CIVIL CODE

Contract; Rescission; Effect.

Rescission entails a mutual restitution of benefits received. An
injured party who has chosen rescission is also entitled to the
payment of damages.
Sandoval Shipyards, Inc. v. PMMA, G.R. No. 188633. April 10, 2013
Obligation; Extinguishment of obligations; Consignation; When
tender of payment not necessary; Judicial in character;
Difference between consignation and tender of payment.
Under Article 1256 of the Civil Code, the debtor shall be released
from responsibility by the consignation of the thing or sum due,
without need of prior tender of payment, when the creditor is absent
or unknown, or when he is incapacitated to receive the payment at
the time it is due, or when two or more persons claim the same right
to collect, or when the title to the obligation has been lost.
Consignation is necessarily judicial. Article 1258 of the Civil Code
specifically provides that consignation shall be made by depositing
the thing or things due at the disposal of judicial authority. The said
provision clearly precludes consignation in venues other than the
courts.
Elsewhere, what may be made is a valid tender of payment, but not
consignation. The two, however, must be distinguished.
Tender of payment must be distinguished from consignation. Tender
is the antecedent of consignation, that is, an act preparatory to the
consignation, which is the principal, and from which are derived the
immediate consequences which the debtor desires or seeks to
obtain. Tender of payment may be extrajudicial, while consignation is
necessarily judicial, and the priority of the first is the attempt to make
a private settlement before proceeding to the solemnities of
consignation. (8 Manresa 325).
Sps. Cacayorin v. Armed Forces and Police Mutual Benefit
Association, Inc., G.R. No. 171298. April 15, 2013
Property; Ejectment; only issue is who is entitled to physical
possession; forcible entry; prior physical possession is vital;
judgment conclusive between the parties and their successorsin-interest; effects if prevailing party is a usufructuary; usufruct;

death of usufructuary extinguishes usufruct.

Ejectment cases forcible entry and unlawful detainer are
summary proceedings designed to provide expeditious means to
protect actual possession or the right to possession of the property
involved. The only question that the courts resolve in ejectment
proceedings is: who is entitled to the physical possession of the
premises, that is, to the possession de facto and not to the
possession de jure. It does not even matter if a partys title to the
property is questionable. Thus, an ejectment case will not
necessarily be decided in favor of one who has presented proof of
ownership of the subject property.
Indeed, possession in ejectment cases means nothing more than
actual physical possession, not legal possession in the sense
contemplated in civil law. In a forcible entry case, prior physical
possession is the primary consideration[.] A party who can prove
prior possession can recover such possession even against the
owner himself. Whatever may be the character of his possession, if
he has in his favor prior possession in time, he has the security that
entitles him to remain on the property until a person with a better right
lawfully ejects him. [T]he party in peaceable, quiet possession shall
not be thrown out by a strong hand, violence, or terror.
The judgment in an ejectment case is conclusive between the parties
and their successors-in interest by title subsequent to the
commencement of the action; hence, it is enforceable by or against
the heirs of the deceased. This judgment entitles the winning party
to: (a) the restitution of the premises, (b) the sum justly due as
arrears of rent or as reasonable compensation for the use and
occupation of the premises, and (c) attorneys fees and costs.
[T]he right to the usufruct is now rendered moot by the death of
Wilfredo since death extinguishes a usufruct under Article 603(1) of
the Civil Code. This development deprives the heirs of the
usufructuary the right to retain or to reacquire possession of the
property even if the ejectment judgment directs its restitution.
Thus, what actually survives under the circumstances is the award of
damages, by way of compensation.
Rivera-Calingasan v. Rivera; G.R. No. 171555. April 17, 2013
Property; Public property; public plaza forms part of the public
dominion; cannot be the object of appropriation, lease, any
other contractual undertaking; void contracts.
A public plaza is for public use and therefore forms part of the public

dominion. Accordingly, it cannot be the object of appropriation either

by the State or by private persons. Nor can it be the subject of lease
or any other contractual undertaking. In Villanueva v. Castaeda, Jr.,
citing Espiritu v. Municipal Council of Pozorrubio, the Court
pronounced that:
x x x Town plazas are properties of public dominion, to be devoted to
public use and to be made available to the public in general. They are
outside the commerce of man and cannot be disposed of or even
leased by the municipality to private parties.
In this relation, Article 1409(1) of the Civil Code provides that a
contract whose purpose is contrary to law, morals, good customs,
public order or public policy is considered void and as such, creates
no rights or obligations or any juridical relations.
Land Bank of the Philippines v. Cacayurin; G.R. No. 191667. April 17,
2013
SPECIAL LAWS
Foreclosure of Mortgage pursuant to P.D. No. 385; when its
purpose is served; when hearing is necessary before issuance
of writ of possession; foreclosure of mortgage under Section 33,
Rule 39 of the Rules on Civil Procedure; when issuance of writ
of possession is not ministerial.
Indeed, while the Court had already declared in Philippine National
Bank v. Adil that once the property of a debtor is foreclosed and sold
to a GFI, it would be mandatory for the court to place the GFI in the
possession and control of the propertypursuant to Section 4 of P.D.
No. 385 (Requiring Government Financial Institutions to Foreclose
Mandatorily All Loans with Arrearages, Including Interest and
Charges Amounting to at Least Twenty (20%) of the Total
Outstanding Obligation) this rule should not be construed as
absolute or without exception.
The evident purpose underlying P.D. 385 is sufficiently served by
allowing foreclosure proceedings initiated by GFIs to continue until a
judgment therein becomes final and executory, without a restraining
order, temporary or permanent injunction against it being issued. But
if a parcel of land is occupied by a party other than the judgment
debtor, the proper procedure is for the court to order a hearing to
determine the nature of said adverse possession before it issues a
writ of possession. This is because a third party, who is not privy to
the debtor, is protected by the law. Such third party may be ejected
from the premises only after he has been given an opportunity to be
heard, to comply with the time honored principle of due process.

In the same vein, under Section 33 of Rule 39 of the Rules on Civil

Procedure, the possession of a mortgaged property may be awarded
to a purchaser in the extrajudicial foreclosure, unless a third party is
actually holding the property adversely vis--vis the judgment debtor.
The obligation of a court to issue a writ of possession in favor of the
purchaser in an extrajudicial foreclosure sale ceases to be ministerial,
once it appears that there is a third party who is in possession of the
property and is claiming a right adverse to that of the
debtor/mortgagor. The Supreme Court explained in Philippine
National Bank v. Austria that the foregoing doctrinal pronouncements
are not without support in substantive law:
x x x. Notably, the Civil Code protects the actual possessor of a
property, to wit:
Art. 433. Actual possession under claim of ownership raises a
disputable presumption of ownership. The true owner must resort to
judicial process for the recovery of the property.
Under the aforequoted provision, one who claims to be the owner of a
property possessed by another must bring the appropriate judicial
action for its physical recovery. The term judicial process could
mean no less than an ejectment suit or reivindicatory action, in which
the ownership claims of the contending parties may be properly heard
and adjudicated.
Royal Savings Bank v. Asia, et al.; G.R. No. 183658. April 10, 2013
Family Code; Declaration of Presumptive Death; judgment is
immediately final and executory; proper remedy is a special civil
action for certiorari filed in the Court of Appeals; decision of
Court of Appeals reviewable by the Supreme Court via certiorari
under Rule 45.
It is improper to avail of an ordinary appeal as a vehicle for
questioning a trial courts decision in a summary proceeding for the
declaration of presumptive death under Article 41 of the Family Code.
As explained in Republic v. Tango, the remedy of a losing party in a
summary proceeding is not an ordinary appeal, but a petition for
certiorari, to wit:
By express provision of law, the judgment of the court in a summary
proceeding shall be immediately final and executory. As a matter of
course, it follows that no appeal can be had of the trial courts
judgment in a summary proceeding for the declaration of presumptive

death of an absent spouse under Article 41 of the Family Code. It

goes without saying, however, that an aggrieved party may file a
petition for certiorari to question abuse of discretion amounting to lack
of jurisdiction. Such petition should be filed in the Court of Appeals in
accordance with the Doctrine of Hierarchy of Courts. To be sure, even
if the Courts original jurisdiction to issue a writ of certiorari is
concurrent with the RTCs and the Court of Appeals in certain cases,
such concurrence does not sanction an unrestricted freedom of
choice of court forum. From the decision of the Court of Appeals, the
losing party may then file a petition for review on certiorari under Rule
45 of the Rules of Court with the Supreme Court. This is because the
errors which the court may commit in the exercise of jurisdiction are
merely errors of judgment which are the proper subject of an appeal.
When the OSG filed its notice of appeal under Rule 42, it availed
itself of the wrong remedy. As a result, the running of the period for
filing of a Petition for Certiorari continued to run and was not tolled.
Upon lapse of that period, the Decision of the RTC could no longer be
questioned.
Republic of the Philippines v. Narceda; G.R. No. 182760. April 10,
2013.