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#########CONSOLIDATED CIVIL LAW DIGESTS FROM 1995 2001Table of contents:page
Agency . . . . . . . . . . . . . . . 01 - 04
Partnership . . . . . . . . . . . .
04 - 04Land
Titles . . . . . . . . . . . . . 04 - 26 Torts &
Damages . . . . . . . . . 26 - 39Oblicon . . . . . . . . . .
. . . . .
39 - 72Sales . . . . . . . . . . . . . . . .
72 - 96 Sectrans . . . . . . . . . . . . . . 96 - 110
Property . . . . . . . . . . . . . .
110 -132Succession . . .
. . . . . . . . . . 133 -139Persons . . . . . . . . . . . .
. . 139 -156 * digests are arranged from the most recent to later casesAGENCY
2000Agency; Distinguished from SaleVICTORIAS MILLING CO. v. CAG.R. No. 117356 . ,
June 19, 2000.It is clear from Article 186 8 that 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. The control factor, more than any other, has caused
the courts to put contracts between principal and agent in a separate category.
This Court has ruled that 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.
That no agency was meant to be established by the CSC and STM is clearly shown
by CSC's communication to petitioner that SLDR No. 1214M had been "sold and
endorsed" to it. The use of the words "sold and endorsed" means that STM and CSC
intended a contract of sale, and not an agency. proceeding from the theory that
the transactions entered into between petitioner and STM are but serial parts of
one account, petitioner insists that its debt has been offset by its claim for
STM's unpaid purchases, pursuant to Article 1279 of the Civil Code. However, the
trial court found, and the Court of Appeals concurred, that the purchase of
sugar covered by SLDR No. 1214M was a separate and independent transaction; it
was not a serial part of a single transaction or of one account contrary to
petitioner's insistence. Evidence on record shows, without being rebutted, that
petitioner had been paid for the sugar purchased under SLDR No. 1214M.
Petitioner clearly had the obligation to deliver said commodity to STM or its
assignee. Since said sugar had been fully paid for, petitioner and CSC, as
assignee of STM, were not mutually creditors and debtors of each other. No
reversible error could thereby be imputed to respondent appellate court when it
refused to apply Article 1279 of the Civil Code to the present case.Petitioner
contends that the sale of sugar under SLDR No. 1214M is a conditional sale or a
contract to sell, with title to the sugar still remaining with the vendorterms
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 Contract of Agency; Validity & EnforceabilityLIM
v. CAFEBRUARY 1996 The contention is far from meritorious. The receipt which
petitioner signed establishes a contract of agency to sell on commission basis.
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
contract2) 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.Civil
Law/Agency & Land Titles/GPA to sell land & innocent purchaser for value

102737, Aug. 21, 1996 Petitioner contends that the power of attorney (GPA) was a
forgery and presented checks, his marriage certificate, etc. to compare his
genuine signature with that in the GPA. He also alleged that the same was not
duly notarized for as testified by Atty. Tubig himself, he did not sign thereon
nor was it ever recorded in his notarial register.The GPA was valid and regular
on its face. It was notarized and such such, carries the evidentiary weight
with respect to due execution. 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.We found, however, that the basis presented by petitioner was
inadequate to sustain his contention. Mere variance of the signatures is not
conclusive proof of forgery. Forgery cannot be presumed. (Tenio-Obsequio v. CA,
G.R. No. 10796 7, 1 Mar. 1994) Petitioner failed to prove his allegation and
simply relied on the apprent difference of the signatures. His denial had not
established that the signature of the GPA was not his.We agree with the lower
court that private respondent was an innocent purchaser for value. Respondent
relied on the GPA presented by petitioners 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. Moreover, the GPA was notarized and
carried with it the presumption of its due execution. Thus, having had no
inkling on any irregularity and having no participation thereof, private
respondent was a buyer in good faith. (Bautista v. CA, G.R. No. 106 042, 28 Feb.
1994)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. Atty. Tubig
denied having notarized the said documents and alleged that his signature had
also been falsified. He presented samples of his signature to prove his
contention. Forgery should be proved by clear nad convincing evidence and
whoever alleges it has the burden of proving the saem. Just like petitioner,
witness Atty. Tubig merely pointed out that his signature was different from
that in the GPA and deed of sale. There had never been an accurate examination
of the signature, even that of petitioner. To determine forgery, it was held in
Cesar v. Sandiganbayan (G.R. Nos. 54719-50, 17 Jan. 1985): The process of
identification must include the determination of the extent, kind and
significance of this resemblance as well as of variation. It becomes necessary
to determine whether the variation is due to the operation of a different
personality, or is only the exepected and inevitable variation found in the
genuine writing of the same writer. It is also necessary to decide whether the
resemblance is the result of a more or less skillful imitation, or is the
habitual and characteristic resemblance which naturally appeats in a genuine
writing. When these 2 questions are correctly answered the whole problem of
identification is solved.Even granting that petitioners 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.Finally, the trial court did not err in applying equitable estoppel, i.e.,
where one or two innocents must suffer a loss, he who by his conduct made the
loss possible must bear it. From the evidence, petitioner must bear the loss as
while he declared that he had sole access to the TCT, his wife was able to get
it, hence petitioner did not observe due diligence.Civil Law/AgencyCOSMIC LUMBER
v. CA & ISIDRO PEREZ G.R.No. 114311, NOVEMBER 1996 Petitioner argues that the
trial courts decision is void because the compromise agreement upon which it
was based is void. Attorney-in-fact Paz G. Villamil-Estrada did not possess the
authority to sell nor was she armed with a Board Resolution authorizing the sale
of its property. She was merely empowered to enter into a compromise agreement
in the recovery suit she was authorized to file against the squatters on the
lot, such authority being expresly confined to the ejectment of third persons
or squatters xxxWe agree with petitioner. The authority granted to Estrada
under the SPA was explicit and exclusionary: 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 petitioners

rights. Nowhere was Estrada granted, expressly or impliedly, the power to sell
the lot or portion thereof. Neither can conferment of the power to sell be
validly inferred from the specific authority to enter into a compromise
agreement becuase of the explicit limitation fixed by the grantor that the
compromise entered into shall only be to protect petitioners rights. In the
context of the grant of powers to Estrada, alienation by sale cannot be deemed
protective of petitioners 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)By selling to respondent Perez a portion of
petitioners land through a compromise agreement, Estrada acted without
authority. The sale ipso jure is void. So is the compromise agreement. This
being the case, the judgment based thereon is void as well. It may be argued
that petitioner knew of the compromise agreement since 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 6 13) 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 6 12, 6 16 ) Indeed, the basic
tenets of agency rest on the highest considerations of justice, equity and fair
play, and an agent will not be permitted to pervert his authority to his own
advantage, and his act in secret hostility to the interests of his principal
transcends the power afforded him. (citation omitted)1995Civil
Law/Agency/Sales/Contract to sellTOYOTA SHAW v. CA244 SCRA 320 (1995 May)A
person dealing with an agent is put upon inquiry and must discover upon his
peril the authority of the agentDefiniteness of price is essential element in
formation of a binding contract of sale.PARTNERSHIP1999Partnership; Creation Of;
RequisitesAFISCO INSURANCE CORP., ET AL. VS CAJan. 25, 1999 (1) Partnership;
creation of; requisites Art. 176 7 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) Insurance pool;
circumstances indicating partnership. 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 NIRC1998Partnership,
its Three Final StagesIRMA IDOS v. CA, ET AL.September 1998Petitioner is charged
for violation of BP 22, for issuing a check to complainant, Eddie Alarilla, as
payment for his share of assets of their partnership, which was in the process
of liquidation, which check however bounced.
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.LAND TITLES2001Land titles; certificate or
registrationLORETA BRAVO CERVANTES, et al vs. HON. COURT OF APPEALS, et al, G.R.
No. 118982, February 19, 2001It is a fundamental principle in land registration
that 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, in this case the private respondents' father, Antonio Francisco. 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. Land Titles; Public landsFELIPE
SEVILLE in his capacity as judicial administrator of the estate of JOAQUIN
COMPANY, et al, G.R. No. 129401, February 2, 2001Unless 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.Under the Regalian
doctrine, 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 presumed to belong to the
State. In Menguito v. Republic, 9 the Court held that "[u]nless public land is
shown to have been reclassified or alienated to a private person by the State,
it remains part of the inalienable public domain. Indeed, 'occupation thereof in
the concept of owner, no matter how long, cannot ripen into ownership and be
registered as a title.' To overcome such presumption, incontrovertible evidence
must be shown by the applicant. Absent such evidence, the land sought to be
registered remains inalienable."
A person in open, continuous, exclusive and
notorious possession of a public land for more than thirty years acquires an
imperfect title thereto. That title may be the subject of judicial confirmation,
pursuant to Section 48 of the Public Land Act. However, Section 4 of
Presidential Decree (PD) No. 1073, 10 paragraph "b" of the aforecited provision
applies only to alienable and disposable lands of the public domain. Clearly,
the burden of proof that the land has been classified as alienable is on the
claimant. In the present case, petitioners failed to discharge this burden.
Hence, their possession of the disputed property, however long, cannot ripen
into ownership.To begin with, the power to classify a land as alienable belongs
to the State, not to private entities. Hence, the pronouncements of Yap or LSBDA
cannot effect the reclassification of the property.Semantics aside, petitioners
are effectively seeking the modification of LSBDA's OCT, which allegedly
encompassed even a parcel of land allegedly belonging to them. Hence, the
present suit, purportedly filed for the "recovery of real property and damages,"
is tantamount to a collateral attack not sanctioned by law. Section 48 of PD
1529, the Property Registration DecreeMoreover, the title became indefeasible
and incontrovertible after the lapse of one year from the time of its
registration and issuance. 23 Section 32 of PD 1529 provides that "[u]pon the
expiration of said period of one year, the decree of registration and the
certificate of title shall become incontrovertible. Any person aggrieved by such
decree of registration in any case may pursue his remedy by action for damages
against the applicant or other persons responsible for the fraud." Petitioners
also claim that the disputed property should be reconveyed to them. This cannot
be allowed. Considering that the land was public before the Miscellaneous Sales
Patent was issued to LSBDA, petitioners have no standing to ask for the
reconveyance of the property to them. The proper remedy is an action for
reversion, which may be instituted only by the Office of the Solicitor General,
pursuant to Section 101 of the Public Land ActIn the light of our earlier
disquisition, the theory has no leg to stand on. Absent any showing that the
land has been classified as alienable, their possession thereof, no matter how

cannot ripen into ownership. In other words, they have not become owners of the
disputed property. Moreover, LSBDA's title was derived from a Miscellaneous
Sales Patent, not from Yap. Finally, petitioners cannot, by a collateral attack,
challenge a certificate of title that has already become indefeasible and
incontrovertible. If petitioners believe that they have been defrauded by Yap,
they should seek redress, not in these proceedings, but in a proper action in
accordance with law.
2000Land Titles: Adverse ClaimDiaz Duarte v. OngMay 2000
This is a land dispute between Diaz & the spouses Ong. Diaz inherited the land
from his parents. In 1979 Diaz sold the land to Corregidor. Corregidor later on
sold back the land by virtue of a deed of repurchase to Diaz. Corregidor
however refused to surrender the TC to Diaz hence, she executed an adverse claim
to the lot. The Ong's claim to be buyers in good faith. Ong contend that the
notice of adverse claim was already cancelled when they bought the property.
Diaz disputes the legality of the cancellation & maintains that the Registrar of
Deeds should not have automatically cancelled the notice of adverse claim simply
because the 30 day period has lapsed.RULINGS:
(1) A notice of adverse claim
remains valid even after the lapse of the 30-day period. - The good faith of
appellant-spouses rests heavily on whether the notice of adverse claim on Lot
1208 was validly cancelled by the Registrar of Deeds. The issue is no longer of
first impression. In the 1996 case of Sajonas v. Court of Appeals (258 SCRA
79), we explained that a notice of adverse claim remain valid even after the
lapse of the 30-day period provided by Section 70 of P.D. No. 1529 or the
Property Registration Decree.
We explained in Sajonas that for as long as
there is yet no petition for its cancellation, the notice of adverse claim
remains subsisting. Thus:
"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 anotation of the 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 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."
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 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.
Land Titles; ConveyanceCORPUZ v. SPS. GROSPE G.R. No. 135297, June 8, 2000.The
sale, transfer or conveyance of land reform rights are, as a rule, void in order
to prevent a circumvention of agrarian reform laws. However, in the present
case, the voluntary surrender or waiver of these rights in favor of the Samahang
Nayon is valid because such action is deemed legally permissible conveyance in
favor of the government. After the surrender or waiver of said land reform
rights, the Department of Agrarian Reform, which took control of the property,
validly awarded it to private respondents.We have already ruled that the sale or
transfer of rights over a property covered by a Certificate of Land Transfer is
void 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.As such [the farmer-beneficiary] gained the rights to possess, cultivate
and enjoy the landholding for himself. Those rights over that particular
property were granted by the government to him and to no other. To insure his
continued possession and enjoyment of the property, he could not, under the law,
make any valid form of transfer except to the government or by hereditary
succession, to his successors.Despite the above prohibition, however, there are
reports that many farmer-beneficiaries of PD 27 have transferred the ownership,
rights, and/or possession of their farms/homelots to other persons or have
surrendered the same to their former landowners. All these transactions or
surrenders are violative of PD 27 and therefore, null and void.Abandonment
requires (a) a clear and absolute intention to renounce a right or claim or to

desert a right or property; and (b) an external act by which that intention is
expressed or carried into effect. The intention to abandon implies a departure,
with the avowed intent of never returning, resuming or claiming the right and
the interest that have been abandoned. Surrender of possession did not amount to
an abandonment because there was an obligation on the part of private
respondents to return possession upon full payment of the loan.PD 27 provides
that title to land acquired pursuant to the land reform program shall not be
transferable except through hereditary succession or to the government, in
accordance with the provisions of existing laws and regulations. Section 8 of RA
3844 also provides that "[t]he agricultural leasehold relation...shall be
extinguished by: ...(2)[v]oluntary surrender of the landholding by the
agricultural lessee, . . . ."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. Land
28, 2000Documents proving ownership such as transfer and original certificates
of title are the legs on which petitioners case stands. Premised on the
relevance of these documents, the trial court ruled in favor of petitioners.
However, the proverbial legs of evidence are broken. While the titles presented
by petitioners show ownership, such ownership is not of the land claimed, but
over the adjoining parcels of land. The technical descriptions in the titles
presented by petitioners betray them as adjacent and adjoining owners of the
land claimed by MWSS for registration.
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.Further, we agree with the Court of Appeals that
if petitioners predecessors-in-interest being members of the bar and learned in
the law merely allowed and tolerated MWD or NAWASAs use of the land, they would
have reduced the agreement into writing for use in the registration of their
property which at that time was still unregistered.We hold that 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 World War II. That was over sixty (6 0) years ago!
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.MWSS presented tax declarations to buttress its
ownership of the land. True, tax declarations do not prove ownership. However,
tax declarations can be strong evidence of ownership when accompanied by
possession for a period sufficient for prescription. Since MWSS possessed the
land in the concept of owner for more than thirty (30) years preceding the
application, MWSS acquired ownership by prescription. 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".Even assuming arguendo
that the pipes were "hidden" from sight, petitioner cannot claim ignorance of
the existence of the pipes. The possession must be public in order to be the
basis for prescription. If the owner proves that the possession is clandestine,
it will not affect his possession. Petitioners also cannot claim that MWSS
abandoned its possession. There is no showing that by discontinuing the use of
the pipes, MWSS voluntarily renounced its claim over the land. Petitioners did
not prove that the spes
recuperendi was gone and the animus revertendi was given up.Land Titles;


2000The 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. Reynaldo Y. Maulit and Edgardo Castro, this Court
did not confine the availability of lis pendens only to cases involving the
title to or possession of real property when it held that:"According to Section
24, Rule 14 of the Rules of Court and Section 76 of Presidential Decree No.
1529, 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."
Land TitlesREPUBLIC OF THE PHILIPPINES vs. CAG.R. No. 130174, July 14, 2000An
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."Nonetheless, applicant
anchors its application for registration of title on the provisions of P. D. No.
1529 or in the alternative Com. Act No. 141, Section 48 (b), as amended by Rep.
Act No. 1942, which allows "those who by themselves or through their
predecessors in interest have been in open, continuous, exclusive and notorious
possession and occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition of ownership, for at least thirty years
immediately preceding the filing of the application" to apply for judicial
confirmation and registration of title.However, the evidence is inconclusive
that applicant and its predecessors in interest had been in open, continuous,
exclusive and notorious possession of the land in question, en concepto de
dueo, or a bona fide claim of acquisition of ownership for at least thirty (30)
years immediately preceding the filing of the application, or since June 12,
1945, or since time immemorial.The applicant failed to prove the fact of
possession by itself and its predecessors in interest for at least thirty (30)
years before the filing of the application. Applicant failed to prove specific
acts showing the nature of its possession and that of its predecessors in
interest. The applicant must present specific acts of ownership to substantiate
the claim and cannot just offer general statements which are mere conclusions of
law than factual evidence of possession." "Actual possession of land consists in
the manifestation of acts of dominion over it of such a nature as a party would
naturally exercise over his own property."The bare assertion of witnesses that
the applicant of land had been in the open, adverse and continuous possession of
the property for over thirty (30) years is hardly "the well-nigh
incontrovertible" evidence required in cases of this nature. In other words,
facts constituting possession must be duly established by competent evidence.
Consequently, the lower court gravely erred in granting the application.Land
G.R. No. 136 588, July 20, 2000Petition for reconstitution of title. Republic Act
No. 26 lays down the special requirements and procedure that must be followed
before jurisdiction may be acquired over a petition for reconstitution of title.

In Section 13 of said Act, these requirements and procedure are provided as

follows: "SECTION 13. The Court shall cause a notice of the petition, filed
under the preceding section, to be published, at the expense of the petitioner,
twice in successive issues of the Official Gazette, and to be 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. The court shall likewise cause a copy of the notice to
be sent, by registered mail or otherwise, at the expense of the petitioner, to
every person named therein whose address is known, at least thirty days prior to
the date of the hearing. Said notice shall state, among other things, the number
of the lost or destroyed certificate 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, 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.
The petitioner shall, at the hearing, submit proof of publication, posting and
service of the notice as directed by the court."These requirements are mandatory
and compliance with them is jurisdictional. In Republic v. Court of Appeals, the
Court held:"Reconstitution of a certificate of title, in the context of Republic
Act No. 26 , denotes the restoration in the original form and condition of a lost
or destroyed instrument attesting [to] the title of a person to a piece of land.
The purpose of the reconstitution is to have, after observing the procedures
prescribed by law, the title reproduced in exactly the same way it has been when
the loss or destruction occurred. Among the conditions explicitly required by
the law is publication of the petition twice in successive issues of the
Official Gazette, and its posting at 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. This
directive is mandatory; indeed, its compliance has been held to be
jurisdictional. . ."Thus, 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"4.
[That] at the hearing, petitioner submit proof of publication,
posting and service of the notice as directed by the court." Land Titles
PHILIPPINES, et al. G.R. No. 143281, August 3, 2000Recovery from Assurance Fund
under the Property Registration Decree. Section 95 of Presidential Decree No.
1529, otherwise known as the Property Registration Decree, provides:SEC. 95.
Action for compensation from funds. A person who, without negligence on
his part, sustains loss or damage, or is deprived of land or any estate or
interest therein in consequence of the bringing of the land under the operation
of the Torrens system or arising after original registration of land, through
fraud or in consequence of any error, omission, mistake or misdescription in any
certificate of title or in any entry or memorandum in the registration book, and
who by the provisions of this Decree is barred or otherwise precluded under the
provision of any law from bringing an action for the recovery of such land or
the estate or interest therein, may bring an action in any court of competent
jurisdiction for the recovery of damage to be paid out of the Assurance Fund. It
may be discerned
from the foregoing provisions that the persons who may recover from the

Assurance Fund are:1)

Any person who sustains loss or damage under the
following conditions:a) that there was no negligence on his part; andb) 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; or2)
person who has been deprived of any land or interest therein under the following
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; andc)
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.
Petitioners did not suffer any prejudice because of the operation of this
doctrine. On the contrary, petitioners sought to avail of the benefits of the
Torrens System by registering the property in their name. Unfortunately for
petitioners, the original owners were able to judicially recover the property
from them. That petitioners eventually lost the property to the original owners,
however, does not entitle them to compensation under the Assurance Fund. While
we commiserate with petitioners, who appear to be victims of unscrupulous
scoundrels, we cannot sanction compensation that is not within the law's
contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals,
the Government is not an insurer of the unwary citizen's property against the
chicanery of scoundrels. Petitioners' recourse is not against the Assurance
Fund, as the Court of Appeals pointed out, but against the rogues who duped
them.Land titles; Property; Buyers in Good FaithNATIONAL IRRIGATION
September 20, 2000LAND TITLES: We agree with NIA that the Transfer Certificate
of Title and the Original Certificate of Title covering the subject parcel of
land contained a reservation granting the government a right of way over the
land covered therein.The transfer certificate of title, on which both the trial
court and Court of Appeals relied, contains such a reservation. It states that
title to the land shall be: ...subject to the provisions of said Land
Registration Act and the Public Land Act, as well as those of Mining Laws, if
the land is mineral, and subject, further to such conditions contained in the
original title as may be subsisting (underscoring ours).Under the Original
Certificate of Title, there was a reservation and condition that the land is
subject to to all conditions and public easements and servitudes recognized
and prescribed by law especially those mentioned in Sections 109, 110, 111, 112,
113 and 114, Commonwealth Act No. 141, as amended. 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, provides that lands
granted by patent,shall further be subject to a right of way not exceeding
twenty meters in width for public highways, railroads, irrigation ditches,
aqueducts, telegraphs and telephone lines, and similar works as the Government
or any public or quasi-public service or enterprises, including mining or forest
concessionaires may reasonably require for carrying on their business, with
damages for the improvements only (underscoring ours).The canal NIA constructed
was only eleven (11) meters in width. This is well within the limit provided by
law. Manglapus has therefore no cause to complain.Article 6 19 of the Civil Code
provides that, Easements are established either by law or by the will of the
owners. The former are called legal and the latter voluntary easements. 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.Neither can Manglapus argue that he was a transferee or buyer in good faith.
Under the Torrens system, for one to be a buyer in good faith and for value, the
vendee must see the transfer certificate of title and rely upon the same.Here,

the annotation on the transfer certificate of title imposed on Manglapus the

duty to refer to the conditions annotated on the back of the original
certificate of title. This, he did not do. The law cannot protect him.
Manglapus is a transferee with notice of the liens annotated in the title.One
who deals with property registered under the Torrens system is charged with
notice of burdens and claims that are annotated on the titleLand Titles;
RegistrationAMELITA DOLFO vs. THE REGISTER OF DEEDS, et al, G.R. No. 13346 5,
September 25, 2000Petitioners reliance on her title is infirm. While she
presented numerous documents to prove its authenticity, however, they have been
disputed by Benjamin Flestado, Chief of the Inspection and Investigation
Division of the Land Registration Authority (LRA), in his Report showing that
her T.C.T. No. T-3206 01 was issued without legal basis and that no document was
on file with the Primary Entry Book of the Registry of Deeds of Trece Martires
City to support the issuance thereof. This Report concludes that petitioners
T.C.T. No. T-3206 01 is spurious. Such finding is reinforced by the NBI Report
dated June 20, 1996 showing that the signature of Register of Deeds Antonia
Cabuco appearing on petitioners title is a forgery. Consequently, Atty.
Artemio Cana, Acting Register of Deeds of Cavite, filed a complaint with the
Regional Trial Court, Branch 89 at Bacoor for annulment of petitioners title.
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.Thus, petitioner
cannot invoke the indefeasibility of her certificate of title. 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.Land Titles; Certificate of titleSPOUSES
APPEALS, ALBERTA ZARAGOZA MORGAN, G.R. No. 106 401, September 29, 2000Sec. 48.
Certificate not subject to collateral attack. - A certificate of title shall not
be subject to collateral attack. It can not be altered, modified, or cancelled
except in a direct proceeding in accordance with law.We have reiterated this
rule in the case of Halili vs. Court of Industrial Relations, citing the earlier
cases of Constantino vs. Espiritu and Co vs. Court of Appeals. In Halili, we
held that a certificate of title accumulates in one document a precise and
correct statement of the exact status of the fee held by its owner. The
certificate, 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. In Constantino, the
Court decided that the certificate, 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. And in Co, we stated that a Torrens title cannot 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 instituted for
that purpose.1999Forest Lands Not Subject to Private Ownership unless
DeclassifiedITUTRALDE V FALCASANTOS Jan. 20, 1999
The Court of Appeals
correctly held that the evidence is unrebutted that the subject land is within
the Forest Reserve Area and hence, not capable of private appropriation and
occupation. In Republic c Register of Deeds of QC (244 SCRA 537), we held that
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 domainGovernment
Immunity from Laches and Estoppel for Acts of its OfficialsRecovery of Ownership
of Subidivision Lands Soldin Good Faith by Private Developer to Innocent
Purchaser for ValueRP v CA, et al. Jan. 21, 1999(1) The State can be put in
estoppel by the mistakes or errors of its officials or agents.- 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, which means the
failure or neglect, for an unreasonable and unexplained length of time, to do
that which by exercising due diligence could or should have been done earlier;
it is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either abandoned
it or declined to assert it.(2) Buyers of the subdivision lots that were
allegedly enlarged relied in good faith on the clean certificate of SJEI.
Because subdivision let buyers were in good faith and did not notice any flaw in
SJEIs certificates of title, it is only fair and reasonable to apply the
equitable principle of estoppel by laches against the government to avosi an
injustice to the innocent purchaser for value.Public Lands: Only the State Can
Institute Reversion ProceedingsURQUIAGA V CAJan. 22, 1999 Even assuming that
private respondents acquired title to Let No. 6 532-B 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. This law
Sec. 101. All actions for reversion to the Govt of land of the
public domain or improvements thereon shall be instituted by the SolGen or the
officer acting in its stead, in the proper courts, in the name of the RP.
other words, petitioners have no standing at all to question the validity of
respondents title.Land Registration: Effect of Withdrawal of Application for
Land RegistrationDIR. OF LANDS VS. CA, ET AL., Feb. 23, 1999(1) Section 37 of
the Land Registration Act (Act 246 ) mandates that the w/drawal 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. The law states that 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.(2) The w/drawal of application for registration of land does not
obliterate the conflicting claims over the sale parcel of land. IF the Dir. Of
Lands registers an adverse claim, the lower court is bound to determine the
conflicting interest ofthe 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 w/drawal by either the applicant or any of the private
oppositors doesnt 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.Civil Law/ land TitlesDELFIN VOLUNTAD et al. v. SPS. MAGTANGGOL
& CORAZON DIZON, et al.August 1999 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. In the case at bar, respondent spouses who knew of the defect in
title cannot be deemed buyers in good faith as against the true owner of the
land or interest thereon. In the case therefore, there is no need for

petitioners to file a separate action to enforce their right to repurchase the

property as against the new registered owners.1998Registered Land, Sale of;
Buyers in good faith defined; Two Transfer Certificates of Title on same land,
Rule SPS. SONYA & ISMAEL MATHAY, JR v. CA, ET AL.September 1998 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. The SC dismissed the petition.
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 cant invoke good faith because at the time the property was sold to
them, the private respondents were occupying and cultivating the property.
Though as a rule, a person dealing with registered land need not go beyond the
certificate of title, where there are circumstances which would put the party on
guard, as is the case at bar, it is expected from the purchaser to inquire first
into the status and nature of the possession of the occupants. Failure to do so
would bar him from invoking the rights of a purchaser in good faith.
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.Land registration; Amendment and Alteration of Certificate of
1998 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. 1997Civil Law/Land TitlesHEIRS OF
FELICIDAD CANQUE, et al. v. CA, et al.July 1997 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. Civil Law/Land TitlesTHE DIRECTOR OF LANDS v. CA,
TEODORA ABISTADO, et al.July 1997 Is newspaper publication of the notice of
initial hearing in an original land registration case mandatory or directory?
Admittedly, P.D. No. 1529, 23 provides that publication in the OG
suffices to confer jurisdiction upon the land registration court. However, the
question boils down to whether, absent any publication in a NOGC, the
land registration court can validly confirm and register the title of private
respondents. We hold in the negative.
The law used the term shall in

prescribing the work to be done by the Commissioner of Land Registration upon

the latters receipt of the court order setting the time for initial hearing.
The word denotes an imperative and thus indicates the mandatory character of a
statute. P.D. No. 1529, 23 requires notice of the initial hearing by means of
publication, mailing and posting, all of which must be complied with. If the
intent of the law were otherwise, said section would not have stressed in detail
the requirements of mailing of notices to all persons named in the petition.
Indeed, if mailing of notices is essential, then by parity of reasoning,
publication in a NOGC is likewise imperative since the law included such
requirement in its detailed provision.
Further, a land proceedings is in rem,
hence must be validated essentially through publication.
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. Civil Law/Land Titles/Reconstitution ORTIGAS & CO.
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 nubmer 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; and4)
Submission by
petitioner at the hearing of proof of the publication, posting and service of
notice as directed by the court.Civil Law/Land TitlesJUAN C. CARVAJAL v. CA &
SOLID HOMESG.R. No. 98328 October 1997
Is there denial of due process if an
applicant for land registration is unable to testify? May a land registration
court, after it is convinced that the property subject of an application for
registration under the Torrens system is already governed by an existing
certificate, dismiss such application and thus ignore petitioners insistence on
submitting further evidence of his alleged title? What constitutes sufficient
evidence to show identity of the land applied for with the land already titled
in favor of private respondent?
The petition has no merit.
First Issue:
Identity of the Property Applied For.
The 2 reports prepared by the LRA and
DENR Survey Division clearly showed that there was an overlapping between the 2
properties. Because the futility of petitioners application was apparent, the
trial court deemed it unnecessary to hear further evidence. We agree. There was
nothing irregular in the trial courts order to the LRA and DENR to submit
reports on the location of the land covered by petitioners application and
private respondents 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 respondents certificate of title
and recommending dismissal of the application for registration. Further, the
order of the land court for the LRA and DENR to submit reports was in accordance
with the purposes of the LRA (Zuiga v. CA, 95 SCRA 740, 747 [1980]) Civil
Law/Land Titles/ReconveyanceVICTORIA LEGARDA v. CA, NEW CATHAY HOUSE, INCOctober
1997 The parties entered into a lease agreement over a QC property owned by
petitioner (123 West Avenue). For some reason, petitioner refused to sign the
contract, although New Cathay House (NCH) made a deposit and a downpayment of
rentals. Thus, NCH sued before the RTC for specific performance with

preliminary injunction and damages.

We do not have to belabor the fact
that all the successors-in-interest of Cabrera to the lot were transferees for
value and in good faith, having relied as they did on the clean titles of their
predecessors. The successive owners were each armed with indefeasible titles
which brought them within the aegis of the Torrens system. It is settled that
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,
26 0 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 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.
Another thing to consider is that Cabrera was impleaded as a
respondent only on 12 August 1991, after promulgation of the Gancayco decision.
The dispositive portion itself ordered NCH, not Cabrera, to reconvey the
property to Legarda. Cabrera was never a party to this case. Neither did he
act as NCH's representative. As held in NPC v. NLRC (G.R. No.s 90933-6 1, 29 May
1997), jurisdiction over a party is acquired by voluntary appearance or by
coercive process [summons]. In other words, until Cabrera was impleaded as
party respondent and ordered to file a comment on 12 August 1991 resolution, the
Court never obtained jurisdiction over him, and to command NCH to reconvey a
property which used to be Cabrera's would be inappropriate as a violation of due
Assuming that reconveyance is possible, that NCH and Cabrera are one
the same and that Cabrera's payment redounded to the benefit of NCH,
reconveyance, under the facts and evidence here, would still not address the
issues raised herein.
The application of the sale price to Legarda's judgment
debt constituted a payment which extinguished her liability to NCH as the party
in whose favor the obligation to pay damages was established. (Art. 1240, NCC)
It was a payment in the sense that NCH had to resort to a court-supervised
auction sale in order to execute the judgment. With fulfillment of the judgment
debtor's obligation, nothing else was required to be done. Under the Gancayco
ruling, the order of reconveyance was premised on the alleged gross negligence
of Coronel. The fact that Cabrera is an NCH officer does not make him a
purchaser in bad faith. His act in representing the company was never
questioned nor disputed by Legarda. And while it is true that he won in the
bidding, it is likewise true that said bidding was conducted by the book. There
is no call to be alarmed in case an official of the company emerges as the
winning bidder since in some cases, the judgment creditor himself personally
participates in the bidding.Legarda, as judgment debtor, cannot claim she was
illegally deprived of her property because such deprivation was done in
accordance with the rules on execution of judgments. Whether the money used to
pay for said property came from the judgment creditor or its representative is
not relevant. What is important is that it was purchased for value. Cabrera
parted with real money at the auction. Had there been no real purchase and
payment below, the subject property would never have been awarded to Cabrera and
registered in his name, and the judgment debt would never have been satisfied.
Thus, to require either NCH or Cabrera to reconvey the property would be an
unlawful intrusion into the lawful exercise of the latter's proprietary right
over the land in question, an act which would constitute an actual denial of
property without due process. It may be true that the lot could have fetched a
higher price, but there is not hint of any irregularity as regards Cabrera's bid
price. Further, despite this low selling price, Legarda still failed to redeem
her property within the 1-year redemption period. She could not feign ignorance
of the auction sale on account of her counsel's failure to inform her, as the
auction sale complied with requirements of notice and publication under the
Rules. In absence of any clear and convincing proof that such requisites were
not followed, the presumption of regularity stands. While Legarda maintains she
was in the U.S. during the redemption period, she admitted that she left only 16
days after the auction sale; moreover, her mother represented her
during the latter's absence. Neither NCH nor Cabrera should be made to suffer
the gross negligence of Coronel. If Legarda may be said to be innocent because
she was ignorant of her counsel's negligence, with more reason are NCH and

Cabrera innocent.
As between 2 parties who may lose out to negligence or
incompetence of counsel of one, the party who was responsible for making it
happen should suffer the consequences. This reflects a basic common law maxim.
Here it was Legarda who misjudged and hired the services of a lawyer who
practically abandoned her case and who continued to retain him even after his
proven apathy and negligence.
The Gancayco decision makes much of the fact that Legarda is now consigned to
penury" and, therefore, the Court "must come to the aid of the distraught
client." It must be remembered, however, that this Court renders decision not
on the basis of emotions, but on its sound judgment, applying the relevant law.
Much as we may pity Legarda, we cannot play the role of a "knight in shining
In Magdalena Homeowners v. CA (184
SCRA 325, 329-30 [1990]), this Court enumerated the cases where a notice of lis
pendens is proper:
action to recover possession of real estate
action to quiet title
action to remove clouds 4)
action for
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.
Elements to annotate a notice of lis pendens: (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. Only the first requisite is at issue
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.
A notice of lis pendens does not create a nonexistent right or
lien. It serves merely as a warning to a person who contracts on the subject
property that he does so at his peril and subject to the result of the pending
litigation. The registration of the notice of lis pendens is done without leave
of court. The Rule merely requires an affirmative relief to be claimed in the
answer to enable a defendant to apply for the annotation of the notice. There
is no requirement that an applicant-defendant must prove his right or interest
over the property sought to be annotated upon.
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.
Civil Law/Land Titles/Innocent Purchaser for ValueGLORIA R. CRUZ v. CA, ROMY V.
SUZARA & MANUEL R. VIZCONDENovember 1997 Petitioner owned a lot in QC. In
1977, she lived-in with Romy Suzara without benefit of marriage. In 1982,
solely out of love and affection, she executed a deed of sale in Romys favor
without monetary consideration. Romy registered the document in his favor and
used the property as collateral for a bank loan. Romy failed to pay off the
loan, thus the mortgage was foreclosed. Petitioner paid the bank to restructure
the loan, resulting in the extension of the redemption period to 2 years. But
without petitioners knowledge, Romy redeemed the property and thereafter
avoided petitioner. Thus petitioner filed an affidavit of adverse claim with
the RD of QC, asserting that the sale to Ronmy was void for lack of
consideration and for being contrary to law and public policy. Petitioner then
sued before the RTC for quieting of title, declaration of nullity of documents,
etc. The RTC ruled that the sale between petitioner and Romy was valid, with
love, affection and accomodation being the consideration for the sale; further,
that Vizconde was an innocent purchaser for value. The CA affirmed.
We cannot
sustain petitioner. 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
6 75 [1984]), petitioner can no longer seek reconveyance of the property as it
has already been acquired by Vizconde in good faith and for value.
lower courts found that on 22 December 1989, when Romy executed the deed of sale

in favor of Vizconde, Romy was the registered owner and nothing was annotated in
the certificate to indicate a flaw in Romys title. It was only on 22 January
1990 that petitioner filed her adverse claim with the RD. This is without
prejudice to any appropriate remedy petitioner may take against Romy.Civil
Law/Land Titles; LeaseREPUBLIC, represented by the Dir. of Lands v. CA,
JOSEFINA L. MORATO, et al. November 1997 Will the lease and/or mortgage of a
portion of a realty acquired through free patent constitute sufficient ground
for the nullification of the grant? Should such property revert to the State
once it is invaded by the sea and thus becomes foreshore land?
First. Under
the Public Land Act (C.A. No. 141), 118, 121, 122 and 124, any encumbrance of
a parcel of land acquired under a free patent or homestead within 5 years from
such grant is prohibited = cancellation of grant and reversion of land to public
domain. Encumbrance has been defined as anything that impairs the use or
transfer of property; anything which constitutes a burden on the title; a
burden or charge upon property; a claim or lien upon property. The lease and
mortgage constitute encumbrances as the grantee (Morato) cannot fully use or
enjoy the land during the duration of the lease. In a contract of lease which
is consensual, bilateral, onerous and commutative, the owner temporarily grants
the use of his or her property to another who undertakes to pay rent therefor.
During the term of the lease, the grantee cannot enjoy the beneficial use of the
land leased, this the Public Land Act prohibits.
As regards the mortgage, it
clearly constitues an encumbrance prohibited by the law as foreclosure of such
mortgage would necessarily result in the auction of the property.
Re: foreshore land reverting to the public domain.
Petitioner correctly
contends that Morato cannot own foreshore land, although respondents contend
that it is unfair if Morato will be deprived of the whole property just because
a portion thereof was immersed in water for reasons not of her own doing.
Here, the free patent application was made in 1972. However, the land has
since become foreshore land. Thus, it can no longer be subject of a free
patent, with Govt. v. Cabagis (53 Phil. 112, 115-16 [1929]) explaining 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.Civil Law/Land TitlesHEIRS OF MARCIANO NAGAO v. CA, et al.
November 1997
It is settled that a MTD hypothetically admits the truth of
the facts alleged therein. In their complaint, private respondents specifically
alleged that they were owners of a portion of the lot for having possessed it in
the concept of an owner, openly, peacefully, etc., since 1920. This claim is an
assertion that the lot was private land, or that even assuming it was part of
the public domain, private respondents ahd already acquired imperfect title
thereto under C.A. No. 141, 48, under which, a lot is segregated from the
public domain as the beneficiary is conclusively presumed to have performed all
the conditions essential to a Government grant. Thus, merely on the basis of the
allegations of the complaint, the lot in question was apparently beyond the
jurisdiction of the Director of Lands and could not be the subject of a Free
Patent. Hence, dismissal of private respondents' complaint was premature and
trial on the merits should have been conducted to thresh out evidentiary
It would been entirely different if the action were clearly for
reversion, in which case, it would have to be instituted by the Sol-Gen,
pursuant to 101, C.A. No. 141.
In light of the above, and at this time,
prescription is unavailing against private respondents' action. 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
Land Titles; Adverse ClaimGARBIN v. CAFebruary 1996 Does the registration of an
adverse claim prevail over the title which was registered subsequent to the
adverse claim? HELD: No. Under Act No. 496 , 110, the purpose of an adverse
claim is to protect the interest of a person over a piece of real property where

the registration of such interest or right is not otherwise provided for by the
Land Registration Act, and serve as notice and warning to third parties dealing
with said property that someone is claiming an interest on the same or a better
right than the registered owner. In 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.Land Titles; ReconstitutionNEW DURAWOOD v. CA
February 1996 R.A. No. 26 , 13 applies only in cases of reconstitution of lost or
destroyed original certificates on file with the Register of Deeds, while P.D.
No. 1529, 109 governs petitions for issuance of new owner's duplicate
certificates of title which are lost or stolen or destroyed. (The former is
expressly provided for in P.D. No. 1529, 110.)In Demetriou v. CA (238 SCRA 158,
16 2 [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." In fact, the said court never
acquired jurisdiction to order the issuance of new certificates. Hence, the
newly issued duplicates are themselves void.It is obvious that this lapse
happened because of failure to follow the procedure in P.D. No. 1529:1)
notice of loss or theft sent to the Register of Deeds.2)
107 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.Land
Titles; MortgageSTATE INVESTMENT HOUSE v. CAMarch 1996 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. (citations omitted)Petitioner asserts that a
purchaser or mortgagee of land covered under the Torrens System is not required
to do more than rely upon the certificate of title. HELD: 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 xxx In this case, petitioner was well aware it was dealing with Solid, a
business entity engaged in the business of selling subdivision lots. In
Sunshine v. IAC (203 SCRA 210), the Court, noting petitioner therein to be a
financing corporation, deviated from the general rule that a purchaser or
mortgagee of a land is not required to look further than what appears on the
face of the Torrens Title.REPUBLIC v. CAMarch 1996 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 [196 0]) 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)REPUBLIC v. CA & HEIRS OF RIBAYAJuly 1996 The CA erred in holding that
the Republic was barred, as the OCT was conclusive against all persons. 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 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.Civil Law/Land TitlesREPUBLIC v. CA & HEIRS OF DEMOCRITO O.
PLAZAJuly 1996 Petitioner argues that the burden rests on applicant to show by
convincing evidence that he has registrable title over the property, which he
failed to do. Further, aside from mere tax declarations, all of recent vintage,
private respondent has not established actual possession of the property in the
manner required by law (14, P.D. 1529) and jurisprudence.Although tax
declarations not conclusive, 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. Registration does not vest title. It is merely evidence of such
title. Civil Law/Land Titles/Public Land Act (C.A. No. 141)CLARA ATONG VDA. DE
BARRIOSJuly 1996 The case involves the simple issue of redemption as provided for
in 119, C.A. No. 141.Petitioners contend that the CA ruling goes against State
Investment House v. CA (215 SCRA 734 [1992]), that in exercising the right of
redemption, tender of payment of the repurchase price is necessary. Petitioners
point out that during the hearings before the trial court, private respondents
could not readily deposit the repurchase price. Petition has no merit.State
Investment is not applicable because it did not involve land granted under a
homestead or free patent, but an ordinary parcel of land which was mortgaged and
foreclosed. Redemption was thus being exercised under civil law provisions and
not under 119, C.A. No. 141, which applies here.
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 6 19 [1989]), with reference to 2 parcels of
land acquired under a free patent for which redemption within 5 years was
conceded by petitioner, 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. HEIRS OF LUIS GONZAGA, et al.
v. CA & SPS. JOSE LEELIN September 1996 Civil Law/Land Titles: [After declaring
that MWSS v. CA, 215 SCRA 783 (1992) is four-square re: overlapping titles],
[t]he present controversy hinges on the question as to who, between petitioners
and private respondents, have legal and valid title to the two lots.. In MWSS,
we ruled: Although petitioner's title was issued in 1940 [earlier than private
respondents'] it will be noted that petitioner's title was based on the
cadastral survey of Kaloocan City, Cadastral Case No. 34, while private
respondents' title was derived from OCT No. 994 issued on April 19, 1917. 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. xxx 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 xxx 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.We sympathize
with petitioner Mascarias who may be a purchaser for value and in good faith,
but whose title, which is only a derivative of the void/later title, could not

possibly be of force and effect more than its parent title. Certainly the
spring cannot rise higher than its source.ATOK BIG-WEDGE MINING v. IAC &
TUKTUKAN SAINGAN G.R. No. 6 3528, September 1996 Civil Law/Land Titles: In the
face of two sets of divergent rulings of the Supreme Court on the nature of the
rights of mining claimants over the land where their claim is located, the
parties herein seek a definitive ruling on the issue: What is actually the
right of a locator of a mining claim located and perfected under the Philippine
Bill of 1902 over the land where the claim is found? Does he have an absolute
right of ownership or does he have the mere right to possess? Whose right to
the land should, therefore, prevail: the mining claimant's or that of an
applicant for land registration? Does the mere recording or location of a
mining claim ipso facto and irreversibly convert the land into mineral land,
notwithstanding the fact that the mining claimant failed to comply with the
strict work requirement under the Philippine Bill of 1902?1)
The records
bear out that private respondent has been in possession of the lot in concept of
owner for more than 30 years. While private respondent offered the tax
declarations and receipts in evidence, petitioner did not present any evidence
in rebuttal thereof. Petitioner merely anchored its cause on its alleged vested
rights to its mining claims under the mandate of the Philippine Bill of 1902 and
our rulings in McDaniel v. Apacible (42 Phil. 749) and the catena of cases
subsequent thereto.2)
Petitioner is deemed to have abandoned his mining claims
under E.O. No. 141 and P.D. No. 1214.All mineral lands, as part of the country's
natural resources, belong to the State. This concept of jura regalia enshrined
in past and present Philippine constitutions has not always been the prevailing
principle in this jurisdiction. There was a time in our history when the mining
laws were comprising of the Filipino people's inherent rights to their natural
Against this backdrop, we resolve whether or not the ownership of
subject land had long been vested on petitioner after it had allegedly located
and recorded its mining claim in accordance with the provisions of the
Philippine Bill of 1902.This issue is not novel, it having first ruled upon in
McDaniel v. Apacible, where we stated: The moment the locator discovered a
valuable mineral deposit on the lands located, and perfected his location in
accordance with law, the power of the U.S. Gov't. to deprive him of the
exclusive right to the possession and enjoyment of the located claim was gone,
the lands had become mineral lands and they were exempted from lands that could
be granted to any other person. The reservations of public lands cannot be made
so as to include prior mineral perfected located locations; and , of course, if
a valid mining location is made upon public lands afterward included in a
reservation, such inclusion or reservation does not affect the validity of the
former location. By such location and perfection, the land located is
segregated from the public domain even as against the Government.We reiterated
this ruling in 8 cases (citations omitted). These cases notwithstanding,
however, there came about thereafter a catena of cases where we declared that
the rights of the holder of a mining claim located under the Philippine Bill of
1902, are not absolute or are not strictly of ownership. This was a ncessary
premise in our affirmation of the constitutionality of P.D. No. 1214 in the 1987
case of Santa Rosa Mining v. Leido (156 SCRA 1), where we stated that mere
location does not mean absolute ownership over the affected land. It merely
segregates the located land from the public domain by barring other would-be
locators from locating the same. To rule otherwise would imply that location is
all that is needed to acquire and maintain rights over a located mining claim.
And our ruling there was upheld in 5 cases (citations omitted). While petitioner
insists there is only one construction of the provisions of the Philippine Bill
of 1902, i.e., in the nature of ownership, private respondent posits the
ultimate question of which between the seemingly inconsistent rulings is the
correct interpretation of the Philippine Bill of 1902 in relation to E.O. No.
141 and P.D. No. 1214.This is not the first time either that we are asked to
resolve these postulations of this court that are perceived to be contradictory.
In the 1994 case of United Paracale Mining v. CA (232 SCRA 6 6 3), it would have
been premature to rule on the issue, not all indispensable parties therein
having been joined. That is not the situation in the present controversy.The
determination of the rights of a mining claim holder under the Philippine Bill
of 1902 is best undertaken on the basis of the very source of those rights,
i.e., the Bill itself. Any alteration or change in the nature of those rights

must be conceded for as long as such is statutorily and constitutionally

sanctioned, for even vested rights may be taken away by the State in the
exercise of police power.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 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.Applying this to the facts of this case, we
find that, not only has petitioner failed to show compliance with the actual
annual work requirement, but also that nowhere on the land could any tangible
work or improvement be found (as noted by the trial commissioner during an
ocular inspection). Understandable thus is the action of the Dir. of Lands not
to further appeal from respondent court's decision, the Director conceding the
land to be registrable, considering petitioner's non-performance of mining work
thereon, private respondent's adverse possession of the subject land more than
30 years and its use thereof for as many years solely for agricultural purposes.
Equally borne out by the records is the fact that petitioner had indeed applied
for a mining lease under P.D. No. 1214, thus, it has, in effect, waived its
rights to secure a patent and it shall have been governed, if private
respondent's claim of adverse and open possession of the subject land for more
than 30 years were not established, by P.D. No. 46 3 in its activities respecting
its mining lease. (Petition dismissed.)Civil Law/Land Titles: Remedial
Law/Special Proceedings/Jurisdiction of probate courtCivil
Law/Succession/Jurisdiction of probate court: Remedial Law/Evidence/Different
judges heard and decided the case: valid since full record available to the
Dec. 18, 1996 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 Manigat v. Castillo (75 Phil. 532, 535 [1945]) that the main function of a
probate court is to settle 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 invetory of the estate properly included them for purposes of
distribution. 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, 6 7 Phil.
353, 356 -357 [1939]) Thus, the lower court did not commit reversible error when
it declared Titulo 4136 as void.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. (citations omitted)It was error on the part of respondent RTC
Judge Bagasao who rendered the decision (but reversed by his successor RTC Judge
Fernandez) to have declared the existence, genuineness and authenticity of
Titulo 4136 despite the effectivity of P.D. 892. Judge Fernandez emphasized
that Titulo 4136 was inadmissible and ineffective as evidence of private
ownership.This Court can only surmise that the reason for non-registration of
Titulo 4136 under the Torrens system is the lack of the necessary documents to
be presented in order to comply with P.D. 892. We do not discount the
possibility that the Titulo in question is not genuine, especially since its
genuineness and due execution have not been proven. In both cases, the heirs
were not able to present the original of Titulo 4136 nor a genuine copy thereof,
despite a subpoena duces tecum. As an alternative to prove their claim,
petitioners referred to a document known as "hypoteca" allegedly appended to the
Titulo. However, it was neither properly identified nor presented as evidence.
The photostat submitted by petitioners had, as found by Judge Fernandez, ash
rings around portions with alterations which were done to erase any trace of the
alterations. Other findings of Judge Fernandez: petitioners did not exert
serious effort to retrieve the original, thus leading one to conclude that the
original would be adverse if produced.As regards the hipoteca which allegedly
defined the metes and bounds of the subject property, petitioners did not
establish the conditions required by law for their admissibility as secondary
evidence to prove that there exists a document designated as Titulo 4136 .
Hence, it acquires no probative value.The private ownership of the land must be
proved through genuineness of title AND clear identity of the land claimed. For
Spanish titles, the land must be concretely measured per hectare of quinon, not
in mass (cuerpos ciertos). (Dir. of Forestry v. CFI Judge Muoz, 23 SCRA 1183,
where we ruled that Titulo 4136 was of doubtful validity.) Further, in Widows &
Orphans Association v. CA (212 SCRA 36 0, 380 [1992]), we ruled that Titulo 4136
had become bereft of any probative value as evidence of land ownership by virtue
of P.D. 892.In G.R. No. 103727, the Titulo cannot be superior to the Torrens
Titles of private respondents Buhain, Ocampo and Dela Cruz. Under the Torrens
system, the titles of private respondents became indefeasible and
incontrovertible one year from its final decree. More importantly, these
titles, having been issued under the Torrens system, enjoy the conclusive
presumption of validity.Re: petitioners' contention that their former counsel
was guilty of gross negligence for having failed to call the proper witnesses
from the Bureau of Forestry, suffice it to say that counsel's negligence binds
the client. Further, petitioners were not prejudiced by the non-presentation of
evidence to prove that Buhain & co's. titles were void, considering that
petitioners' ownership was not duly proved. It bears repeating that petitioners
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. Civil Law/Land Titles: Political Law/Constitutional
Law/Estoppel does not lie against Government; Natural ResourcesSPOUSES IGNACIO
et al.G.R. No. 956 08, Jan. 21, 1997The issues raised essentially boil down to
whether or not the alleged OCTs issued pursuant to the CFI order in 1916 -1917
and the subsequent TCTs issued in 1953 pursuant to the petition for
reconstitution are valid.Petitioners contend that the Treaty of Paris which
ended the Spanish-American War recognized the property rights of Spanish and
Filipino citizens and the American government had no inherent power to
confiscate properties of private citizens and declare them part of any kind of
government reservation. They allege that their predecessors-in-interest have
been in open, adverse and contituous possession of the subject lands for 20-50
years prior to their registration in 1916 -1917. Hence, the reservation of the
land for provincial park purposes (Tiwi Hot Spring National Park) in 1913 by
then Gov-Gen Forbes was tantamount to deprivation of private property without

due process. In support, petitioners presented copies of a number of decisions

of the CFI of Albay, 15th Judicial District of the U.S.A. which state that the
predecessors in interest of petitioners' father, were in continuous, open and
adverse possession of the lots from 20-50 years at the time of their
registration in 1916 .The Philippines passed to the Spanish Crown by discovery
and conquest in the 16 th century. Before the Treaty of Paris, our land, whether
agricultural, mineral or forest, were under the exclusive patrimony and dominion
of the Spanish Crown. Hence, private ownership of land could only be acquired
through royal concessions which were documented in various forms, e.g., Titulo
Royal or Royal Grant, Concesion Especial or Special Grant, Titulo de Compra or
Title by Purchase, and Informacion Posesoria or Possessory Information title
obtained under the Spanish Mortgage Law or under the Royal Decree of January 26 ,
1889.Unfortunately, no proof was presented that petitioners' predecessors in
interest dervied title from an old Spanish grant. Petitioners placed much
reliance upon the declarations of the CFI of Albay as aforementioned. However,
they were not even signed by the judge but were merely certified copies of
notification to Diego Palomo (petitioners' predecessor in interest) bearing the
signature of the clerk of court. Moreover, despite claims by petitioners that
their predecessors in interest were in open, continuous and adverse possession
for 20 to 50 years prior to their registration in 1916 -1917, the lots were only
surveyed in December 1913, the same year they were acquired by Diego Palomo.
Curiously, in February 1913 or 10 months before the lots were surveyed for
Diego, the government had already surveyed the area in preparation for its
reservation for provincial park purposes. If petitioners' predecessors in
interest were indeed in possession of the lots for a number of years prior to
their registration in 1916 -1917, they would have undoubtedly known about the
inclusion of these properties in the reservation in 1913. It is certainly a
trifle late at this point to argue that the
that the CFI decrees were really issue, the lands are still not capable of
appropriation. 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.There is no question that the lots here were not alienable
lands of the public domain. As testified by the District Forester, records in
the Bureau of Forestry show that the subject lots were never declared as
inalienable and disposal prior to 1913 up to the present. Moreover, as part of
the provincial park reservation, they form part of the forest zone.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.Neither do the tax
receipts preented by petitioners prove ownership since they are not conclusive
proof of ownership in land registration cases.We now discuss the matter
regarding the forfeiture of improvements introduced on the subject lots. It
bears emphasis that E.O. No. 40 (reserving the lots for provincial park
purposes) was already in force at the time the lots were surveyed for Diego
Palomo. Petitioners also apparently knew that the subject lands were covered
under the reservation when they filed a petition for reconstitution of the lost
original certificates of title inasmuch as the blue print of the survey done for
the reconstitution states:
"in conflict with provincial reservation." In any case, petitioners are
presumed to know that the law and the failure of government to oppose the
registration of the lots in question is no justification for petitioners to
plead good faith in introducing improvements on the lots.1995Civil Law/Land
TitlesLIGON v. CA244 SCRA 6 93No voluntary instrument shall be registered by the
RD unless the owner's duplicate certificate is presented together with such
instrument, except in some cases or upon court order. (See discussion re: an
order issued by the RTC in exercise of its general jurisdiction, not as a land
registration court.)Civil Law; Land Titles, Pacto de Retro Sales & Equitable
MortgageIGNACIO v. COURT OF APPEALS246 SCRA 242 (1995 July)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.Sale of Land/Land TitlesPILAPIL v. CAG.R. No.
55134, Dec. 4, 1995To 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.However,
nonproduction of the owner's duplicate of the certificate of title 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.TORTS & DAMAGES2000Torts; Vicarious Liability of Employers; DamagesMMTC v.
CAMay 2000MMTC is the operator of a fleet of passenger buses within the Manila
Area. Spouses Rosales sued the bus company for the death of their daughter who
was hit by one of the buses owned by MMTC. The RTC found MMTC & their driver
guilty of negligence & who ordered to pay actual, moral & exemplary damages,
including atty's. fees & costs of lawsuit.RULINGS: Art. 2180 of CC provides that
"employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though
the former are not engaged in any business or industry." The responsibility of
employers for the negligence of their employees in the performance of their
duties is primary, that is, the injured party may recover from the employers
directly, regardless of the solvency of their employees.
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 god father of a family to prevent damage." For this purpose,
they have the burden of proving that they have indeed exercised such diligence,
both in the selection of the employee who committed the quasi-delict and in the
supervision of the performance of his duties.
In the selection of
prospective employees, employers are required to examine them as to their
qualifications, experience, and service records. On the other hand, with
respect to the supervision of employees, employers should formulate standard
operating procedures, monitor their implementation, and impose disciplinary
measures for breaches thereof. To establish these factors in a trial involving
the issue of vicarious liability, employers must submit concrete proof,
including documentary evidence.
Moral damages. - Under Art. 2206 , the
"spouse, legitimate and illegitimate descendants and ascendants of the deceased
may demand moral damages for mental anguish by reason of the death of the
deceased." The reason for the grant of moral damages has been explained thus:
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. The intensity of the pain experienced
by the relatives of the victim is proportionate to the intensity of affection
for him and bears no relation whatsoever with the wealth or means of the
In the instant case, the spouses Rosales presented evidence of
the intense moral suffering they had gone through as a result of the loss of
Liza Rosalie who was their youngest child. The spouses Rosales claim moral
damages in the amount of P5,000,000.00. In People v. Teehankee, Jr., [249 SCRA
54, 116 (1995)] this Court awarded P 1 million as moral damages to the heirs of
a seventeen-year-old girl who was murdered. This amount seems reasonable to us
as moral damages for the loss of a minor child, whether he or she was a victim
of a crime or a quasi-delict. Hence, we hold that the MMTC and Musa are
solidarily liable to the spouses Rosales in the amount of P1,000,000.00 as moral
damages for the death of Liza Rosalie.Compensation for loss of earning capacity
- Art. 2206 of the Civil Code provides that in addition to the indemnity for
death caused by a crime or quasi-delict, the "defendant shall be liable for the
loss of the earning capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter;." 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. In People v.
Teehankee, [249 SCRA 54, 118 (1995)] no award of compensation was granted to the
heirs of a college freshman because there was no sufficient evidence on record
to show that the victim would eventually become a professional pilot. But
compensation should be allowed for loss of earning capacity resulting from the
death of a minor who has not yet commenced employment or training for a specific
profession if sufficient evidence is presented to establish the amount thereof.
The argument for allowing compensation for loss of earning capacity of a minor
is even stronger if he or she was a student, whether already training for a
specific profession or still engaged in general studies. In Khromer v. Dahl,
402 P. 2d 979,982 (196 5), the court, in affirming the award by the jury of
$85,000.00 to the heirs of an eighteen-year-old college freshman who died of
carbon monoxide poisoning, stated as follows:
There are numerous cases that
have held admissible evidence of prospective earnings of a student of a student
or traineeThe appellants contend that such evidence is not admissible unless
the course under study relates to a given occupation or profession and it is
shown that the student is reasonably certain to follow that occupation or
profession. It is true that the majority of these decisions deal with students
who are studying for a specific occupation or profession. However, not one of
these cases indicate that evidence of one's education as a guide to future
earnings is not admissible where the student is engaged in general studies or
whose education does not relate to a specific occupation.Torts; NegligenceFOOD
TERMINAL INC. vs. CAG.R. No. 108397, June 21, 2000.The basic issue raised is
whether or not the petitioner was negligent in the care and custody of
respondent's goods during storagepetitioner 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. Nonetheless, petitioner claimed that temperature was not the sole cause
for the deterioration of respondent's goods. Since negligence has been
established, petitioner's liability for damages is inescapable. 1999Damages
Wenceslao filed
a civil action for damages based on libel against petitioners for an article
referring to a conference organizer associated with shady deals who has lot of
trash tucked inside his closet, Thick-faced,self-proclaimed hero and a
person with dubious ways. The article did not name or identify Wenceslao of
the conference he was organizing.RULING: Complaint for damages dismissed.
Counterclaim also dismissed
Damages cannot be awarded in the absence of
ill-motive in the filing of the complaint. On petitioners counterclaim for
damages, we find the evidence meager to sustain any award. Private respondent
cant 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
counsels fees be awarded every time a party wins a suit.1998Civil Law; Moral
Damages; Terms and Conditions of Credit Card and New Agreement; Abuse of Right;
Damages and Injury distinguishedBPI EXPRESS CARD CORPORATION v. CA, ET AL.
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.Civil Law/Land
Titles/Certificate of Title not subject to collateral attackHALILI v. CIR &
DRIVERS and CONDUCTORS UNIONMay 1996 The fact that the subject real property
was registered under the Torrens System makes the instant petition all the more
dismissible, considering that the best proof of ownership of a piece of land is
the Certificate of Title. 48 of P.D. No. 1529 provides: a certificate of
title shall not be subject to collateral attack.A certificate of title
accumulates in one document a precise and correct statement of the exact status
of the fee held by its owner. The certificate, 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 except in some direct proceeding permitted by law. Otherwise, all
security in registered titles would be lost.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. Hence, whether or not petitioners have
the right to claim ownership of the land in question is beyond the province of
the instant proceeding. Civil Law/Land Titles/Innocent purchasers for value: All
portions of said land, now known as Holy Cross Memorial Park, have already been
sold out to individual lot buyers, who are innocent purchasers for value. 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. Civil
Law/Sales/Capacity to sell: As adverted to earlier, ownership of the lot had
already been vested in the Union upon sale to it by the Heirs of Halili.
Considering this, the Union had every right to dispose of the property. After
the termination of the above-entitled cases, judgment therefor having become
final and executory, even as of 1982, neither the NLRC nor this Court will have
any authority to look into the validity of the disposal by the Union of the
property. Under the circumstances, therefore, it is to be assumed that the sale
by the Union, as virtual owner of the property, to MMPCI would not need any
authority to sell from the NLRC or from this Court and we hereby write finis to
these cases.1997Civil Law & Commercial Law/Damages & Transportation Law
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.
Civil Law/Torts/Medical Malpractice CasesLEONILA GARCIA-RUEDA v. WILFREDO L.
PASCASIO, et al.September 1997
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 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.
Commercial Law/Transportation Law; Insurance/Civil Law/Torts and DamagesNEGROS
NAVIGATION v. CA, et alNovember 1997
The vessel Don Juan (owned by
petitioner) collided with the Tacloban City, an oil tanker owned by PNOC. As
the Don Juan sank, several of her passengers perished; but the 4 members of
private respondents' families were never found. Petitioner admitted that
private respondents purchased 4 tickets and that the tickets were listed in the
passenger manifest. However, petitioner denied that the 4 relatives of private
respondents actually boarded the vessel as their bodies were never recovered.
Further, petitioner contended that the vessel was seaworthy, had a full and
competent crew; moreover, that the collision was entirely due to the fault of
the Tacloban City.
Issues: (1) whether members of private respondents'
families were actually passengers; (2) whether Mecenas v. CA (180 SCRA 83
[1989]) finding petitioner's crew members grossly negligent was binding here;
(3) whether the total loss of the Don Juan extinguished petitioner's liability;
and (4) whether the damages awarded were excessive, unwarranted, etc. First.
Petitioner contends that private respondents should have proven presence of
victims on ship as it is common knowlege that passengers purchase tickets in
advance but do not actually use them. No merit. One private respondent
testified that he brought his family to the vessel and stayed with them until it
was time to depart. 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
Second. The trial court and CA both relied on Mecenas in finding
that petitioner breached its duty to exercise extraordinary diligence. It was
found there that although proximatde 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.
While petitioner's contention that the decision here should be based on
the records of this case may be true as regards the merits of the individual
claims against petitioner, it cannot be true re: cause of the sinking of its
ship. Adherence to Mecenas dictated by stare decisis. Further, the trial court
made its own independent findings on the basis of the testimonies before it.
Third. It is settled that a shipowner is liable notwithstanding total
loss of the ship if fault can be attributed to the shipowner.

Petitioner contends that private respondents should be allowed to claim only

P43,857.14 each as moral damages since in Mecenas, the amount of P307,500.00 was
awarded to the 7 children of the Mecenas couple.
contentkion 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 thedeceased. On the other hand,
damages incidental to or arising out of such death are for pecuniary losses of
the beneficiaries of the deceased.Civil Law/Torts; Medical Malpractice SuitDR.
Define a medical
malpractice suit: 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. 36 5,
RPC, with which the civil action for damages is impliedly instituted. It is via
this latter type of action that the heirs of the deceased here sought redress
for petitioner's alleged imprudence and negligence. The information against
petitioner (surgeon) and one Dr. Lina Ercillo (anaesthesiologist during
deceased's operation) charged them with negligently failing to supply or store
sufficient provisions and facilities necessary to meet any and all exigencies
apr to arise before, during and/or after a surgical operation, thereby causing
the untimely death of Lydia Umali on the day following the operation. The MTCC
acquitted Ercillo but convicted Cruz. The RTC and CA affirmed. Prior to 22
March 1991, petitioner, upon examination, found a myoma in Lydia's (the
deceased) uterus. Petitioner thus scheduled a hysterectomy for 1:00 p.m., 23
March 1991. Lydia and Rowena (daughter) arrived at the hospital (Perpetual Help
Clinic and General Hospital on Balagtas Street, San Pablo City, Laguna) on 22
March 1991, at around 4:30 p.m. As Rowena noticed that the clinic was
untidy/very dusty, she tried to dissuade her mother from proceeding with the
operation. On 23 March 1991, before Lydia was wheeled into the operating room,
Rowena asked petitioner if the operation could be postponed. After petitioner
and Lydia conversed in petitioner's office, Lydia informed Rowena that
petitioner told Lydia that she had to be operated on as scheduled.
the procedure, Rowena and her other relatives (Rowena's husband, sister and 2
aunts) waited outside the operaing room (OR). Dr. Ercillo then went out of the
OR and instructed them to buy tagamet ampules, which Rowena's sister bought
immediately. After an hour, Dr. Ercillo came out again and asked them to buy
blood for Lydia. They bought type "A" blood from a blood bank (St. Gerald Blood
Bank) , which the attendant brought into the OR. After a few hours, petitioner
informed them that the operation was finished. The operating staff then went
inside petitioner's clinic to eat. Some 30 minutes later, Lydia was brought out
of the OR on a stretcher, and petitioner asked Rowena, et al., to buy additional
blood. Unfortunately, there was no more type "A" blood available at the blood
bank. Thereafter, a person arrived to donate blood which was later transfused
into Lydia. Rowena then noticed her mother, who was attached to an oxygen tank,
gasping for breath. Apparently, the oxygen supply had run out and Rowena's
husband, together with petitioner's driver, had to go to another hospital to get
oxygen. Lydia was given the fresh supply of oxygen as soon as it arrived. But
at around 10 p.m., Lydia went into shock and her BP dropped to 6 0/50. Lydia's
unstable condition thus necessitated her transfer to another hospital (San Pablo
District Hospital [SPDH]) for further examination and so that she could be
connected to a respirator. The transfer, however, was without the prior consent
of Rowena nor of the other relatives present, who only found out about the
intended transfer when an ambulance arrived to take Lydia to this other
hospital. Rowena, et al., then boarded a tricycle and followed the ambulance.
Upon Lydia's arrival at SPDH, she was wheeled into the OR and petitioner
and Dr. Ercillo re-operated on Lydia as there was blood oozing from the
abdominal incision. The attending physicians summoned Dr. Bartolome Angeles,
the head of the Obstetrics and Gynecology Dept. of SPDH. However, by the time
Dr. Angeles arrived, Lydia was already in shock and possibly dead as her blood
pressure was already 0/0. Dr. Angeles then informed petitioner and Dr. Ercillo
that there was notheing he could do to save the patient. While petitioner was
closing the abdominal wall, Lydia died. Lydia was pronounced dead on 24 March

1991, 3 a.m., with the death certificate indicating "shock" as the immediate
cause of death and "disseminated intravascular coagulation (DIC)" as the
antecedent cause. In convicting petitioner, the MTCC found that (1) the clinic
was untidy; (2) there was lack of provisions like blood and oxygen to prepare
for any contingencies; (3) the manner and fact that Lydia was brought to SPDH
indicated there was something wrong in the manner by which petitioner conducted
the operation; and (4) no showing that prior to the operation, petitioner
conducted a cardio pulmonary clearance or any blood typing.The RTC reiterated
these findings, while the CA observed that: (1) while the untidiness and
filthiness of the clinic did not, by themselves, indicate negligence, such
nevertheless showed petitioner's absence of due care and supervision over her
subordinates (thus leading to the questions of whether these unsanitary
conditions permeated the OR; whether the surgical instruments were properly
sterilized; whether these conditions contributed to Lydia's infection -- while
only petitioner could answer these, she opted not to testify, giving rise to the
presumption that she had nothing good to testify in her defense); (2) the need
to buy Tagamet and blood, and the empty oxygen tank, showed that petitioner had
not prepared for any unforeseen circumstances prior to going into surgery; (3)
no showing that petitioner conducted any cardio-pulmonary clearance, or at least
procured a clearance from/by an internist, which are standard requirements
before a patient is subjected to surgery; (4) no showing that petitioner
determined, as part of the pre-operative evaluation, the patient's bleeding
parameters, such as bleeding and clotting time; (5) obviously, petitioner did
not prepare the patient; did not get the family's consent to the operation;
did not prepare a medical chart with instructions for the patient's care -- no
proof of these offered. SC, however, holds differently and finds the foregoing
circumstances insufficient to sustain petitioner's conviction for reckless
imprudence resulting in homicide. Elements of reckless imprudence: (1)
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. In the recent
case of Garcia-Rueda v. Pascasio, this Court stated that in accepting a case, a
doctor in effect represents that, having the needed training and skill possessed
by physicians and surgeons practicing in the same field, he will employ such
training, care and skill in the treatment of his patients. He theerefore has 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. It is in
this aspect of medical malpractice that expert testimony is essential to
establish not only the standard of care of the profession but also that the
physican's conduct in the treatment and care falls below such standard.
Further, inasmuch as the causes of the injuries involved in malpractice actions
are determinable
only in light of scientific knowledge, it has been recognized that expert
testimony is usually necessary to support the conclusion as to causation.
Immediately apparent from a review of the records of this case is the
absence of any expert testimony on the matter of the standard of care employed
by other physicians of good standing in the conduct of similar operations. The
prosecution's expert witnesses in the persons of 2 NBI doctors only testified as
to the possible cause of death but did not venture to illuminate the court on
the matter of the standard of care that petitioner should have exercised.
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 which layment 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. (emphasis supplied) It must be remembered that
when the qualifications of a physicial are admitted, as here, there is an
inevitable presumption that in proper cases he takes the necessary precaution
and employs the best of his knowledge and skill in attending to his clients,
unless the contrary is sufficiently established. This presumption is rebuttable
by expert opinion which is so sadly lacking in case at bench.
Even granting
arguendo that the inadequacy of the facilities/supplies/provisions and
untidiness of petitioner's clinic; the failure of petitioner to conduct preoperation tests on the patient; and the subsequent transfer of Lydia to the SPDH
and the reoperation performed on her by petitioner do indicate, even without
expert testimony, that petitioner was recklessly imprudent in the exercise of
her duties as a surgeon, no cogent proof exists that any of these circumstances
caused petitioner's death. Thus, the absence of the fourth element of reckless
imprudence: that the injury to the person or property was a consequence of the
reckless imprudence.
In litigations involving medical negligence, the
plaintiff has th burden of establishing appellant's negligence and for a
reasonable conclusion of negligence, there must be proof of breach of duty on
the part of the surgeon as well as a causal connection of such breach and the
resulting death of his patient. In Chan Lugay v. St. Luke's Hospital (10 CA
Reports 415, 427-28 [196 6 ]), where the attending physicial was absolved of
liability for the death of complainant's wife and newborn baby, the Court of
Appeals held that the negligence must be the proximate cause of the injury;
negligence, no matter in what it consists, cannot create a right of action
unless it is the proximate cause of the injury complained of.
Court has no recourse but to rely on the expert testimonies rendered by the
prosecution and defense witnesses that substantiate rather than contradict
petitioner's allegation that the cause of Lydia's death was DIC which, as
attested to by an expert witness, cannot be attributed to petitioner's fault or
negligence. The probability that Lydia's death was caused by DIC was unrebutted
during trial and has engendered in the mind of this Court a reasonable doubt as
to petitioner's guilt. Thus, her acquittal of the crime charged. While we
condole with the family of Lydia, our hands are bound by law. Nevertheless,
this Court finds petitioner civilly liable for the death of Lydia, for while a
conviction requires proof beyond reasonable doubt, only a preponderance of
evidence is required to establish civil liability.Civil Law/Damages/Moral &
Exemplary damages (see text of decision)PNB v. CA & CARMELO H. FLORESG.R. No.
116 181, Jan. 6 , 1997It is not disputed that petitioner is entitled to payment
for the construction it made, which arose from a quasi-contractual relation
created between the former and private respondent. But should petitioner be
paid based on quantum meruit?The issue was answered in the affirmative in Eslao,
and we find no reason to depart therefrom as: First, the instant quasi-contract
is neither fraudulent nor mala in se. Second, the project was already covered
by a specific appropriation. Third, as in private contracts, the facts show
that an implied obligation to pay would be imposed upon the government. Fourth,
the property or benefit is not ultra vires, i.e., can be the proper subject of
an express contract and are within the contractual powers of the public body.
Fifth, the case falls within the exemption from the mandatory procedure of
public bidding which is dispensed with on the ground of public necessity or when
time is of the essence, and considering that the subject project was contiguous
to an on-going project performed by petitioner and there is no proof of any
unsatisfactory performance of negative slippage. Sixth, the contractor
substantially complied (95% complete) in good faith with its obligation and no
intentional departure from the specifications were alleged. Seventh,
petitioner's claim is clearly supported by equity. Private respondent is

reaping benefits from the scallop fence and wire placed by petitioner. Eight,
there is no proof of any collusion among the parties. Finally, payment is
limited to the actual costs chargeable against funds authorized and certified
for the purpose. All these circumstances, taken together, negate fraud and
collusion. (Rivera v. Malolos, 102 Phil. 285, 291 [1957])The Sol-Gen, on behalf
of private respondent, argues that the matter should be referred to the COA,
citing Eslao. Such argument is without merit. 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. 86 8
[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 amont was not in issue
and the determinatin 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 du 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. (CA decision set
aside and RTC decision reinstated.)1996 Torts & Damages: Contributory negligence;
vicarious liabilityVALENZUELA v. CAFEBRUARY 1996 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.Re: the vicarious liability of L's employer, this 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. Ordinarily, evidence demonstrating
the employer's diligent supervision of its employee during the performance of
the latter's assigned tasks would be enough to relieve him of the liability
imposed by Arts. 2180 and 2176 . The employer is not expected to exercise
supervision over either the employee's private activities or during the
performance of tasks either unsanctioned by the former or unrelated to the
employee's tasks.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.Torts & Damages; Damnum Absque
InjuriaSPOUSES CUSTODIO v. CAFEBRUARY 1996 There is a material injury 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 damage suffered. Thus, there can be
damage without injury when the loss or harm was not the result of a violation of
a legal duty (damnum absque injuria).In order that a plaintiff may maintain an

action for injuries of which he complains, he must establish that such injuries
resulted from a breach of [a legal duty] which the defendant owed to the
plaintiff -- a concurrence of injury to the plaintiff and legal responsibility
by the person causing it.
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)
acts should be willful; and3) 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.Torts
& Damages; Rule 111MANIAGO v. CAThe 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.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])Torts &
Damages; Actual & Moral damagesTRANS-ASIA SHIPPING v. CAMarch 1996 Petitioner's
ship was unseaworthy even before it embarked on a voyage, thus causing private
respondent to be late for work by half a day.Art. 6 98, Code of Commerce must be
read in relation with Arts. 2199 - 2201, 2208 and 21, Civil Code. As such,
petitioner is liable for any pecuniary loss or loss of profits which the private
respondent may have suffered by reason of petitioner's failure to observe
extraordinary diligence. However, in 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.Torts & Damages; Actual damagesMALALUAN v. COMELEC
March 1996 COMELEC declared private respondent Evangelista the winner in an
election contest and awarded actual damages, notwithstanding the fact that the
controversy had become moot and academic on account of the expiration of the
term of office.In case at bench, the question as to damages remains ripe for
adjudication. Petitioner contends that the damages (attorney's fees, xerox
expenses, unearned salary and emoluments) were not alleged nor proved during
trial.In light of Arts. 2199 and 2201, Civil Code, actual damages are
appropriate only in breaches of obligations in cases of contracts and quasicontracts, and on the occasion of crimes and quasi-delicts. Thus, the 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.We rule that no breach of contract or quasicontract nor tortious act nor crime may make petitioner liable for actual
damages. Further, private respondent has not been able to point out to a
specific provision of law authorizing a money claim for election protest
expenses against the losing party. Insofar as the award of protest expenses and
attorney's fees are concerned, We find them to have been awarded without basis,
the election protest not having been clearly unfounded.Torts & Damages:

Exemplary damagesPEOPLE v. PATROLLA JR. Y VEGAMarch 1996 No factual basis for the
award of moral 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.Torts & Damages; Loss of luggageSABENA
v. CAMarch 1996 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.In Alitalia v. IAC
(192 SCRA 9, 16 -18), the Court held: "The Warsaw Convention however denies to
the carrier availment of the provisions which exclude or limit his liability, if
the damage is caused by his wilful misconduct or by such default on his part as,
in accordance with the law of the court seized of the case, is considered to be
equivalent to wilful misconduct xxx 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 xxx' 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. xxx [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 and FLORESApril 1996 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
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. CAMay 1996 Commercial Law & Civil Law/Transportation
& Torts/Common Carriers & Negligence: The use of a kerosene lamp substantially
complies with Section
34 (g) of the Land Transportation Code.The aforequoted 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.
Second, as regards lost earnings, Leticia earned P5,000 a month, but was forced
to stop working due to her injuries. Considering the nature and extent of her
injuries and the length of time it would take her to recover, we find it proper
that Baliwag should compensate her lost income for five (5) years.
the award of moral damages is in accord with law. 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. Finally, we find the award of
attorney's fees justified. The complaint for damages was instituted on

December 15, 1982, following the unjustified refusal of Baliwag to settle their
claim. The Decision was promulgated by the trial court only about nine years
later. Numerous pleadings were filed. Given the complexity of the case and the
amount of damages involved, the award of P10,000.00 is just and reasonable.
PHILIPPINE AIRLINES v. CA & DR. & MRS. MIRANDAIt is now firmly settled that
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.Civil Law/DamagesMR. & MRS. ENGRACIO FABRE & PORFIRIO CABIL v.
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:Moral damages are granted
since the driver's gross negligence amounted to bad faith. 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. Bus driver and
owners jointly and severally liable. BALIWAG TRANSIT v. CA, DIVINA VDA. DE
DIONISIO, et al. G.R. No. 116 6 24, Septemer 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 partked 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 re: selection of or
supervision over employee, rebuttable by clear showing of good father diligence.
Hence, to escape solidary liability for quasi-delict committed by an employee,
the employer must adduce sufficient proof that it exercised such degree of care.
(citations omitted)3)
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. (citations omitted) [Gives Villa
Rey formula.]FOOD TERMINAL, INC. (FTI) v. CA & TAO DEVT., INC. September 1996
Petitioner argues that the CA erred in affirming the rate of interest imposed by
the trial court. This contention is well-taken. The CA incorrectly applied the
provisions of CB Circular No. 416 referring to legal interest in a loan or
forbearance of money, or to cases where money is transferred from one person to
another and the obligation to return the same or a portion thereof is adjudged.
Any other monetary judgment does not fall within its coverage for such
imposition is not within the ambit of authority granted to the CB. 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. Indeed,
the monetary judgment in favor of Tao does not involve a loan or forbearance of
money, hence, the proper imposable rate of interest is 6 %. 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 awards 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. ERMELINO SEQUIO,
et al. G.R. No. 117397, November 1996 We do not agree with the awards of moral
and exemplary damages. There is no factual basis therefore 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
FORMING CORPORATION (MFC)G.R. No. 118325, Jan. 29, 1997There 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.Unfortunately,
no evidentiary foundation for actual damages, hence must be struck down. But
grant of moral damages upheld since with adequate proof and MFC acted in bad
faith (Art. 2220, NCC); likewise with exemplary damages. But both awards must
be reduced. Grant of attorney's fees struck down since dealt with only in
dispositive portion of the RTC decision.1995Civil Law/Torts & DamagesFAR EAST
BANK v. CA241 SCRA 6 71(1995 Feb)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.
Civil Law/Torts & DamagesCHUA v. CA242 SCRA 341(1995 Mar)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 CONTRACTS2000
Contracts; Sales; OwnershipArchipelago Mgmt & Mktng Corp v. CA May 2000This is a
land dispute between Rosalina Morales & Archipelago Mgmt & Mktg Corp. The land
was originally owned by Rosalina. The corp. claims ownership by virtue of a
deed of absolute sale allegedly executed between Rosalina & the corp. Rosalina
denies the contract & contends that the signature was obtained by fraud through
the machinations of her husband Emetero Morales.RULINGS:
(1) There is fraud
when one party is induced by the other to enter into a contract through
and solely because of the latter's insidious words or machinations. It was
clearly demonstrated that fraud attended the execution of the deed of sale. (2) Irregularities also impair the notarization of the deed of sale.
Acts of ownership were exercised by Rosalina even after the alleged execution of
the deed of sale. She continued to possess the disputed property, pay the real
estate taxes and collected rentals from the lessees. - Ownership of a property
means, among others, the right to enjoy and dispose of it, subject to
limitations established by law. The law "recognizes in the owner the right to
enjoy and dispose of the thing owned. The right to enjoy includes: the jus
utendi or the right to receive from the thing what it produces, and the jus
abutendi or the right to consume the thing by its use." Further, "[t]he right
to dispose or the jus disponedi, ids the power of the owner to alienate,
encumber, transform, and even destroy the thing owned."
In the present
case, even after Rosalina allegedly sold her paraphernal property to herein
petitioner, she still performed acts of ownership over the same. Sixteen days
after the alleged execution of the Deed of Sale, she entered into a contract of
lease with Siblings Rodolfo and Nympha as lessees. Furthermore, Rosalina (and
her heirs) continued to possess the disputed property even after the alleged

sale. She also paid the real estate taxes and collected rentals from the
lessees. In fact, after the alleged execution of the questioned Deed of Sale,
she even executed a holographic will bequeathing the property to her husband
Emeterio, her caretaker Baonguis and her children by her first husband.
stark contrast, petitioner never exercised acts of ownership over the property.
Indeed, aside from the alleged Deed of Sale, it presented no other evidence of
its ownership such as books, records or financial statements. Moreover, it did
not pay the real estate taxes even after a new TCT Deed, It must also be
underscored that Atty. Narciso Morales, president of the petitioner corporation,
knew of the subsequent acts of Rosalina, but offered no objection thereto.
Contracts; SalesGoldenRod Inc v. CAMay 2000FACTS: Land dispute again between
Barreto Realty & GoldenRod. Barreto Realty executed an agreement w/ GoldenRod
wherein Barreto accepted GoldenRod's offer to buy the properties of GoldenRod
which was subject to imminent foreclosure. Later on, GoldenRod 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.RULINGS: (1) An earnest money is part of the purchase price. - We
sustain petitioner. Under Article 1482 of the Civil Code, whenever earnest
money is given in a contract of sale, it shall be considered as part of the
purchase price and as proof of the perfection of the contract. Petitioner
clearly stated without any objection from private respondents that the earnest
money was intended to form part of the purchase price. It was an advance
payment which must be deducted from the total price, especially in the absence
of a clear and express agreement thereon.(2)Failure by one party to oppose the
other party's declaration of rescission of a contract amounts to an admission of
the validity of the rescinding party's claim. (3)Rescission of a contract
creates the obligation to return the things which were the object of the
contract, together with their fruits and interest. - Article 1385 of the Civil
Code 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 was called off
and the subject property had already been sold to a third person, as what
obtained in this case. Therefore, by virtue of the extrajudicial rescission of
the contract to sell by 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
P1,000,000.00 plus legal interest from the date it received notice of rescission
from petitioner, i.e., 30 August 1998, up to the date of the return of payment.
It would be most inequitable if respondent BARRETO REALTY would be allowed to
retain petitioner's payment of P1,000,000.00 and at the same time appropriate
the proceeds of the second sale made to another.Oblicon; EstoppelMETROBANK v. CA
G.R. No. 122899, June 8, 2000.Petitioner METROBANK is estopped from refusing the
discharge of the real estate mortgage on the claim that the subject property
still secures "other unliquidated past due loans." In Maneclang vs. Baun, 14
this Court enumerated the requisites for estoppel by conduct to operate, to wit:
there must have been a representation or concealment of material facts;the
representation must have been with knowledge of the facts;the party to whom it
was made must have been ignorant of the truth of the matter; andit must have
been with the intention that the other party would act upon it.Petitioner
METROBANK is thus barred from taking a stand inconsistent with its
representation upon which respondent GTP, as an innocent third person to the
real mortgage agreement, placed exclusive reliance. Respondent GTP had the
reasonable right to rely upon such representations as true, considering that it
had no participation whatsoever in the mortgage agreement and the preparation of
the statement of account, coupled with the expectation that a reputable banking
institution such as petitioner METROBANK do conduct their business concerns in
the highest standards of efficiency and professionalism. For an admission or
representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against a person relying thereon. A party may not go back
on his own acts and representations to the prejudice of the other party who
relied upon them. In the law of evidence, whenever a party has, by his own
declaration, act or omission, intentionally and deliberately led another to

believe a particular thing true, and to act upon such belief, he cannot, in any
litigation arising out of such declaration act, or omission, be permitted to
falsify it. Oblicon; Contractsl SalesROMAGO ELECTRIC CO. v. CAG.R. No. 125947,
June 8, 2000.A contract is defined as a meeting of minds between two persons
whereby one binds himself with respect to the other, to give something or to
render some service. Generally, contracts need not be in writing in order to be
valid. Contracts are obligatory in whatever form they may have been entered into
provided all essential requisites for their validity are present. 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. Sales the understanding of the
parties was that, unless and until complete and substantial payment on the
Motown transaction shall have been made, TSIs occupancy is allowed as a
concession or as "come-on" or incentive for the sale because they could
immediately enter into the premises and begin renovation work. Apparently, as a
result of this understanding, no mention was made by the parties in the Motown
Agreement regarding TSI taking immediate possession of portions of the premises
and of any interim sharing of payment of rentals and utilities charges. since
both Romago and TSI paid equally two months rents and utilities charges for the
four months period they shared the use and occupancy of the subject leased
premises, the parties actually paid their respective share (of rentals and
utilities charges) out of equity and mutual consideration and not pursuant to
any verbal agreement existing between them.Oblicon; Trust; Constructive Trust
YUCHENGCO v. REPUBLIC G.R. No. 131127, June 8, 2000Considering that petitioner
seeks to recover properties, the ownership and possession of which he was
allegedly deprived through fraud, duress and/or coercion, we hold that, assuming
hypothetically these averments to be true, the legal relationship of
constructive trust was present among the parties concerned in the said
transactions. 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;3.
Upon a judgment.Article
1154 of the Civil Code is applicable by parallelism, to wit: The period during
which the obligee was prevented by fortuitous event from enforcing his right is
not reckoned against him. Contracts; PerfectionJARDINE DAVIES INC. v. CAG.R. No.
12806 6 , June 19, 2000.A contract is defined as "a juridical convention
manifested in legal form, by virtue of which one or more persons bind themselves
in favor of another for others, or reciprocally, to the fulfillment of a
prestation to give, to do, or not to
do." There can be no contract unless the following requisites concur: (a)
consent of the contracting parties; (b) object certain which is the subject
matter of the contract; and, (c) cause of the obligation which is established. A
contract binds both contracting parties and has the force of law between them.
Contracts are perfected by mere consent, upon the acceptance by the offeree of
the offer made by the offeror. From that moment, the parties are bound not only
to the fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good
faith, usage and law. To produce a contract, the acceptance must not qualify the
terms of the offer. However, the acceptance may be express or implied. For a
contract to arise, the acceptance must be made known to the offeror.
Accordingly, the acceptance can be withdrawn or revoked before it is made known
to the offeror.
Cited case: we distinguished 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.
Oblicon; NovationESPINA v. CAG.R. No. 116 805, June 22, 2000.The novation must be
clearly proved since its existence is not presumed. In this light, novation is
never presumed; it must be proven as a fact either by express stipulation of the
parties or by implication derived from an irreconcilable incompatibility between
old and new obligations or contracts. Novation takes place only if the parties
expressly so provide, otherwise, the original contract remains in force. In
other words, the parties to a contract must expressly agree that they are
abrogating their old contract in favor of a new one. Where there is no clear
agreement to create a new contract in place of the existing one, novation cannot
be presumed to take place, unless the terms of the new contract are fully
incompatible with the former agreement on every point. Thus, a deed of cession
of the right to repurchase a piece of land does not supersede a contract of
lease over the same property. On February 13, 1993, 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. Contracts; Statute of Frauds; Implied Trusts;
SalesVIEWMASTER CONSTRUCTION CORP vs. ROXAS, et al, G.R. No. 133576 , July 13,
2000 Petitioner Viewmaster agreed to act as the guarantor of Allen Roxas for the
loan that the latter needs from FMIC if herein respondent Allen Roxas shall sell
fifty percent (50%) of his shareholdings in State Investment and shall undertake
a joint venture project with Plaintiff Viewmaster to co-develop the two real
estate properties in Quezon City and Las Pias, and if Roxas shall sell and
petitioner Viewmaster shall purchase fifty percent (50%) of the latters total
eventual acquisitions of shares of stock in State Investment. These were not put
into writing.The court a quo did not err in finding that the Statute of Frauds
covers the foregoing agreements. 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."Contracts which
by their terms are not to be performed within one year may be taken out of the
Statute of Frauds through performance by one party thereto. In order, however,
that a partial performance of the contract may take the case out of the
operation of the statute, it must appear clear that the full performance has
been made by one party within one year, as otherwise the statute would apply."
[Babao vs. Perez, 102 Phil756 .]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. It will not take a mathematical genius to figure out that
the sale of fifty percent (50%) of Allen Roxass shareholdings in State
Investment would amount to more than five hundred pesos (P500.00). Thus, to be
enforceable, the contract must be in writing. It is contended that an implied
trust exists between petitioner and Allen Roxas. The implied trust was allegedly
created by operation of law in accordance with Article 1448 of the New Civil
Code. Quoted below is the provision referred to:"Art. 1448. There is an implied
trust when property is sold, and the legal estate is granted to one party but
the price is paid by another for the purpose of having the beneficial interest
of the property. The former is the trustee, while the latter is the beneficiary.
However, if the person to whom the title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the sale, no trust is implied by
law, it being disputably presumed that there is a gift in favor of the child."
(Emphasis Ours)From the above, it is quite clear that 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.Contracts; FraudARRIOLA vs. DEMETRIOThe 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.Obligations and
Contracts; SalesPILIPINAS HINO vs. CAIt is, of course, a basic rule in evidence
that a party must prove his own affirmative allegations. In civil cases, the
burden of proof is on the plaintiff to establish his case by a preponderance of
evidence. In affirmative averment the onus probandi falls on pleaders shoulder.
Obligation arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.Agreement between the parties,
not being contrary to law, morals, good customs, public policy, or public order
has therefore the force of law between the parties.Equity is applied only in the
absence of, and never against, statutory law or judicial rules of procedure.
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. CACivil 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.ObliconPRODUCERS BANK OF THE PHILIPPINES,
et al vs. BPI & CA G.R. No. 12516 7, September 8, 2000The 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.
The pledge was executed in August 1980 and petitioners refused to register the
shares pledged after respondent acquired the same. Respondent commenced suit in
1989, before the ten-year prescriptive period expired.Oblcion; RescissionSBMA
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.
Oblicon; Interpretation of contractsPILIPINAS BANK vs. COURT OF APPEALS, HON.
ELOY R. BELLO, In his capacity as Presiding Judge, RTC#Manila, Branch 15, And
MERIDIAN ASSURANCE CORPORATIONG.R. No. 14106 0, September 29, 2000Petitioners
Complaint merely alleged that under the provisions of the Policy, it was
entitled to recover from private respondent the amount it lost during the heist.
It did not allege therein that the Policys terms were ambiguous or failed to
express the true agreement between itself and private respondent. Such being
the case, petitioner has no right to insist that it be allowed to present
Tubianosas testimony to shed light on the alleged true agreement of the parties,
notwithstanding its statement in its Pre#Trial Brief that it was presenting said
witness for that purpose.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.As correctly noted by the appellate court, petitioner failed to raise
the issue of an intrinsic ambiguity, mistake or imperfection in the terms of the
Policy, or of the failure of said contract to express the true intent and
agreement of the parties thereto in its Complaint. There was therefore no error
on the part of the appellate court when it affirmed the RTCs Order disallowing
the recall of Tubianosa to the witness stand, for such disallowance 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.Contracts; Equitable
MortgageTUAZON vs. CA, et alG.R. No. 119794. October 3, 2000Article 16 02 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 16 04 of the New Civil Code, the provisions of Article 16 02 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.The present case is entirely
different. Records on hand and the documentary evidence introduced by the
parties indubitably show no room for construction, Article 136 5 of the New Civil
Code on reformation of contracts 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 16 02. When the words of the contract are
clear and readily understandable, there is no room for construction. The
contract is the law between the parties. Said this Court:
Extraordinary inflationSINGSON vs. CALTEX (PHILIPPINES).G.R. No. 137798. October
4, 2000The only issue crucial to the present appeal is whether there existed an
extraordinary inflation during the period 196 8 to 1983 that would call for the
application of Article 1250 of the Civil Code and justify an adjustment or
increase of the rentals between the parties.Article 1250 of the Civil Code
states: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.Article 1250 was inserted in the Civil Code of 1950
to abate the uncertainty and confusion that affected contracts entered into or
payments made during World War II, and to help provide a just solution to future
cases. The Court has held extraordinary inflation to exist 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, this Court has held that the effects of extraordinary
inflation are not to be applied without an official declaration thereof by
competent authorities.Contracts; SalesSANTOS vs. HEIRS OF MARIANO, et al. G.R.
No. 143325. October 24, 2000What determines the validity of a contract, in
general, is the presence of the elements constituting the same, namely, (1)
consent of the contracting parties; (2) object certain which is the subject
matter of the contract; and (3) cause of the obligation which is established
(Article 1318, Civil Code). "The contract of sale is perfected at the moment

there is a meeting of minds upon the thing which is the object of the contract
and upon the price. From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the form of
contracts" (Article 1475, Civil Code). Even with a duly executed written
document purporting to be a contract of sale, the Court cannot rule that the
subject contracts of sale are valid, when the evidence presented in the courts
below show that there had been no meeting of the minds between the supposed
seller and corresponding buyers of the parcels of land in this case. The case is
replete with evidence tending to show that there was really no intention to sell
the subject properties, and we need not delve into these matters anew because
such factual issues are beyond the scope of our review. Suffice it to note that
due execution of documents representing a contract is one thing, but perfection
of the contract is definitely another.
Contracts; Breach; SalesDBP V. CA, et
al. G.R. No. 137557. October 30, 2000The interest and penalty charges to be
paid in case of delay in payments were expressly stipulated in the Conditional
Contract of Sale. 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. 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.Article 1374 of the Civil Code provides that "the various
stipulations of a contract shall be interpreted together, attributing to the
doubtful ones that sense which may result from all of them taken jointly."
[N]either the law nor the courts will extricate a party from an unwise or
undesirable contract he or she entered into with all the required formalities
and with full awareness of its consequences."Article 1229 of the Civil Code
states that "Even if there has been no performance, the penalty may also be
reduced by the courts if it is iniquitous or unconscionable." In the instant
case, private respondents made regular payments to petitioner DBP in compliance
with their principal obligation. They failed only to pay on the dates stipulated
in the contract. This indicates the absence of bad faith on the part of private
respondents and their willingness to comply with the terms of the contract.
There was no substantial breach in the performance of private respondents'
obligation. Article 1191 of the Civil Code provides that "The power to rescind
obligations is implied in reciprocal ones, in case one of the obligors should
not comply with what is incumbent upon him. The injured party may choose between
the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible . . ." 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.
Contracts; Application of PaymentsPACULDO vs. REGALADOG.R. No. 123855. November
20, 2000The right to specify which among his various obligations to the same
creditor is to be satisfied first rests with the debtor, as provided by law, to
wit:Article 1252. He who has various debts of the same kind in favor of one and
the same creditor, may declare at the time of making the payment, to which of
them the same must be applied. Unless the parties so stipulate, or when the
application of payment is made by the party for whose benefit the term has been
constituted, application shall not be made as to debts which are not yet due.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. There was no clear assent by petitioner to the
change in the manner of application of payment. The petitioners silence as
regards the application of payment by respondent cannot mean that he consented
thereto. There was no meeting of the minds. Though an offer may be made, the
acceptance of such offer must be unconditional and unbounded in order that
concurrence can give rise to a perfected contract. Hence, petitioner could not
be in estoppel.Assuming arguendo that, as alleged by respondent, petitioner did
not, at the time the payments were made, choose the obligation to be satisfied

first, respondent may exercise the right to apply the payments to the other
obligations of petitioner. But this is subject to the condition that the
petitioner must give his consent. Petitioners silence is not tantamount to
consent. The consent must be clear and definite.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. Contracts; SalesPUA, vs.
CA, et al. G.R. No. 134992. November 20, 2000The appellate court correctly found
that since said Johnny P. Uy was not even conceived yet at the time of the
alleged sale, he therefore had no legal personality to be named as a buyer in
the said deed of sale. Neither could he have given his consent thereto. Article
1318 of the New Civil Code provides: There is no contract unless the following
requisites concur:(1) Consent of the contracting parties;(2) Object certain
which is the subject matter of the contract;(3) Cause of the obligation which is
established.The contract of sale 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. Consent is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the 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. The appellate court,
therefore, correctly ruled that for lack of consent of one of the contracting
parties, the deed of sale is null and voidColoma could not have acted as
representative of Johnny P. Uy. In the first place, she did not have the right
to represent Johnny P. Uy for lack of legal authority to act for and in behalf
of said minor. It is well-settled that without authority from the Court, no
person can make a valid contract for or on behalf of a minor. 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.Obligations; PaymentSPOUSES BUENAFLOR, vs. CA,
et alG.R. No. 142021. November 29, 2000In the civil law sense, it means not
only the delivery of money but also the performance, in any other manner, of the
obligation. The Civil Code enunciates a counterpart principle to the rule on
liberal construction under Section 6 , Rule 1 of the 1997 Rules of Civil
Procedure. 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. In this case, there is good faith
attempt to comply with the requirements of the Rules regarding the manner of
appeal from the decision of the Regional Trial Court, without any willful or
intentional departure therefrom. The postal money orders which were intended for
the payment of the appellate docket fees were actually sent to the trial court.
They were filed within the reglementary period and received by the trial court.
The petitioners clearly intended to file an appeal.ContractsORTIGAS & CO. LTD.
Vs CA, et. alG.R. No. 126 102. December 4, 2000The 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 singlefamily 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. Contracts;
CORPORATION G.R. No. 134284. December 1, 2000Contractual 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. Hence, Article 1159 of the New Civil
Code provides"Obligations arising from contracts have the force of law between
the contracting parties and should 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.Contracts; leaseLHUILLIER, vs. CA, et al.G.R. No. 128058. December 19,
2000A 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. 16 78 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. Civil Law/ Contracts/ Compromise
PETER CHUA LAO v. MACAPUGAY et al.August 1999 In private respondents Comment
to the petition, they bring to the Courts attention a Compromise Agreement
executed by petitioner and private respondents whereby they mutually agreed to
settle amicably their dispute and to cause the dismissal of all pending cases
filed by 1 party against the other by filing a joint motion to dismiss.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 207.1999Contracts; Lease; Ejectment; Court
Without Power to Extend Leases with Expired ContractCHUA v. CA, IBARRAJan. 21,
1999(1) Petitioners are not entitled to an extension of the time to occupy the
premises in view of the termination of the lease agreement on January 1, 1990;
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.
16 87 of the CC applies only to cases where there is NO period fixed by 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. 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
latters property. Art. 16 78 merely grants to such a lessee making in good
faith useful improvements the right to be reimbursed 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.Requisites
for a Valid Contract; Basis for the Award of DamagesABS-CBN v. CA, et al., Jan.
21, 1999(1) Key issue for consideration in whether there was a perfected
contract between VIVA and ABS-CBN. Resolved against ABS-CBN. 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. Contracts that
are consensual in nature are perfected upon mere meeting of the minds. Once
there is concurrence between the offer and the acceptance upon the subject
matter, consideration, and terms of payment a contract is produced. When Mr.
Del Rosario of Viva met Mr. Lopez of ABS-CBN at the Tamarind Grill on 2 April

1992 to discuss the package of films, said package of 104 VIVA film was VIVAs
offer to ABS-CBN to enter into a new Film Exhibition Agreement. But ABS-CBN,
sent thru MS. Concio, counter-proposal in the form of a graft contract proposing
exhibition of 53 films for consideration of P35M. This counter-proposal could
be nothing less than the counter-offer of Mr.Lopez during his conference with
Mr. Del Rosario. Clearly, there was no acceptance of VIVAs offer for it was
met by a counter-offer which substantially varied the terms of the offer. ABSCBN made no unqualified acceptance of VIVAs offer hence, they underwent a
period of bargaining.(2) On the claim of RBS Corp for damages. 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. Exemplary damages are imposed by way of
correction for the public good, in addition to moral, temperate, liquidated, or
compensatory damages. They are recoverable in criminal cases as part of the
civil liability when the crime was committed with one or more aggravating
circumstances; in quasi-delicts. It may be reiterated that the claims of RBS
against ABS-CBN is not based on contract, quasi-contract, delict, or quasidelict. 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 have meant to impose a penalty on the
right to litigate. If damages result from a persons exercise of a right, it is
damnum absque injuria.Contracts; Lease with Option to Purchase; Exception of
Period to Exercise OptionDIZON, ET AL. v. CAJan. 28, 1999 Private respondents
right to exercise the option to purchase expired with the termination of the
original contract of lease for one year. Hence, there was an implicit renewal
of the contract of lease on a monthly basis. The other terms of the original
contract of lease which are revived in the implied new lease under Under Article
16 70 of the CC are only those terms which are germane to the lessees 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 respondents
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 respondents right to exercise the option to
purchase expired with the termination of the original contract of lease for one
year.Principle of Relativity of Contracts; Prescription or Adverse Possession
RAMOS v. CA, BAUTISTA, ET AL. Feb. 3, 1999(1) Assuming arguendo that the
existence of the documents was properly established, still, the supposed
agreement embodied in the 2 documents bound only the parties thereto, namely
Tolentino and the petitioners, because the latter failed t prove that these were
later registered as to operate against the whole world. They could not have
bound 3rd person like private respondent because of the basic civil law
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) No title to
registered land in derogation to that of the registered owner shall be acquired
by prescription or adverse possession. Bautistas calim to the properties
appears incontrovertible. 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. Oblicon; Option; ContractsCarceller v.
Feb. 10, 1999
Petitioner as lessee and SIHI as lessor entered
into a lease contract with option to purchase for a period of 18 months to
expire on January 30, 1986 . On Jan. 7, 1986 , SIHI notified Carceller of its
desire to sell the property. In a letter fated Jan. 15, 986 , recd by SIHI on
Jan. 29, 1986 , petitioner requested for a 6 -month extension of the lease
contract alleging he needs time to raise money in order to exercise the option.

SIHI disapproved the request and offered to lwase the same property to
petitioner at P30,000/month for one year. On Feb. 18, 1986 , petitioner notified
SIHI of its decision o exercise the option, but this was again disapproved, SIHI
stressing that the option had already lapsed. Petitioner filed an action for
specific performance.(1) Option defined. IT 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.(4) Contracts;
the law allows the parties leeway in the terms of their agreement. In the
contractual relations, the law allows the parties leeway in the terms of their
agreement, which is the law between them. Note that by contract SIHI had given
petitioner 4 periods: (a) the option to purchase for P1.8M within the lease
period; (b) the option to be exercised w/in the option period by written notice
anytime; (c) the document of saleto be consummated w/in the month immediately
following the month when petitioner exercises the option; and (d) the payment
in equal installments of the purchase price over a period of 6 0 months. In our
view, petitioners leter of Jan. 5, 1986 and his formal exercise of the option
on Feb. 18, 1986 were within a reasonable time-frame consistent with periods
given and the known intent of the parties to the agreement dated Jan. 10, 1985.
A contrary view would be harsh and iniquitous.Sale of Real Property; When
Presumed an Equitable Mortgage InsteadMISENA v. RONGAVILLAFeb. 25, 1999
(1)Instances when a contract regardless of its nomenclature may be presumed an
equitable mortgage; case of . Art. 16 02 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 16 02 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.Civil Law/ContractsJAIME ONG v. CA & SPOUSES
ROBLESJuly 1997Petitioner and Respondent executed an Agreement of Purchase and
Sale over a parcel of land. Petitioner failed to completely pay the purchase
price so the respondents filed a complaint for rescission of contract and
recovery of their property wi