Finalcompletecivdigests

C I V I L L A W 1995-2001 DIGESTS ATENEO CENTRAL BAR OPERATIONS 2002
Table of contents:
page
Agency . . . . . . . . . . . . . . .1-2
Partnership . . . . . . . . . . . . 2-3
Land Titles . . . . . . . . . . . . .3-13
Torts & Damages . . . . . . . . . .14-22
Oblicon . . . . . . . . . . . . . . .22-40
Sales . . . . . . . . . . . . . . . . 40-42
Succession . . . . . . . . . . . . . 43-49
Property . . . . . . . . . . . . . . 49-62
Persons . . . . . . . . . . . . . . 63-71
AGENCY
2000
VICTORIAS MILLING CO. v. CA (G.R. No. 117356, June 19, 2000)

Civil Law/Agency/Distinguished from Sale: The basis of agency is representation. On the part of the
principal, there must be an actual intention to appoint or an intention naturally inferable from his words or
actions; and on the part of the agent, there must be an intention to accept the appointment and act on it,
and in the absence of such intent, there is generally no agency.
One factor which most clearly distinguishes agency from other legal concepts is control; one
person — the agent — agrees to act under the control or direction of another — the principal. Indeed, the
very word "agency" has come to connote control by the principal. Where the relation of agency is
dependent upon the acts of the parties, the law makes no presumption of agency, and it is always a fact
to be proved, with the burden of proof resting upon the persons alleging the agency, to show not only the
fact of its existence, but also its nature and extent.
The question of whether a contract is one of sale or agency depends on the intention of the
parties as gathered from the whole scope and effect of the language employed. Ultimately, what is
decisive is the intention of the parties. In this case, the use of the words "sold and endorsed" in CSC’s
communication means that STM and CSC intended a contract of sale, and not an agency. Also, the terms
and conditions clearly show that petitioner transferred title to the sugar to the buyer or his assignee upon
payment of the purchase price. Said terms clearly establish a contract of sale, not a contract to sell.
Petitioner is now estopped from alleging the contrary.
1996
LIM v. CA (February 1996)

Contract of Agency/Validity & Enforceability: There are some provisions of the law which require certain
formalities for particular contracts:
1) When the form is required for the validity of the contract
2) When it is required to make the contract effective as against third parties (Arts. 1357 & 1358, Civil
Code)
3) When form is required for the purpose of proving the existence of the contract (Statute of Frauds).
A contract to sell on commission basis does not belong to any of these three categories, hence, it
is valid and enforceable in whatever form it may be entered into.
VELOSO v. CA (G.R. No. 102737, Aug. 21, 1996)

Civil Law/Agency & Land Titles/GPA to sell land & innocent purchaser for value: Documents
acknowledged before a notary have the evidentiary weight with respect to their due execution. The
questioned GPA and deed of sale, were notarized and therefore, presumed to be valid and duly executed.
While it is true that it was denominated as a GPA, a perusal thereof revealed that it stated an authority to
sell. Thus, there was no need for a separate SPA as the document expressly authorized the agent to sell
the subject property. The SPA can be included in the GPA when it is specified therein the act or
transaction for which the special power is required.
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As to the issue of forgery, the Court ruled that mere variance of the signatures is not conclusive
proof of forgery for forgery cannot be presumed. (Tenio-Obsequio v. CA, G.R. No. 107967, 1 Mar. 1994)
Even granting that petitioner’s signature was falsified, and the GPA and deed of sale void, such would not
revoke title subsequently issued in favor of private respondent, an innocent purchaser for value, one
relying on the notarized GPA presented by petitioner’s wife. Being the wife of the owner and having with
her the title to the property, there was no reason for private respondent not to believe in her authority.
COSMIC LUMBER v. CA (G.R.No. 114311, November 1996)

Civil Law/Agency’Power to Sue and Compromise vis-à-vis Power to Sell Land: The explicit and
exclusionary authority granted to the agent under the SPA for her to sue to eject all persons found on the
lots so that petitioner could take material possession thereof, and for this purpose, to appear at pre-trial
and enter into a compromise agreement, but only insofar as this was protective of petitioner’s rights does
not grant to the agent expressly or impliedly, the power to sell the lot or portion thereof. In the context of
the grant of powers to the agent, alienation by sale cannot be deemed protective of petitioner’s rights,
more so when the land was being sold for P80/sq. m., very much less than its assessed value of
P250.00/sq. m.
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. For the principal to confer the right upon an
agent to sell real estate, a POA must so express the powers of the agent in clear and unmistakable
language. Where there is any reasonable doubt, no such construction shall be given the document.
(citations omitted)
As the sale was void, so were the compromise agreement and the judgement based thereon.
The principal is chargeable with and bound by the knowledge of or notice to his agent received
while the agent was acting as such. But the general rule is intended to protect those who exercise good
faith and not as a shield for unfair dealing. Hence, there is a well-established exception to the general
rule as where the conduct and dealings of the agent are such as to raise a clear presumption that he will
not communicate to the principal the facts in controversy. (Mutual Life v. Hilton Green, 241 US 613) The
logical reason for this exception is that where the agent is committing fraud, it would be contrary to
common sense to expect that he would communicate this to the principal. Verily, when an agent is
engaged in the perpetration of fraud upon his principal, he is not really acting for the principal but is acting
for himself, entirely outside the scope of his agency. (Aetna Casualty v. Local Bldg., 19P2d 612, 616)
1995
TOYOTA SHAW v. CA (244 SCRA 320, May 1995)
Civil Law/Agency/Sales/Contract to sell: A person dealing with an agent is put upon inquiry and must
discover upon his peril the authority of the agent
Definiteness of price is essential element in formation of a binding contract of sale.
PARTNERSHIP
2000
HEIRS OF TAN ENG KEE V. CA (3 Oct 2000)

Particular partnership distinguished from joint venture – A particular partnership is distinguished from joint
venture, to wit:
1. a joint venture (an American concept similar to out joint account) is a sort of informal
partnership, with no firm name and no legal personality. In a joint account, the participating
merchants can transact business under their own name, and can be individually liable
therefore; and
2. usually, but not necessarily a joint venture is limited to a single transaction, although the
business of pursuing to a successful termination may continue for a number of years; a
partnership generally relates to a continuing business of various transactions of a certain
kind.
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It would seem that under the Philippine law, a joint venture is a form of partnership, specifically
particular partnership which has for its object specific undertaking. The Supreme Court has however
recognized a distinction between these 2 business forms and has held that although a corporation cannot
enter into a partnership, it may however engage in a joint venture with others.
TOCAO V. CA ( Oct 2000)

Existence of a partnership – The issue of whether or not a partnership exists is a factual matter which are
within the exclusive domain of both the trial court and CA.
Since a contract of partnership is consensual, an oral contract of partnership is a good as a
written one; when no immovable property or real rights are involved, what matters is that the parties have
complied with the requisites of partnership.
The best evidence of the existence of the partnership, which is not yet terminated (though in the
winding up stage), are the unsold goods and uncollected receivables.
A mere falling out or misunderstanding between the partners does not convert the partnership
into a sham organization – the partnership exists until dissolved under the law.
Anyone of the partners, may at his own pleasure dictate a dissolution of the partnership at will,
though hew must however, act in good faith, not that attendance of bad faith can prevent the dissolution
of the partnership, but that its can result in a liability for damages.
Even if one partner had effected her own withdrawal from the partnership and considered herself
as having ceased to be associated with the partnership in the carrying on of the business, the partnership
was not terminated thereby, it continues until the winding up of the business.
1999
AFISCO INSURANCE CORP. v. CA (Jan. 25, 1999)

Civil Law/Partnership/Creation Of/Requisites (1) Art. 1767 of the CC recognizes the creation of a contract
of partnership when “2 or more persons bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the profits among themselves.” Its requisites are: (1) mutual
contribution to a common stock, and (2) a joint interest in the profits.” In other words, a partnership is
formed when persons contract “to devote to a common purpose either money, property, or labor with the
intention of dividing the profits between themselves.” Meanwhile, an association implies associates who
enter into a “joint enterprise x x x for the transaction of business.”
(2) Where in the case before us, the ceding companies entered into a Pool Agreement or an association
that would handle all the insurance businesses covered under their quota-share reinsurance treaty and
surplus reinsurance treaty in Munich, the following unmistakably indicates a partnership, or an association
covered by Section 24 of the NIRC
1998
IDOS v. CA (September 1998)

Civil Law/Partnership/Final 3 Stages: There are three final stages of a partnership: (1) dissolution; (2)
winding-up; and (3) termination. Dissolution is the change in the relation of the partners caused by any
partner ceasing to be associated in the carrying on of the business. It is that point of time that the partners
cease to carry on the business together. Winding up is the process of settling the business affairs after
dissolution. Termination is the point in time after all the partnership affairs have been wound up.
Art. 1829 of the NCC states that “On dissolution, a partnership is not terminated, but continues
until the winding up of partnership affairs is completed.
The best evidence of the existence of the partnership, which was not yet terminated (though in
the winding up stage) were the unsold goods and uncollected receivables, which were presented to the
trial court. Since the partnership has not been terminated, the petitioner and complainant remained as co-
partners. The check was thus issued by the petitioner to complainant as would a partner to another, and
not as payment from a debtor to a creditor.
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LAND TITLES
2001
SEVILLE v. NATIONAL DEVELOPMENT COMPANY (G.R. No. 129401, February 2, 2001)

Civil Law/ Land Titles/ Public lands/Prescription: Based on the Regalian Doctrine that all lands of the
public domain belong to the State, which is the source of any asserted right to ownership of land, all lands
not otherwise appearing to be clearly within private ownership are thus presumed to belong to the State.
Unless a public land is shown to have been reclassified as alienable or actually alienated by the State to a
private person, that piece of land remains part of the public domain. Hence, occupation thereof, however
long, cannot ripen into ownership.
CERVANTES v. CA (G.R. No. 118982, February 19, 2001)

Civil Law/ Land titles/ Certificate of registration: The certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.
A title once registered under the Torrens System cannot be defeated even by adverse, open and
notorious possession; neither can it be defeated by prescription. Petitioners cannot prove their ownership
of the subject parcels of land through tax declarations and corresponding tax receipts inasmuch as they
are not conclusive evidence of ownership.
2000
DUARTE v. ONG (May 2000)

Civil Law/ Land Titles/ Validity of Adverse Claim: The Court upheld the Sajonas v. CA (258 SCRA 79)
ruling that a notice of adverse claim remains valid even after the lapse of the 30-day period. For as long
as there is yet no petition for its cancellation, the notice of adverse claim remains subsisting.
The law provides that after the lapse of said period, the annotation of the adverse claim may be cancelled
upon filing of a verified petition therefor by the party in interest. If the adverse claim has been
automatically terminated by mere lapse of time, the law would not have required the party in interest to do
a useless act.
In a petition for cancellation of adverse claim, a hearing must first be conducted. The hearing will
afford the parties an opportunity to prove the propriety or impropriety of the adverse claim. Petitioner in
this case was unlawfully denied this opportunity when the Registrar of Deeds automatically cancelled the
adverse claim. Needless to state, the cancellation of her adverse claim is ineffective.
CORPUZ v. SPS. GROSPE (G.R. No. 135297, June 8, 2000)

Civil Law/ Land Titles/ Conveyance of Land Reform Rights: The sale, transfer or conveyance of land
reform rights are, as a rule, void in order to prevent a circumvention of agrarian reform laws except when
the alienation is made in favor of the government or through hereditary succession. This ruling is intended
to prevent a reversion to the old feudal system in which the landowners reacquired vast tracts of land,
thus negating the government's program of freeing the tenant from the bondage of the soil.
Surrender of possession did not amount to an abandonment in this case because there was an
obligation on the part of private respondents to return possession upon full payment of the loan. Voluntary
surrender, as a mode of extinguishment of tenancy relations, does not require court approval as long as it
is convincingly and sufficiently proved by competent evidence. Petitioner's voluntary surrender to the
Samahang Nayon qualifies as a surrender or transfer to the government because such action forms part
of the mechanism for the disposition and the reallocation of farmholdings of tenant-farmers who refuse to
become beneficiaries of PD 27. …what was prohibited was the perpetration of the tenancy or leasehold
relationship between the landlord and the farmer beneficiary.
SANTIAGO v. CA (G.R. No. 109111, June 28, 2000)

Civil Law/ Land Titles/ Property/ Ownership: A torrens certificate of title covers only the land described
therein together with improvements existing thereon, if any, nothing more. The titles presented by
petitioners covering as they do land adjacent to that claimed in MWSS’ application for registration, do not
support their claim, but even defeat it.
If petitioners’ predecessors were truly the owners of the subject parcels of land, they would have
taken steps to have the land properly titled long ago. The land was possessed by MWSS long before
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World War II. Petitioners "slept on the rights" they claim to possess. Relief is denied to a claimant whose
right has become "stale" by reason of negligence or inattention for a long period of time.
By placing the pipelines under the land, there was material occupation of the land by MWSS,
subjecting the land to its will and control. [Under Article 531 of the Civil Code, "Possession is acquired by
the material occupation of a thing or the exercise of a right, or by the fact that it is subject to the action of
our will, or by proper acts and legal formalities established for acquiring such right."] Petitioners cannot
argue that MWSS’ possession was not "open". The existence of the pipes was indicated above the
ground by "pilapils".
ALBERTO v. CA (June 30, 2000)

Civil Law/ Land Titles/Property/Lis pendens: The notice of lis pendens is an announcement to the whole
world that a particular real property is in litigation, and serves as a warning that one who acquires an
interest over said property does so at his own risk, or that he gambles on the result of the litigation over
said property. In Viewmaster Construction Corporation v. Maulit, this Court did not confine the availability
of lis pendens only to cases involving the title to or possession of real property. A notice of lis pendens is
proper in the following cases, viz.:
a)....An action to recover possession of real estate;
b)....An action to quiet title thereto;
c)....An action to remove clouds thereon;
d)....An action for partition; and
e)....Any other proceedings of any kind in Court directly affecting the title to the land or the use or
occupation thereof or the buildings thereon."
REPUBLIC OF THE PHILIPPINES vs. CA (G.R. No. 130174, July 14, 2000)
Civil Law/ Land Titles/ Public Lands/ Res Judicata: An applicant seeking to establish ownership over land
must conclusively show that he is the owner thereof in fee simple, for the standing presumption is that all
lands belong to the public domain of the State, unless acquired from the Government either by purchase
or by grant, except lands possessed by an occupant and his predecessors since time immemorial, for
such possession would justify the presumption that the land had never been part of the public domain or
that it had been private property even before the Spanish conquest.
The land in question is admittedly public. The applicant has no title at all. Its claim of acquisition
of ownership is solely based on possession. In fact, the parcels of land applied for were declared public
land by decision of the Cadastral Court. Such being the case, the application for voluntary registration
under P. D. No. 1529 [Formerly Act No. 496.] is barred by the prior judgment of the Cadastral Court. The
land having been subjected to compulsory registration under the Cadastral Act and declared public land
can no longer be the subject of registration by voluntary application under Presidential Decree No. 1529.
The second application is barred by res-judicata. As previously held, "[W]here the applicant possesses no
title or ownership over the parcel of land, he cannot acquire one under the Torrens System of
registration."
REPUBLIC OF THE PHILIPPINES v. ESTIPULAR (G.R. No. 136588, July 20, 2000)
Civil Law/ Land Titles/ Reconstitution of Title: Before the trial court can acquire jurisdiction to hear and
decide a reconstitution case, compliance with the following requisites is imperative:
1. That the notice of the petition be published, at the expense of the petitioner, twice in successive
issues of the Official Gazette, and posted on the main entrance of the provincial building and of the
municipal building of the municipality or city in which the land is situated, at least thirty days prior to the
date of hearing;
2. That the notice state among other things, the number of the lost or destroyed certificates of title if
known, the name of the registered owner, the name of the occupants or persons in possession of the
property, the owner of the adjoining properties and all other interested parties, the location, area and
boundaries of the property, and the date on which all persons having any interest therein must appear
and file their claim of objection to the petition;
3. That a copy of the notice also be sent, by registered mail or otherwise, at the expense of the
petitioner, to every person named therein (i.e. the occupants or persons in possession of the property, the
owner of the adjoining properties and all other interested parties) whose address is known at least thirty
days prior to the date of the hearing; and
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4. That at the hearing, petitioner submit proof of publication, posting and service of the notice as
directed by the court.
These requisites are mandatory and compliance with them is jurisdictional.
DE GUZMAN v. THE NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES (G.R. No.
143281, August 3, 2000)
Civil law/Land Titles/Recovery from Assurance Fund under the Property Registration Decree: The ff.
persons may recover from the Assurance Fund:
1) Any person who sustains loss or damage under the following conditions:
a. that there was no negligence on his part; and
b. that the loss or damage sustained was through any omission, mistake or malfeasance of the
court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the
performance of their respective duties under the provisions of the Land Registration Act, now, the
Property Registration Decree; or
2) Any person who has been deprived of any land or interest therein under the following conditions:
a. that there was no negligence on his part;
b. that he was deprived as a consequence of the bringing of his land or interest therein under the
provisions of the Property Registration Decree; or by the registration by any other person as owner of
such land; or by mistake, omission or misdescription in any certificate of owner's duplicate, or in any entry
or memorandum in the register or other official book or by any cancellation; and
c. that he is barred or in any way precluded from bringing an action for the recovery of such land
or interest therein, or claim upon the same.
The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine
that a certificate is conclusive evidence of an indefeasible title to land. That petitioners eventually lost the
property to the original owners, however, does not entitle them to compensation under the Assurance
Fund. Petitioners' recourse is not against the Assurance Fund but against the rogues who duped them.
NATIONAL IRRIGATION ADMINISTRATION vs. CA (G. R. No. 114348, September 20, 2000)
Civil Law/ Land Titles/ Property/ Easements/ Buyers in Good Faith: Under the Original Certificate of Title,
there was a reservation and condition that the land is subject to all conditions and public easements and
servitudes recognized and prescribed by law This reservation, unlike the other imposed on the grant, was
not limited by any time period and thus is a subsisting condition. Section 112, Commonwealth Act No.
141, further provides that lands granted by patent shall further be subject to a right of way.
In the present case, we find and declare that a legal easement of a right-of-way exists in favor of
the government. The land was originally public land, and awarded to respondent Manglapus by free
patent. The ruling would be otherwise if the land were originally private property, in which case, just
compensation must be paid for the taking of a part thereof for public use as an easement of a right of
way.
As to the issue of good faith, one who deals with property registered under the Torrens system is
charged with notice of burdens and claims that are annotated on the title
DOLFO v. REGISTER OF DEEDS (G.R. No. 133465, September 25, 2000)

Civil Law/ Land Titles/ Registration: The rule that a title issued under the Torrens System is presumed
valid and, hence, is the best proof of ownership of a piece of land does not apply where the certificate
itself is faulty as to its purported origin. It bears emphasis that the Torrens system does not create or vest
title but only confirms and records one already existing and vested. Thus, while it may be true, as
petitioner argues, that a land registration court has no jurisdiction over parcels of land already covered by
a certificate of title, it is equally true that this rule applies only where there exists no serious controversy
as to the authenticity of the certificate.
SPOUSES ZARAGOZA v. CA (G.R. No. 106401, September 29, 2000)

Civil Law/Land Titles/Certificate of Title Not Subject to Collateral Attack: The certificate of title, in
the absence of fraud, is the evidence of title and shows exactly the real interest of its owner. The title
once registered, with very few exceptions, should not thereafter be impugned, altered, changed, modified,
enlarged or diminished, except in some direct proceeding permitted by law. Otherwise, all security in
registered titles would be lost. A Torrens title cannot thus be collaterally attacked. The issue on the
validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action expressly
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instituted for that purpose.
1999
ITUTRALDE v. FALCASANTOS (Jan. 20, 1999)

Civil Law/ Land Titles/Forest Lands Not Subject to Private Ownership unless Declassified: As held in
Republic v. Register of Deeds (244 SCRA 537), “Forest land, like mineral or timber lands which are public
lands, are not subject to private ownership under the Constitution, become private properties. In the
absence of such classification, the land remains unclassified public land until released therefrom and
rendered open to disposition.” Before any land may be declassified form the forest group and converted
into alienable or disposable land for agricultural or other purposes, there must be a positive act from the
government. Even rules on the confirmation of imperfect titles do not apply unless and until the land
classified as forest land is released in an official proclamation to that effect so that it may form part of the
disposable agricultural lands of the public domain.
RP v CA (Jan. 21, 1999)

Civil Law/ Land Titles/ Government Immunity from Laches: As a general rule, estoppels against the public
are not favored; they must be invoked only in rare and unusual circumstances as they could operate to
defeat the effective operation of a policy adopted to protect the public. However, the government may not
be allowed to deal dishonorably or capriciously with its citizens. In the case at bar, for nearly 20 years,
petitioner failed to correct and recover the alleged increase in the lands area of St. Jude. Its prolonged
inaction strongly militates against its cause, as its is tantamount to laches.
URQUIAGA v. CA (Jan. 22, 1999)

Civil Law/ Land Titles/Public Lands/Only the State Can Institute Reversion Proceedings: Even assuming
that the land was acquired through fraud and misrepresentation, it is only the State which may institute
reversion proceedings under Sec. 101 of the Public Land Act, considering the finding that the subject lot
was public land at the time of the sales applications.
DIR. OF LANDS v. CA (Feb. 23, 1999)

Civil Law/Land Titles/Land Registration/ Effect of Withdrawal of Application for Land Registration:
Section 37 of the Land Registration Act (Act 246) mandates that the withdrawal of the application for land
registration should not mean that the conflicting interests of the parties ceased to exist and therefore the
land registration proceedings must be pursued to its conclusion. An oppositor who claims ownership over
the property covered by the application, or part thereof, may now claim in his answer that the land be
registered in his name in the same proceeding. And if the Dir. Of Lands registers an adverse claim, the
lower court is bound to determine the conflicting interest of the claimant and the applicant and incase
neither succeeds through evidence of proper title for registration, the court may dismiss the case. An
opposition presented by the Dir. Of Lands is for all intents and purposes, a conflicting interest as against
that of the applicant or of the private oppositors, asserting a claim over the land registered.
Consequently, the withdrawal by either the applicant or any of the private oppositors doesn’t ipso fact
obliterate the conflicting interests in the case. Neither is the case terminated because under the law, as
amended, the trial court is required to resolve the claims of the remaining parties, the withdrawal of the
application by the applicant and/or some private oppositors notwithstanding.
VOLUNTAD v. SPS. DIZON (August 1999)

Civil Law/ Land Titles/Reliance on Reliance on Torrens Title/ Exception: The general rule is that a person
dealing with a registered land has a right to rely on the Torrens Certificate of Title
without the need of inquiring further. But this rule cannot apply when the party has
actual knowledge of facts and circumstances that would impel a reasonably cautious
man to make such inquiry or when the purchaser has knowledge of a defect or lack of
title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire
into the status of the title of the property in litigation.
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1998
SPS. MATHAY, JR v. CA (September 1998)

Civil Law/ Land Titles/ Sale of Registered Land/ Buyers in Good Faith /Two Transfer Certificates of Title
on Same Land, Rule: In the three cases merged in this one petition, petitioners, Sps. Mathay, claim title
to three lots, which have been also bought and thereafter occupied by three different parties. Petition
dismissed.
A purchaser in good faith is “one who buys 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 a
rule, he who asserts the status of a purchaser in good faith and for value, has the burden of proving such
assertion. Petitioners can’t invoke good faith because at the time the property was sold to them, the
private respondents were occupying and cultivating the property.
As stated in the case of Baltazar v. CA, between two persons both of whom are in good faith and
both innocent of any negligence, the law must protect and prefer the lawful holder of registered title over
the transferee of a vendor bereft of any transmissible rights. In the instant case, petitioners have no rights
against private respondents. Their recourse is against their vendors.
Where two transfer certificates of title have been issued on different dates, to two different
persons, for the same parcel of land, even if both are presumed to be titleholders in good faith, it does not
necessarily follow that he who holds the earlier title should prevail. The better approach, assuming a
regularity in the issuance of the two titles, is to trace the original certificates from which the disputed
certificates of title were derived. Should there be only one common original certificate, the transfer
certificate issued on an earlier date along the line must prevail, absent any anomaly or irregularity tainting
the process of registration.
DAWSON v. REGISTER OF DEEDS (September 1998)

Civil Law/ Land Titles/ Land Registration/ Amendment and Alteration of Certificate of Title: The case
revolves around the issue of whether Sec. 108 of PD 1529 (Land Registration Act) applies in the instant
case where a contract to sell is involved. The first buyer, Louis Dawson, died without having finished
paying the whole amount, which obligation was assumed by petitioners, his heirs. The RTC and CA
refused the cancellation of the certificate in the name of Louis Dawson and issuance of a new title in the
name of petitioners.
The SC allowed the application of Sec 108 of PD 1529 contending that this is a case of a contract
to sell and not a contract of sale. In the case of Salazar v. CA, in a contract of sale, the title to the property
passes to the vendee upon the delivery of the thing sold; in a contact 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. Thus,
since Louis Dawson was unable to pay the whole price, which was completely paid by petitioners, the
property did not become part of the estate of Louis Dawson. Partition is therefore not the proper remedy
to determine the ownership of the lot whose title had not been vested in Louis Dawson during his lifetime
as his death caused the loss of his juridical personality, which is the fitness to be the subject of legal
relations.
1997
SPOUSES PALOMO v. CA (G.R. No. 95608, Jan. 21, 1997)

Civil Law/Land Titles/Public Lands/ Adverse Possession/Grant of Title: The adverse possession which
may be the basis of a grant of title in confirmation of imperfect title cases applies only to alienable lands of
the public domain. It is elementary in the law governing natural resources that forest land cannot be
owned by private persons. It is not registrable and possession thereof, no matter how lengthy, cannot
convert it into private property, unless such lands are reclassified and considered disposable and
alienable. There is no question that the lots here forming part of the forest zone were not alienable lands
of the public domain.
As to the forfeiture of improvements introduced by petitioners, the fact that the government failed
to oppose the registration of the lots in question is no justification for petitioners to plead good faith in
introducing improvements on the lots.
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HEIRS OF FELICIDAD CANQUE v. (July 1997)

Civil Law/Land Titles/Redemption of Titled Real Estate Foreclosed by a Rural Bank: The mortgagor of
titled real estate acquired under the Public Land Act but foreclosed by a rural bank, may redeem said
property within 2 years from registration of the sheriff's certificate of sale; and if said mortgagor fails to
expire such right, he or his heirs may still repurchase the land within 5 years from the expiration of the
two-year redemption period.
THE DIRECTOR OF LANDS v. CA (July 1997)

Civil Law/Land Titles/Original Land Registration/Publication of Notice of initial Hearing: Newspaper
publication of the notice of initial hearing in an original land registration case is mandatory. Absent any
publication in a newspaper of general circulation (NOGC), the land registration court cannot validly
confirm and register the title. uirement in its detailed provision. It may be asked why publication in a
NOGC is mandatory when the law already requires notice by publication in the OG, mailing and posting.
The reason is due process and the reality that the OG is not as widely read and circulated and is
oftentimes delayed in its circulation.
Further, a land registration proceeding is in rem, hence it must be validated essentially through
publication.
ORTIGAS & CO. v. JUDGE VELASCO (August 1997)

Civil Law/Land Titles/Reconstitution: R.A. No. 26, §13, lays down the requisites for acquisition by the
court of jurisdiction over a proceeding for reconstitution of title:
1) Publication, at petitioner's expense, of notice of the petition for reconstitution twice in successive
issues of the OG, and posting thereof on the main entrance of the provincial building and of the municipal
building of the municipality or city in which the land is situated, at least 30 days prior to the date of
hearing;
2) Specific statement in the notice of the number of the lost or destroyed certificates of title if known,
the name of the registered owner, the name of the occupants or persons in possession of the property,
the owner of the adjoining properties and all other interested parties, the location, area and boundaries of
the property, and the date on which all persons having any interest therein must appear and file their
claim or objection to the petition;
3) Sending, by registered mail or otherwise, at the expense of petitioner, of a copy of the notice to
every person named therein (i.e., the occupants or persons in possession of the property, the owner of
the adjoining properties and all other interested parties) whose address is known, at least 30 days prior to
the date of the hearing; and
4) Submission by petitioner at the hearing of proof of the publication, posting and service of notice
as directed by the court.
CARVAJAL v. CA (G.R. No. 98328, October 1997)

Civil Law/Land Titles/Authority of Land Registration Court:
There was nothing irregular in the trial court’s order to the LRA and DENR to submit reports on
the location of the land covered by petitioner’s application and private respondent’s certificate of title. The
authority of the land registration court to require the filing of additional papers to aid it in its determination
of the propriety of the application is based on P.D. No. 1529, §21, from which, it is also clear that ocular
inspection of the property was merely discretionary, not mandatory. Likewise, the land registration court
was not obliged to order the survey of the contested lot, especially when another government agency had
already submitted a report finding that the contested lot was identical with that described in private
respondent’s certificate of title and recommending dismissal of the application for registration.
LEGARDA v. CA (October 1997)

Civil Law/Land Titles/Reconveyance: One who deals with registered property under the Torrens system
need not go beyond the same, but only has to rely on the title; he is charged with notice only of such
burdens and claims as are annotated on the title. (Sandoval v. CA, 260 SCRA 283 [1996]) Here, no
notice of lis pendens was ever annotated on any of the titles. And even if there were such a notice, it
would not have created a lien over the property as the main office of a lien is to warn prospective buyers
that the property they intend to purchase is the subject of a pending litigation. Therefore, since the
9
property is already in the hands of Luminlun, an innocent purchaser for value, it can no longer be returned
to Cabrera, much less to NCH.
VILLANUEVA v. CA (November 1997)

Civil Law/Land Titles/Notice of Lis Pendens:
In Magdalena Homeowners v. CA (184 SCRA 325, 329-30 [1990]), this Court enumerated the
cases where a notice of lis pendens is proper:
1) action to recover possession of real estate
2) action to quiet title
3) action to remove clouds
4) action for partition
5) any other proceeding of any kind in court directly affecting the title to the land or the use
or occupation thereof or the buildings thereon.
The elements to annotate a notice of lis pendens are that: (1) property must be of such character
as to be subject to the rule; (2) court must have jurisdiction both over the person and the res; and (3)
property or res involved must be sufficiently described in the pleadings.
Although it is not necessary for the applicant to prove his ownership or interest over the property
sought to be affected by lis pendens, the applicant must, in the complaint or answer filed in the case,
assert a claim of possession or title over the subject property in order to give due course to his
application. As settled, lis pendens may be annotated only where there is an action or proceeding in
court which affects the title to, or possession of, real property.
To require that an applicant must prove his ownership or his interest over the property sought to
be affected with the notice of lis pendens will unduly restrict the scope of the rule. In such case, a party
questioning the ownership of the registered owner will litigate his or her case without an assurance that
the property will be protected from unwanted alienation or encumbrance during the pendency of the
action, thereby defeating the very purpose and rationale of the registration.
CRUZ v. CA (November 1997)

Civil Law/Land Titles/Innocent Purchaser for Value: Although under Art. 1490, a husband and wife cannot
sell property to one another as a rule which, for policy considerations requires that the prohibition apply to
common-law relationships (Calimlim v. Fortun, 129 SCRA 675 [1984]), petitioner can no longer seek
reconveyance of the property as it has already been acquired by an innocent purchaser for value
(Vizconde). This is without prejudice to any appropriate remedy petitioner may take against her live-in
companion Romy who sold the property to Vizconde .
REPUBLIC OF THE PHILIPPINES v. CA (November 1997)

Civil Law/Land Titles/Property/Encumbrance of a Free Patent Land/Reversion of Foreshore Land to
Public Domain: The lease and/or mortgage of a portion of a realty acquired through free patent within 5
years from such grant constitute sufficient ground for the nullification of the grant, as the pledge and/or
mortgage are encumbrances for which the use and transfer of property is impaired.
A patent land becoming foreshore land can no longer be subject of a free patent. Govt. v.
Cabañgis (53 Phil. 112, 115-16 [1929]) explained the rationale for this proscription, i.e., where an owner
has to all intents and purposes abandoned the land and permitted it to be totally destroyed so as to
become part of the seashore, the land passes on to the public domain but the owner thus dispossessed
does not retain any right to the natural products resulting from their new nature; it is a de facto case of
eminent domain and not subject to indemnity. When the sea moved towards the estate and the tide
invaded it, the invaded property became foreshore land and passed to the realm of the public domain.
HEIRS OF NAGAÑO v. CA (November 1997)

Civil Law/Land Titles/Free Patent Over Private Land: A free patent issued over private land is void.
Further, private respondents' claim of open, public, etc., possession since 1029 and its illegal inclusion in
petitioners' free patent gave private respondents a cause of action for quieting of title, which is
imprescriptible. Thus private respondents' complaint may thus likewise be considered an action for
quieting of title.
1996
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GARBIN v. CA (February 1996)

Civil Law/Land Titles/ Adverse Claim: The registration of an adverse claim cannot prevail over the title
which was registered subsequent to the adverse claim. In the case at bench, what was registered was
merely the adverse claim, and not the Deed of Sale. Therefore, there is still need to resolve the former's
validity in separate proceedings, as there is an absence of registration of the actual conveyance of the
portion of land therein claimed by private respondents.
NEW DURAWOOD v. CA (February 1996)

Civil Law/Land Titles/ Reconstitution: As ruled in Demetriou v. CA (238 SCRA 158, 162 [1994]), we ruled
that if a certificate of title has not been lost but is in fact in the possession of another person, the
reconstituted title is void and the court rendering the decision has not acquired jurisdiction. Consequently,
the decision may be attacked at any time. In case at bench, the owner's duplicate certificates of title were
not "lost or destroyed," hence, there was no necessity for the petition filed in the trial court for the
"Issuance of New Owner's Duplicate Certificates of Title x x x." The law provides that in case of the
refusal or failure of the holder to surrender the owner's duplicate certificate of title, the remedy is a petition
in court to compel surrender thereof to the Register of Deeds, and not a petition for reconstitution.
STATE INVESTMENT HOUSE v. CA (March 1996)

Civil Law/Land Titles/Unregistered Sale Prevails Over Subsequent Registered Mortgage: Petitioner's
registered mortgage over the property is inferior to that of respondents-spouses' unregistered right. The
unrecorded sale between respondents-spouses and Solid is preferred for the reason that if the original
owner (Solid) had parted with his ownership of the thing sold then he no longer had ownership and free
disposal of that thing so as to be able to mortgage it again. Registration of the mortgage is of no moment
since it is understood to be without prejudice to the better right of third parties.
As a general rule, where there is nothing in the certificate of title to indicate any cloud or vice in
the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore
further than what the Torrens Title upon its face indicates in quest for any hidden defect or inchoate right
that may subsequently defeat his right thereto. This rule, however, admits of an exception as where the
purchaser or mortgagee, has knowledge of a defect or lack of title in his vendor.
REPUBLIC v. CA (March 1996)

Civil Law/Land Titles/Public Lands/Registration of Patent/Reversion: Once a patent is registered under
Act No. 496 (now P.D. No. 1529) and the corresponding certificate of title is issued, the land ceases to be
part of the public domain and becomes private property over which the Director of Lands will no longer
have either control or jurisdiction. (Dir. of Lands v. De Luna, 110 Phil. 28 [1960]) The Torrens Title issued
on the basis of a free or homestead patent becomes as indefeasible as one which was judicially secured
upon the expiration of one year from date of issuance of patent. However, even after the lapse of one
year, the State may still bring an action under §101 of the Public Land Act for the reversion to the public
domain of lands which have been fraudulently granted to private individuals. This has been the
consistent ruling of this Court. (citations omitted)
HALILI v. CIR (May 1996)

Civil Law/Land Titles/Certificate of Title not subject to collateral attack/Innocent Purchaser For Value:The
issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an action
expressly instituted for that purpose. Where innocent third persons, relying on the correctness of the
Certificate of Title thus issued, acquire rights over the property, the Court cannot disregard such rights
and order the total cancellation of the certificate.
REPUBLIC v. CA (July 1996)

Civil Law/Land Titles/Claim by the State Even After A Year of the OCT’s Transcription/Prescription
Against the State: The Republic w is not barred from claiming the property, even if one year after its
transcription which is the date of its effectivity said certificate of title became incontrovertible. First, the
one-year period provided for in Section 38 of Act No. 496 merely refers to a petition for review and is
reckoned from the entry of decree. In the second place, there are other remedies available to an
aggrieved party after the said one-year period, e.g., reconveyance, covered by Section 55 of Act No. 496
which, inter alia, provides that "in all cases of registration procured by fraud, the owner may pursue all his
11
legal and equitable remedies against the parties to such fraud, without prejudice, however, to the rights of
any innocent holder for value of a certificate of title." Likewise, an action for damages is sanctioned in
cases where the property has been transferred to an innocent purchaser for value, which may be filed
within four years from discovery of the fraud. Recourse may also be had against the Assurance Fund.
Finally, prescription never lies against the State for the reversion of property which is part of the public
forest or of a forest reservation which was registered in favor of any party. Then too, public land
registered under the Land Registration Act may be recovered by the State at any time. "Public land
fraudulently included in patents or certificates of title may be reverted to the state in accordance with
Section 101 of the Public Land Act.
REPUBLIC v. CA (July 1996)

Civil Law/Land Titles/Tax Declarations as Proof of Ownership/Registration: Although tax declarations not
conclusive, they are good indicia of possession in concept of owner. They constitute at least proof that the
holder has a claim of title over the property. Such an act strengthens one's bona fide claim of acquisition
of ownership.
Furthermore, registration does not vest title. It is merely evidence of such title.
VDA. DE PANALIGAN v. CA (July 1996)

Civil Law/Land Titles/Public Land Act (C.A. No. 141/Redemption of Foreclosed Land/Tender of Payment:
Where the land mortgaged and foreclosed is granted under a homestead or free patent, tender of
payment of the repurchase price is not among the requisites of the law and is therefore unnecessary. In
PNB v. CA (179 SCRA 619 [1989]), the Court held that it was not even necessary for the preservation of
the right of redemption to make an offer to redeem or tender of payment of purchase price within 5 years.
The filing of an action to redeem within that period is equivalent to a formal offer to redeem. There is not
even a need for consignation of the redemption price.
But where the land mortgaged and foreclosed is an ordinary parcel, the State Investment House
v. CA (215 SCRA 734 [1992]) ruling applies in that tender of payment of the repurchase price is
necessary in exercising the right of redemption. This is so because in this case, redemption is being
exercised under Civil Law provisions and not under §119, C.A. No. 141.
HEIRS OF GONZAGA v. CA (September 1996)

Civil Law/Land Titles/ Two Certificates of Title for the Same Land: In Pamintuan v. San Agustin, this Court
ruled that in a cadastral case the court has no jurisdiction in an earlier land registration case and a second
decree for the same land is null and void. Where two certificates of title purport to include the same land,
the earlier in date prevails. In successive registrations, where more than one certificate is issued in
respect of a particular estate in land, the person claiming under the prior certificate is entitled to the
estate. Lastly, a certificate is not conclusive evidence of title if it is shown that the same land had already
been registered and an earlier certificate for the same is in existence.
ATOK BIG-WEDGE MINING v. IAC (G.R. No. 63528, September 1996)

Civil Law/Land Titles/Public Lands/Effect of Recording of Mining Claims: The recording of mining claims
could not have been intended to be the operative act of classifying lands into mineral lands. The
recording only operates to reserve to the registrant exclusive rights to undertake mining activities upon
the subject land. The power to classify lands into mineral lands could not have been intended under the
Philippine Bill of 1902 to be vested in just anyone who records a mining claim. This strengthens our
holding that the rights of a mining claimant are confined to possessing the land for purposes of extraction
of minerals. Thus, if no minerals are extracted, notwithstanding the recording of the claim, the land is not
mineral land and registration thereof is not precluded by such recorded claim. Thus, in case at bench, the
mining claimant, who had failed to comply with the annual minimum work requirement, could not, all the
more, be expected to have extracted minerals from the mining location.
Thus, it can be said (1) that the rights under the Philippine Bill of 1902 of a mining claim holder
has been made subject by the Bill itself to the strict requirement that he actually performs work or
undertakes improvements on the mine every year and does not merely file his affidavit of annual
assessment, which requirement was correctly identified and declared in E.O. No. 141; and (2) That the
same rights have been terminated by P.D. No. 1214, a police power enactment, under which non-
application for mining lease amounts to waiver of all rights under the Philippine Bill of 1902 and
application for mining lease amounts to waiver of the right under the Bill to apply for a patent. In light of
12
these conditions upon the right of a mining claim holder under the Bill, there should remain no doubt now
that such rights were not, in the first place, absolute or in the nature of ownership, and neither were they
intended to be so.
INTESTATE ESTATE OF THE LATE DON MARIANO SAN PEDRO y ESTEBAN v. CA (Dec. 18, 1996)
Civil Law/Land Titles/Rights Under Spanish Titles and Grants/Remedial Law/Jurisdiction of A Probate
Court: A probate court's jurisdiction is not limited to the determination of who the heirs are and what
shares are due them as regards the decedent's estate. Neither is it confirmed to the issue of the validity
of wills. Thus in Trinidad v. CA (202 SCRA 106, 116 [1991]), we held that questions of title to any property
apparently still belonging to the estate of the deceased may be passed upon in probate with the consent
of all parties, without prejudice to third persons. Parenthetically, questions of title pertaining to the
determination prima facie of whether certain properties ought to be included or excluded from inventory
and accounting may be resolved by the probate court. (Garcia v. Garcia, 67 Phil. 353, 356-357 [1939])
Under P.D. 892 (effective 16 Feb. 1976), all holders of Spanish titles/grants should cause their
lands covered thereby to be registered under Act No. 496 within 6 months from date of effectivity or until
16 Aug. 1976. Otherwise, non-compliance results in a re-classification of their land. Spanish titles can no
longer be countenanced as indubitable evidence of land ownership.
Petitioners, however, are not without recourse. P.D. 892 grants all holders of Spanish titles the
right to apply for registration of their lands under Act No. 496, within 6 months from the effectivity of P.D.
892. Thereafter, however, any Spanish title, if utilized as evidence of possession, cannot be used as
evidence of ownership in any land registration proceedings under the Torrens system. All instruments
affecting lands originally registered under the Spanish Mortgage Law may be recorded under Section 194
of the Revised Administrative Code, as amended by Act No. 3344.
1995
LIGON v. CA (244 SCRA 693)

Civil Law/Land Titles/Registration of Voluntary Instruments in the Register of Deeds: No voluntary
instrument shall be registered by the Register of Deeds unless the owner's duplicate certificate is
presented together with such instrument, except in some cases or upon court order.
IGNACIO v. COURT OF APPEALS (246 SCRA 242 [1995 July])

Civil Law/ Land Titles/ Action for Consolidation of Ownership/ Jurisdiction of RTC as Land Registration
Court: 1) An action for consolidation of ownership must be filed as an ordinary civil action, not as a land
registration case.
2) Whether a particular issue should be resolved by the RTC in its limited jurisdiction as a land
registration court is not a jurisdictional question but a procedural question.
3) The distinction between the general jurisdiction vested in the RTC and its limited jurisdiction when
acting as a land registration court has been eliminated by P.D. No. 1529, to avoid multiplicity of suits. The
RTCs now have the authority to act not only on applications for original registration but also over all
petitions filed after the original registration of title, with power to hear and determine all questions arising
from such applications or petitions. The land registration court can now hear and decide controversial
and contentious cases and those involving substantial issues.
PILAPIL v. CA (G.R. No. 55134, Dec. 4, 1995)

Civil Law/Land Titles/ Sale of Land/ Registration: To affect the land sold, the presentation of the deed of
sale and its entry in the day book must be done with the surrender of the owner's duplicate of the
certificate of title. Production of the owner's duplicate of the certificate of title is required by Section 55 of
Act No. 496 (not Section 53 of P.D. No. 1529), and only after compliance with this and other requirements
shall actual registration retroact to the date of entry in the day book. Nonproduction of the owner's
duplicate of the certificate of title, however, may not invalidate petitioners' claim of ownership over the lot
involved considering the factual circumstances of this case, i.e., constructive knowledge of the prior sale.
13
TORTS & DAMAGES
2000
MMTC v. CA (May 2000)

Torts; Vicarious Liability of Employers; Damages . X Company is the operator of buses. Spouses Y sued
the bus company for the death of their daughter who was hit by one of the buses of X. .
RTC found X & their driver guilty of negligence & who ordered to pay actual, moral &
exemplary damages, including atty's. fees & costs of lawsuit.
RULINGS: 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, “ both in the selection of the employee who committed the quasi-
delict and in the supervision of the performance of his duties.
Moral damages. - The award of moral damages is aimed at a restoration, within the limits of the
possible, of the spiritual status quo ante; and therefore, it must be proportionate to the suffering inflicted.
Compensation for loss of earning capacity - Compensation of this nature is awarded not for loss
of earnings but for loss of capacity to earn money. Evidence must be presented that the victim, if not yet
employed at the time of death, was reasonably certain to complete training for a specific profession. It is
not necessary that education, as a guide to future earnings, relate to a specific occupation like lawyer or
doctor. Evidence of education in general studies is admissible to ascertain future earning.
FOOD TERMINAL INC. vs. CA (G.R. No. 108397, June 21, 2000.)
Torts; Negligence; Damages
X engaged the services to Y company for the care and custody of X’s goods. The basic issue
raised is whether or not the Y was negligent in the care and custody of the goods during storage. Y
practically admitted that it failed to maintain the agreed temperature of the cold storage area at 2 to 4
degrees centigrade at all times, and this caused the deterioration of the yeast stored therein. But Y
claimed that temperature was not the sole cause for the deterioration of the goods. Since negligence has
been established, Y is liable for damages.
PEOPLE V. LIBRANDO (GR No, 132251, July 6, 2000)

Damages as Earning Capacity - X killed Y and was convicted of murder. The heirs of Y was awarded
compensation for the loss of the earning capacity of Y.
The Sc has consistently fixed the indemnity for the loss of the earning capacity of the deceased
by taking into consideration the victim’s net income at the time of his death and his probable life
expectancy.
Net earning capacity =

2/3 (80- age of victim at time of his death) X net income (i.e. gross annual income less living expenses)
In the absence of proof showing the deceased’s living expenses, net income is estimated to be
50% of the gross annual income.
RADIOWEALTH V. DEL ROSARIO (GR No. 138739, July 6, 2000)

Liquidated Damages - X executed a promissory note (PN) in favor of Y company. The PN provided for a
late payment penalty of 2.5% monthly atty’s fees equivalent to 25% of the amount due in case legal
action is instituted and 10% of the same as liquidated damages. X defaulted payment despite repeated
demand. Y filed complaint against X.
Liquidated damages should no longer be imposed for being unconscionable. Such damages
should also be deemed included in the 2.5% monthly penalty. Y is entitled only to atty.’s fees, but only in
a sum equal to 10% of the amount due which the SC deem reasonable under the proven facts.
PEOPLE V. DAROY (Gr No. 118942, July 18, 2000)

Damages as Earning Capacity - X was convicted of murder for the death of Y. Heirs of Y were awarded
indemnity for loss of earning capacity despite absence of evidence to support the widow’s claim for loss of
earning capacity.
14
An indemnity for loss of earning capacity is justified, it appearing from the testimony of the
surviving spouse that the deceased was 40 years old at the time of his untimely death and earned P4,200
monthly. The testimony of the surviving spouse is sufficient to establish a basis from which the court can
make a fair and reasonable estimate of the damages for the loss of the earning capacity of the victim.
PEOPLE V. DE LA TONGGA (GR No. 133246, July 31, 2000)

Damages, Actual and Temperate - X was found guilty by the trial court , of murdering Y. X was
sentenced by the TC to pay the heirs of Y indemnity as well as actual damages. X questioned the award
of actual damages because other than the testimony of the widow for hospital and funeral expenses, no
documentary evidence was presented by the prosecution to support this claim.
The SC agrees with X. To recover actual damages, it is necessary to prove the actual amount of
loss with a reasonable degree of certainty, on the basis of competent proof and the best evidence
obtainable by the injured party. In this case, there were no such proof to sustain award of actual
damages.
In lieu of actual damages, X should pay temperate damage. Art 2224 of the Civil Code provides
that temperate damages may be recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case be proved with certainty.
MAGAT V. CA (GR No. 124221, Aug 4, 2000)

Damages, Actual and Exemplary - X&Y entered into a contract whereon X would purchase for Y
radio transreceivers from Japan. Y commenced operations after winning a bid in Subic Naval Base
without the transreceivers from Japan by borrowing radio units from third party. X thus cancelled his order
with this Japanese supplier. X filed complaint for breach of contract.
Damages cannot be awarded even if assuming there was breach. Damnum absque injure.
There was no bad faith. Y borrowed the equipment because he was faced with the danger of his
bid with Subic cancelled if he did not commence operations immediately. Exemplary damages is awarded
only if breach is wanton, fraudulent, oppressive, malevolent. Neither can actual damages be awarded.
The amount of loss must not only be capable of proof, but must be proven with a reasonable degree of
certainty. The claim must be premised upon competent proof or upon best evidence obtainable, such as
receipts or other documentary proof. Only the testimonies of X’s witnesses were presented.
PEOPLE V. DIAZ (337 SCRA 521 August 9, 2000)

Crime of rape was committed. The award of civil indemnity to the victim must be increased to
P50,000 in accordance with current jurisprudence. In addition, moral damages in the amount of P50,000
must be awarded to the victim without need of further proof other than tat rape was committed against the
victim.
PEOPLE V. PACINA (GR No. 123150 August 16, 2000)

Moral damages, Rape - X was convicted of rape by the Trial Court. The TC granted P500,000 to the
victim as moral damages.
SC ruled that the grant of moral damages amounting to P500,000 is unreasonable. Moral
damages are not intended to enrich the victim, rather they are awarded to allow them to obtain means for
diversion and amusement that could serve to alleviate their moral and psychological sufferings.
ACE HAULERS CORP V. CA (GR No. 127934, 23 August 2000)

Civil liability in Criminal Cases
A vehicular mishap occurred involving a truck, a jeepney and a motorcycle. The motorcycle was
bumped by the jeepney and X, the motorcycle rider was run over by the truck. X died. Issue is whether or
not in an action for damages arising from a vehicular accident, X may recover damages against the
employer of the accused driver both in the criminal case (delict) and the civil case for damages based on
culpa aquiliana.
In negligence case, the offended party has the option between an action for enforcement of civil
liability based on culpa criminal under RPC and action for recovery of damages based on culpa aquiliana
under the Civil Code. But he cannot recover damages twice for the same negligent act or omission.
Consequently, a separate civil action for damages lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party
15
is not allowed to recover damages on both scores, and would be entitled only to the bigger amount of the
2, assuming the awards vary in 2 cases.
PEOPLE V. TOQUERO (25 August 2000)

Award in Rape cases – In rape cases, P50,000 is awarded as moral damages without need of proof of
mental and physical suffering. In addition, P50,000 is awarded to the complainant as civil indemnity ex-
delicto.
PEOPLE V. DUBRIA (26 September 2000)

Loss of earning capacity as damages – The fact that the prosecution did not present documentary
evidence to support its claim for damages for loss of earning capacity of the deceased does not preclude
recovery of said damages. The testimony of the mother of the victim, as to the earning capacity of her
son, sufficiently establishes the basis ofr making such an award.
1999
BORJAL v. CA (Jan. 14, 1999)

Civil Law/Damages: Damages cannot be awarded in the absence of ill-motive in the filing of the
complaint. Private respondent can’t be said to have instituted the present suit in abuse of the legal
processes and with hostility to the press; or that he acted maliciously, wantonly oppressively, fraudulently
and for the sole purpose of harassing petitioners, thereby entitling the latter to damages. On the contrary,
private respondent acted with his right to protect his honor from what he perceived to be malicious
imputations against him. Proof and motive that the institution of the action was prompted be a sinister
design to vex and humiliate a person must be clearly and preponderantly established to entitle the victim
to damages. The law could not have meant to impose a penalty on the right to litigate, nor should
counsel’s fees be awarded every time a party wins a suit.
1998
BPI EXPRESS CARD CORPORATION v. CA

Civil Law/ Moral Damages/ Terms and Conditions of Credit Card and New Agreement/ Abuse of Right/
Damages and Injury Distinguished: This is a case where private respondent, Marasigan, won an award in
the trial court and in the CA for damages allegedly sustained when his BPI credit card was rejected by a
restaurant where he was entertaining some guests on December 8, 1989. The SC reversed the CA and
held that there was no injury suffered by Marasigan as it was shown that he was at fault why his credit
card was dishonored. He was sent a letter by BPI informing him that he was indebted to them and
ordering him to pay his obligation. Marasigan did pay using a postdated check, dated December 15,
1989.
By using the postdated check as payment, Marasigan failed to comply with his agreement with
the bank to settle his account in order that his credit card would not be suspended. Settled is the doctrine
that a check is only a substitute for money and not money, the delivery of such an instrument does not, by
itself operate as payment. Thus, the BPI was justified in suspending his credit card. As such, BPI did not
abuse its right under the terms and conditions of the contract.
The following are the elements for an abuse of right to exist: (1) there is a legal right or duty; (2)
which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another.
Lastly, there is a material distinction between damages and injury. Injury is the illegal invasion of
a legal right; damage is the loss, hurt or harm which results from the injury; and damages are the
recompense or compensation awarded for the damages suffered. Thus, in cases where there is damage
without injury, in those instances in which the harm or loss was not the result of the violation of a legal
duty, the injured party bears the consequences alone. The award for tort damages is based on the
premise that an individual was injured in contemplation of law. There must be a breach of a duty, which
breach must primarily cause the injury.
1997
16
PNB v. CA (G.R. No. 116181, Jan. 6, 1997)

Civil Law/Damages/ Quantum Meruit: Quantum meruit allows recovery of the reasonable value regardless
of any agreement as to value. It entitles the party to as much as he reasonably deserves, as
distinguished from quantum valebant, ot ro as what is reasonably worth.
Unliquidated claims present a justiciable question ripe for judicial determination which is beyond
the powers of COA to adjudicate. (See Phil. Operations v. Auditor-General, 94 Phil. 868 [1954])
Recovery based on quantum meruit is in the nature of such claim because its settlement requires the
application of judgment and discretion and cannot be adjusted by simple arithmetical processes. In
Eslao, the Court found it necessary to refer to the COA the task of determining the total compensation
due to the claimants considering that the matter on the exact amount was not in issue and the
determination thereof involves a review of the factual findings and evidence in support thereof. On the
other hand, the lower court here, had already made a factual finding on the amount reasonably due to
petitioner and scrutinized the evidence to sustain the claim. Besides, there is nothing in the cited cases
which would imply that only the COA can determine the specific amount due to a contractor guided by the
established principle of quantum meruit. As our courts are both courts of law and equity, they are not
powerless to determine a factual matter in accordance with both standards.
DEL ROSARIO v. CA (G.R. No. 118325, Jan. 29, 1997)

Civil Law/ Contracts/ Negligence: There is merit in the petition. The issue is whether or not MFC is
answerable to petitioners for the damage caused to petitioners' residence when its roof, made of shingles
purchased from and installed by the former, was blown away by a typhoon. The Court rules that it is.
What matters here is that MFC's employees delivered and installed the shingles. Thus, all the
quibbling about whether Puno acted as agent of MFC or the spouses, is pointless. The matter is not a
factor in determining MFC's liability for its workers' use of inferior materials and their defective installation
of the shingles. What likewise matters is that MFC's employees, in installing the shingles, used inferior
materials and assembled them in a manner contrary to specifications, in bad faith and with gross
negligence. Hence, MFC infringed and is liable on its warranties.
PAL v. CA (July 1997)

Civil Law/ Commercial Law/Transportation Law/ Damages
Pantejo boarded a PAL plane in Manila and disembarked in Cebu City where he was supposed to take
his connecting flight to Surigao City. Due to a typhoon, the connecting flight was cancelled. PAL gave
each passenger a total of P300.00 cash assistance for the 2-day stay in Cebu. Pantejo requested that he
be billeted at PAL's expense as he did not have cash with him, but PAL refused. Pantejo learned that the
hotel expenses of 2 other passengers were reimbursed by PAL. Pantejo told PAL's manager that he was
going to sue for discrimination. It was only then that PAL offered to pay Pantejo, but due to his ordeal and
anguish, Pantejo refused.
What makes PAL liable for damages here is its blatant refusal to accord the amenities equally to
all its stranded passengers. No compelling reason was advanced to explain this discriminatory conduct.
Moral damages are not intended to enrich plaintiff, merely to obtain means, diversion or
amusements that will serve to alleviate the moral suffering he underwent due to defendant's culpable
action and must, perforce, be proportional to the suffering inflicted. However, substantial damages do not
translate into excessive damages.
The interest of 6% imposed by the CA should be computed from the date of rendition of judgment
and not from the filing of the complaint. This is because at the time of the filing the complaint, the amount
of damages to which plaintiff may be entitled remains unliquidated and not known until definitely
ascertained, assessed and determined by the courts, and only after presentation of proof.
GARCIA-RUEDA v. PASCASIO (September 1997)

Civil Law/Torts/Medical Malpractice Cases: There are 4 elements involved in medical negligence
cases: duty, breach, injury and proximate causation.
When the victim employed the services of the doctors, a physician-patient relationship was
created. In accepting the case, the doctors in effect represented that, having the needed training and skill
possessed by physicians and surgeons practicing in the same filed, they will employ such training, care
and skill in the treatment of their patients. They have a duty to use at least the same level of care that
any other reasonably competent doctor would use to treat a condition under the same circumstances.
The breach of these professional duties of skill and care, or their improper performance, by a physician
17
surgeon whereby the patient is injured in body or in health, constitutes actionable malpractice. Thus, in
the event that any injury results to the patient from want of due care or skill during the operation, the
surgeons may be held answerable in damages for negligence.
Moreover, in malpractice or negligence cases involving the administration of anaesthesia, the
necessity of expert testimony and the availability of the charge of res ipsa to the plaintiff, have been
applied in actions against anaesthesiologists to hold the defendant liable for the death or injury of a
patient under excessive or improper anaesthesia. Essentially, it requires 2-pronged evidence: evidence
as to the recognized standards of the medical community in the particular kind of case, and a showing
that the physician in question negligently departed from this standard in his treatment.
Another element in medical negligence cases is causation which is divided into 2 inquiries:
whether the doctor's actions in fact casued the harm to the patient and whether these were the proximate
cause of the patient's injury.
NEGROS NAVIGATION v. CA (November 1997)

Civil Law/ Commercial Law/Transportation Law/ Insurance/Torts and Damages: (1) Private respondent
need not prove presence of their relative-victims as passengers on the ship There is no reason he should
claim members of his family perished merely to sue. People do not normally lie about so grave a matter
as the loss of dear ones. It would be more difficult to conceal relatives if they were alive than it is for
petitioner to show the contrary.
(2) Petitioner breached its duty to exercise extraordinary diligence. It was found in Mecenas v.
CA (180 SCRA 83 [1989]) there that although proximate cause was negligence of Tacloban City's crew,
Don Juan's crew was equally negligent as its master was playing mahjong at the time of collision and the
officer on watch admitted that he failed to call the attention of the master to the imminent danger; further,
the Don Juan was overloaded and not seaworthy as it sank within 10 to 15 minutes of impact.
(3) A shipowner is liable notwithstanding total loss of the ship if fault can be attributed to the
shipowner.
(4) Petitioner's contention that the expenses for the erection of a monument and other expenses
for memorial services for the victim should be considered included in the death indemnity = without merit.
Death indemnity is given to compensate for violation of the rights to life and physical integrity of the
deceased. Damages incidental to or arising out of such death are for pecuniary losses of the beneficiaries
of the deceased.
CRUZ v. CA (November 1997)

Civil Law/Torts/Medical Malpractice Suit: A medical malpractice suit is the type of claim which a victim
has available to him or her to redress a wrong committed by a medical professional which has caused
bodily harm. (Garcia-Rueda v. Pascasio, G.R. No. 118141, 5 September 1997) In this jurisdiction, these
claims are most often brought as a civil action for damages under Art. 2176, NCC, and in some instances,
as a criminal case under Art. 365, RPC, with which the civil action for damages is impliedly instituted.
The elements of reckless imprudence are: (1) the offender does or fails to do an act; (2) the doing
or failure to do that act is voluntary; (3) that it be without malice; (4) that material damage results from the
reckless imprudence; and (5) that there is inexcusable lack of precaution on the part of the offender,
considering his employment or occupation, degree of intelligence, physical condition, and other
circumstances regarding person, time and place.
Whether or not a physician has committed an "inexcusable lack of precaution" in the treatment of
his patient is to be determined according to the standard of care observed by other members of the
profession in good standing under similar circumstances bearing in mind the advanced state of the
profession at the time of treatment or the present state of medical science.
All 3 courts below bewailed the inadequacy of the facilities/supplies/provisions and untidiness of
petitioner's clinic; the failure to subject the patient to a cardio-pulmonary test prior to the operation; the
omission of any form of blood typing before the transfusion; and even the subsequent transfer of Lydia to
the SPDH and the reoperation performed on her by petitioner. But while it may be true that the
circumstances pointed out by the courts below seemed beyond cavil to constitute reckless imprudence on
the part of the surgeon, this conclusion is still best arrived at not through the educated surmises nor
conjectures of laymen, including judges, but by the unquestionable knowledge of expert witnesses. For
whether a physician or surgeon has exercised the requisite degree of skill and care in the treatment of his
patients is, in the generality of cases, a matter of expert opinion. The deference of courts to the expert
opinion of qualified physicians stems from its realization that the latter possess unusual technical skills
18
which laymen in most instances are incapable of intelligently evaluating. Expert testimony should have
been offered to prove that the circumstances cited by the courts below constituted conduct falling below
the standard of care employed by other physicians in good standing when performing the same operation.
1996
VALENZUELA v. CA (February 1996)

Civil Law/Torts & Damages/ Contributory Negligence/ Vicarious Liability: Was V guilty of contributory
negligence in parking her car alongside Aurora Blvd., which, L points out, is a no parking zone? No.
When V discovered she had a flat tire, she stopped at a lighted place where she parked the car very close
to the sidewalk. Under these circumstances, V exercised the standard reasonably dictated by the
emergency and could not be considered to have contributed to the unfortunate circumstances. The
emergency which lead her to park her car on a sidewalk in Aurora Blvd. was not of her own making, and it
was evidence that she had taken all reasonable precautions.
The vicarious liability of L's employer is not based on the principle of respondeat superior, which
holds the master liable for acts of the servant, but that of pater familias, in which the liability ultimately falls
upon the employer, for his failure to exercise good father diligence in the selection and supervision of his
employees.
When a company gives full use and enjoyment of a company car to its employee, it in effect
guarantees that it is, like every good father, satisfied that its employee will use the privilege reasonably
and responsively.
As such, in providing for a company car, the company owes a responsibility to the public to see to
it that the managerial or other employees to whom it entrusts virtually unlimited use of a company issued
car are able to use the company car capably and responsibly.
[There must be evidence] as to whether or not the company took the steps necessary to
determine or ascertain the driving proficiency and history of L, to whom it gave full and unlimited use of a
company car. Not having been able to overcome the burden of demonstrating that it should be absolved
of liability for entrusting its company car to L, said company, based on the principal of bonus pater
familias, ought to be jointly and severally liable with the former for the injuries sustained by V during the
accident.
SPOUSES CUSTODIO v. CA (February 1996)

Civil Law/Torts & Damages/ Injury and Damage Distinguished/Damnum Absque Injuria: Injury is the
illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and
damages are the recompense or compensation awarded for the damage suffered. In order that the law
will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be
damnum et injuria.
In case at bar, although there was damage, there was no injury.
Contrary to claim of private respondents, petitioners could not be said to have violated the
principle of abuse of right. In order that said principle can be applied, the following requisites must
concur: (1) the defendant acted in a manner that is contrary to morals, good customs or public policy;
(2) the acts should be willful; and (3) there was damage or injury to the plaintiff. (Art. 21, Civil Code)
Petitioners' act in constructing a fence within their lot is a valid exercise of their right as owners,
hence not contrary to morals, etc. (see Art. 430, Civil Code). At the time the fence was constructed, the
lot was not subject to any servitudes. There was no easement of way existing in favor of private
respondents, either by law or contract.
The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie,
although the act may result in damage to another, for no legal right has been invaded. One may use any
lawful means to accomplish a lawful purpose and though the means adopted may cause damage
another, no cause of action arises in the latter's favor. The courts can give no redress for hardship to an
individual resulting from action reasonably calculated to achieve a lawful end by lawful means.
MANIAGO v. CA (March 1996)

Civil law/Torts & Damage/Action for Damages: The right to bring an action for damages under the Civil
Code must be reserved as required by Rule 111, §1, otherwise it should be dismissed.
19
The right of the injured party to sue separately for the recovery of the civil liability whether arising
from crimes or quasi-delicts must be reserved otherwise, they will be deemed instituted with the criminal
action. (Dulay v. CA, 243 SCRA 220 [1995]; Yakult v. CA, 190 SCRA 347 [1990])
TRANS-ASIA SHIPPING v. CA (March 1996)

Civil Law/ Torts & Damages/ Actual & Moral Damages: In the case at bench, private respondent's delay
was due to his insistence on disembarking, which forced the vessel to return to its port of origin. Had he
remained on the vessel, it would have reached it destination, albeit, half a day late. Moreover, private
respondent failed to prove that he did not receive his salary, nor that his absence was not excused. Thus,
no actual damages can be awarded.
But moral and exemplary damages must be awarded as petitioner allowed its vessel to leave the
port of origin with full awareness that it was unseaworthy, hence, it acted with bad faith and in a wanton
and reckless manner.
MALALUAN v. COMELEC (March 1996)

Civil Law/Torts & Damages/ Actual Damages: In light of Arts. 2199 and 2201, Civil Code, actual
damages are appropriate only in breaches of obligations in cases of contracts and quasi-contracts, and
on the occasion of crimes and quasi-delicts. Thus, the claim of a party in an election case for actual
damages must hinge upon these. In their absence, the claimant must be able to point out a specific
provision of law authorizing a money claim for election protest expenses against the losing party.
(Atienza, 239 SCRA 298) For instance, the claimant may cite Arts. 19, 20 and 32(5), Civil Code, which
create obligations not by contract, crime or negligence, but directly by law.
PEOPLE v. PATROLLA JR. y VEGA (March 1996)

Civil Law/Torts & Damages/ Exemplary Damages: Exemplary damages may be awarded in criminal
cases where the crime was committed with one or more aggravating circumstances. No aggravating
circumstance is present, other than treachery, which qualified the killing to murder and abuse of superior
strength which was however absorbed in treachery, to warrant an award of thereof.
SABENA v. CA (March 1996)

Civil Law/ Torts & Damages/Loss of Luggage: Petitioner contends that the alleged negligence of private
respondent should be considered the primary cause of the loss of her luggage, as despite her awareness
that the flight ticket had been confirmed only for Casablanca and Brussels, and that her flight from
Brussels to Manila had yet to be confirmed, she did not retrieve the luggage upon arrival at Brussels.
It remained undisputed that private respondent's luggage was lost while in the custody of
petitioner. When she discovered her bag was missing, she promptly accomplished and filed a Property
Irregularity report, followed up her claim, and even filed a formal letter-complaint. She felt relieved when
she was advised that her luggage had been found, with its contents intact when examined, and that she
could expect it to arrive 4 days later. The then waited anxiously only to be told later that her luggage had
been lost for the second time. Thus, it was clear that petitioner was guilty of gross negligence.
As held in Alitalia v. IAC (192 SCRA 9, 16-18), the Hague Protocol amended the Warsaw
Convention by removing the provision that if the airline took all necessary steps to avoid the damage, it
could exculpate itself completely, and declared the stated limits of liability not applicable 'if it is proved that
the damage resulted from an act or omission of the carrier. The Convention does not thus operate as an
exclusive enumeration of the instances of an airline's liability, or as an absolute limit of the extent of that
liability.[I]t should be deemed a limit of liability only in those cases where the cause of death or injury to
person, or destruction, loss or damage to property or delay in its transport is not attributable to or
attended by any willful misconduct, etc.
PNB v. CA (April 1996)

Civil Law/ Torts Damages/ Moral & Exemplary Damages: Moral damages awarded must be
commensurate with the loss or injury suffered. Moral damages though incapable of pecuniary estimations,
are in the category of an award designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the wrongdoer. Moral damages are emphatically not intended to enrich a
complainant at the expense of the defendant. They are awarded only to enable the injured party to obtain
20
means, diversion or amusements that will serve to obviate the moral suffering he has undergone, by
reason of the defendant's culpable action. Its award is aimed at the restoration, within the limits of the
possible, of the spiritual status quo ante, and it must be proportional to the suffering inflicted.
Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a
deterrent against or as a negative incentive to curb socially deleterious actions.
BALIWAG TRANSIT v. CA (May 1996)

Civil Law/ Commercial Law/ Transportation/ Common Carriers/ Torts/ Negligence: The use of a kerosene
lamp substantially complies with Section 34 (g) of the Land Transportation Code. Said law clearly allows
the use not only of an EWD of the triangular reflectorized plates variety but also parking lights or flares
visible one hundred meters away. No negligence, therefore, may be imputed to A & J Trading and its
driver.
To prove actual damages, the best evidence available to the injured party must be presented.
The court cannot rely on uncorroborated testimony whose truth is suspect, but must depend upon
competent proof that damages have been actually suffered.
In a breach of contract of carriage, moral damages are recoverable if the carrier, through its
agent, acted fraudulently or in bad faith. The evidence shows the gross negligence of the driver of
Baliwag bus which amounted to bad faith.
PHILIPPINE AIRLINES v. CA (June 1996)

Civil Law/Commercial Law/ Transportation Law/ Damages: Moral damages are recoverable in suits
predicated on breach of a contract of carriage where it is proved that the carrier was guilty of fraud or bad
faith. Inattention to and lack of care for the interests of its passengers amount to bad faith. What the law
considers as bad faith which may furnish the ground for an award of moral damages would be bad faith in
securing the contract and in the execution thereof, as well as in the enforcement of its terms, or any other
kind of deceit. Such unprofessional and proscribed conduct is attributable to petitioner airline.
It must, of course, be borne in mind that moral damages are not awarded to penalize the
defendant but to compensate the plaintiff. In a contractual or quasi-contractual relationship, exemplary
damages, on the other hand, may be awarded only if the defendant had acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner. Attorney's fees in the concept of damages may be awarded
where there is a finding of bad faith. The evidence on record amply sustains that the awards assessed
against petitioner are justified and reasonable.
FABRE v. CA (July 1996)

Civil Law/Damages: The CA erred in increasing the amount of compensatory damages because private
respondents did not question this award as inadequate. To the contrary, the award of P500,000 by the
RTC as actual damages is reasonable considering the contingent nature of her income as a casual
employee of a company and as distributor of beauty products and the fact that the possibility that she
might be able to work again has not been foreclosed.
With respect to the other awards:
1.) Moral damages are granted since the driver's gross negligence amounted to bad faith.
2.) Exemplary damages and attorney's fees proper. Error for CA to increase award of moral damages
and reduce attorney's fees, for same reason as compensatory damages.
3.) Bus driver and owners jointly and severally liable.
BALIWAG TRANSIT v. CA (G.R. No. 116624, September 1996)

Civil Law/Torts and Damages/ Employer's Vicarious Liability: 1) Circumstances showing negligence of
driver: he boarded the bus, sat on the driver's seat and was at the steering wheel when the bus moved
pinning down the deceased who was reparing the defective brake system below. The driver should have
known that his brake system was being repaired as he was the one who told the deceased to do so. The
driver should have parked the bus properly and safely. After alighting from the bus to tell the gasman to
fill the tank, he should have placed a stopper or any hard object against a tire or two of the bus. But
without taking the necessary precautions, he boarded the bus, causing it to move, which lead to the
accident.
2) Presumption of negligence on employer's part in the selection of or supervision over employee is
rebuttable by clear showing of good father diligence. Hence, to escape solidary liability for quasi-delict
21
committed by an employee, the employer must adduce sufficient proof that it exercised such degree of
care. (citations omitted)
3) Damages awarded were the following: actual damages (life expectancy and loss of earning
capacity); pecuniary loss, loss of support and service; and moral and mental suffering. The loss of
earning capacity is based on 2 factors: number of years on the basis of which the damages shall be
computed, and the rate at which the loss sustained by the heirs should be fixed [Gives Villa Rey formula].
FOOD TERMINAL, INC. v. CA (September 1996)

Civil Law/Damages/Interest: When an obligation not constituting a loan or forbearance of money is
breached then an interest on the amount of damages awarded may be imposed at the court's discretion
at the rate of 6% p.a. in accordance with Art. 2209, NCC. However, as declared in Eastern Shipping v.
CA (234 SCRA 78), the interim period from the finality of the judgment awarding a monetary claim and
until payment thereof, is deemed to be equivalent to a forbearance of credit. Thus, from the time the
judgment becomes final until its full satisfaction, the applicable rate of legal interest shall be 12%.
The award of the trial court shall earn interest at the rate of 6% p.a. from 15 May 1984 (the date
fixed by the trial court) until fully satisfied, but before judgment becomes final. From date of finality of
judgment until the obligation is totally paid, a rate of 12% is imposed.
PEOPLE v. SEQUIÑO (G.R. No. 117397, November 1996)

Civil Law/ Damages/ Award of Moral Exemplary Damages: There is no factual basis for the award of
moral and exemplary damages insofar as 2 of the private complainants are concerned since they did not
ask for and testify thereon. Only 1 private complainant asked for moral damages of P50,000.00 for her
worries due to the death of her husband. As to exemplary damages, the law is clear that they are
recoverable in criminal cases only when the crime was committed with one or more aggravating
circumstances, none of which are proven here.
1995
FAR EAST BANK v. CA (241 SCRA 671 [Feb. 1995])

Civil Law/Torts & Damages: A quasi-delict can be the cause for breaching a contract that might thereby
permit the application of applicable tort principles even where there is a pre-existing contract
between plaintiff and defendant.
CHUA v. CA (242 SCRA 341[Mar 1995])

Civil Law/Torts & Damages/ Damages for Malicious Prosecution: Malicious prosecution has been
expanded to include baseless civil suits which are meant to harass or humiliate a defendant, but both
malice and lack of probable cause must be clearly shown to justify an award of damages.
OBLIGATIONS AND CONTRACTS
2000
GOLDEN ROD INC. vs CA (May 2000)

Contracts; Sales; Rescission- Land dispute between Barreto Realty executed an agreement w/
Golden Rod wherein Barreto accepted Golden Rod’s offer to buy the properties of Golden Rod which was
subject to imminent foreclosure. Later on, Golden Rod informed Barreto, then its president, that it would
not go through w/ the sale because of the denial of UCPB of its request for an extension of time to pay the
obligation. He also demanded the refund of the earnest money of P1M which it gave to Barreto.
Art. 1385 of the CC provides that rescission creates the obligation to return the things which were
the object of the contract together with their fruits and interest. The vendor is therefore obliged to return
the purchase price paid to him by the buyer if the latter rescinds the sale, or when the transaction as
called off and the subject property had already been sold to a 3rd person, as what was obtained in this
case. Therefore, by virtue of the extrajudicial rescission of the contract to sell by the petitioner without
opposition from private respondents who, in turn, sold the property to other persons, private respondent
Barreto Realty, as the vendor, had the obligation to return the earnest
money of P1M plus legal interest.
22
METROBANK v. CA (G.R. No. 122899, June 8, 2000)

Civil Law/Oblicon/ Estoppel: In Maneclang vs. Baun, this Court enumerated the requisites for estoppel by
conduct to operate, to wit:
1. there must have been a representation or concealment of material facts;
2. the representation must have been with knowledge of the facts;
3. the party to whom it was made must have been ignorant of the truth of the matter; and
4. it must have been with the intention that the other party would act upon it.
ROMAGO ELECTRIC CO. v. CA (G.R. No. 125947, June 8, 2000)

Civil Law/ Oblicon/ Contracts: There is no contract here. We are not convinced that there was a meeting
of the minds between Romago and TSI regarding the question of sharing of payment of rentals and
utilities charges, pending the consummation of the Stock Purchase Agreement. There is no adequate
showing that TSI consented to any such verbal agreement. On the contrary, TSI through its General
Manager Severino Lim and Director Jorge Salazar denied the existence of such verbal agreement or
understanding.
YUCHENGCO v. REPUBLIC (G.R. No. 131127, June 8, 2000)

Civil Law/ Oblicon/ Constructive Trust: Constructive trust is that created by reason of equity to answer the
demands of justice and prevent unjust enrichment. It arises against one, who, by fraud, duress or abuse
of confidence, obtains or holds the legal right to property which he ought not, in equity and good
conscience, hold. Correspondingly, actions thereon prescribe after ten (10) years as provided by Article
1144 of the Civil Code:
The following actions must be brought within ten (10) years from the time the right of action
accrues: (1) upon a written contract; (2) upon an obligation created by law; and (3) upon a judgment.
Article 1154 of the Civil Code is applicable by parallelism: the period during which the obligee was
prevented by fortuitous event from enforcing his right is not reckoned against him.
JARDINE DAVIES INC. v. CA (G.R. No. 128066, June 19, 2000)

Civil Law/ Oblicon/ Condition: We distinguish between a condition imposed on the perfection of a contract
and a condition imposed merely on the performance of an obligation. While failure to comply with the first
condition results in the failure of a contract, failure to comply with the second merely gives the other party
options and/or remedies to protect his interests.
…by the unilateral cancellation of the contract, the defendant has acted with bad faith and this
was further aggravated by the subsequent inking of a contract between defendant and co-defendant. It is
very evident that (the defendant) thought that by the expedient means of merely writing a letter would
automatically cancel or nullify the existing contract entered into by both parties after a process of bidding.
This, to the Court's mind, is a flagrant violation of the express provisions of the law and is contrary to fair
and just dealings to which every man is due.
ESPINA v. CA (G.R. No. 116805, June 22, 2000)

Civil Law/ Oblicon/ Novation/ Application of Payment: 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.
Petitioner gave respondent a notice to vacate the premises and to pay his back rentals. Failing to
do so, respondent's possession became unlawful and his eviction was proper. Now respondent contends
that the petitioner's subsequent acceptance of such payment effectively withdrew the cancellation of the
provisional sale. We do not agree. Unless the application of payment is expressly indicated, the payment
shall be applied to the obligation most onerous to the debtor. In this case, the unpaid rentals constituted
the more onerous obligation of the respondent to petitioner. As the payment did not fully settle the unpaid
rentals, petitioner's cause of action for ejectment survives.
23
VIEWMASTER CONSTRUCTION CORP vs. ROXAS (G.R. No. 133576, July 13, 2000)
Civil Law/ Contracts/ Statute of Frauds/ Implied Trusts/ Sales: The verbal agreement entered into
between petitioner Viewmaster and respondent Allen Roxas was an agreement that by its terms is not to
be performed within a year from the making thereof. To be taken out of the operation of the Statute of
Frauds, the agreement must be fully performed on one side within one year from the making thereof. In
the case at bar, since neither of the parties has fully performed their obligations within the one-year
period, then it behooves this Court to declare that the case falls within the coverage of the Statute of
Frauds. Also, as the sale of fifty percent (50%) of Allen Roxas’s shareholdings in State Investment would
amount to more than five hundred pesos (P500.00), the contract must be in writing to be enforceable.
There is no implied trust here for in order for the provisions of Article 1448 to apply in the
case at bar "the price is paid by another for the purpose of having the beneficial interest of the property."
It bears stressing that respondent Allen Roxas obtained a loan from First Metro Investments, Inc. not from
petitioner Viewmaster. It was FMIC that provided the funds with which Allen Roxas acquired the
controlling interest in State Investment Trust, Inc. FMIC lent the money to Roxas because the latter
needed the money and not to obtain any beneficial interest in the shares of stock in State Investment.
Viewmaster merely facilitated the loan by acting as guarantor of the loan and nothing more.
ARRIOLA vs. DEMETRIO

Civil Law/ Contracts/ Fraud : The law, however, requires that 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. Consent, having been obtained by fraud, the deed entered into
could be annulled.
PILIPINAS HINO vs. CA

Civil Law/ Oblicon/Application of Equity/ Sales: Obligations arising from contracts and agreements
between parties not contrary to law, morals, good customs, public policy or public order have the
force of law between the contracting parties and should be complied with in good faith.
Equity is applied only in the absence of, and never against, statutory law or judicial rules of
procedure.
Also, while this Court recognizes that in contracts to sell even if the contract is terminated the
seller can retain the sums already received or paid, such can be done only if it is expressly provided for in
the contract.
ACE HAULERS CORP. vs. CA

Civil Law/ Civil Liability/ Damages: Civil liability coexists with criminal responsibility. In negligence cases,
the offended party (or his heirs) has the option between an action for enforcement of civil liability based
on culpa criminal under Article 100 of the Revised Penal Code and an action for recovery of damages
based on culpa aquiliana under Article 2176 of the Civil Code. Article 2177 of the Civil Code, however,
precludes recovery of damages twice for the same negligent act or omission.
Consequently, a separate civil action for damages lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party
is not allowed, if he is actually charged also criminally, to recover damages on both scores, and would be
entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two
cases vary.
PRODUCERS BANK OF THE PHILIPPINES v. BPI (G.R. No. 125167, September 8, 2000)
Civil Law/ Oblicon/ Action for Written Contract: The nature of an action is determined by the allegations of
the complaint. In this case, petitioners' complaint alleges facts constituting its cause of action based on a
written contract, the deed of pledge. Hence, the prescriptive period is ten (10) years.
SBMA v. UNIVERSAL INTERNATIONAL GROUP OF TAIWAN (G.R. No. 131680, September 14, 2000)
24
Civil Law/ Oblicon/ Extrajudicial Rescission: A stipulation authorizing a party to extrajudicially rescind a
contract and to recover possession of the property in case of contractual breach is lawful. But when
a valid objection is raised, a judicial determination of the issue is still necessary before a takeover
may be allowed. In the present case, however, respondents do not deny that there was such a
breach of the Agreement; they merely argue that the stipulation allowing a rescission and a recovery
of possession is void. Hence, the other party may validly enforce such stipulation.
PILIPINAS BANK v. CA (G.R. No. 141060, September 29, 2000)

Civil Law/ Oblicon/ Interpretation of Contracts: Section 9, Rule 130 of the Revised Rules of Court
expressly requires that for parol evidence to be admissible to vary the terms of the written agreement, the
mistake or imperfection thereof or its failure to express the true agreement of the parties should be put in
issue by the pleadings. Disallowance of parol evidence in the absence of an intrinsic ambiguity, mistake
or failure to express the true intent and agreement of the parties is in accord with the rule that when the
terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed
upon and there can be, between the parties and their successors-in-interest, no evidence of such other
terms other than the contents of the written agreement.
TUAZON v. CA (G.R. No. 119794. October 3, 2000)

Civil Law/ Contracts/ Equitable Mortgage/ Reformation of Contract: Article 1602 of the Civil Code provides
that a contact shall be presumed to be an equitable mortgage by the presence of any of the following:
'(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument extending the
period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is that the
transaction shall secure the payment of a debt or the performance of any other obligation.'"
Under Article 1604 of the New Civil Code, the provisions of Article 1602 shall also apply to a
contract purporting to be an absolute sale. And for these provisions of law to apply, two requisites must
concur: that the parties entered into a contract denominated as a contract of sale and that their intention
was to secure an existing debt by way of mortgage.
As to the reformation of contracts, Article 1365 applies only if there is evidence, clear and
convincing, that the parties did agree upon a mortgage of subject property. Here, everything appears to
be clear and unambiguous and nothing is doubtful, within the contemplation of Article 1602. When the
words of the contract are clear and readily understandable, there is no room for construction, the contract
being the law between the parties.
SINGSON v. CALTEX (PHILIPPINES) (G.R. No. 137798. October 4, 2000)

Civil Law/ Contracts/ Extraordinary Inflation: Article 1250 of the Civil Code states that in case an
extraordinary inflation or deflation of the currency stipulated should supervene, the value of the currency
at the time of the establishment of the obligation shall be the basis of payment, unless there is an
agreement to the contrary. Extraordinary inflation exists when there is a decrease or increase in the
purchasing power of the Philippine currency which is unusual or beyond the common fluctuation in the
value of said currency, and such increase or decrease could not have been reasonably foreseen or was
manifestly beyond the contemplation of the parties at the time of the establishment of the obligation.
“Erosion” is indeed an accurate description of the trend of decline in the value of the peso in the
past three to four decades. Unfortunate as this trend may be, it is certainly distinct from the phenomenon
contemplated by Article 1250.
Moreover, the effects of extraordinary inflation are not to be applied without an official declaration
thereof by competent authorities.
SANTOS v. HEIRS OF MARIANO (G.R. No. 143325. October 24, 2000)

Civil Law/ Contracts/ Sales: What determines the validity of a contract, in general, is the meeting
of the minds of the parties as to (1) consent of the contracting parties; (2) object certain which is the
25
subject matter of the contract; and (3) cause of the obligation which is established. Due execution of
documents representing a contract is one thing, but perfection of the contract is definitely another.
DBP v. CA (G.R. No. 137557. October 30, 2000)

Civil Law/ Contracts/ Breach/ Rescission: Under the Civil Code, parties to a contract can make
stipulations therein provided they are not contrary to law, morals, good customs, public order or public
policy. The interest and penalty charges to be paid in case of delay in payments were expressly stipulated
in the Conditional Contract of Sale. There being no question as to the validity of the Conditional Contract
of Sale, the DBP correctly applied the provision on interests and penalty charges when private
respondents failed to pay on the dates agreed upon. No further notice to private respondents had to be
given to them.
Rescission of a contract will not be permitted for a slight or casual breach, but only such
substantial and fundamental breach as would defeat the very object of the parties in making the
agreement. Notwithstanding private respondents' delay in paying the amortizations, petitioner DBP
unqualifiedly accepted the payments made by them. Hence, petitioner lost its right to rescind the sale on
the basis of such late payments.
PACULDO v. REGALADO (G.R. No. 123855. November 20, 2000)

Civil Law/ Contracts/ Application of Payments: The right to specify which among his various obligations to
the same creditor is to be satisfied first rests with the debtor.If the debtor accepts from the creditor a
receipt in which an application of the payment is made, the former cannot complain of the same, unless
there is a cause for invalidating the contract.
Also, under the law, if the debtor did not declare at the time he made the payment to which of his
debts with the creditor the payment is to be applied, the law provided the guideline--no payment is to be
made to a debt that is not yet due and the payment has to be applied first to the debt most onerous to the
debtor.
Assnt to the change in the manner of application of payment must be clear and unequivocal.
Mere silence is not tantamount to consent.
PUA v. CA (G.R. No. 134992. November 20, 2000)

Civil Law/ Contracts/ Minors Entering Into Contracts/ Sales/ Simulated Contract: Unemancipated minors,
insane or demented persons, and deaf-mutes who do not know how to write can not validly give consent
to contracts. In the instant case, Johnny P. Uy could not have validly given his consent to the contract of
sale, as he was not even conceived yet at the time of its alleged perfection. For lack of consent of one of
the contracting parties, the deed of sale is null and void
Without authority from the Court, no person can make a valid contract for or on behalf of a minor.
Coloma therefore could not have acted as representative of Johnny P. Uy. Besides, petitioners
themselves insist that Coloma was not acting in a representative capacity when she purchased the
subject, but rather, that she was acting in her own behalf as the actual buyer of said land.
An absolutely simulated contract is not susceptible of ratification.
SPOUSES BUENAFLOR v. CA (G.R. No. 142021. November 29, 2000)

Civil Law/ Obligations/ Payment/ Substantial Performance: In the Civil Law sense, payment means not
only the delivery of money but also the performance, in any other manner, of the obligation.
Article 1234 of the Civil Code allows substantial performance in the payment of obligations. In
order that there may be substantial performance of an obligation, there must have been an attempt in
good faith to perform, without any willful or intentional departure therefrom. This concept of substantial
performance may be applied by analogy in the determination of question on the proper payment of the
appellate docket fees.
AYALA CORPORATION v. ROSA-DIANA REALTY AND DEVELOPMENT CORPORATION (G.R. No.

134284. December 1, 2000)
Civil Law/ Contracts/ Obligatory Force: Contractual obligations between parties have the force of law
between them and absent any allegation that the same are contrary to law, morals, good customs, public
order or public policy, they must be complied with in good faith. The party guilty of violating the deed
restrictions may only be held alternatively liable for substitute performance of its obligation, that is, for the
payment of damages.
26
ORTIGAS & CO. LTD. v. CA (G.R. No. 126102. December 4, 2000)

Civil Law/ Contracts/ Stipulations Contravening Law, Good Customs, etc: The contractual stipulations
annotated on the Torrens Title, on which Ortigas relies, must yield to the ordinance. When that stretch of
Ortigas Avenue from Roosevelt Street to Madison Street was reclassified as a commercial zone by the
Metropolitan Manila Commission in March 1981, the restrictions in the contract of sale between Ortigas
and Hermoso, limiting all construction on the disputed lot to single-family residential buildings, were
deemed extinguished by the retroactive operation of the zoning ordinance and could no longer be
enforced. While our legal system upholds the sanctity of contract so that a contract is deemed law
between the contracting parties, nonetheless, stipulations in a contract cannot contravene "law, morals,
good customs, public order, or public policy." Otherwise such stipulations would be deemed null and void.
LHUILLIER v. CA (G.R. No. 128058. December 19, 2000)

Civil Law/ Contracts/ Lease: A covenant to renew a lease, which makes no provision on its terms, implies
an extension or renewal subject to the same terms in the original lease contract. Since the parties
did not make a new one, the terms and conditions of the original except the provision on the rate and
period of lease are deemed extended.
The parties agreed that all improvements introduced by the lessee would accrue to the benefit of
the owner at the end of the lease, without reimbursement. This stipulation, not being contrary to law,
morals, public order or public policy, binds the parties and is the law between them.
1999
CHUA v. CA (Jan. 21, 1999)

Civil Law/ Contracts/ Lease/ Power of Courts to Extend Lease/Improvements: (1)The potestative authority
of the courts to fix a longer term for a lease under Art. 1687 of the CC applies only to cases where there is
NO period fixed by the parties. Where the lease agreement between the parties has already expired,
courts are without jurisdiction to extend said lease, for to do so would in effect allow the courts to make a
contract for the parties.
(2) Improvements made by lessees on the leased premises are not valid reasons for their
retention thereof; otherwise, a lessee would “improve” his landlord out of his property. Art. 448 of the CC,
in relation to Art. 546, which provides for full reimbursement of useful improvements and retention of the
premises until reimbursements us made, applies only to a possessor in good faith, i.e., one who builds on
a land in the belief that he is the owner thereof. Also, Art. 1678 merely grants to such a lessee making in
good faith useful improvements the right to be reimbursed ½ of the value of the improvements upon the
termination of the lease, or, in the alternative, to remove the improvements if the lessor refuses to make
reimbursement.
ABS-CBN v. CA (Jan. 21, 1999)

Civil Law/ Contracts/ Basis for the Award of Damages: (1) A contract is a meeting of the minds between
two persons whereby one binds himself to give something or render some service to another for a
consideration. In the instant case, there was no acceptance of VIVA’s offer for it was met by a counter-
offer which substantially varied the terms of the offer. ABS-CBN made no unqualified acceptance of
VIVA’s offer hence, they underwent a period of bargaining.
(2) The award of moral damages cannot be granted in favor of a corporation because being an
artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no
senses.
(3) The claims of RBS against ABS-CBN are not based on contract, quasi-contract, delict, or
quasi-delict. Hence, the claims of moral and exemplary damages can only be based on Articles 19, 20,
and 21 of the CC. Verily then, malice or bad faith is at the core of Articles 19, 20, 21. Malice or bad faith
implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity.
Such must be substantiated by evidence. There is no adequate proof that ABS-CBN was inspired by
malice or bad faith. It was honestly convinced of the merits of its cause after it had undergone serious
negotiations culminating in its formal submission of a draft contract. Settled is the rule that the adverse
result of an action does not mean to impose a penalty on the right to litigate. If damages result from a
person’s exercise of a right, it is damnum absque injuria.
27
DIZON v. CA (Jan. 28, 1999)

Civil Law/ Contracts/ Lease with Option to Purchase/ Exception of Period to Exercise Option:The other
terms of the original contract of lease which are revived in the implied new lease under Art.1670 of the CC
are only those terms which are germane to the lessee’s right of continued enjoyment of the property
leased. Therefore, an implied new lease does not ipso facto carry with it any implied revival of private
respondent’s option to purchase (as lessee thereof) the leased premises. The provision entitling the
lessee the option to purchase the leased premises is not deemed incorporated in the impliedly renewed
contract because it is alien to the possession of the lessee. Private respondent’s right to exercise the
option to purchase expired with the termination of the original contract of lease for one year.
RAMOS v. CA (Feb. 3, 1999)

Civil Law/ Oblicon/ Principle of Relativity of Contracts/ Land Titles/ Prescription or Adverse Possession:
(1) In the absence of registration as to operate against the whole world, contracts bind only the parties
who had entered it by virtue of the basic principle of relativity of contracts. This basic principle applies
even if the sales were supposedly concluded at a time prior to the operation of the Torrens system of land
registration over the properties involved.
(2) Under the Cadastral Act, the OCTs issued to the original registrant, shall have the same effect
as CTs granted to an application for registration of land under the Land Registration Act, because “no title
to registered land in derogation to that of the registered owner shall be acquired by prescription or
adverse possession.”
CARCELLER v. CA (Feb. 10, 1999)

Civil Law/ Oblicon/ Contracts/ Option: (1) An option is a preparatory contract in which one party grants to
the other, for a fixed period and under specified conditions, the power to decide, WON to enter into a
principal contract. It binds the party who has given the option, not to enter into the principal contract with
the one to who, the option was granted, if the latter should decide to use the option. It is a separate
agreement distinct from the contract which the parties may enter upon the consummation of the option.
(2) In the contractual relations, the law allows the parties leeway in the terms of their agreement,
which is the law between them.
MISENA v. RONGAVILLA (Feb. 25, 1999)

Civil Law/ Contracts/ Sale of Real Property, When Presumed an Equitable Mortgage Instead: Art. 1602 of
the CC enumerates instances when a contract regardless of its nomenclature may be presumed an
equitable mortgage. It also applies to a contract purporting to be an absolute sale, and the presence of
any of the circumstances in 1602 give rise to the presumption in favor of an equitable mortgage. Here, the
CA confirmed that 3 circumstances were present and proven, to wit: (1) the inadequacy of the
consideration; (2) the respondent remained in possession of the land and (3) the subject property was
charged as security for the loan.
LOGRONIO v. TALESEO (August 1999)

Civil Law/ Laches: Currit Tempus contra decides et sui juris contemptores (Time runs against the slothful
and those who neglect their rights). Through their inaction for 39 years, the petitioners were barred by
laches from asserting ownership and possession of the property in dispute.
SPS. CO v. CA (August 1999)

Civil Law/ Contracts/Sale/Option Contract: An option contract is distinct from a contract of sale, it is a
contract granting a privilege to buy or sell within an agreed time and at a determined price. It is separate
and distinct contract from that which the parties may enter into upon the consummation of the option. It
must be supported by consideration. A contract of sale on the other hand is a consensual contract and is
perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract
and upon the price.
In the case at bar, the contract entered into was a Contract of sale and not an Option Contract so
that the proper remedy would be rescission.
LAPAT v. ROSARIO (August 1999)
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Civil Law/ Contracts/Equitable Mortgage: Where the presumptions under the law that a contract is an
equitable mortgage are present, it shall be considered as such regardless of its nomenclature: (1) when
the price of a sale with the right to repurchase is unusually inadequate; (2) when the vendor remains in
possession as lessee or otherwise; (3) when upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or granting a new period is executed; (4) when the
purchaser retains a part of the purchase price; (5) when the vendor binds himself to pay the taxes on the
thing sold, and; (6) in any other case where it may fairly be inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or performance of any other obligation.
In determining the nature of a contract, courts are not bound by its form or title but by the
intention of the parties.
LAO v. MACAPUGAY (August 1999)

Civil Law/ Contracts/ Compromise: A compromise is a bilateral act or transaction that is expressly
acknowledged as a juridical agreement by the CC. Art 202 provides that “a compromise is a contract
whereby the parties by making reciprocal concessions, avoid a litigation or put an end to one already
commenced. The CC does not only defines and authorizes compromises, it in fact encourages them in
civil actions. They are generally to be favored and cannot be set aside if the parties acted in good faith
and made reciprocal concessions to each other in order to terminate a case. However, the law abhors
settlement of criminal liability so that the compromise agreement cannot affect charges of violation of RA
3019, sec 3(e) and (j) and Sec 4 and RPC Art 171, 172 par 2, Arts. 206 and 207.
HEIRS OF YAP v. CA (August 1999)

Civil Law/ Contracts/ Trusts: One basic distinction between an implied trust and an express trust is that
while the former may be established by parol evidence, the latter cannot. Even then, in order to establish
an implied trust in real property by parol evidence, the proof should be convincing as if the acts giving rise
to the trust obligation are proven by an authentic document. An implied trust, in fine, cannot be
established upon vague and inconclusive proof.
Not to be dismissed, however, is the long standing and broad doctrine of clean hands that will not
allow the creation or the use of a juridical relation, a trust whether express or implied included, to
perpetuate fraud or tolerate bad faith nor to subvert, directly or indirectly, the law.
SPS. BAUTISTA v. PILAR DEV’T CORPORATION (August 1999)

Civil Law/ Contracts/ Novation: The extinguishment of an obligation by the substitution or change of the
obligation by a subsequent one which extinguishes or modifies the first is a novation. It is made either by
changing the object or principal conditions referred to as an objective or real novation; or by substituting
the person of the debtor or subrogating a 3 rd person to the rights of the creditor, which is known as
subjective or personal novation.
Novation may either be express or implied: Express, when the new obligation declares in
unequivocal terms that the old obligation is extinguished. Implied, when the new obligation is on every
point incompatible with the old one. In the case at bar, there was clearly an animus novandi, an express
intention to novate. The 1st promissory note which provides for an interest rate of 12% was cancelled and
replaced by a 2nd note which stipulated a higher interest of 21%. This 2nd note became the new contract
governing the parties’ obligations.
1998
JAPAN AIRLINES v. CA (August 1998)

Civil Law/ Contracts/ Fortuitous Event/ Nominal Damages: Respondents are passengers of Japan Airlines
who were stranded for almost a week in Japan due to the Pinatubo eruption which made NAIA
inaccessible to airline traffic. As a result of the refusal of JAL to pay for the accommodations of
respondents during their whole stay in Japan, they commenced an action for damages against JAL.
As a general rule, common carriers are expected to follow a standard of care and diligence which
is higher and different in kind to that of ordinary carriers. However, in the case at bar, JAL is not
absolutely responsible for all injuries or damages suffered by respondents because such was caused by a
fortuitous event. They are liable for nominal damages to respondents though, for their failure to make the
necessary arrangements to transport respondents on the first available connecting flight to Manila.
Nominal damages are adjudicated in order that a right of a plaintiff, which has been violated of invaded by
29
the defendant, may be vindicated or recognized, and not for the purpose of indemnifying any loss suffered
by him.
VALGOSONS REALTY INC. v. CA (September 1998)

Civil Law/ Lease/ Non-delivery of the Leased Premises: Under Art. 1654 of the NCC, it is the duty of the
lessor, in this case, petitioner VRI (Valgosons Realty Inc), “to deliver the thing which is the object of the
contract ….”, failure to do so constitutes a wrong to which petitioner exposes itself to legal action including
being held liable for damages. The fact that respondent Prudential Bank (PB), the former lessee of the
same space, did not vacate the premises at the time the new lessee (respondent UDB) was supposed to
enter therein cannot exculpate petitioner VRI from its liability for the non-performance of its obligation to
URB. Moreover, UDB has no cause of action against the first lessee (PB) because there is no privity of
contract between the two respondents-lessees.
POLOTAN, SR. v. CA (September 1998)

Civil Law/ Contracts/ Binding Effect/ Escalation Clause/ Contract of Adhesion: Petitioner is a holder of a
credit card of Security Diners International Corporation (Diners Club). He was adjudged by the RTC and
CA to be indebted to the company for the use of the card.
The contract entered into between petitioner and the company is a contract of adhesion. A
contract of adhesion is one in which one of the contracting parties imposes a ready-made form of contract
which the other party may accept or reject but cannot modify. Nevertheless, these types of contracts have
been declared as binding as ordinary contracts, the reason being that the party who adheres to the
contract is free to reject it entirely. The binding effect of any agreement between parties to a contract is
premised on two settled principles: (1) that any obligation arising from a contract has the force of law
between the parties; and (2) that there must be mutuality between the parties based on their essential
equality. The court is therefore not precluded from ruling out blind adherence to their terms if the
attendant facts and circumstances show that they should be ignored for being obviously too one-sided.
In the instant case, the claim of petitioner that the contract is one-sided has no basis. The fact
that the contract allows for the escalation of interests but does not provide for a downward adjustment of
the same does not boost his claim. There is nothing inherently wrong with escalation clauses, as long as
they are not merely potestative but based on reasonable and valid grounds. They are valid stipulations in
commercial contracts to maintain fiscal stability and to retain the value of money in long term contracts. In
this case, the interest rate is based on the fluctuation in the market rates, which is beyond the control of
the credit card company.
1997
ROBLETT INDUSTRIAL CONSTRUCTION CORP. v. CA (G.R. No. 116682, Jan. 2, 1997)

Civil Law/ Estoppel: Estoppel in pais arises when one, by his acts, representations or admissions, or by
his own silence when he ought to speak out, intentionally or through culpable negligence, induces another
to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be
prejudiced if the former is permitted to deny the existence of such facts. (Panay Electric v. CA, 174 SCRA
500 [1989]) This doctrine obtains here. A statement of account for P376,350.18 covering the period
above mentioned was received from respondent by petitioner with nary a protest from the latter. Neither
did petitioner controvert the demand letter concerning the overdue account; on the contrary, it asked for
ample time to source funds to substantially settle the account.
TANGUILIG v. CA (G.R. No. 117190, Jan. 2, 1997)

Civil Law/Contracts/ Interpretation/ Payment/ Fortuitous Event/ Delay: (1) The installation of a deep well
was not included in petitioner's proposals to construct a windmill system for respondent. While the words
"deep well" and "deep well pump" are mentioned in the proposals, these do not indicate that a deep well
is part of the windmill system. They merely describe the type of deep well pump for which the proposed
windmill would be suitable. Since the terms of the instruments are clear they should not be disturbed.
(2) In the absence of a creditor-debtor relationship, respondent cannot claim the benefit of the law
concerning payments made by a third person (Arts. 1236 & 1237)..
(3) In order for a party to claim exemption from liability by reason of fortuitous event under Art.
1174, the event should be the sole and proximate cause of the loss or destruction of the object of the
contract. In Nakpil v. CA (144 SCRA 596 [1986]), 4 requisites must concur: (a) the cause of the breach of
30
the obligation must be independent of the will of the debtor; (b) the event must be either unforseeable 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 creditor's
injury. A strong wind causing the collapse of the windmill cannot be considered fortuitous, for it must be
present where windmills are constructed. There must have been an inherent defect in the windmill itself.
(4) 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. (Art. 1169) When the windmill
failed to function properly it became incumbent upon petitioner to repair it in accordance with the
stipulated guaranty. Thus, respondent cannot be said to have been in delay; instead, it is petitioner who
should bear the expenses for the reconstruction of the windmill. Art. 1167 provides that if a person
obliged to do something fails to do it, the same shall be executed at his cost.
ACE-AGRO DEVELOPMENT CORP. v. CA (G.R. No. 119279, Jan. 21, 1997)

Civil Law/Contracts/Force Majeure: The temporary suspension of work did not merit an automatic
extension of the period of the contract. (Victorias Milling v. Victorias Milling Planters Cooperative, 97 Phil.
318 [1955]) The fact is that the contract was subject to a resolutory period which relieved the parties of
their respective obligations but did not stop the running of the period of the contract. Petitioner may not be
to blame for the failure to resume work after the fire (there were alleged intervening causes, e.g., labor
problems due to the work stoppage), but neither is private respondent.
HEIRS OF SUICO v. CA (G.R. No. 120615, Jan. 21, 1997)

Civil Law/ Contracts/Property/Lease: (1)The parties to the oral lease in question did not fix a specified
period therefor. However, since the rentals were paid monthly, the lease may be deemed to be on a
monthly basis, expiring at the end of every month, pursuant to Arts. 1687 and 1673. In such case, a
demand to vacate was not even necessary for judicial action after the expiration of every one month.
(2) The power of a court to extend the term of the lease under the second sentence of Art. 1687
is potestative, or more precisely, discretionary. The court is not bound to extend it, and its exercise
depends upon the circumstances surrounding the case. Basic common law principles of fairness and
equity shun property entailment that borders on perpetuity to the exclusion of the owner.
(3) The value of the house is inconsequential since it was build in 1950, and private respondents
can remove it if petitioners opt not to retain it by paying 1/2 of its value, pursuant to Art. 1678, which
provides that the lessors would become the owner of the house constructed by reimbursing the lessees in
said amount. Petitioners-lessors are thus given the option to pay indemnity, while private respondents-
lessees do not have a right to demand that they be paid. If the former refuses to reimburse, the latter's
remedy is to remove the house, even though petitioners' lot may suffer damage thereby, as long as the
damage caused is not more than reasonably necessary.
RAMOS v. CA (July 1997)

Civil Law/ Oblicon/ Supervening Inflation: (1) Failure to comply with a provision deemed by the parties
themselves as so important is a ground for the termination of the contract.
(2) Art. 1250 requires for its application a declaration of inflation by the Central Bank, without
such declaration creditors cannot demand an increase of what is due them.
MATANGUIHAN v. CA (July 1997)

Civil Law/Equitable Mortgages: In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered. Accordingly, there are instances
where the form and stipulations of a contract must give way to reflect the true intention of the parties. This
is best illustrated in the instances where contracts of sale, whether absolute, or one where the vendor
reserves the right to repurchase the thing sold or a sale pacto de retro, are presumed to be an equitable
mortgage. An equitable mortgage is defined as one which although lacking in some formality, or form or
words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to
charge real property as security for a debt, and contains nothing impossible or contrary to law. Its
essential requisites are: (1) That the parties entered into a contract denominated as a contract of sale;
and (2) That their intention was to secure an existing debt by way of a mortgage.
Under the wise, just and equitable presumption in Article 1602, a document which appears on its
face to be a sale - absolute or with pacto de retro - may be proven by the vendor or vendor-a-retro to be
one of a loan with mortgage. In this case, parol evidence becomes competent and admissible to prove
31
that the instrument was in truth and in fact given merely as a security for the payment of a loan. And
upon proof of the truth of such allegations, the court will enforce the agreement or understanding in
consonance with the true intent of the parties at the time of the execution of the contract.
Sales with a right to repurchase are not favored. As before, instruments shall not be construed to
be sales with a right to repurchase, with the stringent and onerous effects which follow, unless the terms
of the document and the surrounding circumstances so require. Whenever, under the terms of the
writing, any other construction can be fairly and reasonably inferred, such construction will be adopted
and the contract construed as a mere loan unless the court sees that, if enforced according to its terms, it
is not an unconscionable pact.
NOOL v. CA (July 1997)

Civil Law/Void Contracts/Sales: (1) A contract of repurchase arising out of a contract of sale where the
seller did not have any title to the property "sold" is not valid. Since nothing was sold, then there is also
nothing to repurchase. A void contract cannot give rise to a valid one.
(2) The right to repurchase presupposes a valid contract of sale between the same parties.
(3) In light of the prohibition against unjust enrichment, if a void contract has already been
performed, the restoration of what has been given is in order. Corollarily, interest thereon will run only
from the time of private respondents' demand for the return of this amount in their counterclaim.
ONG v. CA (July 1997)

Civil Law/Contracts/Rescission: Arts 1191 and 1383 are inapplicable in this case: Art 1191 refers to
rescission applicable to reciprocal obligations which should be distinguished from rescission of contracts
under Art 1383. Although both presupposed contracts validly entered into and subsisting and both require
mutual restitution when proper, they are not entirely identical.
SPOUSES SANTIAGO v. CA (August 1997)

Civil Law/ Oblicon/ Simulated or Fictitious Contracts: Here, while petitioners (buyers in a conditional deed
of sale) were able to occupy the property allegedly sold, they were relegated to a small bedroom without
bath and toilet, while Arcega (seller) remained virtually in full possession of the house and lot, using the
master's bedroom. If the transaction was indeed an absolute sale, then Arcega had no business
remaining on the property. Also if petitioners were the legitimate owners, they would have collected rent
from Arcega.
Since the transaction was used merely to facilitate a loan with the SSS with petitioners using the
property as collateral, the contract was absolutely simulated or fictitious, declared void as per Art. 1409,
NCC. The fact that petitioners were able to secure a title in their names did not operate to vest ownership
upon them. The Torrens system does not create nor vest title, but merely confirms and records title
already existing and vested.
BANGAYAN v. CA (August 1997)

Civil Law/Contracts/ Lease/ Novation: Art. 1311, NCC, provides that contracts take effect only between
the parties, their assigns and heirs, except where the rights and obligations arising from
contract are not transmissible by their nature, or by stipulation or by provision of law.
Here, paragraphs 4 and 5 of the lease contract provided that the right of first option was
not transmissible, which are consistent with Art. 1649, NCC that the lessee cannot assign
the lease without the consent of the lessor, unless there is a stipulation to the contrary.
The lessor's consent is necessary as the assignment of the lease would involve the
transfer not only of rights, but also of obligations. It constitutes novation by a substitution
of the person of one of the parties.
It cannot be denied that Teofista's right of first option to buy the leased property in case of its sale
is but part of the bigger right to lease said property. The option was given to Teofista as she was the
lessee. It was a component of the consideration of the lease. The option was by no means an
independent right which Teofista could exercise. It ought to follow that if Teofista was barred by contract
from assigning her right to lease the lot, she was similarly barred from assigning her right of first option to
Angelita.
RAMOS v. CA (September 1997)
32
Civil Law/Contracts/ Sale with Assumption of Mortgage: In sales with assumption of mortgage, the
assumption of mortgage is a condition to the seller's consent so that without approval by the mortgagee,
no sale is perfected.
SPOUSES PANGALINAN v. CA (September 1997)

Civil Law/Sales/Contract to Sell/Extrajudicial Rescission: Art. 1592, NCC, requiring demand by suit or by
notarial act in case the vendor of realty wants to rescind does not apply to a contract to sell but only to a
contract of sale. To argue that there was only a casual breach is to proceed from the assumption that the
contract is one of absolute sale, where non-payment is a resolutory condition, which is not the case.
The applicable provision of law is Art. 1191, NCC. Pursuant to this, the law makes it available to
the injured party alternative remedies such as the power to rescind or enforce fulfillment of the contract,
with damages in either case if the obligor does not comply with what is incumbent upon him.
The validity of the stipulation in the contract providing for automatic rescission upon non-payment
cannot be doubted. It is in the nature of an agreement granting a party the right to rescind a contract
unilaterally in case of breach without need of going to court. Thus, rescission under Art. 1191 was
inevitable due to petitioners' failure to pay the stipulated price within the original period fixed in the
agreement.
TIGNO v. CA (October 1997)

Civil Law/ Contracts/ Implied Trusts: An implied trust is deducible by operation of law from the nature of
the transaction as matters of equity, independently of the particular intention of the parties. It arises where
a person purchases land with his own money and takes conveyance thereof in the name of another. In
such a case, the property is held on resulting trust in favor of the one furnishing the consideration for the
transfer, unless a different intent appears. The trust which results under such circumstances does not
arise from a contract or an agreement of the parties, but from the facts and circumstances; i.e., the trust
results because of equity and it arises by implication or operation of law.
VILLAFLOR v. CA (October 1997)

Civil Law/Contracts/Simulated Contracts/Land Titles: (1) Petitioner's delivery of the certificate of
ownership and execution of the deed of absolute sale were suspensive conditions, which gave rise to a
corresponding obligation on the part of private respondent, i.e., the payment of the last installment of the
consideration mentioned in the first agreement. Such conditions did not affect the perfection of the
contract or prove simulation. Neither did the mortgage.
Simulation occurs when an apparent contract is a declaration of a fictitious will, deliberately made
by agreement of the parties, in order to produce, for the purpose of deception, the appearance of a
juridical act which does not exist or is different from that which was really executed. (Tongoy v. CA, 123
SCRA 99, 118 [1983]) Such an intention is not apparent in the agreements. The intent to sell, on the
other hand, is clear.
(2) At most, nonpayment only gives petitioner the right to sue for collection. Generally, in a
contract of sale, payment of the price is a resolutory condition and the remedy of the seller is to exact
fulfillment or, in case of substantial breach, to rescind the contract under Art. 1191, NCC. However,
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. (Jacinto v. Kaparaz, 209 SCRA 246, 254-55 [1992])
(3) The transfer of ownership via the 2 agreements and the relinquishment of rights, being private
contracts, were binding only between petitioner and private respondent. The Public Land Act finds no
relevance as the disputed land was covered by said Act only after issuance of the order of award in favor
of private respondent. Thus, possession of any disqualification by private respondent under said Act is
immaterial to the private contracts between the parties thereto. (We are not, however, suggesting a
departure from the rule that laws are deemed written in contracts.)
BINGCOY v. CA (October 1997)

Civil Law/Prescription: Acquisitive prescription is in itself a mode of acquiring ownership over a parcel of
land and does not require successional rights in order to ripen into ownership. There is nothing on the
record that discloses even an attempt by petitioners to rebut the evidence of private respondents as to
their peaceful, continuous, adverse and open possession in the concept of an owner over the lots for 22
years. Under the law then, Act No. 190, §41 (Code of Civil Procedure), 10 years of continuous, actual
adverse possession was sufficient.
33
YOBIDO v. CA (October 1997)

Civil Law/Oblicon/Fortuitous Event: The explosion of a newly installed tire of a passenger vehicle causing
the vehicle to fall in the ravine is not a fortuitous event that exempts the carrier from liability for the death
of a passenger. To be considered a fortuitous event: (a) the cause of the unforeseen and unexpected
occurrence must be independent of human will; (b) it must be impossible to foresee the event which
constitutes the caso fortuito, or if it could be foreseen, must have been 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; (d) obligor must be free from any participation in the aggravation of the creditor's injury; (e)
entire exclusion of human agency from the cause of injury or loss.
Under the circumstances here, there are human factors involved. The fact that the tire was new
(in fact, grooves/tread were still visible) did not imply that it was entirely free from manufacturing defects
or that it was properly mounted on the vehicle. Neither may the fact that the tire bought and used vehicle
is of a brand name noted for qualify, resulting in the conclusion that it could not explode within 5 days'
use. Be that as it may, it is settled that an accident caused either by defects in the automobile or through
the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages.
MURLI SADHWANI v. CA (October 1997)

Civil Law/Contracts/Lease/Sublease: Under Art. 1650, NCC, when the lease contract does not expressly
forbid a sublease, the lessee may sublet the thing leased. The rule is different, however, re: assignments
of lease. Art. 1649 provides that the lessee cannot assign the lease without the consent of the lessor,
unless there is a stipulation to the contrary..
Indeed, the consent of the lessor is necessary because the assignment of lease would involve the
transfer not only of rights, but also of obligations. Such assignment would constitute novation by
substitution of one of the parties, i.e., the lessee. There is no evidence here showing that Sawit
subsequently agreed to a substitution of petitioners in place of Orient as lessee.
1996
DOMINGO v. CA (March 1996)

Civil Law/ Contracts/ Compromise: A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced. Essentially, it is a contract
perfected by mere consent. Once an agreement is stamped with judicial approval, it becomes more than
a contract binding upon the parties; having the sanction of the court and entered as its determination of
the controversy, it has the force and effect of any other judgment.
PCIB v. CA (March 1996)

Civil Law/ Contracts/ Absolution from Liability: A stipulation embodied in the standard application
for/receipt furnished by petitioner for the purchase of a telegraphic transfer which relieves it of any liability
resulting from loss caused by errors or delays in the course of the discharge of its services cannot
absolve the petitioner from liability, where it has acted fraudulently and in bad faith. In Geraldez v. CA
(230 SCRA 320 [1994]), it was unequivocally declared that notwithstanding the enforceability of a
contractual limitation, responsibility from a fraudulent act cannot be exculpated because the same is
contrary to public policy. (See Art. 21, Civil Code.) Freedom of contract is subject to the limitation that
the agreement must not be against public policy and any agreement made in violation of this rule is not
binding and will not be enforced. (17 Am Jur. 2d, Contracts 257)
PNB v. CA (April 1996)

Civil Law/ Oblicon/ Payment/ Exemplary Damages: (1)When the court ordered petitioner to pay private
respondent the amount of P32,480.00, it had the obligation to deliver the same to him. Under Art. 1233 of
the Civil Code, a debt shall not be understood to have been paid unless the thing or service in which the
obligation consists has been completely delivered or rendered. The burden of proof of such payment lies
with the debtor. (Pinon v. Osorio, 30 Phil. 365)
(2) Jurisprudence has set down the requirements for exemplary damages to be awarded:
1. they may be imposed by way of example in addition to compensatory damages, and only
after the claimant's right to them has been established;
34
2. they cannot be recovered as a matter of right, their determination depending upon the
amount of compensatory damages that may be awarded to the claimant;
3. the act must be accompanied by bad faith or done in a wanton manner. (Octol v. Ybañez,
111 SCRA 79 [1982]; De Leon v. CA, 165 SCRA 166 [1988])
In the case at bench, while there is a clear breach of petitioner's obligation to pay there is no
evidence that it acted in a fraudulent manner. Furthermore, there is no award of compensatory damages
which is a prerequisite before exemplary damages may be awarded.
SPOUSES ALMEDA v. CA (April 1996)

Civil Law/Contracts/Obligatory Force/Interest/Escalation Clause: (1)The binding effect of any agreement
between parties to a contract is premised on two settled principles: (a) that any obligation arising from
contract has the force of law between the parties; and (b) that there must be mutuality between the
parties based on their essential equality. Any contract which appears to be heavily weighed in favor of
one of the parties so as to lead to an unconscionable result is void. Any stipulation regarding the validity
or compliance of the contract which is left solely to the will of one of the parties, is likewise, invalid.
PNB unilaterally altered the terms of its contract with petitioners by increasing the interest rates
on the loan without prior assent of the latter. Article 1956 stipulates that "No interest shall be due unless it
has been expressly stipulated in writing."
(2)Escalation clauses are not basically wrong or legally objectionable as long as they are not
solely potestative but based on reasonable and valid grounds.
WILLEX PLASTIC v. CA(April 1996)

Civil Law/ Oblicon/Accessory Obligations/Sureties/Retroactivity of Sureties: The consideration necessary
to support a surety obligation need not pass directly to the surety, a consideration moving to the principal
alone being sufficient.
Moreover, as we held in BPI v. Foerster, although a contract of suretyship is ordinarily not to be
construed as retrospective, in the end the intention of the parties as revealed by the evidence is
controlling. In this case, the parties clearly provided that the guaranty would cover "sums obtained and/or
to be obtained.”
YNSON v. CA; YULIENCO v. CA (June 1996)

Civil Law/ Remedial Law/Compromise: Since the parties entered into this compromise agreement freely
without any vice of consent, the same must govern the relations of the parties. A judicial compromise
has the force of law and is conclusive between the parties. A compromise upon its perfection becomes
binding upon the parties and has the effect and authority of res judicata even if not judicially approved.
VILLA v. CA (G.R. No. 119850, June 20, 1996)

Civil Law/ Oblicon/ Stipulation Pour Autrui/ Torts:(1)The "Agreement" entered into by petitioner and
Bankard, provides inter alia that the merchant shall honor validly issued PCCCI credit cards 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 appear on the
face of the credit card.
While de Jesus may not be a party to the said agreement, the above-quoted stipulation conferred
a favor upon de Jesus, a holder of a credit card validly issued by Bankard. This 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 the petitioner before its revocation. In this case, de Jesus' offer to pay by means of his
Bankard constitutes not only an acceptance of the said stipulation but also an explicit communication of
his acceptance to the obligor.
(2)The test for determining the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use the reasonable care and caution which
an ordinary prudent person would have used in the same situation? If not, then he is guilty of negligence.
While it is true that de Jesus did not have sufficient cash on hand this fact alone does not constitute
negligence on his part. Neither can it be claimed that the same was the proximate cause of his damage.
We take judicial notice of the current practice among major establishments to accept payment by means
of credit cards in lieu of cash.
35
ABELLA v. CA (June 1996)

Civil Law/Interpretation of Contracts: It is a cardinal rule in the interpretation of contracts that "if the terms
are clear, the literal meaning of its stipulations shall control." No amount of extrinsic aids are
required.
INCIONG v. CA (June 1996)

Civil Law/Contracts/Fraud/ Credit Transactions/ Solidary Obligations v. Suretyship/ Joint Obligations: (1)
Fraud must be established by clear and convincing evidence, mere preponderance of evidence, not
even being adequate. Petitioner's attempt to prove fraud must, therefore, fail as it was evidenced
only by his own uncorroborated and, expectedly, self-serving testimony.
(2) Petitioner signed the promissory note as a solidary co-maker and not as a guarantor. A
solidary or joint and several obligation is one in which each debtor is liable for the entire obligation, and
each creditor is entitled to demand the whole obligation. While a guarantor may bind himself solidarily
with the principal debtor, the liability of a guarantor is different from that of a solidary debtor. "A guarantor
who binds himself in solidum does not become a solidary co-debtor to all intents and purposes. There is
a difference between a solidary co-debtor and a fiador in solidum (surety). The latter, outside of the
liability he assume to pay the debt before the property of the principal debtor has been exhausted, retains
all other rights, actions and benefits which pertain to him by reason of the fiansa; while a solidary co-
debtor has no other rights than those bestowed upon him in Section 4, Chapter 3, Title I Book IV of the
Civil Code
(3) Under Art. 1207 thereof, when there are two or more debtors in one and the same obligation,
the presumption is that the obligation is joint so that each of the debtors is liable only for a proportionate
part of the debt. There is solidary liability only when the obligation expressly so states, when the law so
provides or when the nature of the obligation so requires.
Because the promissory note involved in this case expressly states that the three signatories
therein are jointly and severally liable, any one, some or all of them may be proceeded against for the
entire obligation. The choice is left to the solidary creditor to determine whom he will enforce collection.
NATIONAL WATERWORKS (now MWSS) v. NLRC (July 1996)

Civil Law/Contracts/Prescription: Article 1155 of the Civil Code provides the specific instances when the
period of prescription may be interrupted. Any such interruption is a factual matter to be properly
supported by evidence. Private respondents' claims herein are not barred by prescription, the period
having been interrupted by the written extrajudicial demands made by private respondents, coupled with
petitioner's own pleas for time within which to pay the claims.
AMERICAN HOME ASSURANCE v. NLRC (July 1996)

Civil Law/ Oblicon/ Condition: Petitioners denied the grant of the bonus to private respondent because the
condition for its grant is that the employee must retire under the SERP. Yet, it was the unjust denial of his
applications that prevented private respondent from complying with such condition for early retirement.
As petitioners, being employers-obligors, voluntarily prevented fulfillment of the condition by their own
acts, private respondent is deemed to have fulfilled the condition for early retirement.
PNB v. CA (July 1996)

Civil Law/Oblicon/Compensation: What petitioner bank is effectively saying is that since the respondent
appellate court ruled that petitioner bank could not do a shortcut and simply intercept funds being coursed
through it, for transmittal to another bank, and eventually to be deposited to the account of an individual
who happens to owe some money to petitioner, and because respondent court ordered petitioner bank to
return the intercepted amount to said individual, who in turn was found by the appellate court to be
indebted to petitioner bank, therefore, there must now be legal compensation of the amounts each owes
the other, hence, there is no need for petitioner bank to actually return the amount, and finally, that
petitioner bank ends up in exactly the same position as when it first took the improper and unwarranted
shortcut by intercepting the said money transfer, notwithstanding the assailed decision saying that this
could not be done! There is here a clever ploy to use this Court to validate an improper act of petitioner
bank, with the not impossible intention of using this case as precedent for similar acts of interception in
the future.
BRILLO HANDICRAFTS v. CA (G.R. No. 109090, Aug. 7, 1996)
36
Civil Law/Contracts/Estoppel: Estoppel has set in where petitioner had partially paid the amount and
acquiesced to the respondent’s rate.
CUIZON v. CA (G.R. No. 102096, Aug. 22, 1996)

Civil Law/Oblicon/Interpretation/Fraud: (1) In contractual relations, the law allows the parties much leeway
and considers their agreement to be the law between them. This is because "courts cannot follow one
every step of his life and extricate him from bad bargains xxx relieve him from one-sided contracts, or
annul the effects of foolish acts." (Vales v. Villa, 35 Phil. 769)
(2) Where the parties have given a practical construction by their conduct, as by acts in partial
performance, such construction may be considered by the court in determining its meaning and
ascertaining the mutual intention of the parties at the time of the contracting. (Javier v. CA, 183 SCRA
171) If it were true as private respondents claim that their agreement was for the transfer of the subject
lots only upon payment of the full consideration, why then did private respondents execute a deed of sale
over one [of six] lot[s] although they knew too well that a partial amount only of the purchase price was
paid? No credible explanation was given by private respondents.
(3) In construing a written agreement, the reason behind and the circumstances surrounding its
execution are of paramount importance to place the interpreter in the situation occupied by the parties
concerned at the time the writing was executed. (Vicente v. Shotwell, 38 SCRA 107) Admittedly, the
intention of the contracting parties should always prevail because their will has the force of law between
them. (Kasilag v. Rodriguez, 69 Phil. 217)
(4) We do not find it proper to use the fair market value as the price of one lot. This is not in
accord with the contract between the parties. It is not the province of the court to alter a contract by
construction or to make a new contract for the parties; its duty is confined to the interpretation of the one
which they have made for themselves without regard to its wisdom or folly as the court cannot supply
material stipulations or read into the contract words which it does not contain. (Bacolod Murcia v. Banco
Nacional, 74 Phil. 675)
(5) Fraud is the deliberate or intentional evasion of the normal fulfillment of an obligation. (8
Manresa 72) The mere failure of private respondents to execute a deed of sale because they demanded
first an accounting of the lots used as collateral by petitioner and amount of loans secured could not be
considered as fraud. Fraud is never presumed; it must be alleged and proven. (Atilano v. Inclan, 45 Phil.
246) Fraud is negated when private respondents partially performed their obligation when they executed
a deed of sale over 1 lot.
RIZAL SURETY v. CA & TRANSOCEAN TRANSPORT (G.R. No. 96727, Aug. 28, 1996)
Civil Law/ Contracts/Trusts: In Mindanao Devt. Authority v. CA (113 SCRA 429, 436-437 [1982]), this
Court held the elements of an express trust:
1) Competent trustor and trustee;
2) An ascertainable trust res; and
3) Sufficiently certain beneficiaries.
There is no need for stilted formalities. There must be a present and complete disposition of the
trust propoerty, notwithstanding that the enjoyment in the beneficiary will take place in the future. Also, the
purpose must be an active one to prevent trust from being executed into a legal estate or interest, and
one not in contravention of some prohibition of statute or rule of public policy.
Power of administration must be other than a mere duty to perform a contract although the
contract is for a 3rd party beneficiary. A declaration of terms is essential, and these must be stated with
reasonable certainty in order that the trustee may administer, and the court, if called upon to do so, may
enforce the trust.
INTER-ASIA SERVICES CORP. v. CA (G.R. No. 106427, October 1996)

Civil Law/ Contracts/ Lease/ Renewal v. Extension: To renew means the old contract is extinguished, thus
a new one must be executed, and vice-versa. In this case, there was only an extension where after the
contract expired on 14 July 1990, “agreements” were entered into for petitioner to stay on the leased
premises up to 1 January 1991 and subsequently up to 1 March 1991. In Fernandez v. CA (166 SCRA
577 [1988]), this Court held that an alleged verbal assurance of renewal of a lease is inadmissible to
qualify the terms of the written lease agreement under the parole evidence rule and unenforceable under
the Statute of Frauds.
37
PHIL. INTL. TRADING CORP. v. ANGELES (G.R. No. 108461, October 1996)
Civil Law/Publication of Laws: In Tañada v. Tuvera (146 SCRA 446 [1986]), we ruled that executive
issuances meant to enforce and implement an existing law pursuant to a valid delegation, must be
published.
SECURITY BANK & TRUST CO. v. RTC (G.R. No. 113926, October 1996)
Civil Law/Interest/Usury: Should the rate of interest on a loan as stipulated in a contract (23%
here), far in excess of the ceiling prescribed under or pursuant to the Usury Law prevail over §2 of CB
Circular No. 905 which prescribes that the rate of interest thereof shall continue to be 12% per annum?
Circular No. 905 merely suspended the effectivity of the Usury Law. Where the rate of interest
was agreed upon by the parties freely, it is not for respondent court to change the stipulations in the
contract where it is not illegal. Further, Art. 1306, NCC provides that contracting parties may establish
stipulations as they deem convenient, provided they are not contrary to law, etc. We find no valid reason
for the respondent court to impose a 12% interest rate on the principal balanc. In a loan, the interest due
should be that stipulated in writing, and in the absence thereof, the rate shall be 12% p.a. (Eastern
Shipping v. CA, 234 SCRA 78) Hence, only in the absence of a stipulation can the court impose the 12%
interest rate.
MACTAN CEBU INTL. AIRPORT AUTHORITY v. CA (G.R. No. 121506, October 1996)
Civil Law/Contracts/Statute of Frauds: Under Art. 1403, NCC, a contract for the sale of real property shall
be unenforceable unless the same or some note or memorandum thereof be in writing
and subscribed the party charged or his agent. Evidence of the agreement cannot be
received without the writing, or a secondary evidence of its contents. In case at bench,
the deed of sale and verbal agreement allowing the right of repurchase should be
considered an integral whole. The deed of sale relied upon by petitioner is in itself the
note or memorandum evidencing the contract. Thus, the requirement of the Statute of
Frauds has been sufficiently complied with. Moreover, the principle of the Statute of
Frauds only applies to executory contracts and not to contract either partially or totally
performed (Victoriano v. CA, 194 SCRA 19), as in this case, where the sale has been
consummated; hence, the same is taken out of the scope of the Statute of Frauds.
As the deed of sale has been consummated, by virtue of which, petitioner accepted some
benefits thereunder, it cannot now deny the existence of the agreement. (Art. 1405, NCC) The Statute of
Frauds was enacted for the purpose of preventing fraud and should not be made the instrument to further
them. (National Bank v. Phil. Vegetable Oil, 49 Phil. 857)
PHIL. NATIONAL BANK v. CA (G.R. No. 123643, October 1996)

Civil Law/Damages/Interest: The 12% interest rate referred to in Circ. 416 applies only to loans or
forbearance of money, or where money is transferred from one person to another and the obligation to
return the same or a portion thereof is adjudged. xxx (FTI v. CA & TAO Devt., G.R. No. 120097, 23 Sept.
1996)
Therefore, the proper rate of interest referred to in the judgment under execution is only 6%, to be
computed from the time of the filing of the complaint considering that the amount adjudged can be
established with reasonable certainty (P98,691.90).
CONSTANTINO v. CA (G.R. No. 116018, November 1996)

Civil Law/Contracts/Land Titles/Fraud: We find respondents’ allegation that they signed the deed prior to
the survey worthy of credit. As found by the trial court, petitioner’s contrary contention was contradicted
by petitioner’s own witness who positively asserted in court that the survey was conducted 6 days after
the signing. Obviously, when respondents signed the deed, it was still incomplete sice petitioner who
caused it to be prepared left several spaces blank, regarding the dimensions of the property to be sold.
The heirs were persuaded to sign the document only upon assurance of petitioner that Roque would be
present when the property would be surveyed. But this turned out to be a ruse of petitioner to induce
respondents to sign the deed. (See Periquet v. IAC, 238 SCRA 697 [1994]) Thus all elements of fraud
vitiating consent for purposes of annulling a contract concur: (a) employed by a contracting party upon the
other; (b) induced the other party to enter into the contract; (c) serious; and (d) resulted in damage and
injury to the party seeking annulment. (Alcasid v. CA, 237 SCRA 419 [1994])
38
Perhaps, another reason to annul the document is that the second page manifests that the
number of the subdivision plan and the respective area of the lot were merely handwritten while the rest
of the statements were typed, which leads us to conclude that the handwritten figures were not available
at the time the document was formalized.
CATHOLIC BISHOP OF BALANGA v. CA (G.R. No. 112519, November 1996)

Civil Law/Contracts/Land Titles/Laches: The elements of laches are:
1) Defendant’s conduct giving rise to the situation complained of;
2) Delay in asserting complainant’s right after he had knowledge of defendant’s conduct and after he
had opportunity to sue;
(a) knowledge of defendant’s action;
(b) opportunity to sue defendant after obtaining such knowledge; and
(c) delay in suing
3) Lack of knowledge or notice on defendant’s part that complainant would assert the right on which
he based his suit; and
4) Injury or prejudice to defendant if relief is accorded to complainant. (citations omitted)
In this case, petitioner sued only after 49 years since the donation, without explanation for this
long delay making petitioner guilty of laches.
Further, while petitioner is still the registered owner, and jurisprudence is settled as to the
imprescriptibility of a Torrens Title, there is equally an abundance of cases where we categorically ruled
that a registered landower may lose his right to recover the possession of his registered property by
reason of laches. (citations omitted)
SPOUSES FLORENDO v. CA (G.R. No. 101771, Dec. 17, 1996)

Civil Law/Contracts/Escalation Clauses: In Banco Filipino v. Navarro (152 SCRA 346,353 [1987]), we
ruled that in general, there is nothing inherently wrong with escalation clauses. In IBAA v. Spouses
Salazar (159 SCRA 133, 137 [1988]), the Court reiterated the rule that escalation clauses are valid in
commercial contracts.
ManCom Resolution 85-08, which is neither a rule nor a CB resolution, cannot be used as basis
for escalation in lieu of CB issuances, since par. (f) of the mortgage contract categorically specifies that
any interest rate increase be in accordance with prevailing rules, regulations and circulars of the CB. The
Banco Filipino and PNB doctrines thus apply four-square, that without such CB issuances, any proposed
increased rate will never become effective.
It will not be amiss also to point out that the unilateral determination and imposition of increased
interest rates by LBP violates the principle of mutuality of contracts (Art. 1308, NCC).
1995
DEL MUNDO v. CA (240 SCRA 348 [1995])

Civil Law/Damages: Actual and moral damages cannot be dealt with in the aggregate, each must be
separately identified and independently justified.
CASTELO v. CA (244 SCRA 180 [May 1995])

Civil Law/Oblicon/ Damages/ Interest: In case of ambiguity in language of contract, that interpretation
which establishes a less onerous transmission of rights or permits greater reciprocity is to
be adopted. In delay in discharging an obligation consisting of a payment of a sum of
money, the appropriate measure of damages is payment of penalty interest. Under Art.
2209, use the rate agreed upon, if none, pay additional interest at a rate equal to the
regular or monetary interest, if none, legal interest of 6% or 12% (latter if loan or
forbearance of money).
RAPANUT v. CA (246 SCRA 323 [July 1995])

Civil Law/Oblicon/Contracts Involving Installment Payments/Estoppel: (1) Failure to exercise the right to
rescission after petitioner's alleged default constitutes a waiver, further, continued acceptance of the
installment payments constitutes estoppel.
(2) In a contract involving installment payment with interest chargeable against the remaining
balance of the obligation, it is the duty of the creditor to inform the debtor of the amount of interest that
39
falls due and that he is applying the installment payments to cover said interest. Otherwise, the creditor
cannot apply the payments to the interest and then hold the debtor in default for non-payment of
installments on the principal (Art. 1253, Civil Code).
DBP v. CA (G.R. No. 110053, Oct. 16, 1995)

Civil Law/Oblicon/Void Contracts/Restoration: If both parties have no fault or are not guilty, the restoration
of what was given by each of them to the other is in order. The declaration of nullity of a contract
which is void ab initio operates to restore things to the state and condition in which they were found
before the execution thereof.
AG & P v. CA (G.R. Nos. 114841-42, Oct. 20, 1995)

Civil Law/Contracts/Damages/Interest: When an obligation not constituting a loan or forbearance of
money is breached, interest on the amount of the damages awarded may be imposed at the rate of six
percent (6%) per annum. No interest shall be adjudged on unliquidated claims unless the same can be
established with reasonable certainty.
The actual base for the computation of such legal interest, however, shall be the amount as finally
adjudged by this Court. Furthermore, when our judgment herein becomes final and executory, the rate of
legal interest shall be twelve percent (12%) from such finality until the satisfaction of the total judgment
account, the interim period being effectively equivalent to a forbearance of credit.
SALES
2001
HEIRS OF SANDEJAS, SR v. LINA (G.R. No. 141634, February 5, 2001)

Civil Law/ Sales/Contract to Sell: (1) A contract of sale is not invalidated by the fact that it is subject to
probate court approval. The transaction remains binding on the seller-heir, but not on the other heirs
who have not given their consent to it.
(2) In a contract to sell, the payment of the purchase price is a positive suspensive condition. The
vendor's obligation to convey the title does not become effective in case of failure to pay. When a contract
is subject to a suspensive condition, its birth or effectivity can take place only if and when the condition
happens or is fulfilled.
The suspensive condition did not reduce the conditional sale between Eliodoro Sr. and
respondent to one that was and a definite, clear and absolute document of sale," as contended by
petitioners. Upon the occurrence of the condition, the conditional sale became a reciprocally demandable
obligation that is binding upon the parties.
SPOUSES LORBES v. CA (G.R. No. 139884, February 15, 2001)

Civil Law/ Sales/Equitable Mortgage: There is no conclusive test to determine whether a deed absolute
on its face is really a simple loan accommodation secured by a mortgage. "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 situation of the parties
at that time, the attitude, acts, conduct, 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.
The conditions which give way to a presumption of equitable mortgage, as set out in Article 1602
of the Civil Code, apply with equal force to a contract purporting to be one of absolute sale. Moreover, the
presence of even one of the circumstances laid out in Article 1602, and not a concurrence of the
circumstances therein enumerated, suffices to construe a contract of sale to be one of equitable
mortgage. This is simply in consonance with the rule that the law favors the least transmission of
property rights.
ROSALES v. CA (G.R. No. 137566, February 28, 2001)
40
Civil Law/Sales/Judicial Sale/Inadequacy of Price: Mere inadequacy of the price per se will not set aside a
judicial sale of real property. But where the inadequacy is purely shocking to the conscience, such
that the mind revolts at it and such that a reasonable man would neither directly nor indirectly be
likely to consent to it, the sale shall be declared null and void.
2000
INTEGRATED PACKAGING CORP. v. CA (G.R. No. 115117, June 8, 2000)

Civil Law/Sales/Contracts/Reciprocal Obligations/Damages: Reciprocal obligations are to be performed
simultaneously, so that the performance of one is conditioned upon the simultaneous fulfillment of the
other. Note that in the contract, petitioner is not even required to make any deposit, down payment or
advance payment, hence, the undertaking of private respondent to deliver the materials is conditional
upon payment by petitioner within the prescribed period.
True, indemnification for damages comprehends not only the loss suffered, that is to say actual
damages (damnum emergens), but also profits which the obligee failed to obtain, referred to as
compensatory damages (lucrum cessans). However, to justify a grant of actual or compensatory
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. Moral damages,
meanwhile, may be awarded when in a breach of contract the defendant acted in bad faith, or was guilty
of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligation.
LAFORTEZA v. MACHUCA (G.R. No. 137552, June 16, 2000)

Civil Law/Sales/Contracts/Rescission: Rescission cannot prosper here. A seller cannot unilaterally and
extrajudicially rescind a contract of sale where there is no express stipulation authorizing him to
extrajudicially rescind. Neither was there a judicial demand for the rescission thereof, a requisite for the
rescission of a contract of sale of an immovable property under Art. 1592. Also, rescission of a contract
will not be permitted for a slight or casual breach, but only such substantial and fundamental breach as
would defeat the very object of the parties in making the agreement. In this case, considering that the six-
month period was merely an approximation of the time it would take to reconstitute the lost title and was
not a condition imposed on the perfection of the contract and considering further that the delay in
payment was only thirty days which was caused by the respondents justified but mistaken belief that an
extension to pay was granted to him…the delay of one month in payment was a mere casual breach that
would not entitle the respondents to rescind the contract. Moreover, the failure of the respondent to
consign is not tantamount to a breach of the contract for by the fact of tendering payment, he was willing
and able to comply with his obligation.
REPUBLIC OF THE PHILIPPINES v. SALEM INVESTMENT CORPORATION (June 23, 2000)

Civil Law/Contracts/Sales/Subrogation: The contention that the Deed of Absolute Sale excluded the
portion expropriated by the government is untenable. The underscored phrase does not say that the
expropriated portion of the lot was excluded from the sale. Rather, it states that the entire property,
consisting of 4,075 square meters, was being sold free from all liens and encumbrances except the lien in
favor of the government over the portion being expropriated by it. Stated in another way, Guerrero was
buying the entire property free from all claims of third persons except those of the government.
Evidently, Lot 834 was conveyed in 1994 to Guerrero by virtue of the Deed of Absolute Sale. This
contract was registered in the Register of Deeds and, accordingly, a new transfer certificate of title was
issued to Guerrero. Pursuant thereto, and by virtue of subrogation, the latter became the rightful owner
entitled to receive the just compensation from the Republic.
SAN MIGUEL PROPERTIES PHILIPPINES, INC. v. SPOUSES HUANG (G.R. No. 137290, July 31,
2000)
Sales; Option Contracts- It can not be said a definite and firm sales agreement between the parties had
been perfected over the lot in question. Indeed, this Court has already ruled before that a definite
agreement on the manner of payment of the purchase price is an essential element in the formation of a
binding and enforceable contract of sale. The fact, therefore, that the petitioners delivered to the
41
respondent the sum of P10,000 as part of the down-payment that they had to pay cannot be considered
as sufficient proof of the perfection of any purchase and sale agreement between the parties herein under
Art. 1482 of the new Civil Code, as the petitioners themselves admit that some essential matter — the
terms of the payment — still had to be mutually covenanted.
Thus, it is not the giving of earnest money, but the proof of the concurrence of all the essential
elements of the contract of sale which establishes the existence of a perfected sale.
SANTOS v. CA (G.R. No. 120820, August 1, 2000)

Civil Law/Sales/ Contract of Sale v. Contract to Sell: In a contract to sell, title remains with the vendor and
does not pass on to the vendee until the purchase price is paid in full, Thus, in contract to sell, the
payment of the purchase price is a positive suspensive condition. Failure to pay the price agreed upon is
not a mere breach, casual or serious, but a situation that prevents the obligation of the vendor to convey
title from acquiring an obligatory force. This is entirely different from the situation in a contract of sale,
where non-payment of the price is a negative resolutory condition. The effects in law are not identical. In a
contract of sale, the vendor has lost ownership of the thing sold and cannot recover it, unless the contract
of sale is rescinded and set aside. In a contract to sell, however, the vendor remains the owner for as
long as the vendee has not complied fully with the condition of paying the purchase. If the vendor should
eject the vendee for failure to meet the condition precedent, he is enforcing the contract and not
rescinding it. When the petitioners in the instant case repossessed the disputed house and lot for failure
of private respondents to pay the purchase price in full, they were merely enforcing the contract and not
rescinding it.
DISTAJO vs. CA
Civil Law/Sales/Persons Prohibited from Purchasing: Art. 1491. The following persons cannot acquire by
purchase, even at a public or judicial auction, either in person or through the mediation of another:
(1) The guardian, the property of the person or persons who may be under guardianship;
(2) Agents, the property whose administration or sale may have been entrusted to them, unless the
consent of the principal has been given;
(3) Executors and administrators, the property of the estate under administration;” x x x
Under paragraph (2) of the above article, the prohibition against agents purchasing property in
their hands for sale or management is not absolute. It does not apply if the principal consents to the sale
of the property in the hands of the agent or administrator.
BAYOCA v. NOGALES (G.R. No. 138201, September 12, 2000)

Sales: In fine, the main issue is who has the superior right to the parcel of land sold to different
buyers at different times by its former owners.
Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales, in the
double sales of immovables, ownership is transferred in the order hereunder stated to —
(a) the first registrant in good faith;
(b) the first in possession in good faith; and
(c) the buyer who presents the oldest title in good faith.
The second buyer must act in good faith in registering the deed. Thus, it has been held that in
cases of double sale of immovables, what finds relevance and materiality is not whether or not the second
buyer was a buyer in good faith but whether or not said second buyer registers such second sale in good
faith, that is, without knowledge of any defect in the title of the property sold.
1998
SPOUSES RAET v. CA (September 1998)

Civil Law/ Sales/ Requisites for Perfection of Contract: There was no contract of sale perfected between
the buyers and PVDHC. There was no meeting of the minds as to the terms thereof, especially with
respect to the price. Furthermore, Gatus, the negotiator, was not an agent of PVDHC. Also, Art. 1874 of
the NCC requires for the validity of a sale involving land that the agent should have an authorization in
writing, which Gatus did not have. At the most, it is became only a proposal to sell. They did not go
beyond the negotiation phase of the a contract, which is the period from the time the prospective
42
contracting parties indicate interest on the contract to the time the contract comes into existence – the
perfection stage.
43
SUCCESSION
GENERAL PROVISIONS (774-782)
NUFABLE v. NUFABLE (July 1997)

For the purpose of transmission of rights, it does not matter when the will of the decedent was
approved. When the subject property of their father was mortgaged, the other heirs had already acquired
successional rights over said property. This is pursuant to the principle contained in Art 777 of the CC to
the effect that the rights to succession are transmitted from the moment of death of the decedent.
As co-owner of the subject property, the right to sell, assign or mortgage is limited to that portion
that may be allotted to the co-owner upon termination of the co-ownership. Further, the other co-owners
do not lose their share when their shares were mortgaged by a co-owner without their consent. It has
likewise been ruled that the mortgage of the inherited property is not binding against co-heirs who never
benefited. Moreover, in a case of foreclosure of property mortgaged by a co-owner, it affects only his
share of the property. As regards the remaining pro-indiviso shares, the same was held in trust by the
winning bidder for the parties rightfully entitled thereto.
RABADILLA v. CA (G.R. No. 113725. June 29, 2000)

Under Article 776 of the New Civil Code, inheritance includes all the property, rights and
obligations of a person, not extinguished by his death. Conformably, whatever rights Rabadilla had by
virtue of subject Codicil were transmitted to his forced heirs, at the time of his death. And since obligations
not extinguished by death also form part of the estate of the decedent; corollarily, the obligations imposed
by the Codicil on the deceased Rabadilla were likewise transmitted to his compulsory heirs upon his
death.
In the said Codicil, testatrix X devised Lot 1 to Rabadilla, subject to the condition that the usufruct
thereof would be delivered to the private respondent every year. Upon the death of Rabadilla, his
compulsory heirs succeeded to his rights and title over the said property, and they also assumed his
obligation to deliver the fruits of the lot involved to private respondent. Such obligation of the instituted
heir reciprocally corresponds to the right of private respondent over the usufruct.
LEGITIMES (886-914)
VILLANUEVA-MIJARES v. CA (G.R. No. 108921. April 12, 2000)

A, son of X, died before the effectivity of New Civil Code of the Philippines. Hence, the old Civil
Code governs the distribution and disposition of his intestate estate. Thereunder, the legitime of the
children and descendants consisted of two-thirds (2/3) of the hereditary estate of the father and of the
mother (first paragraph, Article 808); and the widower or widow, as the case may be, who, at the time of
death of his or her spouse, was not divorced or if divorced, due to the fault of the deceased spouse, was
entitled to a portion in usufruct equal to that which pertains as legitime to each of the legitimate children or
descendants not bettered (Article 834, 1st paragraph.)
FRANCISCO v. FRANCISCO-ALFONSO (G.R. No. 138774. March 8, 2001.)

There was no cause or consideration for the sale, the same was a simulation and hence, null and
void. Even if the kasulatan was not simulated, it still violated the Civil Code provisions insofar as the
transaction affected respondent's legitime. The sale was executed in 1983, when the applicable law was
the Civil Code, not the Family Code.
The legitime of legitimate children and descendants consists of one-half of the hereditary estate
of the father and of the mother. The latter may freely dispose of the remaining half subject to the rights of
illegitimate children and of the surviving spouse as hereinafter provided. Respondent’s compulsory heir
cannot be deprived of her share in the estate save by disinheritance as prescribed by law.
TESTAMENTARY SUCCESSION (783-837)
CODOY v. CALUGAY (August 1999)

In this petition, the petitioners ask whether the provisions of Art 811 of the CC are permissive or
mandatory. The article provides, as a requirement for the probate of a contested holographic will, that at
44
least three witnesses explicitly declare that the signature in the will is the genuine signature of the
testator.
We are convinced that it is mandatory, the word "shall" connotes a mandatory order. We have
ruled that "shall" in a statute commonly denotes an imperative obligation and is inconsistent with the idea
of discretion and that the presumption is that the word "shall" when used in a statute is mandatory.
CONDITIONS AND TERMS (871-885)
RABADILLA v. CA (G.R. No. 113725. June 29, 2000)

Substitution is the designation by the testator of a person or persons to take the place of the heir
or heirs first instituted. Under substitutions in general, the testator may either (1) provide for the
designation of another heir to whom the property shall pass in case the original heir should die before
him/her, renounce the inheritance or be incapacitated to inherit, as in a simple substitution, or (2) leave
his/her property to one person with the express charge that it be transmitted subsequently to another or
others, as in a fideicommissary substitution. The Codicil sued upon contemplates neither of the two.
In simple substitutions, the second heir takes the inheritance in default of the first heir by reason
of incapacity, predecease or renunciation. In the case under consideration, the provisions of subject
Codicil do not provide that should Rabadilla default due to predecease, incapacity or renunciation, the
testatrix's near descendants would substitute him. What the Codicil provides is that, should Rabadilla or
his heirs not fulfill the conditions imposed in the Codicil, the property referred to shall be seized and
turned over to the testatrix's near descendants.
Neither is there a fideicommissary substitution here. In a fideicommissary substitution, the first
heir is strictly mandated to preserve the property and to transmit the same later to the second heir. In the
case under consideration, the instituted heir is in fact allowed under the Codicil to alienate the property
provided the negotiation is with the near descendants or the sister of the testatrix. Thus, a very important
element of a fideicommissary substitution is lacking; the obligation clearly imposing upon the first heir the
preservation of the property and its transmission to the second heir. Without this obligation to preserve
clearly imposed by the testator in his will, there is no fideicommissary substitution. Also, the near
descendants' right to inherit from the testatrix is not definite. The property will only pass to them should
Rabadilla or his heirs not fulfill the obligation to deliver part of the usufruct to private respondent.
Another important element of a fideicommissary substitution is also missing here. Under Article
863, the second heir or the fideicommissary to whom the property is transmitted must not be beyond one
degree from the first heir or the fiduciary. A fideicommissary substitution is therefore, void if the first heir is
not related by first degree to the second heir. In the case under scrutiny, the near descendants are not at
all related to the instituted heir, Rabadilla.
Article 882 of the New Civil Code is the provision of law in point. The institution of an heir in the
manner prescribed in Article 882 is what is known in the law of succession as an institucion sub modo or
a modal institution. In a modal institution, the testator states (1) the object of the institution, (2) the
purpose or application of the property left by the testator, or (3) the charge imposed by the testator upon
the heir. A "mode" imposes an obligation upon the heir or legatee but it does not affect the efficacy of his
rights to the succession. On the other hand, in a conditional testamentary disposition, the condition must
happen or be fulfilled in order for the heir to be entitled to succeed the testator. The condition suspends
but does not obligate; and the mode obligates but does not suspend. To some extent, it is similar to a
resolutory condition.
Then too, since testamentary dispositions are generally acts of liberality, an obligation imposed
upon the heir should not be considered a condition unless it clearly appears from the Will itself that such
was the intention of the testator. In case of doubt, the institution should be considered as modal and not
conditional.
DEVICES AND LEGACIES (924-959)
MANUEL v. FERRER (247 SCRA 476)

When the law speaks of brothers and sisters, nephews and nieces as legal heirs of an illegitimate child, it
refers to illegitimate brothers and sisters as well as to the children, whether legitimate or illegitimate, of
such brothers and sisters.
45
RIGHT OF REPRESENTATION (970-977)
SAYSON v. CA (205 SCRA 322. January 23, 1992 )

While it is true that an adopted child shall be deemed to be a legitimate child and have the same
right as the latter, these rights do not include the right of representation. The relationship created by the
adoption is between only the adopting parents and the adopted child and does not extend to the blood
relatives of either party.
BAGUNU v. PIEDAD (G.R. No. 140975. December 8, 2000.)

The rule on proximity is a concept that favors the relatives nearest in degree to the decedent and
excludes the more distant ones, except when and to the extent that the right of representation can apply.
In every inheritance, the relative nearest in degree excludes the more distant ones, saving the right of
representation when it properly takes place. Relatives in the same degree shall inherit in equal shares,
subject to the provisions of article 1006 with respect to relatives of the full and half blood, and of article
987, paragraph 2, concerning division between the paternal and maternal lines.
By right of representation, a more distant blood relative of a decedent is, by operation of law,
raised to the same place and degree of relationship as that of a closer blood relative of the same
decedent. The representative thereby steps into the shoes of the person he represents and succeeds, not
from the latter, but from the person to whose estate the person represented would have succeeded.
In the direct line, right of representation is proper only in the descending, never in the ascending,
line. In the collateral line, the right of representation may only take place in favor of the children of
brothers or sisters of the decedent when such children survive with their uncles or aunts.
The right of representation does not apply to other collateral relatives within the fifth civil degree
who are sixth in order of preference following, firstly, the legitimate children and descendants, secondly,
the legitimate parents and ascendants, thirdly, the illegitimate children and descendants, fourthly, the
surviving spouse, and fifthly, the brothers and sisters/nephews and nieces, of the decedent. Among
collateral relatives, except only in the case of nephews and nieces of the decedent concurring with their
uncles or aunts, the rule of proximity is an absolute rule.
Among the other collateral relatives, i.e. the sixth in the line of succession, no preference or
distinction shall be observed by reason of relationship by the whole blood. In fine, a maternal aunt can
inherit alongside a paternal uncle, and a first cousin of the full blood can inherit equally with a first cousin
of the half blood, but an uncle or an aunt, being a third-degree relative, excludes the cousins of the
decedent, being in the fourth-degree of relationship; the latter, in turn, would have priority in succession to
a fifth-degree relative.
INTESTATE SUCCESSION (960-969, 978-1014)
ARMAS v. CALISTERIO (GR. No. 136467. April 6, 2000)

The successional right in intestacy of a surviving spouse over the net estate of the deceased,
concurring with legitimate brothers and sisters or nephews and nieces (the latter by right of
representation), is one-half of the inheritance. The brothers and sisters or nephews and nieces, however,
can only succeed by right of representation in the presence of unless and aunts; alone, upon the other
hand, nephews and nieces can succeed in their own right which is to say that brothers and sisters
exclude nephews and nieces except only in representation by the latter of their parents who predecease
or are incapacitated to succeed.
MALANG v. MOSON (G.R. No. 119064. August 22, 2000)

What law governs the succession to the estate of a Muslim who died after the Muslim Code and
family Code took effect? (1) It is the Muslim Code which should determine the identification of the heirs in
the order of intestate succession and the respective shares of the heirs. (2) The status and capacity to
succeed on the part of the individual parties who entered into each and every marriage ceremony will
depend upon the law in force at the time of the performance of the marriage rite. (3) Status and capacity
of the children will depend upon the law in force at the time of conception or birth of the child. (4)
Provisions on legal succession in the Muslim Code will apply. Sharers to an inheritance include: the
husband and wife, the parents, grandparents, descendants, full-blood brothers and sisters, consanguine
brothers and sisters (half-bro/sis by father’s side), and the uterine brothers and sisters (half-bro/sis by
mother’s side).
46
COLLATION (907-911, 1061-1077)
SANCHEZ v. CA (September 1997)

The deeds of sale were not gratuitous transfers of future inheritance. They were contracts of sale
perfected by decedents during their lifetime. Hence the properties conveyed thereby are not collationable
because, essentially, Art. 1601 of the CC contemplates properties conveyed inter vivos by the decedent
to an heir by way of donation or other gratuitous title.
IMPERIAL v. CA (316 SCRA 393. October 8, 1999)

A claim for legitime does not amount to a claim of title. What is brought to collation is not the
donated property itself but the value of the property at the time it was donated. Donation is a real
alienation which conveys ownership upon its acceptance. Hence, any increase in value or deterioration or
loss is for the account of the heir/donee.
Ordinary rules of prescription because the reduction of donations which hinges upon the
allegation of impairment of legitime are not controlled by a particular prescriptive period. For actions upon
an obligation created by law, ten (10) years from the time the right of action accrues is the ordinary
prescriptive period. In this case, the cause of action accrues upon the death of the donor-decedent, for
only then may the net estate and legitimes be ascertained.
The rules of succession require that, in determining legitimes, the following steps must be taken:
(1) the net estate of the decedent be ascertained by deducting all payable obligations and charges from
the value of the property owned by the deceased at the time of his death; (2) the value of all donations
subject to collation would be added to it (and not the property donated). Where collatable property is an
immovable, what may be received is: (1) the equivalent, as much as possible, in property of the same
nature, class and quality; (2) if practicable, equivalent value of the impaired legitime in cash or marketable
securities; (3) in the absence of cash or securities in the estate, so much of such other property as may
be necessary to be sold in public auction.
NAZARENO v. CA (343 SCRA 637. October 18, 2000).

The estate of a deceased person is a juridical entity that has a personality of its own. Though
Romeo represented at one time the estate of Maximo, Sr., the latter has a separate and distinct
personality from the former. Hence, the judgment in case no. 123 regarding the ownership of Maximo, Jr.
over Lot A binds Romeo only, and not the estate of Maximo, Sr., which also has a right to recover
properties which were wrongfully disposed.
It cannot be denied that Maximo, Sr. intended to give the six Quezon City lots to X. As Romeo
testified, their parents executed the Deed of Sale in favor of X because the latter was the only “female
and the only unmarried member of the family.” She was thus entrusted with the real properties in behalf of
her siblings. As she herself admitted, she intended to convey lots b and c to Y in the event the latter
returned from abroad. There was thus an implied trust constituted in her favor. Art 1449 of the CC states:
there is also an implied trust when a donation is made to a person but it appears that although the legal
estate is transmitted to the donee, he nevertheless is either to have no beneficial interest or only a part
thereof. There being an implied trust, the lots in question are therefore subject to collation in accordance
with Art. 1061 which staes: Every compulsory heir who succeeds with other compulsory heirs, must bring
into the mass of the estate any property or right which he nay have received from the decedent, during
the lifetime of the latter, by way of donation, or any other gratuitous title, in order that it may be computed
in the determination of the legitime of each heir, and in the account of the partition.
ALLOWANCE OF WILLS (838-839, 809)
SAN PEDRO v. CA (G.R. No. 106496. December 18, 1996)

Petitioners-heirs contend that the lower court had no jurisdiction as an intestate/probate court to
resolve the question of title over the subject property. Public respondent argues that when the Republic
questioned the existence of the estate of San Pedro, the lower court became duty-bound to rule on the
genuineness and validity of the title which purportedly covers the said estate.
A probate court's jurisdiction is not limited to the determination of who the heirs are and what
shares are due them as regards the decedent's estate. Neither is it confirmed to the issue of the validity
of wills. We held in Maniñgat v. Castillo (75 Phil. 532) that the main function of a probate court is to settle
47
and liquidate the estates of deceased persons either summarily or through the process of administration.
This function necessarily includes the examination of the properties of the deceased so as to rule on
whether or not the inventory of the estate properly included them for purposes of distribution. Thus in
Trinidad v. CA (202 SCRA 106) we held that questions of title to any property apparently still belonging to
the estate of the deceased may be passed upon in probate with the consent of all parties, without
prejudice to third persons. Questions of title pertaining to the determination prima facie of whether certain
properties ought to be included or excluded from inventory and accounting may be resolved by the
probate court. (Garcia v. Garcia, 67 Phil. 353)
REYES v. CA (October 1997)

As a general rule, probate courts are limited to pass only upon the extrinsic validity of the will
sought to be probated. Thus the court merely inquires on its due execution, whether or not it complies
with the formalities prescribed by law, and the testamentary capacity of the testator. It does not
determine nor even by implication prejudge the validity or efficacy of the will's provisions. However, where
the parties agree that the intrinsic validity be first determined, the probate court may do so. The rule on
probate is not inflexible and absolute. Under exceptional circumstances, the probate court is not
powerless to do what the situation constrains it to do and pass upon certain provisions of the will.
In the probate proceeding here, the only issues were whether the testator had animus testandi;
whether vices of consent attended the execution of the will; and whether formalities of the will had been
complied with. Thus, the lower court was not asked to rule upon the intrinsic validity or efficacy of the
will's provisions. As a result, the declaration of the testator that X was his wife did not have to be
scrutinized during probate. The propriety of the institution of X as one of the devisees/legatees already
involved the will's intrinsic validity which did not have to be inquired into by the probate court.
The probate court erroneously invoked Nepomuceno v. CA (139 SCRA 206), where the testator
himself acknowledged his illicit relationship with the devisee. Thus the very tenor of the will invalidated the
legacy as the testator admitted he was disposing of the properties to a person with whom he had been
living in concubinage. To remand the case would only be a waste of time and money since the illegality or
defect was already patent. But here, the testator merely stated in his will that he was bequeathing some
of his properties to his wife X. There was never an open admission of any illicit relationship, unlike in
Nepomuceno.
REYES v. REYES (G.R. No. 139587. November 22, 2000.)

The jurisdiction of the probate court merely relates to matters having to do with the settlement of
the estate and the probate of wills of deceased persons, and the appointment and removal of
administrators, executors, guardians and trustees. The question of ownership is as a rule, an extraneous
matter which the probate court cannot resolve with finality. Thus, for the purpose of determining whether a
certain property should or should not be included in the inventory of estate proceeding, the probate court
may pass upon the title thereto, but such determination is provisional, not conclusive, and is subject to the
final decision in a separate action to resolve title.
The probate court exercises but limited jurisdiction, thus it has no power to take cognizance of
and determine the issue of title to property claimed by a third person adversely to the decedent, unless
the claimant and all other parties having legal interest in the property consent, expressly or impliedly, to
the submission of the question to the probate court for adjudgment, or the interests of third persons are
not thereby prejudiced.
LLORENTE v. CA (G.R. No. 124371. November 23, 2000 )

Article 17 of the CC provides: the forms and solemnities of contracts, wills, and other public
instruments shall be governed by the laws of the country in which they are executed. When the acts
referred to are executed before the diplomatic or consular officials of the Republic of the Philippines in a
foreign country, the solemnities established by Philippine laws shall be observed in their execution.
48
The clear intent of testator X to bequeath his property to his second wife and children by her is
glaringly shown in the will he executed. We do not wish to frustrate his wishes, since he was a foreigner,
not covered by our laws on “family rights and duties, status, condition and legal capacity.”
Whether the will is intrinsically valid and who shall inherit from X are issues best proved by
foreign law which must be pleaded and proved. Whether the will was executed in accordance with the
formalities required is answered by referring to Philippine law. In fact, the will was duly probated. As a
guide, however, the trial court should note that whatever public policy or good customs may be involved in
our system of legitimes, Congress did not intend to extend the same to the succession of foreign
nationals. Congress specifically left the amount of successional rights to the decedent’s national law.
EXECUTORS AND ADMINISTRATORS (1058-1060)
CIR v. CA (G.R. No. 123206. March 22, 2000.)

Administration expenses, as an allowable deduction from the gross estate of the decedent for
purposes of arriving at the value of the net estate, have been construed by the federal and state courts of
the United States to include all expenses “essential to the collection of the assets, payment of debts or
the distribution of the property to the persons entitled to it. Expenditures incurred for the individual benefit
of the heirs, devisees or legatees are not deductible.
ALIPIO v. CA (G.R. No. 134100. September 29, 2000.)

After the death of either of the spouses, no complaint for the collection of indebtedness
chargeable against the conjugal partnership can be brought against the surviving spouse. Instead, the
claim must be made in the proceedings for the liquidation and settlement of the conjugal property. The
reason for this is that upon the death of one spouse, the powers of administration of the surviving spouse
ceases and is passed to the administrator appointed by the court having jurisdiction over the settlement of
estate proceedings. Indeed, the surviving spouse is not even a de facto administrator such that
conveyances made by him of any property belonging to the partnership prior to the liquidation of the mass
of conjugal partnership property is void.
PARTITION (1078-1105)
SALVATIERRA v. CA (G.R. No. 107797. August 26, 1996)

The law is clear that where there are two or more heirs, the whole estate of the decedent is,
before partition, owned in common by such heirs. Hence, the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion that may be allotted to him in the division upon
termination of the co-ownership.
MAGLUCOT_AW v. MAGLUCOT (G.R. No. 132518. March 28, 2000.)

In this jurisdiction, an action for partition is comprised of two phases: first, an order for partition
which determines whether a co-ownership in fact exists, and whether partition is proper; and, second, a
decision confirming the sketch or subdivision submitted by the parties or the commissioners appointed by
the court, as the case may be.
The first phase of the partition and/or accounting suit is taken up with the determination of
whether or not a co-ownership in fact exists (i.e., not otherwise legally proscribed) and may be made by
voluntarily agreement of all the parties interested in the property. This phase may end with a declaration
that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or partition is
legally prohibited. It may end, upon the other hand, with an adjudgement that a co-ownership does in truth
exist, partition is proper in the premises and an accounting of rents and profits received by the defendant
from the real estate in question is in order. In the latter case, the parties may make partition among
themselves by proper instruments of conveyance, and the court shall confirm the partition so agreed
upon.
The second phase commences when it appears that “the parties are unable to agree upon the
partition” directed by the court. In that event, partition shall be done for the parties by the court with the
assistance of not more than three (3) commissioners.
The present rule on the question of finality and appealability of a decision or order decreeing
partition is that it is final and appealable.
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Parties to a partition proceeding, who elected to take under partition, and who took possession of
the portion allotted to them, are estopped to question title to portion allotted to another party. A person
cannot claim both under and against the same instrument. Regardless of whether a parol partition or
agreement to partition is valid and enforceable at law, equity will in proper cases, where the parol partition
has actually been consummated by the taking of possession in severalty and the exercise of ownership
by the parties of the respective portions set off to each, recognize and enforce such parol partition and the
rights of the parties thereunder.
AVELINO v. CA (G.R. No. 115181 March 31, 2000)

Petitioner submits that no partition of the estate is possible in the instant case as no
determination has yet been made of the character and extent of the decedent’s estate. A complete
inventory of the estate may be done during the partition proceedings, especially since the estate has no
debts. Hence the CA committed no reversible error in converting petitioner’s action for letters of
administration into an action for judicial partition. Where the more expeditious remedy of partition is
available to the heirs, then the heirs or the majority of them may not be compelled to submit to
administration proceedings.
SPOUSES ZARAGOZA v. CA (G.R. No. 106401. September 29, 2000)

Was the partition done during the lifetime of X valid? It is basic in the law of succession that a
partition inter vivos may be done for as long as legitimes are not prejudiced. Article 1080 of the CC is
clear on this. The legitime of compulsory heirs is determined after collation, as provide for in Article 1061.
Every compulsory heir, who succeeds with other compulsory heirs, must bring into the mass of
the estate any property or right which he may have received from the decedent, during the lifetime of the
latter, by way of donation, or any other gratuitous title in order that it may be computed in the
determination of the legitime of each heir, and in the account of the partition.
Unfortunately, collation cannot be done in this case where the original petition for delivery of
inheritance share only impleaded one of the other compulsory heirs. The petition must be dismissed
without prejudice to the institution of a new proceeding where all the indispensable parties are present for
the rightful determination of their respective legitime and if the legitimes were prejudiced by the
partitioning inter vivos.
PROPERTY
KINDS
LIGHT RAIL TRANSIT AUTHORITY v. CENTRAL BOARD OF ASSESSMENT APPEALS

(G.R. No. 127316. October 12, 2000)
LRT’s subject carriageways and stations may be considered real property under Article 415 of the
Civil Code. However, it resolutely argues that the same are improvements, not of its properties, but of the
government-owned national roads to which they are immovably attached. They are thus not taxable as
improvements under the Real Property Tax Code. In essence, it contends that to impose a tax on the
carriageways and terminal stations would be to impose taxes on public roads.
The New Civil Code divides the properties into property for public and patrimonial property (Art.
423), and further enumerates the property for public use as provincial road, city streets, municipal streets,
squares, fountains, public waters, public works for public service paid for by said [provinces], cities or
municipalities; all other property is patrimonial without prejudice to provisions of special laws. (Art. 424)
The character of petitioner's property, be it an improvements as otherwise distinguished by
petitioner, needs no further classification when the law already classified it as patrimonial property that
can be subject to tax. This is in line with the old ruling that if the public works is not for such free public
service, it is not within the purview of the first paragraph of Art. 424 if the New Civil Code.
EASEMENTS
FLORE v. LLENADO (June 1995)

Requisites under Arts. 649 & 650: (1) Burden to prove existence of requisites lies on owner of
dominant estate; (2) Mere convenience of dominant estate is not what is required by law as basis to set
up a compulsory easement.
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QUIMEN v. CA (May 1996 )

That where the way is shortest and will cause least prejudice shall be chosen. However, if the
two circumstances do not concur in a single tenement, the way where damage will be least shall be used
even if not the shortest route. This is so because least prejudice over shortest distance. This means that
the court is not bound to establish what is the shortest distance; a longer way may be adopted to avoid
injury to the servient estate, such as when there are constructions or walls which can be avoided by a
round about way, or to secure the interest of the dominant owner, such as when the shortest distance
would place the way on a dangerous decline.
The conditions sine qua non for a valid grant of an easement of right of way are: (a) the dominant
estate is surrounded by other immovable without an adequate outlet to a public highway; (b) the
dominant estate is willing to pay the proper indemnity; (c) the isolation was not due to the acts of the
dominant estate; and, (d) the right of way being claimed is at a point least prejudicial to the servient
estate.
The criterion of least prejudice to the servient estate must prevail over the criterion of shortest
distance although this is a matter of judicial appreciation. While shortest distance may ordinarily imply
least prejudice, it is not always so as when there are permanent structures obstructing the shortest
distance; while on the other hand, the longest distance may be free of obstructions and the easiest or
most convenient to pass through. In other words, where the easement may be established on any of
several tenements surrounding the dominant estate, the one where the way is shortest and will cause the
least damage should be chosen. However if these two (2) circumstances do not concur in a single
tenement, the way which will cause the least damage should be used, even if it will not be the shortest.
This is the test. As between a right of way that would demolish a store of strong materials to provide
egress to a public highway, and another right of way which although longer will only require an avocado
tree to be cut down, the second alternative should be preferred.
LA VISTA ASSOCIATION, INC. v. CA, SOLID HOMES, INC. (September 1997)

Is there an easement of right-of-way over Mangyan Road (La Vista, Q.C.): From the facts here, it
is apparent that the parties and their respective predecessors-in-interest intended to establish an
easement of right-of-way over Mangyan Road for their mutual benefit, both as dominant and servient
estates, and like any other contract, the same may only be extinguished by mutual agreement or
renunciation of the owner of the dominant estate.
When the court says an easement exists, it is not creating one. For, even an injunction cannot be
used to create one as there is no such thing as a judicial easement. As here, a court merely declares the
existence of an easement created by the parties. Petitioner's argument that there are other routes to
Loyola from Mangyan Road is likewise meritless. The opening of an adequate outlet to a highway can
extinguish only legal or compulsory easements, not voluntary easements such as here. The fact that an
easement by grant may have also qualified as an easement of necessity does not detract from its
permanency as a property right, which survives the termination of the necessity.
When the easement here was established by contract, the parties unequivocally made provisions
for its observance by all who in the future might succeed them in dominion.
ALMENDRAS v. CA (August 1998)

For petitioner to be able to demand a right of way through the neighboring estates, the owners of
all surrounding estates should be heard with respect to two matters: (1) at which point establishment of
the easement would be least prejudicial to the owners of the servient estates and (2) at which point the
distance of the right of way to the public highway would be shortest. However, as held in the case of
Quimen v. CA, “… (I)f these two (2) circumstances do not concur in a single tenement, the way which will
cause the least damage should be used, even if it will not be the shortest.” To be able to determine this
fact, in the case at bar, all the surrounding property owners should be heard, precisely the reason why the
case is to be remanded.
VILLANUEVA v. VELASCO
(G.R. No. 130845. November 27, 2000)
The easement in the instant petition is both (1) an easement by grant or a voluntary easement,
and (2) an easement by necessity or a legal easement. A legal easement is one mandated by law,
constituted for public use or for private interest, and becomes a continuing property right. As a
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compulsory easement, it is inseparable from the estate to which it belongs, as provided for in said Article
617 of the Civil Code. The essential requisites for an easement to be compulsory are: (1) the dominant
estate is surrounded by other immovables and has no adequate outlet to a public highway; (2) proper
indemnity has been paid; (3) the isolation was not due to acts of the proprietor of the dominant estate; (4)
the right of way claimed is at a point least prejudicial to the servient estate; and (5) to the extent
consistent with the foregoing rule, where the distance from the dominant estate to a public highway may
be the shortest.
The small house occupying one meter of the two-meter wide easement obstructs the entry of
private respondents' cement mixer and motor vehicle. One meter is insufficient for the needs of private
respondents. It is well-settled that the needs of the dominant estate determine the width of the easement.
Conformably then, petitioner ought to demolish whatever edifice obstructs the easement in view of the
needs of private respondents' estate.
POSSESSION
BARANGAY SAN ROQUE v. HEIRS OF PASTOR (G.R. No. 138896, June 20, 2000.)
We are not persuaded by respondents' argument that the present action involves the title to or
possession of a parcel of land. To emphasize, the question in the present suit is whether the government
may expropriate private property under the given set of circumstances. The government does not dispute
respondents' title to or possession of the same. Indeed, it is not a question of who has a better title or
right, for the government does not even claim that it has a title to the property. It merely asserts its
inherent sovereign power to "appropriate and control individual property for the public benefit, as the
public necessity, convenience or welfare may demand.
SPOUSES ARENAS v. CA ( G.R. No. 126640. November 23, 2000)

In an unlawful detainer case, the issue is the right to physical possession of the premises or
possession de facto.
OWNERSHIP
ACAP v. CA (G.R. No. 118114, Dec. 7, 1995)

[A]n asserted right or claim to ownership or a real right over a thing arising from a juridical act is not per
se sufficient to give rise to ownership over the res. That right or title must be completed by fulfilling
certain conditions imposed by law. Hence, ownership and real rights are acquired only pursuant to a legal
mode or process. While title is the juridical justification, mode is the actual process of acquisition or
transfer of ownership over a thing in question.
Under Art. 712, the modes of acquiring ownership are generally classified into 2 classes: original
(occupation, acquisitive prescription, law or intellectual creation) and derivative (succession mortis causa,
tradition as a result of certain contracts, e.g., sale, barter, donation, assignment or mutuum).
Hence, there is a marked difference between a sale and waiver of hereditary rights. The former
presumes the existence of a contract or deed of sale between the parties. The latter, technically
speaking, is a mode of extinction of ownership ... in favor of other persons who are co-heirs in the
succession. Private respondent, being a stranger to the succession of the decedent, cannot conclusively
claim ownership over the subject lot on the sole basis of the waiver document which neither recites the
elements of either a sale, or a donation, or any other derivative mode of acquiring ownership.
VDA. DE ESCONDE v. CA (February 1996)

The rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and
unless he repudiates the trust applies to express trusts and resulting implied trusts. (citations omitted)
However, in constructive implied trusts, prescription may supervene even if the trustee does not repudiate
the relationship.
REPUBLIC v. DOLDOL (September 1998)

The decision of the CA was reversed for the reason that Doldol did not acquire imperfect title to
the property since he did not occupy the lot before June 12, 1945, which is the requirement of PD 1073,
amending RA 1942. (RA 1942 provided for a simple 30-year prescriptive period of occupation by an
applicant for judicial confirmation of imperfect title.)
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In Republic v. CA, it was stated that the Public Land Act (CA 141) requires that the applicant must
prove (a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious
possession and occupation of the same must either be since time immemorial or for the period prescribed
in the Public Land Act. CA 141, however, has been superseded by RA 1942, which in turn has been
amended by PD 1073.
Not having complied with all the conditions set by law, Doldol cannot be said to have acquired a
right to the land in question as to segregate the same from the public domain. Oral partition of property
valid where evidence supports the same; Written proof of oral partition not required in Art. 1403; A TCT
merely evidences and is not constitutive title; Proof needed for damages
SPOUSES REYES v. DE LA PAZ (September 1998)

Petitioners contend ownership of a parcel of land characterized as forestland, through
prescription, as their ancestors were issued a homestead patent and also had possession thereof.
This contention was rejected by the SC which ruled that a homestead patent issued on a property
which at the time of issuance was part of public domain is void. No prescription runs against the
government. Moreover, a subsequent release of the land as alienable does not cure such defect.
Under the Regalian doctrine, all lands of the public domain belong to the State. Hence, the
burden of proof in overcoming the presumption of State ownership of lands of the public domain is on the
person applying for registration. Petitioners failed to do so.
GARCIA v. CA (August 1999)

Ownership and Possession are 2 distinct legal concepts. Ownership exists when a thing
pertaining to 1 person is completely subjected to his will in a manner not prohibited by law and is
consistent with the rights of others. Possession is the holding of the thing or enjoyment of a right. Literally,
to posses means to actually and physically occupy a thing with or without right. Possession may be had in
2 ways: in the concept of an owner or in the concept of a holder. A possessor in the concept of an owner
may be the owner himself or one who claims to be so. On the other hand, one who possesses as a mere
holder acknowledges on another a superior right which he believes to be ownership, whether his belief be
right or wrong. More so, possession by another through the owner’s tolerance does not affect the owner’s
right to transfer ownership of the property.
PISUENA v. HEIRS OF UNATING (August 1999)

Petitioner at bar claims full ownership of the subject lot which he asserted to be the paraphernal
property of the mother of the vendors as against repsondent’s contention that said lot was conjugal so
that the vendors could have only sold ½ of the said land. Properties acquired during the marriage are
presumed conjugal. However, this prima facie presumption cannot prevail over the cadastral court’s
specific finding, reached in adversarial proceedings, that the lot was inherited by the vendee from her
mother.
The 1980 reconstitution of the title in the name of Petra Unating, married to Aquilino Argamaso
was notice to the whole world, including her heirs and successors-in-interest, that it belonged to Petra as
paraphernal property. The words “married to” were merely descriptive of Petra’s status at the time the it
was awarded and registered in her name.
CRUZ vs. SEC. OF ENVIRONMENT AND NATURAL RESOURCES

(G.R. No. 135385. December 6, 2000)
Although highly bent on communal ownership, customary law on land also sanctions individual
ownership. The residential lots and terrace rice farms are governed by a limited system of individual
ownership. It is limited because while the individual owner has the right to use and dispose of the
property, he does not possess all the rights of an exclusive and full owner as defined under our Civil
Code. Under Kalinga customary law, the alienation of individually-owned land is strongly discouraged
except in marriage and succession and except to meet sudden financial needs due to sickness, death in
the family, or loss of crops. Moreover, land to be alienated should first be offered to a clan-member before
any village-member can purchase it, and in no case may land be sold to a non-member.
Land titles do not exist in the indigenous peoples' economic and social system. The concept of
individual land ownership under the civil law is alien to them. Inherently colonial in origin, our national land
laws and governmental policies frown upon indigenous claims to ancestral lands. Communal ownership is
looked upon as inferior, if not inexistent.
53
CO-OWNERSHIP
MERCADO v. CA (1995)
A co-owner can only alienate his pro-indiviso share in the co-owned property, thus, a co-owner does not
lose his part ownership of a co-owned property when his share is mortgaged by another co-owner without
the former's knowledge and consent
IMPERIAL v. CA (July 1996)

Where an heir who owns one-half undivided share of the area of two lots sell one of the lots without giving
to his co-heir the latter's share of the proceeds, may the latter lay exclusive claim to the remaining lot as
his own?
Inasmuch as the terms of the agreement between Adela and Melanio provide for one-half
undivided share for petitioner over Lots 1091 and 1052, and petitioner in effect waived his rights over one-
half of the remaining Lot 1091 when he sold and appropriated solely as his own the entire proceeds from
the sale of Lot 1052, law (Art. 485, 2nd par., NCC presumes equal portions unless the contrary is proved)
and equity dictate that Lot 1091 should now belong to the estate of the late Adela. (1091 is bigger than
1052 by 3 sq. meters, a difference not significant enough to compel an exact division between opposing
claimants.)
CATAPUSAN v. CA (G.R. No. 109262, November 1996 )

In actions for partition, the court cannot properly issue an order to divide the property, unless it first makes
a determination as to the existence of co-ownership. The court must initially settle the issue of ownership,
the first stage in an action for partition. (De Mesa v. CA, 231 SCRA 773) An action for partition will not lie
if the claimant has no rightful interest over the property. In fact, §1, Rule 69 requires the party filing the
action to state in his complaint the nature and extent of his title. Until the issue of ownership is definitely
resolved, it would be premature to effect a partition of the properties. (Fabrica v. CA, 146 SCRA 250)
ACCRETION
VDA. DE NAZARENO v. CA (June 1996)

Accretion, as a mode of acquiring property requires the concurrence of these requisites: (a) that
the deposition of soil or sediment be gradual and imperceptible; (2) that it be the result of the action of the
waters of the river (or sea); and (3) that the land where accretion takes place is adjacent to the banks of
rivers (or the sea coast). These are called the rules on alluvion which if present in a case, give to the
owners of lands adjoining the banks of rivers or streams any accretion gradually received from the effects
of the current of waters.
Petitioners admit that the accretion was formed by the dumping of boulders, soil and other filling
materials on portions of the Balacanas Creek and the Cagayan River bounding their land. It cannot be
claimed, therefore, that the accumulation of such boulders was gradual and imperceptible, resulting from
the action of the waters or the current. The word "current" indicates the participation of the body of water
in the ebb and flow of waters due to high and low tide.
The accretion in question was man-made or artificial. Alluvion must be the exclusive work of
nature; If man-made accretion, it is part of the public domain.
BAGAIPO v. CA (G.R. No. 116290. December 8, 2000)

The rule is well-settled that accretion benefits a riparian owner when the following requisites are
present: 1) That the deposit be gradual and imperceptible; 2) That it resulted from the effects of the
current of the water; and 3) That the land where accretion takes place is adjacent to the bank of the river.
In the absence of evidence that the change in the course of the river was sudden or that it occurred
through avulsion, the presumption is that the change was gradual and was caused by alluvium and
erosion.
BUILDER IN GOOD FAITH
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PECSON v. CA (May 1995)

Art. 448 does not apply to a case where the owner of the land is the builder, sower, or planter, who then
later loses ownership of the land by sale or donation. But the provisions of Art. 448 on indemnity may be
applied by analogy to a case where one loses ownership of the land on which he earlier built an
apartment.
PLEASANTVILLE v. CA (February 1996)

Is a lot buyer who constructs improvements on the wrong property erroneously delivered by the owner's
agent, a builder in good faith: Good faith consists in the belief of the builder that the land he is building on
is his and his ignorance of any defect or flaw in his title.
GEMINIANO v. CA (July 1996)

While the right to let property is an incident of title and possession, a person may be a lessor and occupy
the position of a landlord to the tenant although he is not the owner of the premises let. After all,
ownership of the property is not being transferred, only temporary use and enjoyment thereof.
Art. 448, in relation to Art. 546, which allows full reimbursement of useful improvements and
retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one
who builds on land with the belief that he is the owner thereof. It does not apply where one's only interest
is that of a lessee under a rental contract; otherwise, it would always be in the power of the tenant to
"improve" his landlord out of his property.
It must be stressed, however, that the right to indemnity under Art. 1678 arises only if the lessor
opts to appropriate the improvements. Since petitioners refused to exercise that option, private
respondents cannot compel them to reimburse the one-half value of the house and improvements.
Neither can they retain the premises until reimbursement is made. The private respondents' sole right
then is to remove the improvements without causing any more impairment upon the property leased than
is necessary.
SPOUSES BENITEZ v. CA & SPOUSES MACAPAGAL (G.R. No. 104828, Jan. 16, 1997)
The jurisdictional requirements for ejectment, as borne out by the facts, are: after conducting a relocation
survey, private respondents discovered that a portion of their land was encroached by petitioners' house;
notices to vacate were sent to petitioners, the last one being dated 26 Oct. 1989; and private
respondents sued for ejectment within 1 year from last demand.
Private respondents' cause of action springs from Rule 70, §1 xxx That petitioners occupied the
land prior to private respondents' purchase thereof does not negate the latter's case for ejectment. Prior
possession is not always a condition sine qua non in ejectment. This is one distinction between forcible
entry and unlawful detainer. In the former, the plaintiff is deprived of physical possession through FISTS,
thus, he must allege and prove prior possession. In the latter, the defendant unlawfully withholds
possession after the expiration or termination of his right thereto under any contract, express or implied.
In such a case, prior physical possession is not required.
Possession can also be acquired, not only by material occupation, but also by the fact that a thing
is subject to the action of one's will or by the proper acts and legal formalities established for acquiring
such right. (citation omitted) Possession of land can be acquired upon the execution of the deed of sale
by the vendor. Actual or physical occupation is not always necessary.
DONATIONS
CENTRAL PHILIPPINE UNIVERSITY v. CA (246 SCRA 511)

When time within which the condition should be fulfilled depends upon the exclusive will of the donee, its
absolute acceptance and acknowledgment of its obligation are sufficient to prevent the statute of
limitations from barring the action for annulment of the donation.
Davide, dissent: What is a modal donation? The word "conditions" is used differently under the law on
contracts and the law on donations.
SPOUSES EDUARTE v. CA (February 1996)

Falsification of the Deed of Donation is a valid ground for revocation under Art. 765 (1): Offense Against
Donor. Tolentino writes that this includes "[a]ll crimes which offend the donor show ingratitude and are
causes for revocation."
55
One such instance is where the certificate of title was already transferred from the name of the
true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent
purchaser. For then, the vendee had the right to rely upon what appeared in the certificate.
Bring an action for damages against those who caused the fraud, or if they are insolvent, an
action against the Treasurer of the Philippines for recovery of damages against the Assurance Fund.
(PNB v. CA, 187 SCRA 735 [1990])
CITY OF ANGELES v. CA & TIMOG SILANGAN DEVT. CORP.

(G.R. No. 97882, Aug. 28, 1996)
The language of §31, P.D. 957, as amended by§2, P.D. 1216, is not precise, but it can be easily inferred
that the phrase "gross area" refers to the entire subd
f open spaces, P.D. 1216 itself requires that the open space devoted to parks are non-alienable public
land and non-buildable. However, there is no prohibition in either P.D. 957 or P.D. 1216 against imposing
conditions on such donation (in this case, devoting the land to building a sports complex, not a drug rehab
center). Any condition may be imposed, so long as it is not contrary to law, etc. Petitioners' contention
that the donation should be unconditional because it is mandatory has no basis. To rule otherwise would
be to unlawfully expand the provisions of the decree.
QUIJADA v. CA (May 2000)

It has been ruled that when a person donates land to another on the condition that the latter would build
upon the land of a school, the condition imposed is not a condition precedent or a suspensive condition
but a resolutory one. So long as the resolutory condition subsists and is capable of fulfillment the
donation remains efffective and the donee continues to be the owner subject only to the rights of the
donor or his successors-in-interest under the deed of donation.
Since no period was imposed by the donor on when must the donee comply with the condition
within a reasonable period. Such period, however, became irrelevant herein when the donee-
Municipality manifested through a resolution that it cannot comply with the condition of building a school
and the same was made known to the donor. Only then - when the non-fulfillment of the resolutory
condition was brought to the donor's knowledge - that ownership of the donated property reverted to the
donor as provided in the automatic reversion clause of the deed of donation.
During the time that ownership of the land has not reverted to her the donor has an inchoate
interest in the donated property. Such inchoate interest may be the subject of contracts including a
contract of sale. In this case, however, what the donor sold was the land itself which she no longer owns.
It would have been different if the donor-seller sold her interests over the property under the deed of
donation which is subject to the possibility of reversion of ownership arising from the non-fulfillment of the
resolutory condition.
SPS. GESTOPA v. CA (G.R. No. 111904. October 5, 2000)

In ascertaining the intention of the donor, all of the deed's provisions must be read together. An
acceptance clause is a mark that the donation is inter vivos. Acceptance is a requirement for donations
inter vivos. Donations mortis causa, being in the form of a will, are not required to be accepted by the
donees during the donors' lifetime.
A limitation on the right to sell during the donors' lifetime implied that ownership had passed to the
donees and donation was already effective during the donors' lifetime. The attending circumstances in the
execution of the subject donation also demonstrated the real intent of the donor to transfer the ownership
over the subject properties upon its execution.
A valid donation, once accepted, becomes irrevocable, except on account of officiousness, failure
by the donee to comply with the charges imposed in the donation, or ingratitude. The donor-spouses did
not invoke any of these reasons in the deed of revocation.
PARTITION
TAN v. LIM (September 1998)

It is ruled that there was already partition of the subject property. An oral partition is valid when evidence
supports the same. In the case at bar, the fact that the heirs of Victoriano alone leased to petitioner Tan
exactly ½ of the disputed property point to the fact that that they exercised the right of ownership over the
said portion to the exclusion of the heirs of Joaquin, considering that the lease agreement was executed
56
without the consent of the latter. Such act of leasing the property is an act of strict ownership. Moreover,
although there was no note or memorandum or any deed of partition offered in evidence, such partition is
valid. A contract is obligatory in whatever form they may have been entered into provided all essential
requisites are present. Written proof of oral partition is not required under Art. 1403 of the NCC. In
addition to that, neither a transfer certificate of title nor a subdivision plan is essential for its validity. A
transfer certificate of title merely evidences and is not constitutive of title. Such certificate can’t confer title
where no title had been vested by some of the means provided by law. A transfer certificate of title is not
one of the means of acquiring ownership of the property.
QUIETING OF TITLE
VDA. DE AVILES v. CA (G.R. No. 95748, November 1996)

Quieting of title is a common law remedy to remove any cloud upon or doubt or uncertainty with respect to
title to real property. (citing VITUG) The NCC authorizes it under Art. 476. To avail of this remedy, a plaintiff
must show that there is an instrument, record, claim or encumbrance or proceeding which constitutes or
casts a cloud, doubt, question or shadow upon the owner's title to or interest in real property. Thus,
petitioners have wholly misapprehended the import of the foregoing rule by claiming that respondent CA
erred in holding that there was "no evidence of any muniment of title, proceeding, written contract," and
that there were, as a matter of fact, 2 such contracts xxx However, these documents in no way constitute
a cloud or cast doubt upon petitioners' title. Rather, the uncertainty arises from the parties' failure to
situate and fix the boundary between their respective properties.
An action to quiet title or to remove any cloud may not be brought for the purpose of settling a
boundary dispute.
STA. ANA, JR. v. CA (November 1997)

The courts below correctly found that the action for reconveyance had already prescribed. Petitioner
cannot escape the onset of prescription by arguing now that his action for reconveyance was really once
that sought quieting of title (hence imprescriptible) and not one based on implied or constructive trust.
From the complaint, it was evident that petitioner's theory was based on implied or constructive trust, as it
was alleged therein that "the property in question is within the property in trust for the plaintiffs." A party
cannot subsequently take a position contrary to, or inconsistent with, his pleadings. Thus a party is bound
by the theory he adopts and by the cause of action he stands on and cannot be permitted after having lost
to repudiate his theory and adopt another.
Petitioner's contention that the prescriptive period should be reckoned from actual knowledge
must fail. It is settled that an action for reconveyance based on an implied trust prescribes in 10 years
from issuance of the Torrens title.
ALEJANDRINO v. CA (September 1998)

Under a co-ownership, the ownership of an undivided thing or right belongs to different persons. Each
co-owner of property which is held pro-indiviso exercises his rights over the whole property and may use
and enjoy the same with no other limitation than that he shall not injure the interests of his co-owners. The
underlying rationale is that until a division is made, the respective share of each cannot be determined
and every co-owner exercises, together with his co-participants, joint ownership over the pro-indiviso
property, in addition to his use and enjoyment of the same. As such, as long as the estate has not been
fully settled and partitioned, a co-owner can exercise his right of ownership over such inchoate right.
Partition of the estate of a decedent may only be effected by (1) the heirs themselves
extrajudicially, (2) the court in an ordinary action for partition, or in the course of administration
proceedings, (3) the testator himself, and (4) the third person designated by the testator. The trial court
therefore, may not order partition of an estate in an action for quieting of title. However, in this case,
evidence on the extrajudicial settlement of estate was offered before the trial court. Thus, this can
become the basis for segregation of the property sold to Nique. When a co-owner sells his inchoate right
in the co-ownership, he expresses his intention to “put an end to indivision among (his) co-heirs.”
BERNARDO v. CA (G.R. No. 111715, June 8, 2000)

The Torrens system of land registration does not create or vest title; it has never been recognized as a
mode of acquiring ownership. Reconstitution of title is simply the reissuance of a new duplicate certificate
of title allegedly lost or destroyed in its original form and condition.
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Reconstitution of title does not pass upon the ownership of the land covered by the lost or
destroyed title. Possession of a lost certificate of title is not necessarily equivalent to ownership of the
land covered by it. The certificate of title, by itself, does not vest ownership; it is merely an evidence of
title over a particular property. Even if the reconstitution proceedings had not been instituted, the
Bernardos are not precluded from establishing by other evidence, such as the certificate of sale allegedly
issued to Tomas Bernardo, the requisite proof of validity of TCT No. 12658.
REPUBLIC v. THE HEIRS OF MAGDATO (G.R. No. 137857, September 11, 2000)
In an action for quieting of title, recovery of possession and ownership of a parcel of land, and damages,
the mortgagee of the equipment and other improvements located on the land is not an indispensable
party, if the said mortgagee does not claim any right to ownership or possession of such real estate.
Hence, the non-joinder of the mortgagee in such suit does not justify an annulment of the judgment
thereon on the ground of extrinsic fraud.
That the action for recovery of possession necessarily includes the removal of equipment located
thereon does not make APT an indispensable party. As noted earlier, FILMARCO, not APT or DBP, was
the owner of the said equipment. Hence, respondents acted correctly in impleading FILMARCO, not APT
or DBP. Certainly, if the claim of APT is adversely affected by the removal or transfer of the property to
another place, it should proceed against FILMARCO, not against respondents. Such transfer or removal
is the concern of FILMARCO, not the respondents. In any event, it should be underscored that the civil
action seeks the recovery of the land, not of the equipment thereon.
EJECTMENT
VALENCIA vs. VALENA

It is well settled that the sheriff’s duty in the execution of a writ issued by a court is purely ministerial. The
Sheriff is also responsible for the speedy and efficient implementation of writs of execution. This duty
becomes more significant in ejectment cases where the rule is that the judgments therein must be
executed immediately when it is in favor of the plaintiff.
AZCUNA, JR. v. CA (March 1996)

In an ejectment suit, petitioner was ordered to vacate by the MTC and ordered to pay rental for continued
use beyond the expiry of the lease and P3,000.00 per day, by way of damages for his failure to turn over
peacefully the three (3) commercial spaces from expiry of the lease until such time as petitioner actually
vacated the premises. Before the SC, petitioner questions the award of damages, claiming that the only
damages that can be recovered in an ejectment suit are the fair rental value for the use and occupation of
the real property -- other damages must be claimed in an ordinary action.
Petitioner's reliance on such doctrine is misplaced, as said cases dealt with additional damages and
charges other than liquidated damages, i.e., those agreed upon by the parties to a contract to be paid in
case of breach thereof. Here, the MTC was merely enforcing paragraph 10 of the lease contract. The
freedom of the contracting parties to make stipulations in their contract provided they are not contrary to
law, etc. is settled.
TALA REALTY v. BANCO FILIPINO (G.R. No. 137980, June 20, 2000.)
Since the unpaid rentals demanded by petitioner were based on a new rate which it unilaterally imposed
and to which respondent did not agree, there lies no ground for ejectment. In such a case, there could still
be ground for ejectment based on non-payment of rentals. The lessor was correct in asking for the
ejectment of the delinquent lessee. Moreover, he should be granted not only the current rentals but also
all the rentals in arrears. This is so even if the lessor himself did not appeal because as ruled by this
Court, there have been instances when substantial justice demands the giving of the proper reliefs.
Thus, when respondent stopped paying any rent at all…it gave petitioner good ground for
instituting ejectment proceedings. Cited case: if ever petitioner took exception to the unilateral or illegal
increase in rental rate, it should not have completely stopped paying rent but should have deposited the
original rent amount with the judicial authorities or in a bank in the name of, and with notice to, petitioner.
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TUBIANO vs. RAZO (July 13, 2000)

As this Court explained in Co Tiamco v. Diaz, 78 Phil. 672 (1946), Rule 70, section 2 requires previous
demand only when the action is ‘for failure to pay rent due or to comply with the conditions for his lease.’
Where the action is to terminate the lease because of the expiration of its term, no such demand is
necessary. In the latter case upon the expiration of the term of the lease, the landlord may go into the
proeprty and occupy it, and if the lessee refuses to vacate the premises, an action for unlawful detainer
may immediately be brought against him even before the expiration of the fifteen or five days provided in
Rule 70, section 2.
Accordingly, upon the expiration of the lease in this case, petitioner became a deforciant
unlawfully withholding possession of the property. There was no need for a demand to be served on him,
except to negate any inference that respondent, as lessor, had agreed to an extension of the term of the
lease under article 1687 of the Civil Code.
Verily, demand to vacate is not a jurisdictional requirement when the ground for ejectment is
expiration of term of the lease contract. Notice/demand to vacate serves no other purpose than to make
known the lessor’s intention to terminate the lease contract. Accordingly, even if petitioner did not receive
the September 7, 1994 notice of private respondent, the ejectment case filed against petitioner cannot be
deemed to be premature considering that even as early as August 1994, petitioner was already informed
that private respondent will no longer renew the subject lease contract.
ACCION PUBLICIANA
CUTANDA vs. HEIRS OF CUTANDA (G.R. No. 109215, July 11, 2000)
We hold that prescription, not laches, is the proper ground for holding private respondent’s action to be
barred. Art. 1106 of the Civil Code provides that by prescription, one acquires ownership and other real
rights through the lapse of time, in the manner and under the conditions laid down by law. In the same
way, rights and actions are lost by prescription. There are thus two kinds of prescription: (1) the
acquisition of a right by the lapse of time, or acquisitive prescription; and (2) the loss of a right of action by
the lapse of time, or extinctive prescription.
Private respondents’ action was an accion publiciana to recover the right of possession and to be
declared owners of the subject lands. Their complaint squarely put in issue the ownership of the lands in
dispute. It may thus be properly treated as an accion reivindicatoria. As found by the Court of Appeals
and by the trial court, however, petitioners’ predecessor-in-interest, Anastacio Cutanda, acquired
possession of said lands in 1933. On the other hand, private respondents did not assert ownership over
the lands until 1988 or 55 years later, when they filed their present complaint for recovery of possession.
It is settled that the remedies of accion publiciana or accion reivindicatoria must be availed of within 10
years from dispossession. Under Art. 555(4) of the Civil Code, the real right of possession is lost after the
lapse of 10 years. [Art. 555 (4) provides: A possessor may lose his possession: (4) By the possession of
another, subject to the provisions of Art. 537, if the new possession has lasted longer than one year. But
the real right of possession is not lost till after the lapse of ten years.] In this case, an action for recovery
of possession and ownership of lands was brought only after 26 years had elapsed. Hence, insofar as
petitioners are concerned, private respondents’ cause of action was barred, not by laches, but by
extinctive prescription, regardless of whether their complaint is considered as an accion publiciana or an
accion reivindicatoria. As regards the private respondents who did not appeal from the ruling of the Court
of Appeals, this question is now final.
HLURB JURISDICTION
ARRANZA v. B.F. HOMES, INC. (G.R. No. 131683. June 19, 2000.)
What complicated the jurisdictional issue in this case is the fact that petitioners are primarily praying for
the retention of respondent's obligations under the Memorandum of Agreement that Receiver Orendain
had entered into with them but which the present Board of Receivers had revoked.
The HLURB should take jurisdiction over petitioners' complaint because it pertains to matters
within the HLURB's competence and expertise. The HLURB should view the issue of whether the Board
of Receivers correctly revoked the agreements entered into between the previous receiver and the
petitioners from the perspective of the homeowners' interests, which P.D. No. 957 aims to protect.
Whatever monetary awards the HLURB may impose upon respondent are incidental matters that should
59
be addressed to the sound discretion of the Board of Receivers charged with maintaining the viability of
respondent as a corporation. Any controversy that may arise in that regard should then be addressed to
the SEC.
Thus, the proceedings at the HLURB should not be suspended notwithstanding that respondent
is still under receivership. The TRO that this Court has issued should accordingly continue until such time
as the HLURB shall have resolved the controversy.
ESTOPPEL
SERG’S PRODUCTS vs. PCI LEASING AND FINANCE, INC.

The Court has held that contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise.
Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any
material fact found therein.
While the parties are bound by the Agreement, third persons acting in good faith are not affected
by its stipulation characterizing the subject machinery as personal.
PRESCRIPTION
HEIRS OF MIRANDA v. CA (March 1996)

As the question was whether petitioners' action was barred by prescription xxx there was no need for the
reception of oral evidence. xxx Since their complaint was filed only xxx after almost 35 years, it was clear
that acquisitive prescription had set in.
Ownership and other real rights over immovable property are acquired by ordinary prescription
through possession for 10 years if the adverse possession is by virtue of a title and it is in good faith.
Without need of title or of good faith, ownership and other real rights over immovable[s] also prescribe
through uninterrupted adverse possession for 30 years. For possession to constitute the foundation of a
prescriptive right, it must be under a claim of title or it must be adverse or in the concept of owner.
Petitioners contend that under Art. 1391 of the Civil Code they had 4 years within which to bring
an action for annulment and this commenced to run only xxx when they allegedly discovered the fraud
committed against them. Art. 1391 presupposes, however, that no acquisitive prescription has set in, for
after the favorable effects of acquisitive prescription have set in, rights of ownership over a property are
rendered indisputable.
RES JUDICATA
RAMIREZ v. CA (APRIL 1996)

Does the judgment in a land registration case denying the application filed in court in 1957 by the parents
of the herein petitioner for the registration of land allegedly formed by alluvial deposits, which judgment
was eventually affirmed by the Court of Appeals in 1968 and became final, constitute res judicata as to
bar a subsequent application by the herein petitioner to register the same property: It is evident that one
of the elements of res judicata is lacking xxx Respondent Court declared that "identity of causes of action
xxx exist since they both sought registration of the land formed by alluvial deposits", but failed to
recognize that the basis for claiming such registration was different in each case. In Case No. B-46,
applicants-spouses xxx (herein petitioner's parents) claimed that their possession of the land, tacked to
that of their predecessors xxx was sufficient to vest title in them by acquisitive prescription. On the other
hand, in LRC Case No. B-526, petitioner claimed that the duration of possession by his parents
(commencing allegedly in 1958), combined with his own possession (counted from 1988 when he
purchased the accretion from his parents) gave him sufficient title thereto by acquisitive prescription.
In other words, because of the different relevant periods of possession being referred to, the
basis of the application in Case No. B-46 is actually different from that in Case No. 526.
ADVERSE CLAIMS
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SAJONAS v. CA (July 1996)

While it is the act of registration which is the operative act which conveys or affects the land insofar as
third persons are concerned, it is likewise true, that the subsequent sale of property covered by a
Certificate of Title cannot prevail over an adverse claim, duly sworn to and annotated on the certificate of
title previous to the sale. While it is true that under the Property Registration Decree, deeds of
conveyance only take effect as a conveyance to bind the land upon its registration, and that a purchaser
is not required to explore further than what the Torrens title, upon its face, indicates in quest for any
hidden defect or inchoate right that may subsequently defeat his right thereto, nonetheless, this rule is not
absolute. Thus, one who buys from the registered owner need not have to look behind the certificate of
title, he is, nevertheless, bound by the liens and encumbrances annotated thereon. One who buys
without checking the vendor's title takes all the risks and losses consequent to such failure.
Sentence three, paragraph two of §70 of P.D. 1529 provides: "The adverse claim shall be
effective for a period of thirty days from the date of registration."
At first blush, the provision in question would seem to restrict the effectivity of the adverse claim
to thirty days. But the above provision cannot and should not be treated separately, but should be read in
relation to the sentence following, which reads: "After the lapse of said period, the annotation of adverse
claim may be cancelled upon filing of a verified petition therefor by the party in interest."
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the
lapse of thirty days, then it would not have been necessary to include the foregoing caveat to clarify and
complete the rule. For then, no adverse claim need be cancelled. If it has been automatically terminated
by mere lapse of time, the law would not have required the party in interest to do a useless act.
LEASE
CHUA v. CA (February 1995 )

There being no ambiguity in the lease contract, there is no basis to allow oral testimony to prove that
petitioner was given verbal assurance of a renewal of the lease.
NASSER v. CA (June 1995)

The trial court had authority to fix the reasonable value for the continued use and occupancy of the leased
premises after the termination of the lease contract.
DE VERA v. CA (G.R. No. 110297, August 7, 1996)

The issue in this case is whether the oral contract of lease was on a month-to-month basis which is
terminated at the end of every month. We hold that it is. We have already ruled that a lease on a month-
to-month basis is, under Art. 1687, a lease with a definite period, upon the expiration of which upon
demand made by the lessor on the lessee to vacate, the ejectment of the lessee may be ordered.
Thus, what has been suspended by the Rent Control Law is Art. 1673, not Art. 1687. The efect of
the suspension on Art. 1687 is only that the lessor cannot eject the tenant by reason alone of the
expiration of the period of lease as provided in Art. 1687. Otherwise, Art. 1687 itself has not been
suspended. Hencem, it can be used to determine the period of a lease agreement. As petitioner was
notified of the expiration of the lease efective December 30, 1990, her right to stay in the premises came
to an end.
SANDEL v. CA (G.R. No. 117250, September 1996 )

Private respondent's reliance on De Rivera v. Halili and Dy Sun v. Brillante is misplaced, for these were
decided before the effectivity of B.P. 129. The former held that the assertion of the parties of their
respective right to own the properties in controversy converted the litigation into an inquiry into the nullity
of the presented documents,or from a mere detainer suit to one that was incapable of pecuniary
estimation, thus beyond the Justice of the Peace's jurisdiction. This rule has since been modified.
§33, BP 129 provides: Even if the defendant sets up the matter of ownership, such is of no
moment, because, the MTC is competent to determine ownership, for the purpose of determining
possession de facto, though without prejudice to a plenary action to determine ownership.
A reading of the complaint shows that the action is for unlawful detainer, since what is sought is
the recovery of possession of the leased premises, following the lapse of the term of the lease
agreement. After the lapse of the lease contract, the lessee has no more right to remain in possession of
the properties. It becomes his obligation to turn over the same to the lessor. (Arts. 1669 & 1673, NCC)
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INTER-ASIA SERVICES CORP. v. CA (G.R. No. 106427, October 1996)

To renew means the old contract is extinguished, thus a new one must be executed, and vice-versa; and
in this case, there was only an extension]
Thus, petitioner failed to establish its right to the issuance of the writ of preliminary injunction. In
fact, the act being enjoined [ejectment] was not a unilateral act on the part of private respondent as the
lower court concluded but a logical consequence of the expiration of the lease contract, an act mutually
agreed upon by the parties.
In Fernandez v. CA (166 SCRA 577 [1988]), this Court held that an alleged verbal assurance of
renewal of a lease is inadmissible to qualify the terms of the written lease agreement under the parole
evidence rule and unenforceable under the Statute of Frauds.
SAN ANDRES v. CA (G.R. No. 94516, December 6, 1996)

The question is whether this constitutes a demand to vacate as required by Rule 70, §2, sufficient to
confer jurisdiction on the MeTC. We rule in the negative. First, the lease between petitioner and private
respondents' predecessor-in-interest, Go Co, was not terminated by the dath of Go Co. The fact is that
the parties here so regarded the contract and therefor continued the lease even aftter Go Co's death in
1974. It was only in 1987, 13 years later, when petitioner demanded execution of a new contract on
ground that the lease had been terminated by Go Co's death.
The demand must be either to pay the rents or comply with the terms of the contract. But
petitioner's letter makes neither demand. Instead, the letter demands execution of a new lease on the
mistaken theory that the lease had been terminated by Go Co's death; further, the lease with Go Co
provided for transfer of ownership of the buildings built upon the land upon expiration of the lease in 2003.
The question is whether the prohibition against the sublease of the land extends to the building.
Because the lessee, Go Co, ran out of funds to finish the construction of the building, he was forced to
borrow money from Land Center, to pay for which he allowed the latter the free use of the building. Land
Center, in turn, subsequently leased the building for a 5-year term to Kookaburra Industrial.
However, for the purpose of enforcing the "no-sublease" provision of the lease contract here, it is
clear not only from the text of the agreement which unequivocally speaks of the sublease of "the land
leased herein," but also from its context that it does not apply to the lease of the building which the lessee
had constructed on the land leased. (citing Arts. 1370, 1373 & 1374) This is because the term of the
lease is for 30 years. The purpose of the lease is for the lessee to have a place on which to construct a
building or a factory. The building could be a tenement house or a factory, either of which could be for
commercial purposes. A stipulation that upon the expiration of the lease the building constructed by the
lessee will become the property of the land owner is usual with respect to commercial buildings, the
lessee calculating that the building will bring him income sufficient to cover his investment for a fair return.
It is thus unlikely that, in entering into the 30-year lease here, the parties contemplated imposing
restrictions on private respondents' rights of ownership of the building, by prohibiting even the lease of the
building constructed by the lessee. The most natural and logical construction of the "no sublease"
provision is that it refers only to the land leased but not to the building or factory which the lessee was
authorized to construct on the land.
HEIRS OF SUICO v. CA (G.R. No. 120615, January 21, 1997)

It has been held that the power of a court to extend the term of the lease under the second sentence of
Art. 1687 is potestative, or more precisely, discretionary. The court is not bound to extend it, and its
exercise depends upon the circumstances surrounding the case.
Private respondents and their parents had been in possession of the premises for 43 years when
the ejectment case was filed. Further, despite the relatively large premises, private respondents were
paying a meager sum as rental. Thus, the arrangement obviously worked in favor of private respondents,
who received greater benefits while petitioners were unable to have full use and enjoyment of a
substantial portion of their property. The need to balance these interests did not sanction an extension of
the term.
The value of the house is inconsequential since it was build in 1950, and private respondents can
remove it if petitioners opt not to retain it by paying 1/2 of its value, pursuant to Art. 1678, which provides
that the lessors would become the owner of the house constructed by reimbursing the lessees in said
amount. Petitioners-lessors are thus given the option to pay indemnity, while private respondents-lessees
do not have a right to demand that they be paid. If the former refuses to reimburse, the latter's remedy is
62
to remove the house, even though petitioners' lot may suffer damage thereby, as long as the damage
caused is not more than reasonably necessary.
BANGAYAN v. CA, (August 1997)

Art. 1311, NCC, provides that contracts take effect only between the parties, their assigns and heirs,
except where the rights and obligations arising from contract are not transmissible by their nature, or by
stipulation or by provision of law. Here, paragraphs 4 and 5 of the lease contract provided that the right of
first option was not transmissible, which are consistent with Art. 1649, NCC that the lessee cannot assign
the lease without the consent of the lessor, unless there is a stipulation to the contrary. We have held
that the lessor's consent is necessary as the assignment of the lease would involve the transfer not only
of rights, but also of obligations. It constitutes novation by a substitution of the person of one of the
parties.
It cannot be denied that Teofista's right of first option to buy the leased property in case of its sale
is but part of the bigger right to lease said property. The option was given to Teofista as she was the
lessee. It was a component of the consideration of the lease. The option was by no means an
independent right which Teofista could exercise. It ought to follow that if Teofista was barred by contract
from assigning her right to lease the lot, she was similarly barred from assigning her right of first option to
Angelita.
SADHWANI v. CA (October 1997)

Whether under their contracts with Orient, petitioners had a right of first refusal (RFR) in case the property
was sold. To begin, it is fundamental that a contract binds only the parties to it (Art. 1311, NCC). The
RFR was embodied in the lease contract between Sawit and Orient, to which petitioners were not a party
to.
The rule is different, however, regarding assignments of lease. Art. 1649 provides that the lessee
cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary.
Indeed, the consent of the lessor is necessary because the assignment of lease would involve the
transfer not only of rights, but also of obligations. Such assignment would constitute novation by
substitution of one of the parties, i.e., the lessee.
CHUA v. CA, IBARRA (January 21, 1999)

Court have no power to extend lease with a term.-As there was no longer any lease to speak of which
could be extended, the MTC was in effect making a contract for the parties which it obviously did not have
the power to do. The potestative authority of the courts to fix a longer term for a lease under Art. 1687 of
the CC applies only to cases where there is no period fixed by the parties.
Improvements made by lessees on the leased premises are not valid reasons for their retention
thereof; otherwise, a lessee would “improve” his landlord out of his property. – The fact that petitioners
allegedly made repairs on the premises in question is not a reason for them to retain the possession of
the premises. There is no provision of law which grants the lessees a right of retention over the leased
premises on that ground. Art. 448 of the CC, in relation to Art. 546, which provides for full reimbursement
of useful improvements and retention of the premises until reimbursements us made, applies only to a
possessor in good faith, i.e., one who builds on a land in the belief that he is the owner thereof. In a
number of cases, the Court has held that this right does not apply to a mere lessee, otherwise, it would
always be in his power to “improve” his landlord our of the latter’s property. Art. 1678 merely grants to
such a lessee making in good faith useful improvements the right to be reimbursed ½ of the value of the
improvements upon the termination of the lease, or, in the alternative, to remove the improvements if the
lessor refuses to make reimbursement.
LHUILLIER, vs. CA, et al. (G.R. No. 128058. December 19, 2000)
A covenant to renew a lease, which makes no provision on its terms, implies an extension or renewal
subject to the same terms in the original lease contract. Since the parties did not make a new one, the
terms and conditions of the original except the provision on the rate and period of lease are deemed
extended. Corollarily, Art. 1678 of the Civil Code did not apply. 9 The parties agreed that all
improvements introduced by the lessee would accrue to the benefit of the owner at the end of the lease,
without reimbursement. 10 This stipulation, not being contrary to law, morals, public order or public policy,
binds the parties and is the law between them.
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PERSONS & FAMILY RELATIONS
2001
REPUBLIC v. DAGDAG (G.R. No. 109975, February 2001)

Civil Law/Persons/ Psychological incapacity/Molina Guidelines: A marriage contracted by any party who,
at the time of the celebration, was psychologically incapacitated to comply with the essential marital
obligations of marriage, is void even if such incapacity becomes manifest only after its solemnization.
And whether or not psychological incapacity calling for annulment exists depends crucially on the
facts of the case.
The Court reaffirms Republic v. CA & Molina, where it laid the following GUIDELINES in the
interpretation and application of Article 36 of the Family Code:
(1) The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any doubt should be
resolved in favor of the existence and continuation of the marriage and against its dissolution and nullity.
(2) The root cause of the psychological incapacity must be: (a) medically or clinically identified, (b) alleged
in the complaint, (c) sufficiently proven by experts and (d) clearly explained in the decision. Article 36 of
the Family Code requires that the incapacity must be psychological — not physical, although its
manifestations and/or symptoms may be physical. The evidence must convince the court that the parties,
or one of them, was mentally or psychically ill to such an extent that the person could not have known the
obligations he was assuming, or knowing them, could not have given valid assumption thereof. The root
cause must be identified as a psychological illness and its incapacitating nature fully explained. Expert
evidence may be given by qualified psychiatrists and clinical psychologists.
(3) The incapacity must be proven to be existing at "the time of the celebration" of the marriage, when the
parties exchanged their "I do's." Its manifestation need not be perceivable at such time, but the illness
itself must have attached at such moment, or prior thereto.
(4) Such incapacity must also be shown to be medically or clinically permanent or incurable. Such
incurability may be absolute or even relative only in regard to the other spouse, not necessarily absolutely
against everyone of the same sex. Furthermore, such incapacity must be relevant to the assumption of
marriage obligations, not necessarily to those not related to marriage, like the exercise of a profession or
employment in a job.
(5) Such illness must be grave enough to bring about the disability of the party to assume the essential
obligations of marriage. Thus, "mild characteriological peculiarities, mood changes, occasional emotional
outbursts" cannot be accepted as root causes. The illness must be shown as downright incapacity or
inability, not a refusal, neglect or difficulty, much less ill will. In other words, there is a natal or supervening
disabling factor in the person, an adverse integral element in the personality structure that effectively
incapacitates the person from really accepting and thereby complying with the obligations essential to
marriage.
(6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family Code
20 as regards the husband and wife as well as Articles 220, 221 and 225 of the same Code 21 in regard
to parents and their children. Such non-complied marital obligation(s) must also be stated in the petition,
proven by evidence and included in the text of the decision.
(7) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling or decisive, should be given great respect by the courts.
(8) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear as
counsel for the state. No decision shall be handed down unless the Solicitor General issues a
certification, which will be quoted in the decision, briefly stating therein his reasons for his agreement or
opposition, as the case may be, to the petition. The Solicitor-General, along with the prosecuting attorney,
shall submit to the court such certification within fifteen (15) days from the date the case is deemed
submitted for resolution of the court. The Solicitor-General shall discharge the equivalent function of the
defensor vinculi contemplated under Canon 1095.
CARIÑO v. CARIÑO (G.R. No. 132529, February 2, 2001)
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Civil Law/Persons/Contracting Second Marriage/Property Regime: (1) Under Article 40 of the Family
Code, a prior and separate declaration of nullity of a marriage is an all important condition precedent only
for purposes of remarriage. That is, if a party who is previously married wishes to contract a second
marriage, he or she has to obtain first a judicial decree declaring the first marriage void, before he or she
could contract said second marriage, otherwise the second marriage would be void. The same rule
applies even if the first marriage is patently void because the parties are not free to determine for
themselves the validity or invalidity or their marriage.
However, for purposes other than remarriage, no judicial action is necessary to declare a
marriage an absolute nullity. For other purposes, such as but not limited to the determination of heirship,
legitimacy or illegitimacy of a child, settlement of estate, dissolution of property regime, or a criminal case
for that matter, the court may pass upon the validity of marriage even after the death of the parties
thereto, and even in a suit not directly instituted to question the validity of said marriage, so long as it is
essential to the determination of the case. In such instances, evidence must be adduced, testimonial or
documentary, to prove the existence of grounds rendering such a previous marriage an absolute nullity.
These need not be limited solely to an earlier final judgment of a court declaring such previous marriage
void.
(2) One of the effects of the declaration of nullity of marriage is the separation of the property of
the spouses according to the applicable property regime. Considering that the two marriages are void ab
initio, the applicable property regime would not be absolute community or conjugal partnership of
property, but rather, be governed by the provisions of Articles 147 and 148 of the Family Code on
"Property Regime of Unions Without Marriage."
Under Article 148 of the Family Code, which refers to the property regime of bigamous marriages,
adulterous relationships, relationships in a state of concubinage, relationships where both man and
woman are married to other persons, and multiple alliances of the same married man, only the properties
acquired by both of the parties through their actual joint contribution of money, property, or industry shall
be owned by them in common in proportion to their respective contributions. In this property regime, the
properties acquired by the parties through their actual joint contribution shall belong to the co-ownership.
Wages and salaries earned by each party belong to him or her exclusively. Then too, contributions in the
form of care of the home, children and household, or spiritual or moral inspiration, are excluded in this
regime.
In contrast, under Article 147, wages and salaries earned by either party during the cohabitation
shall be owned by the parties in equal shares and will be divided equally between them, even if only one
party earned the wages and the other did not contribute thereto.
Conformably, even if the disputed "death benefits" were earned by the deceased alone as a
government employee, Article 147 creates a co-ownership in respect thereto, entitling the petitioner to
share one-half thereof. Thus, one-half of the subject "death benefits" under scrutiny shall go to the
petitioner as her share in the property regime, and the other half pertaining to the deceased shall pass by,
intestate succession, to his legal heirs, namely, his children with Susan Nicdao.
BORJA-MANZANO v. SANCHEZ (A.M. No. MTJ-00-1329. March 8, 2001)

Civil Law/Persons/Marriage/Requirements/ Exceptions: For the provision on legal ratification of marital
cohabitation to apply (Art 34, FC), the following requisites must concur:
1. The man and woman must have been living together as husband and wife for at least five years
before the marriage;
2. The parties must have no legal impediment to marry each other;
3. Absence of legal impediment between the parties must be present at the time of marriage;
4. The parties must execute an affidavit stating that they have lived together for at least five years [and
are without legal impediment to marry each other]; and
5. The solemnizing officer must execute a sworn statement that he had ascertained the qualifications of
the parties and that he had found no legal impediment to their marriage.
2000
FRANCISCO v. CA (May 2000)

Civil Law/Persons/ Conjugal Nature of Property: Spouse invoking the conjugal nature of property must
prove that it was acquired during the marriage. Properties acquired by lucrative title during the marriage
are the exclusive properties of the husband and that certificate of title issued to one spouse "married" to
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the other spouse does not prove that the property was acquired during their marriage. Further, that the
husband is handicapped due to a leg injury sustained in a bicycle accident is not a sufficient ground to
render him incapacitated to perform acts of administration over his own properties
MOSSESGELD v. CA (May 2000)

Civil Law/Persons/Rights of illegitimate Children: As provided in Art 176, FC, illegitimate children shall use
the surname and shall be under the parental authority of their mother, and shall be entitled to support.
This is the rule regardless of whether or not the father admits paternity. Consequently, the Local Civil
Registrar correctly refused to register the certificate of live birth of petitioner's illegitimate child using the
surname of the alleged father, even with the latter's consent. Of course, the putative father, though a
much married man, may legally adopt his own illegitimate child. In case of adoption, the child shall be
considered a legitimate child of the adopter, entitled to use his surname.
The Family Code has effectively repealed the provisions of Article 366 of the Civil Code of the
Philippines giving a natural child acknowledged by both parents the right to use the surname of the father.
The Family Code has limited the classification of children to legitimate and illegitimate, thereby eliminating
the category of acknowledged natural children and natural children by legal fiction.
REPUBLIC v. CA (May 2000)

Civil Law/ Persons/ Legitimate Children/ Surnames: The touchstone for the grant of a petition for change
of surname is that there be proper and reasonable cause for which the change is sought. In this case, the
Court is not persuaded to depart from the applicability of the general rule that requires that legitimate
children shall principally use the surname of their father.
BABIERA v. CATOTAL (G.R. No. 138493. June 15, 2000)

Civil Law/Persons/Action to Annul Birth Certificate: A birth certificate may be ordered cancelled upon
adequate proof that it is fictitious. Thus, void is a certificate which shows that the mother was
already fifty-four years old at the time of the child is birth and which was signed neither by the civil
registrar nor by the supposed mother. Because her inheritance rights are adversely affected, the
legitimate child of such mother is a proper party in the proceedings for the cancellation of the said
certificate. As the birth certificate was void ab initio, the action to nullify it does not prescribe.
Article 171, FC applies to instances in which the father impugns the legitimacy of his wife's child
and presupposes that the child was the undisputed offspring of the mother. It does not contemplate a
situation, like in the instant case, where a child is alleged not to be the child of nature or biological child of
a certain couple. Thus, under Article 166, it is the husband who can impugn the legitimacy of said child by
proving: (1) it was physically impossible for him to have sexual intercourse, with his wife within the first
120 days of the 300 days which immediately preceded the birth of the child; (2) that for biological or other
scientific reasons, the child could not have been his child; (3) that in case of children conceived through
artificial insemination, the written authorization or ratification by either parent was obtained through
mistake, fraud. Violence, intimidation, or undue influence. Articles 170 and 171 reinforce this reading as
they speak of the prescriptive period within which the husband or any of his heirs should file the action
impugning the legitimacy of said child.
MALLILIN v. CASTILLO (G.R. No. 136803. June 16, 2000)

Civil law/Persons/Property Relations: Art. 144 of the Civil Code provides: “When a man and a woman live
together as husband and wife, but they are not married, or their marriage is void from the beginning, the
property acquired by either or both of them through their work or industry or their wages and salaries shall
be governed by the rules on co-ownership.” This provision applies only to cases in which a man and a
woman live together as husband and wife without the benefit of marriage provided they are not
incapacitated or are without impediment to marry each other, or in which the marriage is void ab initio,
provided it is not bigamous. Art. 144, therefore, does not cover parties living in an adulterous relationship.
However, Art. 148 of the Family Code now provides for a limited co-ownership in cases where the
parties in union are incapacitated to marry each other. It states: In cases of cohabitation not falling under
the preceding article, only the properties acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned by them in common in proportion to their
respective contributions. In the absence of proof to the contrary, their contributions and corresponding
shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money
and evidence of credits. It was thus error for the trial court to rule that, because the parties in this case
66
were not capacitated to marry each other at the time that they were alleged to have been living together,
they could not have owned properties in common. The legal relation of the parties is already specifically
covered by Art. 148 of the Family Code.
On the premise that he is a co-owner, he can validly seek the partition of the properties in co-
ownership and the conveyance to him of his share.
BOBIS v. BOBIS (G.R. No. 138509, July 31, 2000)

Civil Law/Persons/Declaration of Nullity of a Void Marriage: Parties should not be permitted to judge for
themselves the nullity of their marriage, for the same must be submitted to the determination of
competent courts. Only when the nullity of the marriage is so declared can it be held as void, and so long
as there is no such declaration, the presumption is that the marriage exists. No matter how obvious,
manifest or patent the absence of an element is, the intervention of the courts must always be resorted to.
That is why Article 40 of the Family Code requires a "final judgment," which only the courts can render.
Thus, as ruled in Landicho v. Relova, he who contracts a second marriage before the judicial declaration
of nullity of the first marriage assumes the risk of being prosecuted for bigamy, and in such a case the
criminal case may not be suspended on the ground of the pendency of a civil case for declaration of
nullity for the pendency of a civil case for declaration of nullity of marriage is not a prejudicial question.
MERCADO v. TAN (G.R. No. 137110. August 1, 2000)

Civil Law/Persons/ Declaration of Nullity of Previous Marriage: The court reiterates that a judicial
declaration of nullity of a previous marriage is necessary before a subsequent one can be legally
contracted. One who enters into a subsequent marriage without first obtaining such judicial declaration is
guilty of bigamy. This principle applies even if the earlier union is characterized by statute as "void."
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 the acts punishable under Article 349
of the Revised Penal Code. That he subsequently obtained a judicial declaration of the nullity of the first
marriage was immaterial. To repeat, the crime had already been consummated by then.
ALIPIO v. CA (G.R. No. 134100, September 29, 2000)

Civil Law/Persons/ Conjugal Partnerships: After the death of either spouses, no complaint for the
collection of indebtedness chargeable against the conjugal partnership can be brought against the
surviving spouse. Instead, the claim must be made in the proceedings for the liquidation and settlement of
the conjugal property. The reason for this is that upon the death of one spouse, the powers of
administration of the surviving spouse ceases and is passed to the administrator appointed by the court
having jurisdiction over the settlement of estate proceedings. While in many cases as in the instant one,
even after the death of one of the spouses, there is no liquidation of the conjugal partnership. This does
not mean, however, that the conjugal partnership continues. And the creditor cannot be said to have no
remedy. Under Sec. 6, Rule 78 of the Revised Rules of Court, he may apply in court for letters of
administration in his capacity as a principal creditor of the deceased . . . if after thirty (30) days from his
death, petitioner failed to apply for administration or request that administration be granted to some other
person.
TE v. CA (G.R. No. 126746. November 29, 2000)

Civil Law/ Persons/ Declaration of Nullity of Previous Marriage/ Bigamy: The outcome of a civil case for
annulment of marriage has no bearing upon the determination of innocence or guilt in the criminal case
for bigamy, because all that is required for the charge of bigamy to prosper is that the first marriage be
subsisting at the time the second marriage is contracted. Petitioner's argument that the nullity of his
marriage to private respondent had to be resolved first in the civil case before the criminal proceedings
could continue, because a declaration that their marriage was void ab initio would necessarily absolve
him from criminal liability, is untenable. Applying Art 40, for purposes of remarriage, in the absence of a
final judgment declaring the previous marriage or voidable, the marriage is deemed valid and subsisting.
1999
DE ASIS v. CA (Feb. 15, 1999)
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Civil Law/Persons/Support/ Renunciation/ Compromise/Filiation: (1) The right to receive support cannot
be renounced; neither can future support be the subject of compromise, Art. 301, CC. The agreement for
the dismissal of the case for support amounted to a renunciation and a compromise which cannot be
countenanced.
(2) Filiation or lack of it cannot be left to the will or agreement of the parties. While it is true that in
order to claim support, filiation and/or paternity must 1st be shown between the claimant and the parent,
however, paternity and filiation or lack of it is a relationship that must be judicially established and it is for
the court to declare its existence or absence. Although in this case, the admission may be binding upon
the respondent, such an admission is at most evidentiary and does not conclusively establish lack of
filiation.
1998
CANG v. CA (September 1998)

Civil Law/Persons/ Adoption/ Consent of Natural Parent Indispensable/ Abandonment Defined/ Financial
Consideration in Awarding Custody: (1) The written consent of the natural father remains indispensable
for the validity of the decree of adoption EXCEPT if the father has abandoned the child or is “insane or
hopelessly intemperate.” However, the trial court has to primarily determine the issue of abandonment in
case the father opposes the adoption primarily because his consent thereto was not sought. Only upon
failure of the oppositor natural father to prove to the satisfaction of the court that he did not abandon his
child may the petition for adoption be considered on its merits.
(2) Abandonment refers to “any conduct of the parent which evinces a settled purpose to forego
all parental duties and relinquish all parental claims to the child.” It means “neglect or refusal to perform
the natural and legal obligations of care and support which parents owe their children.” Petitioner’s
conduct however, does not amount to abandonment, as it was evidenced that despite being in the US, he
regularly communicated with his wife and children and sent money for their support.
(3) Financial support is not the paramount consideration in granting the petition for adoption.
There should be a holistic approach to the matter, taking into account the physical, mental, emotional,
psychological, social and spiritual needs of the child.
(4) As a result of their legal separation, custody was awarded to petitioner’s wife and mother of
the 3 children sought to be adopted. Though all-embracing, this award does not include the authority to
place the children up for adoption.
1997
SILVA v. CA (July 1997)

Civil Law/Family Code/Parental Authority/Visitation Rights of Parents: The visitation right referred to is the
right of access of a non-custodial parent to his or child or children. There is, despite a dearth of specific
legal provisions, enough recognition on the inherent and natural right of parents over their children (Arts.
150 and 220, FC; Art. II, §12, Constitution). There is nothing conclusive to indicate that these provisions
are meant to solely address themselves to legitimate relationships. Indeed, although in varying degrees,
the laws on support and successional rights, by way of examples, clearly go beyond the legitimate
members of the family and so explicitly encompass illegitimate relationships as well. (Arts. 176 and 195,
FC) Then, too, and most importantly, in the declaration of nullity of marriages, a situation that
presupposes a void or inexistent marriage, Art. 49, FC provides for appropriate visitation rights to parents
who are not given custody of their children.
AGAPAY v. PALANG (July 1997)

Civil Law/Family Code/Property Regime of Unions Without Marriage/Heirs/ Proof of Filation: (1) Under Art.
148, only properties acquired by both of the parties through their actual joint contribution of money,
property or industry shall be owned by them in common in proportion to their respective contributions. It
must be stressed that actual contribution is required by Art. 148, in contrast to Art. 147 which states that
efforts in the care and maintenance of the family and household, are regarded as contributions to the
acquisition of common property by one who has no salary or income or work or industry. If actual
contribution of the party is not proved, there will be no co-ownership and no presumption of equal shares.
Even assuming that the property was bought before cohabitation, the rules of co-ownership would still
apply and proof of actual contribution would still be essential.
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(2) Questions as to who are the heirs of the decedent, proof of filiation of illegitimate children and
the determination of the estate of the decedent and claims thereto should be ventilated in the proper
probate court or in a special proceeding instituted for the purpose and cannot be adjudicated in the instant
ordinary civil action which is for recovery of ownership and possession.
TISON v. CA
Civil Law/Family Code/Paternity and Filiation/Succession: There is no presumption in law more firmly
established than the presumption that children born in wedlock are legitimate. And it is settled that the
issue of legitimacy cannot be attacked collaterally. Thus, the issue of whether petitioners are the
legitimate children of the decedent cannot be properly controverted in this action for reconveyance;
moreover, private respondent, as a mere transferee of decedent's surviving spouse, is not the proper
party to impugn filiation of petitioners.
Burden of proof is on private respondent- party denying the presumption bears burden to
overthrow presumption by substantial and credible evidence. Presumption of legitimacy is so strong that
its effect is to shift the burden to other party; unless rebutted, a presumption may stand in lieu of evidence
and support a finding or decision.
MANACOP v. CA (August 1997)

Civil Law/Family Code/Family Home: A writ of execution of a final and executory judgment issued before
the effectivity of the Family Code can be executed on a house and lot constituted as a family
home under the Family Code. This is so because Art. 153, FC has no retroactive effect. In other
words, prior to 3 August 1988, the procedure mandated by the Civil Code had to be followed for a
family home to be constituted as such. There being absolutely no proof that the subject property
was judicially or extrajudicially constituted as a family home, it follows that the FC’s protective
mantle cannot be availed of by petitioner.
The list of beneficiary-occupants of a family home is restricted to those enumerated in the Code.
Occupancy of the family home either by the owner thereof or by any of its beneficiaries must be actual.
The enumeration of beneficiaries in Art. 154 excludes maids and overseers, not being beneficiaries
contemplated by the FC.
DELGADO VDA. DE DELA ROSA v. CA (October 1997)

Civil Law/Family Code/Illegitimate Children: As to the status of the intervenor as an acknowledged
child of male decedent, Art. 175, in conjunction with Arts. 173 and 172, FC, provide for the means
of proving filiation. The cases relied upon by the trial court, pointing to a child's action for
establishing filiation even beyond the putative parent's death are modified by the enactment of the
above provisions of the FC, which cite definite periods within which such actions must be
interposed.
1996
REPUBLIC v. HERNANDEZ (February 1996)

Civil Law/Persons/Adoption: The law allows the adoptee, as a matter of right and obligation, to bear the
surname of the adopter, upon issuance of the decree of adoption. It is the change of the adoptee's
surname to follow that of the adopter which is the natural and necessary consequence of a grant of
adoption and must be specifically contained in the order of the court, in fact, even if not prayed for by
petitioner. However, the given or proper name (a.k.a. the first or Christian name), of the adoptee must
remain as it was originally registered in the civil register.
The name of the adoptee as recorded in the civil register should be used in the adoption
proceedings in order to vest the court with jurisdiction to hear and determine the same (Cruz v. Republic,
17 SCRA 693 [1966]), and shall continue to be so used until the court orders otherwise. Changing the
first name of a person as recorded in the civil register is a substantial change in one's official or legal
name and cannot be authorized without a judicial order.
ARUEGO v. CA (March 1996)
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Civil Law/Family Code/Illegitimate Child/ Recognition: Private respondent's action for compulsory
recognition as an illegitimate child was brought under Art. 285, Civil Code while petitioners
submit that with the advent of the New Family Code, the trial court lost jurisdiction over the
complaint on the ground of prescription. The Court upheld Tayag v. CA (209 SCRA 665 [1992])
wherein the right of action of the minor child has been deemed vested by the filing of the
complaint in court under the regime of the Civil Code prior to the effectivity of the Family Code.
As in Republic v. CA (205 SCRA 356 [1992]), the fact of filing of the petition already vested in
the petitioner her right to file it and to have the same proceed to final adjudication in accordance
with the law in force at the time, and such right can no longer be prejudiced or impaired by the
enactment of a new law.
PEREZ v. CA (March 1996)

Civil Law/Family Code/Application of Art 213: When the parents of the child are separated, Art. 213, FC is
the applicable law. Since the Code does not qualify the word "separation" to mean "legal separation"
decreed by a court, couples who are separated in fact are covered within its terms.
NAVARRO v. DOMAGTOY (July 1996)

Civil Law/Family Code/Declaration of Presumptive Death/ Authority of Solemnizing Officer:
(1) Even if the spouse present has a well-founded belief that the absent spouse was already
dead, a summary proceeding for the declaration of presumptive death is necessary in order to contract a
subsequent marriage, a mandatory requirement which has been precisely incorporated into the Family
Code.
(2) A marriage can be held outside of the judge's chambers or courtroom only in the following
instances: (a) at the point of death; (b) in remote places in accordance with Art. 29; or (c)
upon request of both parties in writing in a sworn statement to this effect.
(3) A priest who is commissioned and allowed by his local ordinary to marry the faithful, is
authorized to do so only within the area of the diocese or place allowed by his Bishop. An appellate court
Justice or a Justice of this Court has jurisdiction over the entire Philippines to solemnize marriages,
regardless of venue, as long as the requisites of the law are complied with. However, judges who are
appointed to specific jurisdictions, may officiate weddings only within said areas and not beyond. Where
s/he solemnizes outside his court's jurisdiction, there is a resultant irregularity in the formal requisite laid
down in Art. 3, which while it may not affect the validity of the marriage, may subject the officiating official
to administrative liability.
VALDES v. RTC (July 1996)

Civil Law/Family Code/Property Regime under Arts 147 & 148: In a void marriage, regardless of cause,
the property relations during the period of cohabitation is governed by Art. 147 or Art. 148, FC, as the
case may be. This peculiar kind of co-ownership under Art 147 applies when a man and a woman,
suffering no legal impediment to marry each other, so exclusively live together as husband and wife under
a void marriage or without the benefit of marriage. The term "capacitated" in the provision (in the first
paragraph of the law) refers to the legal capacity of a party to contract marriage, i.e., any "male or female
of the age of eighteen years or upwards not under any of the impediments mentioned in Articles 37 and
38 of the Code.
Under this property regime, property acquired by both spouses through their work and industry
shall be governed by the rules on equal co-ownership. Any property acquired during the union is prima
facie presumed to have been obtained through their joint efforts. A party who did not participate in the
acquisition of the property shall still be considered as having contributed thereto jointly if said party's
efforts consisted in the care and maintenance of the family household. (Art. 147, FC) Unlike the CPG, the
fruits of the couple's separate property are not included in the co-ownership.
In addition, the law now expressly provides that:-
a) Neither party can dispose, etc. his or her share in co-ownership property, without consent of the
other, during the period of cohabitation; and
b) In case of a void marriage, any party in bad faith shall forfeit his/her share in the co-ownership in
favor of their common children; in default thereof or waiver by any or all of the common children, each
vacant share shall belong to the respective surviving descendants, or still in default thereof, to the
70
innocent party. The forfeiture shall take place upon termination of the cohabitation (Art. 147, FC) or
declaration of nullity of the marriage. (Arts. 43, 50 & 51, FC)
Meanwhile, under Art 148, FC, when the common-law spouses suffer from a legal impediment to
marry or when they do not live exclusively with each other (as husband and wife), only the property
acquired by both of them through their actual joint contribution of money, property or industry shall be
owned in common and in proportion to their respective contributions. Such are prima facie presumed to
be equal. The share of any party who is married to another shall accrue to the AC or CP, as the case
may be, if so existing under a valid marriage. If the party who has acted in bad faith is not validly married
to another, his or her share shall be forfeited in the manner already expressed.
CHI MING TSOI v. CA (G.R. No. 119190, Jan. 16, 1997)

Civil Law/Family Code/Annulment of Marriage/Psychological Incapacity: (1) To prevent collusion, the
NCC provides that no judgment annulling a marriage shall be promulgated upon a stipulation of facts or
by confession of judgment (Arts. 88 & 101[2]) and the Rules of Court prohibit annulment without trial. The
case has reached this Court because petitioner does not want their marriage annulled. This only shows
that there is no collusion.
(2) As to the issue of psychological incapacity, since the action to declare the marriage void may
be filed by either party, i.e., even the psychologically incapacitated, the question of who refuses to have
sex with the other becomes immaterial. Senseless and protracted refusal to have sex is equivalent to
psychological incapacity. (PINEDA, citing VELOSO) Evidently, one of the essential marital obligations under
the FC is to procreate. Constant non-fulfillment of this obligation will finally destroy the integrity of the
marriage. In his case, the senseless and protracted refusal of one of the parties to fulfill this marital
obligation is equivalent to psychological incapacity.
(3) While the law provides that the spouses are obliged to live together, etc. (Art. 68, FC), the
sanction therefor is actually the spontaneous, mutual affection between them, and not any legal mandate
or court order (Cuaderno, 120 Phil. 1298).
SAGALA-ESLAO v. CA (G.R. No. 116773, Jan. 16, 1997)

Civil Law/Family Code/Parental Authority: In Santos v. CA (242 SCRA 407 [1995]), we held that
parental authority is a mass of rights and obligations which the law grants to parents for the purpose of
the children's physical preservation and development, etc. As regards parental authority, there is no
power, but a task; no sovereignty but a sacred trust for the welfare of the minor. Parental authority and
responsiblity are inalienable and may not be transferred renounced except in cases authorized by law.
The right attached to parental authority being purely personal, the law allows a waiver only in cases of
adoption, guardianship, and surrender to a children's home or orphanage. (Arts. 222-224; Act No. 3094)
When a parent entrusts the custody of a minor to another, such as a friend or godfather, even in a
document, what is given is merely temporary custody and does not constitute renunciation of parental
authority. (Celis v. Cafuir, 86 Phil. 555) Even if a definite renunciation is manifest, the law still disallows
the same. (Art. 210, FC)
SPS. ESTONINA v. CA (G.R. No. 111547, Jan. 27, 1997)

Civil Law/Family Code/Presumption of Conjugal Property: Proof of acquisition during the marriage is a
condition sine qua non for the operation of the presumption in favor of the conjugal partnership. The
words "married to" on the certificate of title are merely descriptive of civil status (Jocson v. CA, 170 SCRA
333 [1989]).
1995
SANTOS v. CA (240 SCRA 20 [1995])

Civil Law/Family Code/Psychological Incapacity: Husband argues that the wife's failure to return home
(from the States), or at the very least to communicate with him, for more than 5 years are circumstances
that show psychological incapacity. Petition denied.
Psychological incapacity must be characterized by (a) gravity (b) juridical antecedence, and (c)
incurability. The incapacity must be grave or serious such that the party would be incapable of carrying
out the ordinary duties required in marriage; it must be rooted in the history of the party antedating the
71
marriage, although the overt manifestations may emerge only after the marriage; and it must be incurable
or, even if it were otherwise, the cure would be beyond the means of the party involved.
Psychological incapacity was not meant to comprehend all such possible cases of psychoses as
extremely low intelligence, immaturity and like circumstances. Art. 36 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 the marriage. The intendment of
the law was to confine the meaning of the phrase to the most serious cases of personality disorders
clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage.
This psychological condition must exist at the time the marriage is celebrated. The law does not evidently
envision an inability of the spouse to have sexual relations with the other.
ESPIRITU v. CA (242 SCRA 362 [February 1995])

Civil Law/Family Code/Custody of Children: The best interests of the child must be determined as of the
time that either parent is chosen to be the custodian, but the matter of custody is not permanent
and unalterable.
SANTOS, SR. v. CA (242 SCRA 407 [February 1995])

Civil Law/Family Code/Substitute Parental Authority: Only in case of parents' death, absence or
unsuitability may substitute parental authority be exercised by the surviving grandparent.
ATIENZA v. BRILLANTES, JR. (243 SCRA 32 [March 1995])

Civil Law/Family Code/Application of Art 40: Article 40, FC is applicable to remarriages entered into after
the effectivity of the FC on August 3, 1988 regardless of the date of the first marriage, said article being a
procedural rule where there is no impairment of vested rights.
SALVADOR v. CA (243 SCRA 239 [March 1995])

Civil Law/Family Code/Presumption of Conjugal Property: The Court reiterates the rule that all property of
marriage presumed to belong to the conjugal partnership, unless proven otherwise.
PEOPLE v. TEEHANKEE, JR. (G.R. No. 111206-08, October 6, 1995)

Civil Law/Family Code/Right to Damages of Adoptive Parent: Under the Family Code which was already
in effect at the time of Maureen's death, Anders Hultman, though an adoptive father, was entitled to the
award of damages made by the trial court [See Art. 190 (2) and (5)].
DAVID v. CA (G.R. No. 111180, Nov. 16, 1995)

Civil Law/Family Code/Support & Custody of Minors: (1) While it is true that the determination of the right
to the custody of minor children is relevant in cases where the parents, who are married to each other,
are for some reason separated from each other, it does not follow, however, that it cannot arise in any
other situation. For example, in Salvaña v. Gaela (55 Phil. 680 [1931]), it was held that the writ of habeas
corpus is the proper remedy to enable parents to regain custody of a minor daughter even though she
was in the custody of a third person of her free will because her parents were compelling her to marry a
man against her will. Indeed, Rule 102, §1 makes no distinction between the case of a mother who is
separated from her husband and is entitled to the custody of her child and that of a mother of an
illegitimate child who, by law, is vested with sole parental authority, but is deprived of her rightful custody
of her child.
The fact that V has recognized C may be a ground for ordering him to give support to C, but not
custody. Under Art. 213, Family Code, "no child under seven ... shall be separated from the mother
unless the court finds compelling reasons ..."
(2) The order for payment of allowance need not be conditioned on the grant of custody. Under
Art. 204, FC, a person obliged to give support can fulfill his obligation either by paying the allowance or by
receiving and maintaining in the family dwelling the person who is entitled to support. In the case at bar,
C, being less than 7 at the time the case was decided by the RTC, cannot be taken from the mother's
custody. Even now that the child is over 7, the mother's custody will have to be upheld because the child
categorically expressed preference to live with his mother.
72

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C I V I L L A W 1995-2001 DIGESTS ATENEO CENTRAL BAR OPERATIONS 2002

VICTORIAS MILLING CO. v. CA (G.R. No. 117356, June 19, 2000)

LIM v. CA (February 1996)

VELOSO v. CA (G.R. No. 102737, Aug. 21, 1996)

COSMIC LUMBER v. CA (G.R.No. 114311, November 1996)

HEIRS OF TAN ENG KEE V. CA (3 Oct 2000)

TOCAO V. CA ( Oct 2000)

AFISCO INSURANCE CORP. v. CA (Jan. 25, 1999)

IDOS v. CA (September 1998)

SEVILLE v. NATIONAL DEVELOPMENT COMPANY (G.R. No. 129401, February 2, 2001)

CERVANTES v. CA (G.R. No. 118982, February 19, 2001)

DUARTE v. ONG (May 2000)

CORPUZ v. SPS. GROSPE (G.R. No. 135297, June 8, 2000)

SANTIAGO v. CA (G.R. No. 109111, June 28, 2000)

ALBERTO v. CA (June 30, 2000)

DOLFO v. REGISTER OF DEEDS (G.R. No. 133465, September 25, 2000)

SPOUSES ZARAGOZA v. CA (G.R. No. 106401, September 29, 2000)

instituted for that purpose.

ITUTRALDE v. FALCASANTOS (Jan. 20, 1999)

RP v CA (Jan. 21, 1999)

URQUIAGA v. CA (Jan. 22, 1999)

DIR. OF LANDS v. CA (Feb. 23, 1999)

VOLUNTAD v. SPS. DIZON (August 1999)

SPS. MATHAY, JR v. CA (September 1998)

DAWSON v. REGISTER OF DEEDS (September 1998)

SPOUSES PALOMO v. CA (G.R. No. 95608, Jan. 21, 1997)

HEIRS OF FELICIDAD CANQUE v. (July 1997)

THE DIRECTOR OF LANDS v. CA (July 1997)

ORTIGAS & CO. v. JUDGE VELASCO (August 1997)

CARVAJAL v. CA (G.R. No. 98328, October 1997)

LEGARDA v. CA (October 1997)

VILLANUEVA v. CA (November 1997)

CRUZ v. CA (November 1997)

REPUBLIC OF THE PHILIPPINES v. CA (November 1997)

HEIRS OF NAGAÑO v. CA (November 1997)

GARBIN v. CA (February 1996)

NEW DURAWOOD v. CA (February 1996)

STATE INVESTMENT HOUSE v. CA (March 1996)

REPUBLIC v. CA (March 1996)

HALILI v. CIR (May 1996)

REPUBLIC v. CA (July 1996)

REPUBLIC v. CA (July 1996)

VDA. DE PANALIGAN v. CA (July 1996)

HEIRS OF GONZAGA v. CA (September 1996)

ATOK BIG-WEDGE MINING v. IAC (G.R. No. 63528, September 1996)

LIGON v. CA (244 SCRA 693)

IGNACIO v. COURT OF APPEALS (246 SCRA 242 [1995 July])

PILAPIL v. CA (G.R. No. 55134, Dec. 4, 1995)

TORTS & DAMAGES

MMTC v. CA (May 2000)

PEOPLE V. LIBRANDO (GR No, 132251, July 6, 2000)

Net earning capacity =

RADIOWEALTH V. DEL ROSARIO (GR No. 138739, July 6, 2000)

PEOPLE V. DAROY (Gr No. 118942, July 18, 2000)

PEOPLE V. DE LA TONGGA (GR No. 133246, July 31, 2000)

MAGAT V. CA (GR No. 124221, Aug 4, 2000)

PEOPLE V. DIAZ (337 SCRA 521 August 9, 2000)

PEOPLE V. PACINA (GR No. 123150 August 16, 2000)

ACE HAULERS CORP V. CA (GR No. 127934, 23 August 2000)

PEOPLE V. TOQUERO (25 August 2000)

PEOPLE V. DUBRIA (26 September 2000)

BORJAL v. CA (Jan. 14, 1999)