principally on those more
University of Santo Tomas
closely related to the recipient. However, the more
remote relatives may be held to shoulder the
responsibility should the claimant prove that those
who are called upon to provide support do not
have the means to do so. Here, since it has been
shown that the girls' father, Federico, had no
means to support them, then Francisco, as the
girls’ grandfather, should then extend the support
needed by them.
NOTE: The second option in Art. 204 of the FC,
that of taking in the family dwelling the recipient, is
unavailing in this case since the filing of the case
has evidently made the relations among the
parties bitter and unpleasant. (Mangonon, et al.
v. CA, et al., 494 SCRA 1)
The petition for declaration of nullity filed by
Crisanto against his wife included a prayer for
custody pendente Lite of their four-year old son.
The supplication for custody was based on the
alleged immorality of the mother who, the husband
asserted, was a lesbian. However, the trial court,
citing Art. 213 of the FC, denied Crisanto's prayer
for temporary custody of his son, there having
been no compelling reason to so order it.
Q: Was the trial court correcting in denying
Crisanto’s prayer for temporary custody?
A: Yes. The petitioner failed to overcome the so-
called "tender-age presumption" rule under Art.
213 of the FC. There was no compelling evidence
of the mother's unfitness. 'Sexual preference or
moral laxity alone does not prove parental neglect
or incompetence - to deprive the wife of custody,
the husband must clearly establish that her moral
lapses have had an adverse effect on the welfare
of the child or have distracted the errant spouse
from exercising proper parental care.
NOTE: The general rule that children less than
seven years of age shall not be separated from
the mother finds its raison d'etre in the basic need
of minor children for their mother's loving care.
This is predicated on the "best interest of the child"
principle which pervades not only child custody
cases but also those involving adoption,
guardianship, support, personal status and minors
in conflict with the law. (Pablo-Gualberto v.
Gualberto, 461 SCRA 450)
Custody
In a petition for habeas corpus which he filed
before the Court of Appeals, Joey sought custody
of his minor son from his former live-in partner,
Loreta. Joey alleged that the child's mother was
abroad most of the time and thus, he should be
given joint custody over their son. The CA
however denied the petition, and on the basis of
Art. 213, par (2) of the FC, awarded custody of the
child in favor of the mother.
Q: Was the CA correct in denying Joey’s petition
for habeas corpus for the custody of his minor
son?
A: Yes. Under Art. 176 of the FC, parental
authority over an illegitimate child is vested solely
in the mother, and this is true notwithstanding that

CIVIL LAW NOTES
the child has been recognized by the father as his
offspring. At most, such recognition by the father
would be a ground for ordering the latter to give
support to, but not custody of, the child (David v.
Court of Appeals, 250 SCRA 82). Custody over
the minor in this case was therefore awarded
correctly to the mother, and this is all the more so
in view of Art. 213 of the FC which lays down the
Maternal Preference Rule. There is also no
showing that Joey was able to show proof of any
compelling reason to wrest from the mother
parental authority over their minor child.
NOTE: However, the CA erred in applying Sec. 6,
Rule 99 of the Rules of Court. This provision
applies only when the parents of the child are
married to each other but are separated either by
virtue of a decree of legal separation or because
they are leaving separately de facto. In this case,
the child's parents were never married. Hence, the
portion of the CA decision allowing the child, upon
reaching the age of ten, to choose which parent to
live, should be deleted therefrom. (Briones v.
Miguel, et al., 440 SCRA 455)
In a petition for habeas corpus that was filed by
Loran against his estranged wife, as well as
against his parents-in-law whom he alleged were
unlawfully restraining him from having custody of
his child, the trial court issued an order directing
the aforesaid persons to appear in court and
produce the child in question and to show cause
why the said child should not be discharged from
restraint.
Q: Does trial court's order run counter to Art. 213
of the FC?
A: No. The assailed order of the trial court did not
grant custody of the minor to any of the parties but
was merely a procedural directive addressed to
the petitioners for them to produce the minor in
court and explain why they are restraining his
liberty. Moreover, Art. 213 of the FC deals with the
adjudication of custody and serves as a guideline
for the proper award of-custody by the court. While
the petitioners can raise it as a counter argument
in the custody suit, it may not however be invoked
by them to prevent the father from seeing the
child.
NOTE: Habeas corpus may be resorted to in
cases where rightful custody is withheld from a
person entitled thereto. Under Art. 211 of the FC,
both parents in this case have joint parental
authority over their child and consequently joint
custody over him. Further, although the couple is
separated de facto, the issue of custody has yet to
be adjudicated by the court. In the absence of a
judicial grant of custody, both parents are still
entitled to the custody of their child. (Salientes, et
al. v. Abanilla, et al., GR No. 162734, 29 Aug.
2006)
The tug of war over custody of their minor son
resulted in Ivy's filing of a petition for habeas
corpus against Ernesto before the RTC. The trial
court then granted temporary custody over the
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
19
ADVISER:
child to Ernesto.
Q: Who has jurisdiction over habeas corpus
cases?
A: The RTC. Both the Supreme Court and the
Court of Appeals still retain jurisdiction over
habeas corpus cases involving minors despite the
passage of Rep. Act No. 8369 (The Family Courts
Act of 1997) - the law conferring upon family
courts exclusive jurisdiction over such cases. In an
earlier ruling, the Supreme Court held that it would
be difficult for persons seeking the whereabouts of
minors to seek redress from family courts whose
writs are enforceable only within their respective
territorial jurisdiction. This lack of recourse could
not have been the legislative intent, and thus RA
No. 8369 did not effectively divest the High Court
and Court of Appeals of their jurisdiction over
habeas corpus cases involving custody of minors.
The primordial consideration always is the welfare
and best interest of the child. As it stands then, the
regional trial courts, thru the appropriately
designated family court branches, the Court of
Appeals and the Supreme Court have concurrent
jurisdiction over such petitions. Since in this case,
the petition was first filed before the RTC of
Quezon City, then the latter acquired jurisdiction
over the same to the exclusion of the Court of
Appeals and the Supreme Court. To hold
otherwise would be to risk instances where courts
of concurrent jurisdiction might issue conflicting
orders. (Reyes-Tabujara v. CA, et al., GR No.
172813, 20 July 2006)
Change of Name
The petition filed by the parents in behalf of their
minor son Julian Lin Carulasan Wang sought the
dropping of the latter's middle name, "Carulasan."
The parents averred that their plan for Julian to
study in Singapore and adjust to its culture
necessitates the drop since in that country, middle
names or the mother's surname are not carried in
a person's name. They therefore anticipate that
Julian may be subjected to discrimination on
account of his middle name, which is difficult to
pronounce in light of Singapore's Mandarin
language which does not have the letter "R" but if
there is, Singaporeans pronounce it as "L."
Q: Should the petition for the dropping of his
middle name be granted?
A: No. Petitioners’ justification for seeking the
change in the name of their child, that of
convenience, was characterized by the Supreme
Court as amorphous, to say the least, and would
not warrant a favorable ruling. As Julian is only a
minor and has yet to understand and appreciate
the value of any change in his name, it is best that
the matter be left to his judgment and discretion
when he reaches legal age. The State has an
interest in the names borne by individuals and
entities for purposes of identification, and that a
change of name is a privilege and not a right, such
that before a person can be allowed to change the
name given him either in his birth certificate or civil
registry, he must show proper or reasonable
20
2007 Team Bar-Ops Civil Law Committee

cause, or any compelling reason which may justify

such change. Otherwise, the request would be
denied.

NOTE: The touchstone for the grant of a change

of name is that there be proper and reasonable
cause for which the change is sought. Among the
grounds for change of name which have been held
valid are:
a) when the name is ridiculous, dishonorable or
extremely difficult to write or pronounce;
b) when the change results as a legal
consequence, as in legitimation;
c) when the change will avoid confusion;
d) when one has continuously used and been
known since childhood by a Filipino name and was
unaware of alien parentage;
e) sincere desire to adopt a Filipino name to erase
signs of former alienage, all in good faith and
without prejudicing anyone.

NOTE: A middle name has practical or legal

significance as it serves to identify the maternal
pedigree or filiation of a person and distinguishes
him from others who may have the same given
name and surname as he has. Art. 364 of the Civil
Code states that legitimate and legitimated
children shall principally use the surname of their
father. Art. 174 of the Family Code gives legitimate
children the right to bear the surnames of the
father and mother, while illegitimate children,
under Art. 176, as amended by Rep. Act No. 9255,
shall use the surname of their mother, unless their
father recognizes their filiation, in which case, they
may bear the father's surname. In the case of
these children, their registration in the civil registry
requires that their middle names be indicated
therein, apart of course from their given names
and surnames. (In re: Petition for Change of
Name and/or Correction of Entry in the Civil
Registry of Julian Lin Carulasan Wang, 454
SCRA 155)

Rep. Act No. 9262, "Anti-Violence Against

Women and their Children Act of 2004;" Rep.
Act No. 7610, as amended, "Special Protection
of Children Against Child Abuse, Exploitation
and Discrimination Act"

The Supreme Court decided to withhold the

names and identities of women and child victims,
from the court records in order to respect their
dignity and protect their privacy. These rulings
give effect to the provisions of Rep. Act No. 9262
and Rep. Act No. 9262. The confidentiality or non-
disclosure rule covers the withholding of
information relating to the personal circumstances
of the victim which tend to establish or
compromise their identities, as well as those of
their immediate family or household members. In
the aforesaid cases, the names of the victims were
substituted with initials. (People v. Melchor
Cabalquinto, GR No. 167693, 19 Sept. 2006;
People v. Alexander Mangitngit, GR No.
171270, 20 Sept. 2006)

University of Santo Tomas


CIVIL LAW NOTES
Book II
Immovable Property
AF Company bought a considerable quantity of
rice-cleaning machinery from SM Company, and
executed a chattel mortgage thereon to secure
payment of the purchase price. It included in the
mortgage deed the building of strong materials in
which the machinery was installed, without any
reference to the land on which it stood. The
indebtedness not having been paid when it fell
due, the mortgaged property was sold by the
sheriff and was bought by SM. The mortgage and
the sale of the property to SM in satisfaction of the
mortgage were registered in the chattel mortgage
registry. At or about the time when the chattel
mortgage was executed in favor of SM, AF
executed another mortgage to LY upon the
building. Upon failure to pay, LY secured judgment
for that amount, levied execution upon the
building, bought it at the sheriff’s sale, and had it
registered in the land registry.
Q: Can the annotation made by SM be given legal
effect?
A: No. The annotation of a deed of sale of real
property in a chattel mortgage registry cannot be
given the legal effect of an inscription in the
registry of real property. The building of strong
materials in which the rice-cleaning machinery
was installed was real property, and the mere fact
that the parties seem to have dealt with it separate
and apart from the land on which it stood in no
wise changed its character as real property.
Neither the original registry in the chattel mortgage
registry of the instrument purporting to be a chattel
mortgage of the building and the machinery
installed therein, nor the annotation in that registry
of the sale of the mortgaged property, had any
effect whatever so far as the building was
concerned. (Leung Yee v. Strong Machinery
Company, 37 Phil 644)
Q: Who has a better right to the building?
A: SM, but on the ground of prior possession.
Neither the purchase of the building by LY nor his
inscription of the sale in his favor was made in
good faith, and that SM must be held to be the
owner of the property, it appearing that it first took
possession of the property; and further, that the
building and the land were sold to it long prior to
the date of sale to LY. (Leung Yee v. Strong
Machinery Company, 37 Phil 644)
Classification of Property
John filed an application for registration of a parcel
of land situated near the shore of Laguna de Bay.
The Director of Lands opposed alleging that since
a portion of the land sought to be registered is
covered with water 4-5 months a year, the same is
part of the lake bed of Laguna or is at least a
foreshore land which brings it under Art. 502, a
property of public dominion and hence, not subject
of registration.
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
21
ADVISER:
Q: Should the land be registered in favor of John?
A: Yes. The lake bed is the highest depth of the
water during the dry season. Although lakes are
subject to the same gravitational forces which
cause formation of tides in seas and oceans, such
is not a regular daily occurrence in lakes. Thus,
the alternation of high tides and low tides could
hardly account for the rise in the water level of
Laguna de Bay. Rather, it is the rains which bring
about the inundation of a portion of the land in
question. Water level which causes the
submersion of the land occurs during a shorter
period than the level of water at which the land is
completely dry. The latter thus should be
considered its highest ordinary depth. Neither can
it be foreshore land, which is a strip of land that
lies between the high and low water marks and is
alternately wet and dry according to the flow of the
tide. The submersion in water of a portion of the
land in question is due to the rains and not due to
the flux and reflux of tides. (Republic v. CA, 131
SCRA 532)
Spouses Polinar are the registered owners of a
parcel of land behind the lots of Samela and
Usero. Situated between their lots is a low-level
strip of land, with a stagnant body of water filled
with floating water lilies. Every time heavy rains
occur, the water in said strip of land rises and the
strong current passing through it causes
considerable damage to the house of the Polinars.
Frustrated by their predicament, the Polinars
erected a concrete wall on the bank of the low-
level strip of land about 3 meters from their house
and rip-rapped the soil on that portion of the strip
of land. Samela and Usero, believing themselves
to be the owners of the strip of land, demanded
that the Polinars stop the construction. The
Polinars, however, offered to pay for the strip of
land. Despite the offer, the parties failed to settle
their differences.
Q: Does the strip of land belong to Samela and
Usero?
A: No. The strip of land is a creek and belongs to
no one but the State. It is evidenced by a
barangay certification that a creek exists in the
disputed strip of land. The CA held correctly that
the fact that water lilies thrive in that strip of land
can only mean that there is a permanent stream of
water or creek there. The phrase “others of similar
character” in Art. 420 includes a creek which is a
recess or an arm of a river. It is property belonging
to the public domain which is not susceptible to
private ownership. Being public water, a creek
cannot be registered under the Torrens System in
the name of any individual. Accordingly, the
Polinar spouses may utilize the rip-rapped portion
of the creek to prevent the erosion of their
property. (Usero v. CA, GR No. 152115, 26
January 2005)
Q: May a house be the subject of a chattel
mortgage?
A: Yes. Where a house stands on a rented land
belonging to another person, it may be the subject
22
2007 Team Bar-Ops Civil Law Committee
matter of a chattel mortgage as personal or
movable property if so stipulated in the document
of mortgage, and in an action by the mortgagee for
foreclosure, the validity of the chattel mortgage
cannot be assailed by one of the parties to the
contract of mortgage. (Navarro v. Pineda, 9
SCRA 631)
Q: What is needed to turn public property to
patrimonial?
A: A legislature or executive declaration is
necessary, not mere non-use thereof. (Laurel v.
Garcia, 187 SCRA 797)
Ownership
Accion Reinvindicatoria/ Accion Publiciana
Peralta-Labrador was the owner of a parcel of
land. In 1990, the DPWH constructed a road which
traversed her lot and separated 108 sq. m. from it.
Sometime in 1994, Bugarin forcibly took
possession of the 108 sq. m. lot and refused to
vacate the same. Hence, in 1996, she instituted a
complaint for recovery of possession and
ownership before the MTC.
Q: Does Peralta-Labrador have a cause of action
for forcible entry against Bugarin?
A: No. In Lopez v. David Jr., it was held that an
action for forcible entry is a quieting process and
the one year time bar for filing a suit is in
pursuance of the summary nature of the action.
Thus, the MTC improperly assumed jurisdiction.
After the lapse of the one year period, the suit
must be commenced in the RTC via an accion
publiciana, a suit for the recovery of the right to
possess. It also refers to an ejectment suit filed
after the expiration of one year from the accrual of
the cause of action. Likewise, the case may be
instituted before the same court as an accion
reinvindicatoria, which is an action to recover
ownership as well as possession. It is clear that
petitioner’s allegations make out a case for forcible
entry because she averred prior physical
possession of the lot and the forcible entry thereon
by Bugarin. The cause of action for forcible entry
has prescribed and the MTC had no jurisdiction to
entertain the case. Therefore, petitioner’s
complaint should have been filed with the proper
RTC. (Peralta-Labrador v. Bugarin, GR No.
165177, 25 August 2005)
Forcible Entry/Unlawful Detainer
Crispulo and Florencia asserted that they were co-
owners pro-indiviso of the said lot, their mother
Cristita being the owner and actual possessor
thereof. Upon the latter’s death and while they
were absent from the said lot, Sampayan, through
strategy and stealth, allegedly built a house on the
lot, to their exclusion. After repeated demands,
Sampayan allegedly refused to vacate the said lot.
Thus, they filed an action for unlawful detainer.
The MCTC dismissed the complaint since
Sampayan
Q: Would the complaint prosper?
University of Santo Tomas
A: Yes. For the MCTC to acquire jurisdiction over
a forcible entry case, it is enough that the
complaint avers the jurisdictional facts, ie, that the
plaintiff had prior physical possession and that he
was deprived thereof by the defendant through
force, intimidation, threats, strategy and stealth.
The complaint in this case makes such an
averment. (Sampayan v. CA, GR No. 156360, 14
January 2005)
Q: Did the Sampayan have prior physical
possession?
A: Yes. The MCTC Judge found during his ocular
inspection of the premises that Sampayan’s
predecessors-in-interest have introduced
improvements on the land in question.
(Sampayan v. CA, GR No. 156360, 14 January
2005)
Alava was the owner of a parcel of land. A
contract of lease was executed by Alava and Anita
Lao. This lease was however not filed with the
Register of Deeds, and hence, not annotated on
Alava’s TCT. Rudy Lao, a lessee of another
portion of the same property, eventually
purchased the entire property from Alava. Rudy
then filed a complaint for unlawful detainer against
Jaime Lao, son Anita, alleging that the latter had
occupied a portion of his property without any
lease agreement and without paying any rentals,
and prayed that an order be rendered directing
Jaime to vacate the premises.
Q: Should the complaint be dismissed?
A: Yes. The records in this case show that the
respondent has been in possession of the property
in question, not by mere tolerance or generosity of
Rudy, but as the manager of his mother, who
conducted her business in the building which
stood on a portion of the property leased from
Alava. Jaime’s possession was in behalf of his
mother, and not in his own right. (Rudy Lao v.
Jaime Lao, GR No. 149599, 16 May 2000)
Q: Who is the real party-in-interest as defendant
in the action?
A: Anita Lao. Rudy admitted having knowledge of
the lease of the subject property. Although the
lease contract was not filed with the RD,
nevertheless, Rudy was bound by the terms and
conditions of said contract. The lease, in effect
became a part of the contract of sale. However,
Rudy had no cause of action for unlawful detainer
against Anita because of the subsisting contract of
lease; hence, he could not file the complaint
against her. (Rudy Lao v. Jaime Lao, GR No.
149599, 16 May 2000)
Herrera filed ejectment complaints to order the
defendants to vacate the premises. It was argued
that the complaint will not prosper because there
was no withholding of possession since Herrera
was not in prior possession of the lot.
Q: Is prior physical possession by the plaintiff
necessary for a complaint for unlawful detainer to
prosper?
A: No. The petitioners confuse the remedy of an
action for forcible entry with that of unlawful

CIVIL LAW NOTES
detainer. In unlawful detainer, prior physical
possession by the plaintiff is not necessary. It is
enough that plaintiff has a better right of
possession. Actual and prior physical possession
of a property by a party is indispensable only in
forcible entry cases. In unlawful detainer cases,
the defendant is necessarily in prior lawful
possession of the property of the property but his
possession eventually becomes unlawful upon
termination or expiration of his right to possess.
Thus, the fact that petitioners are in possession of
the lot does not automatically entitle them to
remain in possession. (Ganila v. CA, GR No.
150755, 28 June 2005)
Spouses Ong are the owners of parcels of land.
They sold them to Mandaue Prime Estate Realty,
which then sold it to Ross Rica Sales Center, Inc.
The spouses filed an action to annul the sale and
transfer of property to Mandaue. In the meantime,
an ejectment case was filed against the spouses
Q: Is the case considered as one for accion
reinvindicatoria, and thus the jurisdiction would lie
with the RTC?
A: No. The issue involved in accion
reinvindicatoria is the recovery of ownership of
real property. This differs from accion publiciana
where the issue is the better right of possession or
possession de jure, and accion interdictal where
the issue is material possession or possession de
facto. In an action for unlawful detainer, the
question of possession is primordial, while the
issue of ownership is generally unessential.
Petitioners, in all their pleadings, only sought to
recover physical possession of the subject
property. The mere fact that they claim ownership
over the parcels of land as well did not deprive the
MTC of jurisdiction to try the ejectment case.
(Ross Rica Sales Center v. Sps. Ong, GR No.
132197, 16 August 2005)
Builder, Planter, Sower
Hilario and Dres were declared as the owners of a
parcel of land and the Ignacios as the owners of
the houses and granaries built by them on said lot
with the rights of possessor in GF. Thereafter,
Hilario and Dres filed a motion praying that since
they chose neither to pay the building nor to sell
the land, the Ignacios should be ordered to
remove the structures and restore them in the
possession of the lot.
Q: Should the Ignacios be ordered to remove the
structures?
A: No. The owner has the option of paying the
value of the building or selling the land. He cannot
refuse either to pay or sell and compel the owner
of the building to remove it form the land where it
is erected. He is entitled to such removal only
when, after having chosen to sell the land, the
other party fails to pay for the same. (Ignacio v.
Hilario,76 Phil 606)
P undertook the completion and construction of a
provincial road in Calapan. By virtue of a
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Provincial Board Resolution, P was granted sole
right to use the said road provided that after 20
years, it shall donate the said road to the province.
It also provided that other grantees of lumber
concessions may use said road only with P’s
permission. Upon the recommendation of the
Director of Public Works, on the ground that said
road is a public road, the Provincial Board revoked
the earlier resolution and issued a new one
declaring the said road a toll road, proceeds of
which are to be paid to P as reimbursement of
expenses it incurred in finishing the road.
Notwithstanding said resolution, P brought action
to prohibit the other lumber concessionaires from
using said road on the ground that the questioned
road is its private property.
Q: Does the road in question belong to P as its
private property?
A: No. The fact that the completion of the road
was done at the expense of P does not convert
said road into a private one in the absence of
proof that said land upon which the road was
constructed was owned by P. Indeed, P built the
road in good faith and as such it may be argued
that P is entitled to have possession of the road
until after it has been reimbursed of the expenses
it has incurred. However, provisions governing the
rights of builder in good faith on private land
cannot be applied here because public interest is
involved. (Calapan Lumber Co. v. Community
Sawmill Co., 11 SCRA 346)
The Timbang spouses own the lot; Blas built a
school building on said lot; and Filipinas Colleges
purchased the building from Blas. The CA
declared that Filipinas has acquired the rights of
the Timbangs to the lot and had to pay value of
the land; that should Filipinas fail to pay, it loses its
right to the land and the Timbangs will become the
owners. Thus, the Timbangs must exercise their
option under article 448 to appropriate the building
or compel Filipinas to acquire the land. Filipinas
was also ordered to pay Blas the value of the
buildings. Filipinas failed to pay the amount, so the
Timbangs, in exercising their option, chose to
compel Filipinas to acquire the land. The
Timbangs contend that since Filipinas, as builder
in good faith, has failed to pay the price of the
land, it lost its right of retention under Art. 456 and
the Timbangs, as landowners, automatically
became the owners of the building.
Q: Is there merit in the contention of the
Timbangs?
A: Without merit. There is nothing in Art. 448 and
Art. 546 which would justify the conclusion that
upon failure of the builder to pay the value of the
land, when such is demanded by the landowner,
the latter becomes automatically the owner of the
improvement under Art. 445. So what is the
recourse left to the parties where the builder fails
to pay the value of the land? While the Code is
silent on this point, guidance may be had from
these decisions:
(1) In Miranda v. Fadullon, the builder might be
made to pay rental only, leave things as they
24
2007 Team Bar-Ops Civil Law Committee
are, and assume the relation of lessor and
lessee;
(2) In Ignacio v. Hilario, owner of the land may
have the improvement removed; or
(3) In Bernardo v. Bataclan, the land and the
improvement may be sold in a public auction,
applying the proceeds first to the payments of
the value of the land, and the excess if any, to
be delivered to the owner of the house in
payment thereof. (Filipinas College Inc. v.
Timbang,106 SCRA 247)
Pecson owned a commercial lot on which he built
a 4-door two-storey apartment building. For failure
to pay realty taxes, the lot was sold at public
auction to Nepomuceno, who in turn sold it to the
spouses Nuguid. Pecson challenged the validity of
the sale. The court upheld the validity of the sale
but also held that the apartment building was not
included in the sale. This ruling was affirmed by
the CA and the SC. By virtue of the said ruling, the
spouses became the uncontested owners of the
lot. The spouses subsequently moved for the
delivery of possession of the said lot and
apartment. Pecson filed a motion to restore
possession pending determination of the value of
the apartment.
Q: Is Pecson entitled to the rentals?
A: Yes. The construction of the apartment was
undertaken at the time when Pecson was still the
owner of the lot. When the Nuguids became the
uncontested owner of the lot, the apartment was
already in existence and occupied by tenants.
Under Art. 448, the landowner is given the option,
either to appropriate the improvement as his own
upon payment of the proper amount of indemnity
OR to sell the land to the possessor in good faith.
While Art. 546 provides that a builder in good faith
is entitled to full reimbursement for all the
necessary and useful expenses incurred; it also
gives him right of retention until full reimbursement
is made. While the law aims to concentrate in one
person the ownership of the land and the
improvements thereon in view of the
impracticability of creating a state of forced co-
ownership, it guards against unjust enrichment
insofar as the good-faith builder’s improvements
are concerned. The right of retention is considered
as one of the measures to protect builders in good
faith. A builder in good faith cannot be compelled
to pay rentals during the period of retention nor be
disturbed in his possession by ordering him to
vacate. Since the petitioners opted to appropriate
the improvement for themselves when they
applied for a writ of execution despite knowledge
that the auction sale did not include the apartment
building, they could not benefit from the lot’s
improvement until they reimbursed the improver in
full, based on the current market value of the
property. (Spouses Nuguid v. CA, GR No.
151815, 23 February 2005)
Q: What are necessary expenses?
A: Those made for the preservation of the thing, or
those without which the thing would deteriorate or
be lost, or those that augment the income of the
things upon which they are expended, or those
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incurred for cultivation, production, upkeep, etc.
(Mendoza v. De Guzman, 52 Phil 171)
Right of Retention
The lot in controversy was formerly the subject of
a Homestead Application of Dolorico, Ortiz's ward
who died later. Since then it was Ortiz who
continued the cultivation and possession of the
property, without however filing any application to
acquire title thereon. In the Homestead
Application, Dolorico named his uncle, Martin as
his heir and successor in interest, so that Martin
executed an affidavit relinquishing his rights over
the property in favor of Eleuterio and requested
the Director of Lands to cancel the homestead
application which was granted. Eleuterio filed his
sales applications.
Q: Is Ortiz entitled to right of retention?
A: Yes. A possessor in good faith has the right of
retention of the property until he has been fully
reimbursed for all the necessary and useful
expenses made by him on the property. Its object
is to guarantee the reimbursement for the
expenses, such as those for the preservation of
the property, or for the enhancement of its utility or
productivity. It permits the actual possessor to
remain in possession while he has not been
reimbursed by the person who defeated him in the
possession for those necessary expenses and
useful improvements made by him on the thing
possessed. The right of retention is accessory in
character, accessory to the principal obligation.
The right of the possessor to receive the fruits
terminates when his good faith ceases, he has the
right to use the proceeds of such fruits to pay the
interest as well as the principal of the debt while
he remains in possession, as a means of obtaining
compensation for the debt. The right of retention is
analogous to a contract of antichresis or of pledge.
The civil fruits of the property belong to the
possessor in good faith before the possession is
legally interrupted, and to the owner or lawful
possessor thereafter. However, the possessor in
good faith is entitled to retain the property until he
has been fully reimbursed for all the necessary
and useful expenses made by him on the property.
The right of retention is accessory to a principal
obligation. It is analogous to a contract of
antichresis and lasts only for the period necessary
to enable the creditor to be reimbursed from the
fruits for the necessary and useful expenses.
(Ortiz v. Kayanan, 92 SCRA 146)
Accretion
Rui filed an application for the registration of three
lots adjacent to his fishpond alleging that said lots
belong to him due to accretion. This was opposed
by the Republic, contending that what actually
happened was that Rui merely transferred his
dikes further down the river bed such that
whatever accretion may have taken place was
man-made and not natural.
Q: Should the lands be registered in favor Rui?

CIVIL LAW NOTES
A: NO. There is no accretion. The requirement
that the deposit should be due to the effect of the
current of the river is indispensable. This excludes
those caused by human intervention. Alluvion
must be the exclusive work of nature. Here,
evidence showed that the alleged alluvial deposits
came into being not because of the sole effect of
the river current but as a result of the transfer of
the dike towards the river and encroaching upon it.
The land is not even dry but under two meters of
water. What the respondents claim as accretion is
really an encroachment of a portion of the
Meycauayan river by reclamation. The reason
behind the law giving the riparian owner the right
to any land or alluvion deposited by a river is to
compensate him for the danger of loss that he
suffers because of the location of his land.
(Republic v. CA,132 SCRA 514)
Islands
Eduave is the owner of land forming part of an
island in a non-navigable river. Said land was
eroded due to a typhoon, destroying the bigger
portion and improvements thereon. Due to the
movements of the river deposits on the land that
was not eroded, the area was increased. Later,
Eduave allowed Dodong to introduce
improvements thereon and live there as a
caretaker. Dodong however later denied Eduave’s
claim of ownership so the latter filed action to quiet
title over the property.
Q: Who has a better right to the island?
A: Eduave. Clearly, the land in question is an
island that appears in a non-floatable and non-
navigable river, and it is not disputed that Eduave
is the owner of the parcel of land along the margin
of the river and opposite the island. Applying Art.
465, the island belongs to the owner of the parcel
of land nearer the margin. More accurately,
because the island is longer than the property of
Eduave, he is deemed ipso jure to be the owner of
that portion which corresponds to the length of his
property along the margin of the river. If however,
the riparian owner fails to assert his claim thereof,
the same may yield to the adverse possession of
the third parties, as indeed even accretion to land
titled under the Torrens system must itself still be
registered. Dodong thus may acquire said land by
acquisitive prescription. But here, Dodong’s
possession cannot be considered to be in good
faith, so 30 years of possession is needed.
(Jagualing v. CA, 194 SCRA 607)
Expropriation
Diaz owned a tenanted agricultural land devoted
to the planting of palay. After his death, his son
was appointed administrator of the property. The
National Irrigation Administration (NIA) bulldozed
10 hectares of the property to build 2 irrigation
canals. Although the canals when finished
occupied only a portion of the 10 hectares, the
entire area became prone to flooding 2 months out
of every year because of the side-burrow method
NIA used in the construction of the canals. NIA
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ADVISER:
completed the canals without instituting
expropriation proceedings or indemnifying the
property’s owners. Diaz sought compensation
from NIA for the land affected by the canals. The
trial court held that Diaz was entitled to
compensation in the sum of four million pesos.
Q: Is the award of 4M as just compensation
correct?
A: No. Just compensation is the fair value of the
property as between one who receives, and one
who desires to sell, fixed at the time of the actual
taking by the government. This rule holds true
when the property is taken before the filing of an
expropriation suit, and even if it is the property
owner who brings the action for compensation.
Just compensation for the Canal Sites must be
computed as of the time of taking and not as of the
time the trial court made its order of expropriation.
The concept of just compensation, however, does
not imply fairness to the property alone.
Compensation must also be just to the public
which ultimately bears the cost of expropriation.
The property owner is entitled to compensation
only for what he actually loses, and what he loses
is only the actual value of the property at the time
of the taking. Thus, the award is reduced to P30k.
(Republic v. CA, GR No. 147245, 31 March 2005)
Lots surrounding the Lahug Airport were
purchased by the government on the assurance
that lot owners could repurchase their properties
once the airport was abandoned. Gopuco refused
to enter in such an arrangement but was finally
forced to convey his property by virtue of a court
decision. Thereafter, the airport was ordered
closed by President Aquino as the MCIAA had
commenced operations. Gopuco then filed a
complaint for the recovery of his property.
Q: Does cessation of public purpose warrant
recovery of property?
A: It depends upon the character of the title
acquired by the expropriator. Where the
expropriation is explicitly for a particular purpose
and that alone, with the condition that when that
purpose is ended or abandoned, the property shall
return to its former owner, then when such
purpose is ended the former owner reacquires the
property. However, if the decree of expropriation
gives to the entity a fee simple title, then the land
becomes the absolute property of the expropriator,
and in that case non-usage does not have the
effect of defeating title acquired through
expropriation. (ATO and MCIAA v. Gopuco, GR
No. 158563, 30 June 2005)
Q: May Gopuco validly recover his expropriated
property?
A: No. Gopuco failed to adduce evidence showing
that he and the expropriator actually entered into
any such compromise agreement. The fact of
abandonment of the airport cannot by itself result
in the reversion of the property back to the
Gopuco. Nor did it vest in the latter the right to
demand reconveyance of the said property. When
real property has been acquired for public use
26
2007 Team Bar-Ops Civil Law Committee
unconditionally, either by eminent domain or by
purchase, the abandonment or non-use of the real
property does not ipso facto give to the previous
owners of said property any right to recover the
same. (ATO and MCIAA v. Gopuco, GR No.
158563, 30 June 2005)
The Republic of the Philippines instituted an action
for the expropriation of several lots belonging to
the Denzons. Years later however, the
compensation remained unpaid so the Denzons’
successors-in-interest filed for the recovery of the
lots in question. It appears that one of the lots had
been mortgaged to Lim who foreclosed the same
for failure to pay.
Q: Did the title to the lots vest with the Republic?
A: No. While the prevailing doctrine is that the
non-payment of just compensation does not entitle
the private landowner to recover possession of the
expropriated lots, in cases where the government
failed to pay just compensation within 5 years from
the finality of the judgment in the expropriation
proceedings, the owners concerned shall have the
right to recover possession of their property. Just
compensation not only connotes a reasonable
amount of payment but also a reasonable time for
it. (Republic v. Lim, GR No. 161656, 29 June
2005)
Q: Does Lim have a right of possession over the
property?
A: Yes. A mortgage is inseparable from the
property and adheres to it no matter who may be
the owner. The Republic and its military arm has
no better right to it as in fact it has no title over it.
(Republic v. Lim, GR No. 161656, 29 June 2005)
Co-ownership
A, B, C were the registered owners of a parcel of
agricultural land. At the instance of A, the property
was surveyed to convert it into a subdivision. The
corresponding subdivision plan included 3 road
lots. A, with the consent of the others, sold the 3
road lots to D.
Q: Is D entitled to the use of the lots?
A: As a registered co-owner of the road lots, D is
entitled to avail of all the attributes of ownership-
jus utendi, fruendi, abutendi, disponendi,
vindicandi. Art. 428 is explicit that the owner has
the right to enjoy and dispose of a thing, without
other limitations than those established by law. A
co-owner, such as D, is entitled to use the
property owned in common under Art. 486.
Therefore, the other co-owners cannot close the
road lots to prevent D from using the same.
(Borbajo v. Hidden View Homeowners, GR No.
152440, 31 January 2005)
Borromeo is the co-owner and overseer of certain
parcels of land. Resuena resided in the upper
portion of the lot. Borromeo claims that Resuena
has occupied a portion of the property by virtue of
his own liberality. In his desire to expand and
extend the facilities of the resort that he
established on the subject properties, he
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demanded that Resuena vacate the property.
Resuena, however, refused to vacate his home.
Q: Is Borromeo entitled to eject Resuena from the
property?
A: Yes. Art. 487 is a categorical and an
unqualified authority in favor of Borromeo to evict
Resuena from the portion occupied. Borromeo’s
action for ejectment against Resuena is deemed
to be instituted for the benefit of all co-owners of
the property since Resuena was not able to prove
that he is authorized to occupy the same. Persons
who occupy the land of another at the latter’s
tolerance, without any contract between them, are
necessarily bound by an implied promise that they
will vacate the same upon demand. (Resuena v.
CA, GR No. 128338, 28 Marc 2005)
Q: Is Resuena entitled to reimbursement for
necessary expenses?
A: No. While Art. 546 allows full reimbursement of
useful expenses and retention of the premises
until reimbursement is made, the same applies
only to a possessor in good faith, ie., one who
builds on land with the belief that he is the owner
thereof. Verily, persons whose occupation of a
realty is by sheer tolerance of its owners are not
possessors in good faith. (Resuena v. CA, GR
No. 128338, 28 Marc 2005)
Cleofas was the registered owner of a parcel of
land. When he died, the property passed on to his
wife and children, one of whom is Fortunato.
Lumayno alleges that Fortunato entered into a
contract of sale of his share in the said lot.
Fortunato died. His widow contends that Fortunato
never sold his share and that she had the right of
redemption over the shares previously sold to
Lumayno because the co-owners have not
formally subdivided the property.
Q: May the widow exercise right of redemption?
A: No. The exercise of this right presupposes the
existence of a co-ownership at the time the
conveyance is made by a co-owner and when it is
demanded by the other co-owners. As legal
redemption is intended to minimize co-ownership,
once the property is subdivided and distributed
among the co-owners, the community ceases to
exist and there is no more reason to sustain any
right of legal redemption. In this case, records
reveal that although the lot had not yet been
formally subdivided, still, the particular portions
belonging to the heirs of Cleofas had already been
ascertained and they in fact took possession of
their respective parts. It is evident that the partition
of the lot had already been effected by the heirs of
Cleofas. Even an oral agreement of partition is
valid and binding upon the parties. (Vda. de Ape
v. CA, GR No. 133638, 15 April 2005)
Emilio died intestate, leaving 8 children. His eldest
child, Flores, caused the cancellation of the tax
declaration in Emilio’s name covering a parcel of
land and the issuance of another in his name. The
co-heirs of Flores discovered the cancellation.
Flores then died. Thereafter, the heirs of Flores’s
sisters together with his surviving sisters filed a

CIVIL LAW NOTES
complaint against the heirs of Flores for partition of
the lot and declaration of nullity of the documents.
Q: Did the heirs of Flores acquire ownership over
the lot by extraordinary acquisitive prescription?
A: Yes. While the action to demand partition of a
co-owned property does not prescribe, a co-owner
may acquire ownership thereof by prescription,
where there exists a clear repudiation of the co-
ownership, and the co-owners are apprised of the
claim of adverse and exclusive ownership. In this
case, the respondents never possessed the lot,
much less asserted their claim thereto until 1999
when they filed the complaint for partition. In
contrast, Flores took possession of the lot after
Emilio’s death and exercised acts of dominion
thereon- tilling and cultivating the land, introducing
improvements, and enjoying the produce thereof.
The statutory period of prescription commenced in
1960 when Flores, who had neither title nor good
faith, secured a tax declaration in his name and
may, therefore, be said to have adversely claimed
ownership of the lot. On said date, respondents
were also deemed to have become aware of the
adverse claim. Flores’s possession thus ripened
into ownership through acquisitive prescription
after the lapse of 30 years. (Heirs of Flores
Restar v. Heirs of Dolores Cichon, GR No.
161720, 22 November 2005)
NAPOCOR constructed underground tunnels on
the sub-terrain area of the land owned by Ibrahim
without the latter’s consent. Ibrahim instituted an
action against NAPOCOR for recovery of
possession of land and payment of damages.
Q: Is Ibrahim entitled to receive just compensation
from NAPOCOR?
A: No. Yes. The landowner’s right extends to such
height or depth where it is possible for them to
obtain some benefit or enjoyment, and it is
extinguished beyond such limit as there would be
no more interest protected by law. Ibrahim still had
a legal interest in the sub-terrain portion insofar as
they could have excavated the same for the
construction of a deep well. The manner in which
the easement was created by NAPOCOR violates
the due process rights of Ibrahim as it was without
notice and indemnity to him and did not go through
proper expropriation proceedings. NAPOCOR
could have, at any time, validly exercised the
power of eminent domain to acquire the easement
over the property as this power encompasses not
only the appropriation of title to and possession of
the expropriated property but likewise covers even
the imposition of a mere burden upon the owner of
the condemned property. Landowners cannot be
deprived of their right over their land until
expropriation proceedings are instituted in court.
However, the date of valuation should be
computed from the time when Ibrahim discovered
the construction and not from the date NAPOCOR
actually constructed the said tunnels. (NAPOCOR
v. Lucman Ibrahim, GR No. 168732, 29 June
2007)
Alteration
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Q: What does the term “alteration” in Art. 491, Civil
Code, include?
A: It includes the act by virtue of which a co-owner
changes the thing from the state in which the
others believe it should remain. It is not limited to
material charges. (Viterbo v. Quinto, 35226-R,
December 19, 1973)
Conversion
Q: What is conversion?
A: It refers to the act of using or disposing of
another’s property without lawful authority to do so
in a manner different from that with which a
property is held by the trustees to whom the owner
had entrusted the same. It is not necessary that
the use for which the property is given be directly
to the advantage of the person misappropriating or
converting the property of another. (People v.
Carballo, 17136-CR, 17 November 1976)
Quieting of Title
Q: Is an action to quiet title imprescriptible?
A: Even though the Civil Code does not include an
action to quiet title as one of those actions which
are imprescriptible, the SC in this case held that
such action is imprescriptible. The basis of the SC
is Art. 480. The imprescriptibility of an action to
quiet title is a general principle from American
jurisprudence. (Bucton v. Gabar, 55 SCRA 499)
Possession
JP owned a lot with improvements. He mortgaged
it to RSBank. RC and EI offered to buy the lot. JP
offered to sell the lot to RC. RC was to assume
the mortgage. They executed a private document
which states that JP can start living on the lot
without rent and if after 1 yr. he could not find a
place where to move his house, he could still
continue occupying the site but with rent. Later,
RC went to JP to execute the formal deed of sale,
but JP said they could not continue with the sale
because he sold the lot to EI. JP and EI executed
a formal deed of sale. EI took possession of the
lot. RC registered her adverse claim. 4 days later
EI registered her deed of sale. A TCT with RC's
adverse claim was issued to EI.
Q: Who has a better right to the land?
A: RC. If there is an inscription, prior registration
in GF is a pre-condition to superior title. To merit
the protection of Art. 1544 (2), it is essential that
the buyer of realty must act in GF in registering his
deed of sale. RC's prior purchase of the land was
made in GF; she was the only buyer at that time.
Her GF did not cease after JP told her of the 2nd
sale to EI. Since EI is in BF, their rights to the
improvements they introduced are governed by
Arts. 546 and 547. These provisions seem to imply
that the possessor in BF has neither the right of
retention of useful improvements nor the right to
demand refund for useful expenses. No
reimbursement for EI for the current value of the
useful improvements because they have been
28
2007 Team Bar-Ops Civil Law Committee
enjoying such for 2 decades without rents.
(Carbonell v. CA, 69 SCRA 99)
Adverse Possession
Q: What does the law require for one who asserts
ownership by adverse possession?
A: To prove the presence of the essential
elements which in ordinary acquisitive prescription
of real estate are good faith, a just title, and the
lapse of time fixed by law. (Morales v. CFI of
Misamis Occidental, 97 SCRA 872)
Usufruct
Chayong owned a parcel of land which she
mortgaged to Michael. Upon the OCT was an
annotation of usufructuary rights in favor of
Cheddy.
Q: Is Michael a mortgagee in good faith despite
such annotation?
A: Yes. Such annotation does not impose upon
Michael the obligation to investigate the validity of
Chayong’s title. Usufruct gives a right to enjoy the
property of another with the obligation of
preserving its form and substance. The
usufructuary is entitled to all the natural, industrial
and civil fruits of the property and may personally
enjoy the thing in usufruct, lease it to another, or
alienate his right of usufruct, even by a gratuitous
title, but all the contracts he may enter into as
such usufructuary shall terminate upon the
expiration of the usufruct. Only the jus utendi and
jus fruendi over the property is transferred to the
usufructuary. The owner of the property maintains
the jus disponendi or the power to alienate,
encumber, transform, and even destroy the same.
This right is embodied in the Civil Code, which
provides that the owner of property the usufruct of
which is held by another, may alienate it, although
he cannot alter the property’s form or do anything
which may be prejudicial to the usufructuary.
Based on the foregoing, the annotation is not
sufficient cause to require Michael to investigate
Chayong’s title because the latter’s ownership
over the property remained unimpaired despite
such encumbrance. (Hemedes v. CA, 316 SCRA
347)
Easements
Ramiscal is the registered owner of a parcel of
land. Spouses dela Cruz are occupants of a parcel
of land located at the back of Ramiscal’s property.
The subject property is a long strip of land owned
by Ramiscal which is being used by the spouses
as their pathway to and from the nearest public
highway from their property. The spouses had
enclosed the same with a gate, fence, and roof.
Ramiscal demanded that the spouses demolish
the same. The spouses refused.
Q: Are the spouses entitled to a right of way?
A: No. There is no voluntary nor legal easement
established. The spouses failed to show that they
entered into an agreement with Ramiscal to use
the pathway. Art 649 provides that the easement
of right of way is not compulsory if the isolation of
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the immovable is due to the proprietor’s own acts.
Mere convenience for the dominant estate is not
enough to serve as its basis. There should be no
other adequate outlet to a public highway. Also,
under Art. 649, it is the owner, or any person who
by virtue of a real right may cultivate or use any
immovable surrounded by other immovable
pertaining to other persons, who is entitled to
demand a right of way through the neighboring
estates. Here, the spouses fell short of proving
that they are the owners of the supposed
dominant estate. (Spouses dela Cruz v.
Ramiscal, GR No. 137882, 4 February 2005)
Q: How are easements extinguished?
A: 1. Non-user for ten years; with respect to
discontinuous easements, this period shall be
computed from the day on which they ceased to
be used; and, with respect to the continuous
easements, from the day on which an act contrary
to the same took place; and
2. when either or both of the estates fall into
such condition that the easement cannot be used;
but it shall revive if the subsequent condition of the
estates or either of them should again permit its
use, unless when the use becomes possible,
sufficient time for prescription has elapsed, in
accordance with the provisions of the preceding
number. (Benedicto v. CA, 25 SCRA 145)
Nuisance
Q: Does noise constitute an actionable nuisance?
A: Yes, but it must be a noise which affects
injuriously the health or comfort of ordinary people
in the vicinity to an unreasonable extent. The test
whether rights of property, of health or of comfort
are so injuriously affected by the noise in question
that sufferer is subjected to a loss which goes
beyond the reasonable limit imposed upon him by
the condition of living, or of holding property, in a
particular locality in fact devoted to uses which
involve the emission of noise although ordinary
care is taken to confine it within reasonable
bounds; or in the acting with reasonable regard for
the rights of those affected by it. The noise
continuously emitted by a Meralco substation, day
and night, constitutes an actionable nuisance for
which the appellant is entitled to relief, by requiring
the appellee company to adopt the necessary
measures to deaden or reduce the sound at the
plaintiff’s house. (Velasco v. Manila Electric
Company, 40 SCRA 342)
Q: What is the doctrine of attractive nuisance?
A: It states that one who maintains on his
premises dangerous instrumentalities of
appliances of a character likely to attract children
in play, and who fails to exercise ordinary care to
prevent children from playing therewith or
resorting thereto, is liable to a child of tender years
who is injured thereby, even if the child is
technically a trespasser in the premises. The
reason for the doctrine is that the condition or
appliance although its danger is apparent to those
of age is so enticing or alluring to children of
tender years as to induce them to approach, get
on or use it, and this attractiveness is an implied
invitation to such children. It does not generally
 29
CIVIL LAW NOTES ADVISER:
apply to a body of waters, artificial features other
than the water and its location. (Hidalgo
Enterprises, Inc. v. Balandan, 91 Phil 488)

2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE

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30
2007 Team Bar-Ops Civil Law Committee
Book III
ABC Co. filed a contingent claim against the
Estate of Pedro based on 20 different indemnity
agreements, each subscribed by a distinct
principal and Pedro, as solidary guarantor in all of
them. The trial court dismissed the claims of ABC
Co and held the same are not chargeable to
Pedro’s estate because upon his death he ceased
to be guarantor.
Q: Can ABC Co. file contingent claim against the
estate of Pedro?
A: Under the Article 1311, NCC, “Contracts take
effect only as between the parties, their assigns
and heirs, except in the case where the rights and
obligations arising from the contract are not
transmissible by their nature, or by stipulation or
by provision of law."
Of the three exceptions fixed by Article 1311,
the nature of the obligation of the surety or
guarantor does not warrant the conclusion that his
peculiar individual qualities are contemplated as a
principal inducement for the contract. The solidary
guarantor's liability is not extinguished by his
death. The creditor ABC Co., when it accepted the
latter as a solidary guarantor expects nothing but
the reimbursement of the moneys that it might
have to disburse on account of the obligations of
the principal debtors.
The contracts of suretyship not being rendered
intransmissible due to the nature of the
undertaking, nor by the stipulations of the
contracts themselves, nor by provision of law,
Pedro’s eventual liability thereunder necessarily
passed upon his death to his heirs. The contracts,
therefore, give rise to contingent claims provable
against the estate. (Estate of Hemady v. Luzon
Surety Co., Inc., GRN L-8437, 28 November
1956)
Maria was the lawful wife of Faustino who upon
his death in 1945 left the 5 parcels of land in
question. Faustino left no other heir except his
widow Maria. However, Maria claims that when
Faustino died in 1945, his common-law wife
Rosario took possession illegally of said lands
thus depriving her of their possession and
enjoyment. Maria then filed an action for the
recovery of the ownership and possession of the
lands in question against Rosario and her four
children. The lower court ordered Rosario to
restore to Maria the ownership and possession of
the lands in dispute.
Q: Who is the owner of the properties in question?
A: Faustino died in 1945 much prior to the
effectivity of the New Civil Code. With this
background, it is evident that when Faustino died
in 1945 the five parcels of land passed from the
moment of his death to his only heir, his widow
Maria n. From that moment, therefore, the
rights of inheritance of Maria over the lands in
question became vested.
Rosario contends that the illegitimate children of
the late Faustino under the New Civil Code which
became in force in June, 1950, are given the
status and rights of natural children and are
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entitled to the successional rights, and because
these successional rights were declared for the
first time in the New Code, they shall be given
retroactive effect even though the event which
gave rise to them may have occurred under the
prior legislation. SC, however, found no merit in
Rosario’s claim because rights which are declared
for the first time can only be given retroactive
effect when the new rights do not prejudice any
vested or acquired right of the same origin.
The right of ownership of Maria over the lands in
question became vested in 1945 upon the death of
her late husband and this is so because of the
imperative provision of the law which commands
that the rights to succession are transmitted from
the moment of death. The new right recognized by
the new Civil Code in favor of the illegitimate
children of the deceased cannot, therefore, be
asserted to the impairment of the vested right of
Maria Uson over the lands in dispute. (Uson v.
Del Rosario, et al., GRN L-4963, 29 January
1953)
Francisco, after the death of his wife Josefa,
contracted a second marriage with Tasiana. Upon
Francisco's death, Tasiana instituted testate
proceedings and she was appointed special
administratrix.
The relationship between the children of the first
marriage and Tasiana has been plagued with
several court suits and counter-suits. In order to
put an end to all these litigations, a compromise
agreement was entered into by and between Jose,
(son of Francisco and Josefa) and Tasiana, in
which Tasiana agreed to convey any and all her
individual share and interest in the estate of
Francisco, in exchange for an X amount of money.
The genuineness and due execution of the
compromise agreement is not disputed, but its
validity is, nevertheless, attacked by Tasiana on
the ground that the heirs cannot enter into such
kind of agreement without first probating the will of
Francisco. In assailing the validity of the
agreement, Tasiana cited the case of Guevara vs.
Guevara, 74 Phil. 479, wherein the SC held that
the presentation of a will for probate is mandatory
and that the settlement and distribution of an
estate on the basis of intestacy when the decedent
left a will, is against the law and public policy.
Q: Can the heirs enter into a compromise
agreement without the will having first passed
probate?
A: The doctrine of Guevara vs. Guevara, is not
applicable to the case at bar. The clear object of
the contract was merely the conveyance by
Tasiana of any and all her individual share and
interest in the estate of Francisco. And as a
hereditary share in a decedent's estate is
transmitted or vested immediately from the
moment of the death, there is no legal bar to a
successor disposing of her or his hereditary share
immediately after such death, even if the actual
extent of such share is not determined until the
subsequent liquidation of the estate. Of course,
the effect of such alienation is to be deemed
limited to what is ultimately adjudicated to the
vendor heir. However, the aleatory character of
the contract does not affect the validity of the

CIVIL LAW NOTES
transaction. (De Borja, et al. v. Vda. de Borja,
GRN L-28040 18 August 1972)
Fortunata instituted a civil action to quiet title over
certain parcels of land located in Abra. During the
pendency of the action, Fortunata passed away.
The defendants moved to dismiss on the ground
that Fortunata is dead and, therefore, has no legal
capacity to sue. The court immediately dismissed
the case on the ground that a dead person cannot
be a real party in interest and has no legal
personality to sue.
Q: Is the court correct in its ruling?
A: Article 777 provides "that the rights to the
succession are transmitted from the moment of
the death of the decedent." From the moment of
the death of the decedent, the heirs become the
absolute owners of his property, subject to the
rights and obligations of the decedent, and they
cannot be deprived of their rights thereto except
by the methods provided for by law. The moment
of death is the determining factor when the
heirs acquire a definite right to the inheritance
whether such right be pure or contingent. The
right of the heirs to the property of the
deceased vests in them even before judicial
declaration of their being heirs in the testate or
intestate proceedings.
When Fortunata died, her claim or right to the
parcels of land in litigation was not extinguished by
her death but was transmitted to her heirs upon
her death. Her heirs have thus acquired interest in
the properties in litigation and became parties in
interest in the case. (Bonilla v. Barcena, et al.,
GRN L-41715, 18 June 1976)
Dolores died in New York, U.S.A. Rowena was the
named executrix in her will. Later, Romarico
(widower of Dolores) was named co-administrator
of the estate, pending probate.
Romarico filed a motion asking for authority from
the probate court to sell certain shares of stock
and real properties belonging to the estate to
cover allegedly his advances to the estate, which
he claimed were personal funds.
Rowena opposed the motion to sell on the ground
that the said funds were conjugal properties and
part of the estate, and hence, no ground for
reimbursement.
Romarico insists that the said funds are his
exclusive property having acquired the same
through a survivorship agreement executed with
his late wife and the bank. The agreement
provides:
xxxxx
“We hereby agree with each other and with the
BANK that all money now or hereafter deposited
xxx xxx with the BANK in our joint savings current
account shall be the property of all or both of us
and shall be payable to and collectible or
withdrawable by either or any of us during our
lifetime, and after the death of either or any of us
shall belong to and be the sole property of the
survivor ….xxxxx
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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31
ADVISER:
Q: What is the nature of the survivorship
agreement?
A: The survivorship agreement is a mere
obligation with a term, the term being death.
But although the survivorship agreement is per se
not contrary to law its operation or effect may be
violative of the law. For instance, if it be shown in
a given case that such agreement is a mere cloak
to hide an inofficious donation, to transfer property
in fraud of creditors, or to defeat the legitime of a
forced heir, it may be assailed and annulled upon
such grounds.
The conclusion is accordingly unavoidable that
Dolores having predeceased her husband,
Romarico the latter has acquired upon her death a
vested right over the amounts under savings
account in question. Being the separate property
of Romarico, it forms no more part of the estate of
the deceased. (Vitug v. CA, GRN 82027, 29
March 1990)
Ana Abangan's will consists of two sheets, the first
of which contains all of the dispositions of the
testatrix, duly signed at the bottom by Martin (in
the name and under the direction of the testatrix)
and by three witnesses. The following sheet
contains only the attestation clause duly signed at
the bottom by the three instrumental witnesses.
Neither of these sheets is signed on the left
margin by the testatrix and the three witnesses,
nor numbered by letters; and these omissions.
Q: Can the will be probated? Is there a
compliance with formalities required by law?
A: The purpose of the law in requiring that each
and every sheet of the will should also be signed
on the left margin by the testator and three
witnesses in the presence of each other is to avoid
the substitution of any of said sheets, thereby
changing the testator's dispositions. But when
these dispositions are wholly written on only one
sheet signed at the bottom by the testator and
three witnesses, their signatures on the left margin
of said sheet would be completely purposeless. In
requiring this signature on the margin, the statute
took into consideration, undoubtedly, the case of a
will written on several sheets and must have
referred to the sheets which the testator and the
witnesses do not have to sign at the bottom..
But, when all the dispositive parts of a will are
written on one sheet only, the object of the statute
disappears because the removal of this single
sheet, although unnumbered, cannot be hidden.
(Abangan v. Abangan, GRN 13431,12
November 1919)
The testatrix Leoncia died at the age of 92.The will
in question was prepared by Attorney Almario in
the house of the testatrix Leoncia after she had
expressed to said attorney her desire to make a
will and bequeath her property to the Victorio in
compensation according to her, for his diligent and
faithful services rendered to her. The testatrix
requested Attorney Almario to write her name
where she had to sign by means of her
thumbmark in view of the fact that her fingers no
longer had the necessary strength to hold a pen.
32
2007 Team Bar-Ops Civil Law Committee
Q: May a thumbmark be treated as the signature
of the testatrix?
A: Yes, a thumbmark is a sufficient signature
because it can always be verified anytime. (Payad
v. Tolentino, GRN 42258, 05 September 1936)
This case involves the probate of the will of Antero
Mercado, written in the Ilocano dialect. The will
appears to have been signed by Atty. Florentino
Javier who wrote the name of Antero Mercado,
followed below by "A ruego del testador" and the
name of Florentino Javier. Antero Mercado wrote
a cross immediately after his name.
Q: May the will be probated? Is a cross a sufficient
signature?
A: The cross appearing on the will is neither the
usual signature of Antero Mercado nor even one
of the ways by which he signed his name. The
cross cannot and does not have the
trustworthiness of a thumbmark. (Garcia v.
Lacuesta, et al., GRN L-4067, 29 November
1951)
Pedro Barut applied for the probate of the last will
and testament of Maria Salomon, deceased. After
disposing of her property the testatrix revoked all
former wills made by her. She also stated in said
will that being unable to read or write, the same
had been read to her by two other persons and
that she had instructed Severo, one of the
witnesses, to sign her name to it as testatrix.
The probate of the will was contested and
opposed by a number of the relatives of the
deceased on various grounds, among them that a
later will had been executed by the deceased.
The probate court found that the will was not
entitled to probate on the ground that the
handwriting of the person who it is alleged signed
the name of the testatrix to the will for and on her
behalf looked more like the handwriting of one of
the other witnesses to the will than that of the
person whose handwriting it was alleged to be.
Q: Is it required that the person signing in behalf of
the testatrix also signs his name?
A: No. It is immaterial who writes the name of the
testatrix provided it is written at her request and in
her presence and in the presence of all the
witnesses to the execution of the will.
With respect to the validity of the will, it is
unimportant whether the person who writes the
name of the testatrix signs his own or not. The
important thing is that it clearly appears that the
name of the testatrix was signed at her express
direction in the presence of three witnesses and
that they attested and subscribed it in her
presence and in the presence of each other. That
is all the statute requires. (Barut v. Cabacungan,
GRN 6285, 15 February 1912)
The case involves the probate of the will allegedly
executed by Vicente Cagro. The signatures of the
three witnesses to the will do not appear at the
bottom of the attestation clause, although the page
containing the same is signed by the witnesses on
the left-hand margin.
University of Santo Tomas
Q: Is the will fatally defective because of the
unsigned attestation clause although signed on
the left margin?
A: The will is fatally defective because of the
unsigned attestation clause although signed on
the left margin. The attestation clause is "a
memorandum of the facts attending the execution
of the will" required by law to be made by the
attesting witnesses, and it must necessarily bear
their signatures. An unsigned attestation clause
cannot be considered as an act of the witnesses,
since the omission of their signatures at the
bottom thereof negatives their participation.
(Cagro v. Cagro, et al., GRN L-5826, 29 April
1953)
The case involves the probate of the last will and
testament of Valente Z. Cruz. Of the three
instrumental witnesses thereto, one of them, Atty.
Angel H. Teves, Jr, is at the same time the Notary
Public before whom the will was supposed to have
been acknowledged.
Q: Can the will be allowed? Can the notary public
before the will was supposed to be acknowledged
also act as one of the instrumental witnesses?
A: The last will and testament in question was not
executed in accordance with law. The notary
public before whom the will was acknowledged
cannot be considered as the third instrumental
witness since he cannot acknowledge before
himself his having signed the will. Consequently, if
the third witness were the notary public himself, he
would have to avow assent, or admit his having
signed the will in front of himself.
To permit such a situation to obtain would be
sanctioning a sheer absurdity.
Furthermore, the function of a notary public is,
among others, to guard against any illegal or
immoral arrangements. That function would be
defeated if the notary public were one of the
attesting or instrumental witnesses. It would place
him in an inconsistent position and the very
purpose of the acknowledgment, which is to
minimize fraud, would be thwarted. (Cruz v.
Villasor, 54 SCRA 31)
Benoni Cabrera, one of the legatees named in the
will, sought his appointment as special
administrator of the testator's estate, and he was
so appointed by the probate court.
Thereafter, herein petitioners, claiming to be
nephews and nieces of the testator, instituted a
second petition for the settlement of the intestate
estate. The petition for intestate proceedings
consolidated and the probate proceeding were
consolidated
Petitioners asserted that the will in question is null
and void for the reason that its attestation clause
is fatally defective since it fails to specifically state
that the instrumental witnesses to the will
witnessed the testator signing the will in their
presence and that they also signed the will and all
the pages thereof in the presence of the testator
and of one another.
Q: Is such fact as argued by the petitioners, fatal
defect?
A: Yes, such is a fatal defect which renders the
will void. The attestation clause provides strong

CIVIL LAW NOTES
legal guaranties for the due execution of a will
and to insure the authenticity thereof. As it
appertains only to the witnesses and not to the
testator, it need be signed only by them. Where it
is left unsigned, it would result in the invalidation of
the will.
The absence of that statement required by law is a
fatal defect or imperfection which must necessarily
result in the disallowance of the will. The
aforestated defect in the attestation clause cannot
be characterized as merely involving the form of
the will or the language used therein which would
warrant the application of the substantial
compliance rule under Art. 809.
While it may be true that the attestation clause is
indeed subscribed at the end thereof and at the
left margin of each page by the three attesting
witnesses, it certainly cannot be conclusively
inferred therefrom that the said witnesses affixed
their respective signatures in the presence of the
testator and of each other since. The presence of
said signatures only establishes the fact that it was
indeed signed, but it does not prove that the
attesting witnesses did subscribe to the will in the
presence of the testator and of each other.
Attestation and subscription:
"Attestation" and "subscription" differ in
meaning. Attestation is the act of the senses
(mental act) while subscription is the act of the
hand (mechanical act). To attest a will is to know
that it was published as such, and to certify the
facts required to constitute an actual and legal
publication; but to subscribe a paper published as
a will is only to write on the same paper the names
of the witnesses, for the sole purpose of
identification.
Attestation consists in witnessing the testator's
execution of the will in order to see and take note
mentally that those things are done which the
statute requires for the execution of a will and that
the signature of the testator exists as a fact. On
the other hand, subscription is the signing of the
witnesses' names upon the same paper for the
purpose of identification of such paper as the will
which was executed by the testator.
As attesting involves a mental act, there would be
no means of ascertaining by a physical
examination of the will whether the witnesses had
indeed signed in the presence of the testator and
of each other. An attestation clause refers to that
part of an ordinary will whereby the attesting
witnesses certify that the instrument has been
executed before them and to the manner of the
execution of the same. It is a separate
memorandum or record of the facts surrounding
the conduct of execution and once signed by the
witnesses, it gives affirmation to the fact that
compliance with the essential formalities required
by law has been observed. It is made for the
purpose of preserving in a permanent form a
record of the fact that attended the execution of a
particular will, so that in case of failure of the
memory of the attesting witnesses, or other
casualty, such facts may still be proved. (Caneda
v. CA, GRN 103554, 28 May 1993)
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33
ADVISER:
Felicidad Yap died of heart failure in the UST
Hospital, leaving properties in Pulilan, Bulacan,
and in the City of Manila. Gan filed a petition for
the probate of a holographic will allegedly
executed by the deceased. The holographic will
itself, however, was not presented. Gan tried to
establish its contents and due execution through
the oral testimonies of witnesses who allegedly
seen the same.
Q: Can extrinsic evidence be adduced to establish
the contents and due execution of an allegedly lost
holographic will?
A: Authenticity and due execution is the dominant
requirement to be fulfilled when a notarial will is
submitted to the courts for allowance. For that
purpose the testimony of one of the subscribing
witnesses would be sufficient, if there is no
opposition. If there is, the three must testify, if
available. From the testimony of such witnesses,
the court may form its opinion as to the
genuineness and authenticity of the testament,
and the circumstances of its due execution.
Now, in the matter of holographic wills, no such
guaranties of truth and veracity are demanded,
since they need no witnesses; provided however,
that they are, "entirely written, dated, and signed
by the hand of the testator himself." The law, it is
reasonable to suppose, regards the document
itself as material proof of authenticity, and as its
own safeguard, since it could at any time, be
demonstrated to be-or not to be-in the hands of
the testator himself. "
The execution and the contents of a lost or
destroyed holographic will may not be proved by
the bare testimony of witnesses who have seen
and/or read such will. The only guarantee of
authenticity is the handwriting itself, which is
contained in the holographic will. The loss of the
holographic will entails the loss of the only medium
of proof. (Gan v. Yap, GRN L-12190, 30 August
1958)
Marcela Rodelas filed a petition for the probate of
holographic will of Ricardio B. Bonilla. The
oppositors moved to dismiss the petition for the
probate of the will. They argued that lost or
destroyed holographic wills cannot be proved by
secondary evidence, i.e. a photocopy thereof,
unlike ordinary wills.
The court dismissed the petition for the probate of
the will of Ricardo B. Bonilla on the ground that
once the original copy of the holographic will is
lost, a copy thereof cannot stand in lieu of the
original citing the case of Gan vs. Yap.
Q: Is the court correct in its ruling?
A: If the holographic will has been lost or
destroyed and no other copy is available, the
will cannot be probated because the best and
only evidence is the handwriting of the testator
in said will. It is necessary that there be a
comparison between sample handwritten
statements of the testator and the handwritten will.
But, a photostatic copy or xerox copy of the
holographic will may be allowed because
34
2007 Team Bar-Ops Civil Law Committee
comparison can be made with the standard
writings of the testator. In the case of Gan vs.
Yap, , the Court ruled "the execution and the
contents of a lost or destroyed holographic will
may not be proved by the bare testimony of
witnesses who have seen and/or read such will.
The will itself must be presented; otherwise, it
shall produce no effect. The law regards the
document itself as material proof of authenticity."
But, in Footnote 8 of said decision, it says that
"Perhaps it may be proved by a photographic or
photostatic copy. Even a mimeographed or carbon
copy; or by other similar means, if any, whereby
the authenticity of the handwriting of the deceased
may be exhibited and tested before the probate
court." (Rodelas v. Aranza, et al., GRN 58509,
07 December 1982)
KALAW, claiming to be the sole heir of his
deceased sister, Natividad filed a petition for the
probate of her holographic will.
The holographic Will, as first written, named
ROSA, a sister of the testatrix as her sole heir.
Hence, ROSA opposed probate alleging that the
holographic will contained alterations, corrections,
and insertions without the proper authentication by
the full signature of the testatrix as required by
Article 814 of the Civil Code.
Q: Which will should be probated, the first
unaltered will or the altered will not bearing the full
signature of the testatrix?
A: Neither. Ordinarily, when a number of erasures,
corrections, and interlineations made by the
testator in a holographic Will have not been noted
under his signature, the will is not thereby
invalidated as a whole, but at most only as
respects the particular words erased, corrected or
interlined.
However, when as in this case, the holographic
will in dispute had only one substantial provision,
which was altered by substituting the original heir
with another, but which alteration did not carry the
requisite of authentication by the full signature of
the testator, the effect must be that the entire will
is voided or revoked for the simple reason that
nothing remains in the will after that which could
remain valid.
But, to state that the will as first written should be
given efficacy is to disregard the seeming change
of mind of the testatrix. But that change of mind
can neither be given effect because she failed to
authenticate it in the manner required by law by
affixing her full signature. (Kalaw v. Hon. Relova,
etc., et al., GRN L40207, 28 September 1984)
Esteban Jr., died a bachelor, without descendants,
ascendants, brothers, sisters, nephews or nieces.
His only surviving relatives are: his maternal aunt,
Celedonia and Concordia, sister of his deceased
father, Esteban Sr. the surviving relatives of the
decedent, Celedonia and Concordia are now in
the tug-of-war as to who between them should
inherit the property left by the decedent. Celedonia
argued that the properties left by the decedent are
subject to reserve troncal because said properties
had come from her sister, Salustia.
University of Santo Tomas
Q: Are the decedent's properties were subject to
reserva troncal in favor of Celadonia, his relative
within the third degree on his mother's side from
whom he had inherited them;
A: No. The persons involved in reserva troncal
are:
1. The person obliged to reserve is the reservor
(reservista)-the ascendant who inherits by
operation of law property from his descendants.
2. The persons for whom the property is
reserved are the reservees (reservatarios)-
relatives within the third degree counted from
the descendant (propositus), and belonging to
the line from which the property came.
3. The propositus-the descendant who received
by gratuitous title and died without issue, making
his other ascendant inherit by operation of law."
Clearly, the property of the deceased, Esteban Jr.,
is not reservable property, for Esteban, Jr. was not
an ascendant, but the descendant of his mother,
Salustia from whom he inherited the properties in
question. Therefore, he did not hold his
inheritance subject to a reservation in favor of his
aunt, Celedonia, who is his relative within the third
degree on his mother's side. The reserva troncal
applies to properties inherited by an ascendant
from a descendant who inherited it from another
ascendant or a brother or sister. It does not apply
to property inherited by a descendant from his
ascendant, the reverse of the situation covered by
Article 891. (Solivio v. CA, GRN 83484, 12
February 1990)
Marcelina applied for registration and issuance of
title to two parcels of land.
Marcelina was married to Victoriano. In this
marriage they had a son named Pedro, who at his
father's death inherited the two said parcels. Pedro
died unmarried and without issue. Upon Pedro’s
death, the two parcels of land passed through
inheritance to his mother, Marcelina. Hence, the
hereditary title whereupon is based the application
for registration of her ownership.
Two legitimate brothers of Victoriano opposed the
registration, claiming one of two things: Either that
the registration be denied, or that if granted to her,
the right reserved by law to the opponents be
recorded in the registration of each parcel.
The registration was denied because the trial court
held that the parcels of land in question partake of
the nature of property required by law to be
reserved and that in such a case application could
only be presented jointly in the names of the
mother and the said two uncles of Pedro Sablan.
Q: Are the questioned properties subject to
reserve troncal?
A: Marcelina, ascendant of Pedro, inherited from
him these two parcels of land which he had
acquired without a valuable consideration-that is,
by inheritance from another ascendant, his father
Victoriano. Having acquired them by operation of
law, she is obligated to reserve them intact for the
claimants, who are uncles or relatives within the
third degree and belong to the line from which the
lands come from. The trial court's ruling that they
partake of the nature of property required by law to

CIVIL LAW NOTES
be reserved is therefore in accordance with the
law.
If Pedro had instituted his mother in a will as
the universal heiress of his property, all he left at
death would not be required by law to be reserved,
but only what he would have perforce left her as
the legal portion of a legitimate ascendant.
In such case only the half constituting the legal
portion would be required by law to be reserved,
because it is what by operation of law would fall to
the mother from her son's inheritance; the other
half at free disposal would not have to be
reserved. (Edroso v. Sablan, GRN 6878, 13
September 1913)
Apolonio II married the first time Antonia. During
the marriage he begot nine children. When
Antonia died, he married the second time Severina
with whom he had two children, Mercedes and
Apolonio III. Apolonio II died who was survived by
his second wife Severina and the ten children and
his eleventh son, Apolonio III.
Apolonio executed a will instituting as his
universal heirs his ten children, the posthumos
ApoIonio III and his widow Severina; that he
declared, in one of the paragraphs of said will, all
his property should be divided among all of his
children of both marriages.
Apolonio III, his posthumous son, inherited
several properties. Apolonio III died in 1891. His
mother, Severina, succeeded to all his property.
Severina died leaving a will instituting as her
universal heiress her only living daughter,
Mercedes. As such heir, Mercedes took
possession of all the property left at the death of
her mother and among same is included the
property which Severina inherited from her
deceased son, as reservable property.
Q: Are the properties inherited by Severina from
his son Apolonio III subject to reserve troncal?
A: Yes, the subject properties are subject to
reserve troncal. Apolonio III, acquired the property,
by a lucrative title or by inheritance from his father,
Apolonio II. Although said property was inherited
by his mother, Severina, nevertheless, she was
duty bound to reserve the property thus acquired
for the benefit of the relatives, within the third
degree, of the line from which such property came.
Any ascendant who inherits from his descendant
any property, while there are living, within the third
degree, relatives of the latter, is nothing but a life
usufructuary or a fiduciary of the reservable
property received. He is, however, the legitimate
owner of his own property which is not reservable
property and which constitutes his legitime. But if,
afterwards, all of the relatives, within the third
degree, of the descendant (from whom came the
reservable property) die or disappear, the said
property becomes free property, by operation of
law, and is thereby converted into the legitime of
the ascendant heir who can transmit it at his death
to his legitimate successors or testamentary heirs.
This property has now lost its nature of reservable
property, pertaining thereto at the death of the
relatives, called reservatarios, who belonged
within the third degree to the line from which such
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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35
ADVISER:
property came. (Florentino v. Florentino, GRN
14856, 15 November 1919)
Right of representation in Reserva Troncal:
There is right of representation on the part of
reservatarios who are within the third degree, as in
the case of nephews of the deceased person from
whom the reservable property came. These
reservatarios have the right to represent their
ascendants (fathers and mothers) who are the
brothers of the said deceased person and relatives
within the third degree.
There are then seven "reservatarios" who are
entitled to the reservable property left at the death
of Apolonio II; to wit, his three children of his first
marriage; his other three children (predeceased),
who are represented by their own twelve children
respectively; and Mercedes, his daughter by a
second marriage. All of the plaintiffs are the
relatives of the deceased posthumous son,
Apolonio III, within the third degree (four of whom
being his half-brothers and the remaining twelve
being his nephews as they are the children of his
three half-brothers).
As the first four are his relatives within the
third degree in their own right and the other twelve
are such by representation, all of them are
indisputably entitled as reservatarios to the
property which came from the common ancestor.
Q: Was the disposition in a will of the reservable
properties extinguished the reserve troncal?
A: No. The reservable property, left in a will by
Severina to her only daughter Mercedes, does not
form part of the inheritance left by her death nor of
the legitime of the heiress Mercedes. Just
because she has a forced heiress, with a right to
her inheritance, does not relieve Severina of her
obligation to reserve the property which she
received from her deceased son, nor did same
lose the character of reservable property, held
before the reservatarios received same.
(Florentino v. Florentino, GRN 14856, 15
November 1919)
The subject lot originally belonged to Saturnino.
With his first wife, Teresa, he had four children,
while with his second wife, Andrea, he had an only
son named Francisco. The properties left by
Saturnino upon his death were left to his children.
OCT was issued in the name of Francisco.
Because Francisco was a minor at the time, his
mother administered the property for him, declared
it in her name for taxation purposes. Francisco
died at the age of 20, single and without any
descendant. The said property was inherited by
her mother, who thereafter, sold the property in
question to Constancio Sienes.
When Constancio Sienes demanded from
Paulina Yaeso, the surrender OCT which was in
their possession-the latter refused.
Thereafter, Cipriana and Paulina Yaeso, the
surviving half-sisters of Francisco, and who as
such had declared the property in their name,
executed a deed of sale in favor of the spouses
Fidel Esparcia and Paulina Sienes who, in turn,
declared it in their name for tax purposes and
36
2007 Team Bar-Ops Civil Law Committee
thereafter secured the issuance in their name of
TCT.
Q: Is the land in question subject to reserve
troncal?
A: The land in question was reservable property.
Francisco inherited it by operation of law from his
father Saturnino, and upon Francisco's death,
unmarried and without descendants, it was
inherited, in turn, by his mother, Andrea. The latter
was, therefore, under obligation to reserve it for
the benefit of relatives within the third degree
belonging to the line from which said property
came, if any survived her.
The reserva creates two resolutory
conditions, namely,
(1) the death of the ascendant obliged to reserve
and
(2) the survival, at the time of his death, of
relatives within the third degree belonging to the
line from which the property came
Q: What is the status the sale of the reserved
property made by Andrea?
A: The sale made by Andrea in favor of
Constantino was, therefore, subject to the
condition that the vendees would definitely acquire
ownership, by virtue of the alienation, only if the
vendor died without being survived by any person
entitled to the reservable property. Inasmuch as
when Andrea died, Cipriana, half-sister of
Saturnino was still alive, the conclusion becomes
inescapable that the previous sale made by
Andrea in favor of Constantino became of no legal
effect and the reservable property subject matter
thereof passed in exclusive ownership to Cipriana.
(Sienes, et al. v. Esparcia, et al., GRN L-12957,
24 March 1961)
Q: Can the reservista convey the reservable
properties by will or mortis causa to the reservees
within the third degree (her sixteen grandchildren)
to the exclusion of the reservees in the second
degree, her three daughters and three sons.
A: The reservista could not convey in her
holographic will to her sixteen grandchildren the
reservable properties which she had inherited from
her daughter Filomena because the reservable
properties did not form part of her estate. The
reservista cannot make a disposition mortis causa
of the reservable properties as long as the
reservees survived the reservista.
The reservees inherit the reservable
properties from the propositus, not from the
reservor. Article 891 clearly indicates that the
reservable properties should be inherited by all the
nearest relatives within the third degree from the
prepositus who in this case are the six children of
the reservista. She could not select the reserves to
whom the reservable property should be given and
deprive the other reservees of their share therein.
To allow the reservor in this case to make a
testamentary disposition of the reservable
properties in favor of the reservees in the third
degree and, consequently, to ignore the reservees
in the second degree would be a glaring violation
of article 891. That testamentary disposition
cannot be allowed.
University of Santo Tomas
The disposition of the said properties should be
made in accordance with Article 891 or the rule on
reserva troncal and not in accordance with the
reservor's holographic will. The said properties did
not form part of the reservista’s estate. (Gonzales
v. CFI of Manila (Br. V), et al., GRN L-34395, 19
May 1981)
Maria Cano applied for the registration of a parcel
of land in her name and which was granted,
subject to reserva troncal in favor of Eustaquia.
Upon the death of Maria, Eustaquia filed a motion
for the cancellation of the OCT and the issuance
of a new one in her name. The motion was
opposed by Jose and Teotimo, sons of Maria, who
contended that the application and operation of
the reserva troncal should be ventilated in an
ordinary contentious proceeding, and that the
Registration Court did not have jurisdiction to grant
the motion.
The lower court granted the petition for the
issuance of a new certificate, for the reason that
the death of the reservista vested the ownership of
the property in the petitioner as the sole
reservatario.
The oppositors, heirs of the reservista Maria
Cano, duly appealed from the order, insisting that
the ownership of the reservatario can not be
decreed in a mere proceeding but requires a
judicial administration proceedings, wherein the
rights of appellee, as the reservatario entitled to
the reservable property, are to be declared.
Q: Is it necessary in order for the reservatario to
acquire ownership of the reserved property that
there be further proceedings declaring him as the
owner of the reserved property.
A: No. Upon the death of the reservista, the
reservatario nearest to the propositus becomes,
automatically and by operation of law, the owner
of the reservable property. The reserved property
is no part of the estate of the reservista, and does
not even answer for the debts of the latter. Hence,
its acquisition by the reservatario may be entered
in the property records without necessity of estate
proceedings, since the basic requisites therefor
appear on record. It is equally well settled that the
reservable property can not be transmitted by a
reservista to her or his own successors mortis
causa, so long as a reservatorio within the third
degree from the propositus and belonging to the
line whence the property came, is in existence
when the reservista dies.
Of course, where the registration decree merely
specifies the reservable character of the property,
without determining the identity of the reservatario
or where several reservatarios dispute the
property among themselves, further proceedings
would be unavoidable. But this is not the case.
The rights of the reservataria Eustaquia have been
expressly recognized, and it is nowhere claimed
that there are other reservatarios of equal or
nearer degree. (Cano v. Director of Lands, et
al., GRN L-10701 16 January 1959)
Maria died leaving properties. She left a will. The
substantial portion of the estate was left to
Josefina, the testatrix’s niece.

CIVIL LAW NOTES
A petition for the probate of the will was filed.
Ana, claiming an acknowledged natural child of
Jose, a deceased brother of the testatrix, filed an
opposition to the probate of the will. In other
words, Ana wants the will to be disallowed so that
the estate would be distributed in accordance to
intestate succession.
Q: Is Ana, a legal heir of the testatrix considering
that she claims to be an acknowledged natural
child of the testatrix’s brother, in the event that that
the will is denied probate?
A: It is true that Ana claims to be an
acknowledged natural child of Jose, a deceased
brother of the deceased but such claim cannot
give her any comfort for, even if it be true, the law
does not give her any right to succeed to the
estate of Maria. And this is so because being an
illegitimate child she is prohibited by law from
succeeding to the legitimate relatives of her
natural father. Article 992 provides that “An
illegitimate child has no right to inherit ab intestato
from the legitimate children and relatives of his
father or mother.” (Vicente B. Teotico v. Ana del
Val, G.R. No. L-18753, 26 March 1965)
Teodoro died at the age of 77. His will was
probated. Teodoro had no forced heirs. At the time
of his death, his nearest relatives were (1) his half
brother, Luis (2) his half sister, Paz (3) Amelia,
Jose and Ramon, the children of his half brother,
Pablo and (4) Juana, the daughter of his half
brother Jose. Juana died in thereafter. Tomas filed
an action for the recovery of the supposed
intestate share of his mother, Juana in the estate
of Teodoro.
Q: Has Tomas a cause of action to recover his
mother's supposed intestate share in Teodoro’s
estate?
A: To answer that question, it is necessary to
ascertain Teodoro’s filiation. Teodoro was an
acknowledged natural child or was illegitimate and
since Juanita was the legitimate child of Jose,
himself a legitimate child, Tomas has no cause of
action for the recovery of the supposed hereditary
share of his mother, Juana, as a legal heir, in
Teodoro's estate. Juana was not a legal heir of
Teodoro because there is no reciprocal
succession between legitimate and illegitimate
relatives. Under Article 992, “An illegitimate child
has no right to inherit ab intestato from the
legitimate children and relatives of his father or
mother; nor shall such children or relatives inherit
in the some manner from the illegitimate child.”
The iron-bar rule is based on the theory that
the illegitimate child is disgracefully looked upon
by the legitimate family while the legitimate family
is, in turn, hated by the illegitimate child. The law
does not recognize the blood tie and seeks to
avoid further grounds of resentment
Following the rule in Article 992, it was held that
the legitimate relatives of the mother cannot
succeed her illegitimate child. By reason of that
same rule, the natural child cannot represent his
natural father in the succession to the estate of the
legitimate grandparent. The natural daughter
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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37
ADVISER:
cannot succeed to the estate of her deceased
uncle, a legitimate brother of her natural mother.
Judgment affirmed. (Corpus v. Corpus, GRN L-
22469, 23 October 1978)
Francisca died intestate, was survived by two)
daughters, Maria and Silvestra and a grandson,
Sotero. Sotero died in 1944, while Silvestra died in
1949 without any issue.
In 1964, Cresenciano, claiming to be the son
of the late Sotero, filed a complaint for ownership
of properties, sum of money and accounting
seeking judgment to be declared one of the lawful
heirs of the deceased Francisca.
Q: Can an illegitimate child inherit from the
legitimate relatives of his parents?
A: No. Even if it is true that Cresenciano is the
child of Sotero, still he cannot, by right of
representation, claim a share of the estate left by
the deceased Francisca considering that he was
born outside wedlock. At most, Cresenciano would
be an illegitimate child who has no right to inherit
ab intestato from the legitimate children and
relatives of his father, like the deceased Francisca.
(Article 992) (Leonardo v. CA, et al., GRN 51263,
28 February 1983)
Felisa is a niece of Simona. Pablo was the only
legitimate son of his parents Pascual and Simona.
Pablo, at the time of his death was survived by his
mother Simona and his six minor natural children.
Q: Who are the legal heirs of Simona -her niece
Felisa or her grandchildren (the natural children of
Pablo)?
A: Under Art. 992, an illegitimate child has no right
to inherit ab inrestate from the legitimate children
and relatives of his father or mother; nor shall such
children or relatives inherit in the same manner
from the illegitimate child.
Article 992 provides a barrier or iron curtain in
that it prohibits absolutely a succession ab
intestato between the illegitimate child and the
legitimate children and relatives of the father or
mother of said legitimate child. They may have a
natural tie of blood, but this is not recognized by
law for the purposes of Art. 992.
Between the legitimate family and the
illegitimate family there is presumed to be an
intervening antagonism and incompatibility. The
illegitimate child is disgracefully looked down upon
by the legitimate family; the family is in turn, hated
by the illegitimate child; the latter considers the
privileged condition of the former, and the
resources of which it is thereby deprived; the
former, in turn, sees in the illegitimate child
nothing but the product of sin, palpable evidence
of a blemish broken in life; the law does no more
than recognize this truth, by avoiding further
grounds of resentment.
Thus, the natural children of Pablo cannot
represent their father Pablo in the succession of
the latter to the intestate estate of his legitimate
mother Simona because of the barrier provided for
under Art. 992. (Diaz v. IAC, GRN L-66574, 17
June 1987)
38
2007 Team Bar-Ops Civil Law Committee

University of Santo Tomas


CIVIL LAW NOTES
Book IV
Obligations and Contracts
GSIS approved the application of Agcaoili for the
purchase of a house and lot in the GSIS Housing
Project; it is subject to the condition that he should
immediately occupy the house. But he could not
because the house was uninhabitable. He paid the
first installment and other fees but refused to make
further payment until GSIS had made the house
habitable. GSIS refused and opted to cancel the
award and demand the vacation by Agcaoili of the
premises.
Q: Can GSIS cancel the contract?
A: No. There was a perfected contract of sale
between the parties; there had been a meeting of
the minds upon the purchase by Agcaoili of a
determinate house and lot at a definite price and
from that moment, the parties acquired the right to
reciprocally demand performance.
Agcaoili lost no time in occupying the house.
Because the house was nothing more than a shell,
in such a state of incompleteness that civilized
occupation was not possible, Agcaoili left and ask
a homeless friend to stay in the premises.
Based on their contact, it can only be understood
as imposing on GSIS an obligation to deliver to
Agcaoili a reasonably habitable dwelling in return
for his undertaking to pay the stipulated price.
Since GSIS did not fulfill that obligation, and was
not willing to put the house in habitable state, it
cannot invoke Agcaoili's suspension of payment of
amortizations as cause to cancel the contract
between them. “In reciprocal obligations, neither
party incurs in delay if the other does not comply
or is not ready to comply in a proper manner with
what is incumbent upon him.” (Agcaoili v. GSIS,
165 SCRA 1)
A barge, owned by the Luzon Stevedoring was
being towed down the Pasig river by tugboats also
belonging to the corporation, when the barge
rammed against one of the wooden piles of the
Nagtahan bailey bridge, it smashed the posts and
caused the bridge to tilt. The river, at that time was
swollen and there is a current swift, on account of
the heavy downpour of Manila and the
surrounding provinces.
Q: Is the incident a fortuitous event?
A: No. Considering that the Nagtahan bridge was
an immovable and stationary object, it is
undeniable that the unusual event that the barge,
exclusively controlled by the corporation, rammed
the bridge supports raises a presumption of its
negligence. For in the ordinary course of events,
such a thing does not happen if proper care is
used. Caso fortuito or force majeure are events
that could not be foreseen, or which, though
foreseen, were inevitable (Art. 1174). It is,
therefore, not enough that the event should not
have been foreseen or anticipated, as is
commonly believed, but it must be one impossible
to foresee or to avoid. The mere difficulty to
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39
ADVISER:
foresee the happening is not impossibility to
foresee the same. The very measures adopted by
it prove that the possibility of danger was not only
foreseeable, but actually foreseen, and was not a
fortuitous event. (Republic v. Luzon Stevedoring
Corporation, 21 SCRA 279)
Philippine Bar Association decided to construct an
office building. The construction was undertaken
by the United Construction, Inc. and the plans and
specifications for the building were prepared by
Juan F. Nakpil & Sons. Thereafter, an unusually
strong earthquake hit Manila and its environs and
the building sustained major damaged. Then, two
more earthquakes caused further damage to the
property. Thus, it was demolished.
Q: Does an act of God which caused the failure of
the building exempt the parties from liability?
A: No. There is no dispute that an earthquake is a
fortuitous event or an act of God. To exempt the
obligor from liability under Article 1174 of the Civil
Code, for a breach of an obligation due to an act
of God, the following must concur: (a) the cause of
the breach of the obligation must be independent
of the will of the debtor; (b) the event must be
either unforeseeable or unavoidable; (c) the event
must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner;
and (d) the debtor must be free from any
participation in, or aggravation of the injury to the
creditor.
The principle embodied in the act of God doctrine
strictly requires that the act must be one
occasioned exclusively by the violence of nature
and all human agencies are to be excluded from
creating or entering into the cause of the mischief.
Thus, to be exempt from liability for loss because
of an act of God, he must be free from any
previous negligence or misconduct by which that
loss or damage may have been occasioned. The
negligence United Construction Co., Inc. and the
Nakpils was established. United Construction Co.,
Inc. was found to have made substantial
deviations from the plans and specifications and to
have failed to observe the requisite workmanship
in the construction as well as to exercise the
requisite degree of supervision; while the Nakpils
were found to have inadequacies or defects in the
plans and specifications prepared by them. As
correctly assessed by the lower courts, the defects
in the construction and in the plans and
specifications were the proximate causes that
rendered the PBA building unable to withstand the
earthquake of. For this reason they cannot claim
exemption from liability. (Nakpil&Sons v. CA, 144
SCRA 596)
Arwood and Consunji, as owner and contractor,
respectively, entered into an agreement for the
construction of Arwood's Westwood
Condominium. Despite the completion of the
condominium project, the amount of P962,434.78
remained unpaid by Arwood. Repeated demands
were made but it did not pay.
Q: Is the imposition of 2% interest valid?
40
2007 Team Bar-Ops Civil Law Committee
A: Yes. In their agreement, it provided that
Consunji has two options in case of delay in
monthly payment: a) suspend work on the project
until payment is remitted by the owner or b)
continue the work but the owner shall be required
to pay interest at a rate of 2% per month or a
fraction thereof. Evidently, Consunji chose the
latter option, as the condominium project was in
fact already completed.
The delay of Arwood is undisputed. Since the
agreement stands as the law between the parties,
it cannot ignore the existence of such provision
providing for a penalty for every month's delay.
Arwood should pay the 2% interest every month
for the delay. Moreover, even assuming that there
was a default of stipulation or agreement on
interest, Consunji may still recover on the basis of
the general provision of law, which is Article 2209
of the Civil Code. (Arwood Industries, Inc. v.
D.M. Consunji, Inc., G.R. No. 142277, 11
December 2002)
Franco and Medel obtained loans from Gonzales
in various dates with a 6% interest per month in
which Gonzales retain a portion of the loan as
advance payment of the interest for 1 month. On
the maturity of the promissory notes issued by
Franco and Medel, they failed to pay. Then, they
consolidated all their previous unpaid loans and
sought from Gonzales another loan. They
executed a promissory note which provides that
the interest rate is 5.5% per month. Upon maturity,
again, they failed to pay.
Q: Is the stipulated rate of interest at 5.5% per
month usurious?
A: No. The rate cannot be considered as
"usurious" because Circular No. 905 of the Central
Bank has expressly removed the interest ceilings
prescribed by the Usury Law and that the Usury
Law is now "legally inexistent". Nevertheless, the
interest at 5.5% per month, or 66% per annum is
iniquitous or unconscionable, and, hence, contrary
to morals, if not against the law. The stipulation is
void. The courts shall reduce equitably liquidated
damages, whether intended as an indemnity or a
penalty if they are iniquitous or unconscionable.
Under the circumstances, interest at 12% per
annum, and an additional 1% a month penalty
charge as liquidated damages may be more
reasonable. (Medel v. CA, G.R. No. 131622, 27
November 1998)
Q: What should be applied, the prevailing rate of
dollar to peso at the time the obligation was
incurred or that prevailing at the time of its
payment?
A: RA 529, Sec. 1. provides that an agreement to
pay an obligation in a currency other than
Philippine currency is null and void as contrary to
public policy. It is subject to exceptions: (a)
transactions where the funds involved are the
proceeds of loans or investments made directly or
indirectly through bona fide intermediaries or
agents, by foreign governments, their agencies
and instrumentalities and international financial
and banking institutions so long as the funds are
identifiable, as having emanated from the sources
enumerated above; (b) transactions affecting high
University of Santo Tomas
priority economic projects for agricultural,
industrial and power development as may be
determined by the National Economic Council
which are financed by or through foreign funds; (c)
foreign exchange transactions entered into
between banks or between banks and individuals
or juridical persons; (d) import-export and other
international banking, financial investment and
industrial transactions
With regard to obligations incurred prior to the
effectivity of RA 529, it is specifically provided that
the same shall be discharged in Philippine
currency measured at the prevailing of exchange
at the time the obligation was incurred except in
case of a loan made in a foreign currency
stipulated to be payable in the same currency in
which case the rate of exchange prevailing at the
stipulated date of payment. The obligation was
incurred after the enactment of RA529, thus, the
rate prevailing at the time of payment must be
applied. (San Buenaventura v. CA, G.R. No. L-
43830, 22 January 1990)
Cirer and Hill, the owners of parcel of land
donated it to the municipality of Tarlac, under
certain conditions that a public school be erected
and a public park be made within 6 months from
the date of the ratification of the donation by the
parties as specified in the public document. The
donation was accepted by the municipal president.
It was later registered in the name of the donee.
However, Cirer and Hill sold the land to Parks.
Then the municipality of Tarlac transferred the
parcel to the Province of Tarlac which applied for
and obtained the registration. Parks, alleging that
the conditions of the donation had not been
complied with and invoking the sale of the land
made by Cirer and Hill in his favor, brought an
action against the Province of Tarlac.
Q: Is the condition imposed suspensive?
A: No. The characteristic of a condition precedent
is that the acquisition of the right is not effected
while said condition is not complied with or is not
deemed complied with. Meanwhile nothing is
acquired and there is only an expectancy of right.
Consequently, when a condition is imposed, the
compliance of which cannot be effected except
when the right is deemed acquired, such condition
cannot be a condition precedent.The condition
imposed could not be complied with except after
giving effect to the donation. The donee could not
do any work on the donated land if the donation
had not really been effected, because it would be
an invasion of another's title, for the land would
have continued to belong to the donor so long as
the condition imposed was not complied with.
(Parks v. Province of Tarlac, G.R. No. L-24190,
13 July 1926)
The late Don Lopez, Sr., who was then a member
of the Board of Trustees of CPU, executed a deed
of donation in favor of the latter of a parcel of land
with the following conditions:
1. The land described shall be utilized by the
CPU exclusively for the establishment and use
of a medical college with all its buildings as part
of the curriculum

CIVIL LAW NOTES
2. The said college shall not sell, transfer or
convey to any third party nor in any way
encumber said land
3. The said land shall be called "RAMON
LOPEZ CAMPUS", and the said college shall
be under obligation to erect a cornerstone
bearing that name. Any net income from the
land or any of its parks shall be put in a fund to
be known as the "RAMON LOPEZ CAMPUS
FUND" to be used for improvements of said
campus and erection of a building thereon.
However, the heirs of Don Lopez, Sr., filed an
action for annulment of the donation,
reconveyance and damages against CPU alleging
that CPU had not complied with the conditions of
the donation.
Q: Was the donation onerous? Are the conditions
imposed resolutory or suspensive?
A: The donation was onerous, one executed for a
valuable consideration which is considered the
equivalent of the donation itself. When Don Lopez
donated the land to CPU, he imposed an
obligation to establish a medical college, thus, the
donation must be for an onerous consideration.
Under Art. 1181 of the Civil Code, on conditional
obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired,
shall depend upon the happening of the event
which constitutes the condition. Thus, when a
person donates land to another on the condition
that the latter would build upon the land a school,
the condition imposed was not a condition
precedent or a suspensive condition but a
resolutory one. It is not correct to say that the
schoolhouse had to be constructed before the
donation became effective, that is, before the
donee could become the owner of the land,
otherwise, it would be invading the property rights
of the donor. The donation had to be valid before
the fulfillment of the condition. If there was no
fulfillment or compliance with the condition, the
donation may now be revoked and all rights which
the donee may have acquired under it shall be
deemed lost and extinguished. (Central
Philippine University v. CA, G.R. No. 112127,
17 July 1995)
Tiro is a holder of an ordinary timber license
issued by the Bureau of Forestry. He executed a
Deed of Assignment in favor of the Javiers. At the
time the said deed of assignment was executed,
Tiro had a pending application, for an additional
forest concession. Hence, they entered into
another agreement.
Afterwards, the Javiers, now acting as timber
license holders by virtue of the deed of
assignment entered into a Forest Consolidation
Agreement with other ordinary timber license
holders. For failure of the Javiers to pay the
balance due under the two deeds of assignment,
Tiro filed an action against them.
Q: Are the deeds of assignment null and void, for
total absence of consideration and non-fulfillment
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
41
ADVISER:
of the conditions? Is the condition imposed in the
second agreement resolutory or suspensive?
A: The contemporaneous and subsequent acts of
Tiro and the Javiers reveal that the cause stated in
the first deed of assignment is false. It is settled
that the previous and simultaneous and
subsequent acts of the parties are properly
cognizable indicia of their true intention. Where the
parties to a contract have given it a practical
construction by their conduct as by acts in partial
performance, such construction may be
considered by the court in construing the contract,
determining its meaning and ascertaining the
mutual intention of the parties at the time of
contracting.
The first deed of assignment of is a relatively
simulated contract which states a false cause or
consideration, or one where the parties conceal
their true agreement. A contract with a false
consideration is not null and void per se. Under
Article 1346 of the Civil Code, a relatively
simulated contract, when it does not prejudice a
third person and is not intended for any purpose
contrary to law, morals, good customs, public
order or public policy binds the parties to their real
agreement.
As to the second agreement, the condition
imposed is suspensive. The Javiers cannot be
held liable thereon. The efficacy of said deed of
assignment is subject to the condition that the
application of Tiro for an additional area for forest
concession be approved by the Bureau of
Forestry. Since Tiro did not obtain that approval,
said deed produces no effect. Moreover, under the
second paragraph of Article 1461 of the Civil
Code, the efficacy of the sale of a mere hope or
expectancy is deemed subject to the condition that
the thing will come into existence. Since Tiro never
acquired any right over the additional area, the
agreement executed therefor, which had for its
object the transfer of said right to the Javiers,
never became effective or enforceable. (Javier v.
CA, G.R. No. L-48194, 15 March 1990)
The Alanos executed a document in favor of
Mariño the following tenor:
1. We will pay to Da. Marcela Mariño the
indebtedness incurred in favor of that lady by our
testator;
2. To secure the payment of this debt we
mortgage to her the house and lot bequeathed to
us by the deceased;
3. In case of insolvency on our part, we cede
by virtue of these presents the said house and lot
to her; and if the said property upon appraisal at
the time of the maturity of this obligation should
not be of sufficient value to cover the total amount
of this indebtedness, I, Anastasio Alano, also
mortgage to the said lady my four parcels of land,
to secure the balance, if any.
No part of the interest or of the principal due upon
this undertaking has been paid.
Q: Are the defendants solidarily or jointly and
severally liable?
42
2007 Team Bar-Ops Civil Law Committee
A: One of the effects of the rule established by the
code that the debt is to be regarded as "divided
into as many parts as there are debtors" is that
"the interruption of prescription by the claim of a
creditor addressed to a single debtor or by an
acknowledgment made by one of the debtors in
favor of one or more of the creditors is not to be
understood as prejudicial to or in favor of the other
debtors or creditors. The obligation appears to be
one, when as a matter of fact it is an aggregate of
as many separate and independent obligations as
there are creditors and debtors. Each creditor
cannot demand more than his part; each debtor
cannot be required to pay more than his share.
Prescription, novation, merger, and any other
cause of modification or extinction does not
extinguish or modify the obligation except with
respect to the creditor or debtor affected, without
extending its operation to any other part of the
debt or of the credit. The obligation is, in a word,
pro rata, or in partes viriles. (Agoncillo v. Javier,
38 SCRA 431)
Adamos and Feria purchased two lots from
Porciuncula. Sometime thereafter, the successors-
in-interest of the latter filed for annulment of the
sale. In the meantime, during the pendency of the
above-mentioned case, Adamos and Feria sold to
Ayson Simon. Due to the failure of Adamos and
Feria to comply with their commitment to have the
subdivision plan of the lots approved and to deliver
the titles and possession to Ayson Simson, she
filed a suit for specific performance.
However, since execution of the order was
rendered impossible because of the judgment
which earlier declared the sale of the lots in
question by Porciuncula to be null and void, Ayson
Simson filed, another suit for rescission of the sale
with damages.
Q: Are actions for specifc performance and
rescission alternative remedies and not
accumulative?
A: The rule that the injured party can only choose
between fulfillment and rescission of the
obligation, and cannot have both, applies when
the obligation is possible of fulfillment. If, as in this
case, the fulfillment has become impossible,
Article 1191 allows the injured party to seek
rescission even after he has chosen fulfillment.
(Ayson-Simon v. Adamos, G.R. No. L-39378, 28
August 1984)
De Luna donated a lot to Luzonian Colleges. The
donation, embodied in a Deed of Donation
Intervivos was subject to certain terms and
conditions and provided for the automatic
reversion to the donor of the donated property in
case of violation or non-compliance. The
foundation accepted the donation subject to all the
terms and conditions stated in the donation.
Q: Is judicial intervention necessary for rescinding
a contract?
A: No. It is the finding of the trial court that the
donation subject of this case is one with an
onerous cause. Under the old Civil Code, it is a
settled rule that donations with an onerous cause
University of Santo Tomas
are governed not by the law on donations but by
the rules on contracts.
Under Article 1306 of the NCC, the parties to a
contract have the right to establish such
stipulations, clauses, terms and conditions as they
may deem convenient, provided they are not
contrary to law, morals, good customs, public
order or public policy. The validity of the stipulation
in the contract providing for the automatic
reversion of the donated property to the donor
upon non-compliance cannot be doubted. It is in
the nature of an agreement granting a party the
right to rescind a contract unilaterally in case of
breach, without need of going to court. Upon the
happening of the resolutory condition of non-
compliance with the conditions of the contract, the
donation is automatically revoked without need of
a judicial declaration to that effect. (De Luna v.
Abrigo, G.R. No. L-57455, 18 January 1990)
Villamor used to borrow money from Borromeo.
On one occasion, the Villamor borrowed a large
amount from the Borromeo, for which he
mortgaged his land and house. The deed of
mortgage cannot be registered to the due to
improper forms, consequently he pressed Villamor
for settlement. The latter instead offered to
execute a document promising to pay his debt
even after 10 years as soon as he is able. Villamor
futher stipulates that he waives his right to
prescription established by law.
Q: Is the stipulation to pay after the lapse of 10
years a waiver of prescription?
A: The terms of the contract are not clear on the
period of redemption. But the intent of the parties
thereto is the law between them and should be
enforced. (Borromeo v. CA, G.R. No. L-22962,
28 September 1972)
De Leon is doing business under the name of
Mark Industrial Sales, he sold and delivered to
Silahis various items of merchandise. Allegedly
due to Silahis's failure to pay its account upon
maturity despite repeated demands, De Leon filed
a complaint for the collection of the said accounts.
Silahis presented as affirmative defense that a
debit memo for P 22,200.00 as unrealized profit
for a supposed commission that Silahis should
have received from De Leon for the sale of
sprockets made directly to Dole Philippines.
Q: Was there a legal compensation?
A: When all the requisites mentioned in Art. 1279
of the Civil Code are present, compensation takes
effect by operation of law, even without the
consent or knowledge of the creditors and debtors.
Article 1279 requires, among others, that in order
that legal compensation shall take place, "the two
debts be due" and "they be liquidated and
demandable." Compensation is not proper where
the claim of the person asserting the set-off
against the other is not clear nor liquidated;
compensation cannot extend to unliquidated,
disputed claim existing from breach of contract.
Silahis admits the validity of its outstanding
accounts with De Leon. But whether De Leon is
liable to pay Silahis a commission on the subject
sale to Dole is disputed. This circumstance

CIVIL LAW NOTES
prevents legal compensation from taking place.
(Silahis Marketing Corporation v. IAC, G. R. No.
L-74027, 07 December 1989)
Atty. Laquihon, in behalf of Pacweld filed a
pleading addressed to MPCC entitled motion to
direct payment of attorney's fee”, invoking a
decision wherein MPCC was adjudged to pay
Pacweld the sum of P10,000.00 as attorney's fees.
MPCC filed an opposition stating that the said
amount is set-off by a like sum of P10,000.00,
collectible in its favor from Pacweld also by way of
attorney's fees which MPCC recovered from the
same CFI of Manila in another civil case.
Q: Was there legal compensation?
A: MPCC and Pacweld were creditors and debtors
of each other, their debts to each other consisting
in final and executory judgments of the CFI in two
separate cases. The two obligations, therefore,
respectively offset each other, compensation
having taken effect by operation of law and
extinguished both debts to the concurrent amount
of P10,000.00, pursuant to the provisions of Arts.
1278, 1279 and 1290 of the Civil Code, since all
the requisites provided in Art. 1279 of the said
Code for automatic compensation "even though
the creditors and debtors are not aware of the
compensation" were present. (Mindanao
Portland Cement Corporation v. CA, G.R. No.
L-62169, 28 February 1983)
Echevarria, as legal representative of the firm,
"Viuda e Hijos de F. Suarez," filed an action
against Zapanta for the purpose of recovering a
sum of money. After trial, the court rendered a
judgment against Zapanta. Then, they entered into
an agreement or contract for the payment of said
sum. However, Zapanta failed to punctually
comply with the provisions of the agreement.
Q: Was there novation?
A: A final judgment is one of the most solemn
obligations incurred by parties known to the law.
And in Article 1156 of the Civil Code, it provides
the method by which all civil obligations may be
extinguished. One of the methods is by novation.
In order, however, that an obligation shall be
extinguished by novation, the law requires that the
novation or extinguishment shall be expressly
declared or that the old and new obligations shall
be absolutely incompatible.
The contract was not a new and independent
obligation expressly extinguishing the judgment;
neither were its terms incompatible with the
obligations of the judgment. It was simply another
method of satisfying the judgment. The judgment
was not extinguished. The judgment was not
satisfied and the obligation existing thereunder still
subsisted until the terms of the agreement had
been fully complied with. Zapanta was bound to
perform the conditions mentioned in said contract
punctually. (Zapanta v. De Rotaeche, G.R. No. L-
6910, 09 January 1912)
Lopez obtained a loan in the amount of
P20,000.00 from the Prudential Bank. He
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
43
ADVISER:
executed a Surety Bond in which he, as principal,
and PHILAMGEN as surety, bound themselves
jointly and severally for the payment of the sum.
And he also executed a deed of assignment of
4,000 shares of the Baguio Military Institution in
favor of PHILAMGEN.
Q: Is the stock assignment made by Lopez dation
in payment or pledge? Was there novation?
A: The stock assignment constitutes a pledge and
not a dacion en pago. The requirements of a
contract of pledge have been satisfied: (1) that it
be constituted to secure the fulfillment of a
principal obligation; (2) that the pledgor be the
absolute owner of the thing pledged; and (3) that
the person constituting the pledge has the free
disposal of the property, and in the absence
thereof, that he be legally authorized for the
purpose. (Article 2085, NCC).
According to Article 1245 of the NCC, dation in
payment, whereby property is alienated to the
creditor in satisfaction of a debt in money, shall be
governed by the law of sales.
Dation in payment is the delivery and transmission
of ownership of a thing by the debtor to the
creditor as an accepted equivalent of the
performance of the obligation. Lopez’s loan has
not yet matured when he "alienated" his 4,000
shares of stock to Philamgen. Lopez's obligation
would arise only when he would default in the
payment of the principal obligation which is the
loan and Philamgen had to pay for it. Since it is
contrary to the nature and concept of dation in
payment, the same could not have been
constituted when the stock assignment was
executed. Moreover, there is no express provision
in the terms of the stock assignment that the loan
is immediately extinguished by reason of such
assignment. In case of doubt as to whether a
transaction is a pledge or a dation in payment, the
presumption is in favor of pledge, the latter being
the lesser transmission of rights and interests.
No, there is no novation. Novation which consists
in substituting a new debtor in the place of the
original one, may be made even without the
knowledge or against the will of the latter, but not
without the consent of the creditor. In substituting
the person of the debtor, it is necessary that the
old debtor be released from the obligation and the
third person or new debtor takes his place in the
relation. Without such release, there is no
novation, the third person who has assumed the
obligation of the debtor merely becomes a co-
debtor or a surety. The undertaking of Abello and
Pedrosa that they would buy the shares of stock
does not necessarily imply the extinguishment of
the liability of Lopez. Since it was not established
nor shown that Lopez would be released from
responsibility, the same does not constitute
novation and hence, Philamgen may still enforce
the obligation. The representation of Abello &
Pedrosa was a purely private arrangement
between them, not an agreement between
Philamgen and Lopez. Thus, there was no
novation of the obligation by substitution of debtor.
(Lopez v. CA, G.R. No. L-33157, 29 June 1982)
44
2007 Team Bar-Ops Civil Law Committee
Corpus was charged administratively. Pending the
investigation, he was suspended from office. The
investigating committee found the charges to be
without merit. However on a resolution made by
the Monetary Board upon recommendation of
Cuaderno, Sr. Corpus was considered resigned.
Corpus thru Atty. Alvarez, filed an action against
Cuaderno, Sr., the Central Bank and Marcos who
was appointed to his position. David helped
Corpus in the case to which Corpus sent David a
check but returned it pending resolution of the
case. When the case was remanded for further
proceedings, the decision rendered was in favor of
Corpuz declaring illegal the resolution of the
Monetary Board and ordering the defendant's
reinstatement and the payment of his back
salaries and allowances.
Then, David’s law office made a formal de
command upon Corpuz for collection of 50% of the
amount recovered by Corpus. Corpus refused,
thus, David filed an action against Corpus.
Q: Was there a contract to pay attorney’s fees?
A: Corpus' act of giving the check through his
letter David indicates Corpus' commitment to pay
the former attorney's fees, which is stressed by
expressing that "I wish I could give more but as
you know we were banking on a SC decision
reinstating me and reimbursing my back salaries.
This last sentiment constitutes a promise to pay
more upon his reinstatement and payment of his
back salaries. Moreover, David's letter-reply
confirms such promise. Said reply states that
David decided to be his counsel in the case
because of the value to him of their intimate
relationship over the years and "not, primarily, for
a professional fee." David agreed to render
professional services to Corpus secondarily for a
professional fee.
In addition, the payment of attorney's fees may
also be justified by virtue of the innominate
contract of facio ut des (I do and you give which is
based on the principle that "no one shall unjustly
enrich himself at the expense of another."
Innominate contracts have been elevated to a
codal provision in the New Civil Code by providing
under Article 1307 that such contracts shall be
regulated by the stipulations of the parties, by the
general provisions or principles of obligations and
contracts, by the rules governing the most
analogous nominate contracts, and by the
customs of the people.
While there was no express contract between the
parties for the payment of attorney's fees, David
rendered legal services to Corpus and therefore is
entitled to compensation under the innominate
contract of facio ut des. (Corpus v. CA, G.R. No.
L-40424, 30 June 1980)
Fieldmen's Insurance Company, Inc. issued, in
favor of the Manila Yellow Taxicab, Inc. a common
carrier accident insurance policy. While the policy
was in force, a taxicab of the insured, driven by
Carlito Coquia, met a vehicular accident, in
consequence of which he died. The insured filed
therefor a claim for P5,000.00 to which the
company replied with an offer to pay P2,000.00,
by way of compromise.
University of Santo Tomas
The Insured rejected the same and made a
counter-offer for P4,000.00, but the Company did
not accept it. Hence, the insured and Carlito's
parents, (the Coquia’s) filed a complaint against
the company to collect the proceeds of the policy.
In its answer, the Company admitted the existence
thereof, but pleaded lack of cause of action on the
part of the plaintiffs.
Q: Do the Coquias have a contractual relation with
the company?
A: Second paragraph of Article 1311 of the Civil
Code states that if a contract should contain some
stipulation in favor of a third person, he may
demand its fulfillment provided he communicated
his acceptance to the obligor before its revocation.
A mere incidental benefit or interest of a person is
not sufficient. The contracting parties must have
clearly and deliberately conferred a favor upon a
third person.
This is a the restatement of a well-known principle
concerning contracts pour autrui, the enforcement
of which may be demanded by a third party for
whose benefit it was made, although not a party to
the contract, before the stipulation in his favor has
been revoked by the contracting parties.
Pursuant to the stipulations, the company "will
indemnify any authorized Driver who is driving the
Motor Vehicle" of the insured and, in the event of
death of said driver, the company shall, likewise,
"indemnify his personal representatives." In fact,
the company "may, at its option, make indemnity
payable directly to the claimants or heirs of
claimants ... it being the true intention of this
Policy to protect ... the liabilities of the Insured
towards the passengers of the motor vehicle and
the public", in other words, third parties.
Thus, the policy is typical contract pour autrui, this
character being made more manifest by the fact
that the deceased driver paid 50% of the
corresponding premiums, which were deducted
from his weekly commissions. The Coquias who
are the sole heirs of the deceased have a direct
cause of action against the company. (Coquia v.
Fieldmen’s Insurance Co., Inc., G.R. No. L-
23276, 29 November 1968)
De Jesus hosted a dinner for his friends at
Mandarin’s restaurant. After dinner, the waiter
handed to him the bill. De Jesus offered to pay the
bill through his credit card issued by BANKARD.
This card was accepted by the waiter card
verification. However, the waiter returned and
informed De Jesus that his credit card had
expired.
De Jesus argued that said credit card had yet to
expire as embossed on its face. Again, the credit
card passed over the verification computer but the
same information CARD EXPIRED was produced.
De Jesus left the restaurant and got his BPI
Express Credit Card and offered it to pay the bill.
This was accepted and honored by the cashier
after verification. Then, De Jesus filed an action
against Manadarin and BANKARD.
Q: Is Mandarin bound to accept payment by
means of credit card?

CIVIL LAW NOTES
A: Mandarin is affiliated with BANKARD. In fact,
an "Agreement" entered into by De Jesus and
BANKARD, provides that:
The MERCHANT shall honor validly issued PCCCI
credit cards presented by their corresponding
holders in the purchase of goods and/or services
supplied by it provided that the card expiration
date has not elapsed and the card number does
not appear on the latest cancellation bulletin of
lost, suspended and canceled PCCCI credit cards
and, no signs of tampering, alterations or
irregularities appear on the face of the credit card.
Although Mandarin is not a party to the said
agreement, such stipulation conferred a favor
upon De Jesus. This stipulation is a stipulation
pour autri and under Article 1311 of the Civil Code
De Jesus may demand its fulfillment provided he
communicated his acceptance to Mandarin before
its revocation. De Jesus' offer to pay by means of
his BANKARD credit card constitutes not only an
acceptance of the said stipulation but also an
explicit communication of his acceptance to the
obligor.
Moreover, Mandarin posted a logo inside
Mandarin Villa Seafood Village stating that
"Bankard is accepted here. (Mandarin Villa, Inc.
v. CA, G.R. No. 119850, 20 June 1996)
Sanchez and Rigos executed an instrument
entitled "Option to Purchase," whereby Rigos
"agreed, promised and committed ... to sell" to
Sanchez the sum of P1,510.00, a parcel of land
situated in Nueva Ecija, within two 2 years from
said date with the understanding that said option
shall be deemed "terminated and elapsed," if
"Sanchez shall fail to exercise his right to buy the
property" within the stipulated period.
Several tenders of payment of the sum of
Pl,510.00 was made by Sanchez within said
period but were rejected by Rigos. Thus, Sanchez
deposited said amount with the CFI and filed an
action against Rigos for specific performance and
damages.
Q: Was there a perfected contract?
A: ART. 1324. When the offerer has allowed the
offeree a certain period to accept, the offer may be
withdrawn any time before acceptance by
communicating such withdrawal, except when the
option is founded upon consideration as
something paid or promised.
Under Article 1324 of the new Civil Code, the
general rule regarding offer and acceptance is
that, when the offerer gives to the offeree a certain
period to accept, "the offer may be withdrawn at
any time before acceptance" except when the
option is founded upon consideration, but this
general rule must be interpreted as modified by
the provision of article 1479 which applies to "a
promise to buy and sell" specifically. As already
stated, this rule requires that a promise to sell to
be valid must be supported by a consideration
distinct from the price.
Furthermore, an option is unilateral: a promise to
sell at the price fixed whenever the offeree should
decide to exercise his option within the specified
time. After accepting the promise and before he
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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Civil Law Committee Chairperson:
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Members:
45
ADVISER:
exercises his option, the holder of the option is not
bound to buy. He is free either to buy or not to buy
later. If the option is given without a consideration,
it is a mere offer of a contract of sale, which is not
binding until accepted. If, however, acceptance is
made before a withdrawal, it constitutes a binding
contract of sale, even though the option was not
supported by a sufficient consideration. (Sanchez
v. Rigos, G.R. No. L-25494, 14 June 1972)
Bancom Development Corporation and Odyssey
Park, entered into a Contract to Sell whereby
Bancom agreed to sell to Odyssey the parcel of
land situated in Baguio City and the structure
constructed thereon as the Europa Clubhouse.
Subsequently, in a document entitled "Separate
Deed of Conveyance" Bancom confirmed and
acknowledged that it has ceded, transferred and
conveyed in favor of Union Bank all the rights, title
and interest it has over the property.
22 days after the execution of the contract,
Odyssey paid the amount of P100,000.00 and
other payments beyond the stipulated period.
On December 23, 1981, Mr. Vicente A. Araneta,
President of Europa Condominium Villas, Inc.,
wrotes defendant-appellee Union Bank, a letter,
Exhibit E, stating that the Europa Center was
reported to prospective buyers as well as
government authorities as part of common areas
and amenities under the condominium concept of
selling to the public and for that reason wants to
make it of record that Europa Condominium Villas,
Inc., questions the propriety of the contract to sell.
Odyssey wrote Bancom stating that it
acknowledges receipt of a copy of the letter-
protest from the Europa Condominium Villas, Inc.
in which Europa Center was reported to
prospective buyers. Then, Bancom, wrote Europa
Condominium that the Europa Center and the
parcel of land on which it is built are not part of the
Europa Condominium .
Union Bank wrote Odyssey demanding payment
of the overdue account of P2,193,720.91, inclusive
of interest and service charges, otherwise the
contract to sell would be cancelled and rescinded.
Later, Union Bank formally sent a letter to odyssey
rescinding and/or cancelling the contract to sell
and demanding Odyssey to vacate the premises.
Q: Is rescission proper?
A: Under Article 1191 of the Civil Code:
Art. 1191. The power to rescind obligations is
implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent
upon him.
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages in either case. He may
also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The Court shall decree the rescission claimed,
unless there be just cause authorizing the fixing of
a period.
This is understood to be without prejudice to the
rights of third persons who have acquired the
thing, in accordance with articles 1385 and 1388
and the Mortgage Law.
46
2007 Team Bar-Ops Civil Law Committee
Article 1191 cannot be applied. In a contract to
sell, the payment of the purchase price is a
positive suspensive condition, the failure of which
is not a breach, casual or serious, but a situation
that prevents the obligation of the vendor to
convey title from acquiring an obligatory force. The
breach contemplated in Article 1191 of the Code is
the obligor's failure to comply with an obligation
already extant, not a failure of a condition to
render binding that obligation. In any event, the
failure of petitioner to even complete the down
payment stipulated in the contract to sell puts
Odyssey far from good stead in urging that there
has been substantial compliance with the contract
to sell within the meaning of Article 1191 of the
Code. (Odyssey Park, Inc. v. CA, G.R. No.
107992, 08 October 1997)
Masigla was in possession of Lot 897 in Cavite.
Victoriano discovered that title to Lot No. 897 was
registered in the name of her grandfather. She
secured an extrajudicial partition from all the heirs
of Tamio, who thus waived their shares in the lot in
her favor. Victoriano thereafter secured a title to
said lot in her name.
The heirs of Arcilla, represented by Masigla, filed a
complaint in court for reconveyance of Lot No.
897, claiming that their father Arcilla, had bought
the lot from Tamio and that they had been in
possession thereof since 1927. Masigla could not,
however, present a deed of sale evidencing the
transfer of the property from Tamio to Arcilla. All
that she and her heirs could present were a
"Sinumpaang Salaysay" wherein the children of
Tamio authorized their mother to sell Lot 897 to
Arcilla. While the owner's duplicate of the title to
the property, real property tax receipts and tax
declarations were in the name of Tamio. The
Arcillas also paid tax declarations but the receipts
were lost.
Q: Is the Statute of Frauds applicable?
A: The Statute of Frauds is applicable only to
executory contracts, not to contracts either totally
or partially performed. Thus, where a contract of
sale is alleged to be consummated, it matters not
that neither the receipt for the consideration nor
the sale itself was in writing, because oral
evidence of the alleged consummated sale is not
forbidden by the Statute of Frauds and may not be
excluded in court.
Thus, the testimony of the Arcillas is admissible to
prove the existence of the sale, it being of record
that the land has been in their possession since
1927. Performance of the contract, whether total
or partial, takes it out of the operation of the
statute This performance, necessarily must be
duly proved. And Masigla pointed out the
circumstances to show performance: possession
of the owner's copy of the title, undisturbed in their
possession of the land for more than 50 years,
possession of the "Sinumpaang Salaysay",
expenses incurres for the resurvey of the land, tax
declarations and the the immediate heirs of Tamio
never contested to the Arcillas’ possession of the
land. (Victoriano v. CA, G.R. No. 87550, 11
February 1991)
University of Santo Tomas
Northwest Airlines, through its Japan Branch,
entered into an International Passenger Sales
Agency Agreement with CF Sharp, authorizing the
latter to sell its air transport tickets. CF Sharp
failed to remit the proceeds of the ticket sales,
thus, Northwest airlines filed a collection suit
before the Tokyo District Court which rendered
judgment ordering CF Sharp to pay "83,158,195
Yen and damages for the delay at the rate of 6%
per annum. Unable to execute the decision in
Japan, Northwest Airlines filed a case to enforce
said foreign judgment with the RTC of Manila.
Q: What is the rate of exchange that should be
applied for the payment of the amount?
A: Under Philippine law, stipulations on the
satisfaction of obligations in foreign currency are
void. Payments of monetary obligations, subject to
certain exceptions, shall be discharged in the
currency which is the legal tender in the
Philippines. But since R.A. No. 529 does not
provide for the rate of exchange for the payment of
foreign currency obligations incurred after its
enactment, the SC held in a number of cases that
the rate of exchange for the conversion in the
peso equivalent should be the prevailing rate at
the time of payment.
The repeal of R.A. No. 529 by R.A. No. 8183 has
the effect of removing the prohibition on the
stipulation of currency other than Philippine
currency, such that obligations or transactions
may now be paid in the currency agreed upon by
the parties. Just like R.A. No. 529, however, the
new law does not provide for the applicable rate of
exchange for the conversion of foreign currency-
incurred obligations in their peso equivalent. It
follows, therefore, that the jurisprudence
established in R.A. No. 529 regarding the rate of
conversion remains applicable.
Thus, in Asia World Recruitment, Inc. v. National
Labor Relations Commission, SC, applying R.A.
No. 8183, sustained the ruling of the NLRC that
obligations in foreign currency may be discharged
in Philippine currency based on the prevailing rate
at the time of payment. The wisdom on which the
jurisprudence interpreting R.A. No. 529 is based
equally holds true with R.A. No. 8183. Verily, it is
just and fair to preserve the real value of the
foreign exchange- incurred obligation to the date
of its payment. (C.F. Sharp & Co., Inc. v.
Northwest Airlines, Inc., G.R. No. 133498, 18
April 2002)
Q: Is Article 1250 of the New Civil Code
applicable?
A: No. The rule that the value of the currency at
the time of the establishment of the obligation shall
be the basis of payment finds application only
when there is an official pronouncement or
declaration of the existence of an extraordinary
inflation or deflation. (C.F. Sharp & Co., Inc. v.
Northwest Airlines, Inc., G.R. No. 133498, 18
April 2002)
Q: What is the rate of interest that should be
applied?

CIVIL LAW NOTES
A: In Eastern Shipping Lines, Inc. v. Court of
Appeals, it was held that absent any stipulation,
the legal rate of interest in obligations which
consists in the payment of a sum of money, as in
the present case, is 12% per annum. CF Sharp is
liable to pay the amount adjudged in the foreign
judgment, with "interest thereon at the legal rate
[12% per annum] from the filing of the complaint
therein until the said foreign judgment is fully
satisfied. (C.F. Sharp & Co., Inc. v. Northwest
Airlines, Inc., G.R. No. 133498, 18 April 2002)
Eligio Herrera, Sr., the father of Pastor, was the
owner of 2 parcels of land located at Cainta, Rizal.
Francisco bought the first parcel and paid in
installments. Later, she bought the second parcel.
Contending that the contract price for the 2 parcels
of land was grossly inadequate, the children of
Eligio, Sr., tried to negotiate with Francisco to
increase the purchase price. When Francisco
refused, they filed a complaint for annulment of the
sale.
Q: Are the contracts of sale void or merely
voidable and hence capable of being ratified?
A: A void or inexistent contract is one which has
no force and effect from the very beginning.
Hence, it is as if it has never been entered into
and cannot be validated either by the passage of
time or by ratification. There are two types of void
contracts:
(1) those where one of the essential requisites of a
valid contract as provided for by Article 131810 of
the Civil Code is totally wanting; and (2) those
declared to be so under Article 1409 of the Civil
Code. By contrast, a voidable or annullable
contract is one in which the essential requisites for
validity under Article 1318 are present, but vitiated
by want of capacity, error, violence, intimidation,
undue influence, or deceit.
Article 1318 of the Civil Code states that no
contract exists unless there is a concurrence of
consent of the parties, object certain as subject
matter, and cause of the obligation established.
Article 1327 provides that insane or demented
persons cannot give consent to a contract. But, if
an insane or demented person does enter into a
contract, the legal effect is that the contract is
voidable or annullable as specifically provided in
Article 1390.
In the present case, it was established that Eligio,
Sr. entered into an agreement with Francisco, but
that the former’s capacity to consent was vitiated
by senile dementia. Hence, the contracts are not
void or inexistent per se, rather, these are
contracts that are valid and binding unless
annulled through a proper action filed in court
seasonably.
An annullable contract may be rendered perfectly
valid by ratification, which can be express or
implied. Implied ratification may take the form of
accepting and retaining the benefits of a contract.
This is what happened in this case. Upon learning
of the sale, Pastor negotiated for the increase of
the purchase price while receiving the installment
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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Civil Law Committee Chairperson:
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Members:
47
ADVISER:
payments. It was only when he failed to convince
Francisco to increase the price that they instituted
the complaint for reconveyance of the properties.
Clearly, Pastor was agreeable to the contracts,
only he wanted to get more. Further, there is no
showing that Pastor returned the payments or
made an offer to do so. Indeed there was
ratification. (Francisco v. Herrera, G.R. No.
139982, 21 November 2002)
Juan San Andres was the registered owner of a lot
in Naga City. He sold a portion thereof to
Rodriguez as evidenced by a deed of sale.
Upon the death of Juan San Andres, Ramon San
Andres was appointed judicial administrator of the
decedent's estate. Ramon engaged the services of
a geodetic engineer, Peñero, to prepare a
consolidated plan of the estate. Peñero also
prepared a sketch plan of the lot sold to
Rodriguez. From the result of the survey, it was
found that Rodriguez had enlarged the area which
he purchased.
Thus, Ramon sent a letter to Rodriguez
demanding to vacate the portion allegedly
encroached by him. However, Rodriguez refused.
Ramon then filed an action for recovery of
possession of the disputed lot.
Q: Is the object of the contract determinable
A: Art. 1349. The object of every contract must be
determinate as to its kind. The fact that the
quantity is not determinable shall not be an
obstacle to the existence of a contract, provided it
is possible to determine the same without the
need of a new contract between the parties.
Art. 1460. The requisite that a thing be
determinate is satisfied if at the time the contract is
entered into, the thing is capable of being made
determinate without the necessity of a new and
further agreement between the parties.
There is no dispute that Rodriguez purchased a
portion of the lot consisting of 345 square meters.
This portion is located in the middle of Lot 1914-B-
2, which has a total area of 854 square meters,
and is clearly what was referred to in the receipt
as the "previously paid lot." Since the lot
subsequently sold to Rodriguez is said to adjoin
the "previously paid lot" on three sides thereof, the
subject lot is capable of being determined without
the need of any new contract. The fact that the
exact area of these adjoining residential lots is
subject to the result of a survey does not detract
from the fact that they are determinate or
determinable.
Thus, all of the essential elements of a contract of
sale are present, i.e., that there was a meeting of
the minds between the parties, by virtue of which
the late Juan San Andres undertook to transfer
ownership of and to deliver a determinate thing for
a price certain in money. As Art. 1475 of the Civil
Code provides:
The contract of sale is perfected at the
moment there is a meeting of minds upon the
thing which is the object of the contract and
upon the price.
48
2007 Team Bar-Ops Civil Law Committee
(Heirs of San Andres v. Rodriguez, G.R. No.
135634, 31 May 2000)
Q: Is the contract of sale a conditional one?
A: It is evident from the stipulations in the receipt
that Juan San Andres sold the residential lot in to
Rodriguez and undertook to transfer the
ownership without any qualification, reservation or
condition.
The stipulation that the "payment of the full
consideration based on a survey shall be due and
payable in 5 years from the execution of a formal
deed of sale" is not a condition which affects the
efficacy of the contract of sale. It merely provides
the manner by which the full consideration is to be
computed and the time within which the same is to
be paid. But it does not affect in any manner the
effectivity of the contract. (Heirs of San Andres v.
Rodriguez, G.R. No. 135634, 31 May 2000)
Q: Is there a valid consignation?
A: Under Art. 1257 of this Civil Code, consignation
is proper only in cases where an existing
obligation is due. In this case, however, the
contracting parties agreed that full payment of
purchase price shall be due and payable within 5
years from the execution of a formal deed of sale.
At the time Rodriguez deposited the amount of
P7,035.00 in the court, no formal deed of sale had
yet been executed by the parties, and, therefore,
the 5-year period during which the purchase price
should be paid had not commenced. In short, the
purchase price was not yet due and payable.
(Heirs of San Andres v. Rodriguez, G.R. No.
135634, 31 May 2000)
A parcel of land located at Cagayan de Oro City
was left to the 2 brothers and 8 other siblings by
their parents. Estate Administrator Luminarias
leased 124 square meters of the property to
Honorio Villaranda. Vicente Villaranda, on the
other hand, inherited 64.22 square meters of the
property that had not been leased to Honorio.
The 2 brothers executed the assailed deed of
exchange. Under this instrument, Vicente agreed
to convey his 64.22-square-meter portion to
Honorio, in exchange for a 500-square-meter
property. After, Honorio took possession of the lot
and constructed a building thereon.
Years later, however, a subdivision plan was
completed for the 64.22 square-meter share of
Vicente which was issued in his name. The other
heirs were issued their own title certificates for
their respective shares.9
Honorio and his wife, then brought an action for
specific performance to compel Vicente to comply
with his obligations under the deed of exchange.
Q: Is the deed of exchange null and void?
A: The deed was entered into on July 6, 1976,
while the Family Code took effect only on August
3, 1998. Laws should be applied prospectively
only, unless a legislative intent to give them
retroactive effect is expressly declared or is
necessarily implied from the language used.
Hence, the provisions of the Civil Code, not the
Family Code are applicable.
University of Santo Tomas
According to Article 166 of the Civil Code, the
husband cannot alienate or encumber any real
property of the conjugal partnership without the
wife’s consent. This provision, however, must be
read in conjunction with Article 173 of the same
Code. The latter states that an action to annul an
alienation or encumbrance may be instituted by
the wife during the marriage and within ten years
from the transaction questioned. Videlicet, the lack
of consent on her part will not make the husband’s
alienation or encumbrance of real property of the
conjugal partnership void, but merely voidable.
Hence, the deed is valid until and unless annulled.
(Villaranda v. Villaranda, G.R. No. 153447, 23
February 2004)
Camacho was the owner of a parcel of land
situated in Balanga, Bataan. Camacho and Atty.
Banzon entered into a contract for legal services in
which Camacho bind himself to pay 5000 of the
said lot.
Camacho executed a special power of attorney
giving Atty. Banzon the authority to execute and
sign for her behalf a deed of donation transferring
a 17,000-sq-m portion of the lot to the municipal
government which was then executed and
accepted by the local government.
While Tuazon had been an agricultural tenant in
the lot since World War II. Despite the agreement
of Camacho and Tuazon that Tuazon would
voluntarily surrender the land, Tuazon plowed a
portion of the lot and planted palay without
Camacho’s consent. Thus, they filed a complaint
for forcible entry.
Camacho and the municipality, through Atty.
Banzon, and Tuazon entered into an agreement to
stay court order. Then, Camacho filed a
manifestation the civil case declaring that she had
terminated the services of Atty. Banzon. Atty.
Banzon filed a complaint-in-intervention.
Q: Is there a perfected contract between Camacho
and Atty. Banzon?
A: Yes. Article 1305 of the NCC defines a contract
as a "meeting of minds between two persons
whereby one binds himself, with respect to the
other, to give something or to render some
service." Contracts shall be obligatory in whatever
form they may have been entered into, provided
all the essential requisites for their validity are
present.
In general, there are three (3) essential requisites
for a valid contract: (1) consent of the contracting
parties; (2) an object certain which is the subject of
the contract; and (3) the cause of the obligation
which is established.
1. Consent of the contracting parties
Consent is manifested by the meeting of the offer
and the acceptance upon the thing and the cause
which are to constitute the agreement. The
contract between Camacho and Atty. Banzon is
evidenced by a written document signed by both
parties denominated as Contract of Attorney’s
Fee. It is an established rule that written evidence
is so much more certain and accurate than that
which rests in fleeting memory only; that it would
be unsafe, when parties have expressed the terms

CIVIL LAW NOTES
of their contract in writing, to admit weaker
evidence to control and vary the stronger, and to
show that the parties intended a different contract
from that expressed in the writing signed by them.
Moreover, the moment a party affixes her
signature thereon, he or she is bound by all the
terms stipulated therein and is open to all the legal
obligations that may arise from their breach.
Camacho’s consent to the contract was further
manifested in the following events: the execution
of the agreement with voluntary surrender signed
by Tuazon; the execution of the Deed of Donation
where Atty. Banzon was authorized to sign the
same on behalf of Camacho; and the sale of 1200
sq. m. portion of the property right at the market
site. In all these transactions, Atty. Banzon
represented Camacho pursuant to the Contract of
Attorney’s Fee.
2. Object certain which is the subject of the
contract
Articles 1349 and 1460 of the Civil Code
provide the guidelines in determining whether
or not the object of the contract is certain.
The requisite that a thing be determinate is
satisfied if at the time the contract is entered into,
the thing is capable of being made determinate
without the necessity of a new or further
agreement between the parties.
In this case, the object of the contract is the 5,000-
sq-m portion of Lot 261, Balanga Cadastre. The
failure of the parties to state its exact location in
the contract is of no moment; this is a mere error
occasioned by the parties’ failure to describe with
particularity the subject property, which does not
indicate the absence of the principal object as to
render the contract void. Since Camacho bound
herself to deliver a portion of Lot 261 to Atty.
Banzon, the description of the property subject of
the contract is sufficient to validate the same.
3. Cause of the obligation which is established
In general, the cause is the why the contract or the
essential reason which moves the contracting
parties to enter into the contract. For the cause to
be valid, it must be lawful such that it is not
contrary to law, morals, good customs, public
order or public policy.
Under the terms of the contract, Atty. Banzon was
obliged to negotiate with the municipal
government of Balanga for the transfer of the
proposed new public market to Camacho’s
property; to sell 1,200 square meters right at the
market site; and to take charge of the legal phases
incidental to the transaction which include the
ejectment of persons unlawfully occupying the
property and the execution of the deed of donation
and other papers necessary to consummate the
transaction. There was thus nothing wrong with
the services which respondent undertook to
perform under the contract. They are not contrary
to law, morals, good customs, public order or
public policy. (Camacho v. CA, G.R. No. 127520,
09 February 2007)
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
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Members:
49
ADVISER:
Selegna Management and spouses Angeles were
granted a credit facility by UCPB. As security for
this credit facility, petitioners executed real estate
mortgages over several parcels of land and over
several condominium units in Makati. They were
likewise required to execute a promissory note in
favor of UCPB every time they availed of the credit
facility.
The parties stipulated in their credit agreement
that failure to pay "any availment of the
accommodation or interest, or any sum due" shall
constitute an event of default, which shall
consequently allow UCPB to "declare as
immediately due and payable all outstanding
availments.
In need of further business capital, petitioners
obtained from UCPB an increase in their credit
facility. They executed another promissory note.
Then, UCPB sent petitioners a demand letter to
pay within 5 days the principal amount with the
interest, penalty and other charges due. UCPB
sent another letter of demand. In response,
petitioners paid UCPB the amount of
P10,199,473.96 as partial payment of the accrued
interests. Apparently unsatisfied, UCPB applied for
extrajudicial foreclosure of petitioners’ mortgaged
properties.
Q: Are Selegna Management and spouses
Angeles in default?
A: It is a settled rule of law that foreclosure is
proper when the debtors are in default of the
payment of their obligation. In fact, the parties
stipulated in their credit agreements, mortgage
contracts and promissory notes that UCPB was
authorized to foreclose on the mortgages, in case
of a default by petitioners.
Mora solvendi, or debtor’s default, is defined as a
delay in the fulfillment of an obligation, by reason
of a cause imputable to the debtor. There are
three requisites necessary for a finding of default.
First, the obligation is demandable and liquidated;
second, the debtor delays performance; third, the
creditor judicially or extrajudicially requires the
debtor�s performance.
In the present case, the promissory note executed
on March 29, 1998, expressly states that
petitioners had an obligation to pay monthly
interest on the principal obligation. From
respondent’s demand letter, it is clear that
petitioners failed to meet those monthly payments
since May 30, 1998. Their nonpayment is defined
as an "event of default" in the parties’ credit
agreement.
Considering that the contract is the law between
the parties, UCPB is justified in invoking the
acceleration clause declaring the entire obligation
immediately due and payable. That clause obliged
petitioners to pay the entire loan on January 29,
1999, the date fixed by UCPB.
Q: Is the debt liquidated?
A: A debt is liquidated when the amount is known
or is determinable by inspection of the terms and
conditions of the relevant promissory notes and
related documentation. Failure to furnish a debtor
50
2007 Team Bar-Ops Civil Law Committee
a detailed statement of account does not ipso
facto result in an unliquidated obligation.
Petitioners executed a promissory note, in which
they stated that their principal obligation was in the
amount of P103,909,710.82, subject to an interest
rate of 21.75 percent per annum. Pursuant to the
parties’ credit agreement, petitioners likewise
know that any delay in the payment of the principal
obligation will subject them to a penalty charge of
one percent per month, computed from the due
date until the obligation is paid in full.
Hence, there is no basis for their allegation that a
statement of account was necessary for the
petitioners to know their obligation. We cannot
impair respondent�s right to foreclose the
properties on the basis of their unsubstantiated
allegation of a violation of due process. (Selegna
Management and Development Corporation
and Spouses Angeles v. UCPB, G.R. No.
165662, 03 May 2006)
Q: Does UCPB abandon their demand for full
payment when it accepted the partial payment?
A: When creditors receive partial payment, they
are not ipso facto deemed to have abandoned
their prior demand for full payment.
Thus, to imply that creditors accept partial
payment as complete performance of their
obligation, their acceptance must be made under
circumstances that indicate their intention to
consider the performance complete and to
renounce their claim arising from the defect.
There are no circumstances that would indicate a
renunciation of the right of UCPB to foreclose the
mortgaged properties extrajudicially, on the basis
of petitioners’ continuing default. On the contrary,
it asserted its right by filing an application for
extrajudicial foreclosure after receiving the partial
payment. Clearly, it did not intend to give
petitioners more time to meet their obligation.
While Article 1248 of the Civil Code states that
creditors cannot be compelled to accept partial
payments, it does not prohibit them from accepting
such payments. (Selegna Management and
Development Corporation and Spouses
Angeles v. UCPB, G.R. No. 165662, 03 May
2006)
Globe had been engaged in the coordination of
the provision of various communication facilities
for the military bases of US in Clark Air Base and
Subic Naval Base in Cubi Point, Zambales.
Philcomsat and Globe entered into an agreement
whereby Philcomsat obligated itself to establish,
operate and provide an earth station within Cubi
Point for the exclusive use of the USDCA. The
term of the contract was for 5 years. In turn, Globe
promised to pay Philcomsat monthly rentals for
each leased circuit involved.
At the time of the execution of the agreement, both
parties knew that the RP-US Military Bases
Agreement was to expire in 1991. Under Section
25, Article XVIII of the 1987 Constitution, foreign
military bases, troops or facilities, shall not be
allowed in the Philippines unless a new treaty is
duly concurred in by the Senate and ratified by a
majority of the votes cast by the people in a
national referendum when the Congress so
University of Santo Tomas
requires, and such new treaty is recognized as
such by the US Government.
The Senate passed and adopted a resolution,
expressing its decision not to concur in the
ratification of the treaty to extend the term of the
use by the US of Subic Naval Base.
Thus, Globe notified Philcomsat of its intention to
discontinue the use of the earth station. After the
US military forces left Subic Naval Base,
Philcomsat sent Globe a letter demanding
payment of its outstanding obligations under the
agreement. However, Globe refused. Thus,
Philcomsat filed a complaint against Globe.
Philcomsat contends that under Article 1174 of the
Civil Code, an event must be unforeseen in order
to exempt a party from complying with its
obligations. It insists that the expiration of the RP-
US Military Bases Agreement, the non-ratification
of the treaty and the withdrawal of US military
forces were not unforeseeable.
Q: Are the non-ratification of the treaty and the
expiration of the RP-US Military Bases Agreement
fortuitous events?
A: Yes. Under Article 1174, which exempts an
obligor from liability on account of fortuitous events
or force majeure, refers not only to events that are
unforeseeable, but also to those which are
foreseeable, but inevitable.
A fortuitous event under Article 1174 may either
be an "act of God," or natural occurrences such as
floods or typhoons, or an "act of man," such as
riots, strikes or wars.
In order that Globe may be exempt from non-
compliance with its obligation to pay rentals, the
concurrence of the following elements must be
established: (1) the event must be independent of
the human will; (2) the occurrence must render it
impossible for the debtor to fulfill the obligation in a
normal manner; and (3) the obligor must be free of
participation in, or aggravation of, the injury to the
creditor.
The requisites are present in the instant case.
Philcomsat and Globe had no control over the
non-renewal of the term of the RP-US Military
Bases Agreement when the same expired in 1991,
because the prerogative to ratify the treaty
belonged to the Senate. Neither did the parties
have control over the subsequent withdrawal of
the US military forces and personnel from Cubi
Point.
The events made impossible the continuation of
the agreement without fault on the part of either
party. Such fortuitous events rendered Globe
exempt from payment of rentals for the remainder
of the term of the agreement.
Moerover, Philcomsat and Globe agreed in
Section 8 of their agreement that enumerated
certain events constituting force majeure which
are either unforeseeable, or foreseeable but
beyond the control of the parties. There is nothing
in the enumeration that runs contrary to, or
expands, the concept of a fortuitous event under
Article 1174. It has, therefore, the force and effect
of law between the parties. (Philippine
Communications Satellite Corporation v.
Globe Telecom, Inc., G.R. No. 147324, 25 May
2004)

CIVIL LAW NOTES
Miranda boarded JAL flight No. JL 001 in San
Francisco bound for Manila. Likewise, the Aganas
and Francisco left Los Angeles for Manila via JAL
flight No. JL 061. As an incentive for traveling on
the said airline, both flights were to make an
overnight stopover at Narita, Japan, at the airlines'
expense, thereafter proceeding to Manila the
following day.
After the stay of the Agnas, Francisco and
Miranda at hotel Nikko Narita, they went to the
airport to take their flight to Manila. However, due
to the Mt. Pinatubo eruption, unrelenting ashfall
blanketed NAIA, rendering it inaccessible to airline
traffic. Hence, their trip to Manila was cancelled
indefinitely.
To accommodate the needs of its stranded
passengers, JAL rebooked all the Manila-bound
passengers and also paid for the hotel expenses
for their unexpected overnight stay. However, the
flight to Manila was again cancelled due to NAIA's
indefinite closure. At this point, JAL informed them
that it would no longer defray their hotel and
accommodation expense during their stay in
Narita.
Since NAIA was only reopened to airline traffic on
June 22, 1991, they were forced to pay for their
accommodations and meal expenses from their
personal funds from June 16 to June 21, 1991.
Thus, they filed an action for damages against
JAL.
Q: Does JAL as a common carrier has the
obligation to shoulder the hotel and meal
expenses of its stranded passengers until they
have reached their final destination, even if the
delay were caused by force majeure?
A: There is no dispute that the Mt. Pinatubo
eruption prevented JAL from proceeding to Manila
on schedule. Such event can be considered as
"force majeure" since the delayed arrival in Manila
was not imputable to JAL.
When a party is unable to fulfill his obligation
because of "force majeure," the general rule is that
he cannot be held liable for damages for non-
performance. Corollary, when JAL was prevented
from resuming its flight to Manila due to the effects
of Mt. Pinatubo eruption, whatever losses or
damages in the form of hotel and meal expenses
the stranded passengers incurred, cannot be
charged to JAL. Yet it is undeniable that JAL
assumed their hotel expenses for their unexpected
overnight stay on June 15, 1991.
To be stranded for almost a week in a foreign land
was an exasperating experience for the Aganas,
Francisco and Miranda. They underwent distress
and anxiety during their unanticipated stay in
Narita, but their predicament was not due to the
fault or negligence of JAL but the closure of NAIA
to international flights. Indeed, in the absence of
bad faith or negligence, JAL cannot be liable for
the amenities of its stranded passengers by
reason of a fortuitous event.
Furthermore, it has been held that airline
passengers must take such risks incident to the
mode of travel. Thus, adverse weather conditions
or extreme climatic changes are some of the perils
involved in air travel, the consequences of which
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
51
ADVISER:
the passenger must assume or expect. After all,
common carriers are not the insurer of all risks.
(Japan Airlines v. CA, G.R. No. 118664, 07
August 1998)
MIAA conducted a public bidding for a contract
involving the structural repair and waterproofing of
the buildings of NAIA. The contract was awarded
to ALA when it agreed to reduce the price. ALA
made the necessary repairs and waterproofing.
After submission of its progress billing, it received
partial payments.
However, MIAA unilaterally rescinded the contract
on the ground that ALA failed to complete the
project within the agreed completion date. MIAA
advised ALA of a committee formed to determine
the extent of the work done but ALA, still was not
fully paid.
Then, ALA objected to the rescission and filed a
complaint. During trial, both parties executed a
compromise agreement with a stipulation that
failure of MIAA to pay the amount to ALA within
the period stipulated shall entitle the ALA to a writ
of execution from the RTC to enforce all its claims
pleaded in the complaint.
Finding the compromise agreement not to be
contrary to law, morals, good customs, public
order, and public policy, the court approved it.
Then, MIAA failed to pay within the period
stipulated. Thus, ALA filed a motion for execution
to enforce its claim. MIAA filed a comment and
attributed the delays to its being a government
agency.
Q: Is the compromise agreement valid?
A: Yes. A compromise agreement is a contract
whereby the parties make reciprocal concessions
to resolve their differences, thus avoiding litigation
or putting an end to one that has already
commenced. Generally favored in law, such
agreement is a bilateral act or transaction that is
binding on the contracting parties and is expressly
acknowledged by the Civil Code as a juridical
agreement between them. Provided it is not
contrary to law, morals, good customs, public
order or public policy, it is immediately executory.
To be valid, a compromise agreement is merely
required by law, first, to be based on real claims;
second, to be actually agreed upon in good faith.
Both conditions are present in this case. The
claims of the parties are valid, and the agreement
done without any fraud or vice of consent. Each of
the parties entered into a compromise agreement
freely and voluntarily. (MIAA v. Ala Industries
Corporation, G.R. No. 147349, 13 February
2004)
Q: Is the delay of payment a fortuitous event?
A: Foreseeable difficulties that occur during the
Christmas season and cause a delay do not
constitute a fortuitous event. The difficulties in
processing claims during that period are not "acts
of God" that would excuse noncompliance with
judicially approved obligations.
A fortuitous event is one that cannot be foreseen
or, though foreseen, is inevitable. It has the
following characteristics:
52
2007 Team Bar-Ops Civil Law Committee
"(a) The cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply
with his obligations, must be independent of
human will; (b) it must be impossible to foresee
the event which constitutes the caso fortuito, or if it
can be foreseen, it must be impossible to avoid;
(c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a
normal manner; and (d) the obligor must be free
from any participation in the aggravation of the
injury resulting to the creditor."
Moreover, the act-of-God doctrine requires all
human agencies to be excluded from creating the
cause of the mischief. Such doctrine cannot be
invoked to protect a person who has failed to take
steps to forestall the possible adverse
consequences of loss or injury. Since the delay in
payment in the present case was partly a result of
human participation -- whether from active
intervention or neglect -- the whole occurrence
was humanized and was therefore outside the
ambit of a caso fortuito.
None of these elements appears in this case.
First, processing claims against the government
are certainly not only foreseeable and expectable,
but also dependent upon the human will. Second,
the Christmas season is not a caso fortuito, but a
regularly occurring event. Third, the occurrence of
the Christmas season did not at all render
impossible the normal fulfillment of the obligation.
Fourth, MIAA cannot argue that it is free from any
participation in the delay. It should have laid out on
the compromise table the problems that would be
caused by a deadline falling during the Christmas
season. Furthermore, it should have explained to
ALA the process involved for the payment of AL’s
claim.
In sum, MIAA was negligent, and that it thereby
incurred a delay in the performance of its
contractual obligation under the judicial
compromise. (MIAA v. Ala Industries
Corporation, G.R. No. 147349, 13 February
2004)
Real owned and operated the Wasabe Fastfood
stall located at the Food Center of the PWU. While
Belo owned and operated the BS Masters fastfood
stall, also located at the food center of PWU.
Around 7:00 o'clock in the morning of January 25,
1996, a fire broke at Real's Wasabe Fastfood stall.
The fire spread and gutted other fastfood stalls in
the area, including Belo's stall. An investigation
revealed that the fire broke out due to the leaking
fumes coming from the LPG stove and tank at
Real's stall. For the loss of his fastfood stall due to
the fire, Belo demanded compensation but Real
refused. Hence, Belo filed a complaint for
damages.Belo alleged that Real failed to exercise
due diligence in the upkeep and maintenance of
her cooking equipments, as well as the selection
and supervision of her employees and that Real's
negligence was the proximate cause of the fire
that gutted the fastfood stalls.
Q: Is the fire a fortuitous event?
A: Jurisprudence defines the elements of a
"fortuitous event" as follows: (a) the cause of the
unforeseen and unexpected occurrence must be
independent of human will; (b) it must be
University of Santo Tomas
impossible to foresee the event which constitutes
the caso fortuito, or if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be
such as to render it impossible for the debtor to
fulfill his obligation in a normal manner; and (d) the
obligor must be free from any participation in the
aggravation of the injury resulting to the creditor.
Article 1174 of the Civil Code provides that no
person shall be responsible for a fortuitous event
which could not be foreseen, or which, though
foreseen, was inevitable. In other words, there
must be an entire exclusion of human agency from
the cause of injury or loss.
It is established by evidence that the fire originated
from leaking fumes from the LPG stove and tank
installed at petitioner's fastfood stall and her
employees failed to prevent the fire from
spreading and destroying the other fastfood stalls.
Thus, it was not a fortuitous event. (Real v. Belo,
G.R. NO. 146224, 26 January 2007)
Q: Is Real as owner of the food stall liable?
A: Yes. Whenever an employee's negligence
causes damage or injury to another, there instantly
arises a presumption juris tantum that the
employer failed to exercise diligentissimi patris
families in the selection or supervision of its
employees. To avoid liability for a quasi-delict
committed by his employee, an employer must
overcome the presumption by presenting
convincing proof that he exercised the care and
diligence of a good father of a family in the
selection and supervision of his employee.
In this case, Real not only failed to show that she
submitted proof that the LPG stove and tank in her
fastfood stall were maintained in good condition
and periodically checked for defects but she also
failed to submit proof that she exercised the
diligence of a good father of a family in the
selection and supervision of her employees. For
failing to prove care and diligence in the
maintenance of her cooking equipment and in the
selection and supervision of her employees, Real
had been negligent. (Real v. Belo, G.R. NO.
146224, 26 January 2007)
Ong and spouses Robles executed an "Agreement
of Purchase and Sale" of 2 parcels of land.
Pursuant to the contract they executed, Ong paid
the spouses the sum of P103,499.91 by depositing
it with the UCPB. Subsequently, Ong deposited
sums of money with the BPI in accordance with
their stipulation that Ong pay the loan of the
spouse with BPI.
To answer for Ong’s balance, he issued 4 post-
dated Metro Bank checks payable to the spouses.
When presented for payment, however, the
checks were dishonored. Ong promised to replace
the checks but failed to do so. Worse, out of the
loan of the spouses with BPI, Ong did not pay
wholly. Thus, the spouses sold 3 transformers of
the rice mill included in the parcels of land.
The spouses, through counsel, sent Ong a
demand letter asking for the return of the
properties. Their demand was left unanswered, so,
they filed a complaint for rescission of contract and
recovery of properties with damages.

CIVIL LAW NOTES
Q: Is the contract entered into by Ong and the
spouse be validly rescinded?
A: Rescission, as contemplated in Articles 1380,
of the NCC, is a remedy granted by law to the
contracting parties and even to third persons, to
secure the reparation of damages caused to them
by a contract, even if this should be valid, by
restoration of things to their condition at the
moment prior to the celebration of the contract. It
implies a contract, which even if initially valid,
produces a lesion or a pecuniary damage to
someone.
On the other hand, Article 1191 of the NCC refers
to rescission applicable to reciprocal obligations.
Reciprocal obligations are those which arise from
the same cause, and in which each party is a
debtor and a creditor of the other, such that the
obligation of one is dependent upon the obligation
of the other. They are to be performed
simultaneously such that the performance of one
is conditioned upon the simultaneous fulfillment of
the other.
Rescission of reciprocal obligations under Article
1191 of the NCC should be distinguished from
rescission of contracts under Article 1383.
Although both presuppose contracts validly
entered into and subsisting and both require
mutual restitution when proper, they are not
entirely identical.
While Article 1191 uses the term “rescission,” the
original term which was used in the old Civil Code,
from which the article was based, was “resolution.”
Resolution is a principal action which is based on
breach of a party, while rescission under Article
1383 is a subsidiary action limited to cases of
rescission for lesion under Article 1381 of the
NCC, which expressly enumerates the rescissible
contracts.
The contract entered into by the parties in the
case at bar does not fall under any of those
mentioned by Article 1381. Consequently, Article
1383 is inapplicable.
Furthermore, the agreement of purchase and sale
shows that it is in the nature of a contract to sell. In
a contract to sell, the payment of the purchase
price is a positive suspensive condition, the failure
of which is not a breach, casual or serious, but a
situation that prevents the obligation of the vendor
to convey title from acquiring an obligatory force.
Ong failed to complete payment of the purchase
price. The non-fulfillment of the condition of full
payment rendered the contract to sell ineffective
and without force and effect.
The breach contemplated in Article 1191 of the
NCC is the obligor’s failure to comply with an
obligation. Ong’s failure to pay is not even a
breach but merely an event which prevents the
vendor’s obligation to convey title from acquiring
binding force.
In sum, the agreement of the parties in this may
be set aside, but not because of a breach on the
part of Ong for failure to complete payment of the
purchase price. Rather, his failure to do so brought
about a situation which prevented the obligation of
the spouses to convey title from acquiring an
obligatory force. (Ong v. CA, G.R. No. 97347, 06
July 1999)
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
53
ADVISER:
Q: Is the contract between Ong and the spouses
novated as to the manner and time of payment?
A: Under Article 1292 of the New Civil Code, "In
order that an obligation may be extinguished by
another which substitutes the same, it is
imperative that it be so declared in unequivocal
terms, or that the old and the new obligations be
on every point incompatible with each other."
Novation is never presumed, it must be proven as
a fact either by express stipulation of the parties or
by implication derived from an irreconcilable
incompatibility between the old and the new
obligation.
Records showed that the parties never even
intended to novate their previous agreement. It is
true that Ong paid the spouses small sums of
money in contravention of the manner of payment
stipulated in their contract. These installments
were, however, objected to by the spouses.
Moreover, in order for novation to take place, the
concurrence of the following requisites is
indispensable: (1) there must be a previous valid
obligation; (2) there must be an agreement of the
parties concerned to a new contract; (3) there
must be the extinguishment of the old contract;
and (4) there must be the validity of the new
contract.
The requisites are not found in the case. The
subsequent acts of the parties hardly demonstrate
their intent to dissolve the old obligation as a
consideration for the emergence of the new one.
Again, novation is never presumed, there must be
an express intention to novate. (Ong v. CA, G.R.
No. 97347, 06 July 1999)
The Benos spouses and Lawilao spouses
executed a Pacto de Retro Sale where the Benos
spouses sold their lot and the building erected
thereon for P300,000.00, 1/2 of which was to be
paid in cash and the other half to be paid to the
bank to pay off the loan of the Benos spouses.
Under the contract, the Benos spouses could
redeem the property within 18 months from date of
execution by returning the contract price,
otherwise, the sale would become irrevocable
without necessity of a final deed to consolidate
ownership over the property in the name of the
Lawilao spouses.
After paying the P150,000.00, the Lawilao
spouses immediately took possession of the
property and leased out the building thereon.
However, instead of paying the loan to the bank,
Janice Lawilao restructured it twice. Eventually,
the loan became due and demandable. Thus, a
son of the Benos spouses paid the bank. On the
same day, the Lawilao spouses also went to the
bank and offered to pay the loan, but the bank
refused to accept the payment.
The Lawilao spouses then filed with the MCTC for
consignation. Subsequently, the Lawilao spouses
filed with the MCTC a complaint for consolidation
of ownership.
Q: Is there a valid tender of payment and
consignation by spouses Lawilao of the balance of
the contract price?
54
2007 Team Bar-Ops Civil Law Committee
A: Tender of payment is the manifestation by
debtors of their desire to comply with or to pay
their obligation. If the creditor refuses the tender of
payment without just cause, the debtors are
discharged from the obligation by the consignation
of the sum due. Consignation is made by
depositing the proper amount to the judicial
authority, before whom the tender of payment and
the announcement of the consignation shall be
proved. All interested parties are to be notified of
the consignation. Compliance with these requisites
is mandatory.
In the instant case, spouses Lawilao spouses filed
the petition for consignation against the bank
without notifying the Benos spouses. Hence, the
spouses Lawilao failed to prove the payment of
the balance of the purchase price and
consignation. In fact, even before the filing of the
consignation case, the spouses Lawilao spouses
never notified the Benos spouses of their offer to
pay. (Spouses Benos v. Spouses Lawilao, G.R.
No. 172259, 05 December 2006)
Q: Does spouses Benos have the right to rescind
the contract?
A: The pacto de retro sale does not contain a
provision authorizing its extrajudicial rescission in
case one of the parties fails to comply with what is
incumbent upon him. Spouses Benos cannot
unilaterally rescind the contract without the
intervention of the court. However, even if the
spouses Benos did not rescind the contract
through a notarial act, they nevertheless rescinded
the same in their answer with counterclaim. Since
spouses Lawilao seriously breached the contract,
therefore, the same is rescinded in favor of
spouses Benos. (Spouses Benos v. Spouses
Lawilao, G.R. No. 172259, 05 December 2006)
Khe Hong Cheng, alias Felix Khe, is the owner of
Butuan Shipping Lines. The Philippine Agricultural
Trading Corporation (PATC) shipped on board a
vessel owned by petitioner Khe Hong Cheng,
3,400 bags of copra. The said shipment of copra
was covered by a marine insurance policy issued
by Philam. The vessel, however, sank resulting in
the total loss of the shipment. Because of the loss,
the insurer, paid the value of the copra.
Having been subrogated into the rights of PATC,
Philam filed an action to recover the money paid
based on breach of contract of carriage. While the
case was still pending, petitioner Khe Hong Cheng
executed deeds of donations of parcels of land in
favor of his children.
Then, the trial court rendered judgment against
Khe Hong Cheng.
When the sheriff, accompanied by counsel of
Philam, went to Butuan City to enforce the alias
writ of execution, they discovered that Khe Hong
Cheng no longer had any property and that he had
conveyed the subject properties to his children.
Thus, Philam filed a complaint for the rescission of
the deeds of donation. The trial court ruled in favor
of Philam which was affirmed by the CA.
Q: Does the 4 year prescriptive period as provided
for in Article 1389 of the Civil Code bar Philam to
file its action for rescission of the subject deeds of
donation?
University of Santo Tomas
A: Article 1389 of the Civil Code simply provides
that, "The action to claim rescission must be
commenced within four years." Since this
provision of law is silent as to when the
prescriptive period would commence, the general
rule, i.e., from the moment the cause of action
accrues, therefore, applies. Article 1150 of the
Civil Code is particularly instructive:
Art. 1150. The time for prescription for all
kinds of actions, when there is no special
provision which ordains otherwise, shall be
counted from the day they may be brought.
Indeed, the principle that it is the legal possibility
of bringing the action which determines the
starting point for the computation of the
prescriptive period for the action
It is thus apparent that an action to rescind or an
accion pauliana must be of last resort, availed of
only after all other legal remedies have been
exhausted and have been proven futile. For an
accion pauliana to accrue, the following requisites
must concur:
1) That the plaintiff asking for rescission has a
credit prior to, the alienation, although
demandable later; 2) That the debtor has
made a subsequent contract conveying a
patrimonial benefit to a third person; 3) That
the creditor has no other legal remedy to
satisfy his claim, but would benefit by
rescission of the conveyance to the third
person; 4) That the act being impugned is
fraudulent; 5) That the third person who
received the property conveyed, if by onerous
title, has been an accomplice in the fraud.
The date of the decision of the trial court against
the debtor is immaterial. What is important is that
the credit of Philam antedates that of the
fraudulent alienation by the debtor of his property.
After all, the decision of the trial court against the
debtor will retroact to the time when the debtor
became indebted to the creditor.
Moreover, the following successive measures
must be taken by a creditor before he may bring
an action for rescission of an allegedly fraudulent
sale: (1) exhaust the properties of the debtor
through levying by attachment and execution upon
all the property of the debtor, except such as are
exempt from execution; (2) exercise all the rights
and actions of the debtor, save those personal to
him (accion subrogatoria); and (3) seek rescission
of the contracts executed by the debtor in fraud of
their rights (accion pauliana). Without availing of
the first and second remedies, i.e.. exhausting the
properties of the debtor or subrogating themselves
in Francisco Bareg's transmissible rights and
actions. petitioners simply: undertook the third
measure and filed an action for annulment of sale.
This cannot be done.
Even if Philam was aware that Khe Hong Cheng
had executed the deeds of donation in favor of his
children, the complaint against Butuan Shipping
Lines and/or petitioner Khe Hong Cheng was still
pending. Philam had no idea, at the time that the
trial court’s judgment would be in its favor and
further, that such judgment would not be satisfied.
Philam only learned about the unlawful
conveyances made by Khe Hong Cheng in
January 1997 when its counsel accompanied the
sheriff to Butuan City to attach the properties of

CIVIL LAW NOTES
Khe Hong Cheng. There they found that he no
longer had any properties in his name.
It was only then that Philam's action for rescission
of the deeds of donation accrued because then it
could be said that Philam had exhausted all legal
means to satisfy the trial court's judgment in its
favor.
Since Philam filed its complaint for accion
pauliana on February 25, 1997, barely a month
from its discovery that Khe Hong Cheng had no
other property to satisfy the judgment award
against him, its action for rescission of the subject
deeds clearly had not yet prescribed. (Khe Hong
Cheng v. CA, G.R. No. 144169, 28 March 2000)
Reyes filed before the trial court a complaint for
annulment of contract and damages against Lim
and Keng and Harrison Lumber. The complaint
alleged that, Reyes as seller and Lim as buyer
entered into a contract to sell of a parcel of land.
Harrison Lumber occupied the property as lessee.
Lim filed his answer stating that he was ready and
willing to pay the balance of the purchase price.
Lim requested a meeting with Reyes but Reyes
kept postponing it. Reyes offered to return the P10
million downpayment to Lim because Reyes was
having problems in removing the lessee from the
property. Lim rejected Reyes’ offer. Lim learned
that Reyes had already sold the property to Line
One Foods Corporation.
Then, the trial court ruled that an action for
rescission could prosper only if the party
demanding rescission can return whatever he may
be obliged to restore should the court grant the
rescission. Reyes was directed to deposit the P10
million downpayment with the clerk of court. But
Reyes refused.
Q: Does Reyes have the obligation to deposit the
P10 million downpayment in the court?
A: Yes. There is also no plausible or justifiable
reason for Reyes to object to the deposit of the
P10 million down payment in court. The contract to
sell can no longer be enforced because Reyes
himself subsequently sold the property. Both Lim
and Reyes are seeking for rescission of the
contract.
Under article 1385 of the Civil Code, rescission
creates the obligation to return the things that are
the object of the contract. Rescission is possible
only when the person demanding rescission can
return whatever he may be obliged to restore. A
court of equity will not rescind a contract unless
there is restitution, that is, the parties are restored
to the status quo ante.
Depositing the P10 million down payment in court
ensure restitution of the P10 million to its rightful
owner. Lim, on the other hand, has nothing to
refund, as he has not received anything under the
contract to sell.
The principle that no person may unjustly enrich
himself at the expense of another is embodied in
Article 22 of the Civil Code. This principle applies
not only to substantive rights but also to
procedural remedies. By seeking rescission, a
seller necessarily offers to return what he has
received from the buyer. Such a seller may not
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take back his offer if the court deems it equitable,
to prevent unjust enrichment and ensure
restitution, to put the money in judicial deposit.
In this case, it was just, equitable and proper for
the trial court to order the deposit of the P10
million down payment to prevent unjust
enrichment by Reyes at the expense of Lim.
(Reyes v. Lim, Keng and Harrison Lumber,
Inc., G.R. No. 134241, 11 August 2003)
Barreto and Sons owned 43 parcels of land which
were mortgaged with UCPB. The obligation of the
corporation with remained unpaid resulting to
foreclosure. Goldenrod offered to buy the property
from Barreto & Sons which it accepted.
Goldenrod enclosed an earnest money of P1
million to form part of the purchase price.
When the term of existence of Barreto & Sons
expired, all its assets and liabilities including the
parcels of land were transferred to Barreto Realty.
Goldenrod's offer to buy the property resulted in its
agreement with Barreto Realty that Goldenrod
would pay the outstanding obligations of Barreto
Realty with UCPB.
Goldenrod did not pay UCPB. It requested for an
extension but it refused.
Because of the denial of UCPB for extension to
pay the obligation, Logarta, which acted as agent
and broker of Goldenrod, wrote Que informing him
that it could not go through with the purchase of
the property. Logarta also demanded the refund of
the earnest money given by Goldenrod to Barreto
Realty. Barreto Realty refused, thus, Goldenrod
file a complaint against Barreto Realty.
Q: In the absence of a specific stipulation, may the
seller of real estate keep the earnest money to
answer for damages in the event the sale fails due
to the fault of the prospective buyer?
A: No. Under Art. 1482 of the CC, whenever
earnest money is given in a contract of sale, it
shall be considered as part of the purchase price
and as proof of the perfection of the contract. It
was an advance payment which must be deducted
from the total price.
Goldenrod and Barretto Realty did not intend that
the earnest money or advance payment would be
forfeited when the buyer should fail to pay the
balance of the price, especially in the absence of a
clear and express agreement thereon.
Moreover, Goldenrod resorted to extrajudicial
rescission of its agreement with Barretto Realty.
In University of the Philippines v. de los Angeles,
the right to rescind contracts is not absolute and is
subject to scrutiny and review by the proper court.
SC held further, in the more recent case of Adelfa
Properties, Inc. v. Court of Appeals, that rescission
of reciprocal contracts may be extrajudicially
rescinded unless successfully impugned in court.
If the party does not oppose the declaration of
rescission of the other party, specifying the
grounds therefor, and it fails to reply or protest
against it, its silence thereon suggests an
admission of the veracity and validity of the
rescinding party's claim.
And under Article 1385 of the Civil Code,
rescission creates the obligation to return the
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2007 Team Bar-Ops Civil Law Committee
things which were the object of the contract
together with their fruits and interest.
Therefore, by virtue of the extrajudicial rescission
of the contract to sell by Goldenrod without
opposition from Barretto Realty, which in turn, sold
the property to other persons, Barretto Realty, had
the obligation to return the earnest money which
formed part of the purchase price plus legal
interest from the date it received notice of
rescission. It would be most inequitable if Barretto
Realty would be allowed to retain the money at the
same time appropriate the proceeds of the second
sale made to another. (Goldenrod, Inc. v.
CA, G.R. No. 126812, 24 November 1998)
Pursuant to a promissory note M.B. Lending
Corporation extended a loan to the spouses
Azarraga, together with Palmares. After the
Azarraga spouses paid partially, it left an unpaid
balance. And no payments were made after the
last payment.
Consequently, on the basis of Palmares’ solidary
liability under the promissory note, the corporation
filed a Palmares as the lone party-defendant, to
the exclusion of the principal debtors, allegedly by
reason of the insolvency of the latter.
Q: Where Palmares signs a promissory note as a
co-maker and binds herself to be jointly and
severally liable with the principal debtor in case
the latter defaults in the payment of the loan, is
such undertaking of Palmares deemed to be that
of a surety as an insurer of the debt, or of a
guarantor who warrants the solvency of the
debtor?
A: Palmares is primarily liable as a surety.
The basis of Palmares' liability under the
promissory note is:
ATTENTION TO CO-MAKERS: PLEASE
READ WELL
I, Mrs. Estrella Palmares, as the Co-maker of
the above-quoted loan, have fully understood
the contents of this Promissory Note for Short-
Term Loan:
That as Co-maker, I am fully aware that I shall
be jointly and severally or solidarily liable with
the above principal maker of this note;
That in fact, I hereby agree that M.B.
LENDING CORPORATION may demand
payment of the above loan from me in case
the principal maker, Mrs. Merlyn Azarraga
defaults in the payment of the note subject to
the same conditions above-contained.
Palmares contends that although the second
paragraph says that she is liable as a surety, the
third paragraph defines the nature of her liability
as that of a guarantor. Palmares expressly bound
herself to be jointly and severally or solidarily liable
with the principal maker of the note. The terms of
the contract are clear, explicit and unequivocal
that Palmares' liability is that of a surety.
The terms "jointly and severally or solidarily liable"
contained in the contract which Palmares claims
that are technical and legal terms which could not
be easily understood by an ordinary layman like
her is contrary to her manifestation in the contract
that she "fully understood the contents" of the
promissory note and that she is "fully aware" of her
solidary liability with the principal maker. She that
University of Santo Tomas
she voluntarily affixed her signature thereto, thus,
she cannot now be heard to claim otherwise.
Q: Should the corporation proceed first against the
principal debtor before suing the surety?
A: A creditor's right to proceed against the surety
exists independently of his right to proceed against
the principal.
Under Article 1216 of the Civil Code, the creditor
may proceed against any one of the solidary
debtors or some or all of them simultaneously. The
rule, therefore, is that if the obligation is joint and
several, the creditor has the right to proceed even
against the surety alone.
Since, generally, it is not necessary for the creditor
to proceed against a principal in order to hold the
surety liable, where, the obligation of the surety is
the same that of the principal, then soon as the
principal is in default, the surety is likewise in
default, and may be sued immediately and before
any proceedings are had against the principal.
In the absence of statute or agreement otherwise,
a surety is primarily liable, and with the rule that
his proper remedy is to pay the debt and pursue
the principal for reimbursement, the surety cannot
at law, unless permitted by statute and in the
absence of any agreement limiting the application
of the security, require the creditor or obligee,
before proceeding against the surety, to resort to
and exhaust his remedies against the principal,
particularly where both principal and surety are
equally bound.
Moreover, is a rule that there is nothing to prevent
the creditor from proceeding against the principal
at any time. At any rate, if the surety is dissatisfied
with the degree of activity displayed by the creditor
in the pursuit of his principal, he may pay the debt
himself and become subrogated to all the rights
and remedies of the creditor. (Palmares v.
CA, G.R. No. 126490, 31 March 1998)
Sulit, Mahinay, Pegarido, Bacusmo, Niere, Bacus,
Nemenzo, Dariogo, and Alegarbes filed a
complaint with the DOLE against Filipinas Carbon
Mining Corporation, Sicat, Gonzales, Chiu Chin
Gin, Lo Kuan Chin, and INIMACO, for payment of
separation pay and unpaid wages.
The labor arbiter held that Filipinas Carbon Mining
Corporation, Sicat, Gonzales, Chiu Chin Gin, Lo
Kuan Chin, and INIMACO should pay to pay
complainants in various amounts.
No appeal was filed within the reglementary period
thus, the decision became final and executory.
However, INIMACO filed a "Motion to Quash Alias
Writ of Execution and Set Aside Decision,"
alleging that the alias writ of execution altered and
changed the tenor of the decision by changing the
liability of the respondents from joint to solidary, by
the insertion of the words "AND/OR" between
"Antonio Gonzales/Industrial Management
Development Corporation and Filipinas Carbon
and Mining Corporation, et al." But it was denied.
Q: Is the liability of INIMACO pursuant to the
decision of the labor arbiter solidary or not?
A: INIMACO's liability is not solidary but merely
joint.
A solidary or joint and several obligation is one in
which each debtor is liable for the entire obligation,

CIVIL LAW NOTES
and each creditor is entitled to demand the whole
obligation. In a joint obligation each obligor
answers only for a part of the whole liability and to
each obligee belongs only a part of the correlative
rights.
Well-entrenched is the rule that solidary obligation
cannot lightly be inferred. There is a solidary
liability only when the obligation expressly so
states, when the law so provides or when the
nature of the obligation so requires.
In the dispositive portion of the labor arbiter, the
word "solidary" does not appear. The said fallo
expressly states the following respondents therein
as liable, namely: Filipinas Carbon Mining
Corporation, Sicat, Gonzales, Chiu Chin Gin, Lo
Kuan Chin, and INIMACO. Nor can it be inferred
therefrom that the liability of the 6 respondents in
the case below is solidary, thus their liability
should merely be joint. (INIMACO v. NLRC, G.R.
No. 101723, 11 May 2000)
Chua bought and imported to the Philippines
dicalcium phosphate. The shipment was insured
by First Insurance Co. "against all risks" at port of
departure under a marine policy with Smith, Bell,
and Co. stamped at the lower left side of the policy
as "Claim Agent."
The cargo arrived at the Port of Manila and the
entire cargo was discharged with a number of the
cargo in apparent bad order condition. Chua
secured the services of a cargo surveyor who
reported that out of the 1,250 bags of the imported
material, 600 were damaged by tearing at the
sides of the container bags and the contents partly
empty.
Thus, Chau filed with Smith, Bell, and Co., Inc. a
formal statement of claim for the loss. Smith, Bell,
and Co., Inc. informed Chua that its principal
offered only 50% of the claim which was rejected
by Chua. No settlement of the claim having been
made, Chua then filed an action.
Q: Is a local claim or settling agent like personally
and/or solidarily liable upon a marine insurance
policy issued by its disclosed foreign principal?
A: Article 1207 of the Civil Code clearly provides
that "there is a solidary liability only when the
obligation expressly so states, or when the law or
the nature of the obligation requires solidarity."
The well-entrenched rule is that solidary obligation
cannot lightly be inferred. It must be positively and
clearly expressed.
The Insurance Code is quite clear as to the
purpose and role of a resident agent. Such agent,
as a representative of the foreign insurance
company, is tasked only to receive legal
processes on behalf of its principal and not to
answer personally for any insurance claims.
(Smith, Bell & Co., Inc. v. CA, G.R. No. 110668,
06 February 1997)
Commando, and Lapanday entered into a guard
service contract. Commando provided security
guards in defendant's banana plantation. Then, a
wage order was issued increasing the minimum
wage in which Lapanday complied with. Another
wage order was issued, again, increasing said
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57
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minimum wage. Commando demanded that its
contract with Lapanday be upgraded in
compliance with the wage orders but Lapanday
refused. Their contract expired without the rate
adjustment called for the wage orders being
implemented.
Thus, Commando filed a complaint against
Lapanday.
Q: Does Commando, as security agency which did
not pay the wage increases of the security guards
can recover said wage increases from Lapanday
after the expiration of the contract between them
and the termination of the security guards’
services?
A: As mandated by the Labor Code, the principal
(Lapanday) and the contractor (Commando) are
jointly and severally liable to the employees for
their wages to assure compliance with the
provisions therein including the minimum wage.
In Eagle Security, Inc. vs. NLRC and Spartan
Security and Detective Agency, Inc. vs. NLRC, the
SC ruled that under the Labor Code, in case the
agency fails to pay them the amounts claimed,
PTSI should be held solidarily liable with EAGLE.
Should EAGLE pay, it can claim an adjustment
from PTSI for an increase in consideration to
cover the increases payable to the security
guards.
It is clear also from such that it is only when the
contractor pays the increases mandated that it can
claim an adjustment from the principal to cover the
increases payable to the security guards. The
conclusion is in line with Article 1217.
Pursuant to the above provision, the right of
reimbursement from a co-debtor is recognized in
favor of the one who paid.
The liability of Lapanday to reimburse Commando
only arises if and when Commando actually pays
its employees the increases granted by the wage
orders. Payment, which means not only the
delivery of money but also the performance, in any
other manner, of the obligation, is the operative
fact which will entitle either of the solidary debtors
to seek reimbursement for the share which
corresponds to each of the debtors.
Commando has not actually paid the security
guards the wage increases. Neither is it alleged
that there is an extant claim for such wage
adjustments from the security guards concerned,
whose services have already been terminated by
the contractor. Thus, Commando has no cause of
action against Lapanday to recover the wage
increases.
The increases in wages are intended for the
benefit of the laborers and the contractor may not
assert a claim against the principal for salary wage
adjustments that it has not actually paid.
Otherwise, the contractor would be unduly
enriching itself by recovering wage increases, for
its own benefit. (Lapanday Agricultural
Development Corporation v. CA, G.R. No.
112139, 31 January 2000)
Espina is the registered owner of a Condominium
Unit. Espina as seller and Diaz as buyer, executed
a Provisional Deed of Sale, whereby the former
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2007 Team Bar-Ops Civil Law Committee
sold to the latter the aforesaid condominium unit
for the amount of P100,000.00 to be paid upon the
execution of the contract and the balance to be
paid through PCI Bank postdated checks.
Subsequently, Diaz informed Espina that his
checking account with PCI Bank has been closed
and a new checking account with the same
drawee bank is opened for practical purposes. Ms.
Socorro Diaz, wife of Diaz, paid Espina
P200,000.00, acknowledged by him as partial
payment for the condominium unit subject of this
controversy. The next day Espina sent petitioner a
"Notice of Cancellation" of the Provisional Deed of
Sale. However, despite the Notice of Cancellation
from private respondent, the latter accepted
payment from Diaz.
Q: Is the provisional deed of sale novated the
existing contract of lease?
A: No. The novation must be clearly proved since
its existence is not presumed. "In this light,
novation is never presumed; it must be proven as
a fact either by express stipulation of the parties or
by implication derived from an irreconcilable
incompatibility between old and new obligations or
contracts." Novation takes place only if the parties
expressly so provide, otherwise, the original
contract remains in force. In other words, the
parties to a contract must expressly agree that
they are abrogating their old contract in favor of a
new one. Where there is no clear agreement to
create a new contract in place of the existing one,
novation cannot be presumed to take place,
unless the terms of the new contract are fully
incompatible with the former agreement on every
point. Thus, a deed of cession of the right to
repurchase a piece of land does not supersede a
contract of lease over the same property. In the
provisional deed of sale in this case, after the
initial down payment, respondent's checks in
payment of six installments all bounced and were
dishonored upon presentment for the reason that
the bank account was closed. (Espina v. CA,
G.R. No. 116805, 22 June 2000)
Cuba is a grantee of a Fishpond Lease Agreement
from the Government. Cuba obtained loans from
DBP under the terms stated in the Promissory
Notes. As security for said loans, Cuba executed
two Deeds of Assignment of her Leasehold Rights.
Cuba failed to pay her loan. Without foreclosure
proceedings, DBP appropriated the Leasehold
Rights of Cuba over the fishpond in question. After
DBP has appropriated the Leasehold Rights of
Cuba over the fishpond in question, DBP, in turn,
executed a Deed of Conditional Sale of the
Leasehold Rights in favor of Cuba over the same
fishpond.
In the negotiation for repurchase, Cuba addressed
two letters to the Manager DBP, accepting the
offer to repurchase. After the Deed of Conditional
Sale was executed in favor, Cuba. Cuba failed to
pay the amortizations stipulated in the Deed of
Conditional Sale. After Cuba failed to pay the
amortization as stated in Deed of Conditional Sale,
she entered with the DBP a temporary
arrangement whereby in consideration for the
deferment of the Notarial Rescission of Deed of
Conditional Sale, Cuba promised to make certain
University of Santo Tomas
payments as stated in temporary Arrangement.
DBP thereafter sent a Notice of Rescission which
was received by Cuba.
After the Notice of Rescission, DBP took
possession of the Leasehold Rights of the
fishpond in question. That after defendant DBP
took possession of the Leasehold Rights over the
fishpond in question, DBP advertised in the
SUNDAY PUNCH the public bidding and that DBP
thereafter executed a Deed of Conditional Sale in
favor of Caperal.
Q: Does the assignment made by DBP amounts to
novation, cession or dation?
A: No. DBP's contention that the assignment
novated the promissory notes in that the obligation
to pay a sum of money the loans (under the
promissory notes) was substituted by the
assignment of the rights over the fishpond (under
the deed of assignment) cannot be upheld. As
correctly pointed out by CUBA, the said
assignment merely complemented or
supplemented the notes; both could stand
together. The former was only an accessory to the
latter. Contrary to DBP's submission, the
obligation to pay a sum of money remained, and
the assignment merely served as security for the
loans covered by the promissory notes.
Significantly, both the deeds of assignment and
the promissory notes were executed on the same
dates the loans were granted.
Neither did the assignment amount to payment by
cession under Article 1255 of the Civil Code for
the plain and simple reason that there was only
one creditor, the DBP. Article 1255 contemplates
the existence of two or more creditors and
involves the assignment of all the debtor's
property.
Nor did the assignment constitute dation in
payment under Article 1245 of the civil Code,
which reads: "Dation in payment, whereby
property is alienated to the creditor in satisfaction
of a debt in money, shall be governed by the law
on sales." It bears stressing that the assignment,
being in its essence a mortgage, was but a
security and not a satisfaction of indebtedness.
(DBP v. CA, G.R. No. 118342, 05 January 1998)
Diaz and Company got a loan from the former
PaBC [Pacific Banking Corporation]. The loan was
secured by a real estate mortgage over two
parcels of land owned by the plaintiff Diaz Realty.
Allied Banking Corporation rented an office space
in the building constructed on the properties
covered by the mortgage contract, with the
conformity of mortgagee PaBC, whereby the
parties agreed that the monthly rentals shall be
paid directly to the mortgagee for the lessor's
account, either to partly or fully pay off the
aforesaid mortgage indebtedness. Allied Bank
paid the monthly rentals to PaBC. FEBTC
purchased the credit of Diaz & Company in favor
of PaBC, but it was only after 2 years that Diaz
was informed about it. Diaz) asked the defendant
to make an accounting of the monthly rental
payments made by Allied Bank. Diaz tendered to
FEBTC the amount of P1,450,000.00 through an
Interbank check, in order to prevent the imposition
of additional interests, penalties and surcharges

CIVIL LAW NOTES
on its loan; that FEBTC did not accept it as
payment; that instead, Diaz was asked to deposit
the amount with the defendant's Davao City
Branch Office.
Q: Was there a valid tender of payment?
A: No. FEBTC received from Diaz a check. The
check was subsequently cleared and honored by
Interbank, as shown by the Certification.
In general, a check does not constitute legal
tender, and that a creditor may validly refuse it. It
must be emphasized, however, that this dictum
does not prevent a creditor from accepting a check
as payment. In other words, the creditor has the
option and the discretion of refusing or accepting
it.
In other words, tender of pament is the definitive
act of offering the creditor what is due him or her,
together with the demand that the creditor accept
the same. More important, there must be a fusion
of intent, ability and capability to make good such
offer, which must be absolute and must cover the
amount due. (FEBTC v. Diaz Realty Inc.,
G.R. No. 138588, 23 August 2001)
SDIC operates a credit card system under the
name of Diners Club through which it extends
credit accommodation to its cardholders for the
purchase of goods and payment of services from
its member establishments to be reimbursed later
on by the cardholder upon proper billing. Danilo A.
Alto applied for a Regular (Local) Card with SDIC.
He got as his surety his own sister-in-law Jeanette
Molino Alto. Thus, Danilo signed the printed
application form and Jeanette signed the Surety
Undertaking. On the basis of the completed and
signed Application Form and Surety Undertaking,
the SDIC issued to Danilo a Diners Card. The
latter used this card and initially paid his
obligations to SDIC. Danilo wrote SDIC a letter
requesting it to upgrade his Regular Diners Club
Card to a Diamond (Edition) one. As a
requirement of SDIC, Danilo secured from
Jeanette her approval and the latter obliged.
Danilo's request was granted and he was issued a
Diamond (Edition) Diners Club Card. Danilo had
incurred credit charged plus appropriate interest
and service charge. He defaulted in the payment
of this obligation.
Q: Was the upgrading a novation of the original
agreement governing the use of Danilo Alto's first
credit card, as to extinguish that obligation?
A: Yes. Novation, as a mode of extinguishing
obligations, may be done in two ways: by explicit
declaration, or by material incompatibility.
There is no doubt that the upgrading was a
novation of the original agreement covering the
first credit card issued to Danilo Alto, basically
since it was committed with the intent of canceling
and replacing the said card. However, the
novation did not serve to release petitioner from
her surety obligations because in the Surety
Undertaking she expressly waived discharge in
case of change or novation in the agreement
governing the use of the first credit card. (Molino
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v. Security Diners International Corporation,
G.R. No. 136780, 16 August 2001)
After the departure of Gilda Corpuz for Middel
East, Judie’s wife, he sold the remaining one-half
of their lot to Guiang under a deed of transfer of
rights.
Gilda returned home and found that only Junie
was staying in their house. For staying in spouses
Guiang’s house sold by Judie, they complained
before the barangay authorities for trespassing.
Then, the parties signed an amicable settlement in
which Gilda and her children will voluntarily leave
the house.
Q: Is the deed of transfer of rights executed by
Judie Corpuz and the spouses Guiang void or
voidable?
A: It is void. Article 1390, par. 2 of the NCC, refers
to contracts visited by vices of consent, i.e.,
contracts which were entered into by a person
whose consent was obtained and vitiated through
mistake, violence, intimidation, undue influence or
fraud.
Gilda’s consent to the contract of sale of their
conjugal property was totally inexistent or absent.
Thus, said contract properly falls within the ambit
of Article 124 of the FC.
Q: Is the amicable settlement valid?
A: The deed to transfer of rights cannot be ratified,
even by an amicable settlement. The amicable
settlement entered into by Corpuz and the
spouses Guiang is a contract. Such a contract is
also void. Clearly, a void contract cannot be
ratified. In sum, the deed to transfer of rights and
the amicable settlement are null and void.
(Spouses Guiang v. CA, G.R. No. 125172, 26
June 1998)
Restituta Leonardo is the only legitimate child of
the late spouses Tomasina Paul and Balbino
Leonardo. Teodoro, Victor, Corazon, Piedad, as
well as the late Eduvigis and Dominador, all
surnamed Sebastian, are the illegitimate children
of Tomasina with Jose Sebastian after she
separated from Balbino Leonardo.
Leonardo filed an action to declare the nullity of
the extrajudicial settlement of the estate of
Tomasina Paul and Jose Sebastian. She claims
that her consent was vitiated because she was
deceived into signing the extrajudicial settlement.
Q: Is the consent given by Leonardo to the
extrajudicial settlement of estate was given
voluntarily?
A: No. To be valid, consent must meet the
following requisites: (a) it should be intelligent, or
with an exact notion of the matter to which it
refers; (b) it should be free and (c) it should be
spontaneous. Intelligence in consent is vitiated by
error; freedom by violence, intimidation or undue
influence; and spontaneity by fraud.
To determine the effect of an alleged error, both
the objective and subjective aspects of the case
which is the intellectual capacity of the person who
committed the mistake.
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2007 Team Bar-Ops Civil Law Committee
Mistake, on the other hand, in order to invalidate
consent should refer to the substance of the thing
which is the object of the contract, or to those
conditions which have principally moved one or
both parties to enter into the contract.
Contracts where consent is given by mistake or
because of violence, intimidation, undue influence
or fraud are voidable. These circumstances are
defects of the will, the existence of which impairs
the freedom, intelligence, spontaneity and
voluntariness of the party in giving consent to the
agreement.
Art. 1332 of the Civil Code states that "when one
of the parties is unable to read, or if the contract is
in a language not understood by him, and mistake
or fraud is alleged, the person enforcing the
contract must show that the terms thereof have
been fully explained to the former."
The provision was intended to protect a party to a
contract disadvantaged by illiteracy, ignorance,
mental weakness or some other handicap. It
contemplates a situation wherein a contract is
entered into but the consent of one of the
contracting parties is vitiated by mistake or fraud
committed by the other.
Thus, in case one of the parties to a contract is
unable to read and fraud is alleged, the person
enforcing the contract must show that the terms
thereof have been fully explained to the former.
The presumption of mistake or error on the part of
Leonardo was not sufficiently rebutted by the
Sebastians. The Sebastians failed to offer any
evidence to prove that the extrajudicial settlement
of estate was explained in a language known to
Leonardo.
Leonardo, who only finished Grade 3, was not in a
position to give her free, voluntary and
spontaneous consent without having the
document, which was in English, explained to her
in the Pangasinan dialect. She did not understand
English.
Therefore, the consent of Leonardo was
invalidated by a substantial mistake or error,
rendering the agreement voidable. The
extrajudicial partition between the Sebastians and
Leonardo should be annulled and set aside on the
ground of mistake. (Leonardo vs. CA, G.R. No.
125485, 13 September 2004)
Cenido, as an heir of Aparato and claiming to be
the owner of a house and lot, filed a complaint for
ejectment against spouses Apacionado. On the
other hand, spouses Apacionado allege that they
are the owners which is unregistered purchased
by them from its previous owner, Aparato. Their
claim is anchored on a 1-page typewritten
document entitled "Pagpapatunay," executed by
Aparato.
Q: Is the “Pagpapatunay” entered into by
Bonifacio and spouse Apacionado valid and
enforceable?
A: It is valid but unenforceable. Generally,
contracts are obligatory, in whatever form such
contracts may have been entered into, provided all
the essential requisites for their validity are
present. When, however, the law requires that a
contract be in some form for it to be valid or
University of Santo Tomas
enforceable, that requirement must be complied
with. Art. 1358 is an exception.
The sale of real property should be in writing and
subscribed by the party charged for it to be
enforceable. The "Pagpapatunay" is in writing and
subscribed by Aparato, hence, it is enforceable
under the Statute of Frauds. Not having been
subscribed and sworn to before a notary public,
however, the "Pagpapatunay" is not a public
document, and therefore does not comply with
Article 1358, par 1.
Moreover, the requirement of a public document in
Article 1358 is not for the validity of the instrument
but for its efficacy. Although a conveyance of land
is not made in a public document, it does not
affect the validity of such conveyance.
The private conveyance of the house and lot is
therefore valid between Aparato and the spouses.
(Cenido v. Spouses Apacionado, G.R. No.
132474, 19 November 1999)
SMAB is a Swedish corporation with 3 subsidiary
corporations in the Phimco. Later, STORA, the
then parent company of SMAB, decided to sell the
latter’s worldwide match, lighter and shaving
products operation to Match NV of Netherlands,
(SMNV).
Then, SMNV initiated steps to sell the worldwide
match and lighter businesses. SMNV adopted a
two-pronged strategy, the first being to sell its
shares in Phimco Industries, Inc.
Enriquez, VP of Swedish Match Sociedad
Anonimas was commissioned and granted full
powers by SMNV to negotiate, with the resulting
transaction, however, made subject to final
approval by the board. Enriquez was held under
strict instructions that the sale of Phimco shares
should be executed on or before June 30, 1990.
Enriquez came to the Philippines and informed the
Philippine financial and business circles that the
Phimco shares were for sale. There was an
exchange of correspondence between SMAB and
ALS and Litonjua regarding the projected sale of
the Phimco shares. Litonjua offered to buy the
shares, excluding the lighter division for US$30.6
million, which per another letter was increased to
US$36 million. Litonjua stressed that the bid
amount could be adjusted.
SMAB replied informing Litonjua that ALS should
undertake a due diligence process or pre-
acquisition audit and review of the draft contract
for the match and forestry activities of Phimco.
However, SMAB made it clear that at the
completion of the due diligence process, ALS
should submit its final offer in US dollar terms not
later than June 30, 1990.
Litonjua in a letter expressed disappointment at
the apparent change in SMAB’s approach to the
bidding process. Prior to the deadline for
submission of the final bid, Litonjua advised SMAB
that they would be unable to submit the final offer.
Then, they signed a conditional contract with a
local group for the disposal of Phimco.
Q: Is the contract of sale between SMAB and ALS
unenforceable under the Statute of Frauds?
A: Yes. The Statute of Frauds embodied in Article
1403, par (2), of the Civil Code requires certain
contracts enumerated therein to be evidenced by

CIVIL LAW NOTES
some note or memorandum in order to be
enforceable. The term "Statute of Frauds" is
descriptive of statutes which require certain
classes of contracts to be in writing. The Statute
does not deprive the parties of the right to contract
with respect to the matters therein involved, but
merely regulates the formalities of the contract
necessary to render it enforceable. Evidence of the
agreement cannot be received without the writing
or a secondary evidence of its contents.
The purpose of the Statute is to prevent fraud and
perjury in the enforcement of obligations
depending for their evidence on the unassisted
memory of witnesses, by requiring certain
enumerated contracts and transactions to be
evidenced by a writing signed by the party to be
charged.
However, for a note or memorandum to satisfy the
Statute, it must be complete in itself and cannot
rest partly in writing and partly in parol. The note
or memorandum must contain the names of the
parties, the terms and conditions of the contract,
and a description of the property sufficient to
render it capable of identification. Such note or
memorandum must contain the essential elements
of the contract expressed with certainty that may
be ascertained from the note or memorandum
itself, or some other writing to which it refers or
within which it is connected, without resorting to
parol evidence.
The exchange of correspondence between the
parties do not constitutes the note or
memorandum within the context of Article 1403 of
the Civil Code. It is not complete in itself. First, it
does not indicate at what price the shares were
being sold. respondents were supposed to submit
their final offer in U.S. dollar terms. Second, the
letter does not state the mode of payment of the
price. In fact, Litonjua was supposed to indicate in
his final offer how and where payment for the
shares was planned to be made. (Swedish
Match, AB v. CA, G.R. No. 128120, 20 October
2004)
Spouses Jayme entered into a contract of lease of
their lot with Neri, president of Cebu Asiancars Inc.
It was stipulated that Asiancars may use the
leased premises as a collateral to secure payment
of a loan which Asiancars may obtain from any
bank, provided that the proceeds of the loan shall
be used solely for the construction of a building
which, upon the termination of the lease or the
voluntary surrender of the leased premises before
the expiration of the contract, shall automatically
become the property of the Jayme spouses.
Asiancars obtained a loan from MBTC with the lot
as 1 of the collaterals. Meeting financial difficulties
and incurring an outstanding balance on the loan,
Asiancars conveyed ownership of the building on
the leased premises to MBTC, by way of "dacion
en pago."
Q: Is dacion en pago by Asiancars in favor of
MBTC valid and binding despite the stipulation in
the lease contract that ownership of the building
will vest on the Jaymes at the termination of the
lease?
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A: Yes. Dacion en pago is the delivery and
transmission of ownership of a thing by the debtor
to the creditor as an accepted equivalent of the
performance of the obligation. It is a special mode
of payment where the debtor offers another thing
to the creditor who accepts it as equivalent of
payment of an outstanding debt. The undertaking
really partakes in one sense of the nature of sale,
that is, the creditor is really buying the thing or
property of the debtor, payment for which is to be
charged against the debtor’s debt.
As such, the essential elements of a contract of
sale, namely, consent, object certain, and cause
or consideration must be present. In its modern
concept, what actually takes place in dacion en
pago is an objective novation of the obligation
where the thing offered as an accepted equivalent
of the performance of an obligation is considered
as the object of the contract of sale, while the debt
is considered as the purchase price. In any case,
common consent is an essential prerequisite, be it
sale or novation, to have the effect of totally
extinguishing the debt or obligation.
MBTC was a purchaser in good faith. MBTC had
no knowledge of the stipulation in the lease
contract. Although the same lease was registered
and duly annotated, MBTC was charged with
constructive knowledge only of the fact of lease of
the land and not of the specific provision
stipulating transfer of ownership of the building to
the Jaymes upon termination of the lease. While
the alienation was in violation of the stipulation in
the lease contract between the Jaymes and
Asiancars, MBTC’s own rights could not be
prejudiced by Asiancars’ actions unknown to
MBTC. Thus, the transfer of the building in favor of
MBTC was properly held valid and binding.
(Jayme v. CA, G.R. No. 128669, 04 October
2002)
Insular Life invited companies/corporations to
participate in the bidding of its proposed building in
Lucena City. Asset Builders, with four 4 other
bidders submitted their respective bid proposals,
valid for sixty 60 days. After valuation, the project
manager submitted a report that Asset Builders’
bid was the lowest. among the bidders. Post-
qualifications proceedings of the bidders were
made.
Then, by letter, Insular Life awarded the general
construction contract of the proposed building to
Asselt Builders. However, Asset Builders sent a
letter to Insular stating that it never received any
written notice of award and since its bid offer had
a lifetime of 60 days, its offer was automatically
withdrawn after said date and that Insular Life had
not requested for an extension.
Thus, Insular Life filed a complaint for damages.
Q: Is there acceptance by petitioner of the offer
made by respondent and was it communicated to
the latter, thereby perfecting the contract?
A: No. The period given to Asset Builders within
which to accept the offer was not itself founded
upon or supported by any consideration.
Therefore, under the law, Asset Builders still had
the freedom and the right to withdraw the offer by
62
2007 Team Bar-Ops Civil Law Committee

communicating such withdrawal before Insular
Life’s acceptance of the offer; or, if the offer has
been accepted, before the acceptance came to be
known by Asset Builders.
Asset Builders had no knowledge of such
acceptance when it communicated its withdrawal
to Insular Life. It did send a formal letter
expressing and explaining its withdrawal. As of
that date, the decision to award the contract had
not been made according to the terms of the
instruction to bidders.
Besides, the subsequent acts between the parties
did not even serve as a confirmation of that
decision. The existence of a second proposal –
Insular Life's request for an adjustment of the bid
to accommodate the wage increase -- in fact
belies the perfection of any contract arising from
the first. There was indeed no acceptance of the
offer made by Asset Builders
In sum, there was only an offer and a counteroffer
that did not sum up to any final arrangement
containing the elements of a contract. (Insular
Life Assurance Company, Ltd. v. Asset
Builders Corporation, G.R. No. 147410, 05
February 2004)
Guansing obtained a loan from CDB, to secure the
payment, he mortgaged a parcel of land. As
Guansing defaulted in the payment of his loan,
CDB foreclosed the mortgage.
Then, Lolita Chan Lim offered to purchase the
property from CDB. Lim paid CDB P30,000.00 as
option money. However, Lim discovered that the
property was originally registered in the name of
Guansing’s father. It appears, that the father
instituted an action for the cancellation of his son's
title. The trial court rendered a decision restoring
the father’s previous title. Thus, Lim, joined by her
husband, filed an action for specific performance
and damages against CDB and its mother
company FEBTC.
property to petitioner for P2,000,000, with a down
payment and the balance payable within a period
of 15 years at 12% interest per annum,
compounded yearly.
Under the second contract, GSIS obligated itself to
construct for the OGCC a three-storey building on
the Manila Bay reclaimed area or to make
available another property acceptable to the
OGCC, to be conveyed to the Republic under the
same or mutually acceptable terms and conditions
as those of the first contract. In the meantime, the
OGCC was allowed to continue occupying the
second to the fifth floors of the building at an
annual rental. Then President Ferdinand E.
Marcos approved the second contract by
scribbling on the right upper hand corner and the
GSIS Board of Trustees approved the same.
Q: Is the second contract valid?
A: No. The second contract was null and void ab
initio for being in contravention of Section 3(e) and
(g) of RA 3019, otherwise known as the "Anti-Graft
and Corrupt Practices Act". Both the trial and
appellate courts found that the second contract
gave petitioner unwarranted benefits and was
grossly disadvantageous to the government.
Under Article 1409(7) of the CC, the contract was
null and void from the beginning.
The foregoing clearly shows that the second
contract caused undue injury to the government,
gave petitioner unwarranted benefits and was
grossly disadvantageous to the government. The
disquisition of the CA is sufficiently exhaustive and
convincing considering that in civil cases like this
one, the party with the burden of proof (in this
case, the respondents) needs only to establish its
case by a preponderance of evidence. (Lao v.
Republic of the Philippines, G.R. No. 160719,
23 January 2006)

Q: Can CDB and FEBTC refuse to return the

option money paid by spouses Lim?
A: No. Spouse Lim are thus entitled to recover the
option money paid by them. Moreover, since the
filing of the action for damages against CDB and
FEBTC amounted to a demand by the spouses for
the return of their money, interest thereon at the
legal rate is awarded. Indeed, Art. 1412(2) which
provides that the non-guilty party "may demand
the return of what he has given" clearly implies
that without such prior demand, the obligation to
return what was given does not become legally
demandable. (Cavite Development Bank v.
Spouses Lim, G.R. No. 131679, 01 February
2000)

GSIS is the registered owner of 3 parcels of land.

GSIS and the Republic of the Philippines, through
the Office of the Government Corporate Counsel
(OGCC), entered into a "lease-purchase"
agreement (first contract). GSIS agreed to transfer
the property to the OGCC for a consideration of
P1.5 million, payable in equal yearly amortization-
lease rentals for a period of 15 years. Years after,
Lao offered to purchase the property. GSIS and
petitioner executed a "lease-purchase" agreement
(second contract). GSIS agreed to sell the same
University of Santo Tomas

CIVIL LAW NOTES
Sales
A settlement over a land dispute was executed
between Ngo and Ong but before the court could
approve it, a complaint-in-intervention was filed by
Co alleging that it was agreed that the subject lot
would go to him after paying respondent Ngo for
such lot. Ngo vehemently denied having entered
into such agreement, much less having received
any amount since he refused and even destroyed
the checks given by Co.
Q: Is there a perfected contract of sale between
the parties?
A: None. In fine, the evidence of petitioner does
not indicate a perfection of the purported contract
of sale which, under Art. 1458, is a contract by
which "one of the contracting parties obligates
himself to transfer the ownership and to deliver a
determinate thing, and the other to pay
therefrom a price certain in money or its
equivalent." Under Article 1475, "the contract of
sale is perfected at the moment there is meeting of
the minds upon the thing which is the object of the
contract and upon the price. From that moment
the parties may reciprocally demand performance
subject to the provisions of the law governing the
form of contracts."
A definite agreement on the manner of payment of
the price is an essential element in the formation
of a binding and enforceable contract of sale.
Petitioner’s testimonial and documentary evidence
did not establish any definitive agreement or
meeting of the minds between the parties
concerning the price or term of payment. The
contention of petitioner that the agreement of sale
between him and private respondent was forged
during the arbitration meeting of 11 March 1979 is
contradicted by the Minutes of such meeting.
Based thereon, there was nothing whatsoever that
transpired to indicate that the sale occurred
between the parties. The admission of petitioner
himself that when he issued the checks amounting
to P19, 500.00 in favor of respondent Benito Ngo,
supposedly as partial payment of the purchase
price, the latter destroyed the checks, thereby
negating the existence of the meeting of the minds
of the parties on the sale. (Co v. Court of
Appeals, G.R. No. 123908, 09 February 1998)
X is a devisee of a certain parcel of land. X in his
capacity as an heir entered into a contract to sell
said parcel of land to Z during the probate
proceedings of the estate of the deceased. After
receiving the downpayment, X backed out from
the contract claiming that the probate court did not
approve the contract.
Q: Is the contract to sell entered into by X and Z
valid even w/o the approval of the probate court?
A: As correctly ruled by the Court f Appeals,
Section 7 of Rule 89 of the Rules of Court is not
applicable, because petitioner entered into the
contract to sell in her capacity as an heiress, not
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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ADVISER:
as an executrix or administratrix of the estate. In
the contract, she represented herself as the lawful
owner and seller of the subject parcel of land. She
also explained the reason for the sale to be
“difficulties in her living” conditions and
consequent “need of cash”. These representations
clearly evince that she was not acting on behalf of
the estate under probate when she entered into
contract of sell.
We emphasize that hereditary rights are
vested in heir or heirs from the moment of the
decedent’s death. Petitioner, therefore, became
the owner of her hereditary share the moment her
father died. Thus the lack of judicial approval does
not invalidate the contract to sell, because the
petitioner has the substantive right to sell the
whole or a part of her share in the estate of her
late father.
Finally, the petitioner is estopped from
backing out of her representation in her valid
contract to sell w/ private respondents, from whom
she received initial payment of P300,000.
Petitioner may not renege on her own acts and
representations, to the prejudice of the private
respondents who have relied on them.
Jurisprudence teaches us that neither the law nor
the courts will extricate a party from an unwise and
undesirable contract he or she entered into w/ all
the required formalities and w/ full awareness of its
consequences. (Opulencia v. Court of Appeals
GR no. 125835, 239 SCRA 385)
Spouses-petitioners negotiated with Gatus
concerning the possibility of buying his rights to
certain units at a subdivision developed by
respondent Phil-Ville for parties qualified to obtain
loans from GSIS. They paid Gatus an amount for
which Gatus issued them receipts in her own
name. As they were not GSIS members, they
looked for members who could act as
accommodation parties. However, the GSIS
disapproved their loan applications. Phil-Ville
advised them to seek other sources of financing.
In the meantime, they were allowed to remain in
the subject premises.
Q: Do petitioners and respondents have a
perfected and enforceable contract of sale or at
least an agreement to sell over the disputed
housing units?
A: None. As this Court sees it, there was no
contract of sale perfected between the private
parties over the said property, there being no
meeting of the minds as to terms, especially on
the price thereof. At best, only a proposed contract
to sell obtained which did not even ripen into a
perfected contract due at the first instance to
private respondents' inability to secure approval of
their GSIS housing loans. As it were, petitioners
and private respondents have not hurdled the
negotiation phase of a contract, which is the
period from the time the prospective contracting
parties indicate interest on the contract to the time
the contract comes into existence the perfection
stage upon the concurrence of the essential
64
2007 Team Bar-Ops Civil Law Committee
elements thereof. (Sps. Raet & Sps. Mitra v. CA,
G.R. No. 128016, 17 September 1998)
A and XYZ Development Corp. executed a
contract to sell over a parcel of land. A died w/o
having completed the installment on the property.
His heirs, herein petitioners, then took over the
contract to sell, assumed his obligations by paying
the selling price of the lot from their own funds,
and completed the payment in 1978.
Q: To whom should the final Deed of Absolute
Sale be executed by XYZ Development Corp.
upon full payment of the purchase price?
A: Indeed, on March 1978, XYZ Development
Corp. could not have transferred the title over the
lot through a Deed of Sale to A who had died
seven years earlier. In 1978, the deceased had no
more civil personality or juridical capacity. His
juridical capacity, w/c is the fitness to be subject to
legal relations, was lost through death. In other
words, the said property did not become part of
the estate of A. Necessarily, partition is not the
remedy to determine the ownership thereof.
Having stepped into the shoes of the deceased w/
respect to the said contract, and being the ones
who continued to pay the installments of the
selling price from their own funds, petitioners
necessarily become the lawful owners of the said
lot in whose favor the deed of absolute sale should
have been executed by vendor XYZ Development
Corp. (Dawson v. Register of Deeds of Quezon
City, 295 SCRA 733)
Respondent Abecia was counsel of complainant
Daroy in a case for forcible entry. Judgment was
rendered in favor of complainant as plaintiff in the
ejectment case, ordering the defendants to pay
damages, attorney’s fees and the costs of the suit.
To satisfy the judgment, the sheriff sold at public
auction a parcel of land belonging to one of the
defendants. Complainant Daroy was the highest
bidder. Upon failure of the defendant to redeem
the land, its ownership was consolidated in the
name of Daroy.
Q: Can complainant Daroy sell the lot to his
counsel Abecia?
A: The prohibition in Article 1491 does not apply to
the sale of land acquired by a client to (1) satisfy a
judgment in his favor, to his attorney as long as
the property was not subject of the litigation. For
indeed, while judges, prosecuting attorneys and
others connected in the administration of justice
are prohibited from acquiring “property or rights in
litigation or levied upon in execution, the
prohibition w/ respect to attorneys in the case
extends only to property and rights w/c maybe the
object of any litigation in w/c they may take part by
virtue of their profession (Daroy v. Abecia, 298
SCRA 239)
In an action for specific performance with
damages, plaintiff X alleged that there was an
agreement to purchase the lot of defendant Y for
P15, 000 payable as follows: P3,800 as down
payment, with P385 monthly installment thereafter.
The receipt issued by Y however, contradicted the
testimony of X. the receipts failed to state the total
University of Santo Tomas
purchase price or prove that full payment was
made. For this reason, it was contended that there
was no meeting of their minds and there was no
perfected contract of sale.
Q: Was there a perfected contract of sale?
A: Yes. The question to be determined should not
be whether there was an agreed price, but what
that agreed price was. The sellers could not
render invalid a perfected contract of sale by
merely contradicting the buyer’s obligation
regarding the price, and subsequently raising the
lack of agreement as to the price. (David v.
Tiongson, 313 SCRA 63)
Y obtained a loan from the GSIS. To guarantee
the payment of the loan, Y constituted a mortgage
over his property. Y executed a contract to sell w/
assumption of mortgage in favor of B. The GSIS
conditionally approved the sale provided that B will
execute the promissory note on the obligation to
be assumed and paid directly to the GSIS. Y and
B failed to pay their obligation w/ the GSIS. As a
result, the mortgage property was extra judicially
foreclosed w/ the GSIS as the highest bidder. Y
then negotiated for the sale of the foreclosed
property to P who advanced the redemption price
to Y, who then redeemed the property from the
GSIS. B filed an action against Y and P for
annulment of foreclosure proceeding, redemption
and sale and reconveyance.
Q: Will the action prosper?
A: No. Because of B’s failure to update their
account and execute a promissory note, GSIS’s
conditional approval of the sale of the property and
assumption of mortgage never be became
effective. The “Deed of Absolute Sale w/
Assumption of Mortgage” itself was not perfected
since assumption of the mortgage by petitioners
was a condition precedent for the sale of the
property to them. Article 1181 of the New Civil
Code, provides that “ In conditional obligations, the
acquisition of rights, as well as the extinguishment
or loss of those already acquired, shall depend
upon the happening of the event w/c constitutes
the condition.” Accordingly, in sales w/ assumption
of mortgage, the assumption of mortgage is a
condition to the seller’s consent so that w/o
approval by the mortgagee, no sale is perfected
(Ramos v. Court of Appeals, 279 SCRA 118)
An agreement to sell between Talisay-Silay and
DAE Sugar Milling Corp. was executed covering
vast tract of land. Thereafter, DAE became one of
the respondents in a case for damages. Levy on
execution was then issued against DAE. Petitioner
and DAE Sugar Milling Co., Inc filed a joint motion
asking the court to issue a resolution to direct the
Register of Deeds to register the memorandum of
agreement that they executed on the property
covered by TCT No. 115609.
Q: Was the levy over TCT No. 115609 valid?
A: No, because DAE Sugar did not own the
property covered by TCT No. 115609. The
agreement to sell between Talisay-Silay and Dae
Sugar did not transfer the property to DAE since
the agreement was to sell and not one of sale.

CIVIL LAW NOTES
Thus, a deed of sale or some other contract was
necessary to consummate the sale.
In a contract of sale, the title to the property
passes to the vendee upon the delivery to the
thing sold; in a contract to sell, ownership is, by
agreement, reserved in the vendor and is not to
pass to the vendee until full payment of the
purchase price. Otherwise stated, in a contract of
sale, the vendor loses ownership over the property
and cannot recover it until and unless the contract
is resolved or rescinded; whereas in a contract to
sell, title is retained by the vendor until full
payment of the price. In the latter contract,
payment of the price is a positive suspensive
condition, failure of which is not a breach but an
event that prevents the obligation of the vendor to
convey title from becoming effective. (Abesamis
v. Court of Appeals, G.R. No. 109559, 19 July
2001)
Respondent spouses purchased a jeepney from
Union Motor to be paid in installments. They then
executed a promissory note and a deed of chattel
mortgage in favor of Union Motor w/c in turn
assigned the same with Jardine Finance. To
effectuate the sale as well as the assignment of
the promissory note and chattel mortgage, the
spouses were required to sign documents one of
which was a sales invoice.
Although the Spouses have not yet physically
possessed the vehicle, Union Motor’s agent
required them to sign the receipt as a condition for
the delivery of the vehicle. It was discovered that
the said agent stole the vehicle even prior to its
delivery to the spouses.
Q: Was there a transfer of ownership of the
subject vehicle?
A: No. We rule in favor of the respondent Bernal
spouses. We have ruled that the issuance of a
sales invoice does not prove transfer of ownership
of the thing sold to the buyer; an invoice is nothing
more than a detailed statement of the nature,
quantity and cost of the thing sold and has been
considered not a bill of sale.
The registration certificate signed by the
respondent spouses does not conclusively prove
that constructive delivery was made nor that
ownership has been transferred to the respondent
spouses. Like the receipt and the invoice, the
signing of the said documents was qualified by the
fact that it was a requirement of petitioner for the
sale and financing contract to be approved. In all
forms of delivery, it is necessary that the act of
delivery, whether constructive or actual, should be
coupled with the intention of delivering the thing.
The act, without the intention, is insufficient.
Inasmuch as there was neither physical nor
constructive delivery of a determinate thing, (in
this case, the subject motor vehicle) the thing sold
remained at the seller’s risk. The petitioner should
therefore bear the loss of the subject motor vehicle
after Sosmeña allegedly stole the same. (Union
Motor Corp. v. CA, G.R. No. 117187, 20 July
2001)
Severina’s heirs entered into a compromise with
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ADVISER:
Dominador, et al. in w/c Severina’s heirs will sell
the subject lots to Dominador, et al. with the
delivery of TCT. They executed a deed of sale.
Dominador discovered that the tax declaration of
the land is under the name of another person. So
he asked that the title be first released. Severina’s
heir refused to release the certificate of title
contending that Dominador, et al. have not paid
the stipulated amount.
Q: Were Severina and her heirs justified in not
delivering the owner’s copy of the certificate of title
because Dominador has not yet paid the stipulated
amount?
A: No. Severina’s heirs anchor their claim on the
“kasunduan” stressing on their freedom to
stipulate and the binding effects of contracts. This
argument is misplaced. Article 1305 of the Civil
Code provides “the contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient provided
they are not contrary to law, morals, good
customs, public order or public policy.”
In a contract of sale, the vendor need not possess
title to the thing sold at the perfection of the
contract. However, the vendor must possess title
and must be able to transfer title at the time of
delivery. In a contract of sale, title only passes to
the vendee upon full payment of the stipulated
consideration, or upon delivery of the thing sold.
Under the facts of the case, Severina’s heirs are
not in a position to transfer title. Without passing
on the question of who actually owned the land. It
should be noted that there is no proof of
ownership in favor of the Severina’s heirs.
In fact, it is a certain Eugenio, who holds a tax
declaration over the said land in his name. Though
tax declarations do not prove ownership, such can
be strong evidence of ownership of land when
accompanied by possession for a period sufficient
for prescription. Severina’s heirs have nothing to
counter the document.
Therefore, to insist that Dominador should pay the
price under such circumstances would result in
Severina’s heirs’ unjust enrichment. The essence
of a sale is the transfer of title or an agreement to
transfer it for a price actually paid or promised. In
Nool v CA, it was held that if the sellers cannot
deliver the object of the sale to the buyers, such
contract may be deemed to be inoperative.
(Severina San Miguel v. Court of Appeals, G.R.
No. 136054, 05 September 2001)
NDC and Firestone entered into a contract of
lease wherein it is stipulated that Firestone has the
right of first refusal to purchase the leased
property "should lessor NDC decide to sell the
same”. After the rumor that NDC will transfer the
lot to PUP, Firestone instituted an action for
specific performance to compel NDC to sell the
property in its favor. PUP moved to intervene
arguing that the Memorandum issued by then
Pres. Aquino ordered the transfer of the whole
NDC compound to the Government, which in turn
would convey it in favor of PUP. The court
observed that NDC could not excuse itself from its
obligation to offer first the property to Firestone.
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2007 Team Bar-Ops Civil Law Committee
Q: Can Firestone exercise its right of first refusal?
A: Yes. It is a settled principle in civil law that
when a lease contract contains a right of first
refusal, the lessor is under a legal duty to the
lessee not to sell to anybody at any price until after
he has made an offer to sell to the latter at a
certain price and the lessee has failed to accept it.
The lessee has a right that the lessor's first offer
shall be in his favor.
The option in this case was incorporated in the
contracts of lease by NDC for the benefit of
FIRESTONE which, in view of the total amount of
its investments in the property, wanted to be
assured that it would be given the first opportunity
to buy the property at a price for which it would be
offered. Consistent with their agreement, it was
then implicit for NDC to have first offered the
leased premises of 2.60 hectares to FIRESTONE
prior to the sale in favor of PUP. Only if
FIRESTONE failed to exercise its right of first
priority could NDC lawfully sell the property to
petitioner PUP. (PUP v. Court of Appeals, G.R.
No. 143513, 14 November 2001)
Ten Forty Realty purchased from Galino the
disputed parcel of land. It is alleged by Ten Forty
that Galino sold the same property to respondent
Cruz and that Cruz immediately took possession
of the said property. Ten Forty contended it
merely tolerated Cruz’s occupation of the disputed
property. Since Cruz refused to vacate the
premises, Ten Forty filed an ejectment case
against the former.
Q: Who has a better right between petitioner Ten
Forty and Cruz?
A: The ownership of immovable property sold to
two different buyers at different times is governed
by Article 1544, which reads as follows:
"Should it be immovable property, the ownership
shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.
"Should there be no inscription, the ownership
shall pertain to the person who in good faith was
first in possession; and, in the absence thereof, to
the person who presents the oldest title, provided
there is good faith."
Galino allegedly sold the property in question to
petitioner on December 5, 1996 and,
subsequently, to respondent on April 24, 1998.
Petitioner thus argues that being the first buyer, it
has a better right to own the realty. However, it
has not been able to establish that its Deed of
Sale was recorded in the Registry of Deeds of
Olongapo City. Its claim of an unattested and
unverified notation on its Deed of Absolute Sale is
not equivalent to registration. It admits that,
indeed, the sale has not been recorded in the
Registry of Deeds.
In the absence of the required inscription, the law
gives preferential right to the buyer who in good
faith is first in possession. In determining the
question of who is first in possession, certain basic
parameters have been established by
jurisprudence.
First, the possession mentioned in Article 1544
includes not only material but also symbolic
possession. Second, possessors in good faith are
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those who are not aware of any flaw in their title or
mode of acquisition. Third, buyers of real property
that is in the possession of persons other than the
seller must be wary — they must investigate the
rights of the possessors. Fourth, good faith is
always presumed; upon those who allege bad faith
on the part of the possessors rests the burden of
proof.
Earlier, we ruled that the subject property had not
been delivered to petitioner; hence, it did not
acquire possession either materially or
symbolically. As between the two buyers,
therefore, respondent was first in actual
possession of the property.
Petitioner has not proven that respondent was
aware that her mode of acquiring the property was
defective at the time she acquired it from Galino.
At the time, the property — which was public land
— had not been registered in the name of Galino;
thus, respondent relied on the tax declarations
thereon. As shown, the former's name appeared
on the tax declarations for the property until its
sale to the latter in 1998. Galino was in fact
occupying the realty when respondent took over
possession. Thus, there was no circumstance that
could have placed the latter upon inquiry or
required her to further investigate petitioner's right
of ownership. (Ten Forty Realty & Dev’t. Corp. v.
Cruz, G.R. No. 151212, 10 September 2003)
Spouses Firme are the registered owners of a
parcel of land. The vice president of Bukal
Enterprises authorized his friend, a broker, to
negotiate with the Spouses for the purchase of the
property.
Bukal Enterprises filed a complaint for specific
performance alleging that the Firmes did not make
good of their promise to sell their property. On the
other hand, the Spouses denied that they had
perfected contract of sale since they rejected the
drafts offered by Bukal Enterprises.
Q: Was there a perfected contract of sale between
the Spouses Firme and Bukal Enterprises?
A: None. First, the records indubitably show that
there was no consent on the part of the Spouses
Firme. Witness Aviles did not present any draft
deed of sale during his first meeting with the
Spouses Firme on 30 January 1995. Witness Dr.
Firme was consistent in his testimony that he and
his wife rejected the provisions of the Third Draft
presented by Aviles during their second meeting
on 6 February 1995. The Spouses Firme found the
terms and conditions unacceptable and told Aviles
that they would not sell the property. Aviles
showed them only one draft deed of sale (Third
Draft) during their second and last meeting on 6
February 1995. When shown a copy of the First
Draft, Dr. Firme testified that it was not the deed of
sale shown to them by Aviles during their second
meeting 26 and that the Third Draft was
completely different from the First Draft. (Sps.
Firme v. Bukal Enterprises, G.R. No. 146608, 23
October 2003)
Villaba w/ Soliva’s permission occupied the latter’s
house, and promised to buy the house and lot.
Villaba paid Soliva for the occupation of the house.
When Villaba died, his wife, took possession of the

CIVIL LAW NOTES
property, destroyed the house and built a new
one. Despite repeated demands, the Villaba’s wife
refused to vacate the said property. Soliva filed
complaint for recovery of ownership and
possession. Villaba’s wife came to know that her
late husband had already paid the certain amount
out of the purchase price for the house and lot and
that Soliva’s claim of ownership has already
prescribed.
In the present petition for review, Soliva argues
that the oral contract of sale was invalid because
respondent failed to comply with obligation to pay
in full the purchase price of the house and lot.
Q: Did the failure of respondent to fully pay the
purchase price render the contract invalid?
A: No. The nonpayment of the full consideration
did not invalidate the contract of sale. Under
settled doctrine, nonpayment is a resolutory
condition that extinguishes the transaction existing
for a time and discharges the obligations created
there under. The remedy of the unpaid seller is to
sue for collection or, in case of a substantial
breach, to rescind the contract. These alternative
remedies of specific performance and rescission
are provided under Article 1191.
"The Court shall decree the rescission claimed,
unless there be just cause authorizing the fixing of
a period. The rescission of a sale of immovables,
on the other hand, is governed by Article 1592 of
the Civil Code. Upon the facts found by the trial
and the appellate courts, petitioner did not
exercise her right either to seek specific
performance or to rescind the verbal contract of
sale until May 1982, when she filed her complaint
for recovery of ownership and possession of the
property. (Soliva v. Intestate Estate of Villaba,
GR No. 154017. 08 December 2003)
Parcels of land became the subject of Deeds of
Absolute Sale executed by Hilario in favor of the
respondents. But petitioners claimed that the
transactions entered into were not actually sales
but merely loans. In their answer, respondents
insisted that petitioner Hilario sold to them the lots
in question. The transaction embodied in a deed of
absolute sale was for the price of P240, 000.00.
However, before the properties were registered,
petitioner Hilario asked for the execution of
another deed of absolute sale indicating P50,
000.00 as the price purportedly to lessen the taxes
and fees that they will be paying. A new deed of
absolute sale indicating a selling price of P50,
000.00 for the 3 lots was executed and notarized.
Shortly thereafter, the titles of said lots were
transferred to the respondents.
Q: Does the transaction involve an absolute sale
or an equitable mortgage of real property?
A: It is an absolute sale. Decisive for the proper
determination of the true nature of the transaction
between the parties is the intent of the parties.
There is no conclusive test to determine whether a
deed absolute on its face is really a simple loan
accommodation secured by a mortgage. To
determine whether a deed absolute in form is a
mortgage in reality, the court is not limited to the
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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ADVISER:
written memorials of the transaction. This is so
because the decisive factor in evaluating such
agreement is the intention of the parties, as shown
not necessarily by the terminology used in the
contract but by all the surrounding circumstances,
such as the relative situations of the parties at that
time; the attitudes, acts, conduct, and declarations
of the parties; the negotiations between them
leading to the deed; and generally, all pertinent
facts having a tendency to fix and determine the
real nature of their design and understanding. As
such, documentary and parol evidence may be
submitted and admitted to prove the intention of
the parties. (Sps Austria v. Sps Gonzales, G.R.
No. 147321, 21 January 2004)
A contract of lease was entered into by Agricom
and Dee doing business under the name and style
“Pioneer” Thereafter, Agricom sent letters to its
employees of their termination by virtue of the
lease contract by Dee of the company’s premises.
The severed employees filed a complaint for illegal
dismissal and unfair labor practice against
Agricom, Dee and Pioneer. Pioneer sent a letter to
Agricom complaining of facts and events which
disrupted its operations in the plantation. Pioneer
claimed that it was dragged into labor disputes not
of its own making and complained of being
pestered by some individuals who claimed
portions of the plantation as their own property.
Some of them went to its office and even
presented tax declarations to prove their claims.
Q: Did Agricom fail to maintain Dee in a quiet and
peaceful enjoyment of the leased premises?
A: NO. As lessor, Agricom had the duty to
maintain Chua Tee Dee in the peaceful and
adequate enjoyment of the leased premises. Such
duty was made as part of the contract of lease
entered into by the parties. Even if it had not been
so, the lessor is still duty-bound under Art.1654 of
the Civil Code. The duty "to maintain the lessee in
the peaceful and adequate enjoyment of the lease
for the duration of the contract" mentioned in No. 3
of the article is merely a warranty that the lessee
shall not be disturbed in his legal, and not
physical, possession.
In the case at bar, Chua Tee Dee claims that
several people presented tax declarations to her
and claimed some portions of the leased
premises. However, no case was filed by any of
the said claimants against her or her lessor during
the time she occupied the premises. Patently,
then, Chua Tee Dee had not been disturbed in her
legal possession of the property in derogation of
Article 1654 of the New Civil Code. When Chua
Tee Dee's representative saw that a portion of the
leased premises was being fenced by the
claimants, she had all the right to sue the intruders
who had disturbed her physical possession as
provided for in Article 1654. However, the
petitioner did not file any suit against any of the
claimants. Thus, it cannot be said that Agricom
violated the contract of lease.
Chua Tee Dee also failed to prove that she
suffered any loss from the labor case that was
filed against her enterprise and her husband. True,
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2007 Team Bar-Ops Civil Law Committee
the labor case was instituted during the effectivity
of the lease contract until the case was finally
resolved on August 22, 1986. Surprisingly,
however, during the interregnum, appellant
regularly paid the monthly rentals for the years
1985 to 1989. It was after the labor case has been
resolved that appellant started to fail to pay her
rentals, strongly indicating that the labor case has
not dampened her peaceful and adequate
possession of the leased premises. (Dee v. Court
of Appeal, G.R. No. 135721, 27 May 2004)
Ceballos was able to borrow from Mercado certain
sum of money and as security, she executed a
'Deed of Real Estate Mortgage' over the subject
property. The said mortgage was not registered.
Ceballos defaulted. Thereafter, a 'Deed of
Absolute Sale' was executed by Ceballos and her
husband whereby the mortgaged property was
sold to Mercado for the price of P16, 500.00.
Ceballos offered to buy back the property from
Mercado for the price of P30, 000.00 but the
latter's wife refused since the same was already
transferred in their names by virtue of the Deed of
Absolute Sale. As a consequence, Ceballos filed
the case contending that the Contract should be
declared as an equitable mortgage.
Q: Was the CA correct in rejecting Ceballos’s
contention that the Deed of Absolute sale was one
of equitable mortgage?
A: Yes. The instances when a contract —
regardless of its nomenclature — may be
presumed to be an equitable mortgage are
enumerated in Art. 1602 of the Civil Code.
In this case, both the trial and the appellate courts
found none of the above-enumerated
circumstances. We find no cogent reason to
reverse their factual finding. Concededly, the
original transaction was a loan. Petitioner failed to
pay the loan; consequently, the parties entered into
another agreement — the assailed, duly notarized
Deed of Absolute Sale, which superseded the loan
document. Petitioner had the burden of proving that
she did not intend to sell the property; that Emigdio
Mercado did not intend to buy it; and that the new
agreement did not embody the true intention of the
parties. We find no basis for disturbing the CA's
finding that she had failed to discharge this burden.
(Ceballos v. Intestate Estate of the Late
Emigdio Mercado, G.R. No. 155856. 28 May
2004)
Dalisay Sr. bought parcels of land but indicated
Dalisay Jr. as the buyer in the Deed of Sale.
Dalisay Jr. sold the parcels of land to Gaje.
Respondent as special administratrix of the estate
of Dalisay Sr. filed a complaint for Annulment of
Deed of Sale and Reconveyance. RTC and CA
both ruled in favor of respondent.
Q: Is Dalisay Jr. the owner of the property and
thus, can validly sell such property?
A: No. Foremost, the presumption of truthfulness
engendered by notarized documents is rebuttable,
yielding as it does to clear and convincing
evidence to the contrary. Even as the Deeds of
Sale indicate the name of Dalisay, Jr. as vendee
of the parcels of land, it was established by strong
University of Santo Tomas
evidence that Dalisay, Sr. remained the owner
thereof, and had no intention of transferring the
ownership of the parcels of land exclusively to
Dalisay, Jr. to the exclusion of all his other heirs. It
is telling why Dalisay, Jr., during the length of time
from the execution of the Deeds of Sale on 15
June 1973 and until such time when he sold the
subject parcels of land to his co-petitioners, Gaje
and Mellonida, neither possessed nor exercised
attributes of ownership over the lands. Dalisay, Sr.
remained in possession over the properties from
the time they were bought. (Gaje v. Vda. De
Dalisay, G.R. No. 158762, 04 April 2007)
Eulalia was engaged in the business of buying and
selling large cattle. In order to secure the financial
capital she advanced for her employees
(“biyaheros,”) she required them to surrender TCT
of their properties and to execute the
corresponding Deeds of Sale in her favor.
Domeng Bandong was not required to post any
security but when Eulalia discovered that he
incurred shortage in cattle procurement operation,
he was required to execute a deed of sale over a
parcel of land in favor of Eulalia. She sold the
property to her grandniece Jocelyn who thereafter
instituted an action for ejectment against the
Spouses Bandong.
To assert their right, Spouses Bandong filed an
action for annulment of sale against Eulalia and
Jocelyn alleging that there was no sale intended
but only equitable mortgage for the purpose of
securing the shortage incurred by Domeng in the
amount of P70,000 while employed as “biyahero”
by Eulalia.
Q: Was the deed of sale between Domeng and
Eulalia a contract of sale or an equitable
mortgage?
A: It is an equitable mortgage. An equitable
mortgage is one that - although lacking in some
formality, forms and words, or other requisites
demanded by a statute - nevertheless reveals the
intention of the parties to charge a real property as
security for a debt and contains nothing impossible
or contrary to law. The instances when a contract -
regardless of its nomenclature - may be presumed
to be an equitable mortgage are enumerated
under Art. 1602. In executing the said deed of
sale, Domeng and Eulalia never intended the
transfer of ownership of the subject property but to
burden the same with an encumbrance to secure
the indebtedness incurred by Domeng on the
occasion of his employment with Eulalia. The
agreement between Dominador and Eulalia was
not avoided in its entirety so as to prevent it from
producing any legal effect at all. Instead, the said
transaction is an equitable mortgage, thereby
merely altering the relationship of the parties from
seller and buyer, to mortgagor and mortgagee,
while the subject property is not transferred but
subjected to a lien in favor of the latter. To
reiterate, the existence of any one of the
conditions under Article 1602 of the New Civil
Code, not a concurrence, or an overwhelming
number of such circumstances, suffices to give
rise to the presumption that the contract is an

CIVIL LAW NOTES
equitable mortgage. (Sps. Raymundo, et al. v.
Sps. Bandong, G.R. No. 171250, 04 July 2007)
Partnership
Liwanag, Tabligan and complainant entered into
an agreement, wherein complainant would give
the money needed to buy the cigarettes while
Liwanag and Tabligan would act as her agents,
with a corresponding commission to her if the
goods are sold; otherwise the money would be
returned to complainant. The two made periodic
visits to complainant to report the progress of the
transactions. The visits however, suddenly
stopped. Complainant filed a case of estafa
against Liwanag. Liwanag contended that she is
not guilty of estafa because the three of them were
partners.
Q: Is Liwanag guilty of estafa even assuming that
she is a partner?
A: Yes. Even assuming that a contract of
partnership was indeed entered into by and
between the parties, we have ruled that when
money or property have been received by a
partner for a specific purpose (such as that
obtaining in the instant case) and he later
misappropriated it, such partner is guilty of estafa.
(Liwanag v. Court of Appeals, 281 SCRA 1225)
Two persons entered into a Contract for the
purchase of fishing nets from respondent
company. They claimed that they were engaged in
a business venture with Lim Tong Lim, who
however was not a signatory to the agreement.
They failed to pay the fishing nets hence,
respondent company filed a collection suit against
the three in their capacities as general partners.
Lim Tong Lim denied his liability as a general
partner.
Q: Was there a contract of partnership formed?
A: Yes. This is pursuant to Article 1767 which
provides: By the 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.
From the factual findings of both lower courts, it is
clear that the three had decided to engage in a
fishing business, which they started by buying
boats, financed by a loan. In their Compromise
Agreement, they subsequently revealed their
intention to pay the loan with the proceeds of the
sale of the boats, and to divide equally among
them the excess or loss. These boats, the
purchase and the repair of which were financed
with borrowed money, fell under the term
"common fund" under Article 1767. The
contribution to such fund need not be cash or fixed
assets; it could be an intangible like credit or
industry. That the parties agreed that any loss or
profit from the sale and operation of the boats
would be divided equally among them also shows
that they had indeed formed a partnership.
Moreover, it is clear that the partnership extended
not only to the purchase of the boat, but also to
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that of the nets and the floats. The fishing nets and
the floats, both essential to fishing, were obviously
acquired in furtherance of their business. It would
have been inconceivable for Lim to involve himself
so much in buying the boat but not in the
acquisition of the aforesaid equipment, without
which the business could not have proceeded.
A partnership may be deemed to exist among
parties who agree to borrow money to pursue a
business and to divide the profits or losses that
may arise therefrom, even if it is shown that they
have not contributed any capital of their own to a
"common fund." Their contribution may be in the
form of credit or industry, not necessarily cash or
fixed assets. Being partners, they are all liable for
debts incurred by or on behalf of the partnership.
The liability for a contract entered into on behalf of
an unincorporated association or ostensible
corporation may lie in a person who may not have
directly transacted on its behalf, but reaped
benefits from that contract. (Lim Tong Lim v.
Philippine Fishing Gear Industries, Inc., 317
SCRA 728)
Sisters entered into a “joint venture agreement”
with Manuel for the development of a parcel of
land into a subdivision. Pursuant to the contract,
they executed a Deed of Sale covering the said
land in favor of Manuel. By mortgaging the
property, Manuel obtained a loan which, under the
Joint Venture Agreement, was to be used for the
development of the subdivision. All 3 of them also
agreed to share the proceeds from the sale of the
subdivided lots. The project did not push through,
and the land was subsequently foreclosed by the
bank. The two sisters filed a complaint against
Manuel to recover damages.
Q: Was there partnership among the three?
A: Yes. A reading of the terms embodied in their
Agreement indubitably shows the existence of a
partnership pursuant to Article 1767 of the Civil
Code, which provides:
“ART. 1767. By the 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.”
Under the Agreement, petitioners would contribute
property to the partnership in the form of land
which was to be developed into a subdivision;
while respondent would give, in addition to his
industry, the amount needed for general expenses
and other costs. Furthermore, the income from
the said project would be divided according to the
stipulated percentage. Clearly, the contract
manifested the intention of the parties to form a
partnership. (Torres v. Court of Appeals, 320
SCRA 428)
Respondent and A.C. Aguila & Sons, Co., a
partnership engaged in lending activities entered
into an equitable mortgage w/ pactum
commissorium clause which is clearly prohibited
by law. Respondent failed to pay hence the
partnership appropriated for itself the mortgaged
property. Respondent filed an action for the
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2007 Team Bar-Ops Civil Law Committee
annulment of the contract impleading Alfredo
being the partnership’s manager as adverse party.
Alfredo now contends that he is not the real party
in interest but A.C. Aguila & Co., against which the
case should have been brought.
Q: Is the manager of the partnership the right
party to sue or the partnership itself?
A: The partnership is the real party in interest.
Under Art. 1768, a partnership “has a juridical
personality separate and distinct from that of each
of the partners.” The partners cannot be held liable
for the obligations of the partnership unless it is
shown that the legal fiction of a different juridical
personality is being used for fraudulent, unfair, or
illegal purposes. (Aguila Jr. v. Court of Appeals,
316 SCRA 246)
Upon the death of Kee, his heirs filed a complaint
for accounting, liquidation and winding up of the
alleged partnership Benguet Lumber. Kee’s
brother denied the existence of partnership
between him and his brother.
Q: Were Kee and Lay partners in Benguet
Lumber?
A: No. In the light of the aforequoted legal
provision, we conclude that Kee was only an
employee, not a partner. Petitioners failed to show
how much their father, Kee, received, if any, as his
share in the profits of Benguet Lumber Company
for any particular period. Hence, they failed to
prove that Kee and Lay intended to divide the
profits of the business between themselves, which
is one of the essential features of a partnership.
Also, a demand for periodic accounting is
evidence of a partnership. During Kee’s lifetime,
he appeared never to have made any such
demand for accounting from his brother, Lay.
(Heirs of Tan Eng Kee v. Court of Appeals, 341
SCRA 740, October 3, 2000)
Safic Alcan & Cie ordered from IVO, thru its
president for the delivery of crude coconut oil. IVO,
however, failed to deliver instead, offered a "wash
out" settlement, Thus, IVO bound itself to pay to
Safic the difference between the said prevailing
price and the contract price. IVO still failed to pay
this amount despite repeated demands. It
appeared that IVO’s president entered into such
speculative contracts with Safic, w/o securing the
Board's approval.
Q: Did the trial court err in holding that IVO’s
president entered into contracts w/c were ultra
vires and w/c would not bind IVO?
A: NO. Under Article 1898, the acts of an agent
beyond the scope of his authority do not bind the
principal unless the latter ratifies the same
expressly or impliedly. It also bears emphasizing
that when the third person knows that the agent
was acting beyond his power or authority, the
principal can not be held liable for the acts of the
agent. If the said third person is aware of such
limits of authority, he is to blame, and is not
entitled to recover damages from the agent,
unless the latter undertook to secure the
principal's ratification.
University of Santo Tomas
The most prudent thing petitioner should have
done was to ascertain the extent of the authority of
IVO’s president. Being remiss in this regard,
petitioner can not seek relief on the basis of a
supposed agency. (Safic Alcan & Cie v. Imperial
Vegetable Oil Co., Inc., 355 SCRA 559)
Chua alleged that he verbally entered into a
partnership with Jacinto in the distribution of
Shellane Gas (LPG). For business convenience,
they registered the business name of the
partnership under the name of Jacinto as a sole
proprietorship. Chua and Jacinto contributed funds
with the intention that the profits would be equally
divided between them.
Upon Jacinto's death, his wife and daughter took
over the operations of the partnership w/o Chua’s
consent. Despite repeated demands for
accounting, inventory, appraisal, winding up and
restitution of his net shares in the partnership,
petitioners failed to comply. The mother and
daughter tandem contended that there was no
partnership since there was no written agreement
to that effect.
Q: Was there a partnership formed between Chua
and Jacinto?
A: Yes. Art. 1678 provides that a partnership
retains its juridical personality even if it fails to
register. The failure to register the contract of
partnership does not invalidate the same as
among the partners, so long as the contract has
the essential requisites, because the main
purpose of registration is to give notice to third
parties, and it can be assumed that the members
themselves knew of the contents of their contract.
(Sunga-Chan v. Chua, GR No. 143340, 15 Aug
2001)
To form a lending business, it was verbally agreed
that petitioner would act as financier while
respondents would take charge of solicitation of
members and collection of loan payments. The
venture was launched with the understanding that
petitioner would receive 70% of the profits while
respondents would earn 15% each. Later, they
executed the 'Article of Agreement' which
formalized their earlier verbal agreement.
Petitioner filed a complaint against respondents for
recovery of sum of money and damages for
misappropriating the funds allegedly in their
capacities as employees of petitioner. In their
answer, respondents asserted that they were
partners and not mere employees of petitioner.
Q: Was the parties' relationship one of
partnership or of employer-employee?
A: Partnership. By the 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. The "Articles of Agreement" stipulated
that the signatories shall share the profits of the
business in a 70-15-15 manner, with petitioner
getting the lion's share. This stipulation clearly
proved the establishment of a partnership.
(Santos v. Spouses Reyes, GR No.135813, 25
Oct. 2001)

CIVIL LAW NOTES
Petitioner Emnace, Tabanao and Divinagracia
were partners in a business. They decided to
dissolve their partnership in 1986. Throughout the
existence of the partnership, and even after
Tabanao's untimely demise, petitioner failed to
submit to Tabanao's heirs statement of assets and
liabilities of the partnership, and to render an
accounting of the partnership's finances. Petitioner
also reneged on his promise to turn over to
Tabanao's heirs the deceased's 1/3 share in the
total assets of the partnership, despite formal
demand for payment thereof. Consequently,
Tabanao’s heirs, respondents herein, filed against
petitioner an action for accounting, payment of
shares, division of assets and damages.
Petitioner contends that the trial court should have
dismissed the complaint on the ground of
prescription, arguing that respondents' action
prescribed four (4) years after it accrued in 1986.
The trial court and the Court of Appeals gave
scant consideration to petitioner's hollow
arguments, and rightly so.
Q: Is the action to demand accounting already
barred by prescription?
A: No. The three (3) final stages of a partnership
are: (1) dissolution; (2) winding-up; and (3)
termination. The partnership, although dissolved,
continues to exist and its legal personality is
retained, at which time it completes the winding up
of its affairs, including the partitioning and
distribution of the net partnership assets to the
partners. For as long as the partnership exists,
any of the partners may demand an accounting of
the partnership’s business.
Prescription of the said right starts to run only
upon the dissolution of the partnership when the
final accounting is done. Contrary to petitioner's
protestations that respondents' right to inquire into
the business affairs of the partnership accrued in
1986, prescribing four (4) years thereafter,
prescription had not even begun to run in the
absence of a final accounting. Article 184
provides:
The right to an account of his interest shall accrue
to any partner, or his legal representative as
against the winding up partners or the surviving
partners or the person or partnership continuing
the business, at the date of dissolution, in the
absence of any agreement to the contrary.
Applied in relation to Articles 1807 and 1809,
which also deal with the duty to account, the
above-cited provision states that the right to
demand an accounting accrues at the date of
dissolution in the absence of any agreement to the
contrary. When a final accounting is made, it is
only then that prescription begins to run. In the
case at bar, no final accounting has been made,
and that is precisely what respondents are seeking
in their action before the trial court, since petitioner
has failed or refused to render an accounting of
the partnership's business and assets. Hence, the
said action is not barred by prescription. (Emnace
v. CA, GR No. 126334, 23 Nov. 2001)
A land was sold by Dizon who had no power of
attorney to sell such property. The receipt made
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out in the name of the owner was only signed by
Dizon. The buyer now contends that there is a
perfected contract of sale since they have already
paid partial payment which the owner already
appropriated.
Q: Can Dizon validly bind the owners in the
absence of a written power of attorney?
A: No. When the sale of a piece of land or any
interest thereon is through an agent, the authority
of the latter shall be in writing; otherwise, the sale
shall be void. Thus the authority of an agent to
execute a contract for the sale of real estate must
be conferred in writing and must give him specific
authority, either to conduct the general business of
the principal or to execute a binding contract
containing terms and conditions which are in the
contract he did execute. A special power of
attorney is necessary to enter into any contract by
which the ownership of an immovable is
transmitted or acquired either gratuitously or for a
valuable consideration. The express mandate
required by law to enable an appointee of an
agency (couched) in general terms to sell must be
one that expressly mentions a sale or that includes
a sale as a necessary ingredient of the act
mentioned. For the principal to confer the right
upon an agent to sell real estate, a power of
attorney must so express the powers of the agent
in clear and unmistakable language. When there is
any reasonable doubt that the language so used
conveys such power, no such construction shall
be given the document. (Dizon v. Court of
Appeals, G. R. No. 122544, 28 Jan. 2003)
A partnership was formed for the operation of a
restaurant and catering business. Without prior
knowledge of respondents, petitioners closed
down the restaurant.. Respondents filed a
Complaint for the collection of a sum of money
from petitioners. Petitioners contended that
respondents had no right to demand a return of
their equity because their share, together with the
rest of the capital of the partnership, had been
spent as a result of irreversible business losses.
Q: Are the petitioners liable to respondents for the
latter's share in the partnership?
A: No. We hold that respondents have no right to
demand from petitioners the return of their equity
share. Except as managers of the partnership,
petitioners did not personally hold its equity or
assets. "The partnership has a juridical personality
separate and distinct from that of each of the
partners.” Since the capital was contributed to the
partnership, not to petitioners, it is the partnership
that must refund the equity of the retiring partners.
Since it is the partnership, as a separate and
distinct entity that must refund the shares of the
partners, the amount to be refunded is necessarily
limited to its total resources. In other words, it can
only pay out what it has in its coffers, which
consists of all its assets. However, before the
partners can be paid their shares, the creditors of
the partnership must first be compensated. After all
the creditors have been paid, whatever is left of
the partnership assets becomes available for the
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2007 Team Bar-Ops Civil Law Committee
payment of the partners' shares. (Villareal v.
Ramirez, G.R. No. 144214, 14 July 2003)
Agency
Mahtani decided to visit his relative in India. In
anticipation, he obtained the services of a certain
Mr. Gemar to prepare his travel plan. Since British
Airways had no ticket flights from Manila to
Bombay, Mahtani had to take a connecting flight.
Prior to his departure, Mahtani checked in the PAL
counter in Manila his two pieces of luggage
containing his clothing and personal effects,
confident that upon reaching Hong Kong, the
same would be transferred to the BA flight bound
for Bombay, Unfortunately, when Mahtani arrived
in Bombay, he discovered that his luggage was
missing and that upon inquiry from the BA
representatives, he was told that the same might
have been diverted to London. After plaintiff
waiting for his luggage for one week, BA finally
advised him to file a claim.
Q: Can the agent be held liable by the Principal if
the agent has been negligent as such?
A: Yes. In resolving this issue, it is worth
observing that the contract of air transportation
was exclusively between Mahtani and BA, the
latter merely endorsing the Manila to Hongkong
leg of the former’s journey to PAL, as its
subcontractor or agent. In fact, the fourth
paragraph of the “Conditions of Contracts” of the
ticket issued by BA to Mahtani confirms that the
contract was one of continuous air transportation
from Manila to Bombay. Prescinding from the
above discussion, it is undisputed that PAL, in
transporting Mahtani from Manila to Hongkong
acted as the agent of BA.Parenthetically, the Court
of Appeals should have been cognizant of the
well-settled rule that an agent is also responsible
for any negligence in the performance of its
function and is liable for damages which the
principal may suffer by reason of its negligent act.
Hence, the Court of Appeals erred when it opined
that BA, being the principal, had no cause of
action against PAL, its agent or sub-contractor.
(British Airways v. CA, 285 SCRA 450)
Uy and Roxas are agents authorized to sell eight
parcels of land by the owners thereof. By virtue of
such authority, petitioners offered to sell the lands
to NHA to be utilized and developed as a housing
project. Of the eight parcels of land, however, only
five were paid for by the NHA because of the
report that the remaining area is located at an
active landslide area and therefore, not suitable for
development into a housing project. NHA issued
Resolution cancelling the sale over the remaining
parcels of land. Petitioners who are mere agents
filed a Complaint for Damages against NHA and
its General Manager.
Q: Can the petitioners as mere agents in a
contract of sale maintain an action against the
other party?
A: No. Petitioners are not parties to the contract of
sale between their principals and NHA. They are
mere agents of the owners of the land subject of
University of Santo Tomas
the sale. As agents, they only render some service
or do something in representation or on behalf of
their principals. The rendering of such service did
not make them parties to the contracts of sale
executed in behalf of the latter.
The fact that an agent who makes a contract for
his principal will gain or suffer loss by the
performance or nonperformance of the contract by
the principal or by the other party thereto does not
entitle him to maintain an action on his own behalf
against the other party for its breach. An agent
entitled to receive a commission from his principal
upon the performance of a contract which he has
made on his principal's account does not, from this
fact alone, have any claim against the other party
for breach of the contract, either in an action on
the contract or otherwise. An agent who is not a
promisee cannot maintain an action at law against
a purchaser merely because he is entitled to have
his compensation or advances paid out of the
purchase price before payment to the principal.
(Uy v. CA, 314 SCRA 69)
Trusts
The respondent heirs demanded Ruperto, who
was in possession of the properties, to partition
the same among them but he refused claiming
that during their lifetime, the deceased sold and
conveyed to him all the shares over the properties
in question. The trial court ruled that title over the
lot was not in reality transferred in the name of
Ruperto for the reason that the parties to the deed
of sale merely intended to create an express trust.
Ruperto now claims that the action of
reconveyance instituted by the heirs has already
prescribed.
Q: Is the action of reconveyance already barred by
prescription?
A: No. Prescriptive period for an action of
reconveyance of real property based on implied or
constructive trust which is counted from the date
of registration of property applies when the plaintiff
is not in possession of the contested property.
Moreover, an action to compel the trustee to
convey property registered in his name for the
benefit of the cestui que trust does not prescribe
unless the trustee repudiates the trust. (Viloria v.
Court of Appeals, 309 SCRA 529)
Lorenzo executed a Trust Agreement with his
brother Ramon over a parcel of land since he
knew that being a Chinese, he was disqualified to
acquire such land in the Philippines. Lorenzo’s
heirs now demanded the return of the subject
property
Q: Can a Chinese enter into a Trust Agreement
over a land in the Philippines?
A: No. The trust agreement between Ramon and
Lorenzo, if indeed extant, would have been in
contravention of, in fact, the fundamental law.
Then Section 5, Article XIII, of the 1935
Constitution has provided that –
“Save in cases of hereditary succession, no
private agricultural land shall be transferred or
assigned except to individuals, corporations, or

CIVIL LAW NOTES
associations qualified to acquire or hold lands of
the public domain in the Philippines.”
A trust or a provision in the terms of a trust would
be invalid if the enforcement of the trust or
provision is against the law even though its
performance does not involve the commission of a
criminal or tortuous act. It likewise must follow
that what the parties are not allowed to do
expressly is one that they also may not do
impliedly as, for instance, in the guise of a
resulting trust. (Heirs of L. Yap v. Court of
Appeals, 312 SCRA 603)
Sps. Genguyon were tenants of the Barretto
Apartment. After discovering that there was a
change of owner and fearing that they will be
ejected, the tenants formed an association in order
to protect their interests. They appointed Arlequi
as an officer who will negotiate w/ the new owner.
Then, they discovered that the apartment they
were occupying was already sold to Arlegui who
then demanded them to vacate the premises. The
Genguyons filed a case for the annulment of the
sale.
Q: Was there a constructive trust in this case?
A: Yes. A receiver, trustee, attorney, agent, or any
other person occupying fiduciary relations
respecting property of persons, is utterly disabled
from acquiring from his own benefit the property
committed to his custody. No fraud in fact need be
shown and no excuse will be heard the trustee. If
a person obtains legal title to property by fraud or
concealment, courts of equity will impress upon
the title a so-called constructive trust in favor of
the defrauded party.
A constructive trust, otherwise known as a trust ex
maleficio, a trust ex delicto, a trust de son tort, an
involuntary trust, or an implied trust, is a trust by
operation of law which arises contrary to intention
and in invitum, against one who, by fraud, actual
or constructive, by duress or abuse of confidence,
by commission of wrong, or by any form of
unconscionable conduct, artifice, concealment, or
questionable means, or who in any way against
equity and good conscience, either has obtained
or holds the legal right to property which he ought
not, in equity and good conscience, hold and
enjoy. It is raised by equity to satisfy the demands
of justice.
However, a constructive trust does not arise on
every moral wrong in acquiring or holding property
or on every abuse of confidence in business or
other affairs; ordinarily such a trust arises and will
be declared only on wrongful acquisitions or
retentions of property of which equity, in
accordance with its fundamental principles and the
traditional exercise of its jurisdiction or in
accordance with statutory provision, takes
cognizance. It has been broadly ruled that a
breach of confidence, although in business or
social relations, rendering an acquisition or
retention of property by one person
unconscionable against another, raises a
constructive trust.
"A constructive trust is substantially an appropriate
remedy against unjust enrichment. It is raised by
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equity in respect of property, which has been
acquired by fraud, or where, although acquired
originally without fraud, it is against equity that it
should be retained by the person holding it."
(Arlegui v. CA, GR No. 126437, 06 March 2002)
Remedios asserts that Consolacion acquired the
additional 1,335 square meters through mistake or
fraud and thus Consolacion should be considered
a trustee of an implied trust for the benefit of the
owner of the lots. She filed the case 19 years after
the trustee in an implied trust has registered the
lots in question.
Q: Is Remedios already barred from recovering
the property subject of an implied trust?
A: Yes. It is now well-settled that the prescriptive
period to recover property obtained by fraud or
mistake, giving rise to an implied trust under
Article 1456 of the Civil Code, is ten years
pursuant to Article 1144.This ten-year prescriptive
period begins to run from the date the adverse
party repudiates the implied trust, which
repudiation takes place when the adverse party
registers the land. Remedios filed her complaint
more than 19 years after Consolacion registered
her title over the lots. Unquestionably, Remedios
filed the complaint late thus warranting its
dismissal. (Pascual v. Court of Appeals, G. R.
No. 115925, 15 August 2003)
An OCT covering subject property was issued in
Quintin’s name. Quintin died intestate. In the
intestate court, Miguel claimed that one-half of the
estate was transferred to him by Quintin by virtue
of “General Power of Administration”. Miguel
obtained a TCT. The heirs of Quintin filed a
complaint w/ the RTC for the cancellation of the
TCT.
Q: Is Miguel the real owner of the subject property
or does he merely hold it in trust for the benefit of
Quintin?
A: Miguel only holds it in trust for the benefit of
Quintin. Article 1452 presupposes the
concurrence of two requisites before a trust can be
created, namely: that two or more persons agree
to purchase a property, and that they consent that
one should take the title in his name for
everyone’s benefit. (Heirs of Miguel Franco v.
Court of Appeals, G.R. No. 123924, 11
December 2003)
Credit
Saura applied an industrial loan from
Rehabilitation Finance Corp. The RFC passed a
resolution approving the loan to be secured by a
mortgage. A condition of the RFC was for Saura to
use local raw materials. Saura however informed
RFC that it will have to rely on the importation of
jute since raw materials will be insufficient.
Because of that, negotiations were in a stand still
and Saura requested the cancellation of the
mortgage. After 9 years, Saura sued RFC for
damages.
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2007 Team Bar-Ops Civil Law Committee
Q: Can Saura ask for the cancellation of the
mortgage?
A: Yes. When the negotiation was in the stand
still, Saura obviously cannot comply w/ the
conditions and instead of doing the condition and
insisting on the loan be released, Saura instead
asked for the cancellation of the mortgage. The
action thus taken by both parties was in the nature
of “mutual desistance’ – w/c is a mode of
extinguishing obligations. It is a concept that
derives from the principle that since mutual
agreement can create a contract, mutual
disagreement by the parties can cause its
extinguishment. (Saura v. Development Bank of
the Phil, GR No. 24968, 27 April 1972)
Petitioner Serrano made a time deposit with OBM.
Maneja also made a time deposit w/ OBM. Maneja
assigned and conveyed to Serrano her time
deposit. Notwithstanding series of demands for
encashment of the aforementioned time deposits,
OBM refused to honor the time deposits.
Q: Is OBM liable to Serrano despite the fact the
CB declared that OBM could no longer operate
due to its chronic reserve deficiencies?
A: Yes. Bank deposits are in the nature of
irregular deposits. They are really loans because
they earn interest. All kinds of bank deposits,
whether fixed, savings or current, are to be treated
as loans and are to be covered by the law on
loans. Current and savings deposits are loans to a
bank because it can use the same. Petitioner here
in making time deposits that earn interest w/ OBM
was in reality a creditor of the respondent bank,
and not a depositor. The bank was in turn a debtor
of petitioner. Failure of the respondent OBM to
honor the time deposits is failure to pay its
obligation as a debtor and not a breach of trust
arising from a depositary’s failure to return the
subject matter of the deposit. (Serrano v. Central
Bank, GR No. 30511, 14 Feb 1980)
Reyes obtained a writ of preliminary attachment
and accordingly levied upon all the properties of
the defendant Felicisimo Reyes. For the
dissolution of the attachment, the Imperial
Insurance Inc., as surety, and Felicisimo Reyes as
principal, posted a counter bond. When the
execution of the judgment was effected, the sheriff
returned the writs unsatisfied. Consequently, the
plaintiffs filed a motion for recovery on the surety
bonds.
Q: May the plaintiff who obtained judgment
against the defendant, legally choose to go directly
after the surety in a counter bond w/o prior
exhaustion of the defendants properties?
A: Yes. Although the counter bond contemplated
in Sec17 Rule 57 of the RC is an ordinary
guaranty where the sureties assume a subsidiary
liability, the rule cannot apply to a counter bond
where the surety bound itself “jointly and severally”
with the defendant as in the present case. In
accordance with Art 2059, excussion shall not take
place if he has bound himself solidarily w/ the
debtor. (The Imperial Insurance Inc v. De los
Angeles, GR No. 28030, 18 July 1982)
University of Santo Tomas
To obtain financial accommodations from Makati
Leasing, Wearever Textile Mills discounted and
assigned receivables with the former. To secure
the collection of the receivables assigned, it
executed a Chattel Mortgage over certain raw
materials inventory as well as machinery.
Upon Wearever’s default, Makati Leasing filed a
petition for extrajudicial foreclosure of the
properties. When the Sheriff failed to effect the
seizure of the machinery, Makati Leasing filed a
complaint for judicial foreclosure with the CFI
where it ordered the execution of the writ of
replevin. The sheriff returned to the premises of
Wearever and removed the main drive motor of
the subject machinery.
Q: May the machinery in question be the subject
of a Chattel Mortgage?
A: Yes. Where chattel mortgage is constituted on
machinery permanently attached to the ground
that machinery is to be considered as personal
property and the chattel mortgage constituted
thereon is not null and void, regardless of who
owns the land. However, the chattel mortgage
binds only the contracting parties and cannot
prejudice innocent third parties. (Makati Leasing
and Finance Corp. v. Wearever Textile Mills,
GR No. 58469, 16 May 1983)
Judgment was rendered ordering the Spouses
Reformina to pay the value of the boat, minus the
value of the insurance recovered and the amount
of estimated monthly loss suffered by defendant,
with legal interest from the filing of the complaint
until paid. The decision became final and
executory.
Q: How much by way of legal interest should a
judgment debtor pay the judgment creditor?
A: Under CB 416, the legal rate of interest is
increased from 6% to 12%. Act 2655 deals with
interest on:
1. loan
2. forbearances of money, goods, or credits
3. rate allowed in judgments
The judgments spoken of and referred to are
judgments in litigations involving loans or
forbearances of money, goods or credits. Any
other kind of monetary judgments w/c has nothing
to do with, nor involving loans or forbearance of
any money goods or credits does not fall w/in the
coverage of said law. The law applicable to this
case is Art 2209. (Reformina v. Tomol Jr., GR
No. 59096, 11 October 1985)
Spouses Uy Tong and Kho Po Giok used to be the
owners of an apartment in the Ligaya Building w/
the leasehold rights for 99 years over the land on
w/c the building stands. Spouses purchased 7
motor vehicles from Bayanihan Investment
payable in installments. It was agreed that if the
spouses should fail to pay their obligation,
Bayanihan will automatically be the owner of the
apartment. The spouses after paying the
downpayment, failed to pay the balance, hence,
Bayanihan filed an action for specific performance
against the spouses. The judgment provided that
in case the spouses failed to pay the obligation
w/in 30 days from notice, they are to execute a

CIVIL LAW NOTES
Deed of Absolute Sale over the apartment and/or
leasehold rights.
Q: Is the stipulation a pactum commissorium,
hence void?
A: The questioned agreement evinces no basis for
the application of pactum commissorium. There is
no contract of pledge or mortgage entered into by
the parties. Bayanihan sought the intervention of
the court by filing an action for specific
performance. Hence there was no automatic
appropriation of the property. (Uy Tong v. CA, GR
No 77465, 21 May 1988)
Santos made time deposits with OBM. IRC,
through its president Santos, applied for a loan
with PNB. To secure the loan, Santos executed a
Deed of Assignment of the time deposits in favor
of PNB. When PNB tried to collect from OBM, the
latter did not pay the CTDs. PNB then demanded
payment from Santos and IRC, but the latter
refused payment alleging that the obligation was
deemed paid with the irrevocable assignment of
the CTDs.
Q:
1. Is the liability of IRC deemed paid by
virtue of the deed of assignment?
2. Is OBM liable for damages?
A:
1. NO. For all intents and purposes, the deed
of assignment in this case is actually a
pledge. Where a CTD in a bank, payable at
a future time, was handed over by a debtor
to his creditor, it was not payment, unless
there was an express agreement on the part
of the creditor to receive it as such.
2. YES. While it is true that no interest shall
be due unless it has been expressly
stipulated in writing, this applies only to
interest for the use of money. It does not
comprehend interest paid as damages.
Santos has the right to recover damages
resulting from the default of OBM and the
measure of such damages is interest at the
legal rate of 6% p.a on the amounts due and
unpaid at the expiration of the periods
respectively provided in the contracts.
(Integrated Realty Corp v. PNB,
Integrated Realty Corp v. PNB, GR No.
60705, 28 June 1989)
Petitioner obtained a loan of P20K from defendant
Rural Bank of Kawit. The loan was secured by a
REM over a parcel of land. The mortgage contract
states that the mortgage will cover the payment of
the loan of P20K and such other loans or other
advances already obtained or to be obtained by
the mortgagors from the bank. The loan of P20k
was fully paid. Thereafter they again obtained a
loan of P18K, secured by the same mortgage. The
spouses defaulted. The bank extra judicially
foreclosed the mortgage.
Q: Was the foreclosure sale based on a valid and
subsisting mortgage?
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A: It has long been settled that mortgages given to
secure future advancements are valid and legal
contracts; that the amounts named as
consideration in said contract do not limit the
amount for w/c the mortgage may stand as
security, if from the four corners of the instrument
the intent to secure future and other indebtedness
can be gathered. A mortgage given to secure
advancement is a continuing security and is not
discharged by repayment of the amount named in
the mortgage, until the full amount of the
advancements is paid. (Mojica v. CA, GR No.
94247, 11 Sept 1991)
Respondent spouses alarmed of losing their right
of redemption at the foreclosure sale of a prior
mortgage, loaned money from the plaintiff Bank
secured by mortgage over the same property
subject of the prior mortgage. When the spouses
defaulted, the plaintiff caused the extrajudicial
foreclosure of the mortgage. The land was sold
and the Bank was the highest bidder. No
redemption having been effected, ownership was
consolidated to the Bank. The spouses then filed
an action assailing the validity of the extrajudicial
foreclosure sale.
Q: Was the 2nd mortgage invalid?
A: Yes. The purchaser at the foreclosure sale
merely acquired an inchoate right to the property
w/c could ripen into ownership only upon the lapse
of the redemption period w/o his credit having
been discharged. It is illogical to hold that during
that same period of 12mos. the mortgagor was
divested of his ownership. Since the mortgagor
remains as the absolute owner of the property
during the redemption period and the free disposal
of his property, there would be compliance w/ the
requisites of Art 2085 for the constitution of
another mortgage on the property. (Medida v.
Court of Appeals, GR No. 98334, 08 May 1992)
Two fiber drums of riboflavin were shipped from
Japan via SS Eastern Comet. Upon arrival in
Manila, it was discharged into the custody of Metro
Port Services w/c said that one drum is in bad
order. Allied Brokerage received the shipment
from Metro Port, one drum opened and w/o seal.
Allied then delivered the shipment to the
consignee w/c excepted one drum that contained
spillages while the rest of the contents were
adulterated/fake.
Q: Is the applicable rate of interest 12% or 6%?
A: The interest to be paid is 6% on the amount
due, computed from the date of filing of the
complaint.
A 12% interest, in lieu of 6% shall be imposed on
such amount upon finality of this decision until the
payment thereof.
*When an obligation, regardless of its source is
breached, the contravenor can be held liable for
damages. With regard to an award or interest in
the concept of actual or compensatory damages,
the rate of interest, as well as the accrual thereof,
is imposed as follows:
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2007 Team Bar-Ops Civil Law Committee
1. When the obligation is breached, and it
consists in the payment of a sum of money
(loan or forbearance of money), the interest
due should be that which may have been
stipulated in writing. Furthermore, the
interest due shall itself earn legal interest
from the time it is judicially demanded. In the
absence of stipulation, the rate of interest
shall be 12% per annum to be computed
from default, from judicial or extra-judicial
demand under and subject to the provisions
of Art 1169 of the CC.
2. When an obligation, not constituting a loan or
forbearance of money, is breached, an interest
on the amount of damages awarded may be
imposed at the discretion of the court at the
rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or
damages except when or until the demand can
be established with reasonable certainty.
Where the demand is established with
reasonable certainty, the interest shall begin to
run from the time the claim is made judicially or
extra-judicially but when such certainty cannot
be so reasonably established at the time the
demand is made, the interest shall begin to run
only from the date the judgment of the court is
made. The actual base for the computation of
legal interest shall, in any case, be on the
amount finally adjudged.
When an obligation arises from a contract of
purchase and sale and not from a contract of
loan or mutuum, the applicable rate is 6% per
annum as provided in Article 2209 of the NCC,
and not the rate of 12% per annum as provided
in (CB) Cir. No. 416.
3. When the judgment of the court awarding a
sum of money becomes final and executory, the
rate of legal interest, whether the case falls
under number or number 2, above, shall be 12%
per annum from such finality until its satisfaction,
this interim period being deemed to be by then
an equivalent to a forbearance of credit.
(Eastern Shipping Lines v. CA, GR No. 97412,
12 July 1994)
Petitioner Chua Pac, the president and Gen.
Manager of ACME executed a chattel mortgage in
favor of the Bank as security for the corporate
loan. A provision in the deed is that the chattel
mortgage will also stand as security for future
obligations. The original loan was paid, and so is
the subsequent loan. ACME contracted a 3rd loan
in the amount. ACME however failed to pay that
loan at maturity. As a result, the Bank applied for
an extrajudicial foreclosure of the chattel
mortgage.
Q: Would it be valid and effective to have a clause
in a chattel mortgage that purports to likewise
extend its coverage to obligations yet to be
contracted or incurred?
A: NO. While a pledge, real estate mortgage, or
antichresis may exceptionally secure after-
incurred obligations so long as these future debts
are accurately described, a chattel mortgage,
however, can only cover obligations existing at the
University of Santo Tomas
time the mortgage is constituted. Although a
promise expressed in a chattel mortgage to
include debts that are yet to be contracted can be
a binding commitment that can be compelled
upon, the security itself, however, does not come
into existence or arise until after a chattel
mortgage agreement covering the newly
contracted debt is executed either by conducting a
fresh chattel mortgage or amending the old
contract. (ACME v. CA, GR No. 103576, 22 Aug.
1996)
Ever Textile Mills obtained loans from the bank.
The 1st loan was secured by a Deed of Real and
Chattel Mortgage over the lot where Evertex
stands and the chattels located therein. The 2nd
loan was secured by Chattel Mortgage over
personal properties. After the execution of the
second mortgage, Evertex purchased various
machineries and equipments. Evertex declared
insolvency and all its assets were taken into the
custody of the Insolvency court. When Evertex
failed to pay the loans to PBCom, the latter
extrajudicially foreclosed the mortgages and
appeared as the highest bidder. Then, PBCom
sold the chattels including those that were not
included in the list s of 1st and 2nd mortgage.
Q: 1. Are the after-acquired properties by the
mortgagor deemed to be included in the Chattel
Mortgage agreement?
2. Can petitioner Tsai be considered as
purchaser in good faith?
A: 1. A chattel mortgage shall be deemed to cover
only the property described therein and not like or
substituted property thereafter acquired by the
mortgagor and placed in the same depository as
the property originally mortgaged, anything in the
mortgage to the contrary notwithstanding. Since
the disputed machineries were acquired in 1981
and could not have been involved in the 1975 or
1976 chattel mortgages, it was consequently an
error on the part of the Sheriff to include subject
machineries with the properties enumerated in said
chattel mortgages.
2. 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 purchase, or before he has
notice of the claims or interest of some other
person in the property. As borne out by the
records, she received the letter of respondent’s
counsel, apprising her of respondent’s claim, dated
February 27, 1987. She replied thereto on March
9, 1987. Despite her knowledge of respondent’s
claim, she proceeded to buy the contested units of
machinery on May 3, 1988. The court found that
she was not a purchaser in good faith. (Tsai v.
CA, 366 SCRA 324)
Tomacruz, persuaded by the assurances of
Baylon, agreed to lend Luanzon money. Luanzon
issued and signed a promissory note
acknowledging receipt from Tomacruz and
obliging herself to pay the former the amount.
Petitioner Baylon signed the promissory note,
affixing her signature under the word "guarantor."

CIVIL LAW NOTES
Upon default, Tomacruz made a written demand
upon Baylon for payment, which petitioner did not
heed. Tomacruz filed a case for the collection of a
sum of money against Luanzon and Baylon,
Q: Can the creditor run after the guarantor w/o first
exhausting the properties of the debtor?
A: No. The liability of a guarantor is only subsidiary.
All the properties of the principal debtor must first
be exhausted before his own is levied upon. The
creditor may hold the guarantor liable only after the
judgment has been obtained against the principal
debtor and the latter is unable to pay, “for obviously
the exhaustion of the principal’s property cannot
even begin to take place before judgment has been
obtained.
In the present case, no judgment was first obtained
against the principal debtor. It is useless to speak
of a guarantor when no debtor has been held liable
for the obligation, which is allegedly secured by
such guarantee. Although the principal debtor was
impleaded as defendant, there is nothing in the
records to show that summons was served upon
her. Thus, the trial court never acquired jurisdiction
over the principal debtor. Private respondent must
first obtain a judgment against the principal debtor
before assuming to run after the alleged guarantor.
(Baylon v. CA, 312 SCRA 502)
Real estate mortgage was entered into by the
petitioners, as “mortgagors” and respondent Bank
as “mortgagee”. Upon failure to pay the loan, the
bank extra judicially foreclosed the mortgage
under the provisions of Act 3135 as amended by
Act 4118. The mortgagee-bank was the highest
bidder and during the one-year redemption period,
it filed a petition for and was granted the issuance
of a writ of possession. Petitioners-mortgagors
filed with the CA a petition to enjoin the
implementation of the writ of possession.
Petitioners alleged that there is a pending case for
annulment of extrajudicial foreclosure of real
estate mortgage and argued that the
implementation of the writ of possession would
render nugatory the judgment of the trial court in
the said case.
Q: Is it proper for the petitioners to file for the
issuance of writ of prohibition to enjoin the
issuance of a writ of possession?
A: No. Act No. 3135 as amended by Act 4118, is
clear that the purchaser must first be placed in
possession of the mortgaged property pending
proceedings assailing the issuance of the writ of
possession. If the trial court later finds merit in the
petition to set aside the writ of possession, it shall
dispose in favor of the mortgagor the bond
furnished by the purchaser. Thereafter, either
party may appeal from the order of the judge in
accordance with Section 14 of Act 496. The
rationale for the mandate is to allow the purchaser
to have possession of the foreclosed property
without delay, such possession being founded on
his right of ownership.
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
77
ADVISER:
In several cases, the Court has ruled that the
issuance of a writ of possession is a ministerial
function. The order for a writ of possession issues
as a matter of course upon the filing of the proper
motion and the approval of the corresponding
bond. The judge issuing the order following these
express provisions of law cannot be charged with
having acted without jurisdiction or with grave
abuse of discretion. Therefore, the issuance of the
writ of possession being ministerial in character,
the implementation of such writ by the sheriff is
likewise ministerial.
As a rule, any question regarding the validity of the
mortgage or its foreclosure cannot be a legal
ground for refusing the issuance of a writ of
possession. Regardless of whether or not there is
a pending suit for annulment of the mortgage or
the foreclosure itself, the purchaser is entitled to a
writ of possession, without prejudice of course to
the eventual outcome of said case. Hence, an
injunction to prohibit the issuance of writ of
possession is entirely out of place. Prohibition
does not lie to enjoin the implementation of a writ
of possession. Once the writ of possession has
been issued, the trial court has no alternative but
to enforce the writ without delay. (Sps. Ong v.
CA, G.R. No. 121494, 08 June 2000)
Private respondent Pablo purchased a tractor.
Pablo’s son, Mike rented the house of plaintiff
Calibo. Pablo left his tractor with his son for
safekeeping. Mike then had arrears in the rentals
and he stopped paying the electric and water
consumption. Because of that Mike offered the
tractor of his father to Calibo as security. When
Pablo came back and learned that the tractor was
in the custody of Calibo, he demanded its return.
Calibo however refused. Calibo alleged that the
tractor was pledged to him, and in the alternative,
the tractor was left with him in the concept of
deposit and he may validly hold on to it until Mike
pays his obligation.
Q: Is Calibo obliged to return the tractor?
A: Yes. In a contract of pledge, the creditor is
given the right to retain his debtor’s movable
property in his possession, or in that of a 3rd
person to whom it has been delivered, until the
debt is paid.
There is no valid pledge because Mike is not the
absolute owner of the property pledged.
There is likewise no valid deposit in this case. In a
contract of deposit, a person receives an object
belonging to another with the obligation of safely
keeping it and of returning the same. Petitioner
states that he received the tractor not to safely
keep it but as a form of security for the payment of
Mike Abella’s obligation. There is no deposit
where the principal purpose for receiving the
object is not safekeeping. (Calibo Jr. v. CA, GR
No. 120528, 29 January 2001)
In 1986, Looyuko and Uy, obtained a money
judgment against the Mendozas before the RTC of
Manila. The subject property was sold at public
auction with Looyuko, et al as the highest bidders.
The RD issued a new TCT in the name of Looyuko
78
2007 Team Bar-Ops Civil Law Committee
and Uy. In 1984, Gutang obtained a money
judgment against Mendoza before the RTC of
Iloilo. The subject property was sold at public
auction to Gutang. In 1987, the Rizal RTC issued
a new title in her name.
In 1976, the Mendozas executed a mortgage over
the subject property in favor of FGU
Insurance. The mortgage was registered. When
the Mendozas defaulted, FGU foreclosed the
property. FGU was the highest bidder and the
certificate of sale w/c was issued was
subsequently confirmed by the RTC in 1989.
RTC ordered the cancellation and issuance of a
new title in favor of FGU. Before the new TCT
could be issued, however, Looyuko, et al. and
Spouses Gutang filed their respective motion for
intervention and to set aside the judgment of the
RTC. In 1991, the alleged assignee of FGU and
Looyuko et al., filed a motion for leave to intervene
in the LRC.
Q: Can Looyuko, et al and the Gutangs exercise
the equity of redemption?
A: Yes. Section 1, Rule 68 of the Rules of Court
requires all persons having or claiming an interest
in the premises subordinate in right to that of the
holder of the mortgage be made defendants in the
action for foreclosure. The requirement for joinder
of the person claiming an interest subordinate to
the mortgage sought to be foreclosed, however, is
not mandatory in character but merely directory, in
the sense that failure to comply therewith will not
invalidate the foreclosure proceedings.
The effect of the failure on the part of the
mortgagee to make the subordinate lien holder a
defendant is that the decree entered in the
foreclosure proceeding would not deprive the
subordinate lien holder of his right of redemption.
A decree of foreclosure in a suit to which the
holders of a second lien are not parties leaves the
equity of redemption in favor of such lien holders
unforeclosed and unaffected.
Subordinate lien holders like the Gutangs and
Looyuko et al. acquire only a lien upon the equity
of redemption vested in the mortgagor, and their
rights are strictly subordinate to the lien of the
mortgagee. Moreover, levying upon the property
itself is distinguishable from levying on the
judgment debtor’s interest in it. Such interest can
be levied upon by means of a writ of execution.
Accordingly, a creditor who levies his execution
upon property that the judgment debtor has
mortgaged to another can sell only the equity of
redemption belonging to the mortgagor. It is the
equity of redemption that the subordinate lien
holders had acquired by the levy on execution and
that was sold in the public auction, and not the
property itself.
Such equity of redemption does not constitute a
bar to the registration of the property in the name
of the mortgagee. Registration may be granted in
the name of the mortgagee but subject to the
subordinate lien holders’ equity of redemption,
which should be exercised within 90 days from the
date the decision becomes final. (Looyuko v.
Court of Appeals, G.R. No. 102696, 12 July
2001)
University of Santo Tomas
FMIC granted respondent a loan to finance the
construction and development of the Este Del Sol
Mountain Reserve a sports/resort complex project.
The loan was secured by a mortgage of 2 parcels
of land. As provided for by the Loan Agreement,
an Underwriting Agreement was executed wherein
FMIC shall undertake best effort basis to sell 120K
stocks of Este Del Sol. There’s also a Supervision
Agreement for a period of 4yrs and a Consultancy
Agreement executed for a fee for a period of 4yrs.
When Este Del Sol failed to meet the payments of
the amortizations, FMIC extra judicially foreclosed
the mortgaged properties. FMIC then instituted
collection of the deficiency against Este Del Sol.
Q: Were the Underwriting Agreement,
Supervision Agreement and the Consultancy
Agreement mere cloaks to cover usurious
interest?
A: The Underwriting and Consultancy
Agreements, by the circumstances and several
facts taken altogether were simply cloaks or
devices to cover an illegal scheme employed by
petitioner FMIC to conceal and collect excessive
usurious interest.
When a contract between 2 parties is evidenced
by a written instrument, such document is
ordinarily the best evidence of the terms of the
contract. Courts only need to rely on the face of
the written contracts to determine the intention of
the parties. However, the form of the contract is
not conclusive, for the law will not permit a
usurious loan to hide itself behind a legal form.
Parol evidence is admissible to show that a written
document though legal in form was in fact a device
to cover usury. (First Metro Investment Corp v.
Este Del Sol Mountain Reserve Inc., GR No.
141811, 15 Nov. 2001)
Torts and Damages
Merrit, riding on a motorcycle, was bumped by an
ambulance of the General Hospital. Merrit suffered
serious injuries to his body including his brain,
preventing him from working efficiently. The driver
of the ambulance was held negligent by the trial
court, ordering him to pay Merrit damages. Act
2457 was enacted authorizing Merrit to bring suit
against the government.
Q: Is Government of the Philippines liable to pay
damages to Merrit for the negligence of the
ambulance driver?
A: No. By consenting to be sued, a state simply
waives its immunity from suit. It does not thereby
concede its liability to Merrit or create any cause of
action in his favor, or extend the liability to any
cause not previously recognized. It merely gives
remedy to enforce pre-existing liability and submits
itself to the jurisdiction of the court, subject to its
right to interpose any lawful defense. Act 2457 did
not create liability or cause of action against the
State where none existed before, but merely gave
an additional remedy to enforce such liability as
would have existed if the statute had not been
enacted.
It must be conceded that the State can be made
liable for injuries arising from the negligence of its

CIVIL LAW NOTES
agents or servants only by some positive statute
assuming such liability. In a damages case, the
responsibility of the State is limited to that which it
contracts through a special agent, duly
empowered by a definite order or commission to
perform some act or charge with some definite
purpose which gives rise to the claim, and not
where the claim is based on acts or omissions
imputable to a public official charged with some
administrative and technical office.
Therefore, the State is only liable for the acts of its
agents, officers, and employees where they act as
special agents, officers and employees when they
act as special agents and that the driver of the
ambulance of the General Hospital was not a
special agent. (Meritt v. Government, 34 Phil.
311)
Picart was riding on his pony over a bridge. Smith,
who was driving an automobile from the opposite
direction, blew his horn to warn Picart. Picart saw
the automobile and heard the warning. However,
he pulled the pony closely up against the railing on
the right side of the bridge instead of going to the
left, thinking that he did not have sufficient time to
get over to the other side.
The automobile passed by the animal in such
close proximity that the animal was frightened and
turned its body with its head toward the railing. Its
left hind leg was hit by the car. The horse fell and
its rider was thrown off with some violence. The
horse died and Picart received contusions which
caused temporary unconsciousness and required
medical attention for several days.
Q: Was Smith negligent and therefore liable for
damages?
A: Yes. As he moved toward the center of the
bridge, he must in a moment have perceived that it
was too late or the horse to cross with safety in
front of the moving vehicle. In the nature of things,
this change of situation occurred while the
automobile was yet some distance away; and from
this moment it was no longer within the power of
Picart to escape being run down by going to a
place of greater safety. The control of the situation
had then passed entirely to Smith; and it was his
duty either to bring his car to an immediate stop
or, seeing that there were no other persons on the
bridge, to take the other side and pass sufficiently
far away from the horse to avoid the danger of
collision. Instead of doing this, Smith ran straight
on until he was almost upon the horse (Application
of the Doctrine of Last Clear Chance). He was, we
think, deceived into doing this by the fact that the
horse had not yet exhibited fright. But in view of
the known nature of horses, there was an
appreciable risk that, if the animal in question was
unacquainted with automobiles, he might get
exited and jump under the conditions which here
confronted him. When the defendant exposed the
horse and rider to this danger he was, in our
opinion, negligent in the eye of the law.
The test by which to determine the existence of
negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged
negligent act use that person would have used in
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
79
ADVISER:
the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the
standard supposed to be supplied by the
imaginary conduct of the discreet paterfamilias of
the Roman law. The existence of negligence in a
given case is not determined by reference to the
personal judgment of the actor in the situation
before him. The law considers what would be
reckless, blameworthy, or negligent in the man of
ordinary intelligence and prudence and determines
liability by that. The question as to what would
constitute the conduct of a prudent man in a given
situation must of course be always determined in
the light of human experience and in view of the
facts involved in the particular case. (Picart v.
Smith, G.R. No. L-12219, 15 March 1918)
A fire broke out at a Caltex Station. It started while
a gasoline was being hosed from a tank truck to its
underground storage. The fire spread and burned
several houses and the properties therein. The
owners of the burned houses filed an action for
recovery of damages against the station’s owner
and agent in charge of operation.
Q: Is the owner of the gasoline liable?
A: Yes. Notwithstanding the lack of proof to show
the cause and origin of the fire, negligence can still
be attributed to the defendants by the application
of the doctrine of res ipsa loquitur.
Where the thing which causes injury is shown to
be under the management of the defendant, and
the accident is such as in the ordinary course of
the things does not happen if those who have the
management use proper care, it affords
reasonable evidence, in the absence of an
explanation by the defendant, that the accident
arose from want of care.
The gasoline station, with all its appliances,
equipment, and employees, was under the control
of the defendants. The persons who knew or could
have known how the fire started where the
defendants and their employees but they gave no
explanation. It is a fair and reasonable inference
that the incident happened because of want/lack
of care. (Africa v. Caltex, 16 SCRA 448)
An electric car of Manila Electric was running
along M.H. del Pilar St. Manila. Upon arriving at
Pearl St., it stopped to receive passengers.
Borromeo approached the car with his two
children. The children boarded first and while he
was about to board, he fell off and was dragged by
the car. As a result of the accident, his left foot
was amputated, making it necessary for him to
use an artificial foot to be able to walk. He filed an
action for damages.
Q: Is Manila Electric liable for damages? Is
Borromeo entitled for additional award of
damages?
A: Yes. The plaintiff’s fall was due entirely to the
car having been suddenly set in motion at the
moment that the plaintiff was about to board it.
The subsequent loss of his left foot was due to the
80
2007 Team Bar-Ops Civil Law Committee
carelessness and negligence of the defendant’s
employees in charge of the car.
Yes. The sum awarded by the trial court as
damages is made up of the expense incurred for
hospital, medicine and physician’s fees on account
of this accident. However, the trial court has not
allowed the plaintiff anything for the loss of his
foot. The obligation to indemnify for injury caused
by negligence under Art. 1902 includes two kinds
of damages, damages for the loss actually
suffered and for the profit which the injured may
have failed to realize.
Taking into the account the age of the plaintiff
(45), profession as a marine engineer (which he
can no longer practice because of the amputation)
and salary (P375 a month), the Supreme Court
ruled for additional damages of P2, 000.
(Borromeo v. Manila Electric Railroad and
Light Co., 44 PHIL 165, 05 December 1922)
Afialda was employed by the Hisole as caretaker
of the carabaos. While tending the carabaos,
Afialda was gored by one of them and later died
as a consequence of his injuries. Afialda’s sister
filed an action for damages against the spouses.
Q: Is the owner of the animal liable when damage
is caused to its caretaker?
A: No. The animal was in custody and under the
control of the caretaker, Afialda, who was paid for
his work as such. Obviously, it was the caretaker's
business to try to prevent the animal from causing
injury or damage to anyone, including himself. And
being injured by the animal under those
circumstances, was one of the risks of the
occupation which he had voluntarily assumed and
for which he must take the consequences.
(Afialda v. Hisole, G.R. No. L-2075, 29
November 1949)
Hidalgo Enterprises is an owner of an ice-plant
factory, surrounded by fence. It has two tanks full
of water for purposes of cooling its engine. The
tanks, on the other hand, were not provided with
any kind of fence or top covers and its edges were
barely a foot high from the surface of the ground.
Mario, an 8 year old boy entered the factory
premises to take a bath in one of the tanks. He
sank to the bottom of the tank and died drowning.
Q: Is the water tank an attractive nuisance?
A: No. The attractive nuisance doctrine generally
is not applicable to bodies of water, artificial as
well as natural, in the absence of some unusual
condition or artificial feature other than the mere
water and, its location. Nature has created
streams, lakes and pools which attract children.
Lurking in their waters is always the danger of
drowning. Against this danger children are early
instructed so that they are sufficiently presumed to
know the danger; and if the owner of private
property creates an artificial pool on his own
property, merely duplicating the work of nature
without adding any new danger, he is not liable
because of having created an attractive nuisance.
(Hidalgo Enterprises v. Court of Appeals, G.R.
No. L-3422, June 13, 1952)
University of Santo Tomas
Magno went to the 3-story house of his
stepbrother to repair a “media agua” said to be in
a leaking condition. The “media agua” was below
the window in the third floor. Standing in the said
media agua, Magno received from his son through
that window a galvanized iron sheet to cover the
leaking portion. However, when he turned around,
the iron sheet he was holding came into contact
with the electric wire of the Manila Electric
Company, thus causing his death by electrocution.
His widow Sotera and heirs filed suit to recover
damages from the company.
Q: Can the Manila Electric Company be held
liable for damages for the electrocution suffered by
Efren Magno?
A: No. Where it is shown that the death of the
deceased was primarily caused by his own
negligence, the company could not be held guilty
of negligence or as lacking in due diligence. To
hold the latter liable in damages for the death of
the deceased, such supposed negligence of the
company must have been the proximate cause of
the accident. But in this case, the act of the
deceased in turning around and swinging with the
galvanized iron sheet with his hands was the
proximate cause of the electrocution, therefore his
heirs cannot recover.
Furthermore, the principle of remote and
proximate cause cannot be made the basis of an
action if such remote cause did nothing more than
furnish the condition or give rise to the occasion by
which the injury, a distinct, successive, unrelated,
and efficient cause of the injury would not have
happened but for such condition or occasion. If no
danger existed in the condition except because of
the independent cause, such condition was not the
proximate cause. And if an independent negligent
act (act of the deceased in turning around and
swinging with the galvanized iron sheet with his
hand in the 3rd story without any protective
equipment) sets into operation which result in
injury, such act or condition is the proximate
cause. (Manila Electric Company v.
Bemoquillo, 53 OG 1429, 18 May 1956)
Dante Capuno, son of Delfin, was accused and
found guilty of double homicide through reckless
imprudence for the death of two persons which
resulted from his reckless driving of a jeep. A civil
action was filed against the father and son. The
father set up the defense that if anyone should be
held liable, it should be Dante because at the time
of the accident, Dante was not under his control,
supervision and custody.
Q: Can Delfin be held liable, jointly and severally
with his son, for the death caused by the negligent
act of his son Dante?
A: It is true that under the law above quoted,
"teachers or directors of arts and trades are liable
for any damages caused by their pupils or
apprentices while they are under their custody",
but this provision only applies to an institution of
arts and trades and not to any academic
educational institution. Neither the head of the
school of Dante, nor the city school's supervisor,
could be held liable for the negligent act of Dante

CIVIL LAW NOTES
because he was not then a student of an institute
of arts and trades as provided by law.
The civil liability which the law imposes upon the
father, and, in case of his death or incapacity, the
mother, for any damages that may be caused by
the minor children who live with them, is obvious.
This is necessary consequence of the parental
authority they exercise over them which imposes
upon the parents the "duty of supporting them,
keeping them in their company, educating them
and instructing them in proportion to their means",
while, on the other hand, gives them the "right to
correct and punish them in moderation".
The only way by which parents can relieve
themselves of the liability under Article 2180 Par 2
is if they prove that they exercised all the diligence
of a good father of a family to prevent the damage,
which the defendants failed to prove. (Exconde v.
Capuno, G.R. No. L-10134, 29 June 1957)
Complainant, a teacher, and petitioner
Hermosisima, who was almost ten years younger
than her, used to go around together and were
regarded as engaged, although he had made no
promise of marriage prior thereto. She gave up
teaching and became a life insurance underwriter,
where intimacy developed between her and the
petitioner. They had sexual intercourse.
Complainant told him that she was pregnant,
whereupon he promised to marry her. However,
defendant married another woman.
Q: Are moral damages recoverable for breach of
promise to marry?
A: No. Under the Civil Code, there can be no
recovery of moral damages for a breach of
promise to marry, as such. The omission in the
Civil Code of the proposed chapter on Breach of
Promise suits is a clear manifestation of legislative
intent not to sanction such suits for breach of
promise to marry. otherwise many innocent men
may become the victims of designing and
unscrupulous females. However, if there be
seduction (as defined in Articles 337 and 338 of
the Revised Penal Code), moral damages may be
recovered under Article 2219, par.3 of the Civil
Code. The Court implied that if there be moral
seduction as distinguished from criminal
seduction, there maybe a grant of moral damages.
However, in this case, petitioner is not morally
guilty of seduction, not only because he was ten
years younger than the complainant, but that it
was the woman who virtually seduced the man by
surrendering herself to him because she was
overwhelmed by her love for him, she wanted to
bind him by having a fruit of their engagement
even before they had the benefit of clergy.
(Hermosisima v. CA, No. L-14628, 30 September
1960)
Plaintiffs are the parents and siblings of one Lolita
Pe. The defendant Alfonso Pe is a married man
and was an adopted son of a Chinaman named
Pe Beco, a collateral relative of Lolita’s father.
Defendant frequented the house of Lolita on the
pretext that he wanted her to teach him how to
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pray the rosary. Because of the frequency of his
visits to the latter’s family who was allowed free
access because he was a collateral relative and
was considered as a member of her family, the
two eventually fell in love with each other and
conducted secret love affairs. When the rumors
about their illicit affair reached the knowledge of
her parents, defendant was forbidden from going
to their house and even from seeing Lolita. Lolita
went away with Alfonso.
Hence, the plaintiffs brought this action to recover
damages.
Q: Are the plaintiffs entitled to such damages?
A: Yes. The circumstances under which defendant
tried to win Lolita’s affection cannot lead to any
other conclusion than that it was he who, thru an
ingenious scheme or trickery, seduced the latter to
the extent of making her fall in love with him.
Indeed, no other conclusion can be drawn from
this chain of events than that defendant not only
deliberately, but through clever strategy,
succeeded in winning the affection and love of
Lolita to the extent of having illicit relations with
her. The wrong he has caused her and her family
is indeed immeasurable considering the fact that
he is a married man. Verily, he has committed an
injury to Lolita’s family in a manner contrary to
morals, good customs and public policy as
contemplated in Article 21 of the new Civil Code.
(Pe v. Pe, No. L-17396, 30 May 1962)
Velez and Wassmer, following their mutual
promise of love, decided to get married and set
September 4, 1954 as the big day. Two days
before the wedding Velez left a note for his bride-
to-be stating that the wedding will have to be
postponed because his mother opposes. But the
next day, he sent her a telegram telling her that
the wedding will push thru and he will be returning
very soon. But Velez never returned and was
never heard from again. Beatriz filed an action for
damages. Velez was declared in default and
judgment was rendered against him. Velez filed a
petition for relief from orders, judgment and
proceedings and motion for new trial and
reconsideration.
Q: Is the plaintiff entitled to damages?
A: A mere breach of promise to marry is not an
actionable wrong. But to formally set a wedding
and go through all the preparations and publicity,
only to walk out of it when the matrimony is about
to be solemnized, is quite different. This is
palpably and unjustifiably contrary to good
customs for which defendant must be held
answerable in accordance with Article 21 of the
Civil Code. (Wassmer v. Velez, No. L-20089, 26
December 1964)
A PAL plane crashed resulting in the death of
passengers and crew. Appellants here are parents
of Davila, who died in the crash. They are
appealing the award of damages by the lower
court:
(1) For the death of Pedro T. Davila Jr. the amount
ofP6, 000;
82
2007 Team Bar-Ops Civil Law Committee
(2) For the loss of the earning capacity of the
deceased at the rate ofP12, 000 per annum for
five years in the amount ofP60, 000.
Q: Is the computation of loss of earning capacity
wrong, thus entitling the parents of Davila to a
larger amount?
A: Yes, the deceased was employed as a
manager of a radio station, from which he was
earning P8,400 a year, consisting of a monthly
salary of P600 and allowance of P100. As a
lawyer and a junior partner of his father in the law
office, he had an annual income of P3, 600. From
farming, he was getting an average of P3, 000. All
in all, therefore, the deceased had gross earning
ofP15, 000 a year.
According to Article 2206 (1) of the Civil Code,
"The defendant shall be liable for the loss of the
earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter."
This article, while referring to "damages for death
caused by crime or quasi-delict," is expressly
made applicable by Article 1764 "to the death of a
passenger caused by the breach of contract by a
common carrier."
The deceased, Pedro Davila Jr. was single and 30
years of age when he died. At that age, one's
normal life expectancy is 33-1/3 years, according
to the formula (2/3 x [80 - 30]) adopted by this
Court in the case of Villa Rey Transit Inc. v. CA on
the basis of the American Expectancy Table of
Mortality or the Actuarial of Combined Experience
Table of Mortality. However, although the
deceased was in relatively good health, his
medical history shows that he had complained of
and, had been treated for such ailments as
backaches, chest pains, and occasional feelings of
tiredness. It is reasonable to make an allowance
for these circumstances and consider, for
purposes of this case, a reduction of his life
expectancy to 25 years.
In the same case of Villa Rey Transit, the court
stated: "..earning capacity, as an element of
damages to one's estate for his death by wrongful
act is necessarily his net earning capacity or his
capacity to acquire money, less the necessary
expense for his own living."
Stated otherwise, the: amount recoverable is not
loss of the entire earnings, but rather the loss of
that portion of the earnings which the beneficiary
would have received. In other words, only net
earnings, not gross earnings, are to be
considered, that is the total of the earnings less
expenses necessary in the creation of such
earnings or income and less living and other
incidental expenses.
Considering the fact that the deceased was getting
his income from three (3) different sources,
namely, from managing a radio station, from law
practice, and from farming, the expenses
incidental to the generation of such income were
necessarily more than if he had only one source.
Together with his living expenses, a deduction of
P600 a month, or P7, 200 a year seems
reasonable, leaving a net yearly income of P7,
800. This amount, multiplied by 25 years, or P195,
000, is the amount which should be awarded to
the plaintiffs. (Davila v. PAL, 49 SCRA 497)
University of Santo Tomas
A barge owned by Luzon Stevedoring Co. (LSC),
while being towed by its tugboats, rammed one of
the wooden piles of the Nagtahan Bridge, causing
the bridge to tilt. The Republic sued LSC. In its
defense, they interposed the defense that the
damages to the bridge were caused by force
majeure because the river was swollen due to the
heavy downpour of rain.
Q: Was it fortuitous event that caused of the
damage thereby relieving LSC from liability?
A: NO. The Nagtahan Bridge was an immovable
and stationary object and the hitting of the bridge
by the barge, which was exclusively controlled by
SLC, raises the presumption of negligence on the
part of SLC or its employees in manning the barge
or the tugboat that towed it.
The cause of the damages was not force majeure
because the defendant by its allegations forsee
the event. LSC, knowing and appreciating the
perils posed by the swollen stream and its swift
current, voluntarily entered into a situation
involving obvious danger. It therefore assured the
risk and cannot shed responsibility merely
because the precaution it adopted turned out to be
insufficient. (Republic v. Luzon Stevedoring,
G.R. No. L-21749, 29 September 1967)
A passenger bus owned by Villa Rey and driven
by Casim hit the rear side of a bullcart filled with
hay. As a result, the end of a bamboo pole placed
on top of the hayload hit the right side of the
windshield of the bus penetrating through the
glass windshield and landed on the face of
Quintos, a passenger of the bus. Several Quintos
Jr. died at the hospital despite medical assistance.
The heirs of Quintos brought an action against
Villa Rey Transit for breach of the contract of
carriage to recover damages, including attorney's
fees.
Villa Rey contended that the mishap was due to a
fortuitous event. The trial court, affirmed by the
CA, rejected the defense and found that the
accident and the death of Policronio had been due
to the negligence of the bus driver, for whom Villa
Rey was liable under its contract of carriage with
the deceases. The court awarded P63,750.00 as
damages using the (2/3 x [80-29) formula in
determining his life expectancy, which was
multiplied to his annual income. Villa Rey
appealed the amount arguing that the lower court
erred in adopting said formula and in not acting in
accordance with Alcantara v. Surro in which the
damages were computed on a four (4) year basis,
despite the fact that the victim therein was 39
years old, at the time of his death, and had a life
expectancy of 28.90 years.
Q: Did the trial court err in adopting the (2/3 x [80-
29) formula and using the life expectancy as basis
for the award of damages
A: The determination of the amount of said
damages depends, mainly upon two (2) factors,
namely: (1) the number of years on the basis of
which the damages shall be computed; and (2) the
rate at which the losses sustained by said
respondents should be fixed. The case cited by

CIVIL LAW NOTES
Villa Rey is not controlling in the one at bar. In the
Alcantra case, none of the parties had questioned
the propriety of the four-year basis adopted by the
trial court in making its award of damages. Both
parties appealed, but only as regards the amount
thereof. Life expectancy is, not only relevant, but,
also, an important element in fixing the amount
recoverable by private respondents herein.
Although it is not the sole element determinative of
said amount, no cogent reason has been given to
warrant its disregard and the adoption, in the case
at bar, of a purely arbitrary standard, such as a
four-year rule.
With respect to the rate at which the damages
shall be computed, petitioner impugns the decision
appealed from upon the ground that the damages
awarded therein will have to be paid now, whereas
most of those sought to be indemnified will be
suffered years later. This argument is basically
true. Just the same, the force of the said argument
of petitioner herein is offset by the fact that,
although payment of the award in the case at bar
will have to take place upon the finality of the
decision therein, the liability of petitioner herein
had been fixed at a rate, Policronio's potentiality
and capacity to increase his future income was not
considered.
In Fixing the amount of that support, the
''necessary expenses of his own living," should be
deducted from his earnings. Only net earnings, not
gross earning, are to be considered, that is, the
total of the earnings less expenses necessary in
the creation of such earnings or income and less
living and other incidental expenses. (Villa Rey
Transit, Inc v. CA, G.R. No. L-25499, 18
February 1970)
Jimenez, on his way home from the Market on a
rainy day where streets were covered with flood,
stepped on an uncovered opening in which a dirty
and rusted nail penetrated his leg. He was
hospitalized and confined for 20 days. The injury
prevented him from walking properly for 15 days
and from engaging his job. Jimenez sued the City
of Manila and Asiatic Integrated Corp. The case
was dismissed. The City of Manila argued that the
management of the market was being performed
by Asiatic Integrated Corporation by virtue of a
Management and Operating Contract and it
cannot be held under RA 409.
Q: Can the City of Manila be held liable?
A: Article 2189 of the Civil Code, which specifically
governs liability of local governments due to
injuries and damages by reason of defective
conditions of roads, street, bridges, public
buildings, and other public works under their
control and not RA 409 shall apply. Specific
Provision prevails over a general provision.
It is not necessary the defective public works
belong to the province, city, or municipality. What
is required is that the local government has either
control or supervision over the public works in
question. Despite the management and Control
Contract, Sta. Ana remained under the control of
the City. In fact, the City of Manila employed a
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market master for the Sta. Ana Public Market
whose primary duty is to take direct supervision
and control of that particular market, more
specifically, to check the safety of the place for the
public. The market master is an employee of the
City. Jimenez could not be faulted for going to the
market on a stormy day where the streets are
covered in floods. The City failed to exercise due
diligence of a good father of a family in not taking
ordinary precautions which could have been taken
during good weather to minimize the danger to life
and limb under those difficult circumstances.
(Jimenez v. City of Manila, G.R. No. 71049, 29
May 1987)
Petitioners, officers of OROSEA, purchased a lot
from the spouses Edano payable in installments.
For this purpose, they issued four checks. A deed
of absolute sale was executed for such purpose
notwithstanding that the purchase price has not
yet been fully paid. Thereafter, OROSEA secured
a loan from the Philippine Veterans Bank using the
property as security. The second check, which
was renewed twice was dishonored by the bank.
The Edano spouses filed a complaint for estafa
against petitioners, by virtue of which, the fiscal
filed an information was subsequently filed.
Thereafter, OROSEA filed an action for the
annulment/rescission of the Contract of Sale.
Q: Is the civil case for the annulment of the
contract of sale a prejudicial question to warrant
the suspension of the criminal case for estafa?
A: Petitioners in seeking the annulment of the
deed of sale on the ground of fraud or
misrepresentation are in effect saying that said
deed is voidable due to vitiated consent. Voidable
contracts are binding, unless they are annulled by
a proper action in court. They are susceptible of
ratification. At the time the acts complained of in
the criminal case were committed; the deed of
sale was binding upon the parties. Undeniably, at
the time of said dishonor, petitioners' obligation to
pay the spouses pursuant to the deed of sale,
continued to subsist. And because petitioners'
checks were dishonored for lack of funds,
petitioners are answerable under the law for the
consequences of their said acts. And even if the
civil case were to be finally adjudged to the effect
that the said deed of sale should be annulled,
such declaration would be of no material
importance in the determination of the guilt or
innocence of the petitioners. The resolution,
therefore, of the issues in the civil case are not
determinative of the guilt or innocence of the
petitioners-accused in the criminal case. Hence,
no prejudicial question is involved between the
said two (2) cases. (Umali v. IAC, G.R. No. L-
63198, 21 June 1990)
Famoso while riding with a co-employee in the
caboose of a cargo train of petitioner Ma-ao,
jumped off the train to escape injury when it was
suddenly derailed. But the train fell on its side,
caught his legs by its wheels and pinned him
down, resulting to his death. The claims for death
84
2007 Team Bar-Ops Civil Law Committee
and other benefits having been denied by the
petitioner, his wife Herminia filed a suit. The TC
ruled in her favor but deducted from the total
damages awarded 25% thereof for the decedent’s
contributory negligence. The CA sustained the
rulings of the TC except as to the contributory
negligence of the deceased and disallowed the
deductions.
Q: Was Ma-ao guilty of negligence? Was Famoso
was guilty of contributory negligence?
A: 1. Yes. The maintenance of the rails, for the
purpose inter alia of preventing derailments, was
the responsibility of Ma-ao, and that this
responsibility was not discharged. According to its
own witness, the cases of derailment in the milling
district were frequent and there were even times
when such derailments were reported every hour.
Ma-ao should therefore have taken more prudent
steps to prevent such accidents instead of waiting
until a life was finally lost because of its
negligence.
The claim that the brakemen and the conductors
were required to report any defect in the condition
of the railways and to fill out prescribed forms is
not impressive. What is important is that Ma-ao
should act on these reports and not merely receive
and file them. The fact that it is not easy to detect
if the fish plates are missing is no excuse either.
Indeed, it should stress all the more the need for
the responsible employees of Ma-ao to make
periodic checks and actually go down to the
railroad tracks and see if the fish plates were in
place.
The fish plates (what keeps the rails aligned) were
supposed to have been bolted to the rails and
could be removed only with special tools, which
was in the custody of petitioner. The fact that the
fish plates were not found later at the scene of the
mishap may show they were never there at all to
begin with or had been removed long before. The
absence of the fish plates, whatever the cause or
reason, is by itself alone proof of the negligence of
the petitioner. (Res ipsa loquitur)
The petitioner also disclaims liability on the ground
of Article 2176 of the CC, contending it has
exercised due diligence in the selection and
supervision of its employees. The Court cannot
agree. The record shows it was in fact lax in
requiring them to exercise the necessary vigilance
in maintaining the rails in good condition to
prevent the derailments that sometimes happened
every hour. Obviously, mere ordering the
brakemen and conductors to fill out prescribed
forms reporting derailments, which reports have
not been acted upon as shown by the hourly
derailments is not the kind of supervision
envisioned by the Civil Code.
2. Famoso CANNOT be held guilty of contributory
negligence from the mere fact that he was not at
his assigned station when the train was derailed.
That might have been a violation of company rules
but could not have directly contributed to his injury,
as the petitioner suggests. It is pure speculation to
suppose that he would not have been injured if he
had stayed in the front car rather than at the back
and that he had been killed because he chose to
University of Santo Tomas
ride in the caboose. There is no showing that the
caboose where Famoso was riding was a
dangerous place and that he recklessly dared to
stay there despite warnings or signs of impending
danger.
*Res Ipsa Loquitur - Where the thing which causes
injury is shown to be under the management of the
defendant, and the accident is such as in the
ordinary course of things does not happen if those
who have the management use proper care, it
affords reasonable evidence, in the absence of an
explanation by the defendant, that the accident
arose from want of care.
*Contributory negligence - the act or omission
amounting to want of ordinary care on the part of
the person injured which, concurring with the
defendant's negligence, is the proximate cause of
the injury. It has been held that "to hold a person
as having contributed to his injuries, it must be
shown that he performed an act that brought about
his injuries in disregard of warnings or signs of an
impending danger to health and body." (MA-AO
Sugar Central v. CA, G.R. No. 83491, 27 August
1990)
Lao was presented as a witness in a case filed by
his employer against Espiritu. The case was filed
by the prosecutor but was later dismissed. Espiritu
filed a case for malicious prosecution against Lao.
Q: May Lao be held liable for malicious
prosecution?
A: NO. Lao had a valid defense to the action for
malicious prosecution because it was his employer
that was the complainant in the estafa case
against Espiritu. Lao was only a witness, not the
prosecutor in the estafa case. Moreover, there
was probable cause for the charge of estafa
against Espiritu, as found and certified by the
investigating fiscal himself. Lao was not motivated
by malice in making the affidavit upon which the
fiscal based the filing of the Information against
Espiritu. He executed it as an employee, a
salesman of the St. Joseph Lumber from whom
Espiritu made his purchases of construction
materials and who, therefore, had personal
knowledge of the transaction. Although the
prosecution of Espiritu for estafa did not prosper,
the unsuccessful prosecution may not be labeled
as malicious.
[Note: In this case, the decision of the CA finding
Lao guilty of malicious prosecution had already
become final and executory. But since Lao was
deprived of due process due to the negligence of
the lawyer, which was why he lost the case, and
he had a valid defense against malicious
prosecution, the SC allowed the action for
annulment of judgment] (Lao v. Court of
Appeals, G.R. No. 82808, 11 July 1991)
The Tagbilaran Friendly Bazaar was a victim of
robbery in the sums ofUS$300 and P200. During
such robbery, the security guard of the store,
Parilla, was allegedly shot and killed with the use
of a firearm by Degoma, who was one of the
robbers. The lower court found the accused guilty
and also ordered them to jointly and severally

CIVIL LAW NOTES
indemnify the owners of the Tagbilaran Bazaar the
sum of P200.00 and the equivalent exchange rate
prevailing for US$300, indemnify the heirs of the
guard in the sum of P36,000 for his death,
P200,000 for moral damages, P87,947.94 for
actual expenses, and P5,000 for attorney's fees
for counsel of Parilla.
Q: Was the award for damages correct?
A: The award for actual damages should be
reduced. In delict, the defendant is liable for all
damages which are the natural and probable
consequences of the act or omission complained
of. To seek recovery for actual damages, it is
necessary to prove with a reasonable degree of
certainty, premised upon competent proof and on
the best evidence obtainable by the injured party
the actual amount of loss. Courts cannot simply
assume that damages were sustained by the
injured party, nor can it rely on speculation or
guesswork in determining the fact and amount of
damages. In this case, the award of actual
damages in the amount ofP87, 947.94 is not
sustained by a review of the evidence of record.
Of the expenses allegedly incurred, the Court can
only give credence to those supported by a receipt
and which appear to, have been genuinely
incurred in connection with the death, wake, or
burial of the victim.
The court cannot take account of receipts showing
the following expenses:
Having these guidelines, the Court puts the gross
expenses proved by the immediate heirs of the
victim at P10, 175.85. The Court off-sets the
amount of P6,400, representing the alms received
by the heirs of the victim against the amount of
PI0,175.85, leaving the amount of P3,775.85 as
the actual amount of loss sustained by the
immediate heirs of the victim. The Court increases
the amount of indemnity for the death of Parilla to
P50, 000 in line with present jurisprudence.
(People v. Degoma G.R. Nos. 89404-05, 22 May
1992)
Respondent filed a complaint for damages against
petitioner Baksh for the alleged violation of their
agreement to get married. Marilou alleged that
petitioner courted and proposed to marry her.
Petitioner then visited the respondent’s parents to
secure their approval to the marriage. Then
petitioner forced her to live with him. She was a
virgin before she began living with him.
Subsequently, petitioner maltreated and
threatened to kill her. During a confrontation in the
barangay, petitioner repudiated the marriage
agreement and stated that he is already married to
a girl.
Q: Does Article 21 apply to the case?
A: Yes. Where a man’s promise to marry is in fact
the proximate cause of the acceptance of his love
by a woman and his representation to fulfill that
promise thereafter becomes the proximate cause
of the giving of herself unto him in a sexual
congress, proof that he had, in reality, no intention
of marrying her and that the promise was only a
subtle scheme or deceptive device to entice or
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inveigle her to accept him and to obtain her
consent to the sexual act, could justify the award
of damages pursuant to Article 21 not because of
such promise to marry but because of the fraud
and deceit behind it and the willful injury to her
honor and reputation which followed thereafter. It
is essential, however, that such injury should have
been committed in a manner contrary to morals,
good customs or public policy. (Gashem Shookat
Baksh v. CA, G.R. No. 97336, 19 February 1993)
Amadora was shot to dead by his classmate
Daffon during their commencement execise in
their school auditorium. Daffon was convicted of
homicide through reckless imprudence. Amadora’s
parents filed an action for damages under Art.
2180 of the Civil Code against Collegio de San
Jose Recoletos, and some its official and teacher.
The trial court held that the school cannot be held
liable because it was not a school of arts and trade
but an academic institution of learning and that the
students was not in the custody of the school as
the semester had already ended.
Q: Can the academic institution be held liable for
negligent acts of tits student committed within their
premises but when the semester had already
ended?
A: The general rule is that when the school is
academic rather than technical or vocational in
nature, responsibility for the tort committed by the
student will attached to the teacher in charge of
the student. In case of establishment of arts and
trades, it is the head of the establishment thereof
and he only shall be liable. The court cannot see
reasons for different degrees of vigilance
exercised by the school authority on the basis of
the nature of their respective schools. The custody
requirement does not mean that the student must
be boarding with the school authorities, it does
signify that the students should be within the
control and under the influence of the school or
within the school premises at the time of the
occurrence of the injury whether the semester has
not yet begun or has already ended. The
responsibility includes school sanctioned activities
because the school is in control or exercises
influence over the pupil. As long as it can be
shown that the student is in the school premises in
pursuance of a legitimate student objective, in the
exercise of a legitimate student right, and even in
the enjoyment of a legitimate student right, and
even in the enjoyment of a legitimate student
privilege, the responsibility of the school
authorities over the student continues. Indeed,
even if the student should be doing nothing more
than relaxing in the campus in the company of his
classmates and friends and enjoying the ambience
and atmosphere of the school, he is still within the
custody and subject to the discipline of the school
authorities under the provisions of Article 2180.
(Amadora v. CA, G.R. No. L-47745, 15 April
1988)
Two drums of riboflavin were shipped from Japan
for delivery on board the vessel “SS Eastern
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2007 Team Bar-Ops Civil Law Committee
Comet” owned by Eastern Shipping Lines. The
shipment was insured by Mercantile Insurance
Company. When the shipment arrived in Manila,
one drum was found to be in bad order. As a result
of the alleged fault and negligence of Eastern
Shipping Lines, the Metro Port Service, and the
Allied Brokerage Corporation, the insurance
company had to pay the consignee of the
shipment for the damaged cargo. The insurance
company then filed an action against the three,
claiming that under the marine insurance policy, it
became subrogated to all the rights of action of the
consignee against the defendants.
The CA ordered the defendants to jointly and
severally pay the insurer with legal interest at 12%
per annum from the date of the filing of the
complaint until fully paid.
Q: Should the interest commence from the date of
the filing of the complaint or from the date of the
decision of the trial court? Was the proper rate of
interest is 12% per annum or 6% per annum?
A: The CA is wrong. The interest to be paid is 6%
on the amount due, computed from the date of
filing of the complaint.
A 12% interest, in lieu of 6% shall be imposed on
such amount upon finality of this decision until the
payment thereof.
*When an obligation, regardless of its source is
breached, the contravenor can be held liable for
damages. With regard to an award or interest in
the concept of actual or compensatory damages,
the rate of interest, as well as the accrual thereof,
is imposed as follows:
1. When the obligation is breached, and it consists
in the payment of a sum of money (loan or
forbearance of money), the interest due should be
that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall
be 12% per annum to be computed from default,
from judicial or extra-judicial demand under and
subject to the provisions of Art 1169 of the CC.
2. When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on
the amount of damages awarded may be imposed
at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or
until the demand can be established with
reasonable certainty. Where the demand is
established with reasonable certainty, the interest
shall begin to run from the time the claim is made
judicially or extra-judicially but when such certainty
cannot be so reasonably established at the time the
demand is made, the interest shall begin to run
only from the date the judgment of the court is
made. The actual base for the computation of legal
interest shall, in any case, be on the amount finally
adjudged.
When an obligation arises from a contract of
purchase and sale and not from a contract of loan
or mutuum, the applicable rate is 6% per annum as
provided in Article 2209 of the NCC, and not the
rate of 12% per annum as provided in (CB) Cir. No.
416.
University of Santo Tomas
3. When the judgment of the court awarding a sum
of money becomes final and executory, the rate of
legal interest, whether the case falls under number
or number 2, above, shall be 12% per annum from
such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a
forbearance of credit. (Eastern Shipping Lines v.
CA, G.R. No. 97412, 12 July 1994)
Monterola was traveling on board his motorcycle
towards Mangagoy on the right lane along a dusty
national road in Bislig, Surigao del Sur. At about
the same time, a cargo van of the LBC Cargo,
driven by defendant Tano, Jr., was coming from
the opposite direction on its way to the Bislig
Airport. When Tano was approaching the vicinity
of the airport road entrance on his left, he saw two
vehicles racing against each other from the
opposite direction. Tano stopped his vehicle and
waited for the two racing vehicles to pass by. The
stirred cloud of dust made visibility extremely bad.
Instead of waiting for the dust to settled, Tano
started to make a sharp left turn towards the
airport road. When he was about to reach the
center of the right lane, the motorcycle driven by
Monterola suddenly emerged from the dust and
smashed head-on against the right side of the
LBC van. Monterola died from the severe injuries
he sustained.
Q: Was Tano’s negligence the proximate cause of
the accident?
A: Yes. the proximate cause of the accident was
the negligence of Tano who, despite extremely
poor visibility, hastily executed a left turn without
first waiting for the dust to settle. It was this
negligent act of Tano, which had placed his
vehicle (LBC van) directly on the path of the
motorcycle coming from the opposite direction that
almost instantaneously caused the collision to
occur. Simple prudence required him not to
attempt to cross the other lane until after it would
have been safe from and clear of any oncoming
vehicle.
The doctrine of last clear chance is not applicable
to relieve Tano from liability. The victim was
traveling along the lane where he was rightly
supposed to be. The incident occurred in an
instant. No appreciable time had elapsed, from the
moment Tano swerved to his left to the actual
impact; that could have afforded the victim a last
clear opportunity to avoid the collision.
However, the deceased was not all that free from
negligence in evidently speeding too closely
behind the vehicle he was following. There indeed
was contributory negligence on the victim's part
that could warrant a mitigation of petitioners
liability for damages.
* Doctrine of Last Clear Chance (also referred to,
at times, as "supervening negligence" or as
"discovered peril") The doctrine, in essence, is to
the effect that where both parties are negligent,
but the negligent act of one is appreciably later in
time than that of the other, or when it is impossible
to determine whose fault or negligence should be
attributed to the incident, the one who had the last
clear opportunity to avoid the impending harm and
failed to do so is chargeable with the

CIVIL LAW NOTES
consequences thereof. Stated differently, the rule
would also mean that an antecedent negligence of
a person does not preclude the recovery of
damages for supervening negligence of, or bar a
defense against the liability sought by, another if
the latter, who had the last fair chance, could have
avoided the impending harm by the exercise of
due diligence. (LBC Air Cargo v. CA, G.R. No.
101683, 23 February 1995)
Two vehicles, cruising northward along EDSA,
figured in a traffic accident. The car owned by
Soriano was being driven at the outer lane of the
highway by Jacildone, while the other car, owned
by respondent FILCAR Transport, Inc. (FILCAR),
and driven by Dahl-Jensen as lessee, was at the
center lane, left of the other vehicle. Upon
approaching the corner of Pioneer Street, the car
owned by FILCAR swerved to the right hitting the
left side of the car of Soriano. At that time Dahl-
Jensen, a Danish tourist, did not possess a
Philippine driver's license.
As a consequence, petitioner FGU Insurance, in
view of its insurance contract with Soriano, paid
the latter. By way of subrogation, it sued Dahl-
Jensen and FILCAR, FORTUNE as insurer of
FILCAR for quasi-delict.
Q: For damages suffered by a third party, may an
action based on quasi-delict prosper against a
rent-a-car company and its insurer for fault or
negligence of the car lessee in driving the rented
vehicle?
A: We find no reversible error committed by
respondent court in upholding the dismissal of
FGU’s complaint. The pertinent provision is Art.
2176 of the Civil Code which states: "Whoever by
act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the
parties, is called a quasi-delict." To sustain a claim
based thereon, the following requisites must
concur:
(a) Damage suffered by the plaintiff;
(b) Fault or negligence of the defendant; and,
(c) Connection of cause and effect between
the fault or negligence of the defendant and the
damage incurred by the plaintiff.
We agree with respondent court that FGU failed to
prove the existence of the second requisite, i.e.,
fault or negligence of defendant FILCAR, because
only the fault or negligence of Dahl-Jensen was
sufficiently established, not that of FILCAR. It
should be noted that the damage caused on the
vehicle of Soriano was brought about by the
circumstance that Dahl-Jensen swerved to the
right while the vehicle that he was driving was at
the center lane. It is plain that the negligence was
solely attributable to Dahl-Jensen thus making the
damage suffered by the other vehicle his personal
liability. Respondent FILCAR did not have any
participation therein.
The liability imposed by Art. 2180 arises by virtue
of a presumption juris tantum of negligence on the
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part of the persons made responsible thereunder,
derived from their failure to exercise due care and
vigilance over the acts of subordinates to prevent
them from causing damage. Yet, as correctly
observed by respondent court, Art. 2180 is hardly
applicable because none of the circumstances
mentioned therein obtains in the case under
consideration.
FILCAR being engaged in a rent-a-car business
was only the owner of the car leased to Dahl-
Jensen. As such, there was no vinculum juris
between them as employer and employee.
Respondent FILCAR cannot in any way be
responsible for the negligent act of Dahl-Jensen,
the former not being an employer of the latter.
We now correlate par. 5 of Art. 2180 with Art. 2184
of the same Code which provides: "In motor
vehicle mishap, the owner is solidarily liable with
his driver, if the former, who was in the vehicle,
could have by the use of due diligence, prevented
the misfortune x x x x If the owner was not in the
motor vehicle, the provisions of article 2180 are
applicable."
Obviously, this provision of Art. 2184 is neither
applicable because of the absence of master-
driver relationship between respondent FILCAR
and Dahl-Jensen. Clearly, petitioner has no cause
of action against respondent FILCAR on the basis
of quasi-delict; logically, its claim against
respondent FORTUNE can neither prosper. (FGU
Insurance Corporation v. CA, G.R. No. 118889,
23 March 1998)
The Dimaano’s are owners of a house while
petitioner South Eastern owns a four-storey school
building along the same road. Powerful typhoon
“Saling” hit Metro Manila. The roof of petitioner’s
school building was partly ripped off and blown
away, landing on and destroying portions of the
roofing of Dimaanos’ house. An ocular inspection
of the destroyed buildings was conducted by a
team of engineers. It was found out that the most
likely reason for the dislodging of the roofings
structural trusses is the improper anchorage of the
said trusses to the roof beams.
Q: Was damage on the roof of the building of the
Dimaanos resulting from the impact of the falling
portions of the school building’s roof ripped off by
the strong winds of typhoon “Saling”, within legal
contemplation, due to fortuitous event? Is South
Eastern liable for damages?
A: In order that a fortuitous event may exempt a
person from liability, it is necessary that he be free
from any previous negligence or misconduct by
reason of which the loss may have been
occasioned. An act of God cannot be invoked for
the protection of a person who has been guilty of
gross negligence in not trying to forestall its
possible adverse consequences. When a person’s
negligence concurs with an act of God in producing
damage or injury to another, such person is not
exempt from liability by showing that the immediate
or proximate cause of the damage or injury was a
fortuitous event. When the effect is found to be
partly the result of the participation of man –
whether it be from active intervention, or neglect, or
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2007 Team Bar-Ops Civil Law Committee
failure to act – the whole occurrence is hereby
humanized, and removed from the rules applicable
to acts of God.
There is no question that a typhoon or storm is a
fortuitous event, a natural occurrence which may
be foreseen but is unavoidable despite any
amount of foresight, diligence or care. In order to
be exempt from liability arising from any adverse
consequence engendered thereby, there should
have been no human participation amounting to a
negligent act. In other words, the person seeking
exoneration from liability must not be guilty of
negligence. Negligence, as commonly
understood, is conduct which naturally or
reasonably creates undue risk or harm to others.
It may be the failure to observe that degree of
care, precaution, and vigilance which the
circumstances justly demand, or the omission to
do something which a prudent and reasonable
man, guided by considerations which ordinarily
regulate the conduct of human affairs, would do.
From these premises, we proceed to determine
whether petitioner was negligent, such that if it
were not, the damage caused to private
respondents’ house could have been avoided?
At the outset, it bears emphasizing that a person
claiming damages for the negligence of another
has the burden of proving the existence of fault or
negligence causative of his injury or loss. The
facts constitutive of negligence must be
affirmatively established by competent evidence,
not merely by presumptions and conclusions
without basis in fact. Private respondents, in
establishing the culpability of petitioner, merely
relied on the aforementioned report submitted by a
team which made an ocular inspection of
petitioner’s school building after the typhoon. As
the term imparts, an ocular inspection is one by
means of actual sight or viewing. What is visual to
the eye though, is not always reflective of the real
cause behind. For instance, one who hears a
gunshot and then sees a wounded person, cannot
always definitely conclude that a third person shot
the victim. It could have been self-inflicted or
caused accidentally by a stray bullet. The
relationship of cause and effect must be clearly
shown.
In the present case, other than the said ocular
inspection, no investigation was conducted to
determine the real cause of the partial unroofing of
petitioner’s school building. Private respondents
did not even show that the plans, specifications
and design of said school building were deficient
and defective. Neither did they prove any
substantial deviation from the approved plans and
specifications. Nor did they conclusively
establish that the construction of such building
was basically flawed. (Southeastern College,
Inc. v. CA, et al., GR. No. 126389, 10 July 1998)
Miranda boarded a JAL flight from San Francisco
to Manila along with others. As an incentive for
traveling with JAL, the flights made an overnight
stopover in Japan at the airline's expense. Upon
arrival in Japan, the passengers were billeted in
Hotel Nikko for the night. The following day, they
learned that Mt. Pinatubo erupted, and all flights to
Manila were cancelled indefinitely. JAL rebooked
them on flights due to depart. JAL paid for their
University of Santo Tomas
unexpected overnight stay. Unfortunately, the
flight was also cancelled. JAL informed the
stranded passengers that it would no longer
shoulder their expenses. The passengers filed an
action for damages against JAL, claiming that JAL
failed to live up to its duty to provide care and
comfort to its stranded passengers when it refused
to pay for their subsequent hotel expenses.
Q: Is JAL liable for the expenses incurred by its
stranded passengers brought about by the
unexpected eruption of Mt. Pinatubo?
A: No. However, JAL is liable for nominal
damages. JAL is not liable for the expenses
incurred by the passengers, since the reason why
JAL was prevented from resuming its flight to
Manila was due to the effects of the Mt. Pinatubo
eruption, which was a fortuitous event.
JAL, however, is not completely absolved from
liability. It must be noted that the passengers
bought tickets from the US with Manila as their
final destination. While JAL was no longer required
to defray the passengers' living expenses during
their stay in Japan on account of the fortuitous
event, JAL had the duty to make the necessary
arrangements to transport the passengers on the
first available connecting flight to
Manila. JAL reneged on its obligation to look after
the comfort and convenience of its passengers
when it declassified them from "transit
passengers" to "new passengers," as a result of
which they were obliged to make the necessary
arrangements themselves for the next flight to
Manila.
They were placed on the waiting list from June 20
to June 24. To assure themselves of a seat on an
available flight, they were compelled to stay in the
airport the whole day of
June 22, and it was only at 8 pm of that day that
they were advised that they could be
accommodated in said flight, which flew at about 9
am the next day. Because of JAL's failure to make
the necessary arrangements to transport the
passengers on its first available flight to Manila, an
award ofP100,000 as nominal damages, in favor
of each passenger, is in order. (J.A.L. v. CA, G.R.
No. 118664. 07 August 1998)
The plaintiff tried to prove actual damages by
presenting his general manager who testified as to
the value of the property damaged and also by
presenting documentary evidence in the form of
brochures quoting the prices of similar equipment.
Q: Were the actual damages adequately
established by the evidence presented?
A: No. To enable an injured party to recover actual
or compensatory damages, he is required to prove
the actual amount of loss with reasonable degree
of certainty premised upon competent proof on the
best evidence available.
In this case, actual damages were proven through
the sole testimony of Maria Efigenia's general
manager and certain pieces of documentary
evidence. The testimony of the general manager
as to the valuation of the ship is not reliable
because he is an interested party and because it
was not within his competence to determine the
value of the property. On the other hand, the

CIVIL LAW NOTES
documentary evidence in the form of brochures
are not admissible for being hearsay evidence.
They do not constitute an exception to the hearsay
rule since they are not commercial lists. Since the
persons who prepared them were not presented in
court, they cannot be admitted in evidence.
Nominal damages were awarded instead.
[Though, in reality, they should have been called
temperate damages - the damage was proved, but
the amount was not.] (PNOC Shipping v. CA,
G.R. No. 107518, 08 October 1998)
MMTC Bus, which was driven by its employee
Musa, hit Rosalie who was then crossing
Katipunan Avenue. An eye witness said the girl
was already near the center of the street when the
bus, then bound for the south, hit her. She fell to
the ground upon impact, rolled between the two
front wheels of the bus, and was run over by the
left rear tires thereof. Her body was dragged
several meters away from the point of impact.
Rosalie was taken to the Philippine Heart Center
but efforts to revive her proved futile.
Q: Were Musa and his employer MMTC liable for
negligence?
A: Yes. Employers may be relieved of
responsibility for the negligent acts of their
employees within the scope of their assigned
tasks only if they can show that "they observed all
the diligence of a good father of a family to prevent
damage." For this purpose, they have the burden
of proving that they have indeed exercised such
diligence, both in the selection of the employee
who committed the quasi-delict and in the
supervision of the performance of his duties.
In the selection of prospective employees,
employers are required to examine them as to
their qualifications, experience, and service
records. On the other hand, with respect to the
supervision of employees, employers should
formulate standard operating, procedures, monitor
their implementation, and impose disciplinary
measures for breaches thereof. To establish these
factors in a trial involving the issue of vicarious
liability, employers must submit concrete proof,
including documentary evidence.
In this case, MMTC sought to prove that it
exercised the diligence of a good father of a family
with respect to the selection of employees by
presenting mainly testimonial evidence on its
hiring procedure. Although testimonies were
offered that in the case of Musa all these
precautions were followed, the records of his
interview, of the results of his examinations, and of
his service were not presented.No proof was
presented that Musa did not have any record of
traffic violations. Nor were records of daily
inspections, allegedly conducted by supervisors,
ever presented. It is noteworthy that, in another
case involving MMTC, testimonial evidence of
identical content, which MMTC presented to show
that it exercised the diligence of a good father of a
family in the selection and supervision of
employees and thus avoid vicarious liability for the
negligent acts of its employees, was held to be
insufficient to overcome the presumption of
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negligence against it. (Metro Manila Transit
Corp. v. Court of Appeals, GR. NO. 116617, 16
November 1998)
Franco and Medel obtained several loans from
Gonzales at 6% interest per month. Due to their
failure to pay the loans upon maturity, the two
consolidated all said loans bringing their
indebtedness to a total of P500K, and executed a
promissory note to cover said amount with an
interest of 5.5% per month plus 2% service charge
per annum. Due to Franco and Medel's failure to
pay upon maturity, a complaint for collection of
money was filed against them by Gonzales. The
lower court held that although the usury law was
repealed, the interest charged by Gonzales was
unconscionable and was therefore invalid. The CA
however upheld the validity of the aforementioned
stipulated interest and held that since the usury
law was repealed, the lender and borrower could
agree on any interest that may be charged on the
loan. Medel then filed certiorari with the SC,
arguing that the interest charged by Gonzales was
iniquitous, unconscionable, and exorbitant.
Q: Was the interest stipulation in this case valid?
A: No. Although Circular No. 905 of the Central
Bank expressly repealed the usury law, the
interest in this case of 5.5% per month or 66% per
annum is iniquitous or unconscionable, and hence
contrary to law and morals. Such a stipulation of
interest is void and the courts in such a case shall
equitably reduce liquidated damages, whether
intended as an indemnity or a penalty, if they are
iniquitous and unconscionable.
In this case, due to the iniquitousness of the
stipulated interest, the SC imposed the "legal rate
of interest for loan or forbearance of money,
goods, or credit" which was 12% per annum, plus
an additional 1 % monthly penalty charge. (Medel
v. CA, G.R. NO. 131622, 27 November 1998)
Sps Torralba filed a complaint for damages
against International School for the death of their
only son, while in the custody of the International
School & its officers. RTC awarded damages. I.S.
appealed. The Torralbas moved for execution of
judgment pending appeal on grounds that the
appeal is merely dilatory and filing of a bond is
another good reason for execution.
Q: Was the execution of judgment pending appeal
improper?
A: Yes. Reason that an appeal is dilatory does
NOT justify execution pending appeal, neither
does the filing of a bond, without anything more,
justify the same. IS could not be faulted for its
withdrawal of its supersedeas bond inasmuch as
the lower court granted the execution pending
appeal and rejected its offer of supersedeas bond.
The awards for moral & exemplary damages
CANNOT be the subject of execution pending
appeal.
RATIONALE: The execution of any award for
moral and exemplary damages is dependent on
the outcome of the main case. Unlike actual
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2007 Team Bar-Ops Civil Law Committee
damages for which petitioners may clearly be held
liable if they breach a specific contract and the
amounts of which are fixed and certain, liabilities
with respect to moral and exemplary damages as
well as the exact amounts remain uncertain and
indefinite pending resolution by the CA and SC.
The existence of the factual bases of these types
of damages and their causal relation to the
petitioner's act will have to be determined in the
light of error:; on appeal. It is possible that the
petitioners, after all, while liable for actual
damages may not be liable for moral & exemplary
damages. Or in some cases elevated to the SC,
the awards may be reduced. (International
School v. CA, G.R. No. 131109, 29 June 1999)
Pujol opened with PNB an account denominated
as "Combo Account", a combination of Savings
Account and Current Account in her business
name "Pujol Trading" under which checks drawn
against her checking account could be charged
against her savings account should the funds in
her current account be insufficient to cover the
value of her checks. She issued two checks; both
were dishonored allegedly for insufficiency of
funds. When issued and presented for payment,
however, there were sufficient funds in her savings
account. Realizing its mistake as to the 2nd check,
PNB subsequently accepted and honored it.
Lily, however, filed with the RTC a complaint for
moral and exemplary damages against PNB for
dishonoring her checks despite sufficiency of her
funds.
Q: Is PNB liable to Lily for moral damages due to
the mental anguish embarrassment, besmirched
reputation, she suffered?
A: Yes. The award of moral damages and
attorney's fees affirmed.
A bank is under obligation to treat the accounts of
its depositors with meticulous care.
Responsibility arising from negligence in the
performance of every kind of obligation is
demandable. While PNB's negligence in this case
may not have been attended with malice and bad
faith, nevertheless, it caused serious anxiety,
embarrassment and humiliation to Lily for which
she is entitled to recover reasonable moral
damages. In the case of Leopold Araneta v. Bank
of America it was held that it can hardly be
possible that a customer's check can be wrongfully
refused payment without some impeachment of
his credit which must in fact be an actual injury,
although he cannot, from the nature of the case,
furnish independent and distinct proof thereof.
Damages are not intended to enrich the
complainant at the expense of the defendant; and
there is no hard and fast rule in the determination
of what would be a fair amount of moral damages
since each case must be governed by its own
peculiar facts. The yardstick should be that it is not
palpably and scandalously excessive. In this case,
considering the" reputation and social standing of
Lily, the award of damages is reasonable. (PNB v.
Court of Appeals, G.R. No. 126152, 28
September 1999)
SEACOM is engaged in the business of selling
and distributing agricultural machinery and
University of Santo Tomas
products. It entered into a dealership agreement
with JII, whereby the latter will be its exclusive
dealer in Iloilo. The agreement was subsequently
amended to include Capiz in the territorial
coverage and to make the dealership agreement
on a non-exclusive basis. In the course of the
business, SEACOM brought an action to recover a
balance for unpaid deliveries incurred by JII.
JII denied the obligation and interposed a
counterclaim for damages representing unrealized
profits. JII alleged that as a dealer in Capiz, they
contracted to sell 24 units of power tillers to a
group of farmers to be financed with by Farm
System Development Corporation (FSDC)
corporation, which fact JII allegedly made known
to SEACOM, but the latter taking advantage of
said information and in bad faith, went directly to
FSDC and dealt with it and sold 21 units of said
tractors, thereby depriving JII of unrealized profit.
Q: Did SEACOM act in bad faith when it competed
with its own dealer as regards the sale of farm
machineries to FSDC?
A: Clearly, the bad faith of SEACOM was
established. By appointing JII as a dealer of its
agricultural equipment SEACOM recognized the
role and undertaking of JII to promote and sell said
equipment. Under the dealership agreement, JII
was to act as a middleman to sell SEACOM’s
products in its areas of operations, to the
exclusion of other places, to send its men to
Manila for training and to comply with other
requirements to benefit the dealership. After being
informed of the demonstrations JII had conducted,
SEACOM participated in the bidding for the said
equipment at a lower price, placing itself in direct
competition with its own dealer. The actuations of
SEACOM are tainted by bad faith. Even if the
dealership agreement was amended to make it on
a non-exclusive basis, SEACOM may not exercise
its right unjustly or in a manner that is not in
keeping with honesty or good faith; otherwise, it
opens itself to liability under the abuse of right rule
embodied in article 19 of the Civil Code. (Sea
Commercial Company v. Court of Appeals,
G.R. No. 122823, 25 November 1999)
Plaintiff Ramos was a vigorous woman. However,
upon professional advice she sought to undergo
an operation for the removal of a stone in her gall
bladder. She and her husband met for the first
time Dr. Hosaka. Unfortunately, at the day of the
operation, Dr. Hosaka arrived very late; and
something went wrong w/ the intubation of the
patient. Erlinda stayed at the ICU for a month.
After being discharged from the hospital, she has
been staying in their residence, still needing
constant medical attention. She was also
diagnosed to be suffering from “diffuse cerebral
parenchymal damage.
Q: Should Dr. Hosaka be held liable for damages
as the surgeon in charge?
Can the hospital be held solidarily liable for the
negligent acts of its doctors during an operation?
How is the Doctrine of Res Ipsa Loquitur applied in
the case?
A: Yes. Under the captain of the ship doctrine, the
surgeon is liked to a ship captain who must not

CIVIL LAW NOTES
only be responsible for the safety of the crew but
also of the passengers of the vessel. The head
surgeon is made responsible for everything that
goes wrong within the four corners of the
operating room. It enunciates the liability of the
surgeon not only for the wrongful acts of those
who are under his physical control but also those
wherein he has extension of control.
Yes. In other words, private hospitals, hire, fire
and exercise real control over their attending and
visiting “consultant” staff. While “consultants” are
not, technically employees, a point which
respondent hospital asserts in denying all
responsibility for the patient’s condition, the control
exercised, the hiring, and the rights to terminate
consultants all fulfill the important hallmarks of an
employer-employee relationship, with the
exception of the payment of wages. In assessing
whether such a relationship in fact exists, the
control test is determining. Accordingly, on the
basis of the foregoing, we rule that for the purpose
of allocating responsibility in medical negligence
cases, an employer-employee relationship in
effect exists between hospitals and their attending
and visiting physicians. This being the case, the
question now arises as to whether or not
respondent hospital is solidarily liable with
respondent doctors for petitioner’s condition. The
basis for holding an employer solidarily
responsible for the negligence of its employee is
found in Article 2180 of the Civil Code which
considers a person accountable not only for his
own acts but also for those of others based on the
former’s responsibility under a relationship of
patria potestas. Such responsibility ceases when
the persons or entity concerned prove that they
have observed the diligence of a good father of
the family to prevent damage. In other words,
while the burden of proving negligence rests on
the plaintiffs, once negligence is shown, the
burden shifts to the respondents (parent, guardian,
teacher or employer) who should prove that they
observed the diligence of a good father of a family
to prevent damage.
In the instant case, respondent hospital, apart
from a general denial of its responsibility over
respondent physicians, failed to adduce evidence
showing that it exercised the diligence of a good
father of a family in the hiring and supervision of
the latter. It failed to adduce evidence with regard
to the degree of supervision which it exercised
over its physicians. In neglecting to offer such
proof, or proof of a similar nature, respondent
hospital thereby failed to discharge its burden
under the last paragraph of Article 2180. Having
failed to do this, respondent hospital is
consequently solidarily responsible with its
physicians for Erlinda’s condition. (Ramos v. CA,
G.R. No. 124354, 29 December 1999)
Fuentes, a 6 year old, went to Balgos' house to
play with her two friends, the latter's nieces. While
they were playing, Balgos asked his nieces to go
out and buy some snacks. While they were gone,
Balgos tried to rape Criselle but could not
penetrate the latter's vagina as it was too small.
Criselle eventually told her parents about the
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ADVISER:
incident who reported the same to the police. At
trial, the court a quo found Balgos guilty beyond
reasonable doubt of the crime of statutory rape
and was sentenced to death. He was also ordered
to pay P50K as civil damages. Upon automatic
review by the SC, Balgos argued that he was not
able to penetrate
Criselle's vagina, hence he should only be held
liable for acts of lasciviousness and not rape.
Q: What should be the amount of damages?
A: The crime of rape is consummated by the mere
"touching" of the penis and the labia, hence actual
penetration is not necessary. More importantly, as
to damages, if the commission of rape is qualified
by any of the circumstances under
Art. 335 RPC for which the penalty of death is
imposed, the civil liability for the victim shall be
fixed at not less than P75K. In this case, since the
rape is qualified by the fact that the victim was less
than 7 years old at the time of the crime, the
penalty of death is thus imposed and the civil
liability therefore should be increased from P50 K
to P75K. (People v. Balgos, G.R. No. 126115, 26
January 2000)
The Dean and the Faculty Members of the College
of Law met to deliberate as to who among the
fourth year students should be allowed to
graduate. The plaintiff’s name appeared in the
Tentative List of Candidates for graduation. The
plaintiff attended the investiture. However, he
learned that he had deficiencies in his subjects.
He had to drop from the review course and
deferred from taking the bar exams.
Q: May an educational institution be held liable for
damages for misleading a student into believing
that the latter had satisfied all the requirements for
graduation when such is not the case?
A: Yes. Considering further, that the institution of
learning involved herein is a university which is
engaged in legal education, it should have
practiced what it inculcates in its students, more
specifically the principle of good dealings
enshrined in Articles 19 and 20 of the Civil Code.
Article 19 was intended to expand the concept of
torts by granting adequate legal remedy for the
untold number of moral wrongs which is
impossible for human foresight to provide
specifically in statutory law. In civilized society,
men must be able to assume that others will do
them no intended injury – that others will commit
no internal aggressions upon them; that their
fellowmen, when they act affirmatively will do so
with due care which the ordinary understanding
and moral sense of the community exacts and that
those with whom they deal in the general course
of society will act in good faith. The ultimate thing
in the theory of liability is justifiable reliance under
conditions of civilized society. Schools and
professors cannot just take students for granted
and be indifferent to them, for without the latter,
the former are useless
Educational institutions are duty-bound to inform
the students their academic status and not wait for
the latter to inquire from the former. The conscious
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indifference of a person to the rights or welfare of
the person/persons who may be affected by his
act or omission can support a claim for damages.
Want of care to the conscious disregard of civil
obligations coupled with a conscious knowledge of
the cause naturally calculated to produce them
would make the erring party liable. Petitioner
ought to have known that time was of the essence
in the performance of its obligation to inform
respondent of his grade. It cannot feign ignorance
that respondent will not prepare himself for the bar
exams since that is precisely the immediate
concern after graduation of an LL.B. graduate. It
failed to act seasonably. Petitioner cannot just give
out its student’s grades at any time because a
student has to comply with certain deadlines set
by the Supreme Court on the submission of
requirements for taking the bar. Petitioner’s liability
arose from its failure to promptly inform
respondent of the result of an examination and in
misleading the latter into believing that he had
satisfied all requirements for the course.
(University of the East v. Romeo A. Jader, GR.
No. 132344, 17 February 2000)
A check issued by Valenzuela bounced even if
she had enough money in her account. Later, it
was found that the check bounced because the
bank had made a mistake in crediting her deposits
to another account.
Q: Is Valenzuela entitled to moral damages?
A: Yes, Valenzuela is entitled to moral damages.
Prudential claims that Valenzuela is not entitled to
moral damages because it acted in good faith and
committed an honest mistake. This is untenable.
As a business affected with public interest and
because of the nature of its functions, the bank is
under obligation to treat the accounts of its
depositors with meticulous care, always having in
mind the fiduciary nature of their relationship.
Even if malice or bad faith was not sufficiently
proved in this case, the fact remains that the bank
committed a serious mistake. The bank's
negligence was the result of lack of due care and
caution required of managers and employees of a
firm engaged in so sensitive and demanding a
business as banking. Accordingly, the award of
moral damages was proper.
* This is the exception to the general rule that in
breach of contract, moral damages are proper only
"when there was fraud, malice, or bad faith. When
the party breaching the contract is a bank, in the
exercise of its fiduciary capacity, there is no need
for bad faith order for the moral damages to be
awarded. (Prudential Bank v. Court of Appeals,
G.R. No. 125536, 16 March 2000)
A construction worker of D.M. Consunji, Inc. fell 14
floors from the building resulting to his death.
Police filed a report that the worker was
pronounced dead on arrival (DOA) by the
attending physician.
Investigation disclosed that while victim together
other workers were working at the elevator core of
the building on board a platform made of channel
beam (with pinulid plywood flooring and cable
wires attached to its four corners and hooked at
the 5 ton chain block, when suddenly, the bolt or
University of Santo Tomas
pin which was merely inserted to connect the
chain block with the platform, got loose xxx
causing the whole platform assembly and the
victim to fall down to the basement of the elevator
core of the building under construction thereby
crushing the victim to death.
Q: Can the Doctrine of Res Ipsa Loquitur be
applied in this case?
A: Yes. There is no dispute that appellee’s
husband fell down from the 14th floor of a building
to the basement while he was working with
appellant’s construction project, resulting to his
death. The construction site is within the exclusive
control and management of appellant. It has a
safety engineer, a project superintendent, a
carpenter leadman and others who are in
complete control of the situation therein. The
circumstances of any accident that would occur
therein are peculiarly within the knowledge of the
appellant or its employees. On the other hand, the
appellee is not in a position to know what caused
the accident. Res ipsa loquitur is a rule of
necessity and it applies where evidence is absent
or not readily available, provided the following
requisites are present: (1) the accident was of a
kind which does not ordinarily occur unless
someone is negligent; (2) the instrumentality or
agency which caused the injury was under the
exclusive control of the person charged with
negligence; and (3) the injury suffered must not
have been due to any voluntary action or
contribution on the part of the person injured. No
worker is going to fall from the 14th floor of a
building to the basement while performing work in
a construction site unless someone is negligent,
thus, the first requisite for the application of the
rule of res ipsa loquitur is present. As explained
earlier, the construction site with all its
paraphernalia and human resources that likely
caused the injury is under the exclusive control
and management of appellant thus, the second
requisite is also present. No contributory
negligence was attributed to the appellee’s
deceased husband thus the last requisite is also
present. All the requisites for the application of the
rule of res ipsa loquitur are present, thus a
reasonable presumption or inference of appellant’s
negligence arises.
Petitioner does not dispute the existence of the
requisites for the application of res ipsa loquitur,
but argues that the presumption or inference that it
was negligent did not arise since it “proved that it
exercised due care to avoid the accident which
befell respondent’s husband.” (D.M. Consunji,
Inc. v. CA, G.R. No. 137873, 20 April 2001)
Mercado and Tan got married on 1991. Mercado
was, however, already married to Oliva on 1976.
Tan filed an action for bigamy against Mercado.
More than a month after the bigamy case was
lodged in the Prosecutor’s Office, Mercado filed an
action for Declaration of Nullity of Marriage against
Oliva and a Decision was rendered declaring the
marriage between Mercado and Oliva null and
void. In the criminal proceeding, Mercado argued
as a defense that his previous marriage had been
judicially declared null and void. The trial court
rendered a judgment convicting Mercado for the

CIVIL LAW NOTES
crime of bigamy, which the CA affirmed. Before
the SC, Mercado argued that he obtained a
judicial declaration of nullity of his first marriage,
thereby rendering it void ab initio. He argued that a
void marriage is deemed never to have taken
place at all, hence there is no first marriage to
speak of.
Q: Will pendency of an action for declaration of
nullity of marriage be a prejudicial question to a
criminal action for bigamy?
A: Article 40 of the FC expressly requires a judicial
declaration of nullity of the previous marriage and
that the marriage of a person may be null and void
but there is need of a judicial declaration of such
fact before that person can marry again;
otherwise, the second marriage will also be void.
Such declaration is necessary before one can
contract a second marriage. Absent that
declaration, we hold that one may be charged with
and convicted of bigamy.
“It is now settled that the fact that the first marriage
is void from the beginning is not a defense in a
bigamy charge. As with a voidable marriage,
there must be a judicial declaration of the nullity of
a marriage before contracting the
second marriage. The Code Commission believes
that the parties to a marriage should not be
allowed to assume that their marriage is void,
even if such is the fact, but must first secure a
judicial declaration of nullity of their marriage
before they should be allowed to marry again.
In the instant case, petitioner contracted a second
marriage although there was yet no judicial
declaration of nullity of his first marriage. In fact,
he instituted the Petition to have the first marriage
declared void only after complainant had filed a
letter-complaint charging him with bigamy. By
contracting a second marriage while the first was
still subsisting, he committed bigamy.
That he subsequently obtained a judicial
declaration of the nullity of the first marriage was
immaterial the crime had already been
consummated by then. Moreover, his view
effectively encourages delay in the prosecution of
bigamy cases; an accused could simply file a
petition to declare his previous marriage void and
invoke the pendency of that action as a prejudicial
question in the criminal case. (Mercado v. Tan,
G.R. No. 137110, 01 August 2000)
A verbal agreement was entered into between
Morillo and Mindex for the lease of Morillo’s cargo
truck for use in MINDEX’s mining operations.
MINDEX had been paying the rentals until April
1991. Upon learning that the truck was burned by
unidentified persons while it was parked
unattended due to mechanical trouble, Morillo
offered to sell the truck to MINDEX but the latter
refused. Instead, it replaced the vehicle’s burned
tires and had it towed to a shop for repair and
overhauling. After failing in the series of
negotiations, Morillo pulled out the truck from the
repair shop of MINDEX and had it repaired
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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ADVISER:
elsewhere for which he spent the total amount of
P132,750.00. Morillo sued MINDEX for damages.
Q: Was the burning of the truck caused by
fortuitous event, thereby exempting MINDEX from
liability?
A: No. The negligence of MINDEX makes it
responsible for the loss. Article 1667 of the Civil
Code holds lessees responsible for the
deterioration or loss of the thing leased, unless
they prove that it took place without their fault. In
order for a fortuitous event to exempt one from
liability, it is necessary that one has committed no
negligence or misconduct that may have
occasioned the loss.
An act of God cannot be invoked to protect a
person who has failed to take steps to forestall the
possible adverse consequences of such a loss.
One’s negligence may have concurred with an act
of God in producing damage and injury to another;
nonetheless, showing that the immediate or
proximate cause of the damage or injury was a
fortuitous event would not exempt one from
liability. When the effect is found to be partly the
result of a person’s participation -- whether by
active intervention, neglect or failure to act -- the
whole occurrence is humanized and removed from
the rules applicable to acts of God.
To constitute a fortuitous event, the following
elements must concur: (a) the cause of the
unforeseen and unexpected occurrence or of the
failure of the debtor to comply with obligations
must be independent of human will; (b) it must be
impossible to foresee the event that constitutes
the caso fortuito or, if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be
such as to render it impossible for the debtor to
fulfill obligations in a normal manner; and (d) the
obligor must be free from any participation in the
aggravation of the injury or loss.
Article 1174 of the Civil Code states that no
person shall be responsible for a fortuitous event
that could not be foreseen or, though foreseen,
was inevitable. In other words, there must be an
exclusion of human intervention from the cause of
injury or loss. A review of the records clearly
shows that petitioner failed to exercise reasonable
care and caution that an ordinarily prudent person
would have used in the same situation. (Mindex
Resources Development v. Ephraim Morillo,
G.R. No. 138123, 12 March 2002)
Limpin, Jr. and Apostol filed an application for an
irrevocable domestic letter of credit with
Associated Banking Corporation in favor of LS
Parts Hardware.
The application was approved and a trust receipt
agreement was executed. Sarmiento also signed a
surety/guarantor of the agreement. The
defendants failed to comply with their undertaking.
This prompted the bank to file an action against
them. Lower Court rendered a judgment in favor
of the bank. On appeal, CA affirmed the judgment
of the trial court.
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2007 Team Bar-Ops Civil Law Committee
Q: Does the right of the bank to institute separate
civil action for the recovery of civil liability already
barred on the ground that same was not expressly
reserved in the criminal action earlier filed?
A: No. While a reading of Section 1, Rule 111 of
the Rules on Criminal Procedure shows that the
offended party is required to make a reservation of
his right to institute a separate civil action,
jurisprudence instructs that such reservation may
not necessarily be express but may be inferred not
only from the acts of the offended party but also
from acts other than those of the latter.
Furthermore, failure of the trial court to make any
pronouncement, favorable or unfavorable, as to
the civil liability of the accused amounts to the
reservation of the right to have the civil liability
litigated and determined in a separate civil action.
(Sarmiento Jr. v. Court of Appeals, 394 SCRA
315)
Couple was booked for business class tickets. The
airline had overbooked the business class, so they
were asked to sit in first class section. This was
allegedly against their will. They felt bad because
their kompadres were in business. They filed for
damages against the airline. The trial court
awarded them a whopping sum with moral and
exemplary damages to boot.
Q: Does an involuntary upgrade with no added
costs to plaintiffs warrant an award of damages?
A: No. The whopping 1M lump sum was deleted.
There was no bad faith here. But there was
recognition of a breach of contract of carriage,
thus, a P5, 000 award for nominal damages is
enough. (Cathay Pacific v. Sps. Vasquez, GR
150843, 14 March 2003)
Because of the attacks made by the two
broadcasters of Filipinas Broadcasting against
Ago Medical and Educational Center-Bicol
Christian College of Medicine (“AMEC”) and its
administrators in their radio program “Expose”
saying that AMEC is a dumping ground, garbage
of moral and physical misfits, AMEC charged the
two broadcasters as well as the company for
defamation. The trial court held that the
broadcasts are libelous per se and rejected the
broadcasters claim that their utterances were the
result of straight reporting because it had no
factual basis. In holding FBNI liable for libel, the
trial court found that FBNI failed to exercise
diligence in the selection and supervision of its
employees. Moral damages were awarded to
AMEC.
Q: Considering the fact that AMEC is a juridical
person, is it entitled to moral damages?
A: Yes. A juridical person is generally not entitled
to moral damages because, unlike a natural
person, it cannot experience physical suffering or
such sentiments as wounded feelings, serious
anxiety, mental anguish or moral shock. The Court
of Appeals cites Mambulao Lumber Co. v. PNB, et
al. to justify the award of moral damages.
However, the Court’s statement in Mambulao that
“a corporation may have a good reputation which,
if besmirched, may also be a ground for the award
of moral damages” is an obiter dictum.
University of Santo Tomas
Nevertheless, AMEC’s claim for moral damages
falls under item 7 of Article 2219 of the Civil Code.
This provision expressly authorizes the recovery of
moral damages in cases of libel, slander or any
other form of defamation. Article 2219(7) does not
qualify whether the plaintiff is a natural or juridical
person. Therefore, a juridical person such as a
corporation can validly complain for libel or any
other form of defamation and claim for moral
damages. Moreover, where the broadcast is
libelous per se, the law implies damages. In such
a case, evidence of an honest mistake or the want
of character or reputation of the party libeled goes
only in mitigation of damages. Neither in such a
case is the plaintiff required to introduce evidence
of actual damages as a condition precedent to the
recovery of some damages. In this case, the
broadcasts are libelous per se. Thus, AMEC is
entitled to moral damages. (Filipinas
Broadcasting Network, Inc., v. Ago Medical,
G.R. No. 141994, 17 January 2005)
Melquiades Sugata-on was employed by Candano
Shipping as Marine Engineer. He was one of
those missing after Candano’s vessel sank. His
wife filed an action before the RTC for damages
based on Art.1711 of the NCC and eventually got
a favorable judgment using the standard in Art194
of the Labor Code.
Q: Is the formula for fixing the amount of death
compensation in Art194 of the Labor Code
applicable in determining the compensation
claimed by the heir of deceased employee under
Art 1711 of NCC?
A: The pertinent provisions of the NCC are
Articles 1711, 2199, 2200. In order to give breath
to the aforestated provisions on damages of the
New Civil Code, they must be transformed into a
more tangible and practical mathematical form, so
that the purpose of the law to indemnify the
employee or his heirs for his death or injury
occasioned by his employment, as envisioned by
the Article 1711 of the same code may be
realized. We deem it best to adopt the formula for
loss of earning capacity enunciated in the case of
Villa Rey v. Court of Appeals,[23] in computing the
amount of actual damages to be awarded to the
claimant under Article 1711 of the New Civil Code.
(Candano Shipping v. Sugata-on, GR. No.
163212, 13 March 2007)
Salvador underwent a medical exam as
prerequisite for regular employment. The result
indicated that she has a Hepa-B. Consequently,
she was terminated from employment and her
father (Ramon) suffered a heart attack. She
decided to have another medical exam which then
yielded a negative result. Salvador sued
petitioners for damages.
Q: Are the petitioners liable for damages based on
the issuance of incorrect medical results?
A: Yes. Negligence is the failure to observe for
the protection of the interest of another person
that degree of care, precaution and vigilance
which the circumstances justly demand, whereby
such other person suffers injury. For health care
providers, the test of the existence of negligence

CIVIL LAW NOTES
is: did the health care provider either fail to do
something which a reasonably prudent health
care provider would have done, or that he or she
did something that a reasonably prudent health
care provider would not have done; and that
failure or action caused injury to the patient; if
yes, then he is guilty of negligence. Thus, the
elements of an actionable conduct are: 1) duty, 2)
breach, 3) injury, and 4) proximate causation.All
the elements are present in the case at bar.
(Garcia Jr. v. Salvador, G.R. No. 168512, 20
March 2007)
Treyes, Jr.& his armed men forcibly entered the
leased properties of CGR, set up a barbed wire
fence and harvested tons of fish and fingerlings.
The following days, defendant's men took away
the remaining fish, even the chapel was
destroyed. Religious icons were stolen and as an
extreme act of sacrilege, decapitated the heads of
some of these icons.
Petitioners filed with the MTC complaints for
Forcible Entry and Damages. 4 years after, while
the case was pending, petitioners filed with
the RTC a complaint for damages against
respondent praying for the payment of actual,
moral & exemplary damages.
Q: Can the petitioners independently institute an
action for damages which they claim arose from
incidents occurring after the dispossession by
respondent of the premises during the pendency
of the complaints for forcible entry,
A: The recoverable damages in forcible entry and
detainer cases thus refer to "rents" or "the
reasonable compensation for the use and
occupation of the premises" or "fair rental value of
the property" and attorney's fees and costs.
In the complaint for damages of petitioners, their
claim for damages has no direct relation to their
loss of possession of the premises. It had to do
with respondent's alleged harvesting and carting
away several tons of milkfish and other marine
products in their fishponds, ransacking and
destroying of a chapel built by petitioner CGR
Corporation, and stealing religious icons and even
decapitating the heads of some of them, after the
act of dispossession had occurred. (CGR Corp. v.
Treyes, Jr., G.R. No. 170916, 27 April 2007)
Respondents sued petitioner as the attending
physician for the burns in the left arm that Nora Go
suffered when she gave birth.
Q: Are the petitioners liable for damages?
A: In cases involving medical negligence, the
doctrine of res ipsa loquitur allows the mere
existence of an injury to justify a presumption of
negligence on the part of the person who controls
the instrument causing the injury, provided that the
following requisites concur:
-The accident is of a kind which ordinarily
does not occur in the absence of someone’s
negligence;
-It is caused by an instrumentality within the
exclusive control of the defendant or
defendants; and
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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ADVISER:
-The possibility of contributing conduct which
would make the plaintiff responsible is
eliminated.
As to the first requirement, the gaping wound on
Nora’s arm is certainly not an ordinary occurrence
in the act of delivering a baby, far removed as the
arm is from the organs involved in the process of
giving birth. Such injury could not have happened
unless negligence had set in somewhere.
Second, whether the injury was caused by the
droplight or by the blood pressure cuff is of no
moment. Both instruments are deemed within the
exclusive control of the physician in charge under
the “captain of the ship” doctrine. This doctrine
holds the surgeon in charge of an operation liable
for the negligence of his assistants during the time
when those assistants are under the surgeon’s
control. In this particular case, it can be logically
inferred that petitioner, the senior consultant in
charge during the delivery of Nora’s baby,
exercised control over the assistants assigned to
both the use of the droplight and the taking of
Nora’s blood pressure. Hence, the use of the
droplight and the blood pressure cuff is also within
petitioner’s exclusive control.
Third, the gaping wound on Nora’s left arm, by its
very nature and considering her condition, could
only be caused by something external to her and
outside her control as she was unconscious while
in hypovolemic shock. Hence, Nora could not, by
any stretch of the imagination, have contributed to
her own injury.
Based on the foregoing, the presumption that
petitioner was negligent in the exercise of her
profession stands unrebutted. Clearly, under the
law, petitioner is obliged to pay Nora for moral
damages suffered by the latter as a proximate
result of petitioner’s negligence. (Cantre v. Sps.
Go, G.R. No. 160889, 27 April 2007)
The LADECO crewcab bumped into the car driven
by Borres and owned by Angala. Angala then filed
an action for quasi-delict, damages and attorney’s
fees against LADECO. He alleged that his pick-up
was slowing down to about 5 to 10 kph and was
making a left turn when it was bumped from
behind by the crewcab which was running at
around 60-70 kph. The crewcab stopped 21
meters from the point of impact.
Deocampo alleged that the pick-up and the
crewcab he was driving were both running at
about 40 kph. The pick-up was running along the
outer lane and was about 10 meters away when it
made a U-turn towards the left. He alleged that he
tried to avoid the pick-up but he was unable to
avoid the collision. He stated that he did not apply
the brakes because he knew the collision was
unavoidable. He admitted that he stepped on the
brakes only after the collision.
RTC found the crewcab running very fast while
following the pick-up and the crewcab’s speed was
the proximate cause of the accident and that
Deocampo had the last opportunity to avoid the
accident. The trial court found that Berenguel was
not liable because he was not the owner of the
crewcab. The court rendered judgment ordering
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2007 Team Bar-Ops Civil Law Committee
the defendants LADECO and Deocampo to
solidarily pay the plaintiffs the ff. sums:
23,000 – actual damages
10,000 – moral damages
10,000 – attorney’s fees
Cost of suit
Q: Is respondent entitled to the damages
awarded?
A: Respondent is entitled to Moral damages.
Moral damages are awarded to allow a plaintiff to
obtain means, diversion or amusement that will
serve to alleviate the moral suffering he has
undergone due to the defendant’s culpable action.
We sustain the TC and the CA in ruling that
respondent sufficiently showed that he suffered
shock, serious anxiety and fright which entitle to
him to moral damages.
Both the TC and CA failed to give any justification
for the award of attorney’s fees. Award of
attorney’s fees must be based on findings of fact
and law and stated in the decision of the TC. No
premium should be placed on the right to litigate.
Hence, the award of attorney’s fees is deleted.
(Lapanday Agricultural and Devt. Corp v.
ANGALA, G.R. No. 153076, 21 June 2007)
Human Relations
Respondent filed a complaint for Damages
coupled with Support Pendente Lite alleging that
petitioner was the father of her baby. She sought
to claim damages contending that petitioner as her
superior seduced her into making love.
Q: Will the action for damages prosper?
A: We, however, cannot rule that respondents are
entitled to damages. Article 2219 of the Civil Code
which states moral damages may be recovered in
cases of seduction is inapplicable in this case
because Clarissa was already an adult at the time
she had an affair with petitioner.
Neither can her parents be entitled to damages.
Besides, there is nothing in law or jurisprudence
that entitles the parents of a consenting adult who
begets a love child to damages. (Hermosisima v.
Court of Appeals, G.R. No. L-14628, 30
September 1960)
Three cases of malversation through falsification
were filed Sendaydiego, the provincial treasurer of
Pangasinan, Galvan, and Quirimit, the provincial
auditor, for embezzlement of road and bridge fund.
After trial, CFI Pangasinan acquitted Quirimit and
found Sendaydiego and Samson guilty of
malversation through falsification of public or
official documents
Sendaydiego and Samson appealed to the SC.
Sendaydiego died. His appeal as to his criminal
liability was dismissed.
Q: Will Death, after final judgment but before it has
become final and executory, extinguish both the
criminal and civil liability of the accused-appellant?
A: No. Section 1, Rule 111 of the Rules of Court
provides that the civil action for the civil liability is
deemed impliedly instituted with the criminal action
in the absence of express waiver or its reservation
in a separate action. If the defendant dies after a
University of Santo Tomas
money judgment had been rendered, the action
survives. Death of an accused-appellant, after
final judgment but before it has become final and
executory due to pendency of an appeal,
extinguished criminal liability but the civil liability
survives. In this case, the claim for civil liability
survived Sendaydiego for his death occurred after
final judgment was rendered. Notwithstanding the
dismissal of the appeal of Sendaydiego insofar as
his criminal liability is concerned, SC resolved to
continue exercising civil appellate jurisdiction over
his possible civil liability for money claims arising
from the alleged criminal acts, as if no criminal
case had been instituted against him. (People v.
Sendaydiego, 81 SCRA 120)
Concepcion shipped his construction equipment
aboard the M/V Cebu of Compania Maritima. The
other equipments were safely unloaded within few
hours after arrival in Cagayan de Oro City. On the
other hand, the pay loader fell and was damaged.
Q: Is Compania Maritima liable?
A: Yes. It used a lifting apparatus to lift and
unload a visibly heavy pay loader. Its crew,
moreover, were careless in their methods of
ascertaining the weight of heavy cargoes offered
for shipment before loading and unloading them.
While petitioner has proven that Concepcion did
not furnish an accurate weight of the pay loader,
petitioner is nonetheless liable for the damage
caused to the machinery since they could have
avoided the incident by the exercise of reasonable
skill and attention in overseeing the unloading of
such heavy equipment. While the act of
Concepcion in not disclosing the correct weight of
the loader constitutes a contributory negligence,
such will only mitigate the liability for damages.
(Compania Maritima v. Court of Appeals, 164
SCRA 685)
Bayotas was charged with Rape before RTC and
eventually convicted thereof. Pending appeal of
his conviction, Bayotas died due to cardio
respiratory arrest. Consequently, the Supreme
Court in its Resolution dismissed the criminal
aspect of the appeal. In his comment, the SolGen
expressed his view that the death of accused-
appellant did not extinguish his civil liability as a
result of his commission of the offense charged,
relying on the case of People v. Sendaydiego, and
insists that the appeal should still be resolved for
the purpose of reviewing his conviction by the
lower court on which the civil liability is based.
Q: Does the death of the accused pending appeal
of his conviction extinguish his civil liability?
A: Yes. Whether asserted in the criminal action or
in a separate civil action, civil liability ex delicto, is
extinguished by the death of the accused while his
conviction is on appeal. Article 89 of the Revised
Penal Code is clear on this matter: Criminal
liability is totally extinguished by the death of the
convict, as to the personal penalties; and as to
pecuniary penalties, liability therefore is
extinguished only when the death of the offender
occurs before final judgment. SC construed the
term final judgment employed in the Revised
Penal Code means judgment beyond recall. It

CIVIL LAW NOTES
means that as long as a judgment has not become
executory, it cannot be truthfully said that
defendant is definitely guilty of the felony charged
against him.
The ruling in Sendaydiego deviated from the
expressed intent of Article 89.
It allowed claims for civil liability ex delicto to
survive by ipso facto treating the civil action
impliedly instituted with the criminal, as one filed
under Article 30, as though no criminal
proceedings had been filed but merely a separate
civil action.
In pursuing recovery of civil liability arising from
crime, the final determination of the criminal
liability is a condition precedent to the prosecution
of the civil action, such that when the criminal
action is extinguished by the demise of accused-
appellant pending appeal thereof, said civil action
cannot survive.
Upon death of the accused pending appeal of his
conviction, the criminal action is extinguished
inasmuch as there is no longer a defendant to
stand as the accused; the civil action instituted
therein for recovery of civil liability ex delicto is
ipso facto extinguished, grounded as it is on the
criminal. Moreover, the civil action impliedly
instituted in a criminal proceeding for recovery of
civil liability ex delicto can hardly be categorized
as an ordinary money claim such as that referred
to in Sec. 21, Rule 3 enforceable before the estate
of the deceased accused.
To summarize: 1. Death of the accused pending
appeal of his conviction extinguishes his criminal
liability as well as the civil liability based solely
thereon.
2. Corollarily, the claim for civil liability survives
notwithstanding the death of accused, if the same
may also be predicated on a source of obligation
other than delict.
SC held that the death of appellant Bayotas
extinguished his criminal liability and the civil
liability based solely on the act complained of, i.e.,
rape. (People v. Bayotas, 236 SCRA 239, 02
September 1994)
A vehicular accident between a Guaring’s Lancer,
a Cressida, and a bus resulted to the death of
Guaring Jr and a passenger of the Cressida. The
heirs of Guaring, Jr. brought an action for
damages based on quasi-delict. They showed that
the bus hit the rear portion of the Lancer, causing
it to swerve to the other bound lane and collide
with the Cressida. Phil. Rabbit, on the other hand,
presented evidence tending to show that the
accident was due to the negligence of the
deceased Guaring. RTC of Pampanga, in the
criminal case, acquitted the bus driver.
Q: Did the acquittal in the criminal case of the bus
driver extinguish his civil liability and his
employer?
A: No. It is now settled that acquittal of the
accused, even if based on a finding that he is not
guilty, does not carry with it the extinction of the
civil liability based on quasi delict. Since the cause
of action of the heirs of Guaring is based on culpa
aquiliana and not culpa criminal, and the fact that
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it can be inferred from the criminal case that the
accused driver was acquitted on reasonable doubt
because of dearth of evidence and lack of veracity
of the two principal witnesses, the heirs are not
barred from recovery of damages.
Even if damages are sought on the basis of crime
and not quasi delict, the acquittal of the bus driver
will not bar recovery of damages because the
acquittal was based not on a finding that he was
not guilty but only on reasonable doubt.
The omission of the CA to review the evidence in
this case and instead base its decision on the
findings of the trial court in the criminal case
disregarded the fact that this case had been
instituted independently of the criminal case and
that heirs took no part in the criminal prosecution.
The notion that an action for quasi-delict is
separate and distinct from the criminal action was
thus set aside.
This case must be decided on the basis of the
evidence in the civil case. This is important
because the criminal court appears to have based
its decision, acquitting the bus driver on the
ground of reasonable doubt. It is unfair to bind the
heirs to the result of the criminal action when the
fact is that they did not take part therein. (Heirs of
Guaring Jr. v. Court of Appeals, G.R. No.
108395, 07 March 1997)
Spouses Tumboy and two minor children boarded
a Yubido liner. On its way, the bus fell into a ravine
caused by the bursting of one of its tires. Tito
Tumboy died while others suffered physical
injuries. A complaint for damages was filed but
the defendants raised the defense of fortuitous
event.
Q: Is explosion of a newly-installed tire of a
passenger vehicle a fortuitous event that exempt
the carrier from liability for the death of
passengers?
A: The cause of the blow-out, if due to a factory
defect, improper mounting, excessive tire
pressure, is not an unavoidable event. On the
other hand, there may have been adverse
conditions on the road that were present, which
could make the blow-out caso fortuito. The fact
that the cause of the blow-out is not known does
not relieve the carrier from liability. Owing to the
statutory presumption of negligence against the
carrier and its obligation to exercise the utmost
diligence, it is upon the defendants to prove that
the cause of the blow-out is a fortuitous event. It
is not incumbent upon the plaintiff to prove that the
cause of the blow-out is not a caso fortuito.
(Yubido v. Court of Appeals, GR No. 113033, 17
October 1997)
Singson and Tiongson bought from Cathay Pacific
two tickets for their vacation in US. After staying
for about three weeks, they decided to go back to
the Philippines. Tiongson got a booking for the
flight. It was discovered that his ticket booklet did
not have flight coupon No. 5 corresponding to the
San Francisco-Hong Kong trip. Instead, what was
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2007 Team Bar-Ops Civil Law Committee
left was coupon No. 3 which was supposed to
have been used and removed from the booklet.
Singson filed an action for damages against
Cathay Pacific. He contended that it was the
airline’s agent committed the mistake in tearing off
the wrong flight coupon. Cathay denied the
allegations and answered that since the petitioner
is holding an “opendated” ticket, which meant that
he was not booked on a specific flight on a
particular date, there was no contract of carriage
yet existing.
Q: Is Cathay liable for damages?
A: Yes. Cathay Pacific undoubtedly committed a
breach of contract when it refused to confirm
petitioner’s flight reservation back home on
account of his missing coupon. His contention
that there was no contract of carriage that was
breached since the ticket was open-dated was
untenable. The round ticket issued by the carrier
was in itself a complete written contract. In fact,
the contract was already partially executed when it
transported petitioner to US. (Singson v. CA, GR
No. 11995, 18 November 1997)
Aguilar entered into a lease agreement with
Spouses Juguilon. The subjects of the lease
contract were the two adjacent parcels of land
owned by the spouses. To comply with their
obligations, Spouses vacated the second floor of
the building to be demolished and filed an action
for unlawful detainer against their tenants
occupying the ground floor. However, spouses
decided to move back to their building with a
promise that they would vacate as soon as its
demolition would be undertaken. Spouses
subsequently sent a letter to Aguilar pertaining to
the payments of the lease rentals.
However, Aguilar instituted an action for specific
performance against the Spouses praying that the
entire property be delivered to him pursuant to the
contract. Spouses denied the non-delivery and
sought for rescission of contract for non-payment.
Q: Is it just to allow the lessors to recover the
whole rental payments agreed upon?
A: No. It would be unjust enrichment for the
lessors to demand rent for the entire leased
premises when they themselves are at the same
time occupying a portion thereof. Under the
circumstances, it is but fair that the spouses be
made to pay a fair rental value for the use and
occupation of a portion of the leased premises
from the time they have returned to said building.
SC ruled that a modification of the decision of the
trial court as to the payment of the accrued rentals
be ordered. (Aguilar v. Court of Appeals, 335
SCRA 308)
While respondent Morales, a reporter, was at a
police headquarter, a woman filed a complaint
against petitioner Arafiles, for forcible abduction
with attempted rape.
For the purpose of reporting the same in the issue
of People’s Journal, he personally interviewed the
woman. After the interview, he tried to contact
Arafiles at the NIAS office to verify the story but he
failed. He then wrote an account about the
woman’s complaint w/c then appeared as headline
University of Santo Tomas
on People’s Journal. Petitioner instituted a
complaint against respondents for damages
arising “grossly malicious and overly
sensationalized reporting of the news item”
prepared by respondent Morales,
Q: Did the CA err in holding that the
publication of the news item was not attended with
malice to thus free respondents of liability for
damages.
A: No. Article 33 contemplates a civil action for the
recovery of damages that is entirely unrelated to
the purely criminal aspect of the case. A civil
action for libel under this article shall be instituted
and prosecuted to final judgment and proved by
preponderance of evidence separately from and
entirely independent of the institution, pendency or
result of the criminal action because it is governed
by the provisions of the New Civil Code and not by
the RPC governing the criminal offense charged
and the civil liability arising therefrom.
In actions for damages for libel, it is axiomatic that
the published work alleged to contain libelous
material must be examined and viewed as a
whole.
The article must be construed as an entirety
including the headlines, as they may enlarge,
explain, or restrict or be enlarged, explained or
strengthened or restricted by the context. Whether
or not it is libelous, depends upon the scope, spirit
and motive of the publication taken in its entirety.
A publication claimed to be defamatory must be
read and construed in the sense in which the
readers to whom it is addressed would ordinarily
understand it. So, the whole item, including display
lines, should be read and construed together, and
its meaning and signification thus determined.
The presentation of the news item subject of
petitioner’s complaint may have been in a
sensational manner, but it is not per se illegal.
In determining the manner in which a given event
should be presented as a news item and the
importance to be attached thereto, newspapers
must enjoy a certain degree of discretion.
Every citizen of course has the right to enjoy a
good name and reputation, but we do not consider
that the respondents, under the circumstances of
this case, had violated said right or abused the
freedom of the press. The newspapers should be
given such leeway and tolerance as to enable
them to courageously and effectively perform their
important role in our democracy. In the preparation
of stories, press reporters and [editors] usually
have to race with their deadlines; and consistently
with good faith and reasonable care, they should
not be held to account, to a point of suppression,
for honest mistakes or imperfection in the choice
of words. (Arafiles v. Phil. Journalists Inc., G.R.
No. 150256, 25 March 2004)
Four employees of Act Theater were apprehended
by the police for allegedly tampering a water meter
and were charged accordingly in the proper court.
As a consequence thereof, MWSS sent a notice to
Act Theater; after few hours, it cut off the theater’s
water service connection. Act Theater filed a civil
case for damages against MWSS alleging that the
latter’s arbitrary, whimsical, capricious act in
cutting off its water supply without prior notice

CIVIL LAW NOTES
cause adverse effect to the health and sanitation
of its patrons.
Q: Was the Court of Appeals correct in awarding
damages to respondent on the basis of Article 19
NCC?
A: Yes. A right is a power, privilege, or immunity
guaranteed under a constitution, statute or
decisional law, or recognized as a result of long
usage, constitutive of a legally enforceable claim
of one person against the other.
Concededly, the petitioner, as the owner of the
utility providing water supply to certain consumers
including the respondent, had the right to exclude
any person from the enjoyment and disposal
thereof. However, the exercise of rights is not
without limitations. Having the right should not be
confused with the manner by which such right is to
be exercised.
When a right is exercised in a manner which
discards these norms resulting in damage to
another, a legal wrong is committed for which
actor can be held accountable. In this case, the
petitioner failed to act with justice and give the
respondent what is due to it when the petitioner
unceremoniously cut off the respondent's water
service connection. While it is true that MWSS had
sent a notice of investigation to plaintiff-appellee
prior to the disconnection of the latter's water
services, this was done only a few hours before
the actual disconnection. Upon receipt of the
notice and in order to ascertain the matter, Act
sent its assistant manager Teodulo Gumalid, Jr. to
the MWSS office but he was treated badly on the
flimsy excuse that he had no authority to represent
Act. Act's water services were cut at midnight of
the day following the apprehension of the
employees. Clearly, the plaintiff-appellee was
denied due process when it was deprived of the
water services. As a consequence thereof, Act
had to contract another source to provide water for
a number of days. Plaintiff-appellee was also
compelled to deposit with MWSS the sum of
P200,000 for the restoration of their water
services.
There is, thus, no reason to deviate from the
uniform findings and conclusion of the court a quo
and the appellate court that the petitioner's act
was arbitrary, injurious and prejudicial to the
respondent, justifying the award of damages under
Article 19 of the Civil Code. (MWSS v. Act
Theater, Inc., GR No. 147076, 17 June 2004)
Reyes filed an action for damages against Lim and
Hotel Nikko alleging that Lim humiliated him when
Lim asked him to leave a party taking place at the
penthouse of the hotel for the birthday of its former
manager. Reyes claimed that his friend Dr. Filart
invited him to the party and that he was getting his
food from the buffet table when he was stopped in
a loud voice by Lim to his great shock,
embarrassment, and shame. Lim, on the other
hand, alleged that she asked other people to ask
Reyes to leave in order not to make a scene but
she failed so she asked him herself to leave but
not in the manner alleged by Reyes.
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ADVISER:
Q: Can Reyes claim damages from Lim and the
Hotel?
A: Article 19 and 21 of the Civil Code both
requires that the act complained of must be
intentional. Reyes had not shown that Lim was
driven by animosity against him. The manner by
which Lim asked him to leave was acceptable and
humane under the circumstances. A person who
did not abuse her right in asking a person to leave
a party to which he was not invited cannot be
made to pay damages under Article 19 and 21.
(Nikko Hotel Manila Garden v. Reyes, G.R. No.
154259, 28 February 2005)
Cañete, Alipio, and Navarro offered for sale to Po
Cham a parcel of land. Po Cham had a meeting
with Pizarro at the latter’s house where Pizarro
categorically represented to Po Cham that the
property was alienable and disposable. Deed of
Absolute Sale over the property was executed in
favor of Po Cham. After payment, Po Cham took
possession of the property. Soon after, however,
Po Cham discovered that the property is not an
alienable or disposable land susceptible of private
ownership. Despite repeated demands,
respondent refused to return the purchase price of
the rights over the property.
Po Cham filed an administrative case against
Pizarro alleging that the latter has violated his oath
as a member of the Bar in committing manifest
falsehood and evident misrepresentation by
employing fraudulent means to lure him into
buying rights over the property which property he
represented to be disposable and alienable.
It was found that Po Cham also filed a criminal
complaint for estafa against respondent, Banzon,
Zabala, Cañete, Alipio and Navarro arising from
the questioned sale of rights, upon which
information for estafa was subsequently filed.
Q: Does a prejudicial question exist in this case?
A: The record does not disclose the status of the
estafa case against respondent. His conviction or
acquittal is not, however, essential insofar as the
present administrative case against him is
concerned. Administrative cases against lawyers
belong to a class of their own. They are distinct
from and they may proceed independently of
criminal cases.
The burden of proof for these types of cases
differs. In a criminal case, proof beyond
reasonable doubt is necessary; in an
administrative case for disbarment or suspension,
“clearly preponderant evidence” is all that is
required. Thus, a criminal prosecution will not
constitute a prejudicial question even if the same
facts and circumstances are attendant in the
administrative proceedings.
It should be emphasized that a finding of guilt in
the criminal case will not necessarily result in a
finding of liability in the administrative case.
Conversely, respondent’s acquittal does not
necessarily exculpate him administratively.
It is not thus sound judicial policy to await the final
resolution of a criminal case before a complaint
against a lawyer may be acted upon; otherwise,
this Court will be rendered helpless from
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2007 Team Bar-Ops Civil Law Committee
vigorously applying the rules on admission to and
continuing membership in the legal profession
during the whole period that the criminal case is
pending final disposition when the objectives of
the two proceedings are vastly disparate. (Po
Chan v. Pizarro, A.C. No. 5499, 16 August 2005)
Land Titles and Deeds
A sold to B parcel of land with a clean TCT. B
however, found some persons occupying the lot.
After the sale, B started fencing the property. The
occupants objected to the fencing of the subject
property but were ignored by B on the principle
that a person dealing on a registered land need
not go beyond its certificate of title.
Q: Is the contention of B correct?
A: No. Although it is a recognized principle that a
person dealing on a registered land need not go
beyond it certificate of title, it s also a firmly settled
rule that where there are circumstances w/c would
put a party on guard and prompt him to investigate
or inspect the property being sold to him, such as
the presence of occupants/tenants thereon, it is of
course, expected from the purchaser of valued
piece of land to inquire first into the status or
nature of the possession of the occupants, i.e.,
whether or not the occupants possess the land en
concepto de dueno, in concept of an owner. As is
the common practice in the real estate industry, an
ocular inspection of the premises involved is a
safeguard that a cautious and prudent purchaser
usually takes. Should he find out that the land he
intends to buy is occupied by anybody else other
than the seller who, as in this case, is not in actual
possession, it would then be incumbent upon the
purchaser to verify the extent of the occupant’s
possessory rights. The failure of the prospective
buyer to take such precautionary steps would
mean negligence on his part and would thereby
preclude him from claiming or invoking the rights
of a “purchaser in good faith.” (Mathay v. CA, 295
SCRA 556)
Petitioners claimed that the disputed property was
part of the land in the actual physical possession
of their grandfather Sixto Brusas since 1924,
having inherited the same from their great
grandfather; and the property was subdivided
among the five children of their grandfather.
Private respondents on the other hand, denied
that the disputed property were owned and
possessed by their grandfather Sixto Brusas
during his lifetime. They asserted that Ines was
the absolute owner having entered the property as
early as 1924. In 1957, Ines applied for a free
patent which was approved and the corresponding
certificate of title issued in 1967. An action for
reconveyance was instituted imputing fraud,
misrepresentation and bad faith to Ines in using a
forged affidavit to obtain title over the disputed
property despite full knowledge that she owned
only 1/5 portion thereof.
Q: Did Ines commit fraud in causing the
registration of the disputed property under her
name thus entitling the petitioners to the
reconveyance of their shares therein?
University of Santo Tomas
A: Petitioners failed to prove the fact of fraud in
the case at bar. It appears from the record that
Juan, Tarcela, Mariano and Josefa were notified of
the application for free patent of Ines. They were
duly afforded the opportunity to object to the
registration and to substantiate their claims, which
they failed to do. Further, petitioners never
contested the order of the Bureau of Lands
disregarding their claims. This could only mean
that they either agreed with the order or decided to
abandon their claims. Moreover, they failed to
prove fraud in the execution of the affidavit used
by Ines to obtain title to the disputed property. No
evidence was adduced by them to substantiate
their allegation that their signatures therein were
forged. It is not for private respondents to deny
forgery. The burden of proof that the affidavit of
waiver is indeed spurious rests on petitioners.
Yet, even as they insist on forgery, they never
really took serious efforts in establishing such
allegation by preponderant evidence. Mere
allegations of fraud are not enough. Intentional
acts to deceive and deprive another of his right, or
in some manner injure him, must be specifically
alleged and proved. (Brusas v. CA, G. R. No.
126875, 26 August 1999)
Mumar originally owned a parcel of land since
1917 as evidenced by Tax Declaration. In 1950,
he sold it to Cajes who was issued Tax
Declaration. Cajes occupied and cultivated the
said land. In 1969, unknown to Cajes, Alvarez
succeeded in obtaining the registration of subject
land for which he was issued OCT 546. Alvarez
never occupied nor introduced improvements on
said land. Alvarez sold the land to the spouses
Beduya to whom TCT was issued. The Beduyas
obtained a loan from the DBP and, as security,
mortgaged the land to the bank. Upon default, the
mortgage on the property was foreclosed.
When a re-appraisal of the property was
conducted by DBP’s representatives, it was then
discovered that Cajes was occupying a portion of
said land Cajes was asked to vacate but he
refused to do so, DBP filed a complaint for
recovery of possession with damages against him.
The lower court declared DBP the lawful owner of
the entire land covered by TCT on the ground that
the decree of registration was binding upon the
land. On appeal, the Court of Appeals reversed
and gave judgment for Cajes, declaring him the
owner of the land erroneously included in TCT.
Q: May Cajes seek the reconveyance of the land?
Is the question on the validity of TCT in the
present case for recovery of possession a
collateral attack against the indefeasibility of
Torrens titles?
A:
1. The ownership of the land presently occupied
by Cajes was already vested in him and that its
inclusion in OCT 546 and, subsequently, in TCT
10101, was erroneous. Accordingly, the land in
question must be reconveyed in favor of Cajes,
the true and actual owner thereof, reconveyance
being clearly the proper remedy in the present
case. As held in Vital v. Amore (90 Phil. 955), “The
true owner may bring an action to have the
ownership or title to the land judicially settled and

CIVIL LAW NOTES
the Court in the exercise of its equity jurisdiction,
without ordering the cancellation of the Torrens
title issued upon the patent, may direct the
defendants, the registered owner to reconvey the
parcel of land to the plaintiff who has been found
to be the true owner thereof.” Further, although
generally, an action for reconveyance based on an
implied or constructive trust, such as the present
case, prescribes in 10 years from the date of
issuance of decree of registration; such rule does
not apply when the plaintiff is in actual possession
of the land.
2. It is true that the indefeasibility of Torrens
titles cannot be collaterally attacked. Herein, the
original complaint is for recovery of possession
filed by DBP against Cajes, not an original action
filed by the latter to question the validity of TCT
10101 on which DBP bases its right. However, it
should not be overlooked that Cajes filed a
counterclaim against DBP, claiming ownership
over the land and seeking damages. Hence, the
Court herein could rule on the question of the
validity of TCT 10101 for the counterclaim can be
considered a direct attack on the same.
“A counterclaim is considered a complaint, only
this time, it is the original defendant who becomes
the plaintiff. It stands on the same footing and is to
be tested by the same rules as if it were an
independent action.” In an analogous case, the
Court ruled on the validity of a certificate of title
despite the fact that the original action instituted
before the lower court was a case for recovery of
possession. The Court reasoned that since all the
facts of the case are before it, to direct the party to
institute cancellation proceedings would be
needlessly circuitous and would unnecessarily
delay the termination of the controversy which has
already dragged on for 20 years. Thus, there is no
obstacle to the determination of the validity of TCT
10101 in the present case. To rule on the issue of
validity oF TCT 10101 in the present case for
recovery of possession, due to the circumstances
obtaining, is not tantamount to a collateral attack.
(Development Bank of the Philippines v. Court
of Appeals, GR 129471, 28 April 2000)
The disputed land was originally owned by Amado
Celestial by virtue of a Miscellaneous Sales Patent
issued in his name. It is alleged that Amado
executed a Deed of Absolute Sale covering the
disputed land in favor of Editha who then caused
the disputed property to be subdivided into three
lots. OCT was cancelled and TCTs were issued
covering the three subdivided lots. Thereafter,
Editha sold the lots to Respondent Chua. Chua
notified herein petitioners who were still occupying
the disputed land to vacate the same. In response
to respondent Chua’s demand, herein petitioners
filed with the proper court a complaint for judicial
declaration of the nullity of the Deed of Sale
executed by Amado and likewise all the Deeds of
Sale executed by Editha in favor of Chua.
It is alleged by petitioners that respondent Chua
was not a buyer in good faith because at the time
of the execution of the sale, Chua knew that an old
wooden house and a semi-bungalow house were
already erected in the disputed property.
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Q: Was Chua a buyer in good faith?
A: No. We answer in the negative. The trial court
correctly found that respondent Chua had
knowledge or, at the very least, notice that some
other person had a right to or interest on the
property in question prior to her purchase from
Editha.
For a buyer to be deemed a purchaser in good
Faith, the ruling in Heirs of Severa P. Gregorio v.
Court of Appeals is instructive:
A purchaser in good faith 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 at the time of
purchase or before he has notice of the claim or
interest of some other person in the property. As
good faith primarily refers to a state of mind and is
always a question of intention, evidence as to
conduct and outward acts are usually resorted to
in order to arrive at a reasonable determination of
the inward motive or intention.
The records show that respondent Chua knew for
a fact that prior to 1962 and prior to the sale, there
were erected on the land in question an old
wooden house and a semi-bungalow house which
were occupied by the father of Amado Celestial,
Erlindo Celestial and their other relatives.
Carmencita Paradena, a witness for the
petitioners, admitted residing with Amado and
Florencia as their tenant on the land in question
since 1963. She also testified that the brothers
and sisters of Amado resided with them in the old
wooden house. This contradicts what respondent
Chua's claim that prior to the sale, only spouses
Editha and Erlindo Celestial occupied the land in
question and nobody else. These facts alone
should have put respondent Chua on guard that
there were possible defects in the title of the
vendor. As enumerated in Mathay v. Court of
Appeals, viz:
Although it is a recognized principle that a person
dealing on a registered land need not go beyond
its certificate of title, it is also a firmly settled rule
that where there are circumstances which would
put a party on guard and prompt him to investigate
or inspect the property being sold to him, such as
the presence of occupants/tenants thereon, it is of
course, expected from the purchaser of a valued
piece of land to inquire first into the status or
nature of possession of the occupants, i.e.,
whether or not the occupants possess the land en
concepto de dueño, in concept of owner. As is the
common practice in the real estate industry, an
ocular inspection of the premises involved is a
safeguard a cautious and prudent purchaser
usually takes. Should he find out that the land he
intends to buy is occupied by anybody else other
than the seller, it would then be incumbent upon
the purchaser to verify the extent of the occupant's
possessory rights. The failure of a prospective
buyer to take such precautionary steps would
mean negligence on his part and would thereby
preclude him from claiming or invoking the rights
of a 'purchaser in good faith'.
In the case at bar, respondent Chua failed to make
the necessary inquiry as to the possessory rights
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2007 Team Bar-Ops Civil Law Committee
of the relatives of Editha and Erlindo Celestial. The
records show that respondent Chua failed to
inquire on the respective rights of petitioner
Florencia and Carmencita Paradena, who were in
actual possession of the land in question, or of the
other brothers and sisters of Erlindo Celestial,
husband of Editha, who also resided on the
questioned land. No amount of good faith can
therefore be appreciated in favor of respondent
Chua's acquisition of the land in question. (Heirs
of Amado Celestial v. Heirs of Editha Celestial,
GR No. 142691, 05 August 2003)
Hipolito Mapili was the original owner of a parcel
of unregistered land. He died and was survived by
his only son Magno, the father of herein private
respondents. Filomena Larena, claimed that she
bought the abovementioned property from
Hipolito. After the death of Filomena, herein
petitioner took possession of the property alleging
that she bought the same from her deceased aunt.
Private respondents thereafter sued the petitioner.
Petitioner now maintains that she is the lawful
owner of the disputed property by virtue of the
issuance of the Torrens certificate in her name
and that the same have been declared for tax
purposes in her name.
Q: Is petitioner correct in claiming ownership over
the property on the basis of the Torrens certificate
and tax declarations?
A: No. Torrens certificate pertaining to the
disputed property “does not create or vest title,"
but is merely an "evidence of an indefeasible and
incontrovertible title to the property in favor of the
person whose name appears therein." Land
registration under the Torrens system was never
intended to be a means of acquiring ownership.
Moreover, the Original Certificate of Title was
never formally offered by petitioners. In its Order
dated October 1, 1993, the RTC considered their
prolonged failure to offer it in evidence as a waiver
of their right to offer exhibits. In so ruling, the
court a quo followed the rule that evidence not
formally offered should not be considered.
Neither does the existence of tax declarations
change our mind. It is not a conclusive evidence of
ownership, but a "proof that the holder has a claim
of title over the property." "Tax Declaration No.
1419 for the year 1949 was registered in the name
of the original owner, Hipolito Mapili. A year later,
Tax Declaration No. 9839 was registered in the
name of Petitioner Aquila's aunt. The RTC noted
in its Decision that beginning 1968, the property
had already been registered in the name of Aquila,
as can be seen from Tax Declaration Nos. 18899,
34 4027 and 03-640-C. Normally, one will not pay
taxes on a property not in one's actual or
constructive possession. Hence, being good
indicia of possession in the concept of owner, the
Tax Declarations in the name of Petitioner Aquila
may strengthen her bona fide claim of acquisition
of ownership. Petitioners, however, have not been
able to present the evidence needed to tack the
date of possession on the property in question.
(Larena v. Mapili et al., GR No. 146341, 07
August 2003)
University of Santo Tomas
In a decision by the Court, the ownership of the
subject property was vested to the Government
since it was declared that neither petitioner Tomas
Alonso nor his son Francisco or the latter’s heirs
were the lawful owners of Lot NO. 727. Likewise,
respondent Cebu Country Club, Inc. was not able
to establish a clear title over the subject land
notwithstanding the reconstitution of title.
In light of the aforementioned ruling, both parties
filed their respective Motions for Reconsideration.
On its part, Cebu Country Club invoked
prescription and further argued that reconstitution
of its title was sufficient to prove ownership over
the land.
Q: Was ownership acquired by Cebu Country Club
through prescription? Does reconstitution
determine ownership of land covered by lost or
destroyed title?
A: No. The disputed property is part of the “Friar
Lands” over which the Government holds title and
is not public land but private or patrimonial
property of the Government w/c can be alienated
only upon proper compliance with the
requirements of Act No. 1120 or the Friar Lands
Act.
It is an iron clad rule that prescription can never lie
against the Government. Since respondent failed to
present the paper trail of the property’s conversion
to private property, the lengthy possession and
occupation of the disputed land by respondent
cannot be counted in its favor, as the subject
property being a friar land, remained part of the
patrimonial property of the Government.
Possession of patrimonial property of the
Government, whether spanning decades or
centuries, can not ipso facto ripen into ownership.
Moreover, the rule that statutes of limitation do not
run against the State, unless therein expressly
provided, is founded on "the great principle of
public policy, applicable to all governments alike,
which forbids that the public interests should be
prejudiced by the negligence of the officers or
agents to whose care they are confided."
No. Respondent relies solely on its reconstituted
title which, by itself, does not determine or resolve
the ownership of the land covered by the lost or
destroyed title. The reconstitution of a title is
simply the re-issuance of a lost duplicate
certificate of title in its original form and condition.
It does not determine or resolve the ownership of
the land covered by the lost or destroyed title. A
reconstituted title, like the original certificate of
title, by itself does not vest ownership of the land
or estate covered thereby. (Alonso et. al v. Cebu
Country Club Inc., G.R. No. 130876, 05
December 2003)
Yu filed a petition for the registration of a parcel of
land. Except for the opposition filed the by the
Solicitor General, no one else appeared to oppose
the petition. On the basis of the certification by the
different government agencies, the court rendered
a decision in favor of private respondent Yu. The
decision became final and executory.
OSG received a letter from the Regional Director
of the DENR alleging that after due investigation
by its officers (the Catalan Report), there were
grounds for opposition to respondent’s application

CIVIL LAW NOTES
because the subject property was found to be a
reclaimed foreshore area. With this, the Republic
filed a petition for annulment of judgment which
was dismissed by the Court of Appeals.
Q: Can the subject land be registered in Yu’s
name?
A: No. Foreshore land is that strip of land that lies
between the high and low water marks and is
alternatively wet and dry according to the flow of
tide. It is that part of the land adjacent to the sea,
which is alternately covered and left dry by the
ordinary flow of tides. It is part of the alienable
land of the public domain and may be disposed of
only by lease and not otherwise. Foreshore land
remains part of the public domain and is outside
the commerce of man. It is not capable of private
appropriation.
It is for this reason that the petitioner persists in its
action to revert the subject land to the State. Thus,
even if the decision of the RTC has become final
and executory, we find that the respondent court
abused its discretion in dismissing the petition for
annulment of judgment filed before it which is
impressed with public interest. There are valid and
meritorious grounds to justify such action. The
State has to protect its interests and can not be
bound by, or estopped from, the mistakes or
negligent acts of its officials or agents, much more,
non-suited as a result thereof. (Republic v. CA,
GR. No. 126316, 25 June 2004)
Cezar et al. are the actual occupants and
residents of a portion of land with the
improvements thereon. They are miscellaneous
sales patent applicants of their respective portions
of the lot occupied by them and have been
religiously paying taxes on the property. The same
lot was titled under OCT issued by the then Land
Registration Commission in the name of Salcedo,
pursuant to a decision of the Cadastral Court.
Subsequently, TCTs were issued to Tankiko after
the he purchased Lots of the subdivision plan from
the Heirs of Salcedo. Cezar, et .al. filed an action
for reconveyance.
Q: Does an applicant for sales patent have a
capacity to sue as such?
A: Not being the owners of the land but mere
applicants for sales patents thereon, Cezar, et al.
have no personality to file the suit. Neither will they
be directly affected by the judgment in such suit.
The circumstances of this case do not justify the
exercise of equity jurisdiction that would allow a
suit to be filed by one who is not a real party in
interest. Herein, Cezar, et al. have no clear
enforceable right, since their claim over the land in
question is merely inchoate and uncertain.
Admitting that they are only applicants for sales
patents on the land, they are not and they do not
even claim to be owners thereof. In fact, there is
no certainty that their applications would even be
ruled upon favorably, considering that some of the
applications have been pending for more than 10
years already. Further, it is evident that Cezar, et.
al. are not the real parties in interest. Because
they admit that they are not the owners of the land
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
103
ADVISER:
but mere applicants for sales patents thereon, it is
very clear that the land is public in character and
that it should revert to the State. This being the
case, Section 101 of the Public Land Act
categorically declares that only the government
may institute an action to recover ownership of a
public land. Under Section 2, Rule 3 of the Rules
of Court, every action must be prosecuted or
defended in the name of the real party in interest.
It further defines a “real party in interest” as one
who stands to be benefited or injured by the
judgment in the suit. Clearly, a suit filed by a
person who is not a party in interest must be
dismissed. In the present dispute, only the State
can file a suit for reconveyance of a public land.
(Sps. Tankiko v. Cezar, GR No. 131277, 02
February 1999)
Conflict of Laws
Foreign Ship’s Internal Affairs and the Narrow
Clear Statement Rule
The Cruise Line, a Bermuda Corporation with a
principal place of business in Florida, operates
cruise ships that depart from, and return to, ports
in the United States. They provide passengers
with staterooms or cabins, food, and
entertainment. The cruise ships stop at different
ports of call where passengers may disembark.
Most of the passengers on these cruises are
United States residents; under the terms and
conditions of the tickets, disputes between
passengers and NCL are to be governed by
United States law; and NCL relies upon extensive
advertising in the United States to promote its
cruises and increase its revenues. The two NCL
cruise ships that are the subject of the present
litigation, the Norwegian Sea and the Norwegian
Star, are both registered in the Bahamas.
The petitioners are disabled individuals and their
companions who purchased tickets for round-trip
cruises on the Norwegian Sea or the Norwegian
Star, with departures from Texas. Naming NCL as
the defendant, the petitioners filed a class action in
the United States District Court for the Southern
District of Texas on behalf of all persons similarly
situated. They sought declaratory and injunctive
relief under Title III of the ADA, which prohibits
discrimination on the basis of disability. The
petitioners asserted that cruise ships are covered
both by Title III's prohibition on discrimination in
places of "public accommodation," §12182(a), and
by its prohibition on discrimination in "specified
public transportation services," §12184(a).
Q: Does the Title III of the Americans with
Disabilities Act of 1990 (ADA) apply to foreign-flag
cruise ships in United States waters?
A: In Benz and McCulloch, the Court held that, in
some circumstances, a general statute will not
apply to certain aspects of the internal operations
of foreign vessels temporarily in US waters,
absent a clear statement. Here, the question of
jurisdiction is not anchored on whether or not the
courts have jurisdiction over NCL or any other
ships for that matter, but is anchored on whether
104
2007 Team Bar-Ops Civil Law Committee
or not there is a clear congressional intent to cover
a foreign ship’s internal affairs. Obviously, when a
ship sails within the territorial waters of the United
States, it will be and it is already subjected to the
jurisdiction of its courts.
The US Supreme Court has determined that the
“physical barriers” complained of is only a matter
of internal affairs. Thus, applying the narrow clear
statement rule, US Courts under Title III1 does not
have jurisdiction over foreign ships on matters
involving its internal affairs because it was not
specifically provided for therein. The Court held
that it is reasonable to presume that Congress
intends no interference with matters that are
primarily of concern only to the ship and the
foreign state in which it is registered. It is also
reasonable, however, to presume Congress does
intend its statutes to apply to entities in US
territory that serve, employ, or otherwise affect
American citizens, or that affect the peace and
tranquility of the United States, even if those
entities happen to be foreign-flag ships. Cruise
ships flying foreign flags of convenience but
departing from and returning to US ports
accommodate and transport over 7 million US
residents annually, including large numbers of
disabled individuals. To hold that there is no Title
III protection for the disabled would be a harsh and
unexpected interpretation of a statute designed to
provide broad protection for them.
Title III does not require structural modifications
that conflict with international legal obligations or
pose any real threat to the safety of the crew or
other passengers. It may well follow that it does
not require any permanent and significant
structural modifications that interfere with cruise
ship’s internal affairs. Having said so, the
recourse to the narrow clear statement rule
becomes unnecessary.
Cases may arise, however, where it is prudent for
a court to invoke that rule without determining
whether Title III actually imposes a particular
barrier-removal requirement entailing a permanent
and significant structural modification interfering
with a foreign ship’s internal affairs. Conversely,
where it is not obvious that a particular physical
modification relates to a vessel’s basic
architecture and construction, but it is clear the
modification would conflict with an international
legal obligation, the court may simply hold the
modification not readily achievable, without resort
to the clear statement rule. (Spector v.
Norwegian Cruise Line Ltd., 06 June 2005)
Judgment Coram Non Judice Against Non-
residents
This action was brought by Neff against Pennoyer
for the recovery of a tract of land situated in
Multnomah County, Oregon. Pennoyer, in his
answer, denied Neff's title and right to possession,
and set up a title in himself. By consent of parties,
1
Title III of the American Disabilities Act of 1990 prohibits
discrimination based on disability in places of public
accommodation and in specified public transportation services
and requires covered entities to make reasonable modifications
in policies, practices or procedures to accommodate disabled
persons and to remove architectural and communication
barriers that are structural in nature where such removal is
readily achievable.
University of Santo Tomas
and in pursuance of their written stipulation filed in
the case, the cause was tried by the court, and a
special verdict given, upon which judgment was
rendered in favor of Neff; whereupon Pennoyer
sued out this writ of error.
The parties respectively claimed title as follows:
Neff, under a patent issued to him by the United
States, March 19, [95 U.S. 714, 716] 1866; and
Pennoyer, by virtue of a sale made by the sheriff
of said county, under an execution sued out upon
a judgment against Neff, rendered Feb. 19, 1866,
by the Circuit Court for said county, in an action
wherein he was defendant, and J. H. Mitchell was
plaintiff. Neff was then a non-resident of Oregon.
Q: Is jurisdiction acquired under the
circumstances?
A: As for any other purpose than to subject the
property of a non-resident to valid claims against
him in the State, due process of law would require
appearance or personal service before the
defendant could be personally bound by any
judgment rendered.
Jurisdiction is acquired in one of two modes: first,
as against the person of the defendant by the
service of process; or, secondly, by a procedure
against the property of the defendant within the
jurisdiction of the court. In the latte case, the
defendant is not personally bound by the judgment
beyond the property in question. And it is
immaterial whether the proceeding against the
property be by an attachment or bill in chancery. It
must be substantially a proceeding in rem.
Where a party is within a territory, he may justly be
subjected to its process, and bound personally by
the judgment pronounced on such process against
him. Where he is not within such territory, and is
not personally subject to its law, if, on account of
his supposed or actual property being within the
territory, process by the local laws may, by
attachment, go to compel his appearance, and for
his default to appear judgment may be
pronounced against him, such a judgment must,
upon general principles, be deemed only to bind
him to the extent of such property, and cannot
have the effect of a conclusive judgment in
personam, for the plain reason, that, except so far
as the property is concerned, it is a judgment
coram non judice.
To prevent any misapplication of the views
expressed in this opinion, it is proper to observe
that the Court does not mean to assert, by any
thing we have said, that a State may not authorize
proceedings to determine the status of one of its
citizens towards a non-resident, which would be
binding within the State, though made without
service of process or personal notice to the non-
resident. Likewise, it is not contrary to natural
justice that a man who has agreed to receive a
particular mode of notification of legal proceedings
should be bound by a judgment in which that
particular mode of notification has been followed,
even though he may not have actual notice of
them. In the present case, however, there is no
feature of this latter kind, and consequently, no
consideration of what would be the effect of such
legislation in enforcing the contract of a non-
resident can arise. (Pennoyer v. Neff, 95 U.S.
714, 1877)

CIVIL LAW NOTES
Extraterritorial Service of Notice
Asiavest Limited filed a complaint against the
defendant Antonio Heras praying that said
defendant be ordered to pay to the plaintiff the
amounts awarded by the Hong Kong Court
Judgment. Defendant admits the existence of the
questioned judgment but not necessarily the
authenticity or validity thereof, that plaintiff is not
doing business and is not licensed to do business
in the Philippines; and that the residence of
defendant is New Manila, Quezon City.
Defendant presented two witnesses, namely,
Fortunata dela Vega (personal secretary) and
Russel Warren Lousich (expert on the laws of
Hongkong). Ms. dela Vega's testimony is to the
effect that no writ of summons or copy of a
statement of claim of Asiavest Limited was ever
served in the office of the Navegante Shipping
Agency Limited and/or for Mr. Antonio Heras, and
that no service of the writ of summons was either
served on the defendant at his residence in New
Manila, Quezon City. Mr. Lousich testified that the
defendant was sued on the basis of his personal
guarantee of the obligations of Compania
Hermanos de Navegacion S.A. There is no record
that a writ of summons was served on the person
of the defendant in Hong Kong, or that any such
attempt at service was made. Likewise, there is no
record that a copy of the judgment of the High
Court was furnished or served on the defendant;
anyway, it is not a legal requirement to do so
under Hong Kong laws.
Q: Was the judgment of the Hong Kong Court
repelled by evidence of want of jurisdiction, want
of notice to the party, collusion, fraud or clear
mistake of law or fact, such as to overcome the
presumption established in Section 50, Rule 39 of
the Rules of Court in favor of foreign judgments?
A: An action in personam is an action against a
person on the basis of his personal liability. An
action in rem is an action against the thing itself
instead of against the person. 19 An action quasi
in rem is one wherein an individual is named as
defendant and the purpose of the proceeding is to
subject his interest therein to the obligation or lien
burdening the property.
In an action in personam, jurisdiction over the
person of the defendant is necessary for the court
to validly try and decide the case. Jurisdiction over
the person of a resident defendant who does not
voluntarily appear in court can be acquired by
personal service of summons as provided under
Section 7, Rule 14 of the Rules of Court. If he
cannot be personally served with summons within
a reasonable time, substituted service may be
made in accordance with Section 8 of said Rule. If
he is temporarily out of the country, any of the
following modes of service may he resorted to: (1)
substituted service set forth in Section 8; 21 (2)
personal service outside the country, with leave of
court; (3) service by publication also with leave of
court; 22 or (4) any other manner the court may
deem sufficient.
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
105
ADVISER:
However, in an action in personam wherein the
defendant is a non-resident who does not
voluntarily submit himself to the authority of the
court, personal service of summons within the
state is essential to the acquisition of jurisdiction
over her person. This method of service is
possible if such defendant is physically present in
the country. If he is not found therein, the court
cannot acquire jurisdiction over his person and
therefore cannot validly try and decide the case
against him. An exception was laid down in
Gemperle v. Schenker 26 wherein a non-resident
was served with summons through his wife, who
was a resident of the Philippines and who was his
representative and attorney-in-fact in a prior civil
case filed by him; moreover, the second case was
a mere offshoot of the first case.
On the other hand, in a proceeding in rem or quasi
in rem, jurisdiction over the person of the
defendant is not a prerequisite to confer
jurisdiction on the court provided that the court
acquires jurisdiction over the res. Nonetheless,
summons must be served upon the defendant not
for the purpose of vesting the court with
jurisdiction but merely for satisfying the due
process requirements. Thus, where the defendant
is a non-resident who is not found in the
Philippines and (1) the action affects the personal
status of the plaintiff; (2) the action relates to, or
the subject matter of which is property in the
Philippines in which the defendant has or claims a
lien or interest; (3) the action seeks the exclusion
of the defendant from any interest in the property
located in the Philippines; or (4) the property of the
defendant has been attached in the Philippines -
service of summons may be effected by (a)
personal service out of the country, with leave of
court; (b) publication, also with leave of court; or ()
any other manner the court may deem sufficient.
(Asiavest Limited v. CA and Antonio Heras,
G.R. No. 128803, 25 September 1998)
Processual Presumption
Petitioner Northwest Orient Airlines, Inc.
(NORTHWEST) sought to enforce in the RTC a
judgment rendered in its favor by a Japanese
Court against private respondent C.F. Sharp &
Company, Inc., (SHARP), a corporation
incorporated under Philippine laws. Northwest and
Sharp, through its Japan branch, entered into an
International Passenger Sales Agency Agreement,
whereby the former authorized the latter to sell its
air transportation tickets. Unable to remit the
proceeds of the ticket sales made by defendant on
behalf of the plaintiff under the said agreement,
plaintiff sued defendant in Tokyo, Japan, for
collection of the unremitted proceeds of the ticket
sales. A writ of summons was issued by the Tokyo
District Court of Japan against defendant at its
office in Yokohoma, Kanagawa Prefecture. The
attempt to serve the summons was unsuccessful
because the bailiff was advised by a person in the
office that Mr. Dinozo, the person believed to be
authorized to receive court processes was in
Manila. Bailiff returned to the defendant's office to
serve the summons. Mr. Dinozo refused to accept
106
2007 Team Bar-Ops Civil Law Committee
the same claiming that he was no longer an
employee of the defendant. The Director of the
Tokyo District Court requested the Supreme Court
of Japan to serve the summons through diplomatic
channels upon the defendant's head office in
Manila.
Defendant received from Deputy Sheriff Rolando
Balingit the writ of summons. Despite receipt of
the same, defendant failed to appear at the
scheduled hearing. Thus, the Tokyo Court
proceeded to hear the plaintiff's complaint and
rendered judgment against defendant. Defendant
received from Deputy Sheriff Balingit copy of the
judgment. Defendant not having appealed the
judgment, the same became final and executory.
Plaintiff was unable to execute the decision in
Japan, hence, a suit for enforcement of the
judgment was filed by plaintiff before the Regional
Trial Court of Manila.
Q: Can the Japanese Court acquire jurisdiction
over a Philippine corporation doing business in
Japan by serving summons through diplomatic
channels on the Philippine corporation at its
principal office in Manila after prior attempts to
serve summons in Japan had failed?
A: A foreign Judgment is presumed to be valid
and binding in the country from which it comes,
until the contrary is shown. It is also proper to
presume the regularity of the proceedings and the
giving of due notice therein.
It is settled that matters of remedy and procedure
such as those relating to the service of process
upon a defendant are governed by the lex fori or
the internal law of the forum. In this case, it is the
procedural law of Japan where the judgment was
rendered that determines the validity of the
extraterritorial service of process on SHARP. As to
what this law is a question of fact, not of law. It
may not be taken judicial notice of and must be
pleaded and proved like any other fact. Sections
24 and 25, Rule 132 of the Rules of Court provide
that it may be evidenced by an official publication
on or by a duly attested or authenticated copy
thereof. It was then incumbent upon SHARP to
present evidence as to what that Japanese
procedural law is and to show that under it, the
assailed extraterritorial service is invalid. It did not.
Accordingly, the presumption of validity and
regularity of the service of summons and the
decision thereafter rendered by the Japanese
Court must stand.
Alternatively, in the light of the absence of proof
regarding Japanese law, the presumption of
identity or similarity or the so-called processual
presumption may be invoked. Applying it, the
Japanese law on the matter is presumed to be
similar with the Philippine law on service of
summons on a private foreign corporation doing
business in the Philippines. Section 14, Rule 14 of
the Rules of Court provides that if the defendant is
a foreign corporation doing business in the
Philippines, service may be made: (1) on its
resident agent designated in accordance with law
for that purpose, or, (2) if there is no such resident
agent, on the government official designated by
law to that effect, or (3) on any of its officers or
agents within the Philippines.
University of Santo Tomas
If the foreign corporation has designated an agent
to receive summons, the designation is exclusive,
and service of summons is without force and gives
the court no jurisdiction unless made upon him.
Where the corporation has no such agent, service
shall be made on the government official
designated by law. Whenever service of process is
so made, the government office or official served
shall transmit by mail a copy of the summons or
other legal process to the corporation at its home
or principal office. The sending of such copy is a
necessary part of the service.
Inasmuch as SHARP was admittedly doing
business in Japan through its four duly registered
branches at the time the collection suit against it
was filed, then in the light of the processual
presumption, SHARP may be deemed a resident
of Japan, and, as such, was amenable to the
jurisdiction of the courts therein and may be
deemed to have assented to the said courts' lawful
methods of serving process. (Northwest Orient
Airlines, Inc. v. CA and C.F. Sharp & Company,
GR No. 112573, 09 February 1995)
Unilateral Activity is Not Minimum Contact
Kulko married appellee Sharon Kulko, during
appellant's three-day stopover in California en
route from a military base in Texas to a tour of
duty in Korea. At the time of this marriage, both
parties were domiciled in and residents of New
York State. Immediately following the marriage,
Sharon returned to New York, as did appellant
after his tour of duty. Their first child, Darwin, was
born to the Kulkos in New York, and a year later
their second child, Ilsa, was born, also in New
York. The Kulkos and their two children resided
together as a family in New York City continuously
until March 1972, when the Kulkos separated.
Following the separation, Sharon moved to
California. A written separation agreement was
drawn up in New York, Sharon flew to New York
City in order to sign this agreement. The
agreement provided, inter alia, that the children
would remain with their father during the school
year but would spend their Christmas, Easter, and
summer vacations with their mother. While Sharon
waived any claim for her own support or
maintenance, Ezra agreed to pay his wife $3,000
per year in child support for the periods when the
children were in her care, custody, and control.
Immediately after execution of the separation
agreement, Sharon flew to Haiti and procured a
divorce there; 1 the divorce decree incorporated
the terms of the agreement. She then returned to
California, where she remarried and took the
name Horn.
The children resided with appellant during the
school year and with their mother on vacations, as
provided by the separation agreement, until
December 1973. At this time, just before Ilsa was
to leave New York to spend Christmas vacation
with her mother, she told her father that she
wanted to remain in California after her vacation.
Appellant bought his daughter a one-way plane
ticket, and Ilsa left, taking her clothing with her.
Ilsa then commenced living in California with her
mother during the school year and spending
vacations with her father. In January 1976,

CIVIL LAW NOTES
appellant's other child, Darwin, called his mother
from New York and advised her that he wanted to
live with her in California. Unbeknownst to
appellant, appellee Horn sent a plane ticket to her
son, which he used to fly to California where he
took up residence with his mother and sister.
Less than one month after Darwin's arrival in
California, appellee Sharon commenced this
action against appellant in the California Superior
Court. She sought to establish the Haitian divorce
decree as a California judgment; to modify the
judgment so as to award her full custody of the
children; and to increase appellant's child-support
obligations. 2 Appellant appeared specially and
moved to quash service of the summons on the
ground that he was not a resident of California and
lacked sufficient "minimum contacts" with the State
under International Shoe Co. v. Washington, 326
U.S. 310, 316 (1945), to warrant the State's
assertion of personal jurisdiction over him.
Q: May the California state courts, in the action for
child support, exercise in personam jurisdiction
over a nonresident, non-domiciliary parent of
minor children domiciled within the State?
A: The Due Process Clause of the Fourteenth
Amendment operates as a limitation on the
jurisdiction of state courts to enter judgments
affecting rights or interests of nonresident
defendants. It has long been the rule that a valid
judgment imposing a personal obligation or duty in
favor of the plaintiff may be entered only by a court
having jurisdiction over the person of the
defendant. The existence of personal jurisdiction,
in turn, depends upon the presence of reasonable
notice to the defendant that an action has been
brought and a sufficient connection between the
defendant and the forum State to make it fair to
require defense of the action in the forum.
The constitutional standard for determining
whether the State may enter a binding judgment
against appellant is that a defendant "has certain
minimum contacts with the forum State such that
the maintenance of the suit does not offend
`traditional notions of fair play and substantial
justice.'" An essential criterion in all cases is
whether the "quality and nature" of the defendant's
activity is such that it is "reasonable" and "fair" to
require him to conduct his defense in that State.
To find personal jurisdiction in a State merely
because the mother was residing there, would
discourage parents from entering into reasonable
visitation agreements. Moreover, it could arbitrarily
subject one parent to suit in any State of the Union
where the other parent chose to spend time while
having custody of their offspring pursuant to a
separation agreement. "The unilateral activity of
those who claim some relationship with a
nonresident defendant cannot satisfy the
requirement of contact with the forum State. It is
essential in each case that there be some act by
which the defendant purposefully avails himself of
the privilege of conducting activities within the
forum State.
The "purposeful act" that the California Supreme
Court believed did warrant the exercise of
personal jurisdiction over appellant in California
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was his "actively and fully consenting to Ilsa living
in California for the school year and sending her to
California for that purpose." We cannot accept the
proposition that appellant's acquiescence in Ilsa's
desire to live with her mother conferred jurisdiction
over appellant in the California courts in this
action. A father who agrees, in the interests of
family harmony and his children's preferences, to
allow them to spend more time in California than
was required under a separation agreement can
hardly be said to have "purposefully availed
himself" of the "benefits and protections" of
California's laws.
Nor can we agree with the assertion of the court
below that the exercise of in personam jurisdiction
here was warranted by the financial benefit
appellant derived from his daughter's presence in
California for nine months of the year. This
argument rests on the premise that, while
appellant's liability for support payments remained
unchanged, his yearly expenses for supporting the
child in New York decreased. But any diminution
in appellant's household costs resulted, not from
the child's presence in California, but rather from
her absence from appellant's home.
It cannot be disputed that California has
substantial interests in protecting resident children
and in facilitating child-support actions on behalf of
those children. But these interests simply do not
make California a "fair forum," in which to require
appellant, who derives no personal or commercial
benefit from his child's presence in California and
who lacks any other relevant contact with the
State, either to defend a child-support suit or to
suffer liability by default.
We therefore believe that the state courts in the
instant case failed to heed our admonition that "the
flexible standard of International Shoe" does not
"herald the eventual demise of all restrictions on
the personal jurisdiction of state courts." The mere
act of sending a child to California to live with her
mother is not a commercial act and connotes no
intent to obtain or expectancy of receiving a
corresponding benefit in the State that would
make fair the assertion of that State's judicial
jurisdiction. (Kulko v. California Superior Court,
436 U.S. 84, 1978)
Presence is Antithesis to the Application of
Minimum Contacts
During a trip to California to conduct business and
visit his children, petitioner Burnham, a New
Jersey resident, was served with a California court
summons and his estranged wife's divorce
petition. The California Superior Court denied his
motion to quash the service of process, and the
State Court of Appeal denied mandamus relief,
rejecting his contention that the Due Process
Clause of the Fourteenth Amendment prohibited
California courts from asserting jurisdiction over
him because he lacked "minimum contacts" with
the State. The latter court held it to be a valid
predicate for in personam jurisdiction that he was
personally served while present in the forum State.
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2007 Team Bar-Ops Civil Law Committee
Q: Did the State's courts acquire jurisdiction over
a nonresident, who was personally served with
process while temporarily in that State?
A: Among the most firmly established principles of
personal jurisdiction in American tradition is that
the courts of a State have jurisdiction over
nonresidents who are physically present in the
State. The view developed early that each State
had the power to hale before its courts any
individual who could be found within its borders,
and that once having acquired jurisdiction over
such a person by properly serving him with
process, the State could retain jurisdiction to enter
judgment against him, no matter how fleeting his
visit. "By the common law, personal actions, being
transitory, may be brought in any place, where the
party defendant may be found," for "every nation
may rightfully exercise jurisdiction over all persons
within its domains."
Decisions in the courts of many States in the 19th
and early 20th centuries held that personal service
upon a physically present defendant sufficed to
confer jurisdiction, without regard to whether the
defendant was only briefly in the State or whether
the cause of action was related to his activities
there. Most States, moreover, had statutes or
common-law rules that exempted from service of
process individuals who were brought into the
forum by force or fraud or who were there as a
party or witness in unrelated judicial proceedings.
Shaffer was saying, in other words, not that all
bases for the assertion of in personam jurisdiction
(including, presumably, in-state service) must be
treated alike and subjected to the "minimum
contacts" analysis of International Shoe; but rather
that quasi in rem jurisdiction, that fictional "ancient
form," and in personam jurisdiction, are really one
and the same and must be treated alike - leading
to the conclusion that quasi in rem jurisdiction, i.
e., that form of in personam jurisdiction based
upon a "property ownership" contact and by
definition unaccompanied by personal, in-state
service, must satisfy the litigation-relatedness
requirement of International Shoe. The logic of
Shaffer's holding - which places all suits against
absent nonresidents on the same constitutional
footing, regardless of whether a separate Latin
label is attached to one particular basis of contact
- does not compel the conclusion that physically
present defendants must be treated identically to
absent ones. As we have demonstrated at length,
our tradition has treated the two classes of
defendants quite differently, and it is unreasonable
to read Shaffer as casually obliterating that
distinction. International Shoe confined its
"minimum contacts" requirement to situations in
which the defendant "be not present within the
territory of the forum," and nothing in Shaffer
expands that requirement beyond that. (Burnham
v. Superior Court of California, Marin County,
495 U.S. 604, 1990)
Foreseeability Alone is Insufficient for
Personal Jurisdiction
A products-liability action was instituted in an
Oklahoma state court by respondents husband
and wife to recover for personal injuries sustained
in Oklahoma in an accident involving an
University of Santo Tomas
automobile that had been purchased by them in
New York while they were New York residents and
that was being driven through Oklahoma at the
time of the accident. The defendants included the
automobile retailer and its wholesaler (petitioners),
New York corporations that did no business in
Oklahoma. Petitioners entered special
appearances, claiming that Oklahoma's exercise
of jurisdiction over them would offend limitations
on the State's jurisdiction imposed by the Due
Process Clause of the Fourteenth Amendment.
The trial court rejected petitioners' claims, and
they then sought, but were denied, a writ of
prohibition in the Oklahoma Supreme Court to
restrain respondent trial judge from exercising in
personam jurisdiction over them.
Q: May an Oklahoma court exercise in personam
jurisdiction over a nonresident automobile retailer
and its wholesale distributor in a products-liability
action, when the defendants' only connection with
Oklahoma is the fact that an automobile sold in
New York to New York residents became involved
in an accident in Oklahoma?
A: Consistently with the Due Process Clause, the
Oklahoma trial court may not exercise in
personam jurisdiction over petitioners.
(a) A state court may exercise personal jurisdiction
over a nonresident defendant only so long as
there exist "minimum contacts" between the
defendant and the forum State. International Shoe
Co. v. Washington, 326 U.S. 310 . The
defendant's contacts with the forum State must be
such that maintenance of the suit does not offend
traditional notions of fair play and substantial
justice, id., at 316, and the relationship between
the defendant and the forum must be such that it
is "reasonable . . . to require the corporation to
defend the particular suit which is brought there,"
id., at 317. The Due Process Clause "does not
contemplate that a state may make binding a
judgment in personam against an individual or
corporate defendant with which the state has no
contacts, ties, or relations." Id., at 319. Pp. 291-
294.
(b) Here, there is a total absence in the record of
those affiliating circumstances that are a
necessary predicate to any exercise of state-court
jurisdiction. Petitioners carry on no activity
whatsoever in Oklahoma; they close no sales and
perform no services there, avail [444 U.S. 286,
287] themselves of none of the benefits of
Oklahoma law, and solicit no business there either
through salespersons or through advertising
reasonably calculated to reach that State. Nor
does the record show that they regularly sell cars
to Oklahoma residents or that they indirectly,
through others, serve or seek to serve the
Oklahoma market. Although it is foreseeable that
automobiles sold by petitioners would travel to
Oklahoma and that the automobile here might
cause injury in Oklahoma, "foreseeability" alone is
not a sufficient benchmark for personal jurisdiction
under the Due Process Clause. The foreseeability
that is critical to due process analysis is not the
mere likelihood that a product will find its way into
the forum State, but rather is that the defendant's
conduct and connection with the forum are such
that he should reasonably anticipate being haled

CIVIL LAW NOTES
into court there. Nor can jurisdiction be supported
on the theory that petitioners earn substantial
revenue from goods used in Oklahoma. Pp. 295-
299. (World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 1980)
Foreseeability Must be Coupled with
Additional Conduct
Petitioner manufactures tire valve assemblies in
Japan and sells them to several tire
manufacturers, including Cheng Shin. The sales to
Cheng Shin, which amounted to at least 100,000
assemblies annually from 1978 to 1982, took
place in Taiwan, to which the assemblies were
shipped from Japan. Cheng Shin incorporates the
assemblies into its finished tires, which it sells
throughout the world, including the United States,
where 20 percent of its sales take place in
California. Affidavits indicated that petitioner was
aware that tires incorporating its assemblies would
end up in California, but, on the other hand, that it
never contemplated that its sales to Cheng Shin in
Taiwan would subject it to lawsuits in California.
Nevertheless, in 1979, a product liability suit was
brought in California Superior Court arising from a
motorcycle accident allegedly caused by defects in
a tire manufactured by Cheng Shin, which in turn
filed a cross-complaint seeking indemnification
from petitioner. Although the main suit was
eventually settled and dismissed, the Superior
Court denied petitioner's motion to quash the
summons issued against it. The State Court of
Appeal then ordered that the summons be
quashed, but the State Supreme Court reversed,
finding that petitioner's intentional act of placing its
assemblies into the stream of commerce by
delivering them to Cheng Shin in Taiwan, coupled
with its awareness that some of them would
eventually reach California, were sufficient to
support state court jurisdiction under the Due
Process Clause.
Q: Would the state court's exercise of personal
jurisdiction over petitioner be unreasonable and
unfair in violation of the Due Process Clause?
A: Applying the principle that minimum contacts
must be based on an act of the defendant, the
Court rejected the assertion that a consumer's
unilateral act of bringing the defendant's product
into the forum State was a sufficient constitutional
basis for personal jurisdiction over the defendant.
The Court rejected this concept of foreseeability
as an insufficient basis for jurisdiction under the
Due Process Clause. The Court disclaimed,
however, the idea that "foreseeability is wholly
irrelevant" to personal jurisdiction, concluding that
"the forum State does not exceed its powers under
the Due Process Clause if it asserts personal
jurisdiction over a corporation that delivers its
products into the stream of commerce with the
expectation that they will be purchased by
consumers in the forum State."
The Supreme Court of California's position was
consistent with those courts that have held that
mere foreseeability or awareness was a
constitutionally sufficient basis for personal
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jurisdiction if the defendant's product made its way
into the forum State while still in the stream of
commerce.
Other courts, however, have understood the Due
Process Clause to require something more than
that the defendant was aware of its product's entry
into the forum State through the stream of
commerce in order for the State to exert
jurisdiction over the defendant. In the present
case, for example, the State Court of Appeals did
not read the Due Process Clause, as interpreted
by World-Wide Volkswagen, to allow "mere
foreseeability that the product will enter the forum
state to be enough by itself to establish jurisdiction
over the distributor and retailer."
We now find this latter position to be consonant
with the requirements of due process. The
"substantial connection" between the defendant
and the forum State necessary for a finding of
minimum contacts must come about by an action
of the defendant purposefully directed toward the
forum State. The placement of a product into the
stream of commerce, without more, is not an act of
the defendant purposefully directed toward the
forum State. Additional conduct of the defendant
may indicate an intent or purpose to serve the
market in the forum State, for example, designing
the product for the market in the forum State,
advertising in the forum State, establishing
channels for providing regular advice to customers
in the forum State, or marketing the product
through a distributor who has agreed to serve as
the sales agent in the forum State. But a
defendant's awareness that the stream of
commerce may or will sweep the product into the
forum State does not convert the mere act of
placing the product into the stream into an act
purposefully directed toward the forum State.
Traditional notions of fair play and substantial
justice
The strictures of the Due Process Clause forbid a
state court to exercise personal jurisdiction over
Asahi under circumstances that would offend
"`traditional notions of fair play and substantial
justice.'"
We have previously explained that the
determination of the reasonableness of the
exercise of jurisdiction in each case will depend on
an evaluation of several factors. A court must
consider the burden on the defendant, the
interests of the forum State, and the plaintiff's
interest in obtaining relief. It must also weigh in its
determination "the interstate judicial system's
interest in obtaining the most efficient resolution of
controversies; and the shared interest of the
several States in furthering fundamental
substantive social policies."
When minimum contacts have been established,
often the interests of the plaintiff and the forum in
the exercise of jurisdiction will justify even the
serious burdens placed on the alien defendant. In
the present case, however, the interests of the
plaintiff and the forum in California's assertion of
jurisdiction over Asahi are slight.
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2007 Team Bar-Ops Civil Law Committee
World-Wide Volkswagen also admonished courts
to take into consideration the interests of the
"several States," in addition to the forum State, in
the efficient judicial resolution of the dispute and
the advancement of substantive policies. The
procedural and substantive interests of other
nations in a state court's assertion of jurisdiction
over an alien defendant will differ from case to
case. In every case, however, those interests, as
well as the Federal Government's interest in its
foreign relations policies, will be best served by a
careful inquiry into the reasonableness of the
assertion of jurisdiction in the particular case, and
an unwillingness to find the serious burdens on an
alien defendant outweighed by minimal interests
on the part of the plaintiff or the forum State.
(Asahi Metal Industry Co. v. Superior Court,
480 U.S. 102, 1987)
Waiver of Requirements of Acquiring Personal
Jurisdiction
Respondent Compagnie des Bauxites de Guinee
(CBG) is a Delaware corporation, 49% of which is
owned by the Republic of Guinea and 51% is
owned by Halco (Mining) Inc. CBG's principal
place of business is in the Republic of Guinea,
where it operates bauxite mines and processing
facilities. Halco, which operates in Pennsylvania,
has contracted to perform certain administrative
services for CBG. These include the procurement
of insurance.
In 1973, Halco instructed an insurance broker,
Marsh & McLennan, to obtain $20 million worth of
business interruption insurance to cover CBG's
operations in Guinea. The first half of this
coverage was provided by the Insurance
Company of North America (INA). The second
half, or what is referred to as the "excess"
insurance, was provided by a group of 21 foreign
insurance companies, 2 14 of which are
petitioners in this action (the excess insurers). 3
[456 U.S. 694, 697]
Marsh & McLennan requested Bland Payne to
obtain the excess insurance in the London
insurance market. Pursuant to normal business
practice
"[i]n late January and in February, 1974, Bland
Payne presented to the excess insurer
[petitioners] a placing slip in the amount of
$10,000,000, in excess of the first $10,000,000.
[Petitioners] initialed said placing slip, effective
February 12, 1974, indicating the part of said
$10,000,000 each was willing to insure." 4 Finding
27 of the District Court, 2 App. 347a.
Once the offering was fully subscribed, Bland
Payne issued a cover note indicating the amount
of the coverage and specifying the percentage of
the coverage that each excess insurer had agreed
to insure. No separate policy was issued; the
excess insurers adopted the INA policy "as far as
applicable."
Sometime after February 12, CBG allegedly
experienced mechanical problems in its Guinea
operation, resulting in a business interruption loss
in excess of $10 million. Contending that the loss
was covered under its policies, CBG brought suit
when the insurers refused to indemnify CBG for
the loss. Whatever the mechanical problems
University of Santo Tomas
experienced by CBG, they were perhaps minor
compared to the legal difficulties encountered in
the courts. [456 U.S. 694, 698]
In December 1975, CBG filed a two-count suit in
the Western District of Pennsylvania, asserting
jurisdiction based on diversity of citizenship. The
first count was against INA; the second against the
excess insurers. INA did not challenge personal or
subject-matter jurisdiction of the District Court. The
answer of the excess insurers, however, raised a
number of defenses, including lack of in personam
jurisdiction. Subsequently, this alleged lack of
personal jurisdiction became the basis of a motion
for summary judgment filed by the excess
insurers. 5 The issue in this case requires an
account of respondent's attempt to use discovery
in order to demonstrate the court's personal
jurisdiction over the excess insurers.
Q: Is there a violation of Due Process clause?
A: The validity of an order of a federal court
depends upon that court's having jurisdiction over
both the subject matter and the parties. The
concepts of subject-matter and personal
jurisdiction, however, serve different purposes,
and these different purposes affect the legal
character of the two requirements. Petitioners fail
to recognize the distinction between the two
concepts - speaking instead in general terms of
"jurisdiction" - although their argument's strength
comes from conceiving of jurisdiction only as
subject-matter jurisdiction.
Subject-matter jurisdiction, is an Art. III as well as
a statutory requirement; it functions as a restriction
on federal power, and contributes to the
characterization of the federal sovereign. Certain
legal consequences directly follow from this. For
example, no action of the parties can confer
subject-matter jurisdiction upon a federal court.
Thus, the consent of the parties is irrelevant,
principles of estoppel do not apply, and a party
does not waive the requirement by failing to
challenge jurisdiction early in the proceedings.
Similarly, a court, including an appellate court, will
raise lack of subject-matter jurisdiction on its own
motion. "The rule, springing from the nature and
limits of the judicial power of the United States is
inflexible and without exception, which requires
this court, of its own motion, to deny its
jurisdiction, and, in the exercise of its appellate
power, that of all other courts of the United States,
in all cases where such jurisdiction does not
affirmatively appear in the record."
None of this is true with respect to personal
jurisdiction. The requirement that a court have
personal jurisdiction flows not from Art. III, but
from the Due Process Clause. The personal
jurisdiction requirement recognizes and protects
an individual liberty interest. It represents a
restriction on judicial power not as a matter of
sovereignty, but as a matter of individual liberty.
Thus, the test for personal jurisdiction requires that
"the maintenance of the suit not offend `traditional
notions of fair play and substantial justice.'"
In sum, the requirement of personal jurisdiction
may be intentionally waived, or for various reasons
a defendant may be estopped from raising the
issue. These characteristics portray it for what it is

CIVIL LAW NOTES
- a legal right protecting the individual. The
plaintiff's demonstration of certain historical facts
may make clear to the court that it has personal
jurisdiction over the defendant as a matter of law -
i. e., certain factual showings will have legal
consequences - but this is not the only way in
which the personal jurisdiction of the court may
arise. The actions of the defendant may amount to
a legal submission to the jurisdiction of the court,
whether voluntary or not.
The expression of legal rights is often subject to
certain procedural rules: The failure to follow those
rules may well result in a curtailment of the rights.
Thus, the failure to enter a timely objection to
personal jurisdiction constitutes a waiver of the
objection. A sanction consisting of a finding of
personal jurisdiction has precisely the same effect.
As a general proposition, the Rule 37 sanction
applied to a finding of personal jurisdiction creates
no more of a due process problem than the Rule
12 waiver. Although "a court cannot conclude all
persons interested by its mere assertion of its own
power," not all rules that establish legal
consequences to a party's own behavior are "mere
assertions" of power.
Rule 37 itself embodies the standard for the due
process limits on such rules. It did not violate due
process for a state court to strike the answer and
render a default judgment against a defendant
who failed to comply with a pretrial discovery
order. Such a rule was permissible as an
expression of "the undoubted right of the
lawmaking power to create a presumption of fact
as to the bad faith and untruth of an answer
begotten from the suppression or failure to
produce the proof ordered. The preservation of
due process was secured by the presumption that
the refusal to produce evidence material to the
administration of due process was but an
admission of the want of merit in the asserted
defense." Hammond Packing case.
This situation was specifically distinguished from
that in Hovey v. Elliott in which the Court held that
it did violate due process for a court to take similar
action as "punishment" for failure to obey an order
to pay into the registry of the court a certain sum
of money. Due process is violated only if the
behavior of the defendant will not support the
Hammond Packing presumption. If there is no
abuse of discretion in the application of the Rule
37 sanction, as we find to be the case here, then
the sanction is nothing more than the invocation of
a legal presumption, or what is the same thing, the
finding of a constructive waiver.
Rule 37 contains two standards - one general and
one specific - that limit a district court's discretion.
First, any sanction must be "just"; second, the
sanction must be specifically related to the
particular "claim" which was at issue in the order to
provide discovery. While the latter requirement
reflects the rule of Hammond Packing the former
represents the general due process restrictions on
the court's discretion. (Insurance Corp. v.
Compagnie des Bauxites, 456 U.S. 694, 1982)
Domestice Service of Summons to an Agent of
a Foreign Corporation
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After his parents were killed in an automobile
accident, respondent filed a wrongful death action
in an Illinois court, alleging that defects in the
automobile designed and sold by Volkswagen of
America, Inc. (VWoA), in which the parents were
driving, caused or contributed to their deaths.
When VWoA's answer denied that it had designed
or assembled the vehicle, respondent amended
his complaint to add as a defendant petitioner here
(VWAG), a German corporation which is the sole
owner of VWoA. Respondent attempted to serve
the amended complaint on VWAG by serving
VWoA as VWAG's agent. Filing a special and
limited appearance, VWAG moved to quash the
service on the grounds that it could be served only
in accordance with the Hague Service Convention,
and that respondent had not complied with the
Convention's requirements. The court denied the
motion, reasoning that VWoA and VWAG are so
closely related that VWoA is VWAG's agent for
service of process as a matter of law,
notwithstanding VWAG's failure or refusal to
appoint VWoA formally as an agent. The court
concluded that, because service was
accomplished in this country, the Convention did
not apply. The Appellate Court of Illinois affirmed,
ruling that the Illinois long-arm statute authorized
substituted service on VWoA, and that such
service did not violate the Convention.
Q: Is there a proper service of summons?
A: The Hague Service Convention does not apply
when process is served on a foreign corporation
by serving its domestic subsidiary which, under
state law, is the foreign corporation's involuntary
agent for service.
The service of process in this case is not covered
by Article 1 of the Convention, which provides that
the Convention "shall apply where there is
occasion to transmit a judicial document for
service abroad." "Service" means a formal delivery
of documents that is legally sufficient to charge the
defendant with notice of a pending action. Since
the Convention does not itself prescribe a
standard for determining the legal sufficiency of
the delivery, the internal law of the forum state
controls.
Thus, where, as here, the forum state's law does
not define the applicable method of serving
process as requiring the transmittal of documents
abroad, the Convention does not apply. This
interpretation is consistent with the negotiating
history and the general purposes of the
Convention. One purpose of the Convention is to
provide means to facilitate service of process
abroad. The Convention implements this purpose
by requiring each state to establish a central
authority to assist in the service of process, and
nothing in the present decision interferes with that
requirement. Another purpose of the Convention is
to assure foreign defendants adequate notice. The
present decision does not necessarily advance
this purpose, because it makes application of the
Convention depend on the forum's internal law;
however, it is unlikely that any country will draft its
internal laws deliberately so as to circumvent the
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2007 Team Bar-Ops Civil Law Committee
Convention in cases in which it would be
appropriate to transmit judicial documents for
service abroad. Furthermore, this decision does
not prevent voluntary compliance with the
Convention even when the forum's internal law
does not so require, and such compliance can be
advantageous.
VWAG's contention that service upon it was not
complete until VWoA transmitted the complaint to
it in Germany, and that this transmission "for
service abroad" rendered the Convention
applicable to the case under Article 1, is without
merit. Where, as here, service on a domestic
agent is valid and complete under both state law
and the Due Process Clause without an official
transmission of documents abroad, the inquiry
ends and the Convention has no further
implications. (Volkswagenwerk
Aktiengesellschaft v. Schlunk, 486 U.S. 694,
1988)
Hague Convention is not a Rule of First Resort
The United States, France, and 15 other countries
have acceded to the Hague Evidence Convention,
which prescribes procedures by which a judicial
authority in one contracting state may request
evidence located in another. Plaintiffs brought
suits (later consolidated) in Federal District Court
for personal injuries resulting from the crash of an
aircraft built and sold by petitioners, two
corporations owned by France. Petitioners
answered the complaints without questioning the
court's jurisdiction, and engaged in initial discovery
without objection. However, when plaintiffs served
subsequent discovery requests under the Federal
Rules of Civil Procedure, petitioners filed a motion
for a protective order, alleging that the Convention
dictated the exclusive procedures that must be
followed since petitioners are French and the
discovery sought could only be had in France. A
Magistrate denied the motion, and the Court of
Appeals denied petitioners' mandamus petition,
holding, inter alia, that when a district court has
jurisdiction over a foreign litigant, the Convention
does not apply even though the information sought
may be physically located within the territory of a
foreign signatory to the Convention.
Q: Are the petitioners entitled to the protective
order?
A: In arguing their entitlement to a protective
order, petitioners correctly assert that both the
discovery rules set forth in the Federal Rules of
Civil Procedure and the Hague Convention are the
law of the United States. Initially, we note that at
least four different interpretations of the
relationship between the federal discovery rules
and the Hague Convention are possible. Two of
these interpretations assume that the Hague
Convention by its terms dictates the extent to
which it supplants normal discovery rules.
First, the Hague Convention might be read as
requiring its use to the exclusion of any other
discovery procedures whenever evidence located
abroad is sought for use in an American court.
University of Santo Tomas
Second, the Hague Convention might be
interpreted to require first, but not exclusive, use of
its procedures.
Two other interpretations assume that
international comity, rather than the obligations
created by the treaty, should guide judicial resort
to the Hague Convention.
Third, the Convention might be viewed as
establishing a supplemental set of discovery
procedures, strictly optional under treaty law, to
which concerns of comity nevertheless require first
resort by American courts in all cases.
Fourth, the treaty may be viewed as an
undertaking among sovereigns to facilitate
discovery to which an American court should
resort when it deems that course of action
appropriate, after considering the situations of the
parties before it as well as the interests of the
concerned foreign state.
We reject the first two of the possible
interpretations as inconsistent with the language
and negotiating history of the Hague Convention.
The preamble of the Convention specifies its
purpose "to facilitate the transmission and
execution of Letters of Request" and to "improve
mutual judicial co-operation in civil or commercial
matters." The preamble does not speak in
mandatory terms which would purport to describe
the procedures for all permissible transnational
discovery and exclude all other existing practices.
The text of the Evidence Convention itself does
not modify the law of any contracting state, require
any contracting state to use the Convention
procedures, either in requesting evidence or in
responding to such requests, or compel any
contracting state to change its own evidence-
gathering procedures.
The text of the Convention draws no distinction
between evidence obtained from third parties and
that obtained from the litigants themselves; nor
does it purport to draw any sharp line between
evidence that is "abroad" and evidence that is
within the control of a party subject to the
jurisdiction of the requesting court. Thus, it
appears clear to us that the optional Convention
procedures are available whenever they will
facilitate the gathering of evidence by the means
authorized in the Convention. Although these
procedures are not mandatory, the Hague
Convention does "apply" to the production of
evidence in a litigant's possession in the sense
that it is one method of seeking evidence that a
court may elect to employ.
We cannot accept petitioners' invitation to
announce a new rule of law that would require first
resort to Convention procedures whenever
discovery is sought from a foreign litigant. A rule of
first resort in all cases would therefore be
inconsistent with the overriding interest in the "just,
speedy, and inexpensive determination" of
litigation in our courts. (Societe Nat. Ind. Aero. v.
U.S. District Court, 482 U.S. 522, 1987)
Depositions: Judicial Assistance is Authorized
but not Required
This case concerns the authority of federal district
courts to assist in the production of evidence for
use in a foreign or international tribunal. In the

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matter before us, AMD filed an antitrust complaint
against Intel with the Directorate-General for
Competition of the European Commission. In
pursuit of that complaint, AMD applied to the
United States District Court for the Northern
District of California, invoking 28 U. S. C.
§1782(a), for an order requiring Intel to produce
potentially relevant documents. Section 1782(a)
provides that a federal district court "may order" a
person "resid[ing]" or "found" in the district to give
testimony or produce documents "for use in a
proceeding in a foreign or international tribunal ...
upon the application of any interested person."
Concluding that §1782(a) did not authorize the
requested discovery, the District Court denied
AMD's application. The Court of Appeals for the
Ninth Circuit reversed that determination and
remanded the case, instructing the District Court
to rule on the merits of AMD's application. In
accord with the Court of Appeals, we hold that the
District Court had authority under §1782(a) to
entertain AMD's discovery request. The statute,
we rule, does not categorically bar the assistance
AMD seeks: (1) A complainant before the
European Commission, such as AMD, qualifies as
an "interested person" within §1782(a)'s compass;
(2) the Commission is a §1782(a) "tribunal" when it
acts as a first-instance decision-maker; (3) the
"proceeding" for which discovery is sought under
§1782(a) must be in reasonable contemplation,
but need not be "pending" or "imminent"; and (4)
§1782(a) contains no threshold requirement that
evidence sought from a federal district court would
be discoverable under the law governing the
foreign proceeding. We caution, however, that
§1782(a) authorizes, but does not require, a
federal district court to provide judicial assistance
to foreign or international tribunals or to "interested
person[s]" in proceedings abroad. Whether such
assistance is appropriate in this case is a question
yet unresolved. To guide the District Court on
remand, we suggest considerations relevant to the
disposition of that question.
Q: Can the federal court assist in the production of
evidence for foreign tribunals?
A: The statute authorizes, but does not require, a
federal district court to provide assistance to a
complainant in a European Commission
proceeding that leads to a dispositive ruling, i.e., a
final administrative action both responsive to the
complaint and reviewable in court. Accordingly, we
reject the categorical limitations Intel would place
on the statute's reach.
The complainant who triggers a European
Commission investigation has a significant role in
the process. A complainant "possesses a
reasonable interest in obtaining judicial
assistance," and therefore qualifies as an
"interested person." "Any interested person" is
"intended to include not only litigants before
foreign or international tribunals, but also foreign
and international officials as well as any other
person whether he be designated by foreign law or
international convention or merely possess a
reasonable interest in obtaining the assistance.
Also, Section 1782(a) does not limit the provision
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of judicial assistance to "pending" adjudicative
proceedings.
A district court is not required to grant a §1782(a)
discovery application simply because it has the
authority to do so. We note below factors that bear
consideration in ruling on a §1782(a) request.
First, when the person from whom discovery is
sought is a participant in the foreign proceeding
(as Intel is here), the need for §1782(a) aid
generally is not as apparent as it ordinarily is when
evidence is sought from a non-participant in the
matter arising abroad. A foreign tribunal has
jurisdiction over those appearing before it, and can
itself order them to produce evidence. When the
person who is to produce the evidence is a party
to the foreign proceedings, the foreign or
international tribunal can exercise its own
jurisdiction to order production of the evidence. In
contrast, non-participants in the foreign
proceeding may be outside the foreign tribunal's
jurisdictional reach; hence, their evidence,
available in the United States, may be
unobtainable absent §1782(a) aid.
Second, a court presented with a §1782(a)
request may take into account the nature of the
foreign tribunal, the character of the proceedings
underway abroad, and the receptivity of the
foreign government or the court or agency abroad
to U. S. federal-court judicial assistance.
Specifically, a district court could consider whether
the §1782(a) request conceals an attempt to
circumvent foreign proof-gathering restrictions or
other policies of a foreign country or the United
States. Also, unduly intrusive or burdensome
requests may be rejected or trimmed. (Intel Corp.
v. Advanced Micro Devices, Inc., 542 US 241,
2004)
Forum Non Conveniens
The Litonjuas filed a Complaint against defendant
banks alleging that: they were engaged in the
shipping business; they owned two vessels; they
deposited their revenues from said business
together with other funds with the branches of said
banks in the United Kingdom and Hongkong up to
1979; with their business doing well, the defendant
banks induced them to increase the number of
their ships in operation, offering them easy loans
to acquire said vessels
The Litonjuas claimed that defendant banks as
trustees did not fully render an account of all the
income derived from the operation of the vessels
as well as of the proceeds of the subsequent
foreclosure sale; because of the breach of their
fiduciary duties, the revenues derived from the
operation of all the vessels declined drastically;
the loans acquired for the purchase of the four
additional vessels then matured and remained
unpaid, prompting defendant banks to have all the
six vessels, including the two vessels originally
owned by the private respondents, foreclosed and
sold at public auction to answer for the obligations
incurred for and in behalf of the operation of the
vessels; The Litonjuas prayed for the accounting
of the revenues derived in the operation of the six
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2007 Team Bar-Ops Civil Law Committee
vessels and of the proceeds of the sale thereof at
the foreclosure proceedings instituted by
petitioners. On the other hand, defendant banks
filed a Motion to Dismiss on grounds of forum non
conveniens and lack of cause of action against
them.
Q: Should the complaint be dismissed on the
ground of forum non-conveniens?
A: No. Under the doctrine of forum non
conveniens, a court, in conflicts of law cases, may
refuse impositions on its jurisdiction where it is not
the most "convenient" or available forum and the
parties are not precluded from seeking remedies
elsewhere.
Whether a suit should be entertained or dismissed
on the basis of said doctrine depends largely upon
the facts of the particular case and is addressed to
the sound discretion of the trial court. A Philippine
Court may assume jurisdiction over the case if it
chooses to do so; provided, that the following
requisites are met: (1) that the Philippine Court is
one to which the parties may conveniently resort
to; (2) that the Philippine Court is in a position to
make an intelligent decision as to the law and the
facts; and, (3) that the Philippine Court has or is
likely to have power to enforce its decision."
Evidently, all these requisites are present in the
instant case. (Bank of America NT&SA v. CA,
GR No. 120135, 31 March 2003)
Choice and Ascertainment of Foreign Law
Respondent's husband died of injuries suffered
when a motorcycle on which he was a passenger
was struck by an automobile. The accident
occurred in Wisconsin near the Minnesota border.
The operators of both vehicles were Wisconsin
residents, as was the decedent, who, however,
had been employed in Minnesota and had
commuted daily to work from Wisconsin. Neither
vehicle operator carried valid insurance, but the
decedent held a policy issued by petitioner
covering three automobiles owned by him and
containing an uninsured motorist clause insuring
him against loss incurred from accidents with
uninsured motorists, but limiting such coverage to
$15,000 for each automobile. After the accident,
respondent moved to and became a resident of
Minnesota, and was subsequently appointed in
that State as personal representative of her
husband's estate. She then brought an action in a
Minnesota court seeking a declaration under
Minnesota law that the $15,000 uninsured motorist
coverage on each of her late husband's three
automobiles could be "stacked" to provide total
coverage of $45,000. Petitioner defended on the
ground that whether the three uninsured motorist
coverages could be stacked should be determined
by Wisconsin law, since the insurance policy was
delivered in Wisconsin, the accident occurred
there, and all persons involved were Wisconsin
residents at the time of the accident. The trial
court, interpreting Wisconsin law to disallow
stacking, concluded that Minnesota's choice-of-law
rules required the application of Minnesota law
permitting stacking, and granted summary
judgment for respondent. The Minnesota Supreme
Court affirmed.
University of Santo Tomas
Q: Which law should be applied in the case?
A: In deciding constitutional choice-of-law
questions, whether under the Due Process Clause
or the Full Faith and Credit Clause, this Court has
traditionally examined the contacts of the State,
whose law was applied, with the parties and with
the occurrence or transaction giving rise to the
litigation. In order to ensure that the choice of law
is neither arbitrary nor fundamentally unfair, the
Court has invalidated the choice of law of a State
which has had no significant contact or significant
aggregation of contacts, creating state interests,
with the parties and the occurrence or transaction.
Minnesota has a significant aggregation of
contacts with the parties and the occurrence,
creating state interests, such that application of its
law is neither arbitrary nor fundamentally unfair,
and, accordingly, the choice of law by the
Minnesota Supreme Court does not violate the
Due Process Clause of the Fourteenth
Amendment or the Full Faith and Credit Clause.
(1) Respondent's decedent was a member of
Minnesota's work force. The State's interest in its
commuting nonresident employees, such as
respondent's decedent, reflects a state concern for
the safety and well-being of its work force and the
concomitant effect on Minnesota employers.; (2)
petitioner was at all times present and doing
business in Minnesota. By virtue of such
presence, petitioner can hardly claim unfamiliarity
with the laws of the host jurisdiction and surprise
that the state courts might apply forum law to
litigation in which the company is involved; and (3)
respondent became a Minnesota resident prior to
institution of the instant litigation. Such residence
and subsequent appointment in Minnesota as
personal representative of her late husband's
estate constitute a Minnesota contact which gives
Minnesota an interest in respondent's recovery.
(Allstate Inc. Co. v. Hague, 449 U.S. 302, 1981)
While on a lay-over in Indonesia, plaintiff who was
a flight attendant of SAUDIA went to a disco dance
with fellow crew members both Saudi nationals.
When they were back in the room, one of the
Saudi nationals attempted to rape plaintiff. Later,
the Indonesian police came and arrested the
perpetrators.
When plaintiff returned to Jeddah, several
SAUDIA officials interrogated her about the
Jakarta incident. They then requested her to go
back to Jakarta to help arrange the release of the
perpetrators.Thereafter, defendant SAUDIA
transferred plaintiff to Manila. Her superiors
requested her to see Chief Legal Officer of
SAUDIA, in Saudi Arabia. When she saw him, he
brought her to the police station where the police
took her passport and questioned her about the
Jakarta incident.
Before the departure of her flight to Manila, plaintiff
was not allowed to board the plane and instead
ordered to take a later flight to Jeddah to see, the
Chief Legal Officer of SAUDIA. When she did, she
was brought to a Saudi court where she was
asked to sign a document written in Arabic. They
told her that this was necessary to close the case
against Thamer and Allah. As it turned out, plaintiff

CIVIL LAW NOTES
signed a notice to her to appear before the court.
Plaintiff then returned to Manila.
Shortly afterwards, defendant SAUDIA summoned
plaintiff to report to Jeddah once again for further
investigation.
A SAUDIA legal officer again escorted plaintiff to
the same court where the judge, to her
astonishment and shock, rendered a decision,
translated to her in English, sentencing her to five
months imprisonment and to 286 lashes. Only
then did she realize that the Saudi court had tried
her, together with Thamer and Allah, for what
happened in Jakarta. The court found plaintiff
guilty of (1) adultery; (2) going to a disco, dancing
and listening to the music in violation of Islamic
laws; and (3) socializing with the male crew, in
contravention of Islamic tradition."
Facing conviction, private respondent sought the
help of her employer, petitioner SAUDIA.
Unfortunately, she was denied any assistance.
She then asked the Philippine Embassy in Jeddah
to help her while her case is on appeal.
Meanwhile, to pay for her upkeep, she worked on
the domestic flight of SAUDIA, while Thamer and
Allah continued to serve in the international flights.
Because she was wrongfully convicted, the Prince
of Makkah dismissed the case against her and
allowed her to leave Saudi Arabia. Shortly before
her return to Manila, she was terminated from the
service by SAUDIA, without her being informed of
the cause.
Plaintiff filed a Complaint for damages against
SAUDIA, and Al-Balawi, its country manager.
Q: What law should govern?
A: The Philippine law. Choice-of-law problems
seek to answer two important questions: (1) What
legal system should control a given situation
where some of the significant facts occurred in two
or more states; and (2) to what extent should the
chosen legal system regulate the situation.
Before a choice can be made, it is necessary for
us to determine under what category a certain set
of facts or rules fall. This process is known as
"characterization", or the "doctrine of qualification".
It is the "process of deciding whether or not the
facts relate to the kind of question specified in a
conflicts rule." The purpose of "characterization" is
to enable the forum to select the proper law.
With the widespread criticism of the traditional rule
of lex loci delicti commisi, modem theories and
rules on tort liability have been advanced to offer
fresh judicial approaches to arrive at just results.
In keeping abreast with the modern theories on
tort liability, we find here an occasion to apply the
"State of the most significant relationship" rule,
which in our view should be appropriate to apply
now, given the factual context of this case.
In applying said principle to determine the State
which has the most significant relationship, the
following contacts are to be taken into account and
evaluated according to their relative importance
with respect to the particular issue: (a) the place
where the injury occurred; (b) the place where the
conduct causing the injury occurred; (c) the
domicile, residence, nationality, place of
incorporation and place of business of the parties,
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and (d) the place where the relationship, if any,
between the parties is centered. (Saudi Arabian
Airlines v. CA, G.R. No. 122191, 08 October
1998)
Nationality & Domicile
Petitioner Mercado and private respondent
Manzano were candidates for vice mayor of the
City of Makati in the 1998 elections. The
proclamation of Manzano was suspended in view
of a pending petition for disqualification filed by a
certain Mamaril who alleged that private
respondent was not a citizen of the Philippines but
of the United States.
In its resolution, the COMELEC granted the
petition of Mamaril and ordered the cancellation of
the certificate of candidacy of private respondent
on the ground that he is a dual citizen and, under
§40(d) of the Local Government Code, persons
with dual citizenship are disqualified from running
for any elective position. The COMELEC’s
Second Division said:
What is presented before the Commission is a
petition for disqualification of Manzano as
candidate for the office of Vice-Mayor of Makati
City in the 1998 elections. The petition is based
on the ground that the respondent is an American
citizen based on the record of the Bureau of
Immigration and misrepresented himself as a
natural-born Filipino citizen.
In his answer, Manzano admitted that he is
registered as a foreigner with the Bureau of
Immigration under Alien Certificate of Registration
No. B-31632 and alleged that he is a Filipino
citizen because he was born in 1955 of a Filipino
father and a Filipino mother. He was born in the
United States, and is considered an American
citizen under US Laws. But notwithstanding his
registration as an American citizen, he did not lose
his Filipino citizenship. Judging from the foregoing
facts, it would appear that respondent Manzano is
both a Filipino and a US citizen. In other words,
he holds dual citizenship.
Q: Is Manzano eligible for the office he seeks to
be elected?
A: To begin with, dual citizenship is different from
dual allegiance. The former arises when, as a
result of the concurrent application of the different
laws of two or more states, a person is
simultaneously considered a national by the said
states. Considering the citizenship clause (Art. IV)
of our Constitution, it is possible for the following
classes of citizens of the Philippines to possess
dual citizenship:
(1) Those born of Filipino fathers and/or mothers
in foreign countries which follow the principle of jus
soli;
(2) Those born in the Philippines of Filipino
mothers and alien fathers if by the laws of their
fathers’ country such children are citizens of that
country;
(3) Those who marry aliens if by the laws of the
latter’s country the former are considered citizens,
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2007 Team Bar-Ops Civil Law Committee
unless by their act or omission they are deemed to
have renounced Philippine citizenship.
Dual allegiance, on the other hand, refers to the
situation in which a person simultaneously owes,
by some positive act, loyalty to two or more states.
While dual citizenship is involuntary, dual
allegiance is the result of an individual’s volition.
In including §5 in Article IV on citizenship, the
concern of the Constitutional Commission was not
with dual citizens per se but with naturalized
citizens who maintain their allegiance to their
countries of origin even after their naturalization.
Hence, the phrase “dual citizenship” in R.A. No.
7160, §40(d) and in R.A. No. 7854, §20 must be
understood as referring to “dual allegiance.”
Consequently, persons with mere dual citizenship
do not fall under this disqualification. Unlike those
with dual allegiance, who must, therefore, be
subject to strict process with respect to the
termination of their status, for candidates with dual
citizenship, it should suffice if, upon the filing of
their certificates of candidacy, they elect Philippine
citizenship to terminate their status as persons
with dual citizenship considering that their
condition is the unavoidable consequence of
conflicting laws of different states. As Joaquin G.
Bernas, one of the most perceptive members of
the Constitutional Commission, pointed out:
“[D]ual citizenship is just a reality imposed on us
because we have no control of the laws on
citizenship of other countries. We recognize a
child of a Filipino mother. But whether or not she
is considered a citizen of another country is
something completely beyond our control.”
By electing Philippine citizenship, such candidates
at the same time forswear allegiance to the other
country of which they are also citizens and thereby
terminate their status as dual citizens. It may be
that, from the point of view of the foreign state and
of its laws, such an individual has not effectively
renounced his foreign citizenship.
By declaring in his certificate of candidacy that he
is a Filipino citizen; that he is not a permanent
resident or immigrant of another country; that he
will defend and support the Constitution of the
Philippines and bear true faith and allegiance
thereto and that he does so without mental
reservation, private respondent has, as far as the
laws of this country are concerned, effectively
repudiated his American citizenship and anything
which he may have said before as a dual citizen.
On the other hand, private respondent’s oath of
allegiance to the Philippines, when considered
with the fact that he has spent his youth and
adulthood, received his education, practiced his
profession as an artist, and taken part in past
elections in this country, leaves no doubt of his
election of Philippine citizenship. (Mercado v.
Manzano, G.R. No. 135083, 26 May 1999)
Rosalind Ybasco Lopez was born on May 16,
1934 in Napier Terrace, Broome, Western
Australia, to the spouses, Telesforo Ybasco, a
Filipino citizen and native of Daet, Camarines
Norte, and Theresa Marquez, an Australian. In
1949, at the age of fifteen, she left Australia and
came to settle in the Philippines.
University of Santo Tomas
She was married to Lopez, a Filipino citizen, at the
Malate Catholic Church in Manila. Since then, she
has continuously participated in the electoral
process not only as a voter but as a candidate, as
well. She served as Provincial Board Member of
the Sangguniang Panlalawigan of Davao Oriental.
In 1992, she ran for and was elected governor of
Davao Oriental. Her election was contested by
her opponent, Taojo, Jr., in a petition for quo
warranto, alleging as ground therefor her alleged
Australian citizenship. However, finding no
sufficient proof that respondent had renounced her
Philippine citizenship, the Commission on
Elections en banc dismissed the petition
In the 1995 local elections, respondent Rosalind
Ybasco Lopez ran for re-election as governor of
Davao Oriental. Her opponent, Rabat, filed a
petition for disqualification, before the COMELEC,
contesting her Filipino citizenship but the said
petition was likewise dismissed by the COMELEC,
reiterating substantially its decision in EPC 92-54.
The citizenship of private respondent was once
again raised as an issue when she ran for re-
election as governor of Davao Oriental in the 1998
elections. Her candidacy was questioned by the
herein petitioner Valles.
Q: Did Lopez lose her Filipino citizenship?
A: In order that citizenship may be lost by
renunciation, such renunciation must be express.
Petitioner’s contention that the application of
private respondent for an alien certificate of
registration, and her Australian passport, is bereft
of merit.
Thus, the mere fact that private respondent
Rosalind Ybasco Lopez was a holder of an
Australian passport and had an alien certificate of
registration are not acts constituting an effective
renunciation of citizenship and do not militate
against her claim of Filipino citizenship.
The application of the herein private respondent
for an alien certificate of registration, and her
holding of an Australian passport were mere acts
of assertion of her Australian citizenship before
she effectively renounced the same. Thus, at the
most, private respondent had dual citizenship -
she was an Australian and a Filipino, as well.
Moreover, under Commonwealth Act 63, the fact
that a child of Filipino parent/s was born in another
country has not been included as a ground for
losing one’s Philippine citizenship. Since private
respondent did not lose or renounce her Philippine
citizenship, petitioner’s claim that respondent must
go through the process of repatriation does not
hold water.
"Dual citizenship" as used in the Local
Government Code must be reconciled with Article
IV, Section 5 of the 1987 Constitution on dual
allegiance. (Valles v. Commission on Elections,
G.R. No. 137000, 09 August 2002)
The citizenship of respondent Cruz is at issue in
this case, in view of the constitutional requirement
that "no person shall be a Member of the House of
Representatives unless he is a natural-born
citizen."
Respondent Cruz was a natural-born citizen of the
Philippines. He was born in Tarlac, on 1960, of

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Filipino parents. The fundamental law then
applicable was the 1935 Constitution.
However, respondent Cruz enlisted in the United
States Marine Corps and, without the consent of
the Republic of the Philippines, took an oath of
allegiance to the United States. As a
consequence, he lost his Filipino citizenship for
under Commonwealth Act No. 63, Section 1(4), a
Filipino citizen may lose his citizenship by, among
others, "rendering service to or accepting
commission in the armed forces of a foreign
country." Then he was naturalized as a U.S.
citizen in connection with his service in the U.S.
Marine Corps.
In 1994, respondent Cruz reacquired his Philippine
citizenship through repatriation under Republic Act
No. 2630. He ran for and was elected as the
Representative of the Second District of
Pangasinan in the 1998 elections where he won
by a convincing margin of votes over petitioner
Bengson III, who was then running for reelection.
Subsequently, petitioner filed a case for Quo
Warranto Ad Cautelam with respondent HRET
claiming that respondent Cruz was not qualified to
become a member of the House of
Representatives since he is not a natural-born
citizen as required under Article VI, Section 6 of
the Constitution.
Q: Is the contention of Bengson III correct?
A: The 1987 Constitution enumerates who are
Filipino citizens as follows:
(1) Those who are citizens of the Philippines at the
time of the adoption of this Constitution;
(2) Those whose fathers or mothers are citizens of
the Philippines;
(3) Those born before January 17, 1973 of Filipino
mothers, who elect Philippine citizenship upon
reaching the age of majority, and
(4) Those who are naturalized in accordance with
law.
There are two ways of acquiring citizenship: (1) by
birth, and (2) by naturalization. These ways of
acquiring citizenship correspond to the two kinds
of citizens: the natural-born citizen, and the
naturalized citizen. A person who at the time of
his birth is a citizen of a particular country, is a
natural-born citizen thereof.
As defined in the same Constitution, natural-born
citizens "are those citizens of the Philippines from
birth without having to perform any act to acquire
or perfect his Philippine citizenship."
On the other hand, naturalized citizens are those
who have become Filipino citizens through
naturalization, generally under Commonwealth Act
No. 473, otherwise known as the Revised
Naturalization Law, which repealed the former
Naturalization Law, and by Republic Act No. 530.
To be naturalized, an applicant has to prove that
he possesses all the qualifications and none of the
disqualifications provided by law to become a
Filipino citizen. The decision granting Philippine
citizenship becomes executory only after two (2)
years from its promulgation when the court is
satisfied that during the intervening period, the
applicant has (1) not left the Philippines; (2) has
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dedicated himself to a lawful calling or profession;
(3) has not been convicted of any offense or
violation of Government promulgated rules; or (4)
committed any act prejudicial to the interest of the
nation or contrary to any Government announced
policies.
Filipino citizens who have lost their citizenship
may however reacquire the same in the manner
provided by law. C.A. No. 63, enumerates the
three modes by which Philippine citizenship may
be reacquired by a former citizen: (1) by
naturalization, (2) by repatriation, and (3) by direct
act of Congress.
Naturalization is a mode for both acquisition and
reacquisition of Philippine citizenship. As a mode
of initially acquiring Philippine citizenship,
naturalization is governed by CA No. 473, as
amended. On the other hand, naturalization as a
mode for reacquiring Philippine citizenship is
governed by CA No. 63. Under this law, a former
Filipino citizen who wishes to reacquire Philippine
citizenship must possess certain qualifications and
none of the disqualifications mentioned in Section
4 of C.A. 473.
Repatriation, on the other hand, may be had under
various statutes by those who lost their citizenship
due to: (1) desertion of the armed forces; (2)
service in the armed forces of the allied forces in
World War II; (3) service in the Armed Forces of
the United States at any other time; (4) marriage
of a Filipino woman to an alien; and (5) political
and economic necessity.
As distinguished from the lengthy process of
naturalization, repatriation simply consists of the
taking of an oath of allegiance to the Republic of
the Philippines and registering said oath in the
Local Civil Registry of the place where the person
concerned resides or last resided.
Moreover, repatriation results in the recovery of
the original nationality. This means that a
naturalized Filipino who lost his citizenship will be
restored to his prior status as a naturalized Filipino
citizen. On the other hand, if he was originally a
natural-born citizen before he lost his Philippine
citizenship, he will be restored to his former status
as a natural-born Filipino.
Having thus taken the required oath of allegiance
to the Republic and having registered the same in
the Civil Registry of Magantarem, Pangasinan in
accordance with the aforecited provision,
respondent Cruz is deemed to have recovered his
original status as a natural-born citizen, a status
which he acquired at birth as the son of a Filipino
father. It bears stressing that the act of repatriation
allows him to recover, or return to, his original
status before he lost his Philippine citizenship.
As to persons, they would either be natural-born or
naturalized depending on the reasons for the loss
of their citizenship and the mode prescribed by the
applicable law for the reacquisition thereof. As
respondent Cruz was not required by law to go
through naturalization proceedings in order to
reacquire his citizenship, he is perforce a natural-
born Filipino. As such, he possessed all the
necessary qualifications to be elected as member
of the House of Representatives. (Bengson III v.
HRET, G.R. No. 142840, 07 May 2001)
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2007 Team Bar-Ops Civil Law Committee
Petitioner Nguyen was born in Vietnam to co-
petitioner Boulais and a Vietnamese citizen.
Boulais and Nguyen's mother were not married.
Boulais always has been a citizen of the United
States, and he was in Vietnam under the employ
of a corporation. After he and Nguyen's mother
ended their relationship, Nguyen lived for a time
with the family of Boulais' new Vietnamese
girlfriend. In 1975, Nguyen, then almost six years
of age, came to the United States. He became a
lawful permanent resident and was raised in
Texas by Boulais.
In 1992, when Nguyen was 22, he pleaded guilty
in a Texas state court to two counts of sexual
assault on a child. He was sentenced to eight
years in prison on each count. Three years later,
the United States Immigration and Naturalization
Service (INS) initiated deportation proceedings
against Nguyen as an alien who had been
convicted of two crimes involving moral turpitude,
as well as an aggravated felony. The Immigration
Judge found him deportable.
Nguyen appealed to the Board of Immigration of
Appeals and, in 1998, while the matter was
pending; his father obtained an order of parentage
from a state court, based on DNA testing. By this
time, Nguyen was 28 years old. The Board
dismissed Nguyen's appeal, rejecting his claim to
United States citizenship because he had failed to
establish compliance with 8 U. S. C. §1409(a),
which sets forth the requirements for one who was
born out of wedlock and abroad to a citizen father
and a noncitizen mother.
Nguyen and Boulais appealed to the Court of
Appeals for the Fifth Circuit, arguing that §1409
violates equal protection by providing different
rules for attainment of citizenship by children born
abroad and out of wedlock depending upon
whether the one parent with American citizenship
is the mother or the father.
Q: Is the contention of Nguyen and Boulais
correct??
A: For a gender-based classification to withstand
equal protection scrutiny, it must be established "
`at least that the challenged classification serves
"important governmental objectives and that the
discriminatory means employed" are "substantially
related to the achievement of those objectives.
The imposition of the requirement for a paternal
relationship, but not a maternal one (in cases of
citizenship of a child born overseas where the
couple is not married and where one is an
American and the other is a foreigner), is justified
by two important governmental objectives.
The first governmental interest to be served is the
importance of assuring that a biological parent-
child relationship exists. In the case of the mother,
the relation is verifiable from the birth itself. The
mother's status is documented in most instances
by the birth certificate or hospital records and the
witnesses who attest to her having given birth. In
the case of the father, the uncontestable fact is
that he need not be present at the birth. If he is
present, furthermore, that circumstance is not
incontrovertible proof of fatherhood.
The second important governmental interest is the
determination to ensure that the child and the
University of Santo Tomas
citizen parent have some demonstrated
opportunity or potential to develop not just a
relationship that is recognized, as a formal matter,
by the law, but one that consists of the real,
everyday ties that provide a connection between
child and citizen parent and, in turn, the United
States. In the case of a citizen mother and a child
born overseas, the opportunity for a meaningful
relationship between citizen parent and child
inheres in the very event of birth, an event so often
critical to our constitutional and statutory
understandings of citizenship. The mother knows
that the child is in being and is hers and has an
initial point of contact with him. There is at least an
opportunity for mother and child to develop a real,
meaningful relationship.
The same opportunity does not result from the
event of birth, as a matter of biological inevitability,
in the case of the unwed father. Given the 9-month
interval between conception and birth, it is not
always certain that a father will know that a child
was conceived, nor is it always clear that even the
mother will be sure of the father's identity. (Tuan
Anh Nguyen v. Immigration and Naturalization
Service, June 11, 2001)
Q: The petitioner raises three principal questions:
1. Does Section 5(d) of Rep. Act No. 9189
allowing the registration of voters who are
immigrants or permanent residents in other
countries by their mere act of executing an
affidavit expressing their intention to return to the
Philippines, violate the residency requirement in
Section 1 of Article V of the Constitution?
2. Does Section 18.5 of the same law
empowering the COMELEC to proclaim the
winning candidates for national offices and party
list representatives including the President and the
Vice-President violate the constitutional mandate
under Section 4, Article VII of the Constitution that
the winning candidates for President and the Vice-
President shall be proclaimed as winners by
Congress?
3. May Congress, through the Joint Congressional
Oversight Committee created in Section 25 of
Rep. Act No. 9189, exercise the power to review,
revise, amend, and approve the Implementing
Rules and Regulations that the Commission on
Elections shall promulgate without violating the
independence of the COMELEC under Section 1,
Article IX-A of the Constitution?
A:
A. Does Section 5(d) of Rep. Act No. 9189
violate Section 1, Article V of the 1987
Constitution of the Republic of the Philippines?
Section 5(d) provides:
Sec. 5. Disqualifications. - The following shall be
disqualified from voting under this Act:
d) An immigrant or a permanent resident who is
recognized as such in the host country, unless
he/she executes, upon registration, an affidavit
prepared for the purpose by the Commission
declaring that he/she shall resume actual physical
permanent residence in the Philippines not later
than three (3) years from approval of his/her
registration under this Act. Such affidavit shall also
state that he/she has not applied for citizenship in

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another country. Failure to return shall be cause
for the removal of the name of the immigrant or
permanent resident from the National Registry of
Absentee Voters and his/her permanent
disqualification to vote in absentia.
Petitioner posits that Section 5(d) is
unconstitutional because it violates Section 1,
Article V of the 1987 Constitution which requires
that the voter must be a resident in the Philippines
for at least one year and in the place where he
proposes to vote for at least six months
immediately preceding an election. Petitioner cites
the ruling of the Court in Caasi v. Court of Appeals
to support his claim. In that case, the Court held
that a "green card" holder immigrant to the United
States is deemed to have abandoned his domicile
and residence in the Philippines.
Petitioner further argues that Section 1, Article V
of the Constitution does not allow provisional
registration or a promise by a voter to perform a
condition to be qualified to vote in a political
exercise; that the legislature should not be
allowed to circumvent the requirement of the
Constitution on the right of suffrage by providing a
condition thereon which in effect amends or alters
the aforesaid residence requirement to qualify a
Filipino abroad to vote.[14] He claims that the
right of suffrage should not be granted to anyone
who, on the date of the election, does not possess
the qualifications provided for by Section 1, Article
V of the Constitution.
Section 1, Article V of the Constitution specifically
provides that suffrage may be exercised by (1) all
citizens of the Philippines, (2) not otherwise
disqualified by law, (3) at least eighteen years of
age, (4) who are residents in the Philippines for at
least one year and in the place where they
propose to vote for at least six months
immediately preceding the election. Under
Section 5(d) of R.A. No. 9189, one of those
disqualified from voting is an immigrant or
permanent resident who is recognized as such in
the host country unless he/she executes an
affidavit declaring that he/she shall resume actual
physical permanent residence in the Philippines
not later than three years from approval of his/her
registration under said Act.
Petitioner questions the rightness of the mere act
of execution of an affidavit to qualify the Filipinos
abroad who are immigrants or permanent
residents, to vote. He focuses solely on Section 1,
Article V of the Constitution in ascribing
constitutional infirmity to Section 5(d) of R.A. No.
9189, totally ignoring the provisions of Section 2
empowering Congress to provide a system for
absentee voting by qualified Filipinos abroad.
A simple, cursory reading of Section 5(d) of R.A.
No. 9189 may indeed give the impression that it
contravenes Section 1, Article V of the
Constitution. Filipino immigrants and permanent
residents overseas are perceived as having left
and abandoned the Philippines to live permanently
in their host countries and therefore, a provision in
the law enfranchising those who do not possess
the residency requirement of the Constitution by
the mere act of executing an affidavit expressing
their intent to return to the Philippines within a
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119
ADVISER:
given period, risks a declaration of
unconstitutionality. However, the risk is more
apparent than real.
The Constitution is the fundamental and
paramount law of the nation to which all other laws
must conform and in accordance with which all
private rights must be determined and all public
authority administered. Laws that do not conform
to the Constitution shall be stricken down for being
unconstitutional.
Generally, however, all laws are presumed to be
constitutional. In Peralta v. COMELEC, the Court
said:
An act of the legislature, approved by the
executive, is presumed to be within constitutional
limitations. The responsibility of upholding the
Constitution rests not on the courts alone but on
the legislature as well. The question of the validity
of every statute is first determined by the
legislative department of the government itself.[24]
Thus, presumption of constitutionality of a law
must be overcome convincingly:
To declare a law unconstitutional, the repugnancy
of that law to the Constitution must be clear and
unequivocal, for even if a law is aimed at the
attainment of some public good, no infringement of
constitutional rights is allowed. To strike down a
law there must be a clear showing that what the
fundamental law condemns or prohibits, the
statute allows it to be done.
As the essence of R.A. No. 9189 is to enfranchise
overseas qualified Filipinos, it behooves the Court
to take a holistic view of the pertinent provisions of
both the Constitution and R.A. No. 9189. It is a
basic rule in constitutional construction that the
Constitution should be construed as a whole.
R.A. No. 9189 was enacted in obeisance to the
mandate of the first paragraph of Section 2, Article
V of the Constitution that Congress shall provide a
system for voting by qualified Filipinos abroad. It
must be stressed that Section 2 does not provide
for the parameters of the exercise of legislative
authority in enacting said law. Hence, in the
absence of restrictions, Congress is presumed to
have duly exercised its function as defined in
Article VI (The Legislative Department) of the
Constitution.
To put matters in their right perspective, it is
necessary to dwell first on the significance of
absentee voting. The concept of absentee voting
is relatively new. It is viewed thus:
The method of absentee voting has been said to
be completely separable and distinct from the
regular system of voting, and to be a new and
different manner of voting from that previously
known, and an exception to the customary and
usual manner of voting. The right of absentee and
disabled voters to cast their ballots at an election
is purely statutory; absentee voting was unknown
to, and not recognized at, the common law.
Absentee voting is an outgrowth of modern social
and economic conditions devised to accommodate
those engaged in military or civil life whose duties
make it impracticable for them to attend their
polling places on the day of election, and the
privilege of absentee voting may flow from
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2007 Team Bar-Ops Civil Law Committee
constitutional provisions or be conferred by
statutes, existing in some jurisdictions, which
provide in varying terms for the casting and
reception of ballots by soldiers and sailors or other
qualified voters absent on election day from the
district or precinct of their residence.
Such statutes are regarded as conferring a
privilege and not a right, or an absolute right.
When the legislature chooses to grant the right by
statute, it must operate with equality among all the
class to which it is granted; but statutes of this
nature may be limited in their application to
particular types of elections. The statutes should
be construed in the light of any constitutional
provisions affecting registration and elections, and
with due regard to their texts prior to amendment
and to predecessor statutes and the decisions
thereunder; they should also be construed in the
light of the circumstances under which they were
enacted; and so as to carry out the objects
thereof, if this can be done without doing violence
to their provisions and mandates. Further, in
passing on statutes regulating absentee voting,
the court should look to the whole and every part
of the election laws, the intent of the entire plan,
and reasons and spirit of their adoption, and try to
give effect to every portion thereof.
Ordinarily, an absentee is not a resident and vice
versa; a person cannot be at the same time, both
a resident and an absentee. However, under our
election laws and the countless pronouncements
of the Court pertaining to elections, an absentee
remains attached to his residence in the
Philippines as residence is considered
synonymous with domicile.
In Romualdez-Marcos] the Court enunciated:
Article 50 of the Civil Code decrees that "[f]or the
exercise of civil rights and the fulfillment of civil
obligations, the domicile of natural persons is their
place of habitual residence." In Ong v. Republic,
this court took the concept of domicile to mean an
individual’s "permanent home," "a place to which,
whenever absent for business or for pleasure, one
intends to return, and depends on facts and
circumstances in the sense that they disclose
intent." Based on the foregoing, domicile includes
the twin elements of "the fact of residing or
physical presence in a fixed place" and animus
manendi, or the intention of returning there
permanently.
Residence, in its ordinary conception, implies the
factual relationship of an individual to a certain
place. It is the physical presence of a person in a
given area, community or country. The essential
distinction between residence and domicile in law
is that residence involves the intent to leave when
the purpose for which the resident has taken up
his abode ends. One may seek a place for
purposes such as pleasure, business, or health. If
a person’s intent be to remain, it becomes his
domicile; if his intent is to leave as soon as his
purpose is established it is residence. It is thus,
quite perfectly normal for an individual to have
different residences in various places. However, a
person can only have a single domicile, unless, for
various reasons, he successfully abandons his
domicile in favor of another domicile of choice. In
Uytengsu v. Republic, we laid this distinction quite
clearly:
University of Santo Tomas
"There is a difference between domicile and
residence. ‘Residence’ is used to indicate a place
of abode, whether permanent or temporary;
‘domicile’ denotes a fixed permanent residence to
which, when absent, one has the intention of
returning. A man may have a residence in one
place and a domicile in another. Residence is not
domicile, but domicile is residence coupled with
the intention to remain for an unlimited time. A
man can have but one domicile for the same
purpose at any time, but he may have numerous
places of residence. His place of residence is
generally his place of domicile, but it is not by any
means necessarily so since no length of residence
without intention of remaining will constitute
domicile."
For political purposes the concepts of residence
and domicile are dictated by the peculiar criteria of
political laws. As these concepts have evolved in
our election law, what has clearly and
unequivocally emerged is the fact that residence
for election purposes is used synonymously with
domicile.
B. Is Section 18.5 of R.A. No. 9189 in relation to
Section 4 of the same Act in contravention of
Section 4, Article VII of the Constitution?
Section 4 of R.A. No. 9189 provides that the
overseas absentee voter may vote for president,
vice-president, senators and party-list
representatives.
Section 18.5 of the same Act provides:
SEC. 18. On-Site Counting and Canvassing. -
18. 5 The canvass of votes shall not cause the
delay of the proclamation of a winning candidate if
the outcome of the election will not be affected by
the results thereof. Notwithstanding the foregoing,
the Commission is empowered to order the
proclamation of winning candidates despite the
fact that the scheduled election has not taken
place in a particular country or countries, if the
holding of elections therein has been rendered
impossible by events, factors and circumstances
peculiar to such country or countries, in which
events, factors and circumstances are beyond the
control or influence of the Commission.
Petitioner claims that the provision of Section 18.5
of R.A. No. 9189 empowering the COMELEC to
order the proclamation of winning candidates
insofar as it affects the canvass of votes and
proclamation of winning candidates for president
and vice-president, is unconstitutional because it
violates the following provisions of paragraph 4,
Section 4 of Article VII of the Constitution:
SEC. 4 . . .
The returns of every election for President and
Vice-President, duly certified by the board of
canvassers of each province or city, shall be
transmitted to the Congress, directed to the
President of the Senate. Upon receipt of the
certificates of canvass, the President of the
Senate shall, not later than thirty days after the
day of the election, open all the certificates in the
presence of the Senate and the House of
Representatives in joint public session, and the
Congress, upon determination of the authenticity

CIVIL LAW NOTES
and due execution thereof in the manner provided
by law, canvass the votes.
The person having the highest number of votes
shall be proclaimed elected, but in case two or
more shall have an equal and highest number of
votes, one of them shall forthwith be chosen by
the vote of a majority of all the Members of both
Houses of the Congress, voting separately.
Indeed, the phrase, proclamation of winning
candidates, in Section 18.5 of R.A. No. 9189 is far
too sweeping that it necessarily includes the
proclamation of the winning candidates for the
presidency and the vice-presidency.
Section 18.5 of R.A. No. 9189 appears to be
repugnant to Section 4, Article VII of the
Constitution only insofar as said Section totally
disregarded the authority given to Congress by the
Constitution to proclaim the winning candidates for
the positions of president and vice-president.
In addition, the Court notes that Section 18.4 of
the law, to wit:
18.4. . . . Immediately upon the completion of the
canvass, the chairman of the Special Board of
Canvassers shall transmit via facsimile, electronic
mail, or any other means of transmission equally
safe and reliable the Certificates of Canvass and
the Statements of Votes to the Commission
clashes with paragraph 4, Section 4, Article VII of
the Constitution which provides that the returns of
every election for President and Vice-President
shall be certified by the board of canvassers to
Congress.
Congress could not have allowed the COMELEC
to usurp a power that constitutionally belongs to it
or, as aptly stated by petitioner, to encroach "on
the power of Congress to canvass the votes for
president and vice-president and the power to
proclaim the winners for the said positions." The
provisions of the Constitution as the fundamental
law of the land should be read as part of The
Overseas Absentee Voting Act of 2003 and hence,
the canvassing of the votes and the proclamation
of the winning candidates for president and vice-
president for the entire nation must remain in the
hands of Congress.
C. Are Sections 19 and 25 of R.A. No. 9189 in
violation of Section 1, Article IX-A of the
Constitution?
Petitioner avers that Sections 19 and 25 of R.A.
No. 9189 violate Article IX-A (Common Provisions)
of the Constitution, to wit:
Section 1. The Constitutional Commissions, which
shall be independent, are the Civil Service
Commission, the Commission on Elections, and
the Commission on Audit.
He submits that the creation of the Joint
Congressional Oversight Committee with the
power to review, revise, amend and approve the
Implementing Rules and Regulations promulgated
by the COMELEC, R.A. No. 9189 intrudes into the
independence of the COMELEC which, as a
constitutional body, is not under the control of
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121
ADVISER:
either the executive or legislative departments of
government; that only the COMELEC itself can
promulgate rules and regulations which may be
changed or revised only by the majority of its
members; and that should the rules promulgated
by the COMELEC violate any law, it is the Court
that has the power to review the same via the
petition of any interested party, including the
legislators.
It is only on this question that respondent
COMELEC submitted its Comment. It agrees with
the petitioner that Sections 19 and 25 of R.A. No.
9189 are unconstitutional. Like the petitioner,
respondent COMELEC anchors its claim of
unconstitutionality of said Sections upon Section
1, Article IX-A of the Constitution providing for the
independence of the constitutional commissions
such as the COMELEC. It asserts that its power
to formulate rules and regulations has been
upheld in Gallardo v. Tabamo, Jr.[42] where this
Court held that the power of the COMELEC to
formulate rules and regulations is implicit in its
power to implement regulations under Section 2(1)
of Article IX-C[43] of the Constitution. COMELEC
joins the petitioner in asserting that as an
independent constitutional body, it may not be
subject to interference by any government
instrumentality and that only this Court may review
COMELEC rules and only in cases of grave abuse
of discretion.
The COMELEC adds, however, that another
provision, vis-à-vis its rule-making power, to wit:
SEC. 17. Voting by Mail. -
17.1. For the May, 2004 elections, the
Commission shall authorize voting by mail in not
more than three (3) countries, subject to the
approval of the Congressional Oversight
Committee. Voting by mail may be allowed in
countries that satisfy the following conditions:
a) Where the mailing system is fairly well-
developed and secure to prevent occasion for
fraud;
b) Where there exists a technically
established identification system that would
preclude multiple or proxy voting; and
c) Where the system of reception and
custody of mailed ballots in the embassies,
consulates and other foreign service
establishments concerned are adequate and well-
secured.
Thereafter, voting by mail in any country shall be
allowed only upon review and approval of the Joint
Congressional Oversight Committee.
It is likewise unconstitutional as it violates Section
1, Article IX-A mandating the independence of
constitutional commissions.
The Solicitor General takes exception to his
prefatory statement that the constitutional
challenge must fail and agrees with the petitioner
that Sections 19 and 25 are invalid and
unconstitutional on the ground that there is nothing
in Article VI of the Constitution on Legislative
Department that would as much as imply that
Congress has concurrent power to enforce and
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2007 Team Bar-Ops Civil Law Committee
administer election laws with the COMELEC; and
by the principles of exclusio unius est exclusio
alterius and expressum facit cessare tacitum, the
constitutionally enumerated powers of Congress
circumscribe its authority to the exclusion of all
others.
The parties are unanimous in claiming that
Sections 19, 25 and portions of Section 17.1 are
unconstitutional. Thus, there is no actual issue
forged on this question raised by petitioner.
However, the Court finds it expedient to expound
on the role of Congress through the Joint
Congressional Oversight Committee (JCOC) vis-à-
vis the independence of the COMELEC, as a
constitutional body.
R.A. No. 9189 created the JCOC, as follows:
SEC. 25. Joint Congressional Oversight
Committee. - A Joint Congressional Oversight
Committee is hereby created, composed of the
Chairman of the Senate Committee on
Constitutional Amendments, Revision of Codes
and Laws, and seven (7) other Senators
designated by the Senate President, and the
Chairman of the House Committee on Suffrage
and Electoral Reforms, and seven (7) other
Members of the House of Representatives
designated by the Speaker of the House of
Representatives: Provided, That, of the seven (7)
members to be designated by each House of
Congress, four (4) should come from the majority
and the remaining three (3) from the minority.
The Joint Congressional Oversight Committee
shall have the power to monitor and evaluate the
implementation of this Act. It shall review, revise,
amend and approve the Implementing Rules and
Regulations promulgated by the Commission.
SEC. 19. Authority of the Commission to
Promulgate Rules. - The Commission shall issue
the necessary rules and regulations to effectively
implement the provisions of this Act within sixty
(60) days from the effectivity of this Act. The
Implementing Rules and Regulations shall be
submitted to the Joint Congressional Oversight
Committee created by virtue of this Act for prior
approval.
Composed of Senators and Members of the
House of Representatives, the Joint
Congressional Oversight Committee (JCOC) is a
purely legislative body. There is no question that
the authority of Congress to "monitor and evaluate
the implementation" of R.A. No. 9189 is geared
towards possible amendments or revision of the
law itself and thus, may be performed in aid of its
legislation.
However, aside from its monitoring and evaluation
functions, R.A. No. 9189 gives to the JCOC the
following functions: (a) to "review, revise, amend
and approve the Implementing Rules and
Regulations" (IRR) promulgated by the COMELEC
[Sections 25 and 19]; and (b) subject to the
approval of the JCOC [Section 17.1], the voting by
mail in not more than three countries for the May
2004 elections and in any country determined by
COMELEC.
The ambit of legislative power under Article VI of
the Constitution is circumscribed by other
University of Santo Tomas
constitutional provisions. One such provision is
Section 1 of Article IX-A of the 1987 Constitution
ordaining that constitutional commissions such as
the COMELEC shall be "independent."
Interpreting Section 1, Article X of the 1935
Constitution providing that there shall be an
independent COMELEC, the Court has held that
"[w]hatever may be the nature of the functions of
the Commission on Elections, the fact is that the
framers of the Constitution wanted it to be
independent from the other departments of the
Government."[44 In an earlier case, the Court
elucidated:
The Commission on Elections is a constitutional
body. It is intended to play a distinct and important
part in our scheme of government. In the
discharge of its functions, it should not be
hampered with restrictions that would be fully
warranted in the case of a less responsible
organization. The Commission may err, so may
this court also. It should be allowed considerable
latitude in devising means and methods that will
insure the accomplishment of the great objective
for which it was created - free, orderly and honest
elections. We may not agree fully with its choice
of means, but unless these are clearly illegal or
constitute gross abuse of discretion, this court
should not interfere. Politics is a practical matter,
and political questions must be dealt with
realistically - not from the standpoint of pure
theory. The Commission on Elections, because of
its fact-finding facilities, its contacts with political
strategists, and its knowledge derived from actual
experience in dealing with political controversies,
is in a peculiarly advantageous position to decide
complex political questions.
The Court has no general powers of supervision
over COMELEC which is an independent body
"except those specifically granted by the
Constitution," that is, to review its decisions,
orders and rulings.[46] In the same vein, it is not
correct to hold that because of its recognized
extensive legislative power to enact election laws,
Congress may intrude into the independence of
the COMELEC by exercising supervisory powers
over its rule-making authority.
By virtue of Section 19 of R.A. No. 9189,
Congress has empowered the COMELEC to
"issue the necessary rules and regulations to
effectively implement the provisions of this Act
within sixty days from the effectivity of this Act."
This provision of law follows the usual procedure
in drafting rules and regulations to implement a
law - the legislature grants an administrative
agency the authority to craft the rules and
regulations implementing the law it has enacted, in
recognition of the administrative expertise of that
agency in its particular field of operation.[47]
Once a law is enacted and approved, the
legislative function is deemed accomplished and
complete. The legislative function may spring
back to Congress relative to the same law only if
that body deems it proper to review, amend and
revise the law, but certainly not to approve, review,
revise and amend the IRR of the COMELEC.
By vesting itself with the powers to approve,
review, amend, and revise the IRR for The
Overseas Absentee Voting Act of 2003, Congress
went beyond the scope of its constitutional

CIVIL LAW NOTES
authority. Congress trampled upon the
constitutional mandate of independence of the
COMELEC. Under such a situation, the Court is
left with no option but to withdraw from its usual
reticence in declaring a provision of law
unconstitutional.
The second sentence of the first paragraph of
Section 19 stating that "[t]he Implementing Rules
and Regulations shall be submitted to the Joint
Congressional Oversight Committee created by
virtue of this Act for prior approval," and the
second sentence of the second paragraph of
Section 25 stating that "[i]t shall review, revise,
amend and approve the Implementing Rules and
Regulations promulgated by the Commission,"
whereby Congress, in both provisions, arrogates
unto itself a function not specifically vested by the
Constitution, should be stricken out of the subject
statute for constitutional infirmity. Both provisions
brazenly violate the mandate on the independence
of the COMELEC.
Similarly, the phrase, "subject to the approval of
the Congressional Oversight Committee" in the
first sentence of Section 17.1 which empowers the
Commission to authorize voting by mail in not
more than three countries for the May, 2004
elections; and the phrase, "only upon review and
approval of the Joint Congressional Oversight
Committee" found in the second paragraph of the
same section are unconstitutional as they require
review and approval of voting by mail in any
country after the 2004 elections. Congress may
not confer upon itself the authority to approve or
disapprove the countries wherein voting by mail
shall be allowed, as determined by the COMELEC
pursuant to the conditions provided for in Section
17.1 of R.A. No. 9189.[48] Otherwise, Congress
would overstep the bounds of its constitutional
mandate and intrude into the independence of the
COMELEC.
During the deliberations, all the members of the
Court agreed to adopt the separate opinion of
Justice Reynato S. Puno as part of the ponencia
on the unconstitutionality of Sections 17.1, 19 and
25 of R.A. No. 9189 insofar as they relate to the
creation of and the powers given to the Joint
Congressional Oversight Committee.
a) The phrase in the first sentence of the first
paragraph of Section 17.1, to wit: "subject to the
approval of the Joint Congressional Oversight
Committee;"
b) The portion of the last paragraph of Section
17.1, to wit: "only upon review and approval of the
Joint Congressional Oversight Committee;"
c) The second sentence of the first paragraph of
Section 19, to wit: "The Implementing Rules and
Regulations shall be submitted to the Joint
Congressional Oversight Committee created by
virtue of this Act for prior approval;" and
d) The second sentence in the second paragraph
of Section 25, to wit: "It shall review, revise,
amend and approve the Implementing Rules and
Regulations promulgated by the Commission" of
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the same law; for being repugnant to Section 1,
Article IX-A of the Constitution mandating the
independence of constitutional commission, such
as COMELEC.
The constitutionality of Section 18.5 of R.A. No.
9189 is UPHELD with respect only to the authority
given to the COMELEC to proclaim the winning
candidates for the Senators and party-list
representatives but not as to the power to canvass
the votes and proclaim the winning candidates for
President and Vice-President which is lodged with
Congress under Section 4, Article VII of the
Constitution.
The constitutionality of Section 5(d) is UPHELD.
Pursuant to Section 30 of R.A. No. 9189, the rest
of the provisions of said law continues to be in full
force and effect. (Atty. Macalintal v.
Commission on Elections, G.R. No. 157013, 10
July 2003)
Marriage, Divorce and Other Encounters
Van Dorn is a citizen of the Philippines while
private respondent is a citizen of the United
States; that they were married in Hongkong; that,
after the marriage, they established their
residence in the Philippines; that they begot two
children born; that the parties were divorced in
Nevada, United States; and that petitioner has re-
married also in Nevada. this time to Theodore Van
Dorn, private respondent filed suit against
petitioner at the RTC, stating that petitioner's
business in Manila, (the Galleon Shop, for short),
is conjugal property of the parties, and asking that
petitioner be ordered to render an accounting of
that business, and that private respondent be
declared with right to manage the conjugal
property. Petitioner moved to dismiss the case on
the ground that the cause of action is barred by
previous judgment in the divorce proceedings
before the Nevada Court wherein respondent had
acknowledged that he and petitioner had "no
community property".
Q: Is the divorce decree in Nevada recognizable
here in the Philippines?
A: There can be no question as to the validity of
that Nevada divorce in any of the States of the
U.S. The decree is binding on private respondent
as an American citizen. For instance, private
respondent (Alice) cannot sue petitioner (Richard),
as her husband in any State of the Union. What
he is contending in this case is that the divorce is
not valid and binding in this jurisdiction, the same
being contrary to local law and public policy.
It is true that owing to the nationality principle
embodied in Art. 16 of the NCC, only Philippine
nationals are covered by the policy against
absolute divorces the same being considered
contrary to our concept of public policy and
morality. However, aliens may obtain divorces
abroad, which may be recognized in the
Philippines, provided they are valid according to
their national law. In this case, the divorce in
Nevada released Richard from the marriage from
the standards of American law, under which
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2007 Team Bar-Ops Civil Law Committee
divorce dissolves the marriage, the existing status
or domestic relation of husband and wife, and to
free them both from the bond. The marriage tie,
when thus severed as to one party, ceases to bind
either. A husband without a wife, or a wife without
a husband, is unknown to the law. When the law
provides, in the nature of a penalty, that the guilty
party shall not marry again, that party, as well as
the other, is still absolutely freed from the bond of
the former marriage.
Thus, Richard would have no standing to sue Alice
for accounting with prayer for grant of the right to
manage conjugal property in Manila. As he is
bound by the Decision of his own country’s Court,
which validly exercised jurisdiction over him, and
whose decision he does not repudiate, he is
estopped by his own representation before said
Court from asserting his right over the alleged
conjugal property.
To maintain that under our laws, Alice has to be
considered still married to Richard and still subject
to a wife’s obligations under Art. 109 cannot be
just. Alice should not be obliged to live together
with, observe respect and fidelity, and render
support to Richard. The latter should not continue
to be one of her heirs with possible rights to
conjugal property. She should not be
discriminated against in her own country if the
ends of justice are to be served. (Van Dorn v.
Romillo, Jr., GR No. L-68470, 08 October 1985)
Fe Quita and Arturo Padlan, both Filipinos, were
married in the Philippines. They were not however
blessed with children. Somewhere along the way
their relationship soured. Eventually Fe sued
Arturo for divorce in U.S.A. She submitted in the
divorce proceedings a private writing evidencing
their agreement to live separately from each other
and a settlement of their conjugal properties. She
obtained a final judgment of divorce. Three weeks
thereafter she married a certain Tupaz in the same
locality but their relationship also ended in a
divorce. Still in the U.S.A., she married for the third
time, to a certain Wernimont.
In 1972 Arturo died. He left no will. Inciong filed a
petition with the RTC for issuance of letters of
administration concerning the estate of Arturo in
favor of the Philippine Trust Company.
Respondent Dandan claiming to be the surviving
spouse of Arturo, and the surviving children of
Arturo, opposed the petition and prayed for the
appointment instead of Atty. Cabasal, which was
later replaced by Castillon. Blandina and the
Padlan children submitted certified photocopies of
the private writing and the final judgment of
divorce between petitioner and Arturo. Later
Ruperto Padlan, claiming to be the sole surviving
brother of the deceased Arturo, intervened.
Petitioner Fe Quita moved for the immediate
declaration of heirs of the decedent and the
distribution of his estate.
Q: Was there a valid divorce between Fe and
Arturo?
A: We deduce that the finding on their citizenship
pertained solely to the time of their marriage as
the trial court was not supplied with a basis to
determine petitioners citizenship at the time of
University of Santo Tomas
their divorce. The doubt persisted as to whether
she was still a Filipino citizen when their divorce
was decreed. The trial curt must have overlooked
the materiality of this aspect. Once proven hat
she was no longer a Filipino citizen at the time of
their divorce, Van Dorn would become applicable
and petitioner could very well lose her right to
inherit from Arturo.
When asked whether she was an American citizen
petitioner answered that she was since 1954.
Significantly, the decree of divorce of petitioner
and Arturo was obtained in the same year.
Petitioner, however, did not bother to file a reply
memorandum to erase the uncertainty about her
citizenship at the time of their divorce, a factual
issue requiring hearings to be conducted by the
trial court. Consequently, respondent appellate
court did not err in ordering the case returned to
the trial court for further proceedings. (Quita v.
CA, G.R. No. 124862. 22 December 1998)
The proceedings before the RTC commenced with
the filing of a Complaint for declaration of nullity of
marriage by respondent Crasus. According to the
said Complaint, respondent Crasus married Fely
at Cebu City. They had five children. After the
celebration of their marriage, respondent Crasus
discovered that Fely was “hot-tempered, a nagger
and extravagant.” In 1984, Fely left the
Philippines for the U.S.A., leaving all of their
children to the care of Crasus. Barely a year after,
Crasus received a letter from her requesting that
he sign the enclosed divorce papers; he
disregarded the said request. Sometime in 1985,
respondent Crasus learned, that Fely got married
to an American, with whom she eventually had a
child. In 1987, Fely came back to the Philippines
with her American family. Fely returned to the
Philippines several times more. She had been
openly using the surname of her American
husband in the Philippines and in the U.S.A.
Crasus finally alleged in his Complaint that Fely’s
acts clearly demonstrated her psychological
incapacity to perform the essential obligations of
marriage. Such incapacity, being incurable and
continuing, constitutes a ground for declaration of
nullity of marriage under Article 36, in relation to
Articles 68, 70, and 72, of the Family Code of the
Philippines.
Q: Is there a valid divorce in this case?
A: As it is worded, Art. 26, par. 2, refers to a
special situation wherein one of the couple getting
married is a Filipino citizen and the other a
foreigner at the time the marriage was celebrated.
By its plain and literal interpretation, the said
provision cannot be applied to the case of
respondent Crasus and his wife Fely because at
the time Fely obtained her divorce, she was still a
Filipino citizen. Fely obtained her divorce in the
U.S. in 1984, after which she married her
American husband in 1985. Fely admitted that
she had been an American citizen since 1988. At
the time she filed for divorce, Fely was still a
Filipino citizen, and pursuant to the nationality
principle embodied in Art. 15 of the NCC, she was
still bound by Philippine laws on family rights and
duties, status, condition, and legal capacity, even
when she was already living abroad. Philippine

CIVIL LAW NOTES
laws, then and even until now, do not allow and
recognize divorce between Filipino spouses.
Thus, Fely could not have validly obtained a
divorce from respondent Crasus. (Republic v.
Iyoy, GR No. 152577, 21 September 2005)
Recio, a Filipino, was married to Samson, an
Australian citizen, in Malabon. They lived together
as husband and wife in Australia. Then a decree of
divorce, purportedly dissolving the marriage, was
issued by an Australian family court.
Recio became an Australian citizen, as shown by
a “Certificate of Australian Citizenship” issued by
the Australian government. Petitioner Garcia-- a
Filipina -- and Recio were married in Cabanatuan
City. In their application for a marriage license,
respondent was declared as “single” and “Filipino.”
Afterwards, petitioner and respondent lived
separately without prior judicial dissolution of their
marriage. While the two were still in Australia,
their conjugal assets were divided in accordance
with their Statutory Declarations secured in
Australia.
Petitioner Garcia then filed a Complaint for
Declaration of Nullity of Marriage in the Philippine
court, on the ground of bigamy -- respondent
allegedly had a prior subsisting marriage at the
time he married her. She claimed that she learned
of respondent’s marriage to Editha Samson.
Q: Is the respondent legally capacitated to marry
the petitioner?
A: The divorce decree between respondent and
Editha Samson appears to be an authentic one
issued by an Australian family court. However,
appearance is not sufficient; compliance with the
aforementioned rules on evidence (§24 and §25 of
Rule 132) must be demonstrated.
The burden of proof lies with “the party who
alleges the existence of a fact or thing necessary
in the prosecution or defense of an action.” Since
the divorce was a defense raised by respondent,
the burden of proving the pertinent Australian law
validating it falls squarely upon him. Courts
cannot take judicial notice of foreign laws. The
power of judicial notice must be exercised with
caution, and every reasonable doubt upon the
subject should be resolved in the negative.
The certificate of legal capacity mentioned in Art.
21 of the FC, would have been sufficient to
establish the legal capacity of respondent, had he
duly presented it in court. A duly authenticated
and admitted certificate is prima facie evidence of
legal capacity to marry on the part of the alien
applicant for a marriage license.
Based on the above records, we cannot conclude
that respondent, who was then a naturalized
Australian citizen, was legally capacitated to marry
petitioner on January 12, 1994. Neither can we
grant petitioner’s prayer to declare her marriage to
respondent null and void on the ground of bigamy.
After all, it may turn out that under Australian law,
he was really capacitated to marry petitioner as a
direct result of the divorce decree. (Garcia v.
Recio, G.R. No. 138322, 02 October 2001)
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125
ADVISER:
Orbecido III married Lady Myros in Ozamis City.
They had two children. In 1986, Cipriano’s wife left
for the United States bringing along their son. A
few years later, Cipriano discovered that his wife
had been naturalized as an American citizen.
Cipriano then learned from his son that his wife
had obtained a divorce decree and then married a
certain Stanley. Cipriano thereafter filed with the
trial court a petition for authority to remarry
invoking Paragraph 2 of Article 26 of the Family
Code. No opposition was filed. Finding merit in
the petition, the court granted the same. The
Republic, herein petitioner, through the Office of
the Solicitor General (OSG), sought
reconsideration but it was denied.
Q: Can a Filipino spouse naturalized as foreign
citizen obtain a valid divorce abroad?
A: The legislative intent behind Art. 26, par. 2 of
the FC is to avoid the absurd situation where the
Filipino spouse remains married to an alien
spouse who, after obtaining a divorce, is no longer
married to the Filipino spouse. Thus, taking into
consideration said legislative intent, we hold that
Art. 26, par. 2 of the FC should be interpreted to
include cases involving parties who, at the time of
the celebration of the marriage were Filipino
citizens, but later on, one of them becomes
naturalized as a foreign citizen and obtains a
divorce decree.
The Filipino spouse should likewise be allowed to
remarry as if the other party were a foreigner at
the time of the solemnization of the marriage. To
rule otherwise would be to sanction absurdity and
injustice. A statute may be extended to cases not
within the literal meaning of its terms so long as
they come within its spirit or intent. (Republic v.
Orbecido III, GR No. 154380, 05 October 2005)
Contracts
Disgruntled over TransWorld Airlines, Inc.'s refusal
to accommodate them in TWA Flight 007
departing from New York to Los Angeles despite
possession of confirmed tickets, petitioners filed
an action for damages before the RTC.
Advocating petitioners' position, the trial court
categorically ruled that respondent TransWorld
Airlines (TWA) breached its contract of carriage
with petitioners and that said breach was
"characterized by bad faith." On appeal, however,
the appellate court found that while there was a
breach of contract on respondent TWA's part,
there was neither fraud nor bad faith because
under the Code of Federal Regulations by the Civil
Aeronautics Board of the USA it is allowed to
overbook flights.
Q: Is TWA guilt of bad faith?
A: The fraud or bad faith on the part of respondent
airline when it did not allow petitioners to board
their flight for Los Angeles in spite of confirmed
tickets cannot be disputed. The U.S. law or
regulation allegedly authorizing overbooking has
never been proved. Foreign laws do not prove
themselves nor can the courts take judicial notice
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2007 Team Bar-Ops Civil Law Committee
of them. Like any other fact, they must be alleged
and proved. Respondent TWA relied solely on the
statement of Ms. Gwendolyn Lather its customer
service agent, in her deposition that the Code of
Federal Regulations of the Civil Aeronautics Board
allows overbooking and nothing else.
Existing jurisprudence explicitly states that
overbooking amounts to bad faith, entitling the
passengers concerned to an award of moral
damages.
Even on the assumption that overbooking is
allowed, TWA is still guilty of bad faith in not
informing its passenger a beforehand that it could
breach the contract of carriage even if they have
confirmed tickets if there was overbooking. TWA
should have incorporated stipulations in
overbooking on the tickets issued or to properly
inform its passengers about these policies so that
the latter would be prepared for such eventuality
or would have the choice to ride with another
airline. Also, TWA's was also guilty of not
informing its passengers of its alleged policy of
giving less priority to discounted tickets.
Neither did it present any argument of substance
to show that petitioners were duly apprised of the
overbooked condition of the flight or that there is a
hierarchy of boarding priorities in booking
passengers. It is evident that petitioners had the
right to rely upon the assurance of respondent
TWA, thru its agent in Manila, then in New York,
that their tickets represented confirmed seats
without any qualification. The failure of respondent
TWA to so inform them when it could easily have
done so thereby enabling respondent to hold on to
them as passengers up to the last minute amounts
to bad faith. (Sps. Zalamea v. Court of Appeals,
GR No. 104235, 18 November 1993)
Private respondent Rapadas held Passenger
Ticket and Baggage Claim Check for petitioner's
Flight with the route from Guam to Manila. While
standing in line to board the flight at the Guam
airport, Rapadas was ordered by petitioner's
handcarry control agent to check-in his attache
case. Rapadas protested pointing to the fact that
other co-passengers were permitted to handcarry
bulkier baggages. He stepped out of the line only
to go back again at the end of it to try if he can get
through without having to register his attache
case. However, the same man in charge of
handcarry control did not fail to notice him and
ordered him again to register his baggage. For
fear that he would miss the plane if he insisted and
argued on personally taking the valise with him, he
acceded to checking it in. He then checked it in
but without declaring its contents or the value of its
contents.
Upon arriving in Manila, Rapadas claimed and
was given all his checked-in baggages except the
attache case.
Q: Is the Warsaw convention applicable in the
case?
A: The Warsaw Convention, as amended,
specifically provides that it is applicable to
international carriage. Although the trial court
rejected the evidence of the defendant-petitioner
of a stipulation particularly specifying what
amounts it had bound itself to pay for loss of
University of Santo Tomas
luggage, the Notice and paragraph 2 of the
"Conditions of Contract" should be sufficient notice
showing the applicability of the Warsaw limitations.
Nowhere in the Warsaw Convention, as amended,
is such a detailed notice of baggage liability
limitations required. Nevertheless, it should
become a common, safe and practical custom
among air carriers to indicate beforehand the
precise sums equivalent to those fixed by Article
22 (2) of the Convention.
The provisions in the plane ticket sufficient to
govern the limitations of liabilities of the airline for
loss of luggage. The passenger, upon contracting
with the airline and receiving the plane ticket, was
expected to be vigilant insofar as his luggage is
concerned. If the passenger fails to adduce
evidence to overcome the stipulations, he cannot
avoid the application of the liability limitations.
Private respondent actually refused to register the
attache case and chose to take it with him despite
having been ordered by the PANAM agent to
check it in. In attempting to avoid registering the
luggage by going back to the line, private
respondent manifested a disregard of airline rules
on allowable handcarried baggages. Prudence of
a reasonably careful person also dictates that
cash and jewelry should be removed from
checked-in-luggage and placed in one's pockets or
in a handcarried Manila-paper or plastic envelope.
We are not by any means suggesting that
passengers are always bound to the stipulated
amounts printed on a ticket, found in a contract of
adhesion, or printed elsewhere but referred to in
handouts or forms. We simply recognize that the
reasons behind stipulations on liability limitations
arise from the difficulty, if not impossibility, of
establishing with a clear preponderance of
evidence the contents of: lost valise or suitcase.
(Pan American World Airways, Inc. v. Rapadas,
GR No. 60673, 19 May 1992)
Uy, a revenue passenger of United Airlines for the
San Francisco - Manila route, checked in together
with his luggage one piece of which was found to
be overweight at the airline counter. To his utter
humiliation, an employee of petitioner rebuked him
saying that he should have known the maximum
weight allowance and that he should have packed
his things accordingly. Then, in a loud voice in
front of the milling crowd, she told respondent to
repack his things and transfer some of them from
the overweight luggage to the lighter ones. Upon
arrival in Manila, he discovered that one of his
bags had been slashed and its contents stolen.
He particularized his losses to be around US
$5,310.00.
United Airlines, through Central Baggage
Specialist, did not refute any of respondent’s
allegations and mailed a check representing the
payment of his loss based on the maximum
liability of US $9.70 per pound. Respondent,
thinking the amount to be grossly inadequate to
compensate him for his losses, as well as for the
indignities he was subjected to, sent two (2) more
letters to petitioner airline, demanding an out-of-
court settlement of P1,000,000.00. Petitioner
United Airlines did not accede to his demands.
Consequently, on 9 June 1992 respondent filed a
complaint for damages against United Airlines

CIVIL LAW NOTES
Q: Is the Warsaw convention applicable in the
case?
A: The Warsaw Convention can be applied, or
ignored, depending on the peculiar facts
presented by each case. Thus, we have ruled that
the Convention's provisions do not regulate or
exclude liability for other breaches of contract by
the carrier or misconduct of its officers and
employees, or for some particular or exceptional
type of damage. Neither may the Convention be
invoked to justify the disregard of some
extraordinary sort of damage resulting to a
passenger and preclude recovery therefor beyond
the limits set by said Convention. Likewise, we
have held that the Convention does not preclude
the operation of the Civil Code and other pertinent
laws. It does not regulate, much less exempt, the
carrier from liability for damages for violating the
rights of its passengers under the contract of
carriage, especially if willful misconduct on the part
of the carrier's employees is found or established.
Respondent's complaint reveals that he is suing
on two (2) causes of action: (a) the shabby and
humiliating treatment he received from petitioner's
employees at the San Francisco Airport which
caused him extreme embarrassment and social
humiliation; and, (b) the slashing of his luggage
and the loss of his personal effects amounting to
US $5,310.00.
Insofar as the first cause of action is concerned,
respondent's failure to file his complaint within the
two (2)-year limitation of the Warsaw Convention
does not bar his action since petitioner airline may
still be held liable for breach of other provisions of
the Civil Code which prescribe a different period or
procedure for instituting the action, specifically,
Art. 1146 thereof which prescribes four (4) years
for filing an action based on torts.
As regards the second cause of action, verily,
respondent filed his complaint more than two (2)
years later, beyond the period of limitation
prescribed by the Warsaw Convention for filing a
claim for damages. However, it is obvious that
respondent was forestalled from immediately filing
an action because petitioner airline gave him the
runaround, answering his letters but not giving in
to his demands. (United Airlines v. Uy, G.R. No.
127768, 19 November 1999)
Foreign Corporations
Eriks Pte. Ltd. is a non-resident foreign
corporation engaged in the manufacture and sale
of elements used in sealing pumps, valves and
pipes for industrial purposes, valves and control
equipment used for industrial fluid control and
PVC pipes and fittings for industrial uses.
Enriquez, Jr., doing business under the name and
style of Delrene EB Controls Center and/or EB
Karmine Commercial, ordered and received from
petitioner various elements used in sealing pumps,
valves, pipes and control equipment, PVC pipes
and fittings. The transfers of goods were perfected
in Singapore, for private respondent's account,
F.O.B. Singapore, with a 90-day credit term.
Subsequently, demands were made by petitioner
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upon private respondent to settle his account, but
the latter failed/refused to do so.
Petitioner Corporation filed with the RTC for the
recovery of sum of money. Private respondent
responded with a Motion to Dismiss, contending
that petitioner corporation had no legal capacity to
sue. The trial court dismissed the action on the
ground that petitioner is a foreign corporation
doing business in the Philippines without a license.
Q: Is a foreign corporation which sold its products
sixteen times over a five-month period to the same
Filipino buyer without first obtaining a license to do
business in the Philippines, prohibited from
maintaining an action to collect payment therefor
in Philippine courts?
A: The true test in determining whether a
corporation is doing business in the Philippines or
not, however, seems to be whether the foreign
corporation is continuing the body or substance of
the business or enterprise for which it was
organized or whether it has substantially retired
from it and turned it over to another. The term
implies a continuity of commercial dealings and
arrangements, and contemplates, to that extent,
the performance of acts or works or the exercise
of some of the functions normally incident to, and
in progressive prosecution of, the purpose and
object of its organization.
The purpose of the law is to subject the foreign
corporation doing business in the Philippines to
the jurisdiction of our courts. It is not to prevent the
foreign corporation from performing single or
isolated acts, but to bar it from acquiring a
domicile for the purpose of business without first
taking the steps necessary to render it amenable
to suits in the local courts.
Considering the factual background as laid out
above, the transaction cannot be considered as an
isolated one. Note that there were 17 orders and
deliveries over a four-month period. The private
respondent made separate orders at various
dates. The transactions did not consist of separate
deliveries for one single order. In the case at bar,
the transactions entered into by the appellant with
the appellee are a series of commercial dealings
which would signify an intent on the part of the
petitioner to do business in the Philippines and
could not by any stretch of the imagination be
considered an isolated one, thus would fall under
the category of doing business.
What is determinative of "doing business" is not
really the number or the quantity of the
transactions, but more importantly, the intention of
an entity to continue the body of its business in the
country. The number and quantity are merely
evidence of such intention. The phrase "isolated
transaction" has a definite and fixed meaning, i.e.
a transaction or series of transactions set apart
from the common business of a foreign enterprise
in the sense that there is no intention to engage in
a progressive pursuit of the purpose and object of
the business organization. Whether a foreign
corporation is "doing business" does not
necessarily depend upon the frequency of its
transactions, but more upon the nature and
character of the transactions.
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2007 Team Bar-Ops Civil Law Committee
By this judgment, we are not foreclosing
petitioner's right to collect payment. Res judicata
does not set in a case dismissed for lack of
capacity to sue, because there has been no
determination on the merits. Moreover, this Court
has ruled that subsequent acquisition of the
license will cure the lack of capacity at the time of
the execution of the contract. (Eriks PTE. Ltd. v.
CA, G.R. No. 118843, 06 February 1997)
SBMA advertised in newspapers an invitation
offering to the private sector the opportunity to
develop and operate a modern marine container
terminal within the Subic Bay Freeport Zone.
Three were declared by the SBMA as qualified
bidders after passing the pre-qualification
evaluation conducted by the SBMA-TEC. These
are: (1) ICTSI; (2) RPSI; and (3) HPPL. All three
qualified bidders were required to submit their
respective formal bid package.
The services of 3 international consultants
recommended by the World Bank for their
expertise were hired by SBMA to evaluate the
business plans submitted by each of the bidders.
All the consultants, after such review and
evaluation unanimously concluded that HPPL’s
Business Plan was “far superior to that of the two
other bidders.”
Notwithstanding the SBMA Board’s
recommendations and action awarding the project
to HPPL, then Executive Secretary submitted a
memorandum to the Office of the President
recommending that another rebidding be
conducted. HPPL, feeling aggrieved by the
SBMA’s failure and refusal to commence
negotiations and to execute the Concession
Agreement despite its earlier pronouncements that
HPPL was the winning bidder, filed a complaint
against SBMA before the RTC for specific
performance, mandatory injunction and damages.
In due time, ICTSI, RPSI and the Office of the
President filed separate Answers-in-Intervention to
the complaint opposing the reliefs sought by
complainant HPPL.
Q: Is bidding participation an act of “doing
business” in the Philippines?
A: As a chartered institution, the SBMA is always
under the direct control of the Office of the
President, particularly when contracts and/or
projects undertaken by the SBMA entail
substantial amounts of money. Specifically, Letter
of Instruction No. 620 mandates that the approval
of the President is required in all contracts of the
national government offices, agencies and
instrumentalities, including government-owned or
controlled corporations involving P2,000,000.00
and above, awarded through public bidding or
negotiation. The President may, within his
authority, overturn or reverse any award made by
the SBMA Board of Directors for justifiable
reasons. It is well-established that the discretion to
accept or reject any bid, or even recall the award
thereof, is of such wide latitude that the courts will
not generally interfere with the exercise thereof by
the executive department, unless it is apparent
that such exercise of discretion is used to shield
unfairness or injustice. When the President issued
the memorandum setting aside the award
University of Santo Tomas
previously declared by the SBMA in favor of HPPL
and directing that a rebidding be conducted, the
same was, within the authority of the President
and was a valid exercise of his prerogative.
Consequently, petitioner HPPL acquired no clear
and unmistakable right as the award announced
by the SBMA prior to the President’s revocation
thereof was not final and binding.
It has often been held that a single act or
transaction may be considered as “doing
business” when a corporation performs acts for
which it was created or exercises some of the
functions for which it was organized. The amount
or volume of the business is of no moment, for
even a singular act cannot be merely incidental or
casual if it indicates the foreign corporation’s
intention to do business.
Participating in the bidding process constitutes
“doing business” because it shows the foreign
corporation’s intention to engage in business here.
The bidding for the concession contract is but an
exercise of the corporation’s reason for creation or
existence.
If a foreign corporation operates a business in the
Philippines without a license, and thus does not
submit itself to Philippine laws, it is only just that
said foreign corporation be not allowed to invoke
them in our courts when the need arises. The
requirement of a license is not intended to put
foreign corporations at a disadvantage, for the
doctrine of lack of capacity to sue is based on
considerations of sound public policy.[33]
Accordingly, petitioner HPPL must be held to be
incapacitated to bring this petition for injunction
before this Court for it is a foreign corporation
doing business in the Philippines without the
requisite license. (Hutchison Ports Philippines
Limited v. Subic Bay Metropolitan Authority, et
al., G.R. No. 131367, 31 August 2000)
Property Rights and International Commerce
Like many other developing countries, the
Philippines joined WTO as a founding member
with the goal of improving "Philippine access to
foreign markets, especially its major trading
partners, through the reduction of tariffs on its
exports, particularly agricultural and industrial
products." The President also saw in the WTO the
opening of "new opportunities for the services
sector . . ., (the reduction of) costs and uncertainty
associated with exporting . . ., and (the attraction
of) more investments into the country."
Arguing mainly (1) that the WTO requires the
Philippines "to place nationals and products of
member-countries on the same footing as Filipinos
and local products" and (2) that the WTO
"intrudes, limits and/or impairs" the constitutional
powers of both Congress and the Supreme Court,
the instant petition before this Court assails the
WTO Agreement for violating the mandate of the
1987 Constitution to "develop a self-reliant and
independent national economy effectively
controlled by Filipinos . . . (to) give preference to
qualified Filipinos (and to) promote the preferential
use of Filipino labor, domestic materials and
locally produced goods."

CIVIL LAW NOTES
Q: Do the provisions of the WTO AGREEMENT
and its three annexes contravene SEC. 19,
ARTICLE II, & SECS. 10 AND 12, ARTICLE XII, of
the Philippine Constitution?
Does the Philippine Constitution prohibit Philippine
participation in worldwide trade liberalization and
economic globalization?
A: The principles and state policies enumerated in
Article II and some sections of Article XII are not
"self-executing provisions, the disregard of which
can give rise to a cause of action in the courts.
They do not embody judicially enforceable
constitutional rights but guidelines for legislation.
The reasons for denying a cause of action to an
alleged infringement of broad constitutional
principles are sourced from basic considerations
of due process and the lack of judicial authority to
wade "into the uncharted ocean of social and
economic policy making.
While the Constitution indeed mandates a bias in
favor of Filipino goods, services, labor and
enterprises, at the same time, it recognizes the
need for business exchange with the rest of the
world on the bases of equality and reciprocity and
limits protection of Filipino enterprises only against
foreign competition and trade practices that are
unfair. 32 In other words, the Constitution did not
intend to pursue an isolationist policy. It did not
shut out foreign investments, goods and services
in the development of the Philippine economy.
While the Constitution does not encourage the
unlimited entry of foreign goods, services and
investments into the country, it does not prohibit
them either. In fact, it allows an exchange on the
basis of equality and reciprocity, frowning only on
foreign competition that is unfair.
Furthermore, the constitutional policy of a "self-
reliant and independent national economy" does
not necessarily rule out the entry of foreign
investments, goods and services. It contemplates
neither "economic seclusion" nor "mendicancy in
the international community." As explained by
Constitutional Commissioner Bernardo Villegas,
sponsor of this constitutional policy:
"Economic self reliance is a primary objective of a
developing country that is keenly aware of
overdependence on external assistance for even
its most basic needs. It does not mean autarky or
economic seclusion; rather, it means avoiding
mendicancy in the international community.
Independence refers to the freedom from undue
foreign control of the national economy, especially
in such strategic industries as in the development
of natural resources and public utilities."
The WTO reliance on "most favored nation,"
"national treatment," and "trade without
discrimination" cannot be struck down as
unconstitutional as in fact they are rules of equality
and reciprocity that apply to all WTO members.
Aside from envisioning a trade policy based on
"equality and reciprocity," 37 the fundamental law
encourages industries that are "competitive in both
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
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Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
129
ADVISER:
domestic and foreign markets," thereby
demonstrating a clear policy against a sheltered
domestic trade environment, but one in favor of
the gradual development of robust industries that
can compete with the best in the foreign markets.
Indeed, Filipino managers and Filipino enterprises
have shown capability and tenacity to compete
internationally. And given a free trade
environment, Filipino entrepreneurs and managers
in Hongkong have demonstrated the Filipino
capacity to grow and to prosper against the best
offered under a policy of laissez faire.
Constitutions are designed to meet not only the
vagaries of contemporary events. They should be
interpreted to cover even future and unknown
circumstances. It is to the credit of its drafters that
a Constitution can withstand the assaults of bigots
and infidels but at the same time bend with the
refreshing winds of change necessitated by
unfolding events.
While sovereignty has traditionally been deemed
absolute and all-encompassing on the domestic
level, it is however subject to restrictions and
limitations voluntarily agreed to by the Philippines,
expressly or impliedly, as a member of the family
of nations. Unquestionably, the Constitution did
not envision a hermit-type isolation of the country
from the rest of the world. In its Declaration of
Principles and State Policies, the Constitution
"adopts the generally accepted principles of
international law as part of the law of the land, and
adheres to the policy of peace, equality, justice,
freedom, cooperation and amity, with all nations.
(Tañada, et al. v. Angara, et al., G.R. No.
118295, 02 May 1997)
Escobar, the predecessor-in-interest of petitioner
Mirpuri, filed an application with the Bureau of
Patents for the registration of the trademark
"Barbizon" for use in brassieres and ladies
undergarments. Escobar alleged that she had
been manufacturing and selling these products
under the firm name "L & BM Commercial" since
1970.
Private respondent Barbizon Corporation, a
corporation organized and doing business under
the laws of New York, U.S.A., opposed the
application. It claimed that: The mark BARBIZON
of respondent-applicant is confusingly similar to
the trademark BARBIZON which opposer owns
and has not abandoned. And that the respondent-
applicant's use of the said mark BARBIZON which
resembles the trademark used and owned by
opposer, constitutes an unlawful appropriation of a
mark previously used in the Philippines and not
abandoned and therefore a statutory violation of
Section 4 (d) of Republic Act No. 166.
Director of Patents rendered judgment dismissing
the opposition and giving due course to Escobar's
application,
Escobar was issued a certificate of registration for
the trademark "Barbizon." The trademark was "for
use in "brassieres and lady's underwear garments
like panties. Escobar later assigned all her rights
and interest over the trademark to petitioner
Mirpuri who, under his firm name then, the "Bonito
Enterprises," was the sole and exclusive
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2007 Team Bar-Ops Civil Law Committee
distributor of Escobar's "Barbizon" products. In
1979, however, the Bureau of Patents cancelled
Escobar's certificate of registration. Escobar
reapplied for registration of the cancelled
trademark. Mirpuri filed his own application for
registration of Escobar's trademark. Escobar later
assigned her application to herein petitioner and
this application was opposed by private
respondent.
Q: Can Barbizon Corp. invoke the Paris
Convention?
A: The essential requirement under Article 6b is of
the Paris Convention is that the trademark to be
protected must be "well-known" in the country
where protection is sought. The power to
determine whether a trademark is well-known lies
in the "competent authority of the country of
registration or use." This competent authority
would be either the registering authority if it has
the power to decide this, or the courts of the
country in question if the issue comes before a
court.
Intellectual and industrial property rights cases are
not simple property cases. Trademarks deal with
the psychological function of symbols and the
effect of these symbols on the public at large.
Trademarks play a significant role in
communication, commerce and trade, and serve
valuable and interrelated business functions, both
nationally and internationally. For this reason, all
agreements concerning industrial property, like
those on trademarks and tradenames, are
intimately connected with economic development.
Industrial property encourages investments in new
ideas and inventions and stimulates creative
efforts for the satisfaction of human needs. They
speed up transfer of technology and
industrialization, and thereby bring about social
and economic progress. These advantages have
been acknowledged by the Philippine government
itself. The Intellectual Property Code of the
Philippines declares that "an effective intellectual
and industrial property system is vital to the
development of domestic and creative activity,
facilitates transfer of technology, it attracts foreign
investments, and ensures market access for our
products.
The Code was enacted to strengthen the
intellectual and industrial property system in the
Philippines as mandated by the country's
accession to the Agreement Establishing the
WTO.
Among those annexed is the Agreement on Trade-
Related Aspects of Intellectual Property Rights or
TRIPs. Members to this Agreement "desire to
reduce distortions and impediments to
international trade, taking into account the need to
promote effective and adequate protection of
intellectual property rights, and to ensure that
measures and procedures to enforce intellectual
property rights do not themselves become barriers
to legitimate trade.
The TRIPs Agreement seeks to grant adequate
protection of intellectual property rights by creating
a favorable economic environment to encourage
the inflow of foreign investments, and
strengthening the multi-lateral trading system to
bring about economic, cultural and technological
University of Santo Tomas
independence. (Mirpuri v. CA, G.R. No. 114508,
19 November 1999)
Death, Succession and Administration of
Estate
Republic of the Philippines alleged that during his
exile the late President Marcos executed his last
will and testament in USA, with his wife Imelda
and son Ferdinand II as executors. It moved that
Mrs. Marcos and Ferdinand II be declared
incompetent as executors and prayed that letters
of administration be issued in favor of petitioner's
nominee. Mrs. Imelda Marcos and Ferdinand
Marcos II filed an Opposition/Comment on the
petition.
Petitioner sent a notice of Commencement of
Probate Proceedings in Philippine Court to the
United States (U.S.) District Court of Hawaii,
where a class action was previously filed against
former President Marcos. The action sought
damages against the latter for human rights
violations he allegedly committed during his
authoritarian rule.
Petitioner then filed in the probate court a Petition
for the Issuance of a Writ of Preliminary Injunction
with Urgent Ex-Parte Motion for a Temporary
Restraining Order. It alleged that in the class
action the U.S. District Court of Hawaii issued a
Reference Order appointing special masters for
the purpose of obtaining depositions in the
Philippines on the following matters:
(1) whether the victims identified in the claim
forms suffered torture, summary
execution, or disappearance; and (2) the
extent of damages sustained.
The Reference Order prescribed the procedure,
including the availment of local court reporters and
interpreters as might be required. Petitioner
asserted that the Reference Order impinged on
the exclusive jurisdiction of the probate court and
disregarded the claim of the Philippine
government against the Marcos estate. It also
contended that the claim against the estate should
be filed before the probate court and that the
Philippine government should be accorded first
preference in the priority list of the estate's
creditors.
Respondent Judge Villarama issued a TRO
against the special masters and persons acting in
their stead. Later however, he issued the assailed
Order lifting the TRO.
Q: Does the petitioner have a clear and positive
right w/c may have been violated by the issuance
of the Reference Order by the District Court of
Hawaii?
A: We fail to comprehend what clear and positive
right petitioner has which may be violated by the
issuance and implementation of the Reference
Order by the District Court of Hawaii. Petitioner
seeks to establish such a "right" by claiming that
since the probate court was the first to take
cognizance of the settlement of the Marcos estate
then pursuant to Section 1 of Rule 73 of the Rules
of Court, it exercises jurisdiction thereon to the
exclusion of all other courts; and that, accordingly,

CIVIL LAW NOTES
the District Court of Hawaii cannot assert
jurisdiction over the assets of said estate.
The argument is like a loose cannon ball way off
its target.
Section 1 of Rule 73 refers to courts in the
Philippines and simply means that once a special
proceeding for the settlement of the estate of a
decedent is filed in one of such courts, that court
has exclusive jurisdiction over said estate and no
other special proceedings involving the same
subject matter may be filed before any other court.
Since foreign courts are not contemplated in
Section 1, in no way then can it be validly
maintained that the District Court of Hawaii has
encroached upon, or "impinged on," the
jurisdiction of the probate court by the issuance of
the Reference Order. The Reference Order cannot
be construed as concerning or affecting the
Marcos estate within the exclusive jurisdiction of
the probate court. The duties of the special
masters as defined in the Reference Order were
"to prepare written findings for submission to the
jury regarding (a) whether the victims identified in
the claim forms suffered torture, summary
execution or disappearance, and (b) the extent of
the damages sustained. (Republic v. Judge
Villarama, Jr., G.R. No. 117733, 05 September
1997)
Foreign Judgments
Rances was engaged by petitioner Pascor as
Radio Operator of a vessel belonging to Pascor's
foreign principal, the Gulf-East Ship Management
Limited. After having been transferred from one
vessel to another four times for misbehavior and
inability to get along with officers and crew
members of each of the vessels, the foreign
principal terminated the services of private
respondent Rances citing the latter's poor and
incorrigible work attitude and incitement of others
to insubordination.
Thereafter, private respondent filed a complaint
against petitioner where he sought to carry out
and enforce the same award obtained by him in
Dubai allegedly against Pascor's foreign principal
which he had pleaded as a counterclaim in POEA
Case.
As evidence of this foreign award, private
respondent submitted what purports to be an
"original copy of the decision" of the Dubai court
written in Arabic script and language, with a copy
of an English translation by an unidentified
translator and a copy of a transmittal letter dated
23 September 1984 signed by one Mohd. Bin
Saleh "Honorary Consul for Philippines." The full
texts of the purported English translation of the
Dubai award and of the transmittal letter are set
out in the margin.
In its answer, petitioner Pascor made four principal
arguments: that the copy of the Dubai decision
relied upon by private respondent could not be
considered as evidence, not having been properly
authenticated.
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
131
ADVISER:
Q: Was the Dubai decision properly proved before
the POEA?
A: Even assuming that the POEA has jurisdiction
to recognize and enforce a foreign judgment, still
respondent Rances cannot rely upon the Dubai
decision. The Dubai decision was not properly
proved before the POEA. The Dubai decision
purports to be the written act or record of an act of
an official body or tribunal of a foreign country, and
therefore a public writing under Section 20 (a) of
Rule 132 of the Revised Rules of Court. Sections
25 and 26 of Rules 132 prescribe the manner of
proving a public of official record of a foreign
country in the following terms:
"Sec. 25. Proof of public or official record.-An
official record or an entry therein, when admissible
for any purpose, may be evidenced by an official
publication thereof or by a copy attested by the
officer having the legal custody of the record, or by
his deputy, and accompanied, if the record is not
kept in the Philippines, with a certificate that such
officer has the custody. If the office in which the
record is kept is in a foreign country, the certificate
may be made by a secretary of embassy or
legation, consul general, consul, vice consul, or
consular agent or by any officer in the foreign
service of the Philippines stationed in the foreign
country in which the record is kept, and
authenticated by the seal of his office.
"Sec. 26. What attestation of copy must state.-
Whenever a copy of a writing is attested for the
purpose of evidence, the attestation must state, in
substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may
be. The attestation must be under the official seat
of the attesting officer, if there be any, or if he be
the clerk of a court having a seal, under the seal of
such court."
Respondent Rances failed to submit any
attestation issued by the proper Dubai official
having legal custody of the original of the decision
of the Dubai Court that the copy presented by said
respondent is a faithful copy of the original
decision, which attestation must furthermore be
authenticated by a Philippine Consular Officer
having jurisdiction in Dubai.
The Dubai decision is accompanied by a
document which purports to be an English
translation of that decision; but that translation is
legally defective. Section 34 of Rule 132 of the
Revised Rules of Court requires that documents
written in a non-official language (like Arabic) shall
not be admitted as evidence unless accompanied
by a translation into English or Spanish or Filipino.
In the instant case, there is no showing of who
effected the English translation of the Dubai
decision which respondent Rances submitted to
the POEA. The English translation does not
purport to have been made by an official court
interpreter of the Philippine Government nor of the
Dubai Government.
The Dubai Court decision, even on the basis of the
English translation submitted by respondent
Rances, does not purport on its face to have been
rendered against petitioner Pascor nor against the
foreign principal of petitioner. Petitioner Pascor
has expressly denied that jurisdiction had ever
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2007 Team Bar-Ops Civil Law Committee
been acquired by the Dubai court over the person
of Pascor in accordance with the Rules of
Procedure applicable before the Dubai Court.
(Pacific Asia Overseas Shipping Corporation v.
NLRC, GR No. L-76595, 06 May 1988)
The petitioner Asiavest Merchant Bankers is a
corporation organized under the laws of Malaysia
while private respondent Philippine National
Construction Corporation PNCC is a corporation
duly incorporated and existing under Philippine
laws. It appears that sometime in 1983, petitioner
initiated a suit for collection against private
respondent before the High Court of Malaya.
Petitioner sought to recover the indemnity of the
performance bond it had put up in favor of private
respondent to guarantee the completion of a
Project and the non-payment of the loan it
extended to Asiavest-CDCP.
High Court of Malaya rendered judgment in favor
of the petitioner and against the private
respondent. Following unsuccessful attempts to
secure payment from private respondent under the
judgment, petitioner initiated the complaint before
RTC to enforce the judgment of the High Court of
Malaya.
Q: Can the Malaysian judgment be recognized
and enforced under the circumstances?
A: Yes. Having thus proven, through the foregoing
evidence, the existence and authenticity of the
foreign judgment, said foreign judgment enjoys
presumptive validity and the burden then fell upon
the party who disputes its validity, herein private
respondent, to prove otherwise.
Private respondent failed to sufficiently discharge
the burden that fell upon it – to prove by clear and
convincing evidence the grounds which it relied
upon to prevent enforcement of the Malaysian
High Court judgment, namely, (a) that jurisdiction
was not acquired by the Malaysian Court over the
person of private respondent due to alleged
improper service of summons upon private
respondent and the alleged lack of authority of its
counsel to appear and represent private
respondent in the suit; (b) the foreign judgment is
allegedly tainted by evident collusion, fraud and
clear mistake of fact or law; and (c) not only were
the requisites for enforcement or recognition
allegedly not complied with but also that the
Malaysian judgment is allegedly contrary to the
Constitutional prescription that the “every decision
must state the facts and law on which it is based.”
Private respondent relied solely on the testimony
of its witnesses both of whom failed to shed light
and amplify its defense or claim for non-
enforcement of the foreign judgment against it.
Needless to stress, the recognition to be accorded
a foreign judgment is not necessarily affected by
the fact that the procedure in the courts of the
country in which such judgment was rendered
differs from that of the courts of the country in
which the judgment is relied on. Ultimately,
matters of remedy and procedure such as those
relating to the service of summons or court
process upon the defendant, the authority of
counsel to appear and represent a defendant and
the formal requirements in a decision are
University of Santo Tomas
governed by the lex fori or the internal law of the
forum i.e., the law of Malaysia in this case.
In this case, it is the procedural law of Malaysia
where the judgment was rendered that determines
the validity of the service of court process on
private respondent as well as other matters raised
by it. As to what the Malaysian procedural law is,
remains a question of fact, not of law. It may not
be taken judicial notice of and must be pleaded
and proved like any other fact. Sections 24 and
25 of Rule 132 of the Revised Rules of Court
provide that it may be evidenced by an official
publication or by a duly attested or authenticated
copy thereof. It was then incumbent upon private
respondent to present evidence as to what that
Malaysian procedural law is and to show that
under it, the assailed service of summons upon a
financial officer of a corporation, as alleged by it, is
invalid. It did not. Accordingly, the presumption of
validity and regularity of service of summons and
the decision thereafter rendered by the High Court
of Malaya must stand. (Asiavest Merchant
Bankers Berhad v. CA, G.R. No. 110263, 20 July
2001)
The District Court of Guam informed the SC of the
suspension of Atty. Maquera from the practice of
law in Guam for two years pursuant to the
Decision rendered by the Superior Court of Guam
in a disciplinary case filed by the Guam Bar Ethics
Committee against Maquera.
IBP found that Maquera was admitted to the
Philippine Bar on 1958. On 1974, he was admitted
to the practice of law in the territory of Guam. He
was suspended from the practice of law in Guam
for misconduct, as he acquired his client's property
as payment for his legal services, then sold it and
as a consequence obtained an unreasonably high
fee for handling his client's case.
Q: May a member of the Philippine Bar who was
disbarred or suspended from the practice of law in
a foreign jurisdiction where he has also been
admitted as an attorney be meted the same
sanction as a member of the Philippine Bar for the
same infraction committed in the foreign
jurisdiction?
A: The Guam Superior Court’s judgment ordering
Maquera’s suspension from the practice of law in
Guam does not automatically result in his
suspension or disbarment in the Philippines.
Under Section 27, Rule 138 of the Revised Rules
of Court, the acts which led to his suspension in
Guam are mere grounds for disbarment or
suspension in this jurisdiction, at that only if the
basis of the foreign court’s action includes any of
the grounds for disbarment or suspension in this
jurisdiction. Likewise, the judgment of the Superior
Court of Guam only constitutes prima facie
evidence of Maquera’s unethical acts as a lawyer.
More fundamentally, due process demands that
he be given the opportunity to defend himself and
to present testimonial and documentary evidence
on the matter in an investigation to be conducted
in accordance with Rule 139-B of the Revised
Rules of Court. Said rule mandates that a
respondent lawyer must in all cases be notified of
the charges against him. It is only after
reasonable notice and failure on the part of the

CIVIL LAW NOTES
respondent lawyer to appear during the scheduled
investigation that an investigation may be
conducted ex parte. (In re: Suspension from the
Practice of Law in the Terrritory of Guam of
Atty. Leon G. Maquera, Bar Matter No. 793, 30
July 2004)
The petitioners filed Complaint for the enforcement
of the Final Judgment awarding the plaintiff class a
total of $1,964,005,859.90. They argued that since
the Marcos Estate failed to file a petition for
certiorari with the US Supreme Court after the
Ninth Circuit Court of Appeals had affirmed the
Final Judgment, the decision of the US District
Court had become final and executory, and hence
should be recognized and enforced in the
Philippines, pursuant to Section 50, Rule 39 of the
Rules of Court then in force.
Marcos Estate filed a motion to dismiss, raising,
among others, the non-payment of the correct
filing fees. It alleged that petitioners had only paid
P410.00 as docket and filing fees, notwithstanding
the fact that they sought to enforce a monetary
amount of damages in the amount of over
US$2.25 Billion. The Marcos Estate cited
Supreme Court Circular No. 7, pertaining to the
proper computation and payment of docket fees.
In response, the petitioners claimed that an action
for the enforcement of a foreign judgment is not
capable of pecuniary estimation; hence, a filing fee
of only Four Hundred Ten Pesos (P410.00) was
proper, pursuant to Section 7(c) of Rule 141.
Respondent Judge Ranada issued the subject
Order dismissing the complaint without prejudice.
Respondent judge opined that contrary to the
petitioners’ submission, the subject matter of the
complaint was indeed capable of pecuniary
estimation, as it involved a judgment rendered by
a foreign court ordering the payment of definite
sums of money, allowing for easy determination of
the value of the foreign judgment. On that score,
Section 7(a) of Rule 141 of the Rules of Civil
Procedure would find application, and the RTC
estimated the proper amount of filing fees was
approximately Four Hundred Seventy Two Million
Pesos, which obviously had not been paid.
Not surprisingly, petitioners filed a Motion for
Reconsideration, which Judge Ranada denied.
Q: Was the dismissal proper?
A: Remarkably, the procedural rule now outlined
in Section 48, Rule 39 of the Rules of Civil
Procedure has remained unchanged down to the
last word in nearly a century. There is an evident
distinction between a foreign judgment in an action
in rem and one in personam. For an action in rem,
the foreign judgment is deemed conclusive upon
the title to the thing, while in an action in
personam, the foreign judgment is presumptive,
and not conclusive, of a right as between the
parties and their successors in interest by a
subsequent title. However, in both cases, the
foreign judgment is susceptible to impeachment in
our local courts on the grounds of want of
jurisdiction or notice to the party, collusion, fraud,
or clear mistake of law or fact. Thus, the party
aggrieved by the foreign judgment is entitled to
2007 UST TEAM BAR-OPS CIVIL LAW COMMITTEE
Academics Committee Chairperson:
Civil Law Committee Chairperson:
Vice-Chairperson:
Members:
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ADVISER:
defend against the enforcement of such decision
in the local forum. It is essential that there should
be an opportunity to challenge the foreign
judgment, in order for the court in this jurisdiction
to properly determine its efficacy.
It is clear then that it is usually necessary for an
action to be filed in order to enforce a foreign
judgment, even if such judgment has conclusive
effect as in the case of in rem actions, if only for
the purpose of allowing the losing party an
opportunity to challenge the foreign judgment, and
in order for the court to properly determine its
efficacy. Consequently, the party attacking a
foreign judgment has the burden of overcoming
the presumption of its validity.
There are distinctions between the cause of action
arising from the enforcement of a foreign
judgment, and that arising from the facts or
allegations that occasioned the foreign judgment.
They may pertain to the same set of facts, but
there is an essential difference in the right-duty
correlatives that are sought to be vindicated. On
the other hand, in a complaint for the enforcement
of a foreign judgment awarding damages from the
same tortfeasor, for the violation of the same right
through the same manner of action, the cause of
action derives not from the tortious act but from
the foreign judgment itself.
More importantly, the matters for proof are
different. Using the above example, the
complainant will have to establish before the court
the tortious act or omission committed by the
tortfeasor, who in turn is allowed to rebut these
factual allegations or prove extenuating
circumstances. Extensive litigation is thus
conducted on the facts and from there the right to
and amount of damages are assessed. On the
other hand, in an action to enforce a foreign
judgment, the matter left for proof is the foreign
judgment itself, and not the facts from which it
prescinds.
As stated in Section 48, Rule 39, the actionable
issues are generally restricted to a review of
jurisdiction of the foreign court, the service of
personal notice, collusion, fraud, or mistake of fact
or law. The limitation on review is in consonance
with a strong and pervasive policy in all legal
systems to limit repetitive litigation on claims and
issues. Otherwise known as the policy of
preclusion, it seeks to protect party expectations
resulting from previous litigation, to safeguard
against the harassment of defendants, to insure
that the task of courts not be increased by never-
ending litigation of the same disputes, and to
promote the goal of all law: “rest and quietness.” If
every judgment of a foreign court were reviewable
on the merits, the plaintiff would be forced back on
his/her original cause of action, rendering
immaterial the previously concluded litigation.
The viability of the public policy defense against
the enforcement of a foreign judgment has been
recognized in this jurisdiction. This defense allows
for the application of local standards in reviewing
the foreign judgment, especially when such
judgment creates only a presumptive right, as it
does in cases wherein the judgment is against a
person. The defense is also recognized within the
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international sphere, as many civil law nations

adhere to a broad public policy exception which
may result in a denial of recognition when the
foreign court, in the light of the choice-of-law rules
of the recognizing court, applied the wrong law to
the case. The public policy defense can safeguard
against possible abuses to the easy resort to
offshore litigation if it can be demonstrated that the
original claim is noxious to our constitutional
values. (Mijares, et al. vs Hon. Ranada, G.R. No.
139325, 12 April 2005)

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