ALBARinwcke B Pie pndinonnrone LL eben tP™ Survey of 2015-2016 SC Decisions in CIVIL LAW 8 DEAN ED VINCENT S. ALBANO Bar Review Director HUMAN RELATIONS The core of Articles 19, NCC is bad faith. ‘cia well-settled rule that good faith is always presumed. Bad faith is never presumed, for whoever alleges bad faith has the burden of proving it. Once again that has been the basis of the SC in deciding the case ‘Of Elizabeth Diaz v. Encanto, et al, G.2. No, 171303, January 20, 2016, Leonardo-De Castro, J in this case a professor at the University of the Philippines applied for a sabbatical eave with pay. but tt was denied. This issue was brought to court where there was a finding that the grant or denial of such leave is not a matter of right as itis subject to the exigencies of the service, like acute shortage of teaching staf fiven the Office of the Ombudsman has similar findings with the CA that the grant of leave is not a mafter of rightand that there was no bad faith on the part ofthe officials ofthe UP in denying it. Yet before the SC, the “pplicant insisted that the concerned officials acted in bad faith. Sustalning the findings of the CA and the Ombudsman, the SC Held; There are no traces of bad faith or malice in denying the application for sabbatical leave. They “processed the application in accordance with their usual procedure, White the RTC declared that petitioner Diaz should have been granted a sabbatical leave, it is important to note that the RTC awarded damages to petitioner Diaz merely for the unreasonable and unconscionable delay in the resolution of her sabbatical Teave application. It is an eleinentary rule in this jurisdiction that good faith is presumed and that the burden of proving bad faith rests upon the party alleging the same. (Barons Marketing Corp. v. Court of Appeals and Phelps Dodge Phils, inc. 349 Phil. 769 {1998)) Her complaint for recovery of damages before the RTC was based on the alleged bad faith of the respondents in denying her application for sabbatical leave vis-a-vis Articles 19 and 20 of the Civil Code, ‘Article 19 of the Civil Code “prescribes ‘primordial limitation on all rights’ by setiing certain standards that must be observed in the exercise thereof” (Berons Marketing Corp. v. Court of Appeals and Phelps Dodge Phils. inc; 349 Phil, 769 [1998] Abuse of right under Article 19 exists when the following elements are present: (1) there is a legal right or duty; (2) whict: is exercised in bad ‘sith; (3) tor the sole Intent of prejudtcing or injuring another. (Dart Philippines, Inc, v.Calogcog, 613 Phil. 224 [2099)) ‘The Court, expounding on the concept of bad faith under Article 19, hel Malice or bad faith is at the core of Article 19 of the Civit Cade. Good fatth reters to the state of mind which is manifested by the acts of the individual concerned, It consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of another. It is presumed. Thus, he who alleges bad faith has the duty to prove the same. Uad faith does not simply connote bad judgment or simple negligence; it involves a dishonest purpose or same moral abloquy and conscious doing of a wrong, a breach of known duty tue to some motives of interest or il will that partakes of the nature of fraud. Malice connotes il ‘will or spite and speaks not in response to duty. it implies an intention to do ulterior and unjustifiable harm. Malice is bad falth or bad motive. FAMILY LAW Presumption of marriage. In Luis Uy v, Sps. Mendoza, G.R. No. 206220, Avgust 19, 2015, Carpio, J, the SC once again had the gcéasion to suy that theres a presumption established in our Rules “that a man and wontan deporting temselves.as husband and wife have entered into a lawiul contract of marriage. (Section 3{aa). Rule 131, Riles of Court). Semper praesumitur pro matrimonio - Always presume marriage. (Delgado vda. de De la Rosa v. Helrs of Marsiana Rustia vda. de Damian, 516 Phil. 130 {2006]}. However, this presumption may be contiadicted by a party and oversome by other evidence, “Marriage may be proven by any competent and relevant evidence. in Pugeda v, Trias, 114 Phil. 781 (1962), it was.held that testimony by one of the parties to the marriage, or by one of the witnesses to the marriage, as well as the person who officiated at the solemnization of the marriage, has been held to be admissible to prove the fact of marriage. Documentary evidence may also be shown. in Villanueva v. Court of Appeals, G.R. No. 84464, june 2 1991, 198 SCRA 472, it was held that the best documentary evidence of a marriage is the marriage contract itself: Under Act No. 3613 or the Marriage Law of 1929, as aniended by Commonwealth Act No. 114, which is applicable to the present case being the marriage law in effect at the time Uy and Rosca cohabited, the ‘marriage certificate, where the contracting parties state that they take each other as husband and wile, must be furnished by the person solemnizing the marriage to (1) either of the contracting parties, and (2) the clerk of the Manicipal Court of Manila or,the municipal secretary of the municipality where the marriage was AABRC2O17,SCD2015-2016 in Civil Law/revised with insertions /consolidzted-revised /EVSA cryssolemnized. The third copy of the marriage contract, the marriage license and the affidavit of the interested party regarding the solemnization of the marriage other than those mentioned in Section 5 of the same Act ‘shall be kept by the official, priest, or minister who solemnized the marriage. Here, Uy was not able to present any copy of the marriage certificate which he could have sourced from his own personal records, the solemnizing officer, or the municipal office where the marriage allegedly took place. Ever the findings of the RTC revealed that Uy did not show a single relevant evidence that he was actually married to Rosca. On the contrary, the documents Uy submitted showed that he and Rosca were not legally married to each other. Divorce obtained abroad between a foreigner and a Filipino; effect. In Medina v. Koike, et al, C.R. No. 215723, july 27, 2016, Perlas-Bernabe, J, a Filipino citizen got married to a Japanesse but a divorce decree was obtained in Japan before the Mayor of Ichinomlya City, Aichi Prefecture, Japan as shown by a Divorce Certificate and the same was duly recorded in the Official Family Register of Koike. There was a petition for judicial recognition of the foreign divorce and declaration of capacity to remarry pursuant to Article 26[2} of the Family Code. ‘At the hearing, no one appeared to oppose the petition. On the other hand, Doreen presented several foreign documents, namely, "Certificate of Receiving/ Certificate of Acceptance of Divorce” and "Family Register of Michiyuki Koike" both issued by the Mayor of Ichinomiya City and duly authenticated by the Consul of the Republic of the Philippines for Osaka, Japan. She also presented a certified machine copy of a document entitled "Divorce Certificate” issued by the Consul for the Amuassador of japan in Manila that was fauthenticated by the Department of the Foreign AVfairs, as well as a Certification issued by, the Clty: Civil Registry Office in Manila that the original of said divorce certificate was filed and recorded in the said Office. In addition, photocopies of the Civil Code of Japan and their corresponding English translation, as well as two (2) books entitled “The Civil Code of japan 2000" and “The Civil Code of Japan 2009" wete likewise submitted as proof of the existence of fapan’s law on divorce. Ruling on the petition, the SC : Held: Philippine law does not provide for absolute divorce: hence, our courts ¢annat grant it, However, Article 26 of the Family Code - which addresses foreign marriages or mixed marriages Involving a Filipino and a foreigner - allows @ Filipino spouse to contract a subsequent imiafriage in case the divorce is validly ‘obtained abroad by an alien spouse capacitating him or her to remarry. The provision rea Art. 26. All marriages solemnized outside the Philippines in-accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38, Where a marriage between a Filipino citizén and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad-by the alten spouse capacitating him or her to remarry, the Filipino spouse shall. tikewise have capacity to remarry under Philippine law, The law confers jurisdiction on Philippine courts to extend the effect of a foreign divorce decree to a Filipino spouse without undergoing tial'to determine the validity of the dissolution of the marriage. (Fujikl v. Marinay, 712 Phil. 524 (2013]) mt {In Gorpuz v. Sta. Tomas, 642'Phil. 420-{2010); the Court had the occasion to rulé that: ‘The starting point in-any recognition of a foreign divorce judgment is the acknowledgment that our courts donot take judicial fotice of foreign judgments and laws, ‘no sovereign is bound to give effect within its dominion to a judgment rendered by a tribunal of another country."/This means that the foreign judgment and its authenticity must be proven as facts under our rules on evidence, together with the alien's applicable national law to show the effect of the judgment on the alien hiinself or herself. The recognitfonthay be made in an action instituted specifically for the purpose or in another action wheré'a party invokes the foreign decree as an integral aspect of his claim or defense. : oF £2 hits, in Gateia v. Recio, 418 Phil. 723 (2001), it was pointed out that in order-for a divorce obtained atiréad By the alien spouse to be recognized in our jurisdiction, it must be shown that the divorce decree is the national law of the foreigner. Both the divorce decree and the governing personal law »who obtained the divorce must be proven. Since our courts do not take judicial notice of d judgment, our law on evidence requires that both the divorce decree and the national law of the alien muste alleged and proven like any other fact. If there is no marriage license, the marriage is void; exception. In Salgado v. Anson, G.R. No. 204494, July 27, 2016, Reyes, J, once again the SC ruled that a marriage without a license is void. In this case, the marriage contract of Severina and Luis revealed that no marriage lcense was indlated therein It also appeared that no marriage license was exhibited to the folemnixing officer. Being a public document, the marriage contract is not only 2 prima facie proof of marriage, but is also 4 prima facie evidence ofthe facts stated therein (Section 44, Rule 130 ofthe 1897 Rules of Court) Marriage is of an exceptional character under Article 77 of the Civil Code. 2 JABRC2017.SCO2015-2016 in Civil Law /revised with insertions/consolldated-revised/EVSA/erysArt.77. In ease two persons married in accordance with law desire to ratify their union in conformity with the regulations, rites, or practices of any church, sect, or religion, it shall no fonger be necessary to comply with tive requirements of Chapter 1 of this Title and any ratification made shall merely be considered asa purely religious ceremony. ‘The foregoing provision pertains to a religious ceremony performed with the purpose of ratifving a mariage which was solemnized civilly, In the eyes of the law, the marriage already exists, the subsequent ceremony is undertaken merely to conform to. religious practices. Thus, the parties are exempted from complying with the required issuance of marriage license insofar as the subsequent religious ceremony 1s, concerned, Far this exemption to be applicable, tt is sine qua on that: (1) the parties to the religious ceremony must already be married to each other in accordance with law (civil marriage); and (2) the ratifying ceremony is purely religious in natur Being that the ceremony was the only marriage ceremony between the parties and this was not solemnized pursuant to any ratifying religious rite, practice or regulation but a cvil one officiated by the mayor, this marriage does not fall under the purview of Article 77 of the Civil Code. tt is evident that the win Fequirements of the provision, which are: prior civil marriage between the parties and @ ratifying religious ceremony, were not complied with. There is no prior ceremony to ratify. Thus, this marciage is not of an exceptional.character and 2 marriage license is required for Luis and Severina’s marriage to be valid (Salgado v. Anson, G.R. No. 204494, uly 27, 2016). Marriage of exceptional character. {To be considered void on the ground of absence of a marriage license, the law requires that the absenice of such marriage license must be apparent on the marriage contract, or at the very least, supported by a certification from the local civil registrar that no such marriage license was issued to the parties.” (Aicantara v. Alcantara, 558 Phil. 192 [2007}) Considering that the absence of the marriage license is apparent on the marriage contract itself, with a false statement therein that the marriage is of an exceptional character, and no proof to the contrary was presented, there is no other plausible conclusign other than that the marriage beween Litis and Severina was celebrated without a valid marriage license and is thus, vaid ab initio. In Republic of the Philippines v. Dayot, 573 Phil. 553 (2008), the Court similarly declared that marriage solemanized without a marriage license based on a fabricated claim of exceptional character, is void Un tleu of a marriage license, therein parties to che marriage executed a false affidavit of marital cohabitation. In declaring the marriage voit. che Court rejected the notion that all the formal and essential requisites of marriage were complied with, The Court held that to permit a false affidavit'to take the place of a marriage license isto allow an abject circumvention of the law. It was further explained: We cannot accept the insistence of the Republic that the falsity of the statements in the parties’ affidavit will not aftect the validity of marriage, since all the essential and formal Fequisites were complied with. The-argument deserves scant merit, Patently, it cannot be denied that the marriage between jose and Felisa was celebrated without the formal Fequisite of a-marriage license, Neither did Jose and Felisa meet the explicit legal requirement in Article 76, that they should have lived together as husband and wife for at least five years, so as to be excepted from the requirement of a marriage license. Xx Similarly, we’ are not impressed by the ratiocination of the Republic that as a ‘marriage: under a license is not invalidated by the fact that the license was wrongfully obtained, so must a marriage not be invalidated by-a fabricated statement that the parties have cohabited for atleast five years as required by law. The contrast is flagrant. The former Js swith reference to-af irregularity of the marriage license, and not to the absence of one. Here, there is no marriage license at all. Furchermore, the falsity of the allegation in the sworn affidavit relating to the period of Jose and Felisa's cohabitation, which would have Qualified thelr marriage as an exception to the cequirement for a marriage license, canmiot be -& mere irregularity for it refers to a quintessential fact that the law precisely required to be _Aleposed and attested to by the parties under oath. If the essential matter in the sworn “affidavit is a lie, then itis but a mere scrap of paper, without force and effect. Hence, itis as if there was ao affdavit at al. ‘The Court cannot turn a blind eye to the statements made in the marriage contract because these refer to the absence of a formal requisite of marriage. "Phe parties should not be afforded any excuse to not comply with every single requirement and later use the same missing element as a pre-conceived escape ground to nullify their marriage. There should be no exemption from securing a marriage license unless the circumstances clearly fall within the ambit of the exception." (Nifal v, Bayadog) “The requirement and issuance of marriage license is the State's demonstration of its involvement and participation’ in every ‘marriage, in the maintenance of which the general public is interested. This interest proceeds from the constitutional mandate that the State recognizes (he sanctity of ‘amily lifé and of affording protecuon to the family as a basic ‘autonomous social institution,” Partition agreement is valid. 3 [ABRC2017.5CD2015-2016 in civil Law revised with insertions consolidated-revised /EVSA/crysRelative to the properties they amassed during the period of their cobabitation, Luls and Severina executed a notarized Partition Agreement in November 1980, which divided their properties between them ‘without coure intervention. Luis sought to annul such agreement on the ground that “the separation of Property is not effected by the mere execution of the contract or agreement of the parties, but by the decree of the court approving the same. It, therefore, becomes effective only upon judicial appraval, without which it is void. ‘The SC did not subscribe to the posture of Luis and Held: In Valdes v. RTC, Branch 102, Quezon City, 328 Phil, 1289 [1996], the Court held that "[iJn a void marriage, regardless of the cause thereof, the property relations of the parties during the period of cohabitation is governed by the provisions of Article 14 7 or Article 148, such as the case may be, of the Family Code. Article 147 isa remake of Article 144 of the Civil Code xxx." It provides: Art. 147, When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through thelr work or industry shall be governed by the rules on co-ownership. In the absence of proof to the contrary, properties, acquired while they lived together shall be presumed to have been obtained by their ioint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereot ifthe former's efforts consisted in the care and maintenance of the family and of the household. Neither party can encumber or dispose by acts inter vivos of his or her share in the Property acquired during cohabitation and owned in common, without theednsent of the ‘other, until after the termination of their cohabitation. { When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be forfeited in favor of their common children. In ‘case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. In.the absence of descendants, such share shall belong to the innocent party. In alf-eases, the forfeiture shall take place upon termination of the cohabitation, C As there is no showing that Luis and Severina were incapléitated to marry each other at the time of their cohabitation and considering that their marriage is void from the beginning for lack of a valid marriage license, Article 144 of the Civil Code, in relation to Article 147 of the Family Code, are the pertinent provisions of law governing their property relations. Article,147 of the Family Code “applies to union of parties who are legally capacitated and not barred by any impediment to contract matriage, but whose marriage is nonetheless void for other reasons, like absettce of a-marriage license.” "Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal co- ownership. Any property acquired dufifig thé unlon is prima facie presumed to have been obtained through their joint efforts, A party who did not participate in the acquisition of the property shall still be considered as. having contributed thereto jointly if'said party's ‘efforts consisted in the care and maintenance of the family household." Accordingly, the provisions on coownership under the Civil Code shall apply in the partition of the properties co-owned by Lulsiand-Severina. itis stated under Article 1079 of the Civil Code that “partition, in general, is the separation, division-and assignment of a thing held in common among those to whom it may belong. The thing itself may be divided, or its value." As to how partition may be validly done, Article 496 of the Civil Code'is precise that "partition may be made by agreement hetween the parties or by judicial proceedings xx X*The law does not impose a judicial approval for che agreement to be valid. Hence, even ‘wathout the same, the'partition was validly done by Luls and Severina through the execution of the Partition Agfeeman. 3, © Pe solemmization of a marriage without prior license is a clear violation of the law and would lead ofcould be used, atleast, for the perpetration of fraud against innocent and unyrary parties, which was one of the evils that-the,law sought to prevent by making a prior license a prerequisite for a valid marriage. The ec age’as a sacred institution requires not just the defense of a true and genuine union but lid one as well (Republic of the Philippines v, Dayot) PSYCHOLOGICAL INCAPACITY Bringing her children to mahjong sessions exposed them to culture of gambling; psychological incapacitated. ‘This case originated as an action to declare a marriage void on the ground of psychological incapacity due to the act of the woman of continuously bringing her children to mahjong sessions. It was dismissed, but the SC reconsidered its decision ruling that bringing her children to her mah-jang sessions exposed them to culture of gambling that erode their moral fiber, hence, she is suffering from psychological incapacity. In Valerio Kalaw v, Ma. Elena Fernandez, G.R, No. 166357, January 14, 2015, Bersamin, J, the SC in its original decision dated September 19, 2011 (657 SCRA 822) dismissed the complaint for deciaration of 4 |ABRCZOL7.SCD2015-2016 in Civil Law/revised with insertions /consolidated-revised /EVSA/erysnullity of the marriage of the parties.on the ground of psychological incapacity alleging that she always brought her children to mahjong sessions. A lair assessment of the facts would show that respondent was not totally remiss and incapable of appreciating and performing her marital and parental duties. Not once did the children state that they were neglected by their mother. i the decision of September 19, 2013, the Court further declared as follows: Respondent admittedly played mahjong, but it was not proven that she engaged in | mahjong so frequently that she neglected her duties as a mother and a wite. Abandonment by spouse of her family does not make out a case of psychological incapacity. The basic issue in Nicolas Matudan:v. Republic, et al, G.R. No. 203284, November 14, 2016, Del Castillo, jis whether a spouse is suffering from psychological incapacity if she abandons the family. This is especially so that the husbant admitted that the reason why he filed the complaint was because the wife abandoned them. In ruling against the complaint, the Supreme Court said that while le complained that the wife lacked a sense of guilt and was invalved in “activities defying social and moral ethics.” and that she was, among others, irrational, responsible, immature, and self-centered, ie nonetheless falled to sufficiently and particularly elaborate on these allegations, particularly the degree of the wife's viaimed irresponsibility, immaturity, oF selfishness. This is compounded by the fact that petitioner contradicted his own claims by {testifying that he and Marilyn were happily manied and never had a fight, which is why they begot four children; and the only reason for his fling of the complaint was the wife's complete abendonment of the mactiage and family when she left to wark abroad. $ Psychological incapacity, as a ground to nullify a marriage under Article 36 of the Family Code, should refer to no less than a mental- nat merely physical ~ incapacity that causes a party to be truly incognitive of the basic marital covenants that concomitantly must bbe assumed aud discharged by the parties to the marriage which, as so expressed in Article 68 of the Family Code, among others, include their mutual obligations to live together, observe love, respect and fidelity and render help and support. There is hardly any doubt that the intendment of the law has been to confine the meaning of ‘sychological ‘neapacity’ to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage (Republic v. De Gracia, 726 Phil, 502, 509 (2014) ‘The landmark case of Santas v. Court of Appeais, 310 Phil, 21 [1995], taught us that psychological incapacity under Article 36 of the Family Code must be characterized by (a) gravity, (b) juridical antecedence, and {c) incurability. Ths, the incapacity "must be grave or serious such that the party would be incapable of carrying out the ordinary duties required in marriage; it must be rooted in the history ofthe party antedauing the marriage, although the overt manifestations may emerge only after marriage; and it must be incurable or even if it were otherwise, the cure wauld be beyond the means of the party involved.“In this connection, the burden of proving psycholagical incapacity is on the petitioner, pursuant to Republic v. Court of Appeals, 338 Phil. 664, 676 [1997], or the Motina case The foregoing pronouncements in Santos and Molina have remained ax the precedential guides in deciding cases grounded on the psychological incapacity of a spouse. But the Court has declared the existence or absence of the psychological incapacity based strictly on the facts of each case and not on @ priori assumptions, predilec:ions; or Reneralizations. Indeed, the incapacity. should be established by the totality of evidence Presented during trial, making it incumbent upon tie petitioner to sufficiently prove the existence of the psychological incapacity (Republi¢ v. Court of Appeals, 698 Phil. 257, 267 [2022)). Allegation of irreconcilable differences and conflicting personalities; no psychological incapacity. “An Republic v. Danilo Pangasinan, G.R. No, 214077, August 10, 2016, Velasco, J, the SC once again ruled that lrrsconeilable differences and conflicting personalities of a spouse do not make up a good cuse for Psychdlagical incapacity, reversing lower courts which granted the petition Jn reversing the decisions of the lower courts, the Supreme Court Held: “Psychological incapacity,” as a ground to nullify marriage under Article 36 of the Fatally Code, should refer to no tess than a mental-not merely physical-incapacity that causes a party to be truly tacognitive ofthe basic marital Gevenants that concomitantly must be assumed and discharged by the parties to the marriage which, as so expressed in Article 68 of the Code, among others, include their mutual obligations te live together, observe love, respect and fidelity and tender help and support: (Republic v. De Gracia, G8. No 371587, February 12,2014) As declared by the Court in Santas v. Court of Appeals, G.R. No. 112019, january 4, 1995, 240 SCRA 20, Psychological incapacity must be characterized by (a) gravity, (b) juridical antecedence, and ( c) incurability Thereaher, in Molina, the Court laid down more definitive guidelines in the disposition af psychological incapacity cases, to wit: | Q). Burden of proof to show the nullity of the marriage belongs to the plaintift. 5 FABRCZO17-$CO2018-2016 tn Civik Law revised with insertions /consolidated-revised/EVSA/crys(2) The root cause of the psychological incapacity must be: (a) medically or clinically identified, (b) alleged in the complaint. (c) slfiiently proven by experts and (d) clearly explained In the ecision, (3) The incapacity must be proven to be existing at “the time of the celebration’ of the marriage. (4) Such incapacity must also be shown to be medically or clinically permanent or incurable. (5} Such illness must be grave enough to bring about the aisability of. the party to assume the essential obligations of marriage. (6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family Code as regards the husband and wife, as well as Articles 220, 221 and 225 of the same Code in regard to parents and thelr children, Such non-complied marital obligation(s) must also be stated in the petition, proven by evidence and included in the text of the decision. (7) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in the Philippines, while not controlling or decisive, should be given great respect by our courts. (8) The trial court must arder the prosecuting attorney or fiscal and the Solicitor General to appear ‘as counsel for the state. No decision shall be handed down unless the Solicitor General Issues a certification, which will be quoted in the decision, briefly’ stating therein his reasons for-his agreement or opposition, as the case may be, to the petition. Ss in sum, a person's psychological incapacity to comply with his or her essential obligations, in marriage must be rooted on a medically or clinically identiftable grave iliness that is incurable and shown to have existed at the time of marriage, although the manifestations thereof may only be evidentafter marriage. Using the abovementioned standards in the present case, the Court found that the totality of evidence presented is insufficient to establish Josephine and Daniie's psychological incapacity. Psychological incapacity; illness must be a downright incapacity or inability to,perform duties to the marriage bond. In Rep. v Reghis Romero I, al, G.R. No. 209180; Romero v. Romero lt G.R: No. 209253, February 24, 2016, Perlas-Bernabe, J, the RTC granted the petition and declared the marriage between Reghis and Olivia hull and void ab initio on the ground of psychological incapacity. It relied.on the findings and testimony of Dr. Basilio, holding that Reghis suffered from a disorder that rendered him ufable to perform the obligations of love, respect and fidelity towards Olivia as it gave him a strong absessioa to Succeed in his career, to the exclusion of his responsibilities asa father and husband. it also concurred with Dr. Basilio's observation that Reghis is still deeply attached to his parents and sibiings such that he pursues his business ventures for their doenefit. Likewise, it agreed that Reghis’ behavioral disorder existed even before bis marriage or even his adolescent years and that the same is incurable. It was affirmed by the CA on appeal. in reversing the lower courts, the SC » Held: The policy of the Constitution js to protect and strengthen the family as the basic autonomous social institution, and marriage as the foundation af-the family, As such, the Constitution decrees marriage as legally inviolable and protects It from dissolution. at the whim of the parties. (Navales v. Navales. 578 Phil. 826 [2008}) Psychological incapacity, as a ground to.nulify a niarriage under Articie 36 ofthe Family Code, should refer to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability 19 give meaning and significance tothe marriage, (Santos v, CA, 310 Phil. 21 [1995]) It must be a malady that isso grave and permanent as-to deprive one of awareness of the duties and responsibilities of the ‘matrimonial bond one is about to assume. (Navales v. Navales) Verily, all people fay have certain quirks and idiosyncrasies, or isolated traits associated with certain persotality disorders and there is hardly any doubt that the intention of the law has been to confine the meaning of osychdtogicalintéapacity to the most serious cases. Thus, to warrant the declaration of nullity ‘of marriage, the psychologleabincapactty must: (a) be grave or serious such that the party would be incapable of carrying cut the'6rdinary duties required in a marriage; (6) have juridical antecedence, (, it must be rooted i the Kstory-of she paity antedating the marriage, although the overt manifestations may emerge Gonly after the marriage’ and (c) be incurable, or even if it were otherwise, the cure would be beyond the means af fhe party involved. (Santos v. CA) So an Republic v. CA, 335 Phil. 664 [1997], the Court laid down definitive guidelines on the interpretation and applieation’af Article 36 of the Family Code. Among others, it clarified that the lliness must be grave enough to bring aboutthe incapacity or inability of the party to assume the essential obligations of marriage Such that “ill jehafacteriological peculiarities, mood changes. occasional emotional outbursts” cannot be accepted as F608 causes. The iliness must be shown as downright incapacity or inability, nota refsal, neglect or difficulty, mach less il will. In other words, there is a natal or supervening disabling factor in the person, an adverse integral element in the personality structure that effectively incapacitates the person from really accepting and thereby complying with the obligations essential to marriage. ‘That he married Olivia not out of love. but aut of reverence for the lattér’s parents, does not mean, that Reghis is psychologically incapacitated in the context of Article 36 of the Family Code. In Republic ¥ ‘Albios, GR. No. 198780, October 16, 2013, 707 SCRA 584, the Court held that: Motives for entering into a marriage are varied and complex. The State does not and cannot dictate on the kind oflife that a couple chooses to lead. Any attempt to regulate their lifestyle would go into the realm of thelr right to privacy and would raise serious constitutional questions. The right to marital privacy allows married couples to structure 6 |AURCZ017.SCD2015-2016 in Civil Law/revised with insertions consolidated-revised/EVSA/erystheir marriages in almost any way they see fit, to live together or live apart, to have children or ao children, to love ove another or not, and so on. Thus, marriages entered into for other purposes, limited or otherwise,:such as convenience, companionship, money, status, and title, provided that they comply with all the legal requisites, are equally valid, Love, though the ideal consideration in a marriage contract, is not the only valid cause for marriage, Other considerations, not precluded by law, may validly support a marriage. Cohabitation for 5 years; a requisite to be exempted from marriage license requirement. In Santiogo «: People, G.R. No. 200233, July 15. 2015, Sereno, C), Santos & Gelang were previously married, but Santos gat married to Santiago during the existence of the first marriage. Charged with the crime of bigamy, Santiago contended that she thought that Santos was a widower and that she did not know about the first marriage of Santos. They. married under Article 34, Family Code, an admission that they have cohabited long before their marriage which was proven to be false Is the marriage Valid? Why? Held: No. itis clear that the marriage between petitioner and Santos took place without a marriage license, ‘The absence of this requirement is purportedly explained in their Certificate of Marriage, which revealed that their unton was celebrated under Article 34 of the Family Code. The provision reads as follows: No license shall be necessary for the marriage of a man and a woman who have lived together as husband and wife for at least five years and without any legal impediment to marry each other. The contracting parties shail state the foregoing facts in an affidavit before any person authorized by law to administer oaths. The solemnizing officer shall also state under oath that he ascertained the qualifications of the contracting parties are found no legal impediment to the marriage. Therefore, their marriage would have been exempted from a marriage license had! they cobabited exclusively as husband and wife for at least five vears before their marriage. (Republic . Dayot, 573 Phil. 553 [2008}) However, evidence showed that they never cohabited, as she was residing in the house of her in-laws, and her children from her previous marriage disliked him, Petitioner anid Santos had only known each other for only less than four years. Thus, it follows that the two of them could not have cohabited for at least five years prior to their marriage. No affidavit of cohabitatios ‘The partners did not submit an affidavit of cohabitation as required by Article 34 of the Family Code, They lied before the solemnizing officer and misrepresented that they had actually cohabited for atleast five years before they married each other. Unfortunately, subsequent to this lie was the issuance of the Certificate of Macriage, in which the soiemnizing officer stated under oath that no marriage license was necessary, because the marriage was solemnized under Articie 34 of the Family Code: No less than the present Constitution provides that "marriage, as a inviolable social inst:tulion, is the foundation ofthe family and shall be protected by the State" (Constitution, Article XV, Sec. 2) 1t must be safeguarded from the whims and caprices of the contracting parties. 1a. keeping therefore with this fundamental policy, the Court affirms the conviction of petitioner for bigamy Striet standards in declaration of presumptive death once again reiterated, In Republic v, Joss B, Sarefiogon, 2, GR. No. 199194, February 10, 2016, Del Castili, |, there was a petition for declaration of preentaptive death of a spouse. in his testimony, he said that he first met Netchie in Clarin, Misamis Occidental in 1991. They later became sweethearts and on August 10, 1996, they got married in civil rites at the Manila City Hall. However, they lived together as husband and wife for a month only because he left to work as a seaman witile Netchie went to Hongkong as a domestic helper. For three months, he-did not recelve any communication from Netchie. He likewise had no idea about her whereabouts. While stil abroad, he tried to contact Netchie’s parents, but failed, as the latter had allegedly left Clarin, Misamis Occidental He returned home after his coniract expired. He then inquired from Netchie's relatives and Iriends about her whereabouts, but they also did not know where she was. Because of these, he had to presume that his wife Netchie was already dead. He filed the Petition before the RTC so he could contract another marriage pursuant ta Article 41 of the Family Code. ‘The RTC declared the spouse presumptively death having disappeared for more than (our (4) years: The OSG filed a petition for certiorari under Rule 65 which the CA held as’ an error saying that misappreciation of evidence could not translate into excess or lack of jurisdiction amounting to lack of furisdietion, Reversing the CA, the SC Held: In the 2005 case of Republic v. Bermudez-Lerino, 489 Phil. 761 (2005), it was held that the RTCs Decision on a Petition for declaration of presumptive death pursuant to Article 41 of the Family Code is immediately final and executory. Thus, the CA has no jurisdiction to entertain a notice of appeal pertaining to such judgment. The correct remedy to challenge the RTC Decision was to institute a petition or certiorari under Rule 65, and not a petition for review under Rule 45, (Republic v. Granada, 687 Phil. 403 [2012), citing Republic v. Bermudez-Bermudez-Lorino; See: Rep. v. Cantor; Republic v. Narceda, G.R. No, 182760, April 10. 2013, 695 SCRA 483) 7 \ABRC2017 SCOLOLS-2016 in Civil Law/revised with insertions consolldated-revised/EVSA/crysThe “well-founded belief" requisite under Article 41 of the Family Code is complied with only upon a showing that sincere honest-to-goodness efforts had indeed been made to ascertain whether the absent Spouse is still alive or is already dead. Article 41 of the Family Code pertinently provides that: Art, 41. A marriage contracted by any person during the subsistence of.a previous marriage shall be null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for four consecutive years and the spouise present had @ ‘well-founded belief that the absent spouse was already dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient. For the purpose of contracting the subsequent marriage under. the preceding paragraph the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse. (83a) tn Republi Cantor, it was further held that Before a judicial declaration of presumptive death can be obtained, it must be shown that the prior spouse had been absent for four consecutive years and the present spouse had a well-founded belief that the prior spouse was already dead, Under Article 41 of the Family Code, there are four essential requisites for the declaration of presumptive:death: £. That the absent spouse has been missing for four consecutive years, or two consecutive years ifthe disappearance occurred where there is danger of death under the circumstances iid doven in Article 391°9f the Cwvil Code; 2. That the present spouse wishes to remarry; % 3. That the present spouse has a well-founded belief that the absentee is dead; and, 4. That the present spouse files a summary proceeding for the declaration of presumptive death of the absentee. cal ‘With respect to the third element the holding is that the - inere absence of the spouse (even for such period required by the law), or lack of news that such absentee is stil alive, failure to communicate [by the absentee spouse or invocacion of the) general presumption on absence tinder the Civil Code [would] not suffice. This conclusion proceeds from the premise that-Article 41 of the Family Code places upon the present spouse the burden of proving the-additional and more stringent requirement of “well-founded belie” which can_ofly be-discharged' upon a due showing of proper and hhonest-to- goodness inquiries and efforts to ascertain not only the absent spouse's whereabouts but, more importahtly, that the absent spouse is [either] stil alive or ‘s already dead : ‘The law did pot define’what is meant by “well-founded belief It depends upon the circumstances of each-particular case. Its determination, so to speak, remains on 2 case-to- case basis. To be able to.comply with this requirement, the present spouse must prove that his/her belief was the result of diligent and reasonable efforts and inquiries to locate the absent spouse’and that based on these efforts and inquiries, he/she believes that under the ‘Cibusiatgnces, thebgent spouse is slready dead. It requires exertion of acive effort (not a mere passive one). Effect of mere passive effortsto locate spouse. ‘4 sf the case-at bar, the RTC ruled that Jose had “well-founded belief that Netchie was already dead butt there were passive efforts to locate the absent spouse. thvthe ease of Republic v. Cantor, the Court held that the present spouse (Maria Fe Espinosa Cantor) merely conducteda “passive search” because she simply made unsubstantiated inquiries from her in-laws, from neighbors and friends. For that reason, this Court stressed that the degree of diligence and reasonable search requifed by law is not met (1) when there is failure to present the persons from whom the present spouse allegedly made inquiries especially the absent spouse's relatives, neighbors, and friends, (2) when there is failure to report the missing spouse's purported disappearance or death to the police or mass media, and (3) when the present spouse's evidence might or would only show that the absent spouse chose not to communicate, but not necessarily that the latter was indeed dead, The rationale for this palpably stringent or rigorous requirement has been marked out thus: ‘x [T]he Court, fully aware of the possible collusion of spouses in nullifying their marriage, has consistently applied the “strict standard” approach. This is to ensure that a petition for declaration of presumptive death under Article 41 of the Family Code is not used 3s a tool to conveniently circumvent the laws. Courts should never allow procedural {8 |ABRC2O17.SCD2015-2016 in Civil Law,/revised with insertions/consolidated-revised/EVSA/crysshortcuts and should ensure that the stricter standard required by the Family Code is met. x ‘The application of this stricter standard becomes even more imperative it we consider. the State's policy to protect ind strengthen the institution of marriage. Since ‘marriage serves as the family’s foundation and since it is the state's policy to protect and strengthen the family as a basic social institution, marriage should not be permitted to be dissolved at the whim of the parties. xx xxx [i]t has not escaped this Court's attention that the strict standard required in petitions for declaration of presumptive death has not been fully observed by the lower courts. We need only to cite the instances when this Court, on review, has consistently ruled ‘on the sanctity of marriage and reiterated that anything less than the use of the striet standard necessitates a denial. To rectify this situation, lower courts are now expressly put ‘on notice of the strict standard this Court requires in cases under Article 41 of the Family Code.” 4f anything, Jose's pathetically anemic efforts to locate the missing Netchie are notches below the required degree of stringent “iligence prescribed by jurisprudence. For, aside from his bare claims that he hag inquired from alleged friends and relatives as to Netehie's whereabouts, Jose did not eal to the witness stand specific individuals or persons whom he allegedly saw or met in the course of his search or quest for the allegedly missing Netchie. Neither did he prove that he sought the assistance of the pertinent government agencies as well as the media..Nor did he show that he undertook a thorough, determined and uaflagging search for Netchic, say for at least two years (and what those years were), and naming the particular piaces, provinces, cities, barangays‘or municipalities that he visited, or went to, and identifying the specific persons he interviewed or talked tain the course of his search (Rep. v, Edna Orcelino-Villanueva, GR. No. 210925, july 25, 2015, Mendoxa, f; Republic v. Cantor, GR, No, 184621, December 10, 2013; Rep. v. CA. S13-Phil. 391 {2005)) Void marriage: property relationsitip is governed by the rule on co-ownership. 'n Virginia Ocampo v, Deagracio Ocampa, G.R. No. 198908, August 3, 2015, Peralta, J, Virginia filed a complaint for declaration of nullity of her marriage with her husband on the ground of psychological incapacity. The trial court declared the marriage void, Since no appeal was made, the judgment became final and executory, The trial court ordered Use parties to submit a project of partition of their prperties, but lor their fallure to do so, the court set the case for hearing for them to adduce evidence in support of their respective stand. Later on, the court issued an.ordered declaring the properties as belonging to them on a 50- $0 sharing which Virginia appealed. The CA denied her appealed; hence a petition for review was Hed by the husband questioning whether he should be deprived of his share in the conjugal partnership of gains by reason of bad faith and psychological incapacity Finding lack of merit in the petition the SC Held: While Virginia and Deogracio tied the marital knot on {anuary 16, 1978, itis still the Family Cade Provisions on conjugal partnerships, however, which should govern the property relations betwen Deogracio and Virginia even ifthey were married before the effectivity cf the Family Code. Article, 105 of the Family Code explizitly mandates that the Family Code shall apply to conjugal Partnerships established before the Family Code without prejudice to vested rights already acquired under the Civil Code or other laws. Thus, under the Family Code if the properties are acquired during the mariage, the presumption is that they are conjugal. Hence, the burden of proof is on the party claiming that they are ‘ot conjugal. This is counter-balanced by the requirement that the properties must first be proven to have been acquired during the marriage before they are presumed conjugal. (Villanueva v. Court of Appeals, 471 Phit. 394,411 (2004). : ‘he applicable law, however, in so far’ as the liquidation of the conjugal partnership assets and Habilitys8 concerned, s Article 129 of the Family Code in relation to Article 147 of the Family Code. =, ita void marriage, as in those declared vold under Article 36 of the Family Code, the property relations of the parties during the period of cohabitation is governed either by Article 147 of Article 148 ul the Family Code, Article 147 of the Family Code applies to union of parties who are legally capacitated and not barred by.any impediment to contract marriage, but whose marriage is nonetheless void. Article 147 of the Family Code: When Art. 147, F.C. applies, This particular kind of co-ownership applies when a. man and a woman, sutfering no illegal impediment to marry. each other, exclusively live together as husband and wife under a void marriage or without the benefit of marriage. It is.clear, therefore, that for Article 147 to operate, the man and the woman. (1) must be capacitated to marry each other; (2) live exclusively with each other as husband and wife; and (3) their union is without the benefit of marriage or their marriage is void. The term "capacitated” in the first aragraph of the provision pertains to the legal capacity of a party to contract marriage. Any impediment to marry bas not been, shown to have existed on the part of either Virginia or Deogracio, They lived exclusively ‘with euch other as husband and wile. However, their marriage was found to be void under Article 36 of the Family Code off the ground of Psychological incapacity. (See Marietta N. Barrido v. Leonardo V. Nonato, C.R. No. 176492, Octuber 20, 2014) ‘9 IABRC2017.SCO2015-2016 in Civil Law revised with insertions/consolidated-revised /EVSA crysFrom the foregoing, property acquired by both spouses throug their work and Industry should, therefore, be governed by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. A party who dia not participate in the acquisition of the property shall be considered as having contributed to the same jointly if said party's efforts consisted in the care and maintenance of the family household. Efforts in the care and maintenance of the family and household are regarded as contributions to the acquisition of common property by one who has no salary or income or work or industry. (Barrido v. Nenato, G.R. No. 176492, October 20, 2014). Co-ownership ensues after death of a spouse; sale by one is valid over his Interest. In Melicio Domingo v. Sps. Molina, G.R, No. 200274, April 20, 2016, Brion, J, Anastacio was married to Flora. During the marriage, he obtained a loan from the Spouses Molina, and after Flora's death, he sold his interest over their conjugal property to the creditors. His son filed an action to annul te sale and to recover ownership contending that he could not have sold such portion of the conjugal property without the consent of Flora who already died. The lower courts dismissed the complaint because what Anastacio sold was his share of the property. The basic issue before the SC was the validity of the sale without the consent of Flora. In dismissing the petition, the SC Held: The sale is valid As eatly as Taningco v. Register of Deeds of Lagurra, GR. No. L-15242, June 29, 1962, 5 SCRA 381, 1 was held that the properties ofa dissolved conjugal partnership fall under the regime of eo-ownérship among the surviving spouse and the heirs of the deceased spouse unti final liquidation and partition, The surviving spouse, however, has an actual and vested one-half undivided share of the properties which oes not carisist of determinste and segregated properties until liquidation and partition ofthe conjugal partnership, The spouses Molina would be a trustee for the benefit of the co-heirs of Anastacio in respect of any portion that niight belong to the co-helrs after liquidation and partition. ln Heirs of Protacio Go, Sr. V. Servacio, it was said: xxx [I}fit turns out that the property alienated or mortgaged really would pertain to the share of the surviving spouse, then said transaction is valid. iit tiras out that there really would be, after liquidation, no more conjugal assets then the whole transaction is nuill and void. But if it turns out that half of the property thus alienated or mortgaged belongs to the husband as his share in the conjugal partnership, and half stotild go, to the estate of the wife, then that corresponding to the husband is valid, and that corresponding to the other is not. Since all these can be determined only at the time the liquidation is over, it follows logically that a disposal made by the surviving spouse is Ot void ab initio. Thus, it has been, held thar the sale of conjugal properties-cannot be made by the surviving spouse without the legal requirements. The sale is void as to the share &fthe deceased spouse (except of course as to tha: portion of the husband's share inherited by her as the surviving spouse), The buyers of the property that could not be validly sold become trustees of said portion for the benefit oi the husband's other heirs, the cestui que trust ent. Said heirs shall not be barred by prescription or by laches. Melecia's recourse as a co-owner. of the conjugal properties, including the subject property, is an action for partition under Rule 69 6fthe Revised Rules of Court. As held in the case of Heirs of Protacio Go, Sr. “it is now settled that the appropriate réeourse of e6-owners in cases where their consent were not Seciired in a sale of the entire property as Well as in @ sale rierely of the undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court.” Requirement of liquidation after death of spouse. ‘The conjugal partnership of Anastacio and Flora was dissolved when Flora died in 1968, pursuant io Article 175 (1) of the Civil Code (now Article 126 (1) of the Family Code). ‘ove. cArticle130-0F the Family Code requires the liquidation of the conjugal partnerthip upon death of a Sgdtse.and prohibits any disposition or encumbrance of the conjugal property prior to the conjugal Hiquidation, to quote: Article 130. Upon the termination of the marriage by death, tie conjuxgal partnership property shall be liquidated in the same proceeding for the séttlement of estate ofthe deceased. 5 sMfnd judicial settlement proceeding is instituted, the surviving spouse shall the C@njugal partnership property either judicially or extrajudicially within one year from the death of the deceased spouse. If upon the lapse of the six month period no liquidation is made, any disposition or encumbrance involving the conjugal partnership property of the terminated marriage shall be: void. x x x (emphases supplied) While Article 130 of the Family Code provides that any disposition involving the conjugal! property without prior liquidation of the partnership shall be void, this rule does not apply since the provisions of the Family Code shall be “without prejudice to vested rights already acquired in accordance with the Civil Code or other laws." 10 |ABRC2017 $CD2015-2016 in Civil Law /revised with insertions/consolidated-revised/EVSA/erysFamily home is exempted from forced sale, etc. in Spx. Eulagto v, Paterno Bell, Sr, et al, G.R. No. 186322, uly 8, 2015, Sereno, |, the Spouses Bell sold a residential house and lot for PLM to Sps. Eulogio in 1995 without the consent of their children, hence, the Jatter fled @ complaint for annulment of documents, reconveyance, quieting of title and damages agains\ the Sps. Eulogio, The trial court rendered a judgment declaring the sale void, but at the sarae time declared the same as an equitable mortgage which cannot bind the children due to lack af consent. Both parties’ appealed to the CA which affirmed the judgment of the trial court and which became final and executory. A writ of execution was issued by the RTC but which was enjoined by the CA considering that there was a declaration that the property was a family home. The basis of the RTC in isswing the writ of execution was that the present value of the family home has exceeded the statutory limit. In enjoining the sale, the CA ruled that What is determinative of its exemption is its value at the time ofits constitution and not the current/present value, Ruling on the issue of whether the family home may be sold oa execution under Art, 160 of the Faraily Code, thes Held: Unquestionably, the family home is exempt from execution. (Article 153 of the Family Code), The family home is a real right that is gratuitous, inalienable and free from attachment. (Taneo v. Court of Appeals, 363 Phil. 652 [1999]). The great controlling purpose and policy of the Coustitution is the protection or the preservation of the homestead - the dwelling place. A houseless, homeless population Is a burden upon the energy, dustry, and morals of the community to which it belongs. No greater calamity, not tainted with crime, can befall a family than to be expelled from the roof under which it has beew gathered and sheltered. (Gomez v. Gealone. G.R. No. 58281, 13 November 1991, 203 SCRA 474, citing Young v. Olivarez, 41 Phil 391, 395 [1921]). The fanvily home cannot be seized by creditors except in special cases. (CLS. Exemption $26, at 44 [1943)}, The nature and character of the property that debtors may claim to be exempl, however, ae determined by the exemption statute, The exemption is limited to the particular kind of property or the specific articles prescribed by the statute, the exemption cannot exceed the statutory limit. Articles 155 and 160 of the Family Code specify the exceptions mentioned in Article 1513, 1 wit ARTICLE 155, The family home shall be exempt from execution, farced sale or attachment except (2) For nonpayment of taxes; (2) For debts incurred prior to the constitution of the family home: (3) For debts secured by mortgages on the. premises before or after such constitution; ane (4) For debts due to laborers, mechanics, architects, builders, material men and others who have rendered service or furnished material for the construction af the building ARTICLE 160. When a creditor whose claims Is not amtong those mentioned in Article 15S obtains a judgment in his favor, and he has reasonable grounds to believe that the family home is actually worth more than the maximum amount fixed in Article 157, he may apply to the court which rendered the judgment for an order directing the sale of the Property under execution, The court shall so order if it finds that the actual valve of the family home exceeds the maximum amount allowed by law as of the time of its canstittion, ifthe increased actual value exceeds the maximum allowed in Article 157 and results tram subsequent voluntary. improvements introduced by. the person or-persons constituting the family home, by the owner or owners of the property, or by any of the benellciatics, the same rule and procedure shall apply. At the-execution sale,.no bid below the value allawed for a family home shall be considered. The proceeds shall be applied first to the amount mentioned jn Article 157, and then to the ligbilities under the judgment and the costs. The excess, if any. shall be delivered 20 the judgment debtor. Related to the foregoing is Article 137 of the Family Code, which provides: 2, 2 ARTICLE 157, The actual value of the family home shall not exceed, atthe time of its ‘constitution, the amount of three hutidred thousand pesus in urban areas, and two hundred thousand pesos in rural areas, or such amounts as may hereatter be fixed by law. {mn any event if the value of the currency changes after the adoption of this Cade, the value most favorable for the constitution of a family home shall be the basis of evaluation. For purposes of this Article, urban areas are deemed to include chartered cities and municipalities whose annual income at least equals that legally required for chartered cities All others are deemed to be rural areas. Extent of exemption. ‘The exemption of the family home from execution, forced sale or attachment is limited to P300,000 \o urban areas and 200,000 in rural areas, unless those maximum values are adjusted by law. IF s shown, though, that those amounts do not match the present value of the peso because of currency fluctuations, the amount of exemption shall be based on the value that is most favorable to the constitution of a family home. 11 JABRCZO017.5C02015-2016 n Cs Law/revised with insertions /consolidated-revised/EVSA/erysAny amount in excess of those limits can be applied to the payment of any of the obligations specified in Articles 155 and 160. Any subsequent improvement or enlargement of the family home by the persons constituting tt, Its ‘owners, or any of its beneficiaries will stil be exempt from execution, forced sale or attachment provided the following conditions obtain: (a) the actual value of the property at the time of its constitution has been determined to fall below the statutory limit; and (b) the improvement or enlargement does not result in an increase in its value exceeding the statutory limit, Otherwise; the family home can be the subject of a forced sale, and any amount above the statutory limit is applicable to the obligations under Articles 155 and 160. Certainly, the humane considerations for which the law surrounds the family home with Immunities from levy do not include the intent to enable debtors to thwart the just claims of their creditors. RECOGNITION OF CHILDREN SSS Form indicating chitd as legitimate chitd is admission of legitimate filiation, In Rodaifo Aguilar v. Edna G. Siasat, C.R. No. 200168, January 28, 2015, Del Castille, j, Rodolfo, Mled an action seeking to order Edna to surrender the titles over parcels of land belonging to his parents Alfredoand Candelaria alleging that he is the son and sole heir of his parents. Edna contended that he is not the:son of Alfeedo and Candelaria but a stranger to them and merely grew up with them out of generosity. At the tril, he presented evidence such as his school records statig that the spouses are his parents; ITR which indicated that Candelaria as his mother; SSS form duly subscribed and made under oath by Alfredo during his employment indicating Rodolfo as his son as well as his marriage certificate indicating Alfredo as his father. Edna contended that he was not releted to the spouses by consanguinity as the spouses had no issue at al. ‘The RTC dismissed the action ruling that there was no solid evidence to prove that Rodolfo is the son of the spouses. In fact, there was an affidavit by Candelaria saying that she had no child’Wwith Alfredo. The CA affirmed the decision ruling that his schoo! record not signed by the alleged father did not constitute evidence of iliation. (Reyes v. CA, 135 SCRA 439). The ITR was not honoured by the GA as proof-of filation citing Labagala v. Santiago, 371 SCRA'360, where the SC ruled that the CA likewise did fot accept the SSS Form as sulficient proof to establish and prove the fillation of plaintiff-appellant to the deceased Aguilar spouses. In reversing the CA, the SC reiterating De jesus v. Estate of Dizon, 418 Phil. 768 {2001}, Held: he Aiation of illegitimate children, like legitimate children, is established by (1) the record of birth appearing in the civil register or a final judgment; or (2) an admissiun of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. In the absence thereot,filiation shall be proved by (1) the open and continuous possession of the status of a legitimate child; or (2) any other means allowed by the Rules of Court,and special faws. The due recognition of an legitimate child in a record of birth, a will, a statement before a court of record, or in any authentic ‘writing is, in itself, a consummated act of acknowledgment of the child, and no further court action is required. In fact, any authentic writing is treated not just a ground for compulsory recognition; itis in itself a voluntary recognition that does not require a separate action for judicial approval. Where, instead, s claim for recognition is predicated on other evidence merely tending to prove paternity, Le, outside of a record of birth, a will,a statement before’ court of record or an authentic writing, judicial action within the applicabie statute of limitations is essential {n order to establish the child's acknowledgment. ‘A scrutiny of the records would show that petitioners were born during the marriage of their parents. The certificates of live birth would also identify Dantlo de Jesus as being thelr father. ‘There is perhaps no presumption of the law more firmly established and founded on sounder morality and more convincing reason than the presumption that children born in wedlock are legitimate. This presumption indeed becomes conclusive in the absence of proof that there is physical impossibility of access between the spouses during the first 120 days of the 300 days which immediately precedes the birth of the child due to (a) the physical incapacity of the husband to have sexual intercourse with his wife; (b) the fact that the husband and wife are living separately in such a way that sexual intercourse is not possible; or (©) serious illness of the husband, which absolutely prevents sexual Intercourse. Quite remarkably, upon the expiration of the periods set forth in Article 170, and in proper cases Article 171, of the Family Code (which took effect on 03 August 1988), the action to impugn the legitimacy of a child woul no longer be legally feasible and the status conferred by the presumption becomes fixed and unassailable Appiying the foregoing pronouncement to the Instant case, it must be concluded that petitioner ~ ‘who was born on March 5, 1945, or during the marriage of Alfredo Aguilar and Candelaria Siasat-Agullar and before their respective deaths has sufficiently proved that he Is the legitimate issue of the Aguilar spouses. Alfredo Aguilar's SSS Form £-1 satisfies the requirement for proof of fillation and relationship to the Aguilar spouses under Article 172 of the Family Code; by itself, said document constitutes an "admission of legitimate filiacion in @ public document or a private handwritten instrument and signed by the parent concerned.” Secondary evidence in the absence of Certificate of Live Birth. Since he cannot produce his Certificate of Live Birth since all the records covering t 1946 of the Local Civil Registry of Bacolod City were destroyed, it necessitated the introduction of other documentary evidence - particularly Alfredo Aguilar’s SSS Form E-1 to prove fillation. It was erroneous for the CA to treat said document as mere proof of open and continuous possession of the status of a legitimate 12 |ABRC2017.SCD2015-2016 in Civil Law /revised with insertions /consolidated-revised/EVSA/eryschild junder the second paragraph of Article 172 of the Family Code; it is evidence of filiation under the first paragraph thereof, the same being an express recognition in a public instrument. ‘As stated in De Jesus, fliation may be proved by an admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned, and such due recognition in any authentic writing isin itself,a consummated act of acknowledgment of the'child, and no further court action is required. And, relative to said form of acknowledgment, the Court has further held that: ‘The following are the rules respecting the requirement of affixing the signature of the acknowledging parent in any private handwritten instrament wherein an admission of filiation of a legitimate or illegitimate child is made: 1) Where the private handwritten instrument is the lone piece of evidence submitted to prove filiation, there should be strict compliance with the requirement that the same must be signed by the acknowledging parent; and 2) Where the private bandwritten instrument is accompanied by other relevant and competent evidence, it suffices that the claim of filiation therein be shown to have been made and handwritten by the acknowledging parent as it is merely corroborative of such other evidence. Our laws instruct that the welfare, of the child shall be the “paramount consideration” in resolving questions affecting him. Article 3(1) of the United Nations Convention on the Rights of a Child of which the Philippines is a signatory is similarly emphatic Article 3 1. In all actions concerning chiliren, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration. Itis thus “(he policy of the Family Code to liberalize the rule on the investigation of the paternity and filiation of children, especially of illegitimate children x x x.” Too, “(he State as parens patriae affords special protection to children from abuse, exploitation and other conditions prejudicial to their development.” (Dela Cruz v. Gracia, 612 Phil. 167, 179- 180 (2009)). PROOF OF FILIATION/SUCCESSION Putative father of an illegitimate child was the informant of the live birth; he (s considered the father; considered as recognition. In Alejandra Arado Heirs, etc. v. Anacleto Alarcon, et al. G.R. No, 163362, july 8, 2015, Bersamin, J, Raymundo and Joaquina were married with a son Nicolas, who got married to Florencia, The latter had no issue but Nicolas had an extra-marital affair with Francisca and out of their relationship, Anacleto was born, ‘Anacleto married Elenette. Raymundo died in 1939; Nicolas died in 1954; Florencia died in 1960; foaquina died in 1981. Florencia had three (3) siblings namely Sulpicio, Braulia, and Veronica. Jozquin had four (4) siblings namely Alejandra, Nemesio, Cledonia and Melania, In 1992, the siblings of Joaquina filed a complaint for recovery of property and damages against Anacieto and Elenette. They insisted that Amtacteto was‘not duly recognized as Nicolas’ illegitimate son; that inasmuch as ‘Anacteto was born to Francisca during the subsistence of Nicolas’ marriage to Florencia, Anacleto could only be the spurious child of Nicolas; that there-was no law for the acknowledgment of a spurious child; that even if Anacleto,would be given the benefit of the doubt and be considered a natural child, Article 278 of the Civil Code states that "recognition shall be made in the record of birth, a will, a statement before a court of record, or in any auithentie writing;" that the appearance of the father's name in the certificate of birth alone, without hisagtuat interventiott, was insifficient to prove paternity; that the mere certificate by the civil registrar that che father himself registered the child, without the father's signature, was not proof of the father’s voluntary acknowledgment; that the baptisinal certificate was insufficient proof of paternity. ‘Ain tun, respondents countered that Nicolas recognized Anacleto as his illegitimate child because Nicolas had himself caused the registration of Anacleto's birth. ‘The SC ruled that illegitimate filiation is proved in accordance with Article 175 of the Family Code, to wit: ART. 175. illegitimate children may establish their illegitimate fliation in the same way antl on the same evidence as legitimate children. ‘The action niust be brought within the same period specified in Article 173, except when the action is based on the second paragraph of Articie 172, in which case the action may be brought during the lifetime of the alleged parent. On the other hand, legitimate filiation is.established in accordance with Articles 172 and 173 of the Family Code, which state: ART. 172. The filiation of legitimate children is established by any of the following: (1) The record of birth appearing in the civil register ora final judgment; or 13 |ABRC2017-SCD2015-2016 in Civil Law /revised with insertions consolidated-revised/EVSA/crys(2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. In the absence of the foregoing evidence, the legitimate filiation shall be proved by: (Z) The open and continuous possession of the status of a legitimate child; or (2) Any other means allowed by the Rules of Court and special laws. ART. 173. The action to claim legitimacy may be brought by the child during his or her lifetime and shall be transmitted to the heirs should the child die during minority or in a state of insanity. In these cases, the heirs shall have a period af five years within which to Institute the action, ‘The action already commenced by the child shall survive notwithstanding the death of elther or both of the parties. Nicolas had duly acknowledged Anacleto as his illegitimate son. The birth certificate of Anacleto appearing in the Register of Births showed that Nicolas had himself caused the registration of the birth of Anacleto, he being the informant of the live birth to be registered. Considering that Nicolas, the putative father, had a direct hand in the preparation of the birth certificate, reliance on the birth certificate of Ana¢leto as evidence of his paternity was fully warranted. (Jison v. Court of Appeais, G.R. No. 124853, February 24, 1998, 286 SCRA 495, 523, where the Court opined: "It is settled that a certificate of live birth parportedly identifying the putative father is not competent evidence as to the issue of paternity, when there is no showing that the putative father had a hand in the preparation of sald certificates, and the Local Civil Registrar is devoid of authority to record the paternity of an illegitimate child upon the information ofa third person. Simply put, if the alleged father did not intervene in the birth certifieaté, eg supplying the information himself, the inscription of his name by the mother or doctor or registrar is null and void; the mere certificate by the registrar without the signature of the father is not proof of voluntary. acknowledgment on the latter’s part” Mortgage by spouse of conjugal property, consent of the other is necessary. ‘A spouse's consent is necessary for the disposition orencumberance of conjugal properties. Ifthere is no consent, the sale, encumberance or mortgage is void. But while the mortgage, ete. is void, the principal contract of loan remains valid as the mortgage is only accessory in nature. Such is the ruling in PNB v. Venancio Reyes, jr, GR. No. 212483, October 8, 2016, Leonen, J. In this case, a spouse contracted loan with the bank using as security a conjugal property without the consent of the other spouse. As she falled to pay, the bank foreciosed the mortgage, hence, the husband, filed an action to annul the Certificate of Sale alleging that the mortgage was.void as his signature was forged: The lower courts declared the mortgage void. The Supreme Court affirmed the lower courts and ruled that the written consent of the spouse who did not encumber the property-isnecessary before any disposition or encumberance of a conjugal property cah be valid (Art. 124, Family Code). When CP's liable for obligations contracted diiting the marriage. Petitioner contended that’the conjugal partnership should be made liable to the extent that it redounded to the benefit ofthe fainily under Article 122 of the Family Code. Article 122 applies to debts that wers contracted by a spouse and redounded to the benefit of the family. 1t applies specificaliyto the loan that respondent's wife contracted, but not to the mortgage. ‘Ayala Investment & Development Corp. v. Court of Appeals, 349 Phil. 942-(1998) [Per J. Martinez, Second Division), has explained tiow Article 121 should be applied: From the foregoing juirisprudential rulings, we can derive the following conclusions: [AFI the husband himself fs the principal obligor in the contract, ie, he directly “received the money and services ty be used in or for his own business or his own profession, that contract falls within the term “xxx obligations for the benefit of the conjugal partnership.” Mite, no actual benefit may be proved. itis enough that the beriefit to the family is apparent at the time of the signing of the contract. From the very nature of the contract of loan or “Sebviees, the family stands to benefit from the loan facility or services to be rendered to the ‘bustness-or profession of the husband. It is immaterial, if in the end, his business or profession fails or does not succeed, Simply stated, where the husband contracts obligations on Béhalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit ofthe conjugal partnership. (8) On the other hand, if the money or services are given to another person or entity, and the husband acted only as a surety or guarantor, that contract cannot, by itself alone be categorized as falling within the context of “obligations for the benefit of the conjugal partnership.” The contract of loan or services is clearly for the benefit of the principal debtor and not for the surety or his family. No presumption can be inferred that, when a husband enters into a contract of surety or accommodation agreement, its “for the benefit of the conjugal partnership.” Proof must be presented to establish benefit redounding to the conjugal partnership. 14 |ABRC2017.5CD2015-2016 in Civil Law/revised with insertions /consolidated-revised/EVSA/ecysTwo (2) scenarios under Art. 122, F.C. There are two scenarios considered: one is when the husband, or the wife, contracts 2 loan to be used for the family business and the other is when she acts as a surety or guarantor. if she is a mere surety or guarantor, evidence, that, the family benefited from the loan need to be presented before the conjugal partnership can be held liable. On the other hand, ifthe loan was taken out to be used for the family business, there is no need to prove actual benefit. The law presumes the family benefited from the loan and the conjugal partnership is helé liable. In this case, the loan was used as additional working capital for respondent's printing business. As held in Ayala Investment, since the loaned money Is used in the husband's business, there is a presumption that it redounded to the benefit ofthe family; hence, the conjugal partnership may be held liable for the loan ‘amount (Ayala Investment & Development Corp. v, Court of Appeals, 349 Phil. 942, 952-953 [1998], Per | Martinez, Second Division). Since there is a legal presumption to this effect, there is ne nead to prove actual benefit to'the Family. What the lower courts declared void was the real estate mortgage attached to the conjugal property of the spouses. Since the real estate mortgage was an encumbrance attached to a conjugal property without the consent of the other spouse, it is vold and legally inexistent. Although petitioner cannot forecluse-the mortgage over the conjugal property in. question, It can still recover the loan amount from the conjugal artnership. pein Phillpbine Notional Bonk v. Gonatao, 602 Phil 508 (2008), “a mortgage is merely ah accessory agreement and does not affect the principal contract of loan. The mortgages, while void, can still be considered as instruments evidencing the indebtedness. ‘The mortgage over the conjugal property is void and cannot be foreclosed. However, petitioner can still hold the conjugal ‘partnership liable for the principal obligation since the loan is presumed to have redounded to the oenefit of the family. If the conjugal partnership is insufficient to cover the liability, the husband is solidarity liable with the wife for the unpaid balance (Art. 121, Family Code), The last paragraph of Article 121 of the Family Code Is instructive as it provides that "If the conjugal partnership is insufficient to cover the foregoing iiabilities, the spouses shall be solldarily liable for the unpaid balance with their separate properties.” The last paragraph points to the “subsidiary but solidary liability of the separate properties” of the spouses for liabilities enumerated in the Article. This Article, similartoArticle 94 of the Family Code Boverning the Absolute Coramunity of Property regime, explicitly holds the spoises solidarily liable with each other if the conjugal properties are not enough to answer for. the liabilities. In this case, if the conjugal roperties of the spouses are not enough to answer for the toan, petitioner can recover the remaining unpaid balance from the separate properties of either respondent az his wife. Collateral attack on legitimacy: seconday evidence in proof of filiation. In Geronimo v. Santas, G.R: No, 197099, September 28, 2015, Villarama, |, Karen Santos filed an action for annulment of documents and recovery of possession of properties alleging that she was the sole heir of her parents, She alleged that the defendants who were the siblings of her father adjudicated upon themselves said property and obtained a title over It Thé:defendants countered, saying that the spouses were childless and that the record of birth of Karen was simulated. after trial, the RTC ruled in favor of Karen and ruled that the birth certificate was not tampéred, Furthar, it ruled that assuming arguendo-that the birth certificate was questionable, tie flietion of Karen was proven by evidence of open and continuous possession of the status of a legitimate child. t consideréd'the overt acts of the deceased as recognition such as: payment of her school fees; making her the beneffeiary.of the burial benefits from the GSIS; filing a petition for guardianship over Karen. Finally, it was ruled by therRTC that they failed to impugn her filiation and status within the period under Arts. 170 and 171 of the-Famuily Code. The petitioners questioned the act of proving fillation in an action for anmilment of document as the law contemplates a direct action, hence, her fliation or civil status ‘cannot be.assailed Indirectly or collaterally. The CA ruled that fillation can be proven by secondary evidence yader.Afticle 172 of the Family Code which allows the introduction of evidence of fillation by way of open and Coritinuous possession of the status of legitimate child. 17 -Ssfore the SC, it was contended by the petitioner that secondary evidence may be admitted only in @ dlFeet action ander Article 172 as the law 1s meant to be instituted as a separate action and proof of flation. cenno: be Falsad-as a collatera! issue lke an action for declaration of nullity of a document and recovery of on. Ruling in favor of petitioner, the SC Held: Petitioners correct that proof of legitimacy under Article 172, or illegitimacy under Article 175, shovld only be raised in a direct and separate action instituted to prove the filiation of a child. The rationale behind this procedural prescription is stated in the case of Tison v. Court of Appeals, 342 Phil. 550 [1997], viz. Well settled is the rule that the Issue of legitimacy cannot be attacked collaterally. The rationale for these rules has been explained in this wise: “The presumption of legitimacy in the Family Code x x x actually fixes a civil status for the child born in wedlock and that civil status eannnot be attacked collaterally, The legitimacy of the child can be impugned only in a direct action brought for that purpose, by the proper parties, and within the period limited by law. The legitimacy of the child cannot be contested by way of defense or asa collateral issue in another action for a different 415 JABRC2017.SCD2015-2016 in Civil Law/revised with insertions /consolidated-revised/EVSA/crysPurpose. The necessity of an independent action directly impugning the legitimacy is more clearly expressed in the Mexican Code (Article 335) which provides: “The contest of the legitimacy of a child by the husband o> his heirs must be made by proper complaint before the comipetent cours any contest made in any other way is vold’ This principle applies under our Family Code. Articles 170 and 171 of the code confirm this view, because they Fefer to “the action to impugn the legitimacy.” This action can.be brought only by the husband or his heirs and within the periods fixed in the present articles. Upon the expiration of the periods provided In Aiticle 170, the action to impugn the legitimacy of a child ean no longer be brought, The status conferred by the presumption, therefore, becomes fixed, and tan no longer be questioned. The obvious intention of the law is to prover: the Status ofa child born in wedtock froin being in a state of uncertainty for 2 ong time. tt also aimas to force early action to settle any doubt as to the Paternity of such child, so that the evidence material to the matter, which aust necessarily be facts occurring during the period'of the conception of the child, may still be easily available. Only the husband can contest the legitimacy of a child born to his wife, He Is the one directly confronted with the scandal and ridicule which the infidelity of his wife produces; and he should decide whether to conceal. that infidelity or expose it, in view of the moral and economic interest involved. 1t is only in exceptional cases that his heirs are allowed to contest ‘such legitimacy, Outside of these cases, none - even his heirs ~ can impugn legitimacy; that would amount to an insult to his memory.” (citing Tolentino, A, COMMENTARIES AND JURISPRUDENCE ON THE-CIVIL CODE OF THE PHILIPPINES, Vol. 1, 1990 ed, 536-537). ? When aforesaid rule applicable; when secondary evidence is admissible, What petitioner failed to recognize, however, is that this procedual Tule is applicable only to aetions where the legitimacy ~ or illegitimacy ~ of a child is at issue. This situation does not obtain in the case at bar. In this case, the fliation of a child, the respondent ~ ig not at issue. Petitioner did not clalm that respondent isnot the legitimate child of his deceased brother Rufito and his wife Caridad. W/hat was alleged was that respondent is not the child of the deceased spouses Rufino and Caridad at all, hence, not an heir to his brother Rufino. When he alleged that the child ts not a child of the deceased, jurisprudence shows that the ‘cial court was correct in admitting and ruling on.the secbtdary evidence of respondent ~ even if such proof is similar to the evidence admissible under the second paragraph of Article 172 and despite the instant case not being a direct action to prove one's fliation. In-some cases, the Court did not bar the introduction of secondary evidence in actions which involved allegations that the opposing paity is not the child of a particular couple - even if such evidétice 1s-simillar to’ the kind of proof admissible under the second paragraph of Article 172. a : In Benitez-Badua v. Court of Appeals, G.R. No. 105625, January 24, 1994, 229 SCRA 468, deceased spouses Vicente Benitez (Vicente) and Isabel Chipongiar: (Isabel) owned various properties while they were still living, Isabel departed, in-2982, while Vicente died intestate in 1989. In 1990, Vicente's sister (Victoria Benitez-Lirio) and nephew'{Feodor Benitez Aguilar) instituted a petition before the trial court for the Issuance of letters of administration of his estate in favor of Feodor. They alleged that Vicente was “survived by no other heirs or rélatives be they ascendants or descendants, whether legitimate, illegitimate or legally adopted; that one “Marissa-Benitez-Badua who was raised and cared for by them since childhood is, in fact, not related :0 théi’by blood, nor legally adopted, and is therefore not a legal heir of Vicente” Marissa ‘opposed thy petition’and proffered evidence to prove that she is an holr of Vicente. Marissa submitted the following evidence, via : 1. *her Ceftificate of Live Birth (Exh. 3) 2, _ Baptismal Certificate (Exh. 4); 3. Incume Tax Returns and Information Sheet for Membership with the GSIS of the late Vicente namiingher as his daughter (Exhs, 10 to 21); and 4, 2 Schaol Records (Exhs. 5 & 6). She also testified that the said spouses reared and continuously treated her as their legitimate daughter. ‘The trial cour, relying on Article 366 atid 170 ofthe Pally Code, declared Marissa a the legitimate daughter and sole heir of the spouses Vicente and Isabel The appellate court reversed the ATC ruling holding tha the trial court erred in applying Articles 166 and 170-0 he Family Cade On appeal, the Court affirmed the ceversal nade by the appellate court, va: ne oe Searel reading ofthe above sce ll show tht they do not contemplaic a situation like inthe instant case, where s child is alleged not tobe the child of nature oF Biological child of a certain coupe. Rather, these acs govern a situation where a 16 |ABRC2017.SCb 2015-2016 in Civil Law /revised with insertions /consolidated-revised/EVSA/cryshusband (or his hetrs) denies as his own a child of his wife. Thus, under Article 166, itis the ‘husband who can impugn the legitimacy of said child by proving: (1) it was physically impossible for him to have sexual intercourse, with his wife within the first 120 days of the 300 days which immediately preceded the birth of the child; (2) that for biological or other scientific reasons, the child could not have been his child; (3) that in case of children conceived through artificial insemination, the written authorization or ratification by elther parent was obtained. through mistake, fraud, violence, intimidation or undue influence. Articles 170 and 171 reinforce this reading as they speak of the prescriptive period within which the husband or any of his heirs should file the action impugning the legitimacy of said child, Doubtless then, the appellate court did not err when it refused to apply these articles to the case at bench. For the case at bench Is not one where the heirs of the late Vicente are contending that petitioner is not his child by Isabel. Rather, their clear submission is that petitioner was not born to Vicente and Isabel. Our ruling in Cabatbat- Lim vs. Intermediate Appellate Court 166 SCRA 451, 457 cited in the impugned decision is apropos, viz “Petitioners’ recourse to Article 263,of the New Civil Code [now ‘Art. 170 of the Family Code] is not well-taken. This legal provision refers to an action to impugn legitimacy. Its inapplicable to this case because this is not an action to impugn the legitimacy of a child, but an action of the private respondents to claim their inheritance as legal heirs of their childless deceased aunt. They do not claim that petitioner Violeta Cabatbat Lim is an illegitimate child of the deceased, but that she is not the decedent's child at all, Being neither legally adopted child, nor. an acknowledged natural child, nor a child by legal fiction of Esperatiza ‘Cabatbat, Vioi-ta is nota legal heir of the deceased.” Similatly, the 2001 case of Labagala v. Santiago, 422 Phil. 699 {2001}; which originated from a complaint for recovery of title, ownership and possession before the trial court, respondents contended that petitioner is not the daughter of the decedent Jose and sought to recover from her the 1/3 portion of the subject property pertaifiing to Jose but which came into petitioner's’s6l€ possession upon Jose’ death Respondents sought to prove that petitioner is not the daughter of.the decedent as evidenced by her birth certificate which did not itself indicate the name of Jose as her. father. Citing the case of Sayson v. Court of. Appeais and Article 263 of the Civil Code (now Article 170 of the Family Code), petitioner argued that respondents cannot impugn her fillation collaterally since the case was not an action impugning a child's legitimacy bur one for recovery of ttle, ownership and possession of property. The SC ruled that reliance on Article 263 of the Civil Code is misplaced and respondents may impugn the petitioner's fillation in an action for recovery of title and possession. The birth certificate of petitioner Labagala proved that she “was born of different parents, not José and his wife.” Citing Benitez-Badud and Lim v. Intermediate Appellate Court, 248 Phil. 684 [1988], it was ruled: 2. This article should be read inieonjunction with the other articles in the same chapter ‘on paternity and filiation in the Civil Code. A careful reading of said chapter would reveal that it contemplates situations where a doubt exists that a child is indeed a man’s child by his wife, and the husband (of, improper cases, his heirs) denies the child's filiation. It does not refer to situations whete a child isalleged not to’be the child at all ofa particular couple. Article 263:refers to an action to impugn the legitimacy of a child, to assert and prove that a person is.not‘ man’s child by his wife. However, the present case is not one impugning petitioner's legitimacy. Respondents are asserting not merely that patitioner is not alegitimate child of Jose, but that she is not a child of Jose at all. xx x Karen, not child of spouses. 4° sven if both courts d quo were correct in admitting secondary evidence similar to the proof admistibieiunder Article 172 of the Family Code in this action for annulment of document and recovery of possession, evidence shows that respondent is not a child of the deceased spouses Rufino and Caridad | he'decisions of the lower courts is one based on a misapprehension af facts, This is especially so because-the birth.certificate' was tampered specifically on the entries pertaining te the date of birth of respondettéand fy name of the informant. Using pentel ink, the date of birth of respondent - April 6, 1972 ~ and the nam@.of the informant - Emma Dafo ~ were both superimposed on the document. Despite these glaring erasures; the trial court stil relied on the prima facie presumption of the veracity and regularity of the birth certificate for failure of petitioner to explain how the erasures were done and if the alterations were due to the fault of respondent. Ie thus ruled that respondent's filation was duly established by the birth certificate. The appellate court did not agree, and ruled that the birth certificate presented did not qualify as the valid registration of birth in the civil register as envisioned by the law. ARTICLE 177 = LEGITIMATION Status of a child cannot be collaterally attacked. 17 {ABRC2017-SC020 15-2016 in Civ! Law/revised with insertions/consolidated-revised /EVSA/crysin BBB v. AAA, G.R, No, 193225, February 9, 2015, Reyes, |, a case of Anti-Violence Against Women & Children (RA 9262),'a man and a woman lived together as husband and wife. They gave birth to two (2) children. Subsequently they got married and thereafter, the birth certificates of their children including the child of the woman in a previous relationship were amended to change their civil status to legitimated by virtue of the said marriage. But due to their unhealthy relationship they lived separately from one another. ‘The woman demanded for support from husband including the child in the previous relationship who was legitimated but the husband refused to give support to the said child, He contended that he is not his biological son, hence, his refusal to give support is justified. The SC did not agree with him and Held: Article 177 of the Family Code provides that “{a]nly children conceived and born outside of wedlock of Parents who, atthe time of the conception of the former, Were not disqualified by any impediment to marry each other may be legitimated." Article 178 states that “{lJegitimation shall take place by a subsequent valid marriage between parents.” Jn the case at bar, the parties do not dispute the fact that BBB is not CCC's biological father. Such being the vase, it was improper to have CCC legitimated after the celebration of BBB and AAA's marriage. Clearly then, the legal process of legitimation was trifled with. BBB voluntarily but falsely acknowledged CCC as his son, /rticle 1431 of the New Civil Code pertinently provides: Art. 1431, Through estoppel an admission or representation is rendered conclusive ‘upon the person making it, and cannot be denied or disproved as against the person relying thereon, ‘At leas for the purpose of resolving the instant petition, the principle of estoppel found application and it now bars BBB from making an assertion contrary to his previous representations. He should ‘not be allowed to evade a responsibility arising from his owa misrepresentations. He is bound by the effects of the legitimation process, CCC remains to be BBB’s son, and pursuant to Article 179 of the Famnily Code, the former is entitled vo the same rights as those ofa legitimate child, including the receipt of his father’s support. Notwithstanding the above, there is no absolute preclusion for BBB from. raising before the proper court the issue of CCC's status and filiation. However, BBB caniot do the same in the instant petition before the Court now. In Tison v, CA, 342 Phil. 550 [1997], the Court held that “the civil status of a child cannot be attacked collaterally.” The child's legitimacy “cannot be contested-by way-bf defense of as a collateral issue in another action for a different purpose.” The instant petition sprang out of AKA's application for a PPO before the RTC. Hence, BBB's calm that CCC is not his biological son is a.collateral issue, which the Court has no authority to resolve now. PROPERTY. Claim of awnership must be proven; Requisite of recoriveyance of property. In Ibot v: Heirs of Francisco Tayco, G.R. No. 202950, April 6, 2015, Reyes, |, petitioner was the registered owner of a property. The respondents claimed to be the owners of the property, but presented no indicia of any document to support their claim although they alleged that it was sold to their predecessor-in- interest. The petitioner even sent a deftaind for them to vacate the property prior to the fling of an action for jectment. In dismissing the claim, the SC ruled that the failed to prove t by preponderance of evidence and elas naa acti to recov, the try Haya ene aol the pal net lyon the trengeh ois title and not on the weakness ofthe deféndait’s cal, {In order to successfully’ maintaift an action ta recover the ownetship of a real property, the person who claims a better right to'it must prove two things: first the identity of the land claimed: and second, his title thereto, (Sampaco v. LantudsG.R. No. 163551, July 18, 2014, 654 SCRA 36, 50-51). While the first requisite was proven, the third Was not.as the claitis were conflicting. : Inthe case at bar; the:respondents failed to dispense their burden of proving by clear and convincing evidence that theyaré entitled to the reconveyance, ‘Mere claim-of ownersitip does not suffice. ‘An action for reconveyance should be maintained by the 3 stiffice that the respondents are in possession of the land subject hereof. = Aetion for quieting of title originates from equity jurisprudence. meine ot horace ‘castilejos, on Se aa Incorporada, G.R. No. 190158, July 20, 2016, Reyes, |, the SC-once’again-had the occasion to say that "an action to quiet title to property or to remove a cloud thereon iSaremedy or form of procéeding originating in equity jurisprudence. The plaintiff in such an action seeks for adii@feation that any adverse clatm of title oF interest la the property in question is Invalid, so that the plaintiff and those claiming under him or her may forever be free from any danger of the hostile claim.” (Spouse Divinagracia v. Cometa, 518 Phil. 79 {2006}) It is governed by Article 476 of the Civil Code which a Art. 476. Whenever there is clotid on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which i apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such. cloud or to wiet the title “uit qn action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. 18 JABRC2O17.SCD2015-2016 in Civil Law revised with insertions /consolidated-revised /EVSA/crysFor the action to prosper, two requisites must concur, viz: (1) the plaintiff or complainant must have legal or an equitable title to or interest in the real property which is the subject matter of the action; and (2) the deed, claim, encumbrance or proceeding that is being alleged as a cloud on plaintiff's title must be shown to bein fact invalid or inoperative despite Its prima facie appearance of validity or legal efficacy. (Robles v.CA, 384 Phil. 635 [2000]) BUILDERS ‘Mere construction of @ house on another's land does not create co-ownership; Article 448, NCC applies. 1n Victoria et al. v. Pidlaoan, et al, G.R. No. 196470, April 20, 2016, Brion, J, Rosario and Elma lived together since 1978 until Rosario left for Saudi Arabia. Elma bought a parcel of land and was issued a title. ‘When Rosario returned to the Philippines, she caused the construction of a house on such land. Later, it was contended that they co-owned the property due to the construction of a house on the loi, but there was no praof of any contribution of Rosario in the purchase of the same. Is the contention correct? Explain. Held: No, Article 448 of the Civil Code provides that Ifa person bullds on another's land in good faith, the land owner may either: (a) appropriate the works as his own after payirig indemnity, or (b) oblige the builder to pay the price of the land. The law does not force the parties into a co-ownership. A builder Is in god faith ifhe builds on a land believing himself to be its owner and Is unaware of the defect in his tite or mode of acquisition (Spouses Aquino v. Spouses Aguilar, G.R. No. 182754, june 29, 2015). Rosario’s construction of a house on the lot did not create a co-ownership, regardless ofthe value of the house. Rosario, however, js not without recourse in retrieving the house or I's value. The remedies available to her are set forth in Article 448 of the Civil Code. CO-OWNERSHIP A co-owner may sell an undivided part even without the consent of the others. ‘The case of Tabasondra, etal. v. Sps. Constantino, etal, G.R. No. 196403, December 7, 2016, Bersamin, J. Js a case for partition and accounting concerning a property owned in common, and focuses on the right of two of the co-owner to alienate their shares before the actual division of the property. The basic issue ratsed before the SC was whether a co-owner may sell his/her undivided share ‘without the consent of the other co-owners. Answering the question in the Affirmative, the SC Held: A co-owner or co-owners have the right to alienate their pro indfviso shares to another even without the knowledge ar consent of their co-owners because the.allenation covered the disposition of only their fespective interests in the cointnan property, According to Article 493 of the Civil Code, each co-owner “shall have the full ownership of his port and of the fruits anidcbenefits pertaining thereto, and he may therefore alienate, assign or mortgage It, and even substitute another person in its enjoyment, except when personal rights are involved,” but “the effect of the alienation or the'martgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in.the division upon the termination of the co-ownership.” Hence, the co-owners or their successors-in-inter@st coud not validly assail the alienation (Torres v. Lapinid, GR. No. 187987, November 26, 2014, 742 SCRA 646, 652}, BASEMENT Nature of easement of right of way. An easement of right.of way is areal right, When an easement of right of way is granted to another Person, the rights of the property's awner are limited. (See Cristobal v. Court of Appeals, 353 Phil 318, 328 (1998) (Per. ellosilio,FrseDivision}) An owner may not exercise some of his or her property rights fer the benefit of the person who was granted the easement of right of way, Hence, the burden of proof to show the sxigtence of the above conditions is imposed on the person who seeks the easement of ight of way. (erstobal 4, Sourtof Angas; 383 Phil 318, 327 (1998) [Per] Belosilo, First Division}, citing Costabella Corporation v urtof ADpvals, 271.Phil, 350, 358 (1991) [Per J. Sarmiento, Second Division], which in turn cited Locsin v. Chmiaea: Ga No. L-27318, january 31, 1969, 26 SCRA 816, 836 [Per J. Castro, En Banc], Angela Estate, Ine. Court ot Ei ince of Negros Occidental, 133 Phil. 561, 574 (1968) [Per J. Castro, En Banc], and Bacolod. Bancyy NRE Cbatoeset av. Capitol Subdivision, Inc, tal, 124 Phi, 128, 183 (1966) [Per [JBL Reyes En Banc]) In easement of right of way, “least prejudice” has preferred status over distance. in ‘Alicia Reyes v. Sps: Ramos, GR. No. 194486, February 11, 2015, the petitioner sought for an easement of right of way from the respondents alleging that her property is Isolated without her ful. It was alleged that there was no means of engress or egress to a public highway. Respondents contended that there Was # means of engress or egress to:the public highway because adjacent to her property is a canal where « bridge can be constructed as passageway like what others have done. The RTC found out that if the right of way would pass through respondents’ property there would be destruction of their properties. Since there is an irbation canal, she could construct a bridge over it and pass through it as the way to the irrigation canal would appear to be the shortest and easiest way to reach the barangay road. On appeal, the CA affirmed the decision of the RTC. Affirming the decisions of the lower courts, the SC 49 [ABRCZO17.SCO2015-2016 in Civil Law/revised with insertions consolidated -revised/EVSA/ceysHeld: Assuming, however, that petitioner or her mother did not cause the isolation of petitioner's property, petitioner stilt cannot be granted the easement of right of way over the proposed portion of respondents: Broperty. This is because she falled to satisty the requirements for an easement of right of way under the Civil The following requisites need to be. established before a person becomes entitled to demand the compulsory easement of right of way: (See Bacolod-Mucia Milling Co, Inc, etal. v. Capitol Subdivision, Inc, et al, 124 Phil. 128, 132-133 [1966)) 1. An immovable is surrounded by other immovables belonging to other persons, and is without adequate outlet to a public highway: 2. Payment of proper indemnity by the owner of the surrounded immovable; 3. The isolation of the immovable is not due to its owner's acts; and ‘4. The proposed easement of right of way is established at the point least prejudicial to the servient estate, and insofar as consistent with this rule, where the distance of the dominant estate to a public highway may be the shortest. There is an adequate exit to a public highway; convenience is not the test. In Dichaso, jr. v, Marcos; G.R. No, 180282, April 11, 2011, 647 SCRA 495, it was ruled that the convenience of the dominant estate's owner is not the basis for-granting an easement of right of way, especially ifthe owner's needs may be satisfied without imposing the easement. Thus: Mere convenience for the dominant estate is not what is required by law as the basis of setting up.a compulsory easement. Even in the face of necessity, if it can be satisfied without imposing the easement, the same should not be imposed. Also in Floro v, Llenado, we refused to impose a rigist of way over petitioner's Property although private respondent's alternative. route was admittedly” inconvenient ‘because he had to traverse several ricelands and rice paddies belonging to different persons, not to mention that said passage is impassable during the rainy season. ‘And in Ramos, Sr. v. Gatchalian Realty, inc, this Court refused to gant the easement prayed for even $f petitioner had to pass through lots belonging to other owners, as temporary ingress and egress, which lots were grassy, cogonal, and greatly inconvenient die to flood and mud because such grant would run counter to the prévailing jurisprudence that mere convenience for the dominant estate does not sufflce to serve as basis for the easement. (See also Cristobal v. Court of Appeals, 353 Phil, 318, 328-329) Access to the public highway can be satisfied without imposing an easement on respondents’ property. Her property had another outlet to the highway. In between her property and the highway or road, however, is an irrigation canal, which can be traversed by-constructing a bridge, similar to wiiat was done by the owners of the nearby properties There is, therefore, no need to utilize respondents’ property to serve petitioner's needs, Another adequate exit exists. Petitioner can use this outlet to access the public roads. ‘The outlet may be longer and more inconvenient to petitioner because she will have to traverse other properties and construct a bridge over the irrigation canal before she can reach the road. However, these reasons will not justify the imposition of af easement on respondents’ property because her convenience is not the gauge in determining whethér-to imposé an easement of right of way over another's property. (Dichoso, jr. v. Marcos, G.R,No: 180282, April.11, 2011, 647 SCRA 495, 504) Petitioner failed to satisfy the requirement of “least prejudicial to the servient estate.” Asticle 650 of the Civil Code provides that in determining the existence of an easement of right of way, the requirement of “least prejudice to the servient estate’ trumps “distance {between}. the dominant estate [and the} public highway.” “Distance” is considered only insofar as itis consistent to the requirement of “least prejudice? The court had already affirmed the preferred status of the requirement of “least prejudice” over distance of the dominant estate to the public highway. (Cristobal v. Court of Appeals, 353 Phil. 318, 329 (1998]). Quimen v. Court of Appeals, 326 Phil, 969, 979 [1996]) Thus, in Quimen, the Csourt granted the longer right of way over therein respondent's property because the shorter route required that a structure of strong materials needed to be deinolished. (Quimen v. Court of Appeals, 326 Phil. 969, 981 [1996]} The court said: "ET The court is not bound to establish what is the shortest distance; a longer way may be adopted to avoid injury to the servient estate, such as when there are constructions or walls which can be avoided by a round about way, or to secure the interest of the dominant owner, such as when the shortest distance would place the way on a dangerous decline. ‘The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance although this is a matter of Judicial appreciation. While shortest distance may ordinarily. imply least prejudice, it is not always so as-when .here are permanent structures obstructing the shortest distance; while on the other hand, the longest distance may be free of obstructions and the easiest or most convenient to pass through. In other words, where the easement may be established on any of several tenements surrounding the dominant estate, the one where the way is shortest and will cause the least damage should 20 |ABRC20i7.SCD201$-2016 in Civil Law/revised with insertions/consolidated-revised /EVSA/crysbe chosen: However, as elsewhere stated, if these two (2) circumstances do not concur in a single tenement, the way which will cause the least damage should be used, even if it will not be the shortest, Petitioner would have permanent structures — such a5 the garage, garden, and grotto already installed on respondent's property — destrayed to accommodate her preferred location for the right of way. ‘The cost of having to destrey these structures, coupled with the fact that there is an avallable outlet that can be utilized for the right of way, negates a claim that respondents’ property ts the point least prejudicial to the servienc estate. ‘An easement is a limitation on the owner's right to use his or her property for the benefit of another. By imposing an easement on a property its owner will have to forego using it for whatever purpose he or she deers most beneficial. Least prejudice, therefore, is about the suffering of the servient estate. Its value is not determined solely by the price of the property, but also by. the value of the owner's foregone opportunity for use, resulting from the limitations imposed by the easement. (PAUL A. SAMUELSON andWILLIAM D. NORDHAUS, ECONOMICS 13 (18th ed, 2005). Opportunity cost is defined as_“[tJhe cost of the forgone alterrative(}") aponig an easement on the part of respondents’ property for petitioner's benefit would. cost respondents not only the value of the property but also the value of respondents’ opportunity to use the property as a garage or a garden with a grotto. (See also: Helen Callmoso, et al. v. Alex Roullo, G.R. No. 198594, January 25, 2016, Brion, J} * Easement of right way to be established at point least prejudicial to the servient estate. In the establishment of an easement of right of way, the same must not prejudice the servient estate, While it may be the shortest way to a road, it must be the least prejudicial Such is the ruling in Helen Calimoso, et cl. v. Alex Raul, G.R. No. 198594, january 252016, Brion, j where the RTC and the CA granted an action secking for a right of way, claiming.that his property is isolated by surrounding estates. The owners of the servient estate contended that the adjudged-right of way would cause severe damage to their house where the right of way would pass through. They further contended that the owner of the dominant es:xte has other right of way alternatives such as a wooden bridge over a creek bounding his property on the northeast side, such that if made concrete, Gould provide ingress or egress. Despite such contentions, the CA affirmed the RTC decision, : tn reversing the CA decision, the SC i Held: To be entitled to an easement of right-of-way, the following requisites should be met: "1. The dominant estate is surrounded by, other immovables and has no adequate outlet to a public highway; 2, There is payment of proper indemnity: 3. The isolation is not due to the acts of the proprietor of the dominant estate; and 4. The right-of-way claimedis at'the point least prejudicial to the servient estate and insofar as consistent with this rule, where the distance from the dominant estate to a Public highway may be the shortest”, The immovable in whose’favor the easement is established is called the dominant estate, and the property subject to the easement is called the servient estate. ‘That the respondent's Jot is surrounded by several estates and has no access to a public road are undisputed, The only question before the Court is whether the right-of- way passing through the petitioners’ lot satisfies the fourth requirement of being established at the point least prejudicial to the servient estate. % Three (3) options'as right of way. 2g: “Three options were available to the respondent for the demanded right-of-way: the first option is to traverse directly throiigh the petitioners’ property, which route has an approximate distance of fourteen (14) roffrthe respondent’ lot to the Fajardo Subdivision Road; the second option is to pass through two 461-B-1 and 1461-B-2) located on the southwest of the respondent's lot, which route has iate distance of forty-three (43) meters to another public highway, the Diversion Road: and the 1 option is 15 construct a concrete bridge over the creek and ask for a right-of-way on the property of a certain Mi Based order to reach the Fajardo Subdivision Road. Among the right-of-way alternatives, the CA adopted the Arst option, 4e, passing through the petitioner's f-because it offered the shortest distance (from the respondent's lot) to the Fajardo Subdivision Road and the right-of-way would only affect the “nipa hut" standing on the petitioners’ property. The CA held that the establishment of the easement through the petiticners’ iot was more practical, economical, and less burdensome to the parties. Article 650 of the Civil Code provides that the easement of right-of-way shall be established a¢ che oine least prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. Under this guideline, whenever there are several ‘tenements surrounding the dominant estate, the right-of-way must be established on the tenement where the 21 |ABRCZ017.SCD2015-2016 in Civil Law revised with insertions consolidated-revised/EVSA/crysdistance to the public road or highway is shortest and where the least damage would be caused. If these two criteria (shortest distance and least damage) do not concur in a single tenement, the least prejudice criterion must prevail over the shortest distance criterion. The establishment of a right-of-way through the petitioners’ lot would cause the destruction of the wire fence and a house on the petitioners’ property. Although this right-of-way has the shortest distance to a public road, it Is not the least prejudicial considering the destruction pointed out, and that an option to traverse two vacant lots without causing any damage, albeit longer, is available. “Mere convenience for the dominant estate is not what is required by law as the basis of setting up a compulsory easement;" (Cristobal v. CA, 353 Phil. 318 (1998]) chat “a longer way may be adopted to avold Injury to the servient estate, such as when there are constructions or walls which can be avoided by 9 roundabout way.” Obligation of lower estate to receive water, etc. flowing from higher estate. In Sps. Vergara v. Sonkin, G.R, No. 193659, June 15, 2015, Perlac-Bernabe, j, the lots belonging to the Parties are adjoining to one another. Sonkin’s property is slightly lower than the Vergara property. Sonkin raised the height of the partition wall and caused the construction of their hause which was attached to the partition wall such that a portion thereof became part of the wall of the master’s bedroom. The Vergaras leveled the uneven portion of their property 2s a result of which it became higher than the Sonkin property. Sonkin began complaining because water was leaking into their room through the partition was. ‘They semanded the Vergaras to bulld a retaining wall on thetr property to contain the landfill that they dumped into their property but it remained unheeded. A complaint was filed, but the Vergaras contended that the Sonkin's act of raising the partition wall made the same susceptible to leakage. The trial court held the Vergaras lable and ordered the scrapping of the earth and filling materials dumped in the adjacent perimeter wall of the Sonkin property and erect & retaining wall and to provide adequate drainage system. The Court of Appeals reversed the decision but ordered the Vergaras to provide adequate drainage system to prevent the flow of water into the Sonkin property. On appeal, the SC Held: The proximate cause of the damage done was the negligence of the Vergaras. But Sonkin had contributory negligence. It is undisputed that the Sonkin property is lower in elevation than the Vergara property, and thus, it 4s legally obliged to receive the waters that flow from the latter, pursuant t6Article 637 of the Civil Code. This provision refers to the legal easement pertaining to the natural drainage of lands, which obliges lower estates to receive from the higher estates water which naturally and without the intervention of man descends from the latter, ,e, not those collected artificially in reservoirs, etc. and the stones and earth cartied by the waters. In this light, Sps. Sonkin should have been aware of such circumstance and, accordingly, made the necessary adjustments to their property so as to minimize the burden created by such legal easement: Instead of doing so, they disregarded the easement and:¢onstrueted their house directly against the perimeter wall which adjoins the Vergara property, thereby violating the National Bullding Code in the process, specifically Section 708 (a) thereof which reads: pe ‘The dwelling shall,occupy not more than ninety percent of a corner Jot and eighty percent of an inside lot, and subject to the provisions on Easement on Light and View of the Civil Code of the Philippines, shall be at least 2 meters from the property line. ~~~ ip “NUISANCE Basketball ring may be a nuisance per accidens. In.Gruz et al. Pandactin Hiker’ Club, Inc, GR. No. 188213, January 11, 2016, Peralta, |, a basketball ring and its board were destroyed upon order of the barangay chairman, When sued for Malicious Mischief, Grave Misconduct Conduct Prejudicial to the Best Interest of the Service & Abuse of Authority, she alleged that the baskettall court affected the peace of the barangay, blocked jeepneys, the noise from the games, ‘Equised Jack of sleep among the residents. What she did was in response to a public duty and thus, performing her datiesatithe tie. The Ombudsman dismissed the complaint based on such defense but the CA reversed off appeal.since the action was not approved by ordinance and that inless a thing is a nuisance per se, such a thing: may'mof be abated via an ordinance and extrajudicially. The barangay chair and the tanod were penaliged-as'the destruction was done without following legal procedure. Before the SC, they contended that their act Was migfely in abatement of a nuisance which they claimed as within her power as barangay chairman to pérform and was part of her duty to maintain peace and order. Affirming the judgment of the CA, the Supreme Court, Held: The basketball ring is not a nuisance per se that may be summarily abated. At most, it is a mere nuisance per accidens, for it does not pose an immediate effect upon the safety of persons and property. It is tunitke a mad dog on the loose, which may be killed on sight because of the immediate danger it poses to the safety and lives of the people; nor is like pornographic materials, contaminated milk, end narcotic drugs which are inherently pernicious and which may be summarily destroyed; nor is it similar to a filthy restaurant which may be summarily padiocked th the Interest of the public health, (Ynot v. IAC, 232 Phil. 615, {1987}) A basketball ring by itself, poses no immediate harm or danger to anyone but is merely an object of recreation, Neither is it, by its nature, injurious to the rights of property, of health er of comfort of the 22 |ABRC2017.SCD2015-2016 in Civil Law/revised with insertions /consolidated-revised/EVSA/crys‘community and, thus, it may not be abated as a nuisance without the benefit of a judicial hearing. (Estate of Francisco v. CA, 276 Phil.649 [1991]) Prevailing jurisprudence holds that unless a nuisance is a nuisance per se, it may nat be summarily abated. (Rana v. Wong, G.R. No. 192861, June 30, 2014, 727 SCRA 539, 353; Perez v. Spouses Madrona, G.R No. 184478, March 21, 2012, 668 SCRA 696, 706-707) Who abates a nuisance. Under Article 700 of the Civil Code, the abatement, including one without judicial proceedings, of a Public nuisance is the responsibility of the district health olficer. Under Article 702 of the Code, the district health officer is also the official who shall determine whether or not abatement, without judicial proceedings, is the best remedy agalust a public nuisance. The two articles do not mention that the chief executive of the Jocal government, like the Punong Barangay, is authorized as the official who can determine the propriety of a summary abatement. ‘The barangay officials claimed to have acted in their official capacities in the exercise of their powers under the general welfare clause of the Local Government Code. But they could cite no barangay nor city ordinance that would have justified their summary abatement through the exercise of police powers found in the said clause. No barangay nor city ordinance was violated; neither was there one which specifically declared the said basketball ring as a nuisance per se that may be summarily abated. Though it has been held that a nuisance per se may be abated via an ordinance, without judicial proceedings, (Lucena Grand Central Terminal, Inc. v. JAC Liner, inc. supra) They are required to justify their abatement via such an ordinance because the power they claim to have exercised - the police power under the general welfare clause - is a power exercised by the government mainly through its legislative, and not the executive, branch. The prevailing jurisprudence is that local government units such as the provinces, cities, municipalities and barangays exercise police power through their respective legislative bodies. {Metropolitan Manila Development Authority v. Garin, 496 Phil. 82, 92 (2005); City of Manila v. Laguio, supra). ‘The barangay officials do not claim to have acted in their private capacities but in their capacities as public officials, thus, they are held administratively lable for tneir acts. And even in their capacities as private individuals who may have abated a public nuisance, they came up short of the legal requirements. They do ‘not claim to have complied with any of the requisites laid down in Article 704 of the Civil Code, to wit Art. 704, Any private person may abate 2 public nuisance which is specially injurious to him by removing, or if necessary, by cestroying the thing which constitutes the ‘same, without committing a breach of the peace, or doing unnecessary injury. But it is necessary: (1) That demand be frst made upon the.owner or possessor of the property to abate the nulsance; * (2) That such demand has beenejected;. (3) That the abatement be approved by the district health officer and executed with the assistance of the local policerand (4) That the value of the destruction does not exceed three thousand pesos. DONATION Remuneratory donation; form requiréd.need not be a public document. {mn Reyes v. Asuncion, G8. No. 196083, Navember 1, 2015, Peralta |, the owner of a property wanted to prevent the BCDA irom cotiverting ber property into a resettlement site, hence, she and the respondent executed 2 contract transferring her right over the said property. One of the provisions of the contract is that she gave satd parcel of lund to Femunerate his ten (10) years of service to her, Later on she, fled a complaint to nullify the contract alleging that it was absolutely simulated, or even assuming It to be remuneratory donation, stil it's invalid, because the donation was not notarized. The true nature of the contract is the basic issue where the SC”. Held: The subjectis a remuneratory donation. The contract, as weil as the evidence presented during the {Hal éfe'silent as to-the value of the burden, hence, instead of the law on donations, the rules on contract stiptild govern the subject contract because the donation is onerous as the burden is. imposed upon the donee ofa Shing. withen undetermined value. It is not necessary that the contract be in a public instrument if it nvolvet.imaovable-property, properly citing Pada-Kilario w. Court of Appeals, 379 phil. $15, $27 (2002), which states'that-the requirement of Article 1338 of the Civil Code that acts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property, must appear in a public document, 1s only for convenience, non-compliance with which does not affect the validity or ‘enforceability ofthe acts of the parties as among themselves SUCCESSION Preterition totally abrogates a will. In Iris Morales v. Ana Maria Olandriz etal, GR. No. 198994, February 3, 2016, Brion, J, the Supreme Court once again ruled that fa compulsory heir in the direct line is not instituted in a will, there is preterition which may result inthe total abrogation or nullity Fa will. may not totally nullify a wil ifthere ae legatees and devisees. 23 JABRC2017 $CD2015-2016 in Civil Law/revised with insertions consolidated-revised/EVSA/crysIn this case, a father executed a will but did not institute one of his children, thus, when the will was submitted 1o probate, an opposition was filed. The proponent contended that he was not preterited because he received a donation inter vivos from his father, but that was never proven Holding that there was preterition, the SC Held: Preterition consists in the omission of a compulsory heir from the will elther because he is not named or, although he is named as a father, son, ete, he is neither instituted as an heir nor assigned any part of the sState without expressly being disinherited ~ tacitly depriving the heir of his legitine. (Nuguid v. Nuguid, G. Ny. £23445, June 23, 1966, 17 SCRA 449, 454, citing Vi Manresa, Commentaries ol Codigo Civil Espafol, 7th Ed. (1981). p. 424: Aznar v. Duncan, GR. No. 24365, 17 SCRA 590, 595, citing VI Manresa, p. 428) Preterition Tequires that the omission is total, meaning the heir did not also receive any legacies, devises, or advances on his legitime. {in other words, preterition is the complete and total omission of a compulso-y heir rom the testator’s inheritance without the he’s express disinheritance. Article 854 of the Civil Code states the legal effects of preterition: Art. 854, The preterition or omission of one, some, or all of the compulsory heirs in the direct line, whether living at the time of the execution of the will or born after the death of the testator, shall annul the institution of heir; but the devises and legacies shall be valid insofar as they are not inofficious. If the omitted compulsory heirs should die before the testator, the institution shall be effectual, without prejudice to the right of representation. @ Under the Civil Code, the preterition of a compulsory heir in the direct line shall annul the institution of helis, but the devises and legacies shall remain valid insofar as the legitimes are not impaired. Consequently, ifa will does not institute any devisees o” legatees, the preterition of accémpulsory helt in the Sirect line will result in total intestacy. (Nuguid) In the present case, the decedent's will evidently omitted Francisco Olondriz as an‘heir, legatee, or devisee. As the decedent's illegitimate son, Francisco is a compulsory heir in-the direct line. Unless Morales could show otherwise, Francisco's omission from the will would lead to the conclusion of his preterttion, During the proceedings in the RTC, Morales had the opportunityéto present evidence that Francisco received donations inter vivos and advances on his legitime from the decedent, However, Morales did not appear during the hearing dates, effectively waiving her right to present evidence on the issue. We cannot fault the RTC for reaching the reasonable conclusion that there was preterition, Extent ofthe power of the probate court. ‘The general rule is that in probate proceedings, the scope of the court's inquiry is limited to Guestions on the extrinsic valldity ofthe will; he probate court will oly determine tne will's formal validity and due execution. (Nepomuceno v. Court of Appeals, 223 Phil, 418, 423 [1985]) However, this rule is not inflexible and absolute. (Nepomuceno v. CA} Ibis notbeyond the prabate court's jurisdiction to pass upon the Intrinsic validity of the will when so warranted by exceptional circumstances, (See Nuguid; Nepomuceno, Balanay v. Hon, Martinez, 159-A Phil 718, 723 (1975]} When practical considerations demand that the intrinsic validity of the will be passed upon even before it is probated, the probate court should meet the issue. (alanay, supra nove 10, at 723; ting Nuguid): The decedent’ will does not contain specific legacies or devices znd Francisco's preterition annulled the institution of heirs. The annulment effectively caused the eoval abrogation of the will, resulting In total intestacy of the inheritance(Nuguid v. Nuguid) The decedent's will, no matter how valid it may appear extrinsicall, is null and void.-The-conduct of separate proceedings to determine the intrinsic validity of its testamentary provisions would-be superfluous, hence, no error was committed. in ordering the case to proceed intestats PRESCRIPTION TCT is imprescriptibie; title prevails against mere possession. 4. tn Suapo, etal. v.Sps. De Jesus, e a, G.R. No, 198356, April 20,2015, Brion, },an accion publiciana was filed seekding'to-compel the defendants to vacate the property they were occupying, alleging that they are the ownérs of the samewith a Torrens Title. The defendants alleged that the action has prescribed because it was filed beyonda period of 10 years. They contended that they have been in open, public possession of the Property for aver a period of 10 years. The SC however did not agree with the defense, because the action is imprescriptibleand expounding on the imprescriptibility of the action, the SC Meld: The defense of prescription has no legal basis. Lands covered by a tutle cannot be acquired by prescription or adverse possession. A claim of acquisitive prescription is baseless when the land involved is a registered land because of Article 1126 of the Civil Code in relation to Act 496 [now, Section 47 of Presidential Decree (PD) No. 1529}. ‘The owners enjoy a panoply of benefits under the Torrens system, The most essential insofar as the present case is concerned is Section 47 of PD No. 1529 which states that no title to registered land in derogation ofthe title ofthe registered owner shall be acquired by prescription or adverse possession, 24 |ABRCZ017.SCD2015-2016 in Civil Law/revised with insertinns/consolidated.-revised/EVSA/crysIn addition to the imprescriptibility, the person whe holds a Torrens Title over a land is also entitled to the possession thereof. The right to possess and occupy the land is an attribute and a logical consequence of ownership, Corollary to this rule is the right of the holder of the Torrens Title to eject any person illegally occupying their property. Again, this right is imprescriptible. (Bishop v. CA, G.R. No. 86787, May 8, 1992, 208 SCRA 636, 641). In Bishop v.CA, it was held that even if it be supposed that the holders of the Torrens Title are aware of the other persons’ occupation of the property, regardless of the length of that possession, the lawtul owners have a right to demand the return of their property at any time as long as the possession was unauthorized or merely tolerated, ifat all. (Arroyo v. BIDECO, G.R. No, 167880, November 14, 2012, 685 SCRA 430; Labrador v, Perlas, G.R. No, 173900, August 9, 2010, 627 SCRA 265), OBLIGATIONS AND CONTRACTS ‘If no substantial breach, rescission is improper. In Nolasco, et al. v. Cuerpo, e€ al, G.R. No, 210215, December 9, 2015, Perlas-Bernabe, J, there was a contract of sale between the parties. One ofthe terms and conditions provided that: Petitioners shall, within ninety (90) days from the signing of the subject contract, cause the completion of the transfer of registration of title of the property subject of [the subject contract), from Edilberta N. Santos to their names, at petitioners’ own expense. Failure on the part of petitioners to undertake the foregoing within the prescribed Period shall automatically authorize respondents to undertake the same in behalf of Petitioners and charge the costs incidental to the monthly amortizations upon due date, ‘There was failure to comply, hence it was contended that rescission due to substantial breach is the proper remedy. ‘The SC ruled otherwise and Held: For a contracting party to be entitled to rescission (or resolution) invaccordance with Article 1191 of the Civil Code, the other contracting party must be in substantial breach of the terms and conditions of their contract. A substantial breach of a contract, unlike slight and casual breaches thereof, isa fundamental breach that defeats the object of the parties in entering into an agreement. (Maglasang v. Northwestern University, Inc, G.R. No. 188986, March 20, 2013, 694 SCRA 128) Here, it cannot be said that petitioners’ failure to undertake their obligation defeated the object ofthe parties fa entering into the subject contract, considering that the same provides a contractual recourse in.the event of petitioners’ non-performance of the aforesaid obligation, that is, to cause such transfer themselves in behalf and at the expense of petitioners. Indubitably, there is no substantial-breach-on the part of petitioners that would necessitate a rescission (or resolution) of the subject contract. In reciprocal obligations, elther party_may rescind ~ or more appropriately, resolve ~ the contract upon the other party's substantial bréach of the obligation/s he had assumed thereunder. (Golden Yalley Exploration, Inc. v. Pinkian Minitig-Company, GR. No. 190080, june 11, 2014, 726 SCRA 259, 265) This is expressly provided for in Article 1191 ofthe Civil Code. “More accurately refered to as resolution, the right of rescission under Article 1391 is predicated on 2 breach of faith that violates the reciprocity between the parties to the contract. This retaliatory remedy is slven to the contracting party.who'suffers the injurious breach on the premise that itis ‘unjust that a party be held bound to fulfil! his:promises when the other violates his.” Note that the rescission (or resolution) of a contract will not be permitted for a slight or casual breach, but only for such substantia, and fundamental Violations.as would Uefeat the very object of the parties in making the agreement. (EDS Manufacturing, Inc. . Healthch@ck International, inc. G.R. No. 162802, October 9, 2013, 707 SCRA 133, 141) Ultimately, the Question. of whether 2°beeach of contract is substantial depends upon the attending circumstances. (Mag Nortliwestern University, Inc, G.R. No, 188986, March 20, 2013, 694 SCRA 128, 136) Rescissions cause of action. _., tn-ASB Realty Gerp. v. Ortigas & Co, Led. Partnership, G.R. No. 202947, December 9, 2015, Bersamia, J, a deed of Sale over a property was entered into between Ortigas and Amethyst Pearl Corp. with the condition that the latteriwould construct @ building thereon within four (4) years from December 31, 1991. In the meantime, Amethyst assigned the property to ASB with knowledge of Ortigas, and with knowledge of ASB of the annotations but without express or implied assumption of the obligations to construct the building, Due to the failure of Amethyst to construct the building, Ortigas filed a complaint for specific performance against ASB. Is ASB liable considering its knowledge of the covenants that are annotated at the back of the title? Ruling that it is not, the SC Held: By acquiring the parcel of land with notice of the cover:ants contained in the Deed of Sale between the vendor (Ortigas) and the vendee (Amethyst), the petitioner bound itself to acknowledge and respect the sneumbrance. Even So, the petitioner did not step into the shoes of Amethyst as a party in the Deed of Sale ‘Thus, the annotation ofthe covenants contained in the Deed of Sale did not give rise to a liability on the part of the petitioner as the purchaser/successor-in-iiterest without: its express assumption of the duties se 25 |ABRC2017.5CD2015-2016 in Civil Lw/revised with insertions consolidated-revised/EVSA/crysobligations subject of the annotation. The annotation was only the notice to the purchaser/successor-in- interest of the burden, claim or lien subject of the annotation. {na similar case, Gareia v. Villar, G.R. No. 158891, June 27, 2012, 67 SCRA 80, 92-93, the SC ruled that the sale or transfer of the mortgaged property cannot affect or release the mortgage: thus the purchaser or transferee is necessarily bound to acknowledge and respect the encumbrance, However, Villar, in buying the subject property with notice that it was mortgaged, only undertook to Pay such mortgage or allow the subject property to be sold upon failure of the mortgage creditor to obtain Payment (rom the principal debtor once the debt matures. Villar did not obligate herself to replace the debtor & i Principal obligation, and could not do so in law without the ereditors consent (Article 1293 of the Civil Rescission, not proper. sc sai E8810" the Proper remedy for Ortigas to recover the subject property from the petitioner? The SC said, No. The Civil Code uses rescission in two different contexts, namely: (1) rescission on account of breach ict under Article 1191; and (2) rescission by reason of lesion or economic prejudice under Article 1381. Cogently explaining the differences between the contexts of rescission in his concurring opinion’ Universal Food corp. v. Court of Appeals, L-29155, May 13, 1970, 33 SCRA 1, 22-23, the eminent justice [B.L Reyes observed: of cont xxx The rescission on account of breach of stipulations is not predicated on injury to economic interests of the party plaintiff but on the breach of faith by the defendant, that violates the reciprocity between the parties. It is not a subsidiary action, and Article 1191 may be scanned without disclosing anywhere that the action for rescission thereunder. is subordinated to anything; other than the culpable breach of his obligations by'tlie defendant. This rescission i in principal action retaliatory in character, it being unjust that a party be held bound to fulfil his promises when the other violates his, as expressed in the old Latin aplrism: ‘Non servant fidem, non est fides servanda.” Hence, the reparation of damages for the breach is purely secondary. On the contrary, in the rescission by reason of lesion or economic. prejudice, the cause of action is subordinated to the existence of that prejudiésy"because it is the raison d'etre as well as the measure of the right to rescind. Hence, where the defendant makes good the damages Caused, the action cannot be maintained or continued; as expressly provided in Articles 1383 and 1384. But the operation of these two" articles is limited to the cases of rescission for lesion enumerated in Article 1381 of the Civil Code of the Philippines, and daes not apply to cases under Article 1191. : Ortigas’ complaint was predicated on Article 1191 of the Civil Code. Rescission under Article 1191 of the Givil Code is proper if one of the parties to the contract commits a substantial breach of its provisions. It abrogates the contract from its inception and requires the mutual testitution of the benefits received: (Stipercars, Management & Development Corporation v. Flores, G.R. No, 148173, December 10, 2004, 446 SCRA'34,43) fence, ican be carried out only when the party who demands rescission can return whatever he may be obliged to restore. Considering the foregoing, Ortigas did, not have a cause of action against the petitioner for the rescission of the Deed of Sale. : ‘The petitioner was hot privy to the Deed of Sale because it was not the party obliged thereon. Not having come under the duty not to violate any covenant in the Deed of Sale when it purchased the subject property-despite the afinotatiott-on the tite, its failure to comply with the covenants in the Deed of Sale did not constitute'a breach of'contract that gave rise to Ortigas' right of resvission. {t Was rather Amethyst that defaulted.on the covenants under the Deed of Sale; hence, the action to enforce the provisions of the contract, onsto,restind the contract should be against Amethyst. In other words, rescission could not anymore take place against the-petitioner once the subject property legally came Into the juridical possession of the petittonier/Wwho was-a third party to the Deed of Sale. (Art. 1385, NCC) Appitcation'og payment: debtor has the right: effect if he does not exercise. “The right-to make application of payment is a right of the debtor which is merely directory in nature and must Be promptly exercised, lest, such right passes to the creditor, Such is the pronouncement of the SC in Sps. Tan, e&e¥. China Banking Corp. G.R. No. 200299, August 17, 2016, Perez, J, where after the bank foreclosed the'mortgages over the properties which were used to secure the payment of obligations contracted by the debtor, the debtor failed to manifest its preference as to which among the obligations that ‘were due the proceeds of the sale should be applied Hence, the bank made the application of payment, by applying the proceeds of the sale to the interest first ard then to the principal: Expounding on the rule, the SC said that Held: Obligations are extinguished, among others, by payment or performance. (Go Cinco, et al. ¥: Court of Appeals, et il, 618 Phil. 104, 112 [2009]) Under Article 1232 of the Civil Code, payment means not only the delivery of money but also the performance, in any other manner, of an obligation. Article 1233 of the Civil Code states that a debt shall not be understood to have been paid unless the thing or service in which the obligation consists has been completely delivered or rendered, as the case may he, In contracts of loan, the 26 |ABRC201 7.SCD2015-2016 in Civil Law revised with insertions /consolidated-revised/EVSA crysdebtor is expected to deliver the sum of money due the creditor. These provisions must be read in relation with the other rules on payment under the Civil Code, such as the application of payment, to wit: Art. 1252. He who has various debts of the same kind in favor of one and the seme screditor, 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 arty 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. {In Premiere Development Bank v . Central Surety & Insurance Company Ine, 598 Phil. 827, 844-845 {2009}, it was held that the right of the debtor to apply payment is merely directory in nature and must be Promptly exercised, lest, such right passes to the creditor, vi ‘Article 1252 gives the right ta the debtor to choose to which of several obligations te apply: a particular payment that he tenders to the ereditor. But likewise granted in the same provision is the right of the creditor to apply such payment in case the debtor fails to direct {ts application, This is obvious in Art. 1252, par. 2, viz: ‘If the debtor accepts from the creditor a receipt in which an application of payment is made, the former cannot complain of the same’ It is the directory nature of this right and the subsidiary right of the creditor to apply payments when the debtor does not elect to do so that make this right, like any other right, waivable, Rights may be waived, unless the waiver is contrary to law, public ordér, public policy, morals or good customs, or prejudicial to a third person with a right recognized by faw. A debtor, in making a voluntary payment, may at the time of payment direct an application of it to whatever account he chooses, unless he has assigned of waived that right. Ifthe debtor does not do so, the right passes to the creditor, who may make such application as he chooses, But if neither party has exercised its option, the court will apply the payment according to the. justice and equity of the case, taking Into consideration all its circumstances.” € {mn the event that the debtor failed to exercise the right to’ elect, the creditor may choose to which among the debts the payment is applied as in the case at bar. It is noteworthy that after the sale of the foreclosed properties at the public auction, the debtor failed to manifest its preference as to which among the obligations that were all due the proceeds of-the sale ‘should be applied. its silence can be construed as acquiescence to Ching Bank's application of the payment fst to the interest and penaltios and the remainder to the principal which is sanctioned by Article 42530f the New Civil Code. ‘CONTRACTS Contract is the law: between the parties; effect of breach. In Talampas, jr. v. Moldez Realty, Inc, G.R. No, 170134, June 17, 2015, Brion, J, there was a contract Where the petitioner undertook to perform rozdwarks, earthworks and sitegrading, ete. for 4 total cost of P10,500,000.00 to be paid-on progress billing. P500,000.00 was paid as downpayment. While work was in Progress, Moldex terminated the contract due to the redesign of the project which was not found in the contract. Petitioner demanded for payment of equipment rentals during the suspension of the contract and 20% of the contract price as cost of opportunity loss due to the early termination of the contract, but Tespondent refused to pay. A complaint for breach of contract was filed for the unilateral terminations of the agreement and fraud for falling to disclose the project's tack of conversion clearance certificate from the DAR which he claimed to be the real reason for the termination of the contract. The RTC decided in favor of the petitioners ruling that the project design was not a stipulated ground for the termination of the contract. and that Moldex committed fraud. ‘The CA reversed the decision on appeal, ruling that there was no unilateral termination considering that petitioner consented to it. Italso reversed the ruling on fraud. In reversing the CA, the SC Held: Contratis have thé force of law between the parties and must be complied with in good faith. A contracting party's failure, without legal reason, to comply with contract stipulations breaches their contract and can be the basis for the award of damages to.the other contracting party The respondent failed to. comply with its contractual stipulations on the unilateral scegiaation when it terminated their contract due to the redesign of the Metrogute Silang Estates’ subdivision plan which is not one of the grounds agreed upon. The respondent could-not have validly and unilaterally terminated its contract with the petitioner, as the latter has not committed any of the stipulated acts of default. In fac the petitioner at that time was willing and able to perform his obligations under thei contract. 27 IABRCZO17 SCD2015-2016 in Civil Law/revised with insertions /consolidated-revised/EVSA/crysor the caer fesPondent’s termination of the subject contract violated the partes’ agreement as the Teeaoh for the termination, Le, the redesign ofthe project's subdivision plan, was nota stitrdatea eaten er the unilateral termination under their contract. TRE request for an oficial letter of termination does not necessarily mean consentto the termination; ‘more than a request for a final decision from the respondent. 2s respondent also contended that the pettioner ratified the termination of their contract by inset Payments for progress billings, costs of equipment mobilization demobilization, refund cy aes ctice pond payments, and the releace of retention fees. The petitioner’ receipt of these payments tobe ‘acts of ratification or consent to the contract's termination cannot ve considered ratifieation ‘Hfect of qualified acceptance of offer; receipt of payments and additional demands. Consent is manifested by the meeting of the offer and the acceptance upon the.thing and the cause Wey are. £0 constitute the contract. (Article 1319, Civil Code). The offer must be certain, and the acceplance, whether express or implied, must be absolute. (Articles 1319 and 1320, Civil Code), An acteptonce considered absolute and unqualified when iis identical in all respects with that of the affer so as te produce Sonsent or a meeting ofthe minds, (Traders Royal Bank v. Cuison Lumber Cc. Inc, GR. NO. 174286 fone 2009, 588 SCRA 690, 701, 703). : There was no such meeting of the minds between the parties on the matter of termination because the petitioner's acceptance of the respondent's offer to terminate was not absolute. : ‘To terminate thelr contract, the respondent offered to pay the petitioner billings Fee accomplished Works, unrecouped costs of equipment mobilization and demobilization, unrecouped payniert of insurance bond and the release of all retention fees — payments that the petitioner accepted or reseived. But despite receipt of payments, no absolute acceptance of the respondent's offe taok place because the petitioner still demanded the payment of equipment rentals, cost of opportunity last amiong ethers, In fact the payments received were for finished or delivered: works and forsexpenses ineurved for the respondent's account. By making the additional demands, the petitioner effectively made a qualified jcceptance or a counteroffer, which the respondent did not accept. Under these circumstances, we see no full consent. Jn Manila Metal Container Corporation v. Philfgpine National Ba 2006, S11 SCRA 444, 465-466, the Court ruled me ‘A qualified acceptance or one that involves a new proposal constitutes a counteroffer and a rejection of the original offer. A couliter-offer Is considered in law, a ejection of the original offer and an attempt to end.the negotiation between the parties of a aifferent basis, Consequently, when something is desired which is not exactly what is. preposed in the offer, such acceptance is not sufficient to guarantee consent because any modification or variation from the terms of the offer annul the offer. The acceptance must be identical in all réspects with that ofthe offer so as to produce consent or meeting of the minds. GR, No. 166862, December 20, Perfection of contracts; effect if there ts restructuring proposal. In Sps. Gironelia v. PNB, GR: No. 194515, September 16, 2015, Perez, J, the SC once again had the occasion to rule that if thete is a propésad restructuring of the obligation, there is no perfected contract yet, Partial payment is not yet payment on the proposed restructuring agreement but on the old contract. A contract Is perfected by mere corisent. in turn, consent is manifested by the meeting of the offer and the acceptance upon the:thing’and the cause which are to constitute the contract. The offer must be certain and the acceptance seasonable,and absolute. If qualified, the acceptance would merely constitute a counter-offer as what occurred in this case. ‘To reach that moment of perfection, the parties must agree on the samé thing in the same sense, so that their minds meet'as to all the terms. They must have a distinct intention commen to beth afd rithoue doubt oF difference; untif all understand alike, there can be no assent, and therefore no contract. The minds of parties:must:meet ab-every point; nothing can be left open for further arrangement. So long as there is any uitcertainyy, oF indefiniteness, or future negotiations or considerations to be had between the parties, there is not acompléted contract, and in fact. there is no contract at all -“=Payiments.under its original loan account cannot be considered as partial execiition ‘of the proposed restructufing loan agreement. They were clearly made during the pendency of the negotiations on the restructuring: Stich pendency proves, absence, not presence of an agreement ready for execution, At the time of payments only petitioners’ obligation under the original credit agreements were in existence: Indeed, the Payment scieme under the proposed restructuring was outlined by PNB only in the leter of 25 January 2000. Further on this, negotiation begins fromthe time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties Once there is concurrence of the offer and acceptance of the object and cause, the stage of negotiation is finished. (Batafigan v. Cojuangco, 78 Phil, 481, 484 (1947); See also Metropolitan Bank and Trust Company v. Tonda, 392 Phil. 797, 809 (2000)), This situation does not obtain in the case at bar. The letter of PNB was qualifiedly accepted by the Spouses Gironelia as contained in their letter and constituted a counter-offer which PN ultimately rejected. The surrounding circumstances clearly show that the parties were not past the stage of negotiation for the terms 28 |ABRCZ017,SCD2015-2016 in Civil Law/revised with Insertions /consolidated-revised/EVSA crysand conditions of the restructured loan agreements, There was no meeting of the minds on the restructuring of the loans. Thus, the Spouses Gironelia's original Php9,500,000,00 loan agreement subsists. Contract of services. In WT Construction, Inc. v, The Province of Cebu, G:R. No, 208984; Province of Cebu v. WT Construction, Inc, G.R. No, 209245, September 16, 2015, Perlas-Bernabe, j, in connection with the 12” ASEAN Summit where the Province of Cebu was the site, the latter decided to construct the Cebu International Convention, Center (CICC). WTC! emerged as the winning bidder to construct. There was an issue as tothe nature of the lability of the Province of Cebu in connection with WTC!'s performance of a particular service like the performance of additional works on CICC consisting of site development, additional structural, architectural, plumbing and electrical works thereon, where it advanced the cost of the additional works. Is it a forebearance of money or contract of services? ‘The Supreme Court ruled it to be one of contract of services. In Sunga-Chan v. CA, 578 Phil. 262 (2008), the Court characterized @ transaction involving forbearance of money as follows: ‘The term "forbearance," within the context of usury law, has been described as a contractual obligation of a lender or creditor to refrain, during a given period of time, from ‘requiring the borrower or debtor to repay the loan or debt then due and payable, In Estores v. Supangan, GR. No, 175139, April 18, 2012, 670 SCRA 95, the Court explained that forbearance of money, goods, or credit refers to arrangements other than loan agreements where a person acqulesces to the temporary use of his money, goods or credits pending the happening of certain events or fulfilment of certain conditions such that if these conditions are breached, the said person is entitled not only to the return of the principal amount given, but also to compensation for the use of his money equivalent to the legal interest since the use or deprivation of funds is akin to a loan, 4 Applying the foregoing standards the liability of the Province of Cebu to WTCI is not in the nature of a forbearance of money as it does not involve an acquiescence to the temporary use of WTCI's money, goods or credits. Rather; it involves WTCI's performance of a particular service; Le, the performance of additional works on CICC, consisting of site development, additional structural, architectural, plumbing, and electrical works thereon. The liabilities arising from construction contracts do not partake of loans or forbearance of money but are in the nature of contracts of service. In Federal Builders, inc. v. Foundation Specialists, Inc., G.R. Nos 194907 and 194621, September 8, 2014, 734 SCRA 379, the Court ruled that the liability arising from the on-payment for the construction works, specifically the construction of a diaphragm wall, capping beam, and guide walls of the Trafalgar Plaza in Makat! City-do not partake of a loan or forbearance of money but is more in the nature of a contract of service. Hence, the rate of legal interest imposable on the liability of the Province of Cebu to WTC! is 6% per annum, in accordance withthe guidelines laid down in Eastern Shipping Lines, Ine. ¥. Court of Appeals, G.R. No. 97412, july 12, 1994, 234 SCRA 78 (Eastern Shipping Lines, In), viz: Simulated contracts are void; no title acquired. Once again, in Clemente ¥:°CA, et dl,.GR. No.175483, October 14, 2015, Jardeleza, , the SC had the occasion to say that a simulated contractis void, In fact, no trust was created over said properties In this case the owner-executed a contract of sale over her properties but retained ownership over the same. In fact, she exectited a special power of attorney for the transferee to administer the same. The validity of the contract was put tossue where the SC Held: Thecontract is Vole as it Was merely simulated and without any consideration. A Contract is a meeting of minds between two persons whereby one binds himseli, with respect to the other.to give something or to render some service. Article 1318 provides that there is no contract unless the following requisites concur: ‘" (2) Consent of the contracting parties; ject Certain which isthe subject matter ofthe contract; and {8) Cause of the obligation which is established. All these-elements must be present to constitute a valid contract; the absence of one renders the contract Void. ASione of the essential elements, consent when wanting makes the contract non-existent. Consent is mdajfested by the meeting of the offer and the acceptance of the thing and the cause, which are to constitute the contract A contract of sale is perfected at the moment there is a meeting of the minds upon the thing that is the object of the contract, and upon the price. Here, there was na valid contract of sale between the parties because thelr consent was absent. The contract of sale was a mere simulation. Simulation takes place when the parties do not really want the contract they have executed to produce the legal effects expressed by its wordings. Article 1345 of the Civil Code provides that the simulation of 2 Contract may elther be absolute or relative, The former takes place when the parties do not intend to be Dour at all; the later, when the parties conceal their true agreement. The case of Helrs of Policronia M. Ureto, ‘Srv Heirs of Liberato M. Ureta, GR. Nos. 165748 & 165930, September 14, 2011, 657 SC8A 585, $75 clting 29 IABRC2017 ScD2015-2016 in Civil Law/revised with insertions /consolidated-revised /EVSA/crysVolerio v. Refresca, GR. Wo, 163687, March 28, 2006, 485 SCRA 494, 500-501 is instructive on absolute simulation of contracts, viz: ° : grenade cngusie io absolute simulation, there is a colorable contract but it has no substance as the parties have no intention to be bound by it. The main characteristic of an ctestane Uf Shor’ in absolute simulation there appears to be a valid contract but there is actually hone because the element of consent is lacking. This is so because the parties do not actualy intend to he beatct he the terms of the contract. - ESTOPPEL Estoppel by deed arises if there is express commitment. In jose Go. et al. v. Bangko Sentral ng Pilipinas, et al, G.R. No. 202262, June 8, 2015, Bersamin, [,'a compromise between the BSP dnd Orient Commercial Banking Corp, where properties of Ever Crest Golf Cla Resort, Inc. and Mega Heights, Inc. were used to secure the payment of the obligations of Orient te BSP ang agreed that the said properties shall be subject of existing writ of attachment until the obligation shall hove been fully paid. As there was no compliance with the judgment based on compromise, BSP moved for execution of the compromise against the aforesaid properties. Ever Crest and Mega Heights objected on the ground that they were not impleaded as parties in the suit or signatory to.the compromise agreement. Finding the argument untenable, the SC Held: Peritioners are in estoppel by deed of virtue ofthe execution of the compromise agreement, especially 30 that they were the ones who offered their properties as security. They, firmly commitzed:in the compromise agreement, to have their properties with Improvements be-made subject to the writ of attachment in order “to secure the faithful payment of the outstanding obligation until such obligation shall have been tully paid by defendants to plaintiff and expressly asstired Bangko: Sentral in the same compromise agreement that “all che corporate approvals for the exerucion of this Compromise agreemene by. Ever Crest Golf Club Resort, ne, and Mega Heights, Inc, consisting of stockholders resolution and Board of Directors approval have already heen obtained at the time of the execution ofthis Agreement." They warranted in the compromise agreement that: “Failure on the part of the defendants to fully setle their outstanding abligations and to comply with any of the terms of this Compromise Agreement shall entitle the pleintif to immediately ask for a Writ of Execution against all assets ofthe Ever Crest Golf Club Resort, Ine, and Mega Heights, Inc, now or hereafter arising upon the-signirig-of this Compromise Agreement” By sich express commitments, they are estopped from claiming that the properties of Ever Crest and Mega Helghts could not be the subject of levy pursuant to the writ of execution. In other words, they could not anymore assail the court for authorizing the enforcement of the judgment on the compromise agreement against the assets of Ever Crest " ‘ ‘TRUST Implied trust converted to express trust. In Go v. The Estate of the Later Felisia de Buenaventura, etc, G.R. No. 211972; Guerrero, et al’ v. The Estate of the Late Felisa de Buenaventura, etc, G.R. No. 212045, June 22, 2015, Perlas-Bernabe, |, in 1960 Felisa, as owner of a parce! of land, transferred the same to her daughter Bella, married to Delfin, §r. and Felimon, Sr, to assist them in procuring a loan from the GSIS, Her title was cancelled and a new one was issued under the names of Bella and Delfin. in a letter dated September 21, 1970, addressed to the latter, she said that the property still belonged to her and that she transferred the property due te their intention to procure a loan from the GSIS. She requested that beneath the letter, they should sign, and they signed and she likewise signed the same. The nature of the transfer ofthe property was the basic issue ina litigation between the parties where the SC Held: Taking into considering the contents of the letter, the transfer was a case of an express trust. ““sThe Wortls of Felisa inthe letter unequivocally and absolutely déclared her intention of transferring the title over'the subject property to Gella, Delfi, Sr, and Felimon, Sr. ni tder to merely accommodate them in securing a'Woan from the GSIS. She likewise stated clearly that she was retaining her ownership over the subject property and articulated her wish to have her heirs share equally therein. Hence, while in the beginning, an implied trust was merely created between Felisa, as trustor, and Bella, Delfin, Sr, and Felimon, Sr. as both trustees and beneficiaries, the execution of the September 21, 1970 lever settled, once and for all, the nature of the trust established between them as an express one, thelr true Intentlot:irrefutably extant thereon. Bella's attempt to thwart the express trust established in this case by claiming that she affixed her signature on the September 21, 1970 letter only “to appease” her mother, Felisa, and that she could afford to sign the letter since the title covering the subject property was in their name as owners anyway. does not hold water. As held in Lee Tek Sheng v. CA, 354 Phil. 556 [1998], the "[mlere issuance of the certificate of title in the name of any person does not foreclose the possibility that the real property may be under co- 30 |ABRC2017.SCD2015-2016 in Civil Law/revised with insertions/consolidated-revised!/ EVSA/crys‘ownership with persons not named in the certificate or that the registrant may only be a trustee or that other parties may have acquired interest subsequent to the issuance of the certificate of title.” Registration does not vest title; it is merely the evidence of such title. (Heirs of Rosa and Cirila Dumaliang v. Serban, 545 Phil. 243, 256 (2007) Bella never denied the purpose for which the sale to them of the subject property was effected. Instead, they relied heavily and anchored their defense on the existencé of their certificate of title covering the subject property, which, ta reiterate, was Insufficient wo prove their ownership over the same Independent of the express trust ‘TRUST Action for quieting of title is enforcing implied trust; prescription to enforce ls 10 years. ‘The cause of action for quieting of title, recovery and damages over a property acquired through a forged deed can be.considered as that of enforcing an implied trust under Article 1436 of the Civil Code: ‘Art. 1456. property is acquired through mistake or fraud, the person obtaining it 1s, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. In Heirs of Jose Olviga v. Court of Appeals, G.R. No. 104813, October 21, 1993, 227 SCRA 330, the Court explained when an action enforcing an implied trust prescribes: ss ‘With regard to the issue of prescription, this Court has ruled a number of times before that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed ‘or the date of the issuance of the certificate of title over the property (Vda-de Portugal vs IAC, 159 SCRA 178). But this rule applies only when the plaintiff is aot in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance, which in efect seeks to quiet title to the property, does not prescribe. Petitioners wer= not in possession of the subject property when they’ filed their complaint for quieting of title, recovery and damages. If their complaint were to.be considered as that of enforcing an implied trust, it should have been filed within 10 years from the issuance of the title in the name of the Innocent purchaser for value. However, the complaint was filed about 20.years from the issuance of the title, Which is way beyond the prescriptive period. Worse, such, delay is unjustified and unreasonably long, and petitioners clearly failed to exercise due diligence in assefting their right over the property: Therefore, petitioners’ complaint is likewise barred by laches, which.has been defined as the failure or neglect for an unreasonable and unexplained leng.h of time to do that which by exercising due diligence, could or show have been done earlier, thus, giving rise t6:2 presumption that the party entitled to assert it either has abandoned or declined to assert it. (Philippine Carpet Manufacturing Corporation v. Tagyamon, G.R. No. 191475, December 11, 2013, 712 SCRA489, 498; Tolentino, etal. v. Sps. Latagan, et al, G.R. No. 179874, lune 25, 2015, Peralta, j) é SALES Contract is contract to sell when it is. Once again, the SC in Rodriguez x Sps, Sioson, G.R. No. 199180, July 27, 2016, Reyes, J, a contract was ruled to-be one of a comtract to’sell where the owner agreed to sell the subject property to the other party upon full payment of the purchase priee. ‘The SC'said that this is the very nature of a contract to sell, which isa “bilateral contract whereby the ‘prospective seller, while expressly reserving the ownership of the property despite delivery thereof to the prospective buyernbinids himself to sell the property exclusively to the prospective buyer upon fulftllment of ie git owed ure, ‘e, the full payment of the purchase price." (Ace Foods, Inc. v. Micro Pacific Technologies Co, itd, 723 Phil. 742, 751 [2013]) | 2) hig agreement to exec.ite a deed of sale upon full payment of the purchase price “shows that the vend9Fs reserved tide to the subject property until full payment of the purchase price.” (Diego v. Diego, et al, 704 Phil. 323, 384 [2013] citing Reyes v. Tuparan, 665 Phil. 425, 442 [2611}) Effect of delivery in a contract to sell. The alleged delivery of the property, even if true, is irrelevant considering that in a contract to sell ownership is retained by the registered owner in spite of the partial payment of the purchase price and delivery of possession of the property. Thus, in Rogue v. Aguado, G.R. No. 193787, April 7, 2014, 720 SCRA 780, it was ruled that since the petitioners have not paid the final installment of the purchase price, the condition which would have triggered the parties' obligation to enter into and thereby perfect a contract of sale cannot be deemed to have been fulfilled; consequently, they “cannot validly claim ownership over the subject portion even if they had made an initial payment and even took possession of the same.” Having failed to pay the purchase price in full, the prospective buyer cannot claim ownership and the ‘owner is not legally proscribed from alienating the same lot to other buyers. 31 |ABRC2017.SCD2015-2016 in Ci Law/revised with insertions /cansolidated-revised/EVSA/exysContract of sale disguised as donation, Jn Victoria, et al. Pidlaoan, ¢ al, C.R. No, 196470, Apel 20, 2016, Brion, j, Elma and Normita were Tener anattter into a contract of sale over a parcel of land entitled “Panananto ng Pagkatanggap ng Kahustuhang Bayad” when the notary public advised them to enter a contract of donation te nna payment ey cabital gains tax. They then entered into a contract of donation, What is the true nature of ehare agreement? xplain, Hela: The contract is truly one of sale but disguised as a donation. Thus, the deed of donation executed by them is only relatively simulated. Bank as mortgagee should exercise utmost diligence in inspecting property. In ABP v. Belle Corp, GR. No, 205271, September 2, 2015, Peralta |, a real propery was mortgaged With the bank. After verification, it found that there was an access road traversing the same leading to jseveay Highland Golf Course but it did not inquire into the same, instead it disregarded such suspicious brovoking its presence, Ruling that the bank is a mortgagee in bad faith, the SC Held: Where the mortgagee acted with haste {n granting the loan, and did not ascertain the ownership of the land being mortgaged it cannot be considered an innocent mortgagee, (Arguelles v. Malarayat Rural Banke Ie, GR. No. 200468, March 19, 2014, 719 SCRA 563) When the purchaser or the mortgagee is a bank, the rule on innocent purchasers or mortgages for value is applied more strictly. (Heirs of Gregorio Lopez v. Development Bank of the Philippines, GR. No 193951, November 19, 2014) Being in the business of extending loans secured by real estate mortgage, banks arc resumed to be familiar with the rules on land registration. (Erasusta, jr. v. Court of Appeals, $27 Phil. 639, 652 [2006]) Since the banking business 1s impressed with public interest, they are expected to be more cautious, to exercise a higher degree of diligence, care and prudence, than private individuals in their dealings, even those involving registered lands. (Heirs of Gregorio Lopez’ v. Development Bank of the Philippines, G.R. No. 193551, November 19, 2014; Arguelles v. Malaréyat Rural-Bank, Ine, supra note 46, at 573; and PNB v. Corpuz, 626 Phil. 410, 413 [2010]) Banks may not simply rely on the face.of the certificate of Lite, (Heirs of Gregorio Lopez v. Development Hank of the Philippines, GI. No. 193551, November 19, 2014) Hence, they cannot assume that, simply because the title offered as security is, on its face free of any encumbrances or lien, they are relieved of the responsibiity of taking firther steps to verify the title and lnspect the properties to be mortgaged. (Land Bank of the Philippines v. Poblete, supra) As expected, the ascertainment of the status or condition of a property offered to It as security for a loan must he » standard and indispensable part of a bank’s operations. (Philippine Amanali Bank (now Al-Amanah islamte investment Bank of the Philippines, also known as islamic Bank) v. Contreras, GR. No. 173168, September 29, 2014, 736 SCRA 567, 580) Itis of judicial notice that the standard practice for banks before approving a loan isto send 'ts representatives to the property offered as collateral t@.assess its actual condition, verify the genuineness ofthe title, and investigate who is/are its real owrter/s and actual posséssors. (Land Sank ofthe Philippines v. Poblete, supra; Alano v. Planter's Development Bank-667 Phil: 81,89-90 (2011); Philippine National Bank v. Corpur, 626 Phil. 410, 413 [2010]; Erasusta, fr. v. Court of Appeals, 527 Phil. 639, 651 [2006]; and PNB v. Heirs of Militar, 504 Phil. 634, 644 (2005]) Delivery makes the vendee the owner, tn Sps. Badilla v. Bragat, G.R. Noi187013, Aprit 22, 2015, Peralta, |, Sps. Pastrano sold a parcel of land to Ledesnia in 1968 who in.turn’sold it to Spouses Badilla who took possession of the same. Claiming to be the ‘owner, Bragat filed an acti6n-for-reconveyarice against Badilla. The latter filed an action for quieting of title claiming that they are the owners. The RTC ruled in favor of Bragat which was affirmed by the CA. In reversing the CAs decision, the SC a Held: The Spouses Badilla-are the owners considering that when Bragat’ bought the property, Spouses Pastrano were no tonger the owners as they have already sold it to the Spouses Badilla who took possession of the property. Although:that Sale appeared to be merely verbal, and payment sherefor was to be made on installment; it was a:partially consummated sale, with the Badillas paying the initial purchase price and Ledesma surrendering possession. That the parties intended for ownership to be transferred may be inferred from their lack uf any agreement stipulating that owitership of the property is reserved by the seller and shall not pass to the bityer itil the latter has fully paid the purchase price. (Art. 1478, NCC). The fact is, Ledesma ‘even delivered to-thé Badillas the owner's duplicate copy of the title. The Civil Code states that ownership of the thing sols transferred to the vendee upon the actual or constructive delivery of the same, (Arts. 1477, 1496, NCC). And the thing is understood as delivered when it is placed in the control and possession of the yendee. (Art, 1497, NCC). Payment of the purchase price is not esscntlal to the transfer of ownership as long asthe property sold has been delivered; and such delivery (ead) operate to divest he vendor of te to erty which may not be regained or recovered until and unless the contract Is resolved or rescinded in conlnce oth aw (Pilpping Watnal Bank wr Court of Appeals 498 PAIL 798 982 CHOBTY cain, Sampaguita Pictures, Inc. v. Jalwindor Manufecturers, inc. 182 Phil. 16, 22 (1979), and Pingol v. Court of Appeals, G.R. No. 102909, September 6, 1993, 226 SCRA 118, 128). Acceptance of delivery inferred from conduct. 382 |ABRC2017.SCD2015-2016 in Civil Law/revised with insertions /consolidated-revised/EVSA/crysIn NFF industrial Corporation v. G & L Associated Brokerage and/or Gerordo Trinidad, G.R. No. 178169, January 12, 2015, Peralta, J, there was a controversy.as to whether there was delivery of bulk bags of cement for not. Evidence showed that when the cement was delivered, the petitioner's employees were allowed to ass through the guard-on-duty who allowed the entry of the delivery into Its premises which was the designated delivery site and there was acknowledgment of the first batch of delivery and even followed up the remaining balance of the order for delivery. The sales Invoices were served on the respondent company’s employees and there was never any complain relative thereto. it was contended that there was failure to strictly comply with the instructions to deliver the bulk bags to the specified person, Was there delivery, thus making the buyer liable? Explain. Held: Yes, Despite its fellure to strictly Comply with the instruction to deliver the bulk bags to the specified person, acceptance of delivery may be inferred from the conduct of the respondents. Accordingly. Fespondents may be held jiable to pay for the price of the bulk bags pursuant to Article 1585 of the Civil Code which provides that: ARTICLE 1585, The buyer is deemed ta have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him, and hhe does any act in relation to them which is inconsistent with the ownership of the seller. oF when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. As early as Sy v Mina, GR. No. L-32217, August 15, 1988, 164 SCRA 213, citing Pan Pacific Company (Phils) v. Advertising Corporation, GR. No. 1-22050, June 13, 1968, 23 SCRA 977, 991, it has been Pronounced that the vendee's acceptance of the equipment and supplles and accessories, and the use it made of them is an implied conformity to the terms ofthe invoices and he is bound thereby. The buyer's failure to interpose any objection to the invoices issued to it, to evidence delivery of the materials ordered as per their agreement, should be deemed as an implied acceptance by the buyer of the said conditions. (Naga Development v. Court of Appeals, G.R. No. L-28173, September 30, 1971, 41 SCRA'108), Mirror doctrine applies in mortgages. A person who deliberately ignores a significant fact that could. create suspicion in an otherwise reasonable persan is not a mortgagee in good faith, A mortgagee cannot close bis eyes to facts which should put a reasonable man on his guard and claim that he acted in good faith undér the belief that there was no defect in the title of the mortgagor. His mere refusal to believe that such defect exists or the willful closing of his eyes to the possibility of the existence of a defect in the mortgagor'sttite will not make him an innocent mortgagee for value IF it afterwards develops that the title was in fact defective, and it appears that he had such notice of the defect as would have led to Its discovery had he.acted with that measure of precaution which may reasonably be required of a prudent man in alike situation, Void title can be the root of a valid title if transferred to innocent purchaser for value. In Tolentino, et al. v. Sps. Latagan, et al,, G:R.No.179874, june 22, 2015, Peralta, J, the SC once again expounded on the effect of a forged:déed which effected the transfer of a real property and whether the purchaser ofthe property is a buyer in good faith. Citing Ru/loe v. Burgas, GR°No, 143573, january 30, 2009, the Court held that a forged deed of sale is. null and void and conveys ng ttl, for-itis a well-settled principle that no one can give what one does not have; nemo dat quod non hgbet:Once can sel] only what one owns or is authorized to sell, and the buyer can acquire no more right than-what the seller ‘can transfer legally. (Consolidated Rural Bank, inc. v. Court of Appeals, GR, No. 132461, January'17, 2005, 448 SCRA 347, 363). Due to the forged Deed of Absolute Sale the buyer acquired no right over the’subject property which he could convey to his daughter. All the transactions subsequentito the falsfied'sale between him and his daughter are likewise void. However; #t-has also been consistently ruled that a forged or fraudulent document may become the rpotof a‘valid title, ifthe property has already been transferred from the name of the owner to that of the forger, {Lim v. Chuatoco; G.R.No. 161861, March 11, 2005, 453 SCRA 308), and then to that-of an innocent ‘plrchaser for value: (Camper Realty Corp. v. Pajo-Reyes, et al, 646 Phil 689 [2010]; Rufloe v. Burgos, supra; citing Cayana'y. Court of Appeals, G.R. No. 125607, March 18, 2004, 426 SCRA 10, 22). This doctrine empltasizes that'a person who deals with registered property in goed faith will acquire good title from a forger’and ‘be’ absolutely protected by 2 Torrens title. This is because a prospective buyer of a property registered-unider the Torrens system need not go beyond che title, especially when she has not notice of any badge of frauthor defect that would place her on guard. in view of such doctrine, the Court now resolves the second issue of whether oF not Maria is an innocent purchaser for value. Non-payment of price or consideration; effect. Jt was contended that the daughter testified that she did not pay her father the price stated in the contract of sale, hence, the contract is simulated, thus, It void for lack of consideration. Brushing aside such contention, the SC Held: As to the lack of consideration for the second deed of sale, itis presumed that a written contract is for a valuable consideration. (Rules of Court, Rule 131). Thus, the execution of a deed purporting to convey ownership of a realty isin itself prima facie evidence of the existence of a valuable consideration and the party alleging lack of consideration has the burden of proving such 33 |ABRC2017.SCD2015-2016 in Civ Low revised with insertions consolidated-revised /EVSA/crysallegation. (Ong v. Ong, G.R. No, L-67888, October 8, 1985, cit . , October 8, 1985, citing Caballero, et al. v. Caballero, et al, CA, 45 Pr Rate) Petitioners failed to present clear and convincing evidence to ovoncen ce disputable Presumption. Right to repurchase is good only for 10 years. In Cebu State College of Science & Technology (CSCST) v. Misterio, et al, GR No. 179025, june 17, ae aeiy cralta} there was a contract of sale with right to repurchase after the school shay ce ceased to the righ a ru ransferred its school site elsewhere, The con:roversy that arose was the period te naar he the right to repurchase considering that it was not expressly stipulated. fa Fesolving the controversy, the SC Hela: cannot exceed ten (10) years. in cases of conventional redemption when the vendor oterre ne ves the right o repurchase the property sold, the parties tothe sale must observe the pereneetore forth by Article 1606 of the New Civil Code, which states: Art 1606. The right referred to in Article. 1602, in the absence of an express agreement, shall last four years from the date of the contract. Should there be an agreement, the period cannot exceed ten years. However, the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase, ‘Thus, depending on whether the parties have agreed upon a specific period within which-the vendor fone poaeeaxercise his right to repurchase, the property subject ofthe sale may be redeemed only within the limits prescribed by the aforequoted provision, ‘As stared in Yadao vs. Yadao (20 Phil. Rep. 260): “A pacto de retro is, in a certain, aspect, the Suspension of the title to the land involved. It was the intention of the legislature to limilt the continuance of auch a condition, with the purpose that the title to the real estate in question should he definitely Placed, it being, in the opinion of the legislature, against public policy to permit such an-uncettaly, condition relative to the title to real estate to continue for more than ten years. Eifect of agreements indicating indefinite stipulations for the exercise-of the right to repurchase. When vendors a retro were granted the right to repurchase properties séld “at any time they have the money,” “in the month of March of any year,” or “at any time,after the first year,” the Court had not hesitated in imposing the ten (10)-year period, the expiration of which effectively bars redemption of the sublect properties. There have been numerous occasions wherein the SG invalidated stipulations permitting the repurchase of property only after the lapse of at least ten (10) years from the date of the execution of the contract for being in contravention of the limitation 2 mandated by the Civil Code provision. Waivers of such period were likewise held to be void for being against public policy. The Court deemed it necessary to. keep within the teri (10)-year period those instances where parties agree to suspend the right until the occurrence of a certain time, event, or condition, insofar as the application of the four (4)-year period In the first paragraph of Articlé 1606 Civil C>a® would prolong the exertise of the Fight beyond ten (10) years, Thus, in Rosales v. Reyes, it was held that in cases where the four (4-year period would extend the life of the contraét beyond ten (10)-years, the vendor a retro will only have the remainder of the said ten (10)-year period to redeem:the property, in line with the manifest spirit of the law. When, for instance, the contract providesthat the right may only be exercised after seven (7), eight (8), or nine (9) years after the execution of the sale, the vendor a retro may cnly redeem the property before the expiration of the ten (10)-year period from the date of the sale. Inline with this, Umale v, Fernandez, et. ai, pronounces that the Period of redemption agreed upon by the parties may be extended after the four (4)-yesr period so long as the total period does not exceed ten (10) years from the date of the contract. PD9s7 € Ofttitle must be with the approval of HLURB; invalidity is not of the whole mortgage. An United Overseas Bank of the Phil. v. The Board of Commissioners-HLURB, et ol, G.R. No, 182133, june 23, 2015, J, there was a condominium property that was sold, but the same was mortgaged without the approval of the- HLURB. A unit-buyer filed a complaint to nullify the entire mortgage, where the Supreme Court ruled:*hat it is only to the extent of the unit purchased by the Party that the mortgage should be declared voi 1e SC recognized the fact that decisions vary in this particular subject matter. in Metropolitan Bank and Trust Co, Inc. v. SLGT Holdings, Inc, G.R. Nos, 175181-82 and G.R. Nos. 175354 & 175387-88, September 14, 2007, 533 SCRA 516, the Court nullified the entire mortgage contract gigied breve he subi deoper and te bank abe the that nwo uns ot buyer filed a case for declaration of nullity of mortgage. in the sald case, the entire mortgage contract was nullifie on the basis ofthe principle of indivisibility of mortgage as provided in Article 2089 of the New Civil Code ‘This notwithstanding, in the fairly recent case of Philippine National Bank v. Lim, tne Court reverted to the previous ruling in Far East Bank, G.R. No, 171677, January 30, 2012, 689 SCRA 523, 543, cting Manila Baking Corporation v, Robina, G.R. No, 145941, December 16, 2008, 574 SCRA 16, 23, that a unit buyer has fo standing to seek for the complete nullification of the entire mortgage, because he has an actionable ‘34 |ABRCZO17.SCD2015-2016 in Civil Law revised with insertions/consolidated-revised/EVSA/erysinterest only over the unithe has bought. Hence, the mortgage was nullified only insofar as it affected the untt buyer. FES Spo recent view espoused In Philippine National Bank is in accord with law and equity. While 2 mortgage may’ be nulliffed if t was in violation of Section 18 of P.D. No, 957, such nullification applies only to the interest of the complaining buyer. It eannot extend to the entire mortgage, A buyer of a particular unit or ot has no standing to ask for the nullification of the entire mortgage. Since buyer has an actionable interest only over its unit, It Is but logical to conclude that it has no standing to seek for the complete nullification of the subject mortgage and the HLURB was incorrect when it voided the whole mortgage. Purpose of prior approval of HLURB, ‘The prior approval reouirement is intended to protect buyers of condominium units from fraudulent manipulations perpetrated by unscrupulous condominium sellers and operators, such as their fallure’ to deliver titles to the buyer or titles free from lien and encumbrances. This is pursuant to the intent of P.D. No. 957 to protect hapless buyers from the unjust practices of unscrupulous developers which may constitute ‘mortgages over condominium projects sans the knowledge of the former and the consent of the HLURB. ‘Thus, failure to secure the HLURB'S prior written approval as required by P.D. No. 957 will not annul the entire mortgage between the condominium developer and the creditor bank, otherwise the protection intended for condominium buyers will inadvertently be extended to the condominium developer éven though, by falling to secure the government's prior approval, itis the party at fault. To rule otherwise would certainly affect the stability of large-scale mortgages, which ts prevalent in the real estate industry. To be sure, mortgagee banks would be indubitably placed at riskeif. condominium developers are empowered to unilaterally invalidate mortgage contracts based on their mere failure to secure prior written approval of the mortgage by the HLURB, which could be easily caused by Inadvertence or by deliberate intent. PARTNERSHIP Partners are subsidiarily liable for partnership llabilities; application of the law. In Guy v, Atty. Michael Gacott, G.R, No. 206147, January 13, 2016, Mendoza, |, a complaint was filed against a partnership for breach of contract for having failed to deliver the replacement of transreceivers Gacott purchased from it after they were returned due to defects. After judgment was rendered, a property of 2 partner, the petitioner, was levied upon. He cuestioned the levy on the ground that he was not impleaded as a party.in the suit, invoking the right to due process. It was shown that tie sheriff never attempted to exhaust. first the properties of the partnership. Ruling that Guy's property could not be levied upen immediately the SC Held: The liability of the partner is merely subsidiaty-and could be held personally liable if properly impleaded and after all partnership assets had been exhausted. Under Art. 1816, NCC, which governs the:liability of the partners to third persons, the partners’ obligation with respect to the partnership liabilities is subsidiary in nature. It provides that the partners shall only be liable with their property after all the partnership assets have been exhausted. To say that one’s liability is subsidiary means that it merely becomes secondary and only arises if the one primarily liable fails to sufficiently satisty the obligation. ‘Resort to-the properties of 4 partner may be made only after efforts in exhausting partnership assets have failed or that such partnership assets are insufficient to cover the entire obligation. The subsidiary nature of the parmers’ liability with the partnership is one of the valid defenses against a premature execution of judgment directed to a partner. No. genuine efforts were’made to locate the properties of the partnership that could have been attached to satisfy the fedgment™ contrary to the clear mandate of Article 1816. Being subsidiarily liable, the partner could only be helé:personally liable if properly impleaded and after all partmership assets had deen exhausted. 8 cs sAtticle/1616°provides that the partners’ obligation to third persons with respect to the partnership liability is pro rota or joint, Liability Is joinc when a debtor is liable only for the payment of only a proportionate part df-the debt. In contrast, a solidary liability makes a debtor liable for the payment of the efititg debt, Inthe same vein, Article 1207 does not presume solidary liability unless: 1) the obligation expressly s8:states; or 2) the law or nature requires solidarity. With regard to partnerships, ordinarily, the lability of the partners'ts not solidary (Liwanag v. Workmen's Compensation Commission, 105 Phil 741, 743 (1958). The:jolnt Uability of the partners is a defense that can be raised by a partner impleaded in a complaint agaiust the partnership. Wen thre slay ably of the poenership and porters lyin exceptional cumstances shall he partners lblity be soldary in nature. Aries 1 1828 and 1824 the Ci Code provide or these exeeporal ondiions.ovits Article 1822. Where, by any wrongful act or omission of any partner acting in the dinar course ofthe business ofthe parsership or with the authority of his co-pareers tes or injury is eqused to any person, act being aparner nthe partesship any pevaliy iseurred the partnership able therelorto the same exentar the pareoer 20 sein citing teat 38 {ABRC2017.SCDZ015-2016 in Civil Law revised with insertions/consolidated-revised/EVSA/erysArticle 1823. The partnership is bound to make good the loss: (1) Where one partner acting within the scope of his apparent authority receives ‘money or property of a third person and misapplies it; and (2} Where the partnership in the course of its business receives money or property ofa third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership. Article 1824, All partners are liable solidarily with the partnership for everything chargeable to the partnership under Articles 1822 and 1823, Im essence, these provisions articulate that itis the act of a partner which caused loss or injury to a third person that makes all other partners solidarily liable with the partnership because of the words “ony wrongful act or omission of any partner acting in the ordinary course of the business,” “one parther acting within the scope-of his apparent authority” and ‘misapplied by any partner while It isin the custody of the partnership.” The obligation is solidary because the law protects the third person, who in good faith relied uupon the authority of a partner, whether such authority is real-or apparent (Muiflasque v. Court of Appeals, 224 Phil. 79, 90 (1985), Laws not applicable, In the case at bench, it was not shown that the partner or the other partiers did a wrorigful act.or misapplied the money or property he or the partnership received from Gacott. A third personwho transacted with said partnership can hold the partners solidarily liable for the whole obligation if the case of the third Person falls under Articles 1822 or 1823. Gscott’s claim stemmed from the’ alleged’ defective transreccivers he bought from the partnership, through the latter's employee, MedeSiomas. it was for a breach of warranty in a contractual obligation entered into in the name and for the account of the Partnership, not due to the acts of any of the partners. For said reason, itis the general rule under Article 1916 that governs the joint lability of such breach, and not the exceptions under Articles 1822 to 1824. Thus, it was improper to hold Guy solidarily liable for the obligation of the partnership. AGENCY Inaplied agency. i In Dra, Mercedes Oliver v. PS Bank, etal, G.R, No. 214567, April 4.2016, Mendoza, j, Oliver and Castro had a business agreement wherein Oliver obtained loans from the bank through the help of Castro who was Manager of the bank and after acquiring the loan proceeds, Castro would lend the acquired amounts to prospective berrowers who were waiting for the actual release of thelr loan proceeds. Oliver would earn interest per month from the proceeds of the borrowers while Castro would earn commissions. What kind of business transaction did they enter into? Explain. ===. * Held: There was an implied agency between the parties. _- ‘A contract of agency may be inférred-from ali the dealings between Oliver and Castro. Agency can be express or implied from the acts of the principal, from his silence or lack of action, or his fallure to repudiate ‘he agency knowing that another person is acting.on his behalf without authority (Article 1869, New Civil Code of the Philippines), The question of whether an agency has been created is ordinarily a question which may be established in the samie way as any other fact, either-by direct or circumstantial evidence. The question is uitimately one of mteation. : Accordingly, the laws.on-agency-apply to their relationship. Article 1881 of the New Civil Code provides that the agent must act-within the scope of his authority. He may do such acts as may be conducive tw the accomplishment of the purpose of the agency. Thus, as long as the agent acts within the scope of the authority gives by his principal, the actions of the former shall bind the latter. SPA necessary if principal authorizes agent to sell real property. ~ = InFlorentina Bautista-Spille v. Nicorp Management & Dev. Corp. et al, G.R. No. 214057, October 19, 2018, Mendoza, j, the only evidence adduced to prove that the agent had authority to sell the principal's property was.a General Power of Attorney which merely authorized the agent to exercise administration and supervision over‘the:properties of the principal, It was contended that there was no perfected contract to sell \s the contention correct? Why? Held: Yes. Tha well-established rule is when a sale of a parcel of land or any interest therein is through an agent, the authority ofthe latter shall be in writing, otherwise the sale shall be void. Articles 1874 and 1878 of the Civil Code explicitly provide: 4 ‘Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing: otherwise, the sale'shall be void. Act. 1878. Special powers of attorney are necessary in the following cases: yx {5} Bo cater tno any cana by ‘which te owndrahip of an "Immovable 1 transmitted or acquired either gratuitously or for valuable consideration; ‘36 |ABRC2O17.SCD2025-2016 in Civil Law /revised with insertions /consolldated-revised/EVSA/crysFrom the foregoing, itis clear that an SP A in the conveyance of real rights over immovable property is necessary. (Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, inc. , 479 Phil. B96, 912 (2004)). In Cesmic Lumber Corporation v. Court of Appeals, 332 Phil. 948 {1996}, the Court enunciated, When the sale of 2 piece of land or any interest thereon is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. Thus, the authority of an agent to execute a contract for the sale of real estate must be conferred in writing and must give him specific authority, either to conduct the general business of the principal or to execute a binding contract containing terms and conditions which are in the contract he did execute. A special power of attorney is necessary to enter into any contract, by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. The express mandate required by law to enable an appointee of aan agency (couched) in general terms to sell must be one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act mentioned, For the principal to confer the right upon an agent to sell real estate, a power of attorney must 30 express the powers ofthe agent in clear and unmistakable language. When there is any reasonable doubt that the language so used conveys such pawer, no such construction shall be given the document” Such authority must be conferred in writing and must express the powers of the agent in clear and unmistakable language In order for the principal to confer the right upon an agent to sell the real property (Yoshizaki v. Joy Training Center of Aurora; Inc, GR. No. 174978, july 31, 2013, 702 SCRA, 631, 642). Itis a general rule that a power of attorney must be strictly construed, and courts will not infer or presume broad powers from deeds which do not sufficiently include property or subject under which the agent is to deal. (Wootichild Holdings, Ine. v. Roxas Electric and Construction Company, Ine, suprandte 20, at 913). Thus, When the authority is couched In general terms, without mentioning any specific powerto sell or mortgage or to do other specific acts of strict dominion, then only acts of administration are deemed conferred. (Veloso v. Courtof Appeals, 329 Phil. 398, 405 (1996)). = Effect if authority is general. Z There was no perfected contract to sell, in the General Power of Attorney the agent was not granted, expressly or impliedly, any power to sell the subject property or a portion theréof. Time and again, the Court has stressed that the power of administration does not include acts of disposition, which are acis of strict ownership, As such, an authority to dispose cannot proceed from an authority to administer, and vice versa, for the two powers may only be exercised by an agent by following the provisions on agency of the Civil Code. {Aggabao v. Parulan, 644 Phil. 26, 37 (2010) . Duty when dealing with agent. The well-settled rule is that a person-dealing:with an assumed agent is bound to ascertain not only the fact of agency but also the nature and extent of the agent's authority. (Lintonjua v. Fernandez, 471 Phil 440, 458 (20044), The law requires a higher dégree of prudence from one who buys from a person who is not the registered owner. He is expected to examine all factual circumstances necessary for him to determine if there are any flaws in the title of the'transferor, or-in his capacity to transfer the land. (Abad v. Guimba, 503, Phil, 321, 331-332 (2005). In,ascertaining good faith, or the lack of it, which is a question of intention, courts are necessarily controlled by the evidence as to the conduct and outward acts by which alone the inward motive may, with safety, be determined, Good faith, or want of itis not a visible, tangible fact that can be seen oF touched, but rather a state-ortondition of mind which can only be judged by actual or fancied token or signs. (Philippine Netional Bank. Militar, 526 Phil, 788, 798 [2006)}. J COMMON CARRIERS, Uablity of conimon car. ters for injuries; court need not make findings of negligence. ‘ Sulpicio'Lines, inc. v. Sesance, G.R. No. 172682, july 27, 2016, Bersamin, |, M/V Princess of the ome sank resulting in injures tothe etiioner. To exculpate isl rom lability the common earier vou ofistie seaworthiness of the vessel and that the sinking of the vessel was due to severe weather condition,-a force majeure. At the time of the sinking, there was only Storm Signal No. } and that considering the size of:the vessel, it could have withstood the storm considering that the smaller fishing boats that responded tothe incident could withstand the storm. It was found out that the immediate and proximate ‘cause of the sinking of the vessel was due to the gross negligence of its captain in maneuvering the vessel, Holding the carrier liable for damages, the SC Held: Common carriers are liable for the death or injuries to passengers through negligence or willful acts of the former's employees, althaugh such employees may have acted beyond the scope of their authority or in Violation of the orders of the common carriers. ‘This lability of the common carriers does not cease upon proof that they exercised all the diligence ‘of good father of a family in the selection and supervision of their employees (Art. 1759, NCC) ‘The liability of common carriers under Article 1759 is demanded by the duty of utmost diligence Fequired of common carriers in safely carrying their passengers. 37 {ABRC2017.SCD2018-2016 in Civil Law /revised with insertions consolidated-revised/EVSA/erys(On the other band, Article 1756 of the Civil Code lays down the presumption of negligence against the common carrier in the event of death or injury of its passenger, viz. Article 1756, In case of death of or injuries to passengers, common carriers are Presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articies 1733 and 1753, ‘No need to make findings of fact of negligence. Clearly, the trial court is not required to make an express finding of the common carrier's fault or aren ibence (Diaz v. Court of Appeals, GR. No. 149748, uly 25, 2006, 496 SCRA 468, 472). Even the mere proof (ign felleves the passengers from establishing the fault or negligence of the carrier or its employees (ight Ratt Transit Authority v. Navidad, GR. No. 145804, February 6, 2003, 37 SCRA 75, 81) The Presumption of negligence applies so Jong as there is evidence showing that: a) a contract exists between the passe” nger and the common carrier: and (b) the injury or death took place during the existence of such Gantract. In such event. the burden shifts to the common carrier to prove its observance of extraordinary sligence, and that an unforeseen event or force majeure had caused the injury. Defense of fortzitous event. A common! carrier may be relieved of any liability arising from a fortuitous event pursuant to Article 2274 of the Civil Code, But while it may free a.common carrier from Liability, the provision still requires exclusion of human agency from the cause of inlury or loss (Perla Compania De Seguros, Inc. v. Saringaya tl, GP. No. 147746, October 25, 2005, 474 SCRA 191, 200; Yobido v. Court of Appeals, G.R. No. 113003, October 17, 1997, 261 SCRA |, 9.) Else stated, for a common carrier to be absolved from liability in case.of force ‘majeure, it is not enough that the accident was caused by a fortuitous event. The common carrier thust still Prove that it did not contribute to the occurrence of the incident duce to its own or its’émployees’ negligence Bachelor Express, Inc. v. Court of Appeals, G.R. No, 85691, July 31, 1990, 188 SCRA 216, 222-223). In Schmite Transport & Brokerage Corporation v. Transport Venture, inc, G.R. No, 150255, April 22, 2005, 456 SCRA $57 as follows: In order to be considered a fortuitous event, however, (1) the,cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with’ his obligation, must be independent of human will; (2) it must: be-impossible to foresee the event which constitute the caso fortuito, ar if it can be foreseen it must be impossible to avoid: (3) the occurrence must be such as to render it impossible for the debtor to fulfil his obligation in any manner; and (4) the obligor must be Tree from any participation in the aggravation of the injury resulting to the creditor. [T]he principle embodied in thé%act of God doctrine strictly requires that the act must be ogcasionéé.solely by the violence of nature Human Intervention is to be excluded from creating or entering into the cause of the mischief. When the effectis found to be in part the result of the participation of man, whether due to his active intervention or neglect or failure to act, the whole occurrence is then humanized and removed from the rules applicable to theacts of God, Agent has no power of strict dominion:. - In V.Gent, Ina. v. Marnig Star Travel & Tours, Inc, G.R. No. 186305, july 22, 2015, Brion, |, petitioner purchased 26 plane tickets from respondent. Since there were.unused tickets, petitioner returned the same to the respondent which refunded the value of some of the tickets. For failure to pay the price of the other tickets despite demands, petitioner filed a complaint for sum of money, Respondent contended that petitioner had no catise“of action sinee:the tickets were purchased by the passengers. The trial court dismissed the action ruliig that f€ Was not the real party-in-interest. The CA affirmed the RTC's culing and dismissed the complaint for reason’that V-Gent, Inc. as agent was not the real party-in-interest. Agreeing with the CA on jeal,the SCs - eh ge apnasttipe be occu of dortted i de nding oC DATE gary tiem ne NS caw stands to be benefited or injured by the judgment in the suit. In suits where an agent represents a party, the principal isthreal party-in-interest; an agent cannot file a suit in his own name on behalf of the principal. Rule 8, Section 3 of the Rules of Court provides the exception when an agent may sue or be sued without joining the principal. “Section 3. Representatives as parties. - Where the action is allowed to be prosecuted and defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party-in-interest, ‘A representative may be a trustee of an express trust, a guardian, an executor oF administrator, or a party authorized by law or these Rules, An agent acting in his own name and for the benefit of an undisclosed prineipal may sue or be sued without joining the principal except when the contract involves things belonging to the principal. LOAN Stipulaced interest of 3% or more is excesstve; void. 38 |ABRC2017.SC02015-2016 in Civil Law/revised with insertions/consolidated-revised/EVSA/crysIn Marilag v. Martinez, G.R. No. 201892, July 22, 2015, Perlas-Bernabe, |, a contract of loan secured by mortgage was entered into with a stipulated interest of 3% per month, Ruling that such interest rate is not valid, the SC Held: it is void because itis excessive, iniquitous, unconscionable and exorbitant, hence, illegal, and void for being contrary to morals. in Agaer v. BPI, Inc, it was ruled that settied is the principle that stipulated interest rates of three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and exorbltant. While Ceneral Bank Circular No. 905-82 which took effect on january 1, 1963, (as amended by Cir. No. 799) effectively, removed the celling on interest rates for both secured and unsecured loans, regardless of maturity, nothing in the said cireular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorshaging of their assets. Since the stipulation on the interest rate is void for being contrary to morals, ifnot against the law, itis as if there was no express contract on said interest rate; thus, the interest rate may be reduced as reason and ‘equity demand. SURETY/GUARANTY Essence of continuing guaranty is surety; caption not controlling; intent controls. In Allied Banking Corp. v. Yujuico, GR. No. 163216, June 29, 2015, Bersamin, J, there were two (2) continuing guaranty undertakings containing identical provisions, The parties, however, interchangeably used the terms guaranty and surety in characterizing the undertakings of jesus under the continuing guaranties. The terms are distinct from each other, however, and the distinction is expressly delineated in the Civ Code, o wit, the SC said. Article 2047. By guaranty 2 person, called the guarantor, binds himself to the creditor to fulfill the obligation ofthe principal debtor in case the latter should fall to do so, if a person binds himself solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title {of this Book shall be observed. in such case the contract is called a suretyship. Ft a Thus, in guaranty, the guarantor “binds himself to the creditor to-fulfill the obligation of the principal debtor in case the latter should fail to do so.” The liability of the guarantors sécondary to that of the principal debtor because he “cannot be compelled to pay the creditor unless the latter hasexhausted all the property of the debtor, and has resorted to all the legal remedies against the debtor.” (Civil Code, Article 2058). In contrast, the surety is solidarily bound to the obligation of the principal debtor. (Ang v. Associated Bank, G.R, No, 146511, September 5, 2007, 32 SCRA 244, 274-275), (QUASI-DELICT Liability for damages in case of negligence} test of negligence. In Abrogar v. Cosmos Boctling Co, & Incergames, Inc, G.R. No. 164749, March 15, 2017, Bersamin, j Intergames, Inc. organized a marathon sponsored by Casmos Bottling Co. where the late Rommel Abrogar participated. in the course of the Marathon, Rommel. was bumped by a jeepney resulting in his death. His parents filed a complaint for damages, but Cosmos contended that as a mere sponsor, it was not responsible for the death of the participant and alleged that it was not the organizer. Intergames, Inc. on the other hand, contended that the accident was exclusively the negligence of the jeepney driver and that itis not an insurer of the safety ofits participants. The participation of Rommel was conditioned on his waiver ofall rights and causes of action arising from his participation and it exercised the diligence of a good father of a (amily in the conduct ofthe marathi. The ATC held Intergames, Inc. liable as it failed to satisfy the requirements of due diligence called for by and’appropriate under the circumstances. The CA reversed the decision applying the Principle of assumption of risk, hence, appeal was made contending that Intergames should be made liable uggs negligence: holding inergames, In. abl the SC Held: intergames, dnc. fel! short of the diligence demanded by the circumstances of persons, tlme and place. ‘The participants were minors, there were no employees of its own to man the race, only volunteers. Ascording to intergames President, the preparations included the conduct of ocular inspection of the route of the race, seriding.out letters to various cooperating agencies securing permits, putting directional signs and setting up water stations. But it did not even conduct an assembly of the coordinating agencies before the marathon Was held. These were not sufficient to prove that it exercised the diligence required by law. Negligence isthe failure to observe for the protection of the interests of another person that degree of care, precaution, andl vigilance which the circumstances justly demand, whereby such other person suffers injury. Under Article 1173 of the Civ! Code, it consists ofthe “omission of that diligence which is required by the riature of the obligation and corresponds with the circumstances of the person, of the time and of the place." The Civil Code makes liability for negligence clear under Article 2176, and Article 20 Test of negligence. To determine the existence of negligence, the following time-honored test has been set in Picar v Smith, 37 Phil. 809 [1918] ‘The test by which to determine the existence of negligence in a particular case may be'stated as follows: Did the defendant in doing the alleged negligent act use that reasonable 39 JABRC2017.SCD2015-2016 in Civil Law revised with insertions consalidated-evised/EVSA/erysfare and caution which an ordinarily prudent person would have used in the same situation? {Fos then he is guilty of negligence. The law here in effet adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfumilias of the Roman tow, The aristence of negligence in_a given case is not determined by reference to the personel judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and determines lability by that The question as to what would constitute the conduct of a prudent man in a given situation must of course be always determined in the light of human experience and in'view: of the facts involved in the particular case. Abstract speculation cannot here be of much value but thls much can be profitably said: Reasonable mien govern their conduct by the Circumstances which are before them or known to them. They are not, and are not supposed to be, omniscient of the future. Hence they can be expected to take care only when there is something before them to suggest or warn of danger. Could a prudent man, in the case under consideration, foresee harm as a result of the course actually pursued? If so, it was the duty of the actor to take precautions to guard against that harm, Reasonable foresight of harm. followed by the ignoring of the suggestion born.of this prevision, is always necessary before negligence can be held to exist Stated in these terms, the proper criterion for determining the existence of nepligence in a given cases this: Conduct is said to be negligent when & prudent man in the position of the tortfeasor would have foreseen that an effect harmful Yo another was sufficiently probable to warrant his foregoing the conduct or guarding’against its consequences. ‘The organizer had a choice which was safer like Roxas Boulevard but it had chotén Marcos Highway which was even prohibited by the police to prevent impairment of accessibility of the road to residents as against Roxas Boulevard where runners could run against the flow of vehicular-traffic As it'did not held the danger already foreseen on the route of the marathon, it fell short ofthe diligence required by the circumstances, The participants of the Marathon were mostly minors aged 14 ta!18 years joining a race of that kind tor the rst time. The combined factors of their youth, eagerness andif@xperiénce ought to have put a reasonably prudent organizer on higher guard as to their safety and-security needs during the race, especially considering Intergames' awareness of the risks already foreseen and of other risks already known to it as of similar events in the past organizer. There was no question at all that a higher degree of diligence was equired given that practically all of the participants were children or minors like Rommel; and that the law imposes 2 duty of care towards children and minors evea if ordinarily there was no such duty under the same circumsvances had the persons involved been adults of Sufficient discretion. In that respect, Intergames did not observe the degree of care necessary as the organizer, rendering it liable for negligence. As the Court has ‘emphasized in Corliss v. The Manila Railroad Gompany..No. L-21291, March 28, 1969, 27 SCRA 674, where the danger is great, a high degree of care is ftecessary, and the failure to observe it is a want of ordinary care under the circumstances. 4 ‘ ‘The circumstances of the persons, time and place required far more than what Intergames undertook im staging the race. Due diligence would have made a/reasonably prudent organizer of the race participated in by young, inexperienced or beginner’ funners to conduct the race in a route suitably blocked off from vehicular treffc for the safety ahd security not only of the participants bu: the motoring public as well, Since the marathon would be runalongside moving vehicular traffic, at the very least, Intergames ought to have seen to the constant and claser. coordination among the personnel manning the rute to prevent the foreseen risks from befalling the participants. But this It Sadly failed to do, Q - While: Rommét'was running the marathon on Don Mariano Marcos Avenue and. after passing the Philippine Atomic Energy Commission Building, he was bumped by a passenger jeepney that was racing ‘with a minibus and two other vehicles as if trying to crowd each other out. As such, the death of Rommel was caused by the negligence of the jeepney driver. ‘eo Antergames staunchly insisted that it was not Hable, maintaining that even assuming arguendo ‘that It was negligent, the negligence of the Jeepney driver was the proximate cause of the death of mel; hence, ttshould not be held liable. Did the: négligence of Intergames give rise to its liability for’ the death of Rommet notwithstanding the negligence of the jeepney driver? "i Held: In order for liability from negligence to arise, there must be not only proof of damage and negligence, but also proof that the damage was the consequence of the negligence, The Court has said in Vda.ide Gregorio v. Go Chong Bing, 102Phil. 536 (1957] xxx Negligence as 2 source of obligation both under the civil law and in American cases was carefully considered and-it was held that in order to establish his right to a recovery, must establish by competent evidence: : (1) Damages to the plaintif. (2) Negligence by act or omission of which defendan: personally or some persoh for whose acts it must respond, was guilty. 40 |ABRCZ017.SCD2015-2016 in Civil Law /revised with insertions /consolldated-revised/EVSA/erys