Civil Law Cases

Chua, et al. v. United Coconut Planters Bank, et al., G.R. No.
215999, 16 August 2017
27 JAN
Third Division
[BERSAMIN, J.]
FACTS: It is undisputed that petitioners Spouses Chua and LGCTI as well as respondents Jose Go, had
existing loan obligations with UCPB prior to the March 1997 JVA. As an offshoot of the JVA, two deeds of
trust were executed by the parties involving petitioners’ 44-hectare property covered by 32 titles. The
deeds of trust were neither expressly cancelled not rescinded despite the fact that the project under the
JVA never came to fruition. On March 21, 2000, UCPB and petitioners entered into the MOA
consolidating the outstanding obligations of the Spouses Chua and LGCTI.
Petitioners exchanged their 30 parcels of land to effectively reduce their total unpaid obligations to only
P68,000,000.00. To settle the balance, they agreed to convert it into equity in LGCTI in case they would
default in their payment. To implement the MOA, they signed the REM drafted by UCPB, which included
the properties listed in the MOA as security for the credit accommodation of P404,597,177.04.
Unknown to them, however, Jose Go, acting in behalf of Revere, likewise executed another REM
covering the properties that Revere was holding in trust for them. When UCPB foreclosed the
mortgages, it applied about P75.09 million out of the P227,700,000.00 proceeds of the foreclosure sale
to the obligations of Revere and Jose Go. Moreover, UCPB pursued petitioners for their supposed
deficiency amounting to P68,000,000.00, which was meanwhile assigned to respondent Asset Pool A by
UCPB.
ISSUE#1: Did the REM subsist even after the foreclosure sale of the subject properties?
HELD#1: NO.
A review of the MOA dated March 21, 2000 would reveal that petitioners’ outstanding obligation
referred to, after deducting the amount of the thirty properties, was reduced to only P68,000,000.00. To
settle this balance, petitioners agreed to convert this into equity in LGCTI in case they defaulted in their
payment. In this case, what prompted the foreclosure sale of the mortgaged properties was petitioners’
failure to pay their obligations. When the proceeds of the foreclosure sale were applied to their
outstanding obligations, the payment of the balance of the P68,000,000.00 was deliberately left out, and
the proceeds were conveniently applied to settle P75,000,000.00 of Revere and/or Jose Go’s unpaid
obligations with UCPB. This application was in blatant contravention of the agreement that Revere’s or
Jose Go’s obligations would be paid only if there were excess in the application of the foreclosure
proceeds. Accordingly, the CA should have applied the proceeds to the entire outstanding obligations of
petitioners, and only the excess, if any, should have been applied to pay off Revere and/or Jose Go’s
obligations.
ISSUE#2: Was the deed of assignment covering the deficiency in petitioner’s obligations to UPCB valid?
HELD#2: NO.
Based on the foregoing, therefore, we conclude that the deed of assignment of liabilities covering the
deficiency in its obligation to UCPB in the amount of P68,000,000.00 was null and void. According to the
apportionment of bid price executed by UCPB ‘s account officer, the bidamounting to P227,700,000.00
far exceeded the indebtedness of the Spouses Chua and LGCTI in the amount of P204,597,177.04, which
was inclusive of the P68,000,000.00 subject of the deed of assignment of liabilities as well as the
P32,703,893,450.00 corresponding to the interests and penalties that UCPB waived in favor of
petitioners.
It can be further concluded that UCPB could not have validly assigned to Asset Pool A any right or
interest in the P68,000,000.00 balance because the proper application of the proceeds of the
foreclosure sale would have necessarily resulted in the full extinguishment of petitioners’ entire
obligation. Otherwise, unjust enrichment would ensue at the expense of petitioners. There is unjust
enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains
money or property of another against the fundamental principles of justice, equity and good conscience.
The principle of unjust enrichment requires the concurrence of two conditions, namely: (1) that a person
is benefited without a valid basis or justification; and (2) that such benefit is derived at the expense of
another. The main objective of the principle against unjust enrichment is to prevent a person from
enriching himself at the expense of another without just cause or consideration. This principle against
unjust enrichment would be infringed if we were to uphold the decision of the CA despite its having no
basis in law and in equity.
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Posted by Jhez on January 27, 2018 in Case Digests, Civil Law

Tags: deed of assignment, foreclosure, mortgage, real estate
Gabucan v. Judge Manta, G.R. No. L-51546, January 28, 1980.
14
AUG
[AQUINO, J.]
FACTS
The Court of First Instance of Camiguin in its “decision” for the probate of the will of the late Rogaciano
Gabucan, dismissed the proceeding because the requisite documentary stamp was not affixed to the
notarial acknowledgment in the will and, hence, according to respondent Judge, it was not admissible in
evidence, citing section 238 of the Tax Code, now section 250 of the 1977 Tax Code.
ISSUE
Whether or not the probate of a notarial will should be denied on the ground that it does not bear a
thirty-centavo documentary stamp.
RULING
NO. What the probate court should have done was to require the petitioner or proponent to affix the
requisite thirty-centavo documentary stamp to the notarial acknowledgment of the will which is the
taxable portion of that document. That procedure may be implied from the provision of section 238 that
the non-admissibility of the document, which does not bear the requisite documentary stamp, subsists
only “until the requisite stamp or stamps shall have been affixed thereto and cancelled.” Thus, it was
held that the documentary stamp may be affixed at the time the taxable document is presented in
evidence. That the lack of the documentary stamp on a document does not invalidate such document.
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Posted by Jhez on August 14, 2017 in Case Digests, Civil Law, Succession
Tags: admissibility, documentary stamp, probate
Cruz v. Judge Villasor, G.R. No. L-32213, November 26, 1973.
14
AUG
[ESGUERRA, J.]
FACTS
The probate of the last will and testament of the late Valente Z. Cruz was opposed by petitioner Agapita
on the ground of fraud, deceit, misrepresentation and undue influence, and that it was not executed in
accordance with law. Of the three instrumental witnesses thereto, namely Deogracias T. Jamaloas Jr.,
Dr. Francisco Pañares and Atty. Angel H. Teves, Jr., one of them, the last named, is at the same time the
Notary Public before whom the will was supposed to have been acknowledged.
ISSUE
Whether or not the probate of a will is valid if one of the three instrumental witnessed is the notary
public to whom the will was acknowledged.
RULING
NO. To allow the notary public to act as third witness, or one the attesting and acknowledging witnesses,
would have the effect of having only two attesting witnesses to the will which would be in contravention
of the provisions of Article 80 be requiring at least three credible witnesses to act as such and of Article
806 which requires that the testator and the required number of witnesses must appear before the
notary public to acknowledge the will. The result would be, as has been said, that only two witnesses
appeared before the notary public for or that purpose. In the circumstances, the law would not be duly
in observed.
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Tags: acknowledgment, credible, instrumental, witness
Icasiano v. Icasiano, G.R. No. L-18979, June 30, 1964.
14
AUG
[REYES, J.B.L., J.]
FACTS
Witness Natividad who testified on his failure to sign page three (3) of the original, admits that he may
have lifted two pages instead of one when he signed the same, but affirmed that page three (3) was
signed in his presence.
ISSUE
Whether or not a will can be probated if one of the witness inadvertently failed to sign one of the pages
thereof.
RULING
YES. The inadvertent failure of one witness to affix his signature to one page of a testament, due to the
simultaneous lifting of two pages in the course of signing, is not per se sufficient to justify denial of
probate. Impossibility of substitution of this page is assured not only the fact that the testatrix and two
other witnesses did sign the defective page, but also by its bearing the coincident imprint of the seal of
the notary public before whom the testament was ratified by testatrix and all three witnesses. The law
should not be so strictly and literally interpreted as to penalize the testatrix on account of the
inadvertence of a single witness over whose conduct she had no control, where the purpose of the law
to guarantee the identity of the testament and its component pages is sufficiently attained, no
intentional or deliberate deviation existed, and the evidence on record attests to the full observance of
the statutory requisites.
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Tags: inadvertent, signing, substantial compliance, witness
Lopez v. Lopez, G.R. No. 189984, November 12, 2012.
14
AUG
[PERLAS-BERNABE, J.]
FACTS
The RTC disallowed the probate of the will for failure to comply with the required statement in the
attestation clause as to the number of pages used upon which the will is written. While the
acknowledgment portion stated that the will consists of 7 pages including the page on which the
ratification and acknowledgment are written, the RTC observed that it has 8 pages including the
acknowledgment portion. As such, it disallowed the will for not having been executed and attested in
accordance with law.
ISSUE
Whether or not the discrepancy between the number of pages in the attestation clause and the actual
number of pages in the will that would warrant its disallowance.
RULING
YES. The provisions of the Civil Code on Forms of Wills, particularly, Articles 805 and 809 of the Civil
Code provide that the attestation must state the number of pages used upon which the will is written.
The purpose of the law is to safeguard against possible interpolation or omission of one or some of its
pages and prevent any increase or decrease in the pages. Here, the will actually consists of 8 pages
including its acknowledgment which discrepancy cannot be explained by mere examination of the will
itself but through the presentation of evidence aliunde.
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Posted by Jhez on August 14, 2017 in Case Digests, Civil Law, Succession, Uncategorized
Tags: aliunde, attestation clause, will
Echavez v. Dozen Construction and Development Corporation, G.R. No. 192916, October 11, 2010.
14
AUG
[BRION, J.]
FACTS
Vicente Echavez (Vicente) was the absolute owner of the subject lots donated to petitioner Manuel
Echavez (Manuel) through a Deed of Donation Mortis Causa, sans attestation clause, acknowledged
before a notary public. Manuel accepted the donation. Vicente sold the same lots in favor of Dozen
Construction and Development Corporation (Dozen Corporation). Manuel filed a petition to approve
Vicente’s donation mortis causa in his favor and an action to annul the contracts of sale Vicente
executed in favor of Dozen Corporation.
ISSUE
Whether or not the donation mortis causa is valid despite the non-conformity with the formalities of a
will.
RULING
NO. A donation mortis causa must comply with the formalities prescribed by law for the validity of wills,
“otherwise, the donation is void and would produce no effect.” Articles 805 and 806 of the Civil Code
should have been applied. Although the witnesses in the present case acknowledged the execution of
the Deed of Donation Mortis Causa before the notary public, this is not the avowal the law requires from
the instrumental witnesses to the execution of a decedent’s will. Hence, the donation is void, while the
sale to Dozen Construction is valid.
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Tags: donation, formalities, mortis causa, will
Taboada v. Rosal, G.R. No. L-36033, November 5, 1982.
14
AUG
[GUTIERREZ, JR., J.]
FACTS
In the petition for probate filed with the respondent court, the petitioner attached the alleged last will
and testament of the late Dorotea Perez. Written in the Cebuano-Visayan dialect, the will consists of two
pages. The first page contains the entire testamentary dispositions and is signed at the end or bottom of
the page by the testatrix alone and at the left hand margin by the three (3) instrumental witnesses. The
second page which contains the attestation clause and the acknowledgment is signed at the end of the
attestation clause by the three (3) attesting witnesses and at the left hand margin by the testatrix.
ISSUE
Whether or not the will is void for failure to state the number of pages used in writing the will.
RULING
NO. This would have been a fatal defect were it not for the fact that, in this case, it is discernible from
the entire will that it is really and actually composed of only two pages duly signed by the testatrix and
her instrumental witnesses. [T]he first page which contains the entirety of the testamentary dispositions
is signed by the testatrix at the end or at the bottom while the instrumental witnesses signed at the left
margin. The other page which is marked as “Pagina dos” comprises the attestation clause and the
acknowledgment. The acknowledgment itself states that “This Last Will and Testament consists of two
pages including this page”.
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Tags: acknowledgment
Nera v. Rimando, G.R. No. L-5971, February 21, 1911.
14
AUG
[CARSON, J.]
FACTS
A notarial will was executed in a small room. At the moment when the witness Javellana signed the
document, Jaboneta was outside, some eight or ten feet away but was actually and physically present
and in such position with relation to Jaboneta that he could see everything that took place by merely
casting his eyes in the proper direction and without any physical obstruction to prevent his doing so.
ISSUE
Whether or not the notarial will is void for the failure of the instrumental witnesses to see each other
sign.
RULING
NO. The phrase “in the presence” required by law simply means that position of the parties with relation
to each other at the moment of the subscription of each signature, must be such that they may see each
other sign if they choose to do so. The question whether the testator and the subscribing witnesses to
an alleged will sign the instrument “in the presence” of each other does not depend upon proof of the
fact that their eyes were actually cast upon the paper at the moment of its subscription by each of them,
but that at that moment existing conditions and their position with relation to each other were such that
by merely casting the eyes in the proper direction they could have seen each other sign.
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Tags: in the presence, instrumental witness, physical obstruction

In the Matter of the Summary Settlement of Estate of Anacleta Abellana, Balonan v. Abellana, G.R. No. L-
15153, August 31, 1960.
14
AUG
[LABRADOR, J.]
FACTS
The first page of the will is signed by Juan Bello and under his name appears typewritten “Por la
testadora Anacleta Abellana…”, and on the second page appears the signature of three (3) instrumental
witnesses Blas Sebastian, Faustino Macaso and Rafael Ignacio, at the bottom of which appears the
signature of T. de los Santos and below his signature is his official designation as the notary public who
notarized the said testament.
ISSUE
Does the signature of another person above the name of the testator comply with the requirements of
law prescribing the manner in which a will shall be executed?
RULING
NO. The will must be subscribed at the end thereof by the testator himself or by the testator’s name
written by some other person in his presence and by his express direction (Section 618 of the Code of
Civil Procedure). Here, the name of the testatrix, Anacleta Abellana, does not appear written under the
will by said Abellana herself, or by Dr. Juan Abello. There is, therefore, a failure to comply with the
express requirement in the law that the testator must himself sign the will, or that his name be affixed
thereto by some other person in his presence and by his express direction.
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Tags: express direction, notarial will, testator
In the Matter of the Will of Antero Mercado, Garcia v. Lacuesta, G.R. No. L-4067, November 29, 1951.
14
AUG
[PARAS, C.J.]
FACTS
The will appears to have been signed by Atty. Florentino Javier who wrote the name of Antero Mercado,
followed below by “A reugo del testator” and the name of Florentino Javier. Antero Mercado is alleged
to have written a cross immediately after his name. The attestation clause failed to state that the
testator caused another person to write the testator’s name under his express direction. The herein
petitioner argues, however, that there is no need for such recital because the cross written by the
testator after his name is a sufficient signature and the signature of Atty. Florentino Javier is a
surplusage.
ISSUE
Whether or not the will is void on the ground that it failed to state that the testator caused another
person to write the testator’s name under his express direction.
RULING
YES. The attestation clause is fatally defective for failing to state that Antero Mercado caused Atty.
Florentino Javier to write the testator’s name under his express direction, as required by section 618 of
the Code of Civil Procedure. It is not here pretended that the cross appearing on the will is the usual
signature of Antero Mercado or even one of the ways by which he signed his name. After mature
reflection, [the Court is] not prepared to liken the mere sign of the cross to a thumbmark, and the
reason is obvious. The cross cannot and does not have the trustworthiness of a thumbmark.
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Tags: attestation clause, cross, surplusage, thumbmark
Suroza v. Judge Honrado, A.M. 2026 CFI, December 19, 1981.
14
AUG
[AQUINO, J.]
FACTS
Mauro Suroza and Marcelina Salvador reared a boy named Agapito who used the surname Suroza.
Mauro died and Marcelina became the beneficiary of Mauro’s pension. Years after, Agapito married
Nenita. Marcelina executed a notarial will. That will which is in English was thumbmarked by her.
Marcelina was illiterate. In that will, Marcelina bequeathed all her estate to her supposed
granddaughter Marilyn. In the opening paragraph of the will, it was stated that English was a language
“understood and known” to the testatrix. But in its concluding paragraph, it was stated that the will was
read to the testatrix “and translated into Filipino language”.
ISSUE
Whether or not a will written in another language which is a translation of the language known to the
testator is void.
RULING
YES. That could only mean that the will was written in a language not known to the illiterate testatrix
and, therefore, it is void because of the mandatory provision of article 804 of the Civil Code that every
will must be executed in a language or dialect known to the testator. Thus, a will written in English,
which was not known to the Igorot testator, is void and must be disallowed.
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Tags: igorot, language, notarial will
Baltazar v. Laxa, G.R. No. 174489, April 11, 2012.
25
JUL
[DEL CASTILLO, J.]
FACTS
Paciencia was a 78 year old spinster at the time she executed her will. The same was executed in the
house of a certain retired Judge Limpin, was read to Paciencia twice, was signed by her, and was
attested to by three credible witness. Petitioner Rosie Mateo, daughter of the first cousin of testatrix,
testified that the latter was “magulyan” or “forgetful” because she would sometimes leave her wallet in
the kitchen then start looking for it moments later.
ISSUE
Whether or not forgetfulness is equivalent to being unsound mind, hence lack of testamentary capacity.
RULING
NO. The state of being forgetful does not necessarily make a person mentally unsound so as to render
him unfit to execute a will. Forgetfulness is not equivalent to being of unsound mind. Article 799 of the
Civil Code provides for the criteria for soundness of mind. In this case, apart from the testimony of Rosie
pertaining to Paciencia’s forgetfulness, there is no substantial evidence, medical or otherwise, that
would show that Paciencia was of unsound mind at the time of the execution of the will. The law
presumes that every person is of sound mind, in the absence of proof to the contrary.
A scrutiny of the Will discloses that [Paciencia] was aware of the nature of the document she executed.
She specially requested that the customs of her faith be observed upon her death.
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Posted by Jhez on July 25, 2017 in Case Digests, Civil Law, Succession
Tags: forgetfulness, spinster, unsound mind
Solla v. Ascuenta, G.R. No. L-24955, September 4, 1926.
25
JUL
[VILLA-REAL, J.]
FACTS
Maria Solla died leaving a will in accordance with the laws then in force but was not probated. Maria
then instituted grandson Leandro Serrano as universal heir, with the obligation that the latter shall “give
or deliver to the parish priest of this town a sufficient sum of money necessary for a yearly novena” and
shall “insist that his heirs comply with the same”. The Trial Court ruled that the order mentioned by
Maria Solla that Leandro shall “insist that his heirs comply with the same” pertains to both the
distribution of the legacies and the pious bequests.
ISSUE
Whether or not the phrase “insist that his heirs comply with the same” pertains to both the distribution
of the legacies and the pious bequests.
RULING
NO. In order to determine the testator’s intention, the court should place itself as near as possible in his
position, and hence, where the language of the will is ambiguous or doubtful, should take into
consideration the situation of the testator and the facts and circumstances surrounding him at the time
the will executed. In the present case, it appearing that it was Mari Solla’s intention, in ordering her
universal heir Leandro Serrano in her will at the hour of his death, to insist upon the compliance of her
orders by his heirs, that the latter should comply with her pious orders and that she did not mean her
orders concerning her legacies.
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Tags: bequests, legacies, pious
Intestate Estate of the Late Vito Borromeo v. Borromeo, G.R. No. L-55000, July 23, 1987.
25
JUL
FACTS
Fortunato claimed a portion of the legitime being an illegitimate son of the deceased, by incorporating a
Waiver of Hereditary Rights supposedly signed by the rest of the Borromeo’s. In the waiver, of the 9
heirs relinquished to Fortunato their shares in the disputed estate. The petitioners opposed this Waiver
for reason that this is without force and effect because there can be no effective waiver of hereditary
rights before there has been a valid acceptance of the inheritance from the heirs who intend to transfer
the same.
ISSUE
Whether or not a Waiver of Hereditary Rights can be executed without a valid acceptance from the heirs
in question.
RULING
YES. The prevailing jurisprudence on waiver of hereditary rights is that “the properties included in an
existing inheritance cannot be considered as belonging to third persons with respect to the heirs, who
by fiction of law continue the personality of the former. The heirs succeed the deceased by the mere
fact of death. More or less, time may elapse from the moment of the death of the deceased until the
heirs enter into possession of the hereditary property, but the acceptance in any event retroacts to the
moment of the death, in accordance with article 989 of the Civil Code. The right is vested, although
conditioned upon the adjudication of the corresponding hereditary portion.
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Tags: hereditary rights, waiver
Bough v. Modesto, 94 Phil, January 28, 1954.
25
JUL
FACTS
Bruno Modesto, Bough and Restituto Anapo executed a private document whereby Modesto agreed
that he would share to the latter-parties whatever property that he will receive by inheritance from his
wife, who predeceased him eventually. It was proved in such private document that the properties were
to be divided and proportioned. Bough and Restituto instituted the present action to secure judgment
ordering Modesto to divide the properties left by his wife in the manner and form provided for in such
private document.
ISSUE
Whether or not the contract which contains object of which is Modesto’s inheritance is valid and binding
between the parties.
RULING
YES. The contract is valid. It is well settled that rights by inheritance are acquired and transmitted upon
the death of the decedent. With this, it follows that it is perfectly legal for an heir to enter into a
contract of the nature of the document. The contract becomes effective only when Modesto is declared
as heir but his right over the inheritance accrues from the time his wife died.
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Tags: contract, inheritance
Cruz v. Cruz, G.R. No. 173292, September 1, 2010.
25
JUL
[CARPIO, J.]
FACTS
Memoracion Z. Cruz filed with the RTC a Complaint against her son, Oswaldo Z. Cruz, for “Annulment of
Sale, Reconveyance and Damages.” After Memoracion finished presenting her evidence in chief, she
died. The RTC was informed, albeit belatedly, of the death of Memoracion, and was supplied with the
name and address of her legal representative, Edgardo Cruz.
ISSUE
Whether or not Petition for Annulment of Deed of Sale, Reconveyance and Damages is a purely personal
action which did not survive the death of petitioner.
RULING
NO. The question as to whether an action survives or not depends on the nature of the action and the
damage sued for. In the causes of action which survive, the wrong complained [of] affects primarily and
principally property and property rights, the injuries to the person being merely incidental, while in the
causes of action which do not survive, the injury complained of is to the person, the property and rights
of property affected being incidental. Here, the petition for annulment of deed of sale involves property
and property rights, and hence, survives the death of petitioner Memoracion.
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Posted by Jhez on July 25, 2017 in Civil Law, Succession
Tags: death, evidence in chief, survive
Bonilla v. Barcena, G.R. No. L-41715, June 18, 1976.
25
JUL
[MARTIN, J.]
FACTS
Fortunata Barcena filed an action to quiet title over parcels of land. Pending the proceeding, she died.
The counsel for deceased plaintiff filed a written manifestation praying that the minors Rosalio Bonilla
and Salvacion Bonilla be allowed to substitute their deceased mother, but the court denied the counsel’s
prayer for lack of merit, and dismissed the complaint on the ground that a dead person has no legal
personality to sue.
ISSUE
Whether or not a court action survives, through the heirs, after the death of the plaintiff.
RULING
YES. Article 777 of the Civil Code provides “that the rights to the succession are transmitted from the
moment of the death of the decedent.” From the moment of the death of the decedent, the heirs
become the absolute owners of his property, subject to the rights and obligations of the decedent, and
they cannot be deprived of their rights thereto except by the methods provided for by law. When
Fortunata Barcena, therefore, died her claim or right to the parcels of land in litigation, was not
extinguished by her death but was transmitted to her heirs upon her death. Her heirs have thus acquired
interest in the properties in litigation and became parties in interest in the case. There is, therefore, no
reason for the respondent Court not to allow their substitution as parties in interest for the deceased
plaintiff.
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Tags: legal personality, substitute, survive
Testate Estate of Josefa tangco v. De Borja, G.R. No. L-28040, August 18, 1972.
25
JUL
[REYES, J.B.L., J.]
FACTS
The testate estate of Josefa Tangco alone has been unsettled for more than a quarter of a century. In
order to put an end to all these litigations, a compromise agreement was entered into. Tasiana assailed
the validity of agreement applying the doctrine in Guevarra v. Guevarra. Jose de Borja pointed out that
the Rules of Court allows the extrajudicial settlement of the estate of a deceased person regardless of
whether he left a will or not.
ISSUE
Whether or not the heirs may enter into compromise agreement to convey their share of the
inheritance even before the probate of the will.
RULING
YES. The ruling in Guevarra v. Guevara, relied by the appellant, which declared invalid a compromise
agreement which disposes of the estate before probate of the will is not applicable here. Successional
rights are transmitted from the moment of the death of the decedent (Art. 777). In this case, the clear
object of the contract was merely the conveyance by Tasiana Ongsingco of any and all her individual
share and interest, actual or eventual in the estate of Francisco de Borja and JosefaTangco. The
transaction was binding on both in their individual capacities, upon the perfection of the contract, even
without previous authority of the Court to enter into the same.
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Tags: compromise agreement, extrajudicial, partition
Uson v. Del Rosario, G.R. No. L-4963, January 29, 1953.
25
JUL
[BAUTISTA ANGELO, J.]
FACTS
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the lands involved
in this litigation. Faustino Nebreda left no other heir except his widow Maria Uson. Maria Uson sought to
recover lands held by Maria del Rosario who had four illegitimate children with Nebreda, which the
latter contends that her children are given the status and rights of natural children and are entitled to
the successional rights, and because these successional rights were declared for the first time in the new
code, they shall be given retroactive effect.
ISSUE
Whether or not the illegitimate children may have successional rights under the new Civil Code by way
of its retroactive effect.
RULING
NO. Article 2253 above referred to provides indeed that rights which are declared for the first time shall
have retroactive effect even though the event which gave rise to them may have occurred under the
former legislation, but this is so only when the new rights do not prejudice any vested or acquired right
of the same origin. The law commands that the rights to succession are transmitted from the moment of
death (Article 657, old Civil Code). The new right recognized by the new Civil Code in favor of the
illegitimate children of the deceased cannot, therefore, be asserted to the impairment of the vested
right of Maria Uson over the lands in dispute.
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Tags: retroactive effect, successional rights
Guinto v. Medina, 50 O.G. #1 p. 199, October 7, 1953.
25
JUL
FACTS
Leon Guinto filed an action for forcible entry against Santiago Medina alleging that he has been in
possession of the said parcel of land since 1934 and that Medina by means of force and intimidation
deprived him of his possession thereof. The trial court ruled in favor of Guinto but it dismissed the
prayer for damages. Pending appeal, Medina died. Medina was substituted by his heirs. The Court
awarded the damages appealed.
ISSUE
Whether or not the heirs of Medina are liable for damages, and if in the affirmative to what extent.
RULING
YES. The action to recover damages survives notwithstanding the death of the adverse party whom
damages are sought to be recovered. In this case, the heirs of Medina are liable to pay the damages as
they are merely substituted in the place of Medina upon his death. However, their liability is only to the
extent of the value of the property, which they might have received from the deceased defendant.
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Tags: damages, forcible entry, liability
Reyes v. Court of Appeals, SC L-5620, July 31, 1954.
25
JUL
FACTS
Benedicto delos Reyes, during his lifetime, sold some of his properties to the heirs of his executor. The
said sale was challenged by the heirs of the decedent, contending therein that said properties cannot be
legally disposed by the decedent because it forms part of his estate to be inherited by petitioners, the
decedent heirs. Both the trial court upheld the validity of the sale between decedent and the heirs of
the executor having said that the sold properties were sold before the death of the decedent and can no
longer be part of the inheritance.
ISSUE
Whether or not the petitioners are entitled of the property sold by the decedent during his lifetime.
RULING
It depends. The general rule is that the heirs cannot validly claim ownership over the properties in
question if alienated prior to the decedent’s death. The rights to succession are transmitted at the
moment of death of the decedent (Art. 777 of the Civil Code) Exception is when said alienation is
subsequently declared void as when there is intent to defraud and to deprive the heirs of their legitimes.
In such case, said alienation is void. Here, the sale was declared void for being absolutely simulated and
because of intent to defraud heirs of their legitimes. Hence, said properties still form part of the
inheritance of the deceased.
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Tags: estate, fraud, sale, void
Testate Estate of the late Reverend Father Pascual Rigor, The Parish Priest, G.R. No. L-22036, April 30,
1979.
20
JUL
[AQUINO, J.]
FACTS
Father Rigor died leaving a will naming as devisees the testator’s three sisters. The will also contained a
bequest to be given to the nearest male relative who shall pursue an ecclesiastical career until his
ordination as priest. Inasmuch as no nephew of the testator claimed the devise and as the administratrix
and the legal heirs believed that the parish priest of Victoria had no right to administer the ricelands, the
same were not delivered to that ecclesiastic.
ISSUE
Whether the testator’s nearest male relative who took the priesthood after the testator’s death falls
within the intention of the testator in providing to whom the bequest is to be given.
RULING
NO. The Court held that the said bequest refers to the testator’s nearest male relative living at the time
of his death and not to any indefinite time thereafter. “In order to be capacitated to inherit, the heir,
devisee or legatee must be living at the moment the succession opens, except in case of representation,
when it is proper” (Art. 1025, Civil Code).Inasmuch as the testator was not survived by any nephew who
became a priest, the unavoidable conclusion is that the bequest in question was ineffectual or
inoperative. Therefore, the administration of the rice lands by the parish priest of Victoria, as envisaged
in the will was likewise inoperative.
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Tags: bequest, devisee
Cayetano v. Leonidas, G.R. No. L-54919, May 30, 1984.
20
JUL
FACTS
The testatrix was an American citizen at the time of her death and was a permanent resident of
Pennsylvania, U.S.A.; that the testatrix died in Manila while temporarily residing with her sister; that
during her lifetime, the testatrix made her last will and testament according to the laws of Pennsylvania,
U.S.A.; that after the testatrix death, her last will and testament was presented, probated, allowed, and
registered with the Registry of Wills at the County of Philadelphia, U.S.A. An opposition to the reprobate
of the will was filed by herein petitioner alleging among other things that the intrinsic provisions of the
will are null and void. The petitioner maintains that since the respondent judge allowed the reprobate of
Adoracion’s will, Hermogenes C. Campos was divested of his legitime which was reserved by the law for
him.
ISSUES
[1]Whether or not the Philippine law will apply to determine the intrinsic validity of a will executed by
an undisputed foreigner.
[2] Whether or not Philippine law will apply to determine the capacity to succeed of Adoracion’s heirs.
RULING
[1] NO. It is a settled rule that as regards the intrinsic validity of the provisions of the will, as provided for
by Article 16(2) and 1039 of the Civil Code, the national law of the decedent must apply. This was
squarely applied in the case of Bellis v. Bellis (20 SCRA 358).“It is therefore evident that whatever public
policy or good customs may be involved in our system of legitimes, Congress has not intended to extend
the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia, the
amount of successional rights, to the decedent’s national law. Specific provisions must prevail over
general ones.”
[2] NO. Capacity to succeed is governed by the law of the nation of the decedent. (Article 1039, Civil
Code) The law which governs Adoracion Campo’s will is the law of Pennsylvania, U.S.A., which is the
national law of the decedent. Although the parties admit that the Pennsylvania law does not provide for
legitimes and that all the estate may be given away by the testatrix to a complete stranger, the
petitioner argues that such law should not apply because it would be contrary to the sound and
established public policy and would run counter to the specific provisions of Philippine Law.
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Tags: domicile, intrinsic, probate
Bellis v. Bellis, G.R. No. 23678, June 6, 1967.
20
JUL
[BENGZON, J.P., J.]
FACTS
Amos G. Bellis, was a citizen of the State of Texas of the United States. He executed a will in the
Philippines, disposing a part of his estate in favor of his illegitimate children, before he died a resident of
San Antonio, Texas, U.S.A. His will was probated in the CFI of Manila.
ISSUE
Which law must apply to the dispositions in the will, the Texas Law or Philippine law?
RULING
It is the Texas Law. Texas Law should govern the execution of the will and the successional rights of the
illegitimate children. As stated in Article 16, par. 2, and Art. 1039 of the Civil Code, it renders applicable
the national law of the decedent, in intestate or testamentary successions, with regard the amount of
successional rights, among others. Here, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and
that under the laws of Texas, there are no forced heirs or legitimes. The Doctrine of Renvoi was
discussed but not applied in this case. Accordingly, since the intrinsic validity of the provision of the will
and the amount of successional rights are to be determined under Texas law, the Philippine law on
legitimes cannot be applied to the testacy of Amos G. Bellis.
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Tags: probate, renvoi, testate
In the Matter of the Testate Estate of Edward E. Christiansen, 61 O.G. #46, p.7302.
20
JUL
[LABRADOR, J.]
FACTS
Edward Christensen was born in New York but migrated to California where he resided. Later, the
Philippines became his domicile until the time of his death. In his will, he acknowledged Maria Lucy
Christensen as his only heir but left a legacy of sum of money to Maria Helen Christensen. Helen posits
that California law is clear that the matter is referred back to the law of the domicile and therefore
Philippine Law is applicable. Lucy contends that the national law of the deceased must apply hence
Helen is not compulsory heir and so Edward could freely dispose his property.
ISSUE
Which is the relevant law insofar as the amount of successional rights of Helen and Lucy are concerned?
RULING
It is ultimately the Philippine Law. The California law has two rules on the matter. The internal law which
should apply to Californians domiciled in California and the conflicts rule which should apply to
Californians domiciled outside of California. Edward being domiciled outside California (in the
Philippines) follows that the law of his domicile. The validity of the provisions of his will depriving his
acknowledged natural child, Helen, should be governed by the Philippine law in determining the
successional rights of Helen.
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Tags: domicile, renvoi
Testate Estate of the late Bernabe Rodriguez, G.R. No. 1627-R, July 1, 1948.
20
JUL
FACTS
Petitioner Araniego, widow of the deceased, filed a petition for probate of the latter’s will before the
Court of First Instance of Bulacan. Respondents opposed the petition. They contended that since the
deceased named Araniego as his universal heir and the latter having likewise named the deceased as her
universal heir, making them reciprocal beneficiaries of each other, both testators violated the
prohibition on joint wills under the Civil Code, and the probate must be denied.
ISSUE
Whether the wills executed by testators reciprocally making the other as beneficiary is a joint will
prohibited by law.
RULING
NO. Article 669 of the old Civil Code (Art. 818 of the new Civil Code) prohibits the making of a will jointly
by two or more persons either for their reciprocal benefit or for the benefit of a third person. In other
words, it is making such will conjointly or in the same document that is prohibited. Here, the two
testators, who were husband and wife, instructed the other as universal heir in their respective wills,
said wills are not conjoint because they are made in different instruments. Hence, there is no joint will
to speak of and the prohibition in the Civil Code is inapplicable.
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Tags: conjointly, joint will, probate, reciprocal
Dela Cerna v. Potot, G.R. No. L-20234, December 23, 1964.
20
JUL
[REYES, J.B.L., J.]
FACTS
A joint will was executed by Bernabe dela Cerna and Gervasia Rebaca. Bernabe dela Cerna died on
August 30, 1939, and the aforesaid will was probated on October 31, 1939. Upon the death of Gervasia
Rebaca on October 14, 1952, another petition for the probate of the same will insofar as Gervasia was
concerned was filed on November 6, 1952. The second probate was denied because the will was
allegedly executed contrary to the prohibition of joint wills.
ISSUE
Whether a joint will may be denied subsequent probate after it was admitted in prior probate
proceedings.
RULING
NO. It is true the law (Art. 669, old Civil Code; Art. 818, new Civil Code) prohibits the making of a will
jointly by two or more persons either for their reciprocal benefit or for the benefit of a third person.
However, as in the present case, the joint last will and testament has been admitted to probate by final
order of a Court of competent jurisdiction, so that there seems to be no alternative except to give effect
to the provisions thereof that are not contrary to law. It follows that the validity of the joint will, in so far
as the estate of Gervasia was concerned, must be, on her death, reexamined and adjudicated de novo,
since a joint will is considered a separate will of each testator.
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Tags: de novo, joint will
Probate of Will of the late William R. Giberson, G.R. No. L-4113, June 30, 1952.
20
JUL
[PABLO, J.]
FACTS
Lela G. Dalton presented on February 10, 1949 an application with the Court of First Instance of Cebu for
the probate of the holographic will of William R. Giberson, a citizen of the State of Illinois, United States,
dated April 29, 1920 in San Francisco, California. Spring Giberson, legitimate son of William R. Giberson,
presented an opposition alleging that the will is apocrypha (with questionable authenticity), it does not
represent the true will of the late Giberson, and has not been granted according to the law.
ISSUE
Whether the wills executed outside the Philippines may be probated without being first probated in the
country of its execution.
RULING
YES. Section 635 of the Code of Civil Procedure stating that “a will made out of the Philippine Islands…
may be proved, allowed, and recorded in the Philippine Islands, and shall have the same effect as if
executed according to the laws of these Islands” is still in force and has not been abrogated by Rule 78
of the Rules of Court. Here, the will of William Giberson need not be probated first in the State of
Illinois, USA before it may be probated here in the Philippines. The Court opined that Section 635 of the
Code of Civil Procedure is substantive in nature and therefore could not have been repealed by the
Rules of Court which are only procedural in nature.
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Posted by Jhez on July 20, 2017 in Case Digests, Civil Law, Succession, Uncategorized
Tags: holographic, probate, will

In the matter Estate of Edward Randolph Hix, G.R. No. L-32636, March 17, 1930.
20
JUL
[MALCOLM, J.]
FACTS
Petitioner theorized that the alleged will was executed in Elkins, West Virginia, on November 3, 1925, by
Hix who had his residence in that jurisdiction. The will was presented for probate in the Court of First
Instance but no evidence was introduced to show that the extract from the laws of West Virginia was in
force at the time the alleged will was executed. For that reason, the probate was denied.
ISSUE
Whether the courts of the Philippine Islands are authorized to take judicial notice of foreign laws insofar
as wills are concerned.
RULING
NO. The laws of a foreign jurisdiction do not prove themselves in our courts. Such laws must be proved
as facts. Here, the requirement of law was not met. There was no extract from the law attested by the
certificate of the officer having charge of the original, under the seal of the State of West Virginia, as
provided in the Section 301 of the Code of Civil Procedure. In addition, the due execution of the will was
not established. The only evidence on this point is to be found in the testimony of the petitioner. On the
supposition that the witnesses to the will reside without the Philippine Islands, it would then the duty of
the petitioner to prove execution by some other means. (Code of Civil Procedure, Sec. 633)
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Tags: foreign law. judicial notice, probate
In re: Will and Testament of the deceased REVEREND SANCHO ABADIA, G.R. No.L-7188, August 9, 1954
20
JUL
[MONTEMAYOR, J.]
FACTS
The deceased Father Sancho Abadia executed a holographic will in his own handwriting, numbered and
signed by the testator himself and attested by three (3) witnesses on September 6, 1923. He died on
January 14, 1943 in Cebu. The will was admitted to probate on January 24, 1952. Some of the cousins
and nephews, who would inherit the estate of the deceased if he left no will, filed opposition.
ISSUE
What law should apply as to the validity of the holographic will: the old Civil Code when the will was
executed or the new Civil Code which could have validated the will?
RULING
It should be the old Civil Code. The new Civil Code, which took effect August 30, 1950, provides in Art.
795: “The validity of a will as to its form depends upon the observance of the law in force at the time it is
made.” Here, the validity of the holographic will is to be judged not by the law enforced at the time
when the petition is decided by the court but at the time the instrument was executed. When one
executes a will which is invalid for failure to observe and follow the legal requirements at the time of its
execution, just like in this case, then upon his death he should be regarded and declared as having died
intestate. This is because the general rule is that the Legislature cannot validate void wills.
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Posted by Jhez on July 20, 2017 in Case Digests, Civil Law, Succession, Uncategorized
Tags: holographic, intestate, will
Dr. Solidum v. People, G.R. No. 192123, 10 March 2014.
26
APR
[BERSAMIN, J.]
FACTS: Gerald Albert Gercayo (Gerald) was born with an imperforate anus. Two days after his birth,
Gerald underwent colostomy, a surgical procedure to bring one end of the large intestine out through
the abdominal wall, enabling him to excrete through a colostomy bag attached to the side of his body.
When Gerald was three years old, he was admitted at the Ospital ng Maynila for a pull-through
operation Dr. Leandro Resurreccion headed the surgical team, and was assisted by Dr. Joselito Luceño,
Dr. Donatella Valeña and Dr. Joseph Tibio. The anesthesiologists included Dr. Marichu Abella, Dr. Arnel
Razon and petitioner Dr. Fernando Solidum (Dr. Solidum). During the operation, Gerald experienced
bradycardia, and went into a coma. His coma lasted for two weeks, but he regained consciousness only
after a month. He could no longer see, hear or move.
A criminal complaint for Reckless Imprudence Resulting in Serious Physical Injuries was filed against Dr.
Solidum. The RTC rendered a judgment of conviction against Dr. Solidum with Ospital ng Maynila jointly
and severally liable. The CA affirmed the RTC judgment. The SC ruled that Dr. Solidum must be acquitted
because the prosecution did not prove beyond reasonable doubt that Dr. Solidum had been recklessly
imprudent in administering the anesthetic agent to Gerald. Indeed, Dr. Vertido’s findings did not
preclude the probability that other factors related to Gerald’s major operation, which could or could not
necessarily be attributed to the administration of the anesthesia, had caused the hypoxia and had then
led Gerald to experience bradycardia. Dr. Vertido revealingly concluded in his report, instead, that
“although the anesthesiologist followed the normal routine and precautionary procedures, still hypoxia
and its corresponding side effects did occur.
ISSUE#1: Will the acquittal of Dr. Solidum exempt him from civil liability arising from the crime?
HELD#2: NO, it does not follow.
We have to clarify that the acquittal of Dr. Solidum would not immediately exempt him from civil
liability. But we cannot now find and declare him civilly liable because the circumstances that have been
established here do not present the factual and legal bases for validly doing so. His acquittal did not
derive only from reasonable doubt. There was really no firm and competent showing how the injury to
Gerard had been caused. That meant that the manner of administration of the anesthesia by Dr.
Solidum was not necessarily the cause of the hypoxia that caused the bradycardia experienced by
Gerard. Consequently, to adjudge Dr. Solidum civilly liable would be to speculate on the cause of the
hypoxia. We are not allowed to do so, for civil liability must not rest on speculation but on competent
evidence.
ISSUE#2: Is the decree that Ospital ng Maynila is jointly and severally liable with Dr. Solidum correct?
HELD#2: NO, the decree is not correct.
For one, Ospital ng Maynila was not at all a party in the proceedings. Hence, its fundamental right to be
heard was not respected from the outset. The R TC and the CA should have been alert to this
fundamental defect. Verily, no person can be prejudiced by a ruling rendered in an action or proceeding
in which he was not made a party. Such a rule would enforce the constitutional guarantee of due
process of law.
Moreover, Ospital ng Maynila could be held civilly liable only when subsidiary liability would be properly
enforceable pursuant to Article 103 of the Revised Penal Code. But the subsidiary liability seems far-
fetched here. The conditions for subsidiary liability to attach to Ospital ng Maynila should first be
complied with. Firstly, pursuant to Article 103 of the Revised Penal Code, Ospital ng Maynila must be
shown to be a corporation “engaged in any kind of industry.” The term industry means any department
or branch of art, occupation or business, especially one that employs labor and capital, and is engaged in
industry.
However, Ospital ng Maynila, being a public hospital, was not engaged in industry conducted for profit
but purely in charitable and humanitarian work. Secondly, assuming that Ospital ng Maynila was
engaged in industry for profit, Dr. Solidum must be shown to be an employee of Ospital ng Maynila
acting in the discharge of his duties during the operation on Gerald. Yet, he definitely was not such
employee but a consultant of the hospital. And, thirdly, assuming that civil liability was adjudged against
Dr. Solidum as an employee (which did not happen here), the execution against him was unsatisfied due
to his being insolvent.
N.B.
In criminal prosecutions, the civil action for the recovery of civil liability that is deemed instituted with
the criminal action refers only to that arising from the offense charged. It is puzzling, therefore, how the
RTC and the CA could have adjudged Ospital ng Maynila jointly and severally liable with Dr. Solidum for
the damages despite the obvious fact that Ospital ng Maynila, being an artificial entity, had not been
charged along with Dr. Solidum. The lower courts thereby acted capriciously and whimsically, which
rendered their judgment against Ospital ng Maynila void as the product of grave abuse of discretion
amounting to lack of jurisdiction.
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Posted by Jhez on April 26, 2017 in Case Digests, Civil Law, Criminal Procedure, Legal Medicine, Other
Law Subjects, Remedial Law
Tags: hypoxia, imperforate, jointly and severally, res ipsa, subsidiary liability
Spouses Fermin v. Court of Appeals, et al., G.R. No. 95146, 06 May 1991.
22
APR
[GANCAYCO, J.]
FACTS: A reading of the lease agreement shows that it is for a term of ten (10) years and that the lease
shall be renewable for another term of 10 years upon mutual agreement of the parties. The agreed
rental is P5,000.00 per annum with the escalation clause that the rental shall be increased by 10% at the
end of each five-year period counted from the effectivity of the lease agreement. After the 10-year term
and during the renewal period, the lessee may, at his/their own option and discretion, terminate the
lease, after giving the lessors a previous written notice in advance, at least 180 days from the effective
date of termination. Upon termination of the lease after the first 10 years, all improvements which are
permanent in nature that may have been constructed by the lessee on the leased properties, shall
become properties of the lessors, their heirs or assigns, without any further obligation to reimburse the
lessees. The lessee has the priority to purchase the property if the lessors decide to sell said property.
Before the expiration of the 10 year term of the lease, private respondents manifested their desire to
renew the lease when they sent petitioners’ representative a prepared lease agreement already signed
by them but it was never signed nor returned by petitioners. Petitioners would be willing to renew said
lease if the rentals are increased to P2,000.00 monthly. Petitioners acquiesced on private respondents’
occupation for more than 15 days after the expiration of the lease agreement. Private respondents now
contend that there is an implied renewal of lease agreement for another 10 years.
ISSUE: Is the contention that implied renewal of a lease agreement originally for 10 year term be for
another 10 years correct?
HELD: NO, the contention is not correct.
From the foregoing set of facts, it cannot be said that the lease agreement had been effectively renewed
for another 10 years. The stipulation of the parties is clear in that such a renewal is subject to the mutual
agreement of the parties. While there is no question that private respondents expressed their desire to
renew the lease by another 10 years at the rate of the rental stipulated in the lease agreement,
apparently petitioners would be willing to renew said lease if the rentals are increased to P2,000.00
monthly. Obviously, there was no meeting of the minds as to the rate of the rental. As there was no
agreement reached, then the term of the lease may not be considered to have been renewed for
another 10 years.
However, since after the expiration of the lease agreement, the private respondents continued to
occupy the premises for more than 15 days with the acquiescence of petitioners, then it is understood
that there is an implied new lease, not for the period of the original contract, but from year to year.
Article 1670 of the Civil Code so provides for this situation.
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Posted by Jhez on April 22, 2017 in Case Digests, Lease
Tags: agreement, implied renewal, Lease
Doromal, et al. v. Court of Appeals and Javellana, G.R. No. L-36083, 05 September 1975.
22
APR
[BARREDO, J.]
FACTS:
Private respondent (plaintiff) Javellana filed an action for redemption of a co-owned property against
petitioners Doromal, et al. (defendants). The Court of First Instance (CFI) dismissed the action for having
been made out of time. The Court of Appeals reversed the trial court’s decision and held that although
respondent Javellana was informed of her co-owners’ proposal to sell the land in question to petitioners
she was, however, “never notified … least of all, in writing”, of the actual execution and registration of
the corresponding deed of sale, hence, said respondent’s right to redeem had not yet expired at the
time she made her offer for that purpose thru her letter of June 10, 1968 delivered to petitioners on
even date.
The other pivotal issue raised by petitioners on relates to the price which respondent offered for the
redemption in question. The decision under review states that notwithstanding the fact that “the
consideration of P30,000 only was placed in the deed of sale to minimize the payment of the
registration fees, stamps and sales tax” and
ISSUE#1: Is a notice to co-owner(s) of a perfected sale a sufficient notice for the counting of the 30-day
right of redemption period by a co-owner?
HELD#1: NO, the notice of perfected sale is not sufficient.
We are of the considered opinion and so hold that for purposes of the co-owner’s right of redemption
granted by Article 1620 of the Civil Code, the notice in writing which Article 1623 requires to be made to
the other co-owners and from receipt of which the 30-day period to redeem should be counted is a
notice not only of a perfected sale but of the actual execution and delivery of the deed of sale. This is
implied from the latter portion of Article 1623 which requires that before a register of deeds can record
a sale by a co-owner, there must be presented to him, an affidavit to the effect that the notice of the
sale had been sent in writing to the other co-owners. A sale may not be presented to the register of
deeds for registration unless it be in the form of a duly executed public instrument. Moreover, the law
prefers that all the terms and conditions of the sale should be definite and in writing. As aptly observed
by Justice Gatmaitan in the decision under review, Article 1619 of the Civil Code bestows unto a co-
owner the right to redeem and “to be subrogated under the same terms and conditions stipulated in the
contract”, and to avoid any controversy as to the terms and conditions under which the right to redeem
may be exercised, it is best that the period therefor should not be deemed to have commenced unless
the notice of the disposition is made after the formal deed of disposal has been duly executed. And it
being beyond dispute that respondent herein has never been notified in writing of the execution of the
deed of sale by which petitioners acquired the subject property, it necessarily follows that her tender to
redeem the same made on June 10, 1968 was well within the period prescribed by law. Indeed, it is
immaterial when she might have actually come to know about said deed, it appearing she has never
been shown a copy thereof through a written communication by either any of the petitioners-
purchasers or any of her co-owners-vendees. (Cornejo et al. vs. CA et al., 16 SCRA 775.)
ISSUE#2: Can the contention of the petitioners be sustained that redemption price should be the actual
amount paid and not that consideration in the deed of sale which is only P30,000?
HELD#2: No, petitioners’ contention cannot be sustained.
As stated in the decision under review, the trial court found that “the consideration of P30,000 only was
placed in the deed of sale to minimize the payment of the registration fees, stamps and sales tax.” With
this undisputed fact in mind, it is impossible for the Supreme Court to sanction petitioners’ pragmatic
but immoral posture. Being patently violative of public policy and injurious to public interest, the
seemingly wide practice of understating considerations of transactions for the purpose of evading taxes
and fees due to the government must be condemned and all parties guilty thereof must be made to
suffer the consequences of their ill-advised agreement to defraud the state. Verily, the trial court fell
short of its devotion and loyalty to the Republic in officially giving its stamp of approval to the stand of
petitioners and even berating respondent Javellana as wanting to enrich herself “at the expense of her
own blood relatives who are her aunts, uncles and cousins.” On the contrary, said “blood relatives”
should have been sternly told, as We here hold, that they are in pari-delicto with petitioners in
committing tax evasion and should not receive any consideration from any court in respect to the
money paid for the sale in dispute. Their situation is similar to that of parties to an illegal contract.
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Posted by Jhez on April 22, 2017 in Case Digests, Civil Law, Sales
Tags: co-owner, redemption price, right of redemption
Arcaina and Banta v. Ingram, G.R. No. 196444, 15 February 2017.
14
APR
[JARDELEZA, J.]
FACTS: Arcaina is the owner of Lot No. 3230 (property). Arcaina’s attorney-in-fact, Banta, entered into a
contract with Ingram for the sale of the property. Banta showed Ingram and the latter’s attorney-in-fact,
the metes and bounds of the property and represented that Lot No. 3230 has an area of more or less
6,200 square meters (sq. m.) per the tax declaration covering it. The contract price was P1,860,000.00,
with Ingram making installment payments for the property. They also separately executed deeds of
absolute sale over the property in Ingram’s favor, dated March 21, 2005 by Banta, and April 13, 2005 by
Arcaina. Subsequently, Ingram caused the property to be surveyed and discovered that Lot No. 3230 has
an area of 12,000 sq. m. Upon learning of the actual area of the property, Banta allegedly insisted that
the difference of 5,800 sq. m. remains unsold. This was opposed by Ingram who claims that she owns
the whole lot by virtue of the sale.
ISSUE: Was Lot 3230 sold for a lump sum or for a unit price contract? To what extent of lot area is
Ingram entitled to?
HELD: Lot No. 3230 was sold for a lump sum. Ingram is entitled only to 6,200 square meters.
In sales involving real estate, the parties may choose between two types of pricing agreement: a unit
price contract wherein the purchase price is determined by way of reference to a stated rate per unit
area (e.g., P1,000.00 per sq. m.) or a lump sum contract which states a full purchase price for an
immovable the area of which may be declared based on an estimate or where both the area and
boundaries are stated (e.g., P1 million for 1,000 sq. m., etc.). Here, the Deed of Sale executed by Banta
on March 21, 2005 and the Deed of Sale executed by Arcaina on April 13, 2005 both show that the
property was conveyed to Ingram at the predetermined price of P1,860,000.00. There was no indication
that it was bought on a per-square-meter basis. Thus, Article 1542 of the Civil Code governs the sale.
In a lump sum contract, a vendor is generally obligated to deliver all the land covered within the
boundaries, regardless of whether the real area should be greater or smaller than that recited in the
deed. However, in case there is conflict between the area actually covered by the boundaries and the
estimated area stated in the contract of sale, he/she shall do so only when the excess or deficiency
between the former and the latter is reasonable.
Applying Del Prado to the case before us, we find that the difference of 5,800 sq. m. is too substantial to
be considered reasonable. We note that only 6,200 sq. m. was agreed upon between petitioners and
Ingram. Declaring Ingram as the owner of the whole 12,000 sq. m. on the premise that this is the actual
area included in the boundaries would be ordering the delivery of almost twice the area stated in the
deeds of sale. Surely, Article 1542 does not contemplate such an unfair situation to befall a vendor —
that he/she would be compelled to deliver double the amount that he/she originally sold without a
corresponding increase in price. In Asiain v. Jalandoni, we explained that “[a] vendee of a land when it is
sold in gross or with the description ‘more or less’ does not thereby ipso facto take all risk of quantity in
the land. The use of ‘more or less’ or similar words in designating quantity covers only a reasonable
excess or deficiency.” Therefore, we rule that Ingram is entitled only to 6,200 sq. m. of the property. An
area of 5,800 sq. m. more than the area intended to be sold is not a reasonable excess that can be
deemed included in the sale.
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Posted by Jhez on April 14, 2017 in Case Digests, Civil Law, Sales
Tags: lump sum, more or less, per square meter, unit price contract
Suntay III v. Cojuangco-Suntay, G.R. No. 183053, 16 June 2010
01
APR
[NACHURA, J.]
FACTS
Petitioner argues that Article 992 of the Civil Code, the successional bar between the legitimate and
illegitimate relatives of a decedent, does not apply in this instance where facts indubitably demonstrate
the contrary – Emilio III, an illegitimate grandchild of the decedent, was actually treated by the decedent
and her husband as their own son, reared from infancy, educated and trained in their businesses, and
eventually legally adopted by decedent’s husband, the original oppositor to respondent’s petition for
letters of administration.
ISSUE
Whether or not the illegitimate child may inherit from the grandparent, who treated the former like his
own son, notwithstanding Article 992 of the Civil Code.
RULING
YES. The factual antecedents of this case accurately reflect the basis of intestate succession, i.e., love
first descends, for the decedent, Cristina, did not distinguish between her legitimate and illegitimate
grandchildren. Neither did her husband, Federico, who, in fact, legally raised the status of Emilio III from
an illegitimate grandchild to that of a legitimate child. The peculiar circumstances of this case,
painstakingly pointed out by counsel for petitioner, overthrow the legal presumption in Article 992 of
the Civil Code that there exist animosity and antagonism between legitimate and illegitimate
descendants of a deceased.
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Posted by Jhez on April 1, 2017 in Case Digests, Civil Law, Succession
Tags: bar rule, illegitimate, iron curtain
Saludaga v. FEU and De Jesus, G.R. No. 179337, 30 April 2008.
19
MAR
[YNARES-SANTIAGO, J.]
FACTS: Petitioner Joseph Saludaga was a sophomore law student of respondent Far Eastern University
(FEU) when he was shot by Alejandro Rosete (Rosete), one of the security guards on duty at the school
premises on August 18, 1996. Petitioner was rushed to FEU-Dr. Nicanor Reyes Medical Foundation (FEU-
NRMF) due to the wound he sustained. Meanwhile, Rosete was brought to the police station where he
explained that the shooting was accidental. Saludaga thereafter filed a complaint for damages against
respondents on the ground that they breached their obligation to provide students with a safe and
secure environment and an atmosphere conducive to learning. Respondents, in turn, filed a Third-Party
Complaint against Galaxy Development and Management Corporation (Galaxy), the agency contracted
by respondent FEU to provide security services within its premises and Mariano D. Imperial (Imperial),
Galaxys President, to indemnify them for whatever would be adjudged in favor of petitioner, if any; and
to pay attorneys fees and cost of the suit.
ISSUE#1: What is the source of FEU’s obligation to indemnify Saludaga? What is needed to prove that
this obligation of FEU exists?
ISSUE#2: In the alternative, is FEU vicariously liable under Article 2180 of the Civil Code.
HELD#1: Culpa contractual.
It is settled that in culpa contractual, the mere proof of the existence of the contract and the failure of
its compliance justify, prima facie, a corresponding right of relief. In the instant case, we find that, when
petitioner was shot inside the campus by no less the security guard who was hired to maintain peace
and secure the premises, there is a prima facie showing that respondents failed to comply with its
obligation to provide a safe and secure environment to its students.
HELD#2: NO.
[R]espondents cannot be held liable for damages under Article 2180 of the Civil Code because
respondents are not the employers of Rosete. The latter was employed by Galaxy. The instructions
issued by respondents Security Consultant to Galaxy and its security guards are ordinarily no more than
requests commonly envisaged in the contract for services entered into by a principal and a security
agency. They cannot be construed as the element of control as to treat respondents as the employers of
Rosete.
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Posted by Jhez on March 19, 2017 in Case Digests, Civil Law, Obligations and Contracts
Tags: culpa contractual, prima facie
Development Bank of the Philippines (DBP) v. Adil, Confesor and Villafuerte, et al., G.R. No. L-48889, 11
May 1989.
19
MAR
[GANCAYCO, J.]
FACTS: On February 10, 1940 spouses Patricio Confesor and Jovita Villafuerte obtained an agricultural
loan from the Agricultural and Industrial Bank (AIB), now the Development of the Philippines (DBP), in
the sum of P2,000.00, Philippine Currency, as evidenced by a promissory note of said date whereby they
bound themselves jointly and severally to pay the account in ten (10) equal yearly amortizations. As the
obligation remained outstanding and unpaid even after the lapse of the aforesaid ten-year period,
Confesor, who was by then a member of the Congress of the Philippines, executed a second promissory
note on April 11, 1961 expressly acknowledging said loan and promising to pay the same on or before
June 15, 1961. The trial court ordered the spouses to pay the loan but this was reversed on appeal.
ISSUE#1: Does prescription operate to discharge a debt even if it there was acknowledgment of the
debtor?
ISSUE#2: Is the conjugal partnership of Confesor and Villafuerte bound by the execution of the second
promissory note?
HELD#1: NO.
This is not a mere case of acknowledgment of a debt that has prescribed but a new promise to pay the
debt. The consideration of the new promissory note is the pre-existing obligation under the first
promissory note. The statutory limitation bars the remedy but does not discharge the debt. A new
express promise to pay a debt barred … will take the case from the operation of the statute of
limitations as this proceeds upon the ground that as a statutory limitation merely bars the remedy and
does not discharge the debt, there is something more than a mere moral obligation to support a
promise, to wit a – pre-existing debt which is a sufficient consideration for the new the new promise;
upon this sufficient consideration constitutes, in fact, a new cause of action.
HELD#2: YES.
Under Article 165 of the Civil Code, the husband is the administrator of the conjugal partnership. As
such administrator, all debts and obligations contracted by the husband for the benefit of the conjugal
partnership, are chargeable to the conjugal partnership. No doubt, in this case, respondent Confesor
signed the second promissory note for the benefit of the conjugal partnership. Hence the conjugal
partnership is liable for this obligation.
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Tags: conjugal partnership, prescription, promissory
Ansay et al. v. National Development Company (NDC), G.R. No. L-13667, 29 April 1960.
19
MAR
[PARAS, C.J.]
FACTS: Ansay et al. filed against NDC a complaint praying for a 20% Christmas bonus for the years 1954
and 1955. The trial court dismissed the complaint ratiocinating that a bonus is an act of liberality and the
court takes it that it is not within its judicial powers to command respondents to be liberal and that
Ansay et al. admitted that NDC is not under legal duty to give such bonus and that the court has no
power to compel a party to comply with a moral obligation (Art. 142, New Civil Code.). Ansay et al.
appealed and argued that there exists a cause of action in their complaint because their claim rests on
moral grounds or what in brief is defined by law as a natural obligation.
ISSUE: Is the grant of Christmas bonus for the years 1954 and 1955 demandable based on natural or
moral obligation?
HELD: NO.
Article 1423 of the New Civil Code classifies obligations into civil or natural. “Civil obligations are a right
of action to compel their performance. Natural obligations, not being based on positive law but on
equity and natural law, do not grant a right of action to enforce their performance, but after voluntary
fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by
reason thereof”. It is thus readily seen that an element of natural obligation before it can be cognizable
by the court is voluntary fulfillment by the obligor. Certainly retention can be ordered but only after
there has been voluntary performance. But here there has been no voluntary performance. In fact, the
court cannot order the performance.
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Posted by Jhez on March 19, 2017 in Civil Law, Obligations and Contracts
Tags: bonus, civil obligation, natural law, natural obligation
Villaroel v. Estrada, G.R. No. L-47262, 19 December 1940.
19
MAR
[AVANCEÑA, Pres.]
FACTS: On May 9, 1912, Alejandro F. Callao, the mother of the defendant Juan F. Villarroel, obtained
from the spouses Mariano Estrada and Severina a loan of P1,000 payable after seven years. Alejandra
died, leaving as sole heir to the defendant. The spouses Mariano Estrada and Severina also died, leaving
as sole heir the plaintiff Bernardino Estrada. On August 9, 1930, the defendant signed a document
(Exhibit B) by which it declares the applicant to owe the amount of P1,000, with an interest of 12
percent per year. This action deals with the collection of this amount.
ISSUE: Is the defendant Juan under obligation to pay the loan that already prescribed if he subsequently
declared that he owed it to plaintiff Bernardino?
HELD: YES.
Although the action to recover the original debt has already been prescribed when the claim was filed in
this case, the question that arises in this appeal is mainly whether, notwithstanding such a prescription,
the action (may be) brought. However, the present action is not based on the original obligation
contracted by the defendant’s mother, who has already been prescribed, but in which the defendant
contracted on August 9, 1930 upon assuming the fulfillment of that obligation, Already prescribed. Since
the defendant is the sole inheritor of the primitive debtor, with the right to succeed in his inheritance,
that debt, brought by his mother legally, although it has lost its effectiveness by prescription, is now,
however, for a moral obligation, which is consideration Sufficient to create and render effective and
enforceable its obligation voluntarily contracted on August 9, 1930 in Exhibit B.
The rule that a new promise to pay a pre-paid debt must be made by the same obligated person or by
another legally authorized by it, is not applicable to the present case in which it is not required to fulfill
the obligation of the obligee originally, but of which he voluntarily wanted to assume this obligation.
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Tags: obligation, prescription
Continental Steel Manufacturing Corp. v. Montao, 182836, 13 October 2009.
14
JAN
[CHICO-NAZARIO, J.]
FACTS:
Hortillano, an employee of Continental Steel, filed a claim for Paternity Leave, Bereavement Leave and
Death and Accident Insurance for dependent pursuant to the Collective Bargaining Agreement (CBA)
concluded between Continental and the Union. The claim was based on the death of Hortillano’s unborn
child. Hortillanos wife, had a premature delivery while she was in the 38th week of pregnancy.
According to the Certificate of Fetal Death, the female fetus died during labor due to fetal Anoxia
secondary to uteroplacental insufficiency. Continental Steel immediately granted Hortillanos claim for
paternity leave but denied his claims for bereavement leave and other death benefits, consisting of the
death and accident insurance. Continental Steel posited that the express provision of the CBA did not
contemplate the death of an unborn child, a fetus, without legal personality. Continental Steel, relying
on Articles 40, 41 and 42 of the Civil Code, contended that only one with civil personality could die.
Hence, the unborn child never died because it never acquired juridical personality. Proceeding from the
same line of thought, Continental Steel reasoned that a fetus that was dead from the moment of
delivery was not a person at all.
ISSUE: Whether death can only happen to one with civil/juridical personality.
HELD: NO.
The reliance of Continental Steel on Articles 40, 41 and 42 of the Civil Code for the legal definition of
death is misplaced. Article 40 provides that a conceived child acquires personality only when it is born,
and Article 41 defines when a child is considered born. Article 42 plainly states that civil personality is
extinguished by death.
First, the issue of civil personality is not relevant herein. Articles 40, 41 and 42 of the Civil Code on
natural persons, must be applied in relation to Article 37 of the same Code, the very first of the general
provisions on civil personality.
We need not establish civil personality of the unborn child herein since his/her juridical capacity and
capacity to act as a person are not in issue. It is not a question before us whether the unborn child
acquired any rights or incurred any obligations prior to his/her death that were passed on to or assumed
by the child’s parents. The rights to bereavement leave and other death benefits in the instant case
pertain directly to the parents of the unborn child upon the latters death.
Second, Sections 40, 41 and 42 of the Civil Code do not provide at all a definition of death. Moreover,
while the Civil Code expressly provides that civil personality may be extinguished by death, it does not
explicitly state that only those who have acquired juridical personality could die.
And third, death has been defined as the cessation of life. Life is not synonymous with civil personality.
One need not acquire civil personality first before he/she could die. Even a child inside the womb
already has life. No less than the Constitution recognizes the life of the unborn from conception, that
the State must protect equally with the life of the mother. If the unborn already has life, then the
cessation thereof even prior to the child being delivered, qualifies as death.
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Posted by Jhez on January 14, 2017 in Case Digests, Civil Law, Labor Law, Legal Medicine, Persons and
Family Relations
Tags: conception, death, fetus, foetus, personality, unborn
Professional Services Inc. (PSI) v. Agana, G.R. No. 126297, 31 January 2007.
13
DEC
[SANDOVAL-GUTIERREZ, J.]
FACTS:
Natividad Agana was rushed to the Medical City General Hospital (Medical City Hospital) because of
difficulty of bowel movement and bloody anal discharge. After a series of medical examinations, Dr.
Miguel Ampil diagnosed her to be suffering from “cancer of the sigmoid.” Dr. Ampil, assisted by the
medical staff of the Medical City Hospital, performed an anterior resection surgery on Natividad. He
found that the malignancy in her sigmoid area had spread on her left ovary, necessitating the removal of
certain portions of it. Thus, Dr. Ampil obtained the consent of Natividad’s husband, Enrique Agana, to
permit Dr. Juan Fuentes, respondent in G.R. No. 126467, to perform hysterectomy on her. Thereafter,
Dr. Ampil took over, completed the operation and closed the incision. However, based on the record of
the hospital, the attending nurses indicated nota bene that 2 sponges were missing. The same was
reported to Dr. Ampil but were not found after “diligent seach”.
After couple of days, Natividad complained of excruciating pain in her anal region. She consulted both
Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural consequence of the
surgery. Dr. Ampil then recommended that she consult an oncologist to examine the cancerous nodes
which were not removed during the operation. Natividad went to the United States for four months but
she was only declared free of cancer. In Natividad’s return to the Philippines, her daughter found a piece
of gauze protruding from her vagina. Upon being informed about it, Dr. Ampil proceeded to her house
where he managed to extract by hand a piece of gauze measuring 1.5 inches in width. He then assured
her that the pains would soon vanish. But instead the pains intensified, prompting Natividad to seek
treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez detected the
presence of another foreign object in her vagina — a foul-smelling gauze measuring 1.5 inches in width
which badly infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive organs
which forced stool to excrete through the vagina. Natividad underwent another surgical operation to
remedy the damage. Civil and administrative complaints, for damages and gross negligence respectively,
were filed against Professional Services Inc., owner of Medical City Hospital, Dr. Ampil and Dr. Fuentes.
ISSUE(S):
Are the following liable?
(1) Professional Services Inc., based on
(a) “employer-employee relationship”;
(b) “doctrine of apparent authority”;
(c) “corporate negligence”;
(2) Dr. Ampil,
(a) for medical negligence;
(b) under the “captain of the ship doctrine”;
(3) Dr.Fuentes, under the doctrine of res ipsa loquitor;

HELD:
(1)
(a) YES.
[P]rivate hospitals, hire, fire and exercise real control over their attending and visiting ‘consultant’ staff.
While ‘consultants’ are not, technically employees, x x x, the control exercised, the hiring, and the right
to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with
the exception of the payment of wages. In assessing whether such a relationship in fact exists, the
control test is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of
allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists
between hospitals and their attending and visiting physicians.
(b) YES.
Apparent authority, or what is sometimes referred to as the “holding out” theory, or doctrine of
ostensible agency or agency by estoppel, has its origin from the law of agency. It imposes liability, not as
the result of the reality of a contractual relationship, but rather because of the actions of a principal or
an employer in somehow misleading the public into believing that the relationship or the authority
exists. xxx In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and
specializations of the physicians associated or accredited by it, including those of Dr. Ampil and Dr.
Fuentes. We concur with the Court of Appeals’ conclusion that it “is now estopped from passing all the
blame to the physicians whose names it proudly paraded in the public directory leading the public to
believe that it vouched for their skill and competence.” Indeed, PSI’s act is tantamount to holding out to
the public that Medical City Hospital, through its accredited physicians, offers quality health care
services. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications, the
hospital created the impression that they were its agents, authorized to perform medical or surgical
services for its patients. As expected, these patients, Natividad being one of them, accepted the services
on the reasonable belief that such were being rendered by the hospital or its employees, agents, or
servants.
(c) YES.
Hospital’s corporate negligence extends to permitting a physician known to be incompetent to practice

at the hospital. xxx [A] patient who enters a hospital does so with the reasonable expectation that it will
attempt to cure him. The hospital accordingly has the duty to make a reasonable effort to monitor and
oversee the treatment prescribed and administered by the physicians practicing in its premises. In the
present case, it was duly established that PSI operates the Medical City Hospital for the purpose and
under the concept of providing comprehensive medical services to the public. Accordingly, it has the
duty to exercise reasonable care to protect from harm all patients admitted into its facility for medical
treatment. Unfortunately, PSI failed to perform such duty.
(2)
(a) YES.
This is a clear case of medical malpractice or more appropriately, medical negligence. To successfully
pursue this kind of case, a patient must only prove that a health care provider either failed to do
something which a reasonably prudent health care provider would have done, or that he did something
that a reasonably prudent provider would not have done; and that failure or action caused injury to the
patient. Simply put, the elements are duty, breach, injury and proximate causation. Dr, Ampil, as the
lead surgeon, had the duty to remove all foreign objects, such as gauzes, from Natividad’s body before
closure of the incision. When he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil
breached both duties. Such breach caused injury to Natividad, necessitating her further examination by
American doctors and another surgery. That Dr. Ampil’s negligence is the proximate cause of Natividad’s
injury could be traced from his act of closing the incision despite the information given by the attending
nurses that two pieces of gauze were still missing. That they were later on extracted from Natividad’s
vagina established the causal link between Dr. Ampil’s negligence and the injury. And what further
aggravated such injury was his deliberate concealment of the missing gauzes from the knowledge of
Natividad and her family.
(b) YES.
Under the “Captain of the Ship” rule, the operating surgeon is the person in complete charge of the
surgery room and all personnel connected with the operation. Their duty is to obey his orders. As stated
before, Dr. Ampil was the lead surgeon. In other words, he was the “Captain of the Ship.” That he
discharged such role is evident from his following conduct: (1) calling Dr. Fuentes to perform a
hysterectomy; (2) examining the work of Dr. Fuentes and finding it in order; (3) granting Dr. Fuentes’
permission to leave; and (4) ordering the closure of the incision. To our mind, it was this act of ordering
the closure of the incision notwithstanding that two pieces of gauze remained unaccounted for, that
caused injury to Natividad’s body. Clearly, the control and management of the thing which caused the
injury was in the hands of Dr. Ampil, not Dr. Fuentes.
(3) NO.
The requisites for the applicability of the doctrine of res ipsa loquitur are: (1) the occurrence of an
injury; (2) the thing which caused the injury was under the control and management of the defendant;
(3) the occurrence was such that in the ordinary course of things, would not have happened if those
who had control or management used proper care; and (4) the absence of explanation by the
defendant. Of the foregoing requisites, the most instrumental is the “control and management of the
thing which caused the injury.”
We find the element of “control and management of the thing which caused the injury” to be wanting.
Hence, the doctrine of res ipsa loquitur will not lie.
It was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil) found that
the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes performed the surgery and
thereafter reported and showed his work to Dr. Ampil. The latter examined it and finding everything to
be in order, allowed Dr. Fuentes to leave the operating room. Dr. Ampil then resumed operating on
Natividad. He was about to finish the procedure when the attending nurses informed him that two
pieces of gauze were missing. A “diligent search” was conducted, but the misplaced gauzes were not
found. Dr. Ampil then directed that the incision be closed. During this entire period, Dr. Fuentes was no
longer in the operating room and had, in fact, left the hospital.
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Posted by Jhez on December 13, 2016 in Case Digests, Civil Law, Legal Medicine, Other Law Subjects,
Torts and Damages
Tags: agency by estoppel, agency by implication, captain of the ship, corporate negligence, gauze,
holding out, res ipsa loquitor, sigmoid, sponge
De los Santos v. De la Cruz, G.R. No. L-29192, 22 February 1971
02
OCT
[VILLAMOR, J.]
FACTS
The parties admit that the owner of the estate, subject matter of the extrajudicial partition agreement,
was Pelagia de la Cruz, who died intestate; that defendant-appellant (De la Cruz)is a nephew of the said
decedent; that plaintiff-appellee (De los Santos) is a grandniece of Pelagia de la Cruz, her mother,
Marciana de la Cruz, being a niece who predeceased said Pelagia de la Cruz; and that the purpose of the
extrajudicial partition agreement was to divide and distribute the estate among the heirs of Pelagia de la
Cruz.
ISSUE
What is the effect of an extra-judicial partition which included a person who is not an heir of the
deceased?
RULING
The extrajudicial partition agreement is void with respect to plaintiff-appellee.
Article 1105 of the Civil Code provides: “A partition which includes a person believed to be a heir, but
who is not, shall be void only with respect to such person.” Partition of property affected between a
person entitled to inherit from the deceased owner thereof and another person who thought he was an
heir, when he was not really and lawfully such, to the prejudice of the rights of the true heir designated
by law to succeed the deceased, is null and void. A fortiori, plaintiff-appellee could hardly derive from
the agreement the right to have its terms enforced.
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Posted by Jhez on October 2, 2016 in Case Digests, Civil Law, Remedial Law, Special Proceedings,
Succession
Tags: extra-judicial, partition
Nogales v. Capitol Medical Center, et al., G.R. No. 142625, 19 December 2006.
20
SEP
[CARPIO, J.]
FACTS:
Pregnant with her fourth child, Corazon Nogales (“Corazon”), who was then 37 years old, was under the
exclusive prenatal care of Dr. Oscar Estrada (“Dr. Estrada”) beginning on her fourth month of pregnancy
or as early as December 1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted
an increase in her blood pressure and development of leg edema indicating preeclampsia, which is a
dangerous complication of pregnancy. Around midnight of 25 May 1976, Corazon started to experience
mild labor pains prompting Corazon and Rogelio Nogales (“Spouses Nogales”) to see Dr. Estrada at his
home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical
Center (“CMC”). The following day, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse
noted the written admission request of Dr. Estrada. Upon Corazon’s admission at the CMC, Rogelio
Nogales (“Rogelio”) executed and signed the “Consent on Admission and Agreement” and “Admission
Agreement.” Corazon was then brought to the labor room of the CMC. Corazon died at 9:15 a.m. The
cause of death was “hemorrhage, post partum.”
Petitioners filed a complaint for damages with the Regional Trial Court of Manila against CMC, Dr.
Estrada, and the rest of CMC medical staff for the death of Corazon. In their defense, CMC pointed out
that Dr. Estrada was a consultant to be considered as an independent-contractor, and that no employer-
employee relationship existed between the former and the latter.
After more than 11 years of trial, the trial court rendered judgment on 22 November 1993 finding Dr.
Estrada solely liable for damages. Petitioners appealed the trial court’s decision. Petitioners claimed that
aside from Dr. Estrada, the remaining respondents should be held equally liable for negligence.
Petitioners pointed out the extent of each respondent’s alleged liability.
On appeal, the Court of Appeals affirmed the trial court’s ruling and applied the “borrowed servant
doctrine” to release the liability of other medical staff. This doctrine provides that once the surgeon
enters the operating room and takes charge of the proceedings, the acts or omissions of operating room
personnel, and any negligence associated with such acts or omissions, are imputable to the surgeon.
While the assisting physicians and nurses may be employed by the hospital, or engaged by the patient,
they normally become the temporary servants or agents of the surgeon in charge while the operation is
in progress, and liability may be imposed upon the surgeon for their negligent acts under the doctrine of
respondeat superior.
ISSUE: Whether CMC is vicariously liable for the negligence of Dr. Estrada as its attending independent-
contractor physician considering that facts of the instant case.
HELD: YES.
In general, a hospital is not liable for the negligence of an independent contractor-physician. There is,
however, an exception to this principle. The hospital may be liable if the physician is the “ostensible”
agent of the hospital. This exception is also known as the “doctrine of apparent authority.”xxx The
doctrine of apparent authority essentially involves two factors to determine the liability of an
independent-contractor physician. The first factor focuses on the hospital’s manifestations and is
sometimes described as an inquiry whether the hospital acted in a manner which would lead a
reasonable person to conclude that the individual who was alleged to be negligent was an employee or
agent of the hospital. In this regard, the hospital need not make express representations to the patient
that the treating physician is an employee of the hospital; rather a representation may be general and
implied. xxx The second factor focuses on the patient’s reliance. It is sometimes characterized as an
inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent,
consistent with ordinary care and prudence.
xxx
In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff. Through CMC’s
acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to believe
that Dr. Estrada was an employee or agent of CMC. CMC cannot now repudiate such authority. The
records show that the Spouses Nogales relied upon a perceived employment relationship with CMC in
accepting Dr. Estrada’s services. Rogelio testified that he and his wife specifically chose Dr. Estrada to
handle Corazon’s delivery not only because of their friend’s recommendation, but more importantly
because of Dr. Estrada’s “connection with a reputable hospital, the [CMC].” In other words, Dr. Estrada’s
relationship with CMC played a significant role in the Spouses Nogales’ decision in accepting Dr.
Estrada’s services as the obstetrician-gynecologist for Corazon’s delivery. Moreover, as earlier stated,
there is no showing that before and during Corazon’s confinement at CMC, the Spouses Nogales knew or
should have known that Dr. Estrada was not an employee of CMC. xxx CMC’s defense that all it did was
“to extend to [Corazon] its facilities” is untenable. The Court cannot close its eyes to the reality that
hospitals, such as CMC, are in the business of treatment.
xxx
The Court finds respondent Capitol Medical Center vicariously liable for the negligence of Dr. Oscar
Estrada. The amounts of P105,000 as actual damages and P700,000 as moral damages should each earn
legal interest at the rate of six percent (6%) per annum computed from the date of the judgment of the
trial court. The Court affirms the rest of the Decision dated 6 February 1998 and Resolution dated 21
March 2000 of the Court of Appeals in CA-G.R. CV No. 45641.
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Posted by Jhez on September 20, 2016 in Case Digests, Civil Law, Criminal Law, Legal Medicine, Torts and
Damages
Tags: atony, borrowed servant doctrine, cervical, doctrine of apparent authority, doctrine of justifiable
reliance, hysterectomy, preeclampsia, respondeat superior, vicarious liability
Dr. Encarnacion Lumantas v. Hanz Calapiz, G.R. No. 163753, 15 January 2014.
05
SEP
[BERSAMIN, J.]
FACTS:
In 1995, Spouses Hilario Calapiz, Jr. and Herlita Calapiz brought their 8-year-old son, Hanz Calapiz (Hanz),
to the Misamis Occidental Provincial Hospital, Oroquieta City, for an emergency appendectomy. Hanz
was attended to by the petitioner, who suggested to the parents that Hanz also undergo circumcision at
no added cost to spare him the pain. With the parents’ consent, the petitioner performed the coronal
type of circumcision on Hanz after his appendectomy. On the following day, Hanz complained of pain in
his penis, which exhibited blisters. His testicles were swollen. The parents noticed that the child urinated
abnormally after the petitioner forcibly removed the catheter, but the petitioner dismissed the
abnormality as normal. Hanz was discharged from the hospital over his parents’ protestations, and was
directed to continue taking antibiotics. After a few days, Hanz was confined in a hospital because of the
abscess formation between the base and the shaft of his penis. Presuming that the ulceration was
brought about by Hanz’s appendicitis, the petitioner referred him to Dr. Henry Go, an urologist, who
diagnosed the boy to have a damaged urethra. Thus, Hanz underwent cystostomy, and thereafter was
operated on three times to repair his damaged urethra.
When his damaged urethra could not be fully repaired and reconstructed, Hanz’s parents brought a
criminal charge against the petitioner for reckless imprudence resulting to serious physical injuries. In his
defense, the petitioner denied the charge. He contended that at the time of his examination of Hanz, he
had found an accumulation of pus at the vicinity of the appendix two to three inches from the penis that
had required immediate surgical operation; that after performing the appendectomy, he had
circumcised Hanz with his parents’ consent by using a congo instrument, thereby debunking the parents’
claim that their child had been cauterized; that he had then cleared Hanz once his fever had subsided;
that he had found no complications when Hanz returned for his follow up check-up; and that the
abscess formation between the base and the shaft of the penis had been brought about by Hanz’s burst
appendicitis.
The RTC acquitted the petitioner of the crime charged for insufficiency of the evidence. It held that the
Prosecution’s evidence did not show the required standard of care to be observed by other members of
the medical profession under similar circumstances. Nonetheless, the RTC ruled that the petitioner was
liable for moral damages because there was a preponderance of evidence showing that Hanz had
received the injurious trauma from his circumcision by the petitioner. The Petitioner appealed his case
to the CA contending that he could not be held civilly liable because there was no proof of his
negligence. The CA affirmed the RTC, sustaining the award of moral damages.
ISSUE:
Whether the CA erred in affirming the petitioner’s civil liability despite his acquittal of the crime of
reckless imprudence resulting in serious physical injuries.
HELD:
NO.
It is axiomatic that every person criminally liable for a felony is also civilly liable. xxx Our law recognizes
two kinds of acquittal, with different effects on the civil liability of the accused. First is an acquittal on
the ground that the accused is not the author of the act or omission complained of. This instance closes
the door to civil liability, for a person who has been found to be not the perpetrator of any act or
omission cannot and can never be held liable for such act or omission. There being no delict, civil liability
ex delicto is out of the question, and the civil action, if any, which may be instituted must be based on
grounds other than the delict complained of. This is the situation contemplated in Rule 111 of the Rules
of Court. The second instance is an acquittal based on reasonable doubt on the guilt of the accused. In
this case, even if the guilt of the accused has not been satisfactorily established, he is not exempt from
civil liability which may be proved by preponderance of evidence only.
The petitioner’s contention that he could not be held civilly liable because there was no proof of his
negligence deserves scant consideration. The failure of the Prosecution to prove his criminal negligence
with moral certainty did not forbid a finding against him that there was preponderant evidence of his
negligence to hold him civilly liable. With the RTC and the CA both finding that Hanz had sustained the
injurious trauma from the hands of the petitioner on the occasion of or incidental to the circumcision,
and that the trauma could have been avoided, the Court must concur with their uniform findings. In that
regard, the Court need not analyze and weigh again the evidence considered in the proceedings a quo.
The Court, by virtue of its not being a trier of facts, should now accord the highest respect to the factual
findings of the trial court as affirmed by the CA in the absence of a clear showing by the petitioner that
such findings were tainted with arbitrariness, capriciousness or palpable error.
Every person is entitled to the physical integrity of his body. Although we have long advocated the view
that any physical injury, like the loss or diminution of the use of any part of one’s body, is not equatable
to a pecuniary loss, and is not susceptible of exact monetary estimation, civil damages should be
assessed once that integrity has been violated. The assessment is but an imperfect estimation of the
true value of one’s body. The usual practice is to award moral damages for the physical injuries
sustained. In Hanz’s case, the undesirable outcome of the circumcision performed by the petitioner
forced the young child to endure several other procedures on his penis in order to repair his damaged
urethra. Surely, his physical and moral sufferings properly warranted the amount of P50,000.00 awarded
as moral damages.
Many years have gone by since Hanz suffered the injury. Interest of 6% per annum should then be
imposed on the award as a sincere means of adjusting the value of the award to a level that is not only
reasonable but just and commensurate. Unless we make the adjustment in the permissible manner by
prescribing legal interest on the award, his sufferings would be unduly compounded. For that purpose,
the reckoning of interest should be from the filing of the criminal information on April 17, 1997, the
making of the judicial demand for the liability of the petitioner.
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Posted by Jhez on September 5, 2016 in Case Digests, Criminal Law, Legal Medicine, Remedial Law, Torts
and Damages
Tags: appendectomy, circumcision, civil liability, ex delicto, moral damages, urethra
Cebu Country Club, Inc. (CCCI) et al., v. Elizagaque, G.R. No. 160273, January 18, 2008.
11
MAY
[SANDOVAL-GUTIERREZ, J.]
(Long Version Digest)
FACTS
Cebu Country Club, Inc. (CCCI), petitioner, is a domestic corporation operating as a non-profit and non-
stock private membership club, having its principal place of business in Banilad, Cebu City. Petitioners
herein are members of its Board of Directors. In 1996, respondent filed with CCCI an application for
proprietary membership. The application was indorsed by CCCI’s two (2) proprietary members, namely:
Edmundo T. Misa and Silvano Ludo. As the price of a proprietary share was around the P5 million range,
Benito Unchuan, then president of CCCI, offered to sell respondent a share for only P3.5 million.
Respondent, however, purchased the share of a certain Dr. Butalid for only P3 million. Consequently, on
September 6, 1996, CCCI issued Proprietary Ownership Certificate No. 1446 to respondent.
During the meetings dated April 4, 1997 and May 30, 1997 of the CCCI Board of Directors, action on
respondent’s application for proprietary membership was deferred. In another Board meeting held on
July 30, 1997, respondent’s application was voted upon. As shown by the records, the Board adopted a
secret balloting known as the “black ball system” of voting wherein each member will drop a ball in the
ballot box. A white ball represents conformity to the admission of an applicant, while a black ball means
disapproval. Pursuant to Section 3(c), as amended, cited above, a unanimous vote of the directors is
required. When respondent’s application for proprietary membership was voted upon during the Board
meeting on July 30, 1997, the ballot box contained one (1) black ball. Thus, for lack of unanimity, his
application was disapproved.
On August 6, 1997, Edmundo T. Misa, on behalf of respondent, wrote CCCI a letter of reconsideration.
As CCCI did not answer, respondent, on October 7, 1997, wrote another letter of reconsideration. Still,
CCCI kept silent. On November 5, 1997, respondent again sent CCCI a letter inquiring whether any
member of the Board objected to his application. Again, CCCI did not reply. Consequently, on December
23, 1998, respondent filed with the Regional Trial Court (RTC), Branch 71, Pasig City a complaint for
damages against petitioners
ISSUE
Whether in disapproving respondent’s application for proprietary membership with CCCI, petitioners are
liable to respondent for damages, and if so, whether their liability is joint and several.
RULING
YES.
In rejecting respondent’s application for proprietary membership, we find that petitioners violated the
rules governing human relations, the basic principles to be observed for the rightful relationship
between human beings and for the stability of social order. The trial court and the Court of Appeals
aptly held that petitioners committed fraud and evident bad faith in disapproving respondent’s
applications. This is contrary to morals, good custom or public policy. Hence, petitioners are liable for
damages pursuant to Article 19 in relation to Article 21 of the same Code.
It bears stressing that the amendment to Section 3(c) of CCCI’s Amended By-Laws requiring the
unanimous vote of the directors present at a special or regular meeting was not printed on the
application form respondent filled and submitted to CCCI. What was printed thereon was the original
provision of Section 3(c) which was silent on the required number of votes needed for admission of an
applicant as a proprietary member.
Petitioners explained that the amendment was not printed on the application form due to economic
reasons. We find this excuse flimsy and unconvincing. Such amendment, aside from being extremely
significant, was introduced way back in 1978 or almost twenty (20) years before respondent filed his
application. We cannot fathom why such a prestigious and exclusive golf country club, like the CCCI,
whose members are all affluent, did not have enough money to cause the printing of an updated
application form.
It is thus clear that respondent was left groping in the dark wondering why his application was
disapproved. He was not even informed that a unanimous vote of the Board members was required.
When he sent a letter for reconsideration and an inquiry whether there was an objection to his
application, petitioners apparently ignored him. Certainly, respondent did not deserve this kind of
treatment. Having been designated by San Miguel Corporation as a special non-proprietary member of
CCCI, he should have been treated by petitioners with courtesy and civility. At the very least, they should
have informed him why his application was disapproved.
The exercise of a right, though legal by itself, must nonetheless be in accordance with the proper norm.
When the right is exercised arbitrarily, unjustly or excessively and results in damage to another, a legal
wrong is committed for which the wrongdoer must be held responsible.
Section 31 of the Corporation Code provides:
SEC. 31. Liability of directors, trustees or officers. — Directors or trustees who willfully and knowingly
vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or
bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in
conflict with their duty as such directors, or trustees shall be liable jointly and severally for all damages
resulting therefrom suffered by the corporation, its stockholders or members and other persons.
(Emphasis ours)
The challenged Decision and Resolution of the Court of Appeals are AFFIRMED with modification in the
sense that (a) the award of moral damages is reduced fromP2,000,000.00 to P50,000.00; (b) the award
of exemplary damages is reduced from P1,000,000.00 toP25,000.00; and (c) the award of attorney’s fees
and litigation expenses is reduced from P500,000.00 andP50,000.00 to P50,000.00 and P25,000.00,
respectively.
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Posted by Jhez on May 11, 2015 in Case Digests, Civil Law, Commercial Law, Corporation Law, Torts and
Damages
Tags: abuse of rights, black ball system, joint and solidary, proprietary membership
Consolidated Plywood Industries, Inc. v. IFC Leasing and Acceptance Corp [G.R. No. 72593. April 30,
1987]
20
APR
FACTS
A non-negotiable promissory note was issued:
“FOR VALUE RECEIVED, I/we jointly and severally promise to pay to the INDUSTRIAL PRODUCTS
MARKETING, the sum of ONE MILLION NINETY THREE THOUSAND SEVEN HUNDRED EIGHTY NINE PESOS
& 71/100 only (P 1,093,789.71), Philippine Currency, the said principal sum, to be payable in 24 monthly
installments starting July 15, 1978 and every 15th of the month thereafter until fully paid. …”
ISSUE
Whether or not a non-negotiable promissory note may be assigned.
RULING
YES. The subject promissory note may be assigned. It follows then that the respondent can never be a
holder in due course but remains a mere assignee of the note in question. Thus, the petitioner may raise
against the respondent all defenses available to it as against the seller-assignor.
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Posted by Jhez on April 20, 2014 in Case Digests, Civil Law, Commercial Law, Negotiable Instruments Law
Tags: assignability, Birthday, non-negotiable, transfer
Casabuena v. Court of Appeals [G.R. No. 115410. February 27, 1988]
20
APR
FACTS
To secure debt, spouses Urdaneta ceded their rights over the land through a deed of assignment.
ISSUE
Whether or not a deed of assignment transfer ownership of property to assignee.
RULING
NO. The act of assignment could not have operated to efface liens or restrictions burdening the right
assigned, because an assignee cannot acquire a greater right than that pertaining to the assignor. At
most, an assignee can only acquire rights duplicating those which his assignor is entitled by law to
exercise. In the case at bar, the Casabuenas merely stepped into Benin’s shoes, who was not so much an
owner as a mere assignee of the rights of her debtors. Not having acquired any right over the land in
question, it follows that Benin conveyed nothing to defendants with respect to the property.
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Tags: assignee, deed of assignment, transfer
Pay v. Palanca [G.R. No. L-29900. June 28, 1974]
20
APR
FACTS
The promissory note indicated payment “upon demand”. Petitioner relied on this to mean that
prescription would not lie unless there is demand from them. The petition was filed fifteen years after its
issuance.
ISSUE
Whether or not a promissory note to be paid “upon demand” is immediately due and demandable.
RULING
YES. Every obligation whose performance does not depend upon a future or uncertain event, or upon a
past event unknown to the parties, is demandable at once (Art. 1179 of the New Civil Code). The
obligation being due and demandable in this case, it would appear that the filing of the suit after fifteen
years was much too late.
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Tags: demandable, due, promissory note
Philippine Bank of Commerce v. Aruego [G.R. Nos. L-25836-37. January 31, 1981]
24
MAR
FACTS
Aruego signed instruments, labeled bills of exchange, as follows:
“JOSE ARUEGO (Acceptor) (SGD) JOSE ARGUEGO”
Philippine Bank of Commerce filed an action against Aruego. The sum sought to be recovered represents
the cost of the printing of “World Current Events,” a periodical published by the latter. To facilitate the
payment of the printing Aruego obtained a credit accommodation from the plaintiff. Thus, for every
printing of the “World Current Events,” the printer, Encal Press and Photo Engraving, collected the cost
of printing by drawing a draft against Philippine Bank of Commerce, said draft being sent later to the
Aruego for acceptance. Aruego contends that he signed the drafts only as an accommodation party and
as such, should be made liable only after a showing that the drawer is incapable of paying. He also
contends that the drafts signed by him were not really bills of exchange but mere pieces of evidence of
indebtedness because payments were made before acceptance.
ISSUES:
(a) Whether or not the drafts may be considered negotiable bills of exchange.
(b) Whether or not Aruego may be held liable only as an agent.
(c) Whether or not an accommodation party is liable.
RULING
(a) YES. Under the Negotiable Instruments Law, a bill of exchange is an unconditional order in writting
addressed by one person to another, signed by the person giving it, requiring the person to whom it is
addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order
or to bearer. As long as a commercial paper conforms with the definition of a bill of exchange, that
paper is considered a bill of exchange. The nature of acceptance is important only in the determination
of the kind of liabilities of the parties involved, but not in the determination of whether a commercial
paper is a bill of exchange or not.
(b) NO. For failure to disclose his principal, Aruego is personally liable for the drafts he accepted. Section
20 of the Negotiable Instruments Law provides that “Where the instrument contains or a person adds to
his signature words indicating that he signs for or on behalf of a principal or in a representative capacity,
he is not liable on the instrument if he was duly authorized; but the mere addition of words describing
him as an agent or as filing a representative character, without disclosing his principal, does not exempt
him from personal liability.”
(c) YES. Such person is liable on the instrument to a holder for value, notwithstanding such holder, at the
time of the taking of the instrument knew him to be only an accommodation party. In lending his name
to the accommodated party, the accommodation party is in effect a surety for the latter. He lends his
name to enable the accommodated party to obtain credit or to raise money. He receives no part of the
consideration for the instrument but assumes liability to the other parties thereto because he wants to
accommodate another. In the instant case, Aruego signed as a drawee/acceptor. Under the Negotiable
Instrument Law, a drawee is primarily liable. Thus, he should not have signed as an acceptor/drawee
because in doing so, he became primarily and personally liable for the drafts.
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Posted by Jhez on March 24, 2014 in Case Digests, Civil Law, Commercial Law, Negotiable Instruments
Law
Tags: agent, bills of exchange, negotiable
Sesbreño v. Court of Appeals [G.R. No. 89252. May 24, 1993]
24
MAR
FACTS
Petitioner Raul Sesbreño made a money market placement in the amount of P300,000.00 with the
Philippine Underwriters Finance Corporation (“Philfinance”). The latter issued a Certificate of
Confirmation of Sale “without recourse” from Delta Motors Corporation Promissory Note, a Certificate
of securities indicating the sale to petitioner, with the notation that the said security was in
custodianship of Pilipinas Bank, andpost-dated checks payable with petitioner as payee, Philfinance as
drawer. Petitioner approached private respondent Pilipinas Bank and handed her a demand letter
informing the bank that his placement with Philfinance had remained unpaid and outstanding, and that
he in effect was asking for the physical delivery of the underlying promissory note. Pilipinas did not
deliver the Note, nor any certificate of participation in respect thereof, to petitioner.
ISSUES
(a) Whether or not Pilipinas Bank is liable for its action.
(b)Whether or not non-negotiable instruments are transferrable.
RULING
(1) YES. Private respondent Pilipinas bank is liable for damages plus legal interest thereon by arising out
of its breach of duty. By failing to deliver the Note to the petitioner as depositor-beneficiary of the thing
deposited, Pilipinas effectively and unlawfully deprived petitioner of the Note deposited with it.
Whether or not Pilipinas itself benefitted from such conversion or unlawful deprivation inflicted upon
petitioner, is of no moment for present purposes.In the case at bar, the custodian-depositary bank
Pilipinas refused to deliver the security deposited with it when petitioner first demanded physical
delivery thereof. Instead of complying with the demand of the petitioner, Pilipinas purported to require
and await the instructions of Philfinance, in obvious contravention of its undertaking under the DCR to
effect physical delivery of the Note upon receipt of “written instructions” from petitioner Sesbreño.
(2) YES. A non-negotiable instrument may, obviously, not be negotiated; but it may be assigned or
transferred, absent an express prohibition against assignment or transfer written in the face of the
instrument. It is important to bear in mind that the negotiation of a negotiable instrument must be
distinguished from the assignment or transfer of an instrument whether that be negotiable or non-
negotiable. Only an instrument qualifying as a negotiable instrument under the relevant statute may be
negotiated either by indorsement thereof coupled with delivery, or by delivery alone where the
negotiable instrument is in bearer form. A negotiable instrument may, however, instead of being
negotiated, also be assigned or transferred. The legal consequences of negotiation as distinguished from
assignment of a negotiable instrument are, of course, different.
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Law
Tags: assignability, negotiation
Philippine Airlines v. Court of Appeals [G.R. No. L-49188. January 30, 1990]
24
MAR
FACTS
Amelia Tan was found to have been wronged by Philippine Air Lines (PAL). She filed her complaint in
1967. After ten (10) years of protracted litigation in the Court of First Instance and the Court of Appeals,
Ms. Tan won her case. Almost twenty-two (22) years later, Ms. Tan has not seen a centavo of what the
courts have solemnly declared as rightfully hers. Through absolutely no fault of her own, Ms. Tan has
been deprived of what, technically, she should have been paid from the start, before 1967, without
need of her going to court to enforce her rights. And all because PAL did not issue the checks intended
for her, in her name. Petitioner PAL filed a petition for review on certiorari the decision of Court of
Appeals dismissing the petition for certiorari against the order of the Court of First Instance (CFI) which
issued an alias writ of execution against them. Petitioner alleged that the payment in check had already
been effected to the absconding sheriff, satisfying the judgment.
ISSUE
Whether or not payment by check to the sheriff extinguished the judgment debt.
RULING
NO. The payment made by the petitioner to the absconding sheriff was not in cash or legal tender but in
checks. The checks were not payable to Amelia Tan or Able Printing Press but to the absconding
sheriff.In the absence of an agreement, either express or implied, payment means the discharge of a
debt or obligation in money and unless the parties so agree, a debtor has no rights, except at his own
peril, to substitute something in lieu of cash as medium of payment of his debt. Strictly speaking, the
acceptance by the sheriff of the petitioner’s checks, in the case at bar, does not, per se, operate as a
discharge of the judgment debt. The check as a negotiable instrument is only a substitute for money and
not money, the delivery of such an instrument does not, by itself, operate as payment. A check, whether
a manager’s check or ordinary cheek, is not legal tender, and an offer of a check in payment of a debt is
not a valid tender of payment and may be refused receipt by the obligee or creditor. Mere delivery of
checks does not discharge the obligation under a judgment. The obligation is not extinguished and
remains suspended until the payment by commercial document is actually realized (Art. 1249, Civil
Code, par. 3).
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Law
Tags: check, execution, payment
Kauffman v. PNB [G.R. No. 16454. September 29, 1921]
24
MAR
FACTS
Wicks, the treasurer of the Philippine Fiber and Produce Company (PFPC), presented himself in the
exchange department of the Philippine National Bank in Manila and requested that a telegraphic
transfer of $45,000 should be made to Kauffman in New York City, upon account of the PFPC.
Pay George A. Kauffman, New York, account Philippine Fiber Produce Co., $45,000. (Sgd.) PHILIPPINE
NATIONAL BANK, Manila.
PNB’s representative in New York withheld the money from Kauffman, in view of his reluctance to
accept certain bills of the PFPC. Kauffman demanded the money but was refused to be paid.
ISSUE
Whether or not Kauffman has a right of action based on Negotiable Instruments Law.
RULING
NO. Kauffman has no right of action based on Negotiable Instrument’s Law on the ground that it can
only come into operation if there is a document in existence of the character described in Section 1 of
the said Law, and rights properly speaking arise in respect to said instrument until it is delivered. In this
case, there was an order transmitted by PNB to its New York branch, for the payment of a specified sum
of money to Kauffman. But this order was not made payable “to order” or “to bearer,” as required in
subsection (d) of that Act; and inasmuch as it never left the possession of the bank, or its representative
in New York City, there was no delivery in the sense intended in Section 16 of the same Law. In this
connection it is unnecessary to point out that the official receipt delivered by the bank to the purchaser
of the telegraphic order, and already set out above, cannot itself be viewed in the light of a negotiable
instrument, although it affords complete proof of the obligation actually assumed by the bank.
Kauffman, however, has remedy based on the Civil Code, particularly on stipulations pour atrui.
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Law
Tags: negotiability, negotiable, pour atrui
Golden Sun Finance Corporation v. Albano [A.M. P-11-2888. July 27, 2011]
03
OCT
GOLDEN SUN FINANCE CORPORATION represented by Rachelle L. Marmito, complainant,
vs.
RICARDO R. ALBANO, Sheriff III, Metropolitan Trial Court, Branch 62, Makati City, respondent.
[A.M. P-11-2888. July 27, 2011]
FACTS:
Respondent was charged of negligence and grave misconduct for levying a Honda Civic Sedan by virtue
of a writ of execution. The complainant averred that the levy and sale of the motor vehicle by the
respondent was illegal. It claimed that the respondent was negligent when he levied upon the motor
vehicle and proceeded with the auction sale without looking into the car’s Certificate of Registration to
determine whether it was encumbered or not. The encumbrance on the motor vehicle having been
made prior to the suit filed by the Royal Makati Credit Resource, the complainant posited that its claim
should have priority over the former’s claims. Required by the Office of the Court Administrator (OCA) to
comment on the charges against him, the respondent contended that he had no knowledge that the car
was encumbered because the Certificate of Registration was never shown to him. He also had no
knowledge that the car was the subject of a writ of replevin in another Civil Case. Thus, the respondent
asked for the dismissal of the complaint, stressing that he had acted within the scope of his duty as
sheriff when he enforced the writ of execution. The OCA recommended that the respondent be charged
administratively.
ISSUES:
Remedial Law
(1) Whether or not the recommendation of the OCA is proper on the ground of negligence on the part
of the respondent.
RULINGS:
Remedial Law
(1) No. The Court failed to find sufficient basis to declare the respondent administratively liable for
simple neglect of duty. Section 9(b), Rule 39 of the Rules of Court states the manner by which judgments
for money may be satisfied by levy. It is to emphasize that a sheriff’s duty to execute a writ is simply
ministerial, and he is bound to perform only those tasks stated under the Rules of Court and no more.
Any interest a third party may have on the property levied upon by the sheriff to enforce a judgment is
the third party’s responsibility to protect through the remedies provided under Rule 39 of the Rules of
Court. Thus, [the Court] cannot hold the respondent liable on the ground that the complainant cites. If
at all, the respondent should have required, as a matter of sound established practice, the production of
the certificate of registration, but this is an altogether different matter that [the Court] do not here pass
upon.
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Posted by Jhez on October 3, 2013 in Case Digests, Civil Law, Remedial Law
Tags: grave misconduct, negligence, writ of execution
Calang v. People [G.R. No. 190696. August 3, 2010]
03
OCT
ROLITO CALANG and PHILTRANCO SERVICE ENTERPRISE, INC., petitioners,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
[G.R. No. 190696. August 3, 2010]
FACTS:
Petitioner Calang was driving a bus owned by Philtranco when its rear left side hit the front left portion
of a Sarao jeep coming from the opposite direction. As a result of the collision, the jeep’s driver, lost
control of the vehicle, and bumped and killed a bystander who was standing along the highway’s
shoulder. The jeep turned turtle three (3) times before finally stopping at about 25 meters from the
point of impact. Two of the jeep’s passengers were instantly killed, while the other passengers sustained
serious physical injuries. The prosecution charged Calang with multiple homicide, multiple serious
physical injuries and damage to property thru reckless imprudence before the RTC. RTC found Calang
guilty beyond reasonable doubt of reckless imprudence resulting [in] multiple homicide, multiple
physical injuries and damage to property. The Court of Appeals affirmed in toto the decision of RTC.
ISSUES:
Remedial Law
(1) Whether or not factual issues may be raised on petition for review on certiorari under Rule 45 of the
Revised Rules of Court.
Civil Law
(1) Whether or not Philtranco may be held jointly and severally liable with Calang.
Criminal Law
(1) Whether or not Philtranco may be held subsidiary liable with Calang.
RULINGS:
Remedial Law
(1) No. The finding of negligence on his part by the trial court, affirmed by the CA, is a question of fact
that [the Court] cannot pass upon without going into factual matters touching on the finding of
negligence. In petitions for review on certiorari under Rule 45 of the Revised Rules of Court, this Court is
limited to reviewing only errors of law, not of fact, unless the factual findings complained of are devoid
of support by the evidence on record, or the assailed judgment is based on a misapprehension of facts.
Civil Law
(1) No. The RTC and the CA both erred in holding Philtranco jointly and severally liable with Calang. He
was charged criminally before the RTC. Undisputedly, Philtranco was not a direct party in this case. Since
the cause of action against Calang was based on delict, both the RTC and the CA erred in holding
Philtranco jointly and severally liable with Calang, based on quasi-delict under Articles 2176 and 2180 of
the Civil Code. Articles 2176 and 2180 of the Civil Code pertain to the vicarious liability of an employer
for quasi-delicts that an employee has committed. Such provision of law does not apply to civil liability
arising from delict.
Criminal Law
(1) Yes. Philtranco’s liability may only be subsidiary. Article 102 of the Revised Penal Code states the
subsidiary civil liabilities of innkeepers, tavernkeepers and proprietors of establishments, as follows:
In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or
corporations shall be civilly liable for crimes committed in their establishments, in all cases where a
violation of municipal ordinances or some general or special police regulations shall have been
committed by them or their employees.
Innkeepers are also subsidiary liable for the restitution of goods taken by robbery or theft within their
houses from guests lodging therein, or for the payment of the value thereof, provided that such guests
shall have notified in advance the innkeeper himself, or the person representing him, of the deposit of
such goods within the inn; and shall furthermore have followed the directions which such innkeeper or
his representative may have given them with respect to the care of and vigilance over such goods. No
liability shall attach in case of robbery with violence against or intimidation of persons unless committed
by the innkeeper’s employees.
The foregoing subsidiary liability applies to employers, according to Article 103 of the Revised Penal
Code, which reads:
The subsidiary liability established in the next preceding article shall also apply to employers, teachers,
persons, and corporations engaged in any kind of industry for felonies committed by their servants,
pupils, workmen, apprentices, or employees in the discharge of their duties.
The provisions of the Revised Penal Code on subsidiary liability – Articles 102 and 103 – are deemed
written into the judgments in cases to which they are applicable. Thus, in the dispositive portion of its
decision, the trial court need not expressly pronounce the subsidiary liability of the employer.
Nonetheless, before the employers’ subsidiary liability is enforced, adequate evidence must exist
establishing that (1) they are indeed the employers of the convicted employees; (2) they are engaged in
some kind of industry; (3) the crime was committed by the employees in the discharge of their duties;
and (4) the execution against the latter has not been satisfied due to insolvency. The determination of
these conditions may be done in the same criminal action in which the employee’s liability, criminal and
civil, has been pronounced, in a hearing set for that precise purpose, with due notice to the employer, as
part of the proceedings for the execution of the judgment.
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Posted by Jhez on October 3, 2013 in Case Digests, Civil Law, Criminal Law, Remedial Law
Tags: certiorari, reckless imprudence, subsidiary liability
Philippine Guardians Brotherhood, Inc. (PGBI) v. Commission on Elections [G.R. No. 190529. April 29,
2010]
03
OCT
PHILIPPINE GUARDIANS BROTHERHOOD, INC. (PGBI) represented by its Secretary General George “FGBF
George” Duldulao, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
[G.R. No. 190529. April 29, 2010]

FACTS:
Respondent delisted petitioner, a party list organization, from the roster of registered national, regional
or sectoral parties, organizations or coalitions under the party-list system through its resolution, denying
also the latter’s motion for reconsideration, in accordance with Section 6(8) of Republic Act No. 7941
(RA 7941), otherwise known as the Party-List System Act, which provides:
Section 6. Removal and/or Cancellation of Registration. – The COMELEC may motu proprio or upon
verified complaint of any interested party, remove or cancel, after due notice and hearing, the
registration of any national, regional or sectoral party, organization or coalition on any of the following
grounds:
x x x x
(8) It fails to participate in the last two (2) preceding elections or fails to obtain at least two per centum
(2%) of the votes cast under the party-list system in the two (2) preceding elections for the constituency
in which it has registered.[Emphasis supplied.]
Petitioner was delisted because it failed to get 2% of the votes cast in 2004 and it did not participate in
the 2007 elections. Petitioner filed its opposition to the resolution citing among others the
misapplication in the ruling of MINERO v. COMELEC, but was denied for lack of merit. Petitioner
elevated the matter to SC showing the excerpts from the records of Senate Bill No. 1913 before it
became the law in question.
ISSUES:
Political Law
(1) Whether or not there is legal basis in the delisting of PGBI.
(2) Whether or not PGBI’s right to due process was violated.
Civil Law (Statutory Construction)

(1) Whether or not the doctrine of judicial precedent applies in this case.
RULINGS:
Political Law
(1) No. The MINERO ruling is an erroneous application of Section 6(8) of RA 7941; hence, it cannot
sustain PGBI’s delisting from the roster of registered national, regional or sectoral parties, organizations
or coalitions under the party-list system. First, the law is in the plain, clear and unmistakable language of
the law which provides for two (2) separate reasons for delisting. Second, MINERO is diametrically
opposed to the legislative intent of Section 6(8) of RA 7941, as PGBI’s cited congressional deliberations
clearly show. MINERO therefore simply cannot stand.
(2) No. On the due process issue, petitioner’s right to due process was not violated for [it] was given an
opportunity to seek, as it did seek, a reconsideration of [COMELEC resolution]. The essence of due
process, consistently held, is simply the opportunity to be heard; as applied to administrative
proceedings, due process is the opportunity to explain one’s side or the opportunity to seek a
reconsideration of the action or ruling complained of. A formal or trial-type hearing is not at all times
and in all instances essential. The requirement is satisfied where the parties are afforded fair and
reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is
absolute lack of notice and hearing x x x. [It is] obvious [that] under the attendant circumstances that
PGBI was not denied due process.
Civil Law (Statutory Construction)
(1) No. This case is an exception to the application of the principle of stare decisis. The doctrine of stare
decisis et non quieta movere (to adhere to precedents and not to unsettle things which are established)
is embodied in Article 8 of the Civil Code of the Philippines which provides, thus:
ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines.
The doctrine enjoins adherence to judicial precedents. It requires courts in a country to follow the rule
established in a decision of its Supreme Court. That decision becomes a judicial precedent to be
followed in subsequent cases by all courts in the land. The doctrine of stare decisis is based on the
principle that once a question of law has been examined and decided, it should be deemed settled and
closed to further argument.
The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular
case override the great benefits derived by [SC’s] judicial system from the doctrine of stare decisis, the
Court is justified in setting it aside. MINERO did unnecessary violence to the language of the law, the
intent of the legislature, and to the rule of law in general. Clearly, [SC] cannot allow PGBI to be
prejudiced by the continuing validity of an erroneous ruling. Thus, [SC] now abandons MINERO and
strike it out from [the] ruling case law.
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Posted by Jhez on October 3, 2013 in Case Digests, Civil Law, Political Law, Statutory Construction
Tags: minero, party list, stare decisis
Continental Watchman and Security Agency, Inc. v. National Food Authority [G.R. No. 171015. August
25, 2010]
03
OCT
CONTINENTAL WATCHMAN AND SECURITY AGENCY, INC., petitioner,
vs.
NATIONAL FOOD AUTHORITY, respondent.
[G.R. No. 171015. August 25, 2010]
FACTS:
The case began when NFA wrote Continental that it no longer enjoyed its trust and confidence and that
Continental had to “pull out [its] guard[s] from NFA offices, installation and warehouses to allow the
incoming security agency to take over the security services for NFA[.]” Continental questioned NFA’s
decision to terminate its contract in a complaint against the NFA and NFA Administrator [David] for
damages and injunction with prayer for the issuance of a temporary restraining order, which obtained
favorable action from the trial court. Continental moved for the issuance of a writ of execution which
was later on, amended to the amount of P8,445,161.00. The writ of execution was issued by Judge
Velasco. While still hearing, NFA’s deposit with the Philippine National Bank, was garnished. In view of
the garnishment, NFA Administrator David (later joined by the NFA) sought relief from Supreme Court
by filing a special civil action for certiorari and cited the jurisdictional errors and obtained a favorable
ruling. Based on said decision, NFA filed a motion before the RTC for the return of the garnished amount
with legal interest and damages. The RTC granted this motion and directed Continental to return the
P8,445,161.00 to the NFA. Continental moved for partial reconsideration but the RTC denied the motion.
It was elevated to the Court of Appeals but was again denied.
ISSUES:
Civil Law
(1) Whether or not petitioner has the right to set-off the security service fee for the guard who served
during the injunction was validly in effect.
(2) Whether or not the court a quo acted properly when it did hold in abeyance the issuance of a writ of
execution on the return of illegally garnished amount.
RULINGS:
Civil Law
(1) No. After SC’s final and executory Decision declaring null and void the writ of execution [that Judge
Velasco] issued, it should appear clear to all – especially to Continental – that it has no legal basis to hold
on to the P8,445,161.00 that resulted from the void writ of execution and the equally defective
garnishment that followed. Hence, Continental is under the absolute obligation to return the garnished
amount. Whether it is entitled to recover from the services it rendered to the NFA is a matter still to be
litigated before the RTC. Accordingly, the Court upholds the presently assailed CA ruling that sustained
the RTC’s order granting the issuance of a writ of execution for the return of the P8,445,161.00 to the
NFA. The salaries of security guards that Continental wants to set-off are actually the subject of
Continental’s supplemental complaint which is actually a counterclaim that it asserted to defeat the
return of the P8,445,161.00 that it had been unjustly holding for years. It cannot be countenanced.
(2) Yes. The trial court committed no grave abuse of discretion in ordering the return of the amount
garnished from the deposits of the NFA with the Philippine National Bank. The garnishment stemmed
from an order of execution that has been adjudged by the Supreme Court as patently erroneous and
without any legal basis. Hence, no error in the trial court’s action to undo the effects of its prior
erroneous and legally infirm order.
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Posted by Jhez on October 3, 2013 in Case Digests, Civil Law, Remedial Law
Tags: certiorari, execution, garnishment, NFA, trust and confidence
Intra-Strata Assurance Corporation v. Republic [G.R. No. 156571. July 09, 2008]
03
OCT
INTRA-STRATA ASSURANCE CORPORATION and PHILIPPINE HOME ASSURANCE CORPORATION,

petitioners,
vs.
REPUBLIC OF THE PHILIPPINES represented by the BUREAU OF CUSTOMS, respondent.
[G.R. No. 156571. July 09, 2008]
FACTS:
Grand textile is a local manufacturing corporation importing various articles such as dyestuffs, spare
parts for warehouse machinery and filaments. Subsequent to importation, the articles were transferred
to Bureau of Customs (BoC) where it required payment of tariffs and other charges. Inter-Strata and
PhilHome issued warehousing bonds in favor of BoC which provided that that the goods shall be
withdrawn from the bonded warehouse “on payment of the legal customs duties, internal revenue, and
other charges to which they shall then be subject.” Without payment of the taxes, customs duties, and
charges due and for purposes of domestic consumption, Grand Textile withdrew the imported goods
from storage. The Bureau of Customs demanded payment of the amounts due from Grand Textile as
importer, and from Intra-Strata and PhilHome as sureties. All three failed to pay. The government
responded by filing a collection suit against the parties with the RTC of Manila. The RTC ruled in favor of
the BoC which was later affirmed by the Court of Appeals.
ISSUES:
Civil Law
(1) Whether or not the withdrawal of the stored goods, wares and merchandise – without notice to
them as sureties – released them from any liability for the duties, taxes, and charges they committed to
pay under the bonds they issued.
RULINGS:
Civil Law
(1) No. The surety does not, by reason of the surety agreement, earn the right to intervene in the
principal creditor-debtor relationship; its role becomes alive only upon the debtor’s default, at which
time it can be directly held liable by the creditor for payment as a solidary obligor. A surety contract is
made principally for the benefit of the creditor-obligee and this is ensured by the solidary nature of the
sureties’ undertaking. Under these terms, the surety is not entitled as a rule to a separate notice of
default,nor to the benefit of excussion, and may be sued separately or together with the principal
debtor.
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Posted by Jhez on October 3, 2013 in Case Digests, Civil Law
Tags: Bureau of Customs, dyestuff, solidary, textile
Apo Fruits Corporation v. Land Bank of the Philippines [G.R. No. 164195. April 5, 2011]
03
SEP
FACTS:
Petitioners voluntarily offered to sell their lands to the government under Republic Act 6657, otherwise
known as the Comprehensive Agrarian Reform Law (CARL). Government took petitioners’ lands on
December 9, 1996. Land Bank valued the properties atP165,484.47 per hectare, but AFC-HPI rejected
the offer of that amount. Consequently, on instruction of the Department of Agrarian Reform (DAR),
Land Bank deposited for AFC and HPI P26,409,549.86 and P45,481,706.76, respectively, or a total of
P71,891,256.62. Upon revaluation of the expropriated properties, Land Bank eventually made additional
deposits, placing the total amount paid at P411,769,168.32 (P71,891,256.62 + P339,877,911.70), an
increase of nearly five times. Both petitioners withdrew the amounts. Still, they filed separate
complaints for just compensation with the DAR Adjudication Board (DARAB), where it was dismissed,
after three years, for lack of jurisdiction. Petitioners filed a case with the RTC for the proper
determination of just compensation. The RTC ruled in favor of petitioners fixing the valuation of
petitioners’ properties at P103.33/sq.m with 12% interest plus attorney’s fees. Respondents appealed to
the Third Division of the Supreme Court where the RTC ruling was upheld. Upon motion for
reconsideration, the Third Division deleted the award of interest and attorney’s fees and entry of
judgment was issued. The just compensation of which was only settled on May 9, 2008. Petitioners filed
a second motion for reconsideration with respect to denial of award of legal interest and attorney’s fees
and a motion to refer the second motion to the Court En Banc and was granted accordingly, restoring in
toto the ruling of the RTC. Respondent filed their second motion for reconsideration as well for holding
of oral arguments with the Motion for Leave to Intervene and to admit for Reconsideration in-
Intervention by the Office of the Solicitor General in behalf of the Republic of the Philippines.
ISSUES:
Political Law (Constitutional Law)
(1) Whether or not the “transcendental importance” does not apply to the present case.
(2) Whether or not the standard of “transcendental importance” cannot justify the negation of the
doctrine of immutability of a final judgment and the abrogation of a vested right in favor of the
Government that respondent LBP represents.
(3) Whether or not the Honorable Court ignored the deliberations of the 1986 Constitutional
Commission showing that just compensation for expropriated agricultural property must be viewed in
the context of social justice.
Civil Law:
Whether or not the second motion for reconsideration of respondent deleting interest and attorney’s
fees amount to unjust enrichment in its favor.
Remedial Law
(1) Whether or not the rules on second motion for reconsideration by the Supreme Court should be
strictly complied with by a vote of two-thirds of its actual membership.
(2) Whether or not the holding of oral arguments would still serve its purpose.
(3) Whether or not the Motion for Leave to Intervene and to admit for Reconsideration in-Intervention
from the Office of the Solicitor General may still be granted.
RULINGS:
Political Law (Constitutional Law)
(1) No. The present case goes beyond the private interests involved; it involves a matter of public
interest – the proper application of a basic constitutionally-guaranteed right, namely, the right of a
landowner to receive just compensation when the government exercises the power of eminent domain
in its agrarian reform program.
Section 9, Article III of the 1987 Constitution expresses the constitutional rule on eminent domain –
“Private property shall not be taken for public use without just compensation.” While confirming the
State’s inherent power and right to take private property for public use, this provision at the same time
lays down the limitation in the exercise of this power. When it takes property pursuant to its inherent
right and power, the State has the corresponding obligation to pay the owner just compensation for the
property taken. For compensation to be considered “just,” it must not only be the full and fair
equivalent of the property taken; it must also be paid to the landowner without delay.
(2) No. The doctrine “transcendental importance,” contrary to the assertion it is applicable only to legal
standing questions, is justified in negating the doctrine of immutability of judgment. It will be a very
myopic reading of the ruling as the context clearly shows that the phrase “transcendental importance”
was used only to emphasize the overriding public interest involved in this case. The Supreme Court said
in their resolution:
That the issues posed by this case are of transcendental importance is not hard to discern from these
discussions. A constitutional limitation, guaranteed under no less than the all-important Bill of Rights, is
at stake in this case: how can compensation in an eminent domain case be “just” when the payment for
the compensation for property already taken has been unreasonably delayed? To claim, as the assailed
Resolution does, that only private interest is involved in this case is to forget that an expropriation
involves the government as a necessary actor. It forgets, too, that under eminent domain, the
constitutional limits or standards apply to government who carries the burden of showing that these
standards have been met. Thus, to simply dismiss the case as a private interest matter is an extremely
shortsighted view that this Court should not leave uncorrected.
xxxx
More than the stability of our jurisprudence, the matter before us is of transcendental importance to
the nation because of the subject matter involved – agrarian reform, a societal objective of that the
government has unceasingly sought to achieve in the past half century.
From this perspective, the court demonstrated that the higher interests of justice are duly served.
(3) Yes. In fact, while a proposal was made during the deliberations of the 1986 Constitutional
Commission to give a lower market price per square meter for larger tracts of land, the Commission
never intended to give agricultural landowners less than just compensation in the expropriation of
property for agrarian reform purposes.
[N]othing is inherently contradictory in the public purpose of land reform and the right of landowners to
receive just compensation for the expropriation by the State of their properties. That the petitioners are
corporations that used to own large tracts of land should not be taken against them. As Mr. Justice
Isagani Cruz eloquently put it:
[S]ocial justice – or any justice for that matter – is for the deserving, whether he be a millionaire in his
mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt
the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy and
compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the rich
simply because they are rich, for justice must always be served, for poor and rich alike, according to the
mandate of the law.
Civil Law
Yes. In the present case, it is undisputed that the government took the petitioners’ lands on December
9, 1996; the petitioners only received full payment of the just compensation due on May 9, 2008. This
circumstance, by itself, already confirms the unconscionable delay in the payment of just compensation.
An added dimension is the impact of the delay. One impact – as pointed out above – is the loss of
income the landowners suffered. Another impact that the LBP now glosses over is the income that the
LBP earned from the sizeable sum it withheld for twelve long years. From this perspective, the
unaccounted-for LBP income is unjust enrichment in its favor and an inequitable loss to the landowners.
This situation was what the Court essentially addressed when it awarded the petitioners 12% interest.
Remedial Law
(1) No. When the Court ruled on the petitioners’ motion for reconsideration by a vote of 12 Members (8
for the grant of the motion and 4 against), the Court ruled on the merits of the petitioners’ motion. This
ruling complied in all respects with the Constitution requirement for the votes that should support a
ruling of the Court. Admittedly, the Court did not make any express prior ruling accepting or disallowing
the petitioners’ motion as required by Section 3, Rule 15 of the Internal Rules. The Court, however, did
not thereby contravene its own rule on 2nd motions for reconsideration; since 12 Members of the Court
opted to entertain the motion by voting for and against it, the Court simply did not register an express
vote, but instead demonstrated its compliance with the rule through the participation by no less than 12
of its 15 Members. Viewed in this light, the Court cannot even be claimed to have suspended the
effectiveness of its rule on 2nd motions for reconsideration; it simply complied with this rule in a form
other than by express and separate voting.
(2) No. The submissions of the parties, as well as the records of the case, have already provided this
Court with enough arguments and particulars to rule on the issues involved. Oral arguments at this point
would be superfluous and would serve no useful purpose.
(3) No. The interest of the Republic, for whom the OSG speaks, has been amply protected through the
direct action of petitioner LBP – the government instrumentality created by law to provide timely and
adequate financial support in all phases involved in the execution of needed agrarian reform. The OSG
had every opportunity to intervene through the long years that this case had been pending but it chose
to show its hand only at this very late stage when its presence can only serve to delay the final
disposition of this case. The arguments the OSG presents, furthermore, are issues that this Court has
considered in the course of resolving this case. Thus, every reason exists to deny the intervention prayed
for.
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Posted by Jhez on September 3, 2013 in Case Digests, Civil Law, Political Law, Remedial Law
Tags: just compensation, second motion for reconsideration, social justice, transcendental importance,
unjust enrichment
Caleon v. Agus Development Corp. (G.R. No. 77365. April 7, 1992)
18
AUG
FACTS:
Agus Development Corporation leased to Rita Caleon its lot for P180.00/month. Caleon built a 4-door
apartment and sub-leased it at P350.00/door/month without Agus’ consent. Agus’ filed an ejectment
suit under Batas Pambansa (B.P.) Blg. 25 after Caleon refused to vacate the lot. Caleon argued that B.P.
Blg. 25 cannot be applied because there is a perfected contract of lease without any express prohibition
on subleasing. The MTC ruled in favor of Agus. It was appealed to the RTC but was dismissed outright.
Hence this petition for review.
ISSUE:
Whether or not B.P. Blg. 25 is unconstitutional for being violative of “non-impairment clause” on the
ground that it impaired the lease contract.
HELD:
No. B.P. Blg. 25 is valid and constitutional. The lease contract is subordinate to the police power of the
state. Petition is denied.
RATIO:
B.P. Blg. 25 is derived from P.D. No. 20 which has been declared by the Supreme Court as police power
legislation so that the applicability thereof to existing contracts cannot be denied. The constitutional
guaranty of non-impairment of obligations of contract is limited by and subject to the exercise of police
power of the state in the interest of public health, safety, morals and general welfare. In spite of the
constitutional prohibition, the State continues to possess authority to safeguard the vital interests of its
people. Legislation appropriate to safeguarding said interest may modify or abrogate contracts already
in effect.
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Posted by Jhez on August 18, 2013 in Case Digests, Civil Law, Political Law
Tags: ejectment, non-impairment
Balatbat vs. Court of Appeals and Pasion (G.R. No. 36378. January 27, 1992)
31
MAY
PIO BALATBAT, petitioner,
vs.
COURT OF APPEALS and DOMINGO PASION, respondents.
Bureau of Agrarian Legal Assistance for petitioner.
Roberto Y. Miranda for private respondent.
Ponente: DAVIDE
FACTS:
Petitioner is the agricultural lessee of a parcel of land located at Santiago, Sta. Ana, Pampanga which is
owned by Daniel Garcia. The latter sold the land to private respondent Domingo Pasion and had
declared for taxation purposes. Sometime after the sale, respondent, on a claim that he will personally
cultivate the land, filed with the Court of Agrarian Relations a complaint to eject petitioner alleging
therein that he had notified petitioner of his intention to personally cultivate the landholding, but
despite the lapse of one (1) agricultural year from receipt of the notice thereof, petitioner refused to
vacate the land.
In his amended answer with counterclaim, petitioner denied having received any notice from the private
respondent and by way of special and affirmative defenses. The trial court ruled against petitioner. The
Court of Appeals affirmed the decision of the trial court.
ISSUE:
Whether or not the Court of Appeals correctly gave retroactive application to Section 7 of RA 6389.
HELD:
No. Petition was dismissed for want of merit.
RATIO:
The Supreme Court ruled that Section 7 of R.A. No. 6389 cannot be given retroactive effect because,
while during the debates on the bill which was eventually enacted into Republic Act No. 6389, there
were statements made on the floor that “the owner will lose the right to eject after the enactment of
this measure” even in cases where the owner has not really succeeded in ejecting the tenants. Congress
failed to express an intention to make Republic Act No. 6389 retroactive and to cover ejectment cases
on the ground of personal cultivation then pending adjudication by the courts.
Since under the original provision of Section 36(1) of R.A. No. 3844, the dispossession of the agricultural
lessee on the ground of personal cultivation by the agricultural lessor-owner can only take place when
“authorized by the Court in a judgment that is final and executory,” it follows then that since the repeal
of the provision took effect before the judgment in this case became final and executory, private
respondent may no longer dispossess petitioner on that ground because it had been removed from the
statute books.
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Posted by Jhez on May 31, 2013 in Case Digests, Civil Law, Remedial Law, Statutory Construction
Tags: ejectment, prospective statutes, RA 6389
Gallardo vs. Borromeo (G.R. No. L-36007. May 25, 1988)
31
MAY
FERNANDO GALLARDO, petitioner-appellant,
vs.
JUAN BORROMEO, respondent-appellee.
Joselito Coloma for petitioner.
Bureau of Agrarian Legal Assistance for respondent.
Ponente: GRIÑO-AQUINO
FACTS:
Appeal by certiorari to review the decision of Court of Appeals affirming in toto the decision dated April
2, 1971 of the Court of Agrarian Relations, dismissing the complaint which the petitioner Fernando
Gallardo filed on to terminate the leasehold of the respondent tenant so he (plaintfff) may cultivate it
himself as he had retired from his government job as a letter carrier. The respondent alleged that the
petitioner has no knowledge of filing and that his only purpose is to eject the respondent filing from the
landholding. Applying Section 7, Republic Act 6389, it held that the landowner’s desire to cultivate the
land himself is not a valid ground for dispossessing the tenant.
ISSUE:
Whether or not the Court of Appeals correctly gave retroactive application to Section 7 of RA 6389.
HELD:
NO. Decision of Court of Appeals and Agrarian Court were set aside. Respondent-appellee ordered to
vacate leasehold and surrender its possession to petitioner-appelant.
RATIO:
Since Congress failed to express intention to make RA 6389 retroactive, it may not apply to ejectment
cases then already pending adjudication by the courts. A sound canon of statutory construction is that
statute operates prospectively only and never retroactively, unless the legislative intent to threatened
contrary is made manifest either by the express terms of the statute or by necessary implication. … No
court will hold a statute to be retroactive when the legislature has not said so.
Article 4 of the New Civil Code provides that “laws shall have no retroactive effect unless therein
otherwise provided,”
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Posted by Jhez on May 31, 2013 in Case Digests, Civil Law, Statutory Construction
Tags: ejectment, prospective statutes
Kilosbayan vs. Morato (G.R. No. 118910. July 17, 1995)
25
APR
KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C.

CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE
TAN, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, SEN.
FREDDIE WEBB, SEN. WIGBERTO TAÑADA, REP. JOKER P. ARROYO, petitioners,
vs.
MANUEL L. MORATO, in his capacity as Chairman of the Philippine Charity Sweepstakes Office, and the
PHILIPPINE GAMING MANAGEMENT CORPORATION, respondents.
Ponente: MENDOZA
FACTS:
[T]his suit was filed seeking to declare the ELA invalid on the ground that it is substantially the same as
the Contract of Lease nullified in the first case [decision in G.R. No. 113375 (Kilosbayan, Incorporated v.
Guingona, 232 SCRA 110 (1994)) invalidating the Contract of Lease between the Philippine Charity
Sweepstakes Office (PCSO) and the Philippine Gaming Management Corp. (PGMC)]. Petitioners maintain
(1) that the Equipment Lease Agreement (ELA) is a different lease contract with none of the vestiges of a
joint venture which were found in the Contract of Lease nullified in the prior case; (2) that the ELA did
not have to be submitted to a public bidding because it fell within the exception provided in E.O. No.
301, §1 (e); (3) that the power to determine whether the ELA is advantageous to the government is
vested in the Board of Directors of the PCSO; (4) that for lack of funds the PCSO cannot purchase its own
on-line lottery equipment and has had to enter into a lease contract; (5) that what petitioners are
actually seeking in this suit is to further their moral crusade and political agenda, using the Court as their
forum.
ISSUE:
Whether or not the ELA between the Philippine Charity Sweepstakes Office and the Philippine Gaming
Management Corp. is invalid.
HELD:
NO. Petition for prohibition, review and/or injunction was dismissed. Pertinent to the issue, the SC held:
xxx
(3) that the ELA is valid as a lease contract under the Civil Code and is not contrary to the charter of the
Philippine Charity Sweepstakes Office;
(4) that under §1(A) of its charter (R.A. 1169), the Philippine Charity Sweepstakes Office has authority to
enter into a contract for the holding of an on-line lottery, whether alone or in association, collaboration
or joint venture with another party, so long as it itselfholds or conducts such lottery; and
(5) That the Equipment Lease Agreement (ELA) in question did not have to be submitted to public
bidding as a condition for its validity.
RATIO:
E.O. No. 301, §1 applies only to contracts for the purchase of supplies, materials and equipment. It does
not refer to contracts of lease of equipment like the ELA. The provisions on lease are found in §§ 6 and 7
but they refer to the lease of privately-owned buildings or spaces for government use or of government-
owned buildings or spaces for private use, and these provisions do not require public bidding. It is thus
difficult to see how E.O. No. 301 can be applied to the ELA when the only feature of the ELA that may be
thought of as close to a contract of purchase and sale is the option to buy given to the PCSO. An option
to buy is not of course a contract of purchase and sale.
Indeed the question is not whether compared with the former joint venture agreement the present
lease contract is “[more] advantageous to the government.” The question is whether under the
circumstances, the ELA is the most advantageous contract that could be obtained compared with similar
lease agreements which the PCSO could have made with other parties. Petitioners have not shown that
more favorable terms could have been obtained by the PCSO or that at any rate the ELA, which the
PCSO concluded with the PGMC, is disadvantageous to the government.
SEPARATE OPINIONS:
PADILLA, concurring
I join the majority in voting for the dismissal of the petition in this case.
As to whether or not the ELA is grossly disadvantageous to the government, it should be stressed that
the matter involves, basically, a policy — determination by the executive branch which this Court should
not ordinarily reverse or substitute with its own judgment, in keeping with the time honored doctrine of
separation of powers.
VITUG, concurring
I most humbly reiterate the separate opinion I have made in Kilosbayan, Inc., et al., vs. Teofisto
Guingona, Sr., etc., et al. (G.R. No. 113375, promulgated on 05 May 1994).
Back to the core of the petition, however, the matter of the legal standing of petitioners in their suit
assailing the subject-contract appears to me, both under substantive law and the rules of procedure, to
still be an insuperable issue. I have gone over carefully the pleadings submitted in G.R. No. 118910, and I
regret my inability to see anything new that can convince me to depart from the view I have expressed
on it in G.R. No. 113375.
FELICIANO, dissenting
With very great respect, it is submitted that the above conclusion has been merely assumed rather than
demonstrated and that what is in fact before this Court does not adequately support such conclusion.
REGALADO, dissenting
I am constrained to respectfully dissent from the majority opinion premised on the constitutional and
procedural doctrines posed and interpreted in tandem therein. I also regret that I have to impose on the
majority with this virtual turno en contra when I could have indicated my disaccord by just joining Mr.
Justice Davide in his commendably objective presentation of the minority position. I feel, however, that
certain views that have been advanced require a rejoinder lest they lapse into the realm of unanimous
precedents.
DAVIDE, dissenting
I register a dissenting vote.
I am disturbed by the sudden reversal of our rulings in Kilosbayan, Inc., et al. vs. Guingona, et al.
(hereinafter referred to as the first lotto case) regarding the application or interpretation of the
exception clause in paragraph B, Section 1 of the Charter of the PCSO (R.A.. No. 1169), as amended by
B.P. Blg. 442, and on the issue of locus standi of the petitioners to question the contract of lease
involving the on-line lottery system entered into between the Philippine Charity Sweepstakes Office
(PCSO) and the Philippine Gaming Management Corporation (PGMC). Such reversal upsets the salutary
doctrines of the law of the case, res judicata, and stare decisis. It puts to jeopardy the faith and
confidence of the people, specially the lawyers and litigants, in the certainty and stability of the
pronouncements of this Court. It opens the floodgates to endless litigations for re-examination of such
pronouncements and weakens this Court’s judicial and moral authority to demand from lower courts
obedience thereto and to impose sanctions for their opposite conduct.
1 Comment
Posted by Jhez on April 25, 2013 in Case Digests, Civil Law, Political Law, Statutory Construction
Tags: extrinsic aids, option to buy, res judicata, separation of powers
Cecilio de Villa vs Court of Appeals (G.R. No. 87416. April 8, 1991)
25
APR
CECILIO S. DE VILLA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, HONORABLE JOB B. MADAYAG, and
ROBERTO Z. LORAYES, respondents.
San Jose Enriquez, Lacas Santos & Borje for petitioner.
Eduardo R. Robles for private respondent.
Ponente: PARAS
FACTS:
[P]etitioner was charged before the Regional Trial Court with violation of Batas Pambansa Bilang 22.
After arraignment and after private respondent had testified on direct examination, petitioner moved to
dismiss the Information on the following grounds: x x x (b) That no offense was committed since the
check involved was payable in dollars, hence, the obligation created is null and void pursuant to
Republic Act No. 529 (An Act to Assure Uniform Value of Philippine Coin and Currency). Accused’s
motion to dismiss was denied for lack of merit. Petitioner moved for reconsideration but his motion was
subsequently denied by respondent court.
ISSUE:
Whether or not B.P. No. 22 covers foreign (currency) checks.
HELD:
YES. Petition was dismissed for lack of merit.
RATIO:
It is a cardinal principle in statutory construction that where the law does not distinguish courts should
not distinguish. Parenthetically, the rule is that where the law does not make any exception, courts may
not except something unless compelling reasons exist to justify it. Under the Bouncing Checks Law (B.P.
Blg. 22), foreign checks, provided they are either drawn and issued in the Philippines though payable
outside thereof, or made payable and dishonored in the Philippines though drawn and issued outside
thereof, are within the coverage of said law. The law likewise applied to checks drawn against current
accounts in foreign currency.
[I]t is well established that courts may avail themselves of the actual proceedings of the legislative body
to assist in determining the construction of a statute of doubtful meaning (citation omitted). Thus,
where there is doubts as to what a provision of a statute means, the meaning put to the provision
during the legislative deliberation or discussion on the bill may be adopted (citation omitted). The
records of the Batasan, Vol. III, unmistakably show that the intention of the lawmakers is to apply the
law to whatever currency may be the subject thereof. Courts may avail themselves of the actual
proceedings of the legislative body to assist in determining the construction of a statute of doubtful
meaning.
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Posted by Jhez on April 25, 2013 in Case Digests, Civil Law, Criminal Law, Statutory Construction
Tags: BP 22, extrinsic aids, legislative deliberation
Alonzo vs. Intermediate Appellate Court and Padua (G.R. No. L-72873. May 28, 1987)
16
APR
CARLOS ALONZO and CASIMIRA ALONZO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents.
Perpetuo L.B. Alonzo for petitioners.
Luis R. Reyes for private respondent.
Ponente: CRUZ
FACTS:
Five brothers and sisters inherited in equal pro indiviso shares a parcel of land registered in ‘the name of
their deceased parents. One of them transferred his undivided share by way of absolute sale. A year
later, his sister sold her share in a “Con Pacto de Retro Sale”. By virtue of such agreements, the
petitioners occupied, after the said sales, an area corresponding to two-fifths of the said lot,
representing the portions sold to them. The vendees subsequently enclosed the same with a fence. with
their consent, their son Eduardo Alonzo and his wife built a semi-concrete house on a part of the
enclosed area.
One of the five coheirs sought to redeem the area sold to petitioners but was dismissed when it
appeared that he was an American citizen. Another coheir filed her own complaint invoking the same
right of redemption of her brother. Trial court dismissed the complaint, on the ground that the right
had lapsed, not having been exercised within thirty days from notice of the sales. Although there was no
written notice, it was held that actual knowledge of the sales by the co-heirs satisfied the requirement of
the law. Respondent court reversed the decision of the Trial Court.
ISSUE:
Whether or not actual knowledge satisfied the requirement of Art. 1088 of the New Civil Code.
HELD:
YES. Decision of respondent court was reversed and that of trial court reinstated.
RATIO:
The co-heirs in this case were undeniably informed of the sales although no notice in writing was given
them. And there is no doubt either that the 30-day period began and ended during the 14 years
between the sales in question and the filing of the complaint for redemption in 1977, without the co-
heirs exercising their right of redemption. These are the justifications for this exception.
While [courts] may not read into the law a purpose that is not there, [courts] nevertheless have the right
to read out of it the reason for its enactment. In doing so, [courts] defer not to “the letter that killeth”
but to “the spirit that vivifieth,” to give effect to the law maker’s will.
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Posted by Jhez on April 16, 2013 in Case Digests, Civil Law, Statutory Construction
Tags: injustice, legislative intent, pacto de retro, pro indiviso, verbal notice
Salvacion vs. Central Bank of the Philippines (G.R. No. 94723. August 21, 1997)
16
APR
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian, and Spouses
FEDERICO N. SALVACION, JR., and EVELINA E. SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and GREG BARTELLI y
NORTHCOTT,respondents.
Ponente: TORRES, JR.
FACTS:
Respondent Greg Bartelli y Northcott, an American tourist, coaxed and lured the 12-year old petitioner
Karen Salvacion to go with him in his apartment where the former repeatedly raped latter. After the
rescue, policemen recovered dollar and peso checks including a foreign currency deposit from China
Banking Corporation (CBC). Writ of preliminary attachment and hold departure order were issued.
Notice of Garnishment was served by the Deputy Sheriff to CBC which later invoked R.A. No. 1405 as its
answer to it. Deputy Sheriff sent his reply to CBC saying that the garnishment did not violate the secrecy
of bank deposits since the disclosure is merely incidental to a garnishment properly and legally made by
virtue of a court order which has placed the subject deposits in custodia legis. CBC replied and invoked
Section 113 of Central Bank Circular No. 960 to the effect that the dollar deposits of Greg Bartelli are
exempt from attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body, whatsoever. Central Bank of the Philippines affirmed
the defense of CBC.
ISSUE:
Whether or not Sec. 113 of Central Bank Circular 960 and Sec. 8 of RA 6426 amended by PD 1246
otherwise known as the “Foreign Currency Deposit Act” be made applicable to a foreign transient.
HELD:
NO. The provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar as it amends Section 8
of R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances.
RATIO:
[T]he application of the law depends on the extent of its justice. Eventually, if we rule that the
questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment,
or any other order or process of any court, legislative body, government agency or any administrative
body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen
aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil
Code which provides that “in case of doubt in the interpretation or application of laws, it is presumed
that the lawmaking body intended right and justice to prevail.
“Ninguno non deue enriquecerse tortizeramente con dano de otro.” Simply stated, when the statute is
silent or ambiguous, this is one of those fundamental solutions that would respond to the vehement
urge of conscience. It would be unthinkable, that the questioned Section 113 of Central Bank No. 960
would be used as a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty
at the expense of the innocent.
Call it what it may — but is there no conflict of legal policy here? Dollar against Peso? Upholding the
final and executory judgment of the lower court against the Central Bank Circular protecting the foreign
depositor? Shielding or protecting the dollar deposit of a transient alien depositor against injustice to a
national and victim of a crime? This situation calls for fairness against legal tyranny.
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Posted by Jhez on April 16, 2013 in Case Digests, Civil Law, Statutory Construction
Tags: custodia legis, declaratory relief, garnishment, injustice, writ of preliminary attachment
Information Technology Foundation of the Philippines vs. Commission on Elections, G.R. No. 159139,
January 13, 2004
06
MAR
INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES MA. CORAZON M. AKOL, MIGUEL UY,
EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and
MANUEL ALCUAZ JR, petitioners,
vs. COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC BIDDING and
AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON DE GUZMAN, JOSE F.
BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.;
and MEGA PACIFIC CONSORTIUM, respondents.
[G.R. No. 159139. January 13, 2004]
FACTS:
Petitioners were participating bidders questioning the identity and eligibility of the awarded contractor
Mega Pacific Consortium (MPC) where the competing bidder is Mega Pacific eSolutions, Inc. (MPEI) as
signed by Mr. Willy Yu of the latter. Private respondent claims that MPEI is the lead partner tied up with
other companies like SK C&C, WeSolv, Election.com and ePLDT. Respondent COMELEC obtained copies
of Memorandum of Agreements and Teaming Agreements.
ISSUE:
Whether or not there was an existence of a consortium.
RULING:
NO. There was no documentary or other basis for Comelec to conclude that a consortium had actually
been formed amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT. The president of
MPEI signing for allegedly in behalf of MPC without any further proof, did not by itself prove the
existence of the consortium. It did not show that MPEI or its president have been duly pre-authorized
by the other members of the putative consortium to represent them, to bid on their collective behalf
and, more important, to commit them jointly and severally to the bid undertakings. The letter is purely
self-serving and uncorroborated.
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Posted by Jhez on March 6, 2013 in Case Digests, Civil Law, Government Procurement
Tags: bidding, consortium
Kwok vs. Philippine Carpet Manufacturing Corporation (457 SCRA 465)
06
MAR
DONALD KWOK, petitioner,
vs. PHILIPPINE CARPET MANUFACTURING CORPORATION, respondent.
[G.R. No. 149252. April 28, 2005]
FACTS:
Petitioner filed a complaint against the respondent corporation for the recovery of accumulated
vacation and sick leave credits before the NLRC. Petitioner clung to the verbal contract with Mr. Lim, the
President of the respondent corporation and his father-in-law for his claims. Petitioner obtained
favorable judgment. In their appeal, respondent averred that the position the petition held was not
entitled cash conversions of vacation and sick leave credits. The decision of the Labor Arbiter was
reversed. The Court of Appeals affirmed the reversed decision.
ISSUE:
Whether or not the verbal contract in favor of petitioner is valid.
RULING:
NO. It is true that for a contract to be binding on the parties thereto, it need not be in writing unless the
law requires that such contract be in some form in order that it may be valid or enforceable or that it be
executed in a certain way, in which case that requirement is absolute and independent. (Art. 1356, NCC)
But the court disbelieved petitioner’s testimony and gave credence and probative weight to the
collective testimonies of the employees and officers of the respondent corporation, including Mr. Lim,
whom the petitioner presented as a hostile witness. Even assuming that the petitioner was entitled of
such benefits, there was no record to show the record of absences to arrive at the actual number of
leave credits. There was no conformity of such agreement with the Board and if so, such claim was
already barred by prescription under Article 291 of the Labor Code.
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Posted by Jhez on March 6, 2013 in Case Digests, Civil Law
Tags: hostile witness, prescription, verbal contract
Paguyo vs. Astorga (470 SCRA 440)
06
MAR
SPOUSES DOMINGO and LOURDES PAGUYO, petitioners,
vs. PIERRE ASTORGA and ST. ANDREW REALTY, INC., respondents.
[G.R. No. 130982. September 16, 2005]
FACTS:
Petitioners owned a five-storey named Paguyo Building over the land owned by the Armas family.
Pending civil case, petitioners and Armases entered into compromise agreement for the former to
acquire the lot. In dire need of money, petitioner entered into agreement “Receipt of Earnest Money”
with herein respondent for the sale of former’s property and lot which was to be purchased from
Armases. Petitioner (Lourdes) later entered into Deed of Absolute Sale of Paguyo Building with the
respondent, who also paid for the accrued and subsequent real property taxes. Petitioner filed
Complaint rescission of “Receipt of Earnest Money” alleging there has been fraud on the part of
respondents. The RTC and Court of Appeals ruled in favor of respondents with damages.
ISSUE:
Whether or not petitioner’s complaint for rescission is tenable.
RULING:
NO. Petitioners’ contentions lack merit. For one, on top of the amount received by petitioners,
respondents had to shoulder accrued real estate taxes. For another, respondents believe it was the
value for their money inasmuch as the building stands on a lot with a lot owner reluctant to sell it. For a
third, said amount was arrived considering the depreciated value of the building in view o economic and
political uncertainties that time. Except in cases specified by law, lesion or inadequacy of cause shall not
invalidate a contract, unless there has been fraud, mistake or undue influence. (Art. 1355, NCC) Gross
inadequacy of the price does not affect a contract of sale, except as may indicate a defect in the
consent, or the parties really intended a donation or some other act of contract. (Art.1470, NCC)
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Tags: earnest money, lesion, rescission
BPI Express Card Corporation vs. Olalia (372 SCRA 399)
06
MAR
BPI EXPRESS CARD CORPORATION, petitioner,
vs. EDDIE C. OLALIA, respondents.

[G.R. No. 131086. December 14, 2001]
FACTS:
Respondent was issued by the petitioner a credit card under his name. Upon renewal, petitioner issued
in addition a supplementary card in the name of respondent’s wife. Respondent denies application. The
supplementary card accumulated a purchase of over P100k. Petitioner demanded payment but
respondent refused to pay. The RTC ordered respondent to pay only the purchase of its principal card
but was reversed after the filing of Motion for Reconsideration. The Court of Appeals affirmed the
original decision of the RTC.
ISSUE:
Whether or not the (1) credit card issued to respondent’s wife is valid, and (2) respondent be held liable
for its purchases.
RULING:
(1) NO. The issuance of the supplementary card shall only be upon payment of necessary fee and
submission of application from the principal for the purpose. Contracts of adhesion are to be construed
strictly against the party who drafted it.
(2) NO. Respondent should not be held liable for the purchase made under the so-called extension or
supplementary card as petitioner failed to explain why a card was issued without accomplishment of
requirements. It did not even secured specimen signatures of purported extension cardholder to
compare with charge slips. Respondent is liable only for the purchases made under his own credit card.
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Tags: contracts of adhesion, credit card, supplementary card
Mendoza vs. Court of Appeals (359 SCRA 438)
06
MAR
DANILO D. MENDOZA, also doing business under the name and style of ATLANTIC EXCHAGE PHILIPPINES,
petitioner,
vs. COURT OF APPEALS, PHILIPPINE NATIONAL BANK, FERNANDO MARAMAG JR., RICARDO G. DECEPIDA,
and BAYANI A. BAUTISTA, respondent.
[G.R. No. 116710. June 25, 2001]
FACTS:
Respondent was granted by respondent Philippine National Bank (PNB) credit line and Letter of
Credit/Trust Receipt (LC/TR) line. As security for the credit accommodations and for those which may
thereinafter be granted, petitioner mortgaged to respondent PNB some of his properties. Petitioner
later requested for loan restructuring and issued promissory notes, which he failed to comply.
Respondent PNB extra-judicially foreclosed the real and chattel mortgages, and the mortgaged
properties were sold at public auction to respondent PNB, as highest bidder. Petitioner filed a case in
the RTC contending that foreclosure is illegal invoking promissory estoppel, and secured favorable
judgment. The decision of RTC was reversed by the Court of Appeals.
ISSUE:
Whether or not the foreclosure of petitioner’s real estate and chattel mortgages were legal and valid as
opposed to promissory estoppel.
RULING:
YES. First, there was no promissory estoppel as the promise (of respondent bank) must be plain and
unambiguous and sufficiently specific. Second, there was no meeting of the minds leading to another
contract, hence loan was not restructured. Third, promissory notes petitioner issued were valid. Fourth,
stipulation in the mortgage, extending its scope and effect to after-acquired property is valid and binding
after the correct and valid process of extra-judicial foreclosure. Finally, record showed that petitioner
did not even attempt to tender any redemption price during the one-year redemption period.
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Tags: chattel mortgage, extra-judicial foreclosure, letter of credit, promissory estoppel
Cathay Pacific Airways Ltd. Vs. Vasquez (399 SCRA 207)
06
MAR
CATHAY PACIFIC AIRWAYS LTD., petitioner,
vs. SPOUSES DANIEL VASQUEZ and MARIA LUISA MADRIGAL VASQUEZ, respondents.
[G.R. No. 150843. March 14, 2003]
FACTS:
In respondents’ return flight to Manila from Hongkong, they were deprived of their original seats in
Business Class with their companions because of overbooking. Since respondents were privileged
members, their seats were upgraded to First Class. Respondents refused but eventually persuaded to
accept it. Upon return to Manila, they demanded that they be indemnified in the amount of P1million
for the “humiliation and embarrassment” caused by its employees. Petitioner’s Country Manager failed
to respond. Respondents instituted action for damages. The RTC ruled in favor of respondents. The
Court of Appeals affirmed the RTC decision with modification in the award of damages.
ISSUE:
Whether or not the petitioners (1) breached the contract of carriage, (2) acted with fraud and (3) were
liable for damages.
RULING:
(1) YES. Although respondents have the priority of upgrading their seats, such priority may be waived, as
what respondents did. It should have not been imposed on them over their vehement objection.
(2) NO. There was no evident bad faith or fraud in upgrade of seat neither on overbooking of flight as it
is within 10% tolerance.
(3) YES. Nominal damages (Art. 2221, NCC) were awarded in the amount of P5,000.00. Moral damages
(Art.2220, NCC) and attorney’s fees were set aside and deleted from the Court of Appeals’ ruling.
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Tags: contract of carriage, nominal damages, seat upgrade
San Agustin vs. Court of Appeals (371 SCRA 346)
06
MAR
JESUS SAN AGUSTIN, petitioner,
vs. HON. COURT OF APPEALS and MAXIMO MENEZ, respondents.
[G.R. No. 121940. December 4, 2001]

FACTS:
Government Service Insurance System (GSIS) sold to a certain Macaria Vda. de Caiquep a parcel of
residential land evidenced by a Deed of Absolute Sale. The following encumbrance was annotated at the
back of the title, not to sell, convey, lease or sublease, or otherwise encumber the property. A day after
the issuance of TCT Macaria Vda. de Caiquep sold the subject lot to private respondent, Maximo Menez,
Jr., as evidenced by a Deed of Absolute Sale. Said TCT was lost, but private respondent subsequently
obtained a duplicate after judicial proceedings. Petitioner was not notified. Both RTC and CA ruled in
favor of private respondent.
ISSUE:
Whether or not the petitioner is correct that Deed of Sale between Macaria Vda. de Caiquep and private
respondent is null and void in accordance with Par.7 Art.1409 of the New Civil Code.
RULING:
NO. Petitioner’s contention is less than meritorious. In this case, the GSIS, the proper party, has not filed
any action for the annulment of Deed of Sale between them and Macaria Vda. de Caiquep, nor for the
forfeiture of the lot in question. The contract of sale remains valid between the parties, unless and until
annulled in the proper suit filed by the rightful party, the GSIS. The said contract of sale is binding upon
the heirs of Macaria Vda. de Caiquep, including petitioner who alleges to be one of her heirs, in line with
the rule that heirs are bound by contracts entered into by their predecessors-in-interest. Since, both
were aware of the existence of the stipulated condition in favor of the original seller, GSIS, yet both
entered into an agreement violating said condition and nullifying its effects, said parties should be held
in estoppel to assail and annul their own deliberate acts.
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Tags: deed of sale, estoppel, foreclosure, predecessors-in-interest

Filinvest Land vs. Court of Appeals (470 SCRA 57)
06
MAR
FILINVEST LAND, INC., petitioner,
vs. THE HONORABLE COURT OF APPEALS, PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY and
PACIFIC EQUIPMENT CORPORATION, respondents.
[G.R. No. 138980. September 20, 2005]
FACTS:
Petitioner awarded to respondent Pacific Equipment Corp (Pecorp) development of its residential
subdivisions, a contract amounting to P12,470,000.00. Pecorp posted two surety bonds to guarantee
faithful compliance. Both agreed that liquidated damages of P15,000/day shall be paid by Pecorp in case
of delay. Petitioner claimed that Pecorp failed to complete the works (94.53%) and claims for damages.
Pecorp on the other hand contended that their work stopped due to failure of petitioner to pay for
certain completed portion. RTC assigned a commissioner to evaluate the claims and counter-claims. The
total amount due to Pecorp was computed to be P1,881,867.66. Petitioner claimed that liquidated
damages amounted to P3,990,000.00 Both claims and counter-claims were dismissed. Court of Appeals
affirmed the ruling of RTC.
ISSUE:
Whether or not the penalty (liquidated damages) of P15,000.00 per day of delay shall be binding upon
mutual agreement of parties.
RULING:
NO. As a general rule, courts are not at liberty to ignore the freedom of the parties to agree on such
terms and conditions as they see fit as long as they are not contrary to law, morals, good customs, public
order or public policy. The judge shall equitably reduce the penalty when the principal obligation has
been partly or irregularly complied with by the debtor. Even if there has been no performance, the
penalty may also be reduced by the courts if it is iniquitous or unconscionable (Art.1229, NCC). A penalty
interest of P15,000.00 per day of delay as liquidated damages or P3,990,000.00 (representing 32%
penalty of the P12,470,000.00 contract price) is unconscionable considering that the construction was
already not far from completion.
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Tags: interest, liquidated damages, unconscionable, usurious, works
Ramos vs. Sarao (461 SCRA 103)
06
MAR
MYRNA RAMOS, petitioner,
vs. SUSANA S. SARAO and JONAS RAMOS, respondents.
[G.R. No. 149756. February 11, 2005]
FACTS:
Spouses Jonas Ramos and Myrna Ramos executed a contract over their conjugal house and lot in favor
of respondent for and in consideration of P1,310,430. Entitled “DEED OF SALE UNDER PACTO DE
RETRO,” the contract, inter alia, granted the Ramos spouses the option to repurchase the property
within six months plus an interest of 4.5 percent. Petitioner tendered to Sarao the amount of
P1,633,034.20 in the form of two manager’s checks, which the latter refused to accept for being
allegedly insufficient. Myrna filed a Complaint, and she deposited with the RTC two checks that Sarao
refused to accept. Sarao filed against the Ramos spouses a Petition “for consolidation of ownership in
pacto de retro sale”. Both RTC and CA dismissed petitioner’s complaint and appeal respectively in favor
of respondent Sarao.
ISSUE:
Whether or not the pacto de retro sale was in reality an equitable mortgage?
RULING:
YES. In order to judge the intention of the contracting parties, their contemporaneous and subsequent
acts shall be principally considered (Art.1371, NCC). The contract shall be presumed to be an equitable
mortgage, in any of the following cases:(1) When the price of a sale with right to repurchase is unusually
inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after
the expiration of the right to repurchase another instrument extending the period of redemption or
granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase
price; (5) When the vendor binds himself to pay the taxes on the thing sold; (6) In any other case where
it may be fairly inferred that the real intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation. (Art. 1602, NCC)
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Tags: equitable mortgage, mortgage, pacto de retro, real property
Philippine Savings Bank vs. Mañalac, Jr. (457 SCRA 203)
14
JAN
FACTS:
Respondent spouses obtained a loan from petitioner covered by promissory note. As a security for the
loan, respondent executed a Real Estate Mortgage in favor of the petitioner over eight parcels of land.
Respondents were unable to pay the installments so that the loan obligations were restructured.
Respondent entered into Deed of Sale with Assumption of Mortgage on 3 real properties (and another
property) with spouses Galicia. Respondent’s repeated default in payment of past due obligations
prompted the petitioner to file for extrajudicial foreclosure of remaining mortgaged properties.
Respondent asked for partial release of mortgage after enclosing a cashier check payment. Petitioner
sold some mortgaged properties that prompted respondent to institute action for damages. Trial court
annulled the sale of mortgaged properties. The Court of appeals affirmed with modification the decision
of trial court requiring indemnification of the respondent by petitioner.
ISSUE:
Whether or not there was novation in applying the payment made by respondent to loan account of
Galicia.
RULING:
NO. Novation is never presumed. Novation is the extinguishment of an obligation by the substitution or
change of the obligation by a subsequent one which extinguishes or modifies the first, either by
changing the object or principal conditions, or, by substituting another in place of the debtor, or by
subrogating a third person in the rights of the creditor. It is obvious that there was no agreement to
form a new contract by novating the mortgage contracts of the Mañalacs and the Galicias. Neither can
Mañalac be deemed substitute debtor within the contemplation of Article 1293 of the Civil Code. The
Decision of the Court of Appeals was reversed and set aside.
Leave a comment
Tags: extinguishment of obligation, foreclosure, mortgage, novation

Iloilo Traders Finance. Inc. vs. Heirs of Oscar Soriano, Jr. (404 SCRA 67)
14
JAN
FACTS:
Respondents executed two promissory notes secured by real property mortgages in favor of petitioner.
The respondents defaulted and petitioner moved for extra-judicial foreclosure of the mortgages.
Respondent filed a complaint against petitioner. The parties later entered into “amicable settlement”
and submitted it to the trial court for approval. The trial court required the parties to give some
clarifications on several issues that were not complied. The amicable settlement was disapproved and
the court proceeded. Respondents withdrew the case and filed a (new) case for novation and specific
performance which was decided favorably for the respondents. The Court of Appeals affirmed the
judgment.
ISSUE:
Whether or not the amicable settlement entered into between parties has novated the original
obligation.
RULING:
NO. The parties entered into the agreement basically to put an end to Civil Case No. 14007 then pending
before the Regional Trial Court.Concededly, the provisions of the settlement were beneficial to the
respondent couple. The compromise extended the terms of payment and implicitly deferred the
extrajudicial foreclosure of the mortgaged property. It was well to the interest of respondent spouses to
ensure its judicial approval; instead, they went to ignore the order of the trial court and virtually failed
to make any further appearance in court. This conduct on the part of respondent spouses gave
petitioner the correct impression that the Sorianos did not intend to be bound by the compromise
settlement, and its non-materialization negated the very purpose for which it was executed.
The decision of the court of the Court of Appeals affirming that of the trial court was reversed and set
aside.
Leave a comment
Tags: amicable settlement, foreclosure, mortgage, novation, obligation
Rodzssen Supply Co. Inc. vs. Far East Bank & Trust Co. (357 SCRA 618)
14
JAN
FACTS:
Petitioner opened with respondent a domestic letter of credit (LOC) in favor of Ekman and Company,
Inc. (Ekman) for the purchase of five hydraulic loaders. The first three hydraulic loaders were received by
the petitioner before the expiry of LOC and respondent paid Ekman. The remaining two hydraulic
loaders were received by the petitioner after the expiry of LOC/contract but respondent still paid
Ekman. Petitioner refused to pay respondent. Respondent filed a case. Petitioner answered by way of
affirmative defense that respondent had no cause of action being allegedly in bad faith and breach of
contract. The trial court and Court of Appeals ruled in favor of respondent to recover from the cost of
two hydraulic loaders.
ISSUE:
Whether or not the respondent is entitled of reimbursement from petitioner for its payment out of
mutual negligence.
RULING:
YES. Petitioner should pay respondent bank the amount the latter expended for the equipment
belatedly delivered by Ekman and voluntarily received and kept by petitioner. Respondent bank’s right
to seek recovery from petitioner is anchored, not upon the inefficacious Letter of Credit, but on Article
2142 of the Civil Code which reads: “Certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense
of another.” When both parties to a transaction are mutually negligent in the performance of their
obligations, the fault of one cancels the negligence of the other and, as in this case, their rights and
obligations may be determined equitably under the law proscribing unjust enrichment.
Leave a comment
Tags: affirmative defense, letter of credit, obligation, unjust enrichment
PNB MADECOR vs. Uy (363 SCRA 128)
14
JAN
FACTS:
Guillermo Uy assigned to respondent his receivables due from Pantranco North Express Inc. (PNEI).
Respondent filed a collection suit with an application for issuance of preliminary attachment against
PNEI which was granted by the RTC. The sheriff issued a notice of garnishment addressed to PNB and
PNB MADECOR. The RTC rendered judgment against PNEI with writ of execution causing the sheriff to
garnish the amount therein from the credits and collectibles of PNEI from petitioner and levy upon the
assets of petitioner should its personal assets be insufficient to cover its debt with PNEI. Petitioner
claimed that as debtor, it is likewise a creditor for PNEI considering unpaid rentals of PNEI for its parcel
of land and by operation of law on compensation, it is actually the PNEI that still has outstanding
obligations to it.
ISSUE:
Whether or not there was legal compensation between the petitioner and PNEI as a defense of the
former.
RULING:
NO. There could not be any compensation between PNEI’s receivables from PNB MADECOR and the
latter’s obligation to the former because PNB MADECOR’s supposed debt to PNEI is the subject of
attachment proceedings initiated by a third party, herein respondent Gerardo Uy. This is a controversy
that would prevent legal compensation from taking place, per the requirements set forth in Article 1279
of the Civil Code. Moreover, it was not clear whether, at the time compensation was supposed to have
taken place, the rentals being claimed by petitioner were indeed still unpaid. Petitioner did not present
evidence in this regard, apart from a statement of account.
Leave a comment
Tags: compensation, execution, garnishment
Velarde vs. Court of Appeals (361 SCRA 57)
14
JAN
FACTS:
The private respondent executed a Deed of Sale with Assumption of Mortgage, with a balance of P1.8
million, in favor of the petitioners. Pursuant to said agreements, plaintiffs paid the bank (BPI) for three
(3) months until they were advised that the Application for Assumption of Mortgage was denied. This
prompted the plaintiffs not to make any further payment. Private respondent wrote the petitioners
informing the non-fulfillment of the obligations. Petitioners, thru counsel responded that they are
willing to pay in cash the balance subject to several conditions. Private respondents sent a notarial
notice of cancellation/rescission of the Deed of Sale. Petitioners filed a complaint which was
consequently dismissed by an outgoing judge but was reversed by the assuming judge in their Motion
for Reconsideration. The Court of Appeals reinstated the decision to dismiss.
ISSUE:
Whether or not there is a substantial breach of contract that would entitle its rescission.
RULING:
YES. Article 1191 of the New Civil Code applies. The breach committed did not merely consist of a slight
delay in payment or an irregularity; such breach would not normally defeat the intention of the parties
to the contract. Here, petitioners not only failed to pay the P1.8 million balance, but they also imposed
upon private respondents new obligations as preconditions to the performance of their own obligation.
In effect, the qualified offer to pay was a repudiation of an existing obligation, which was legally due and
demandable under the contract of sale. Hence, private respondents were left with the legal option of
seeking rescission to protect their own interest.
Leave a comment
Tags: breach, contract, mortgage
Aguilar vs. Citytrust Finance Corporation (474 SCRA 285)
10
DEC
FACTS:
Petitioners purchased a car from World Cars, Inc. at an agreed price of payable in 90 days and were
being made to sign a promissory note, chattel mortgage, disclosures and other documents the dates of
which were left blank and which showed that they would still be obliged to pay on installment in 12
months for the car if checks were not cleared. The chattel mortgage was executed in favor of World Cars
which embodied a deed of assignment in favor of the respondent. Petitioner issued checks payable to a
certain Joselito Perez, representative of World Cars, Inc. and World Cars, Inc. After some time,
respondent contacted the petitioner about the latter’s overdue accounts. Petitioner filed a complaint for
annulment of chattel mortgage plus damages against respondent and World Cars, Inc. in Quezon City
RTC which ruled in favor of herein petitioner. The appellate court modified that of trial court giving
effect to the promissory note and its derivative instruments.
ISSUE:
Whether or not World Cars, Inc. is liable to pay the unpaid obligations of petitioners if the latter will be
able to prove that they already fully paid the price of the subject car.
RULING:
YES. Since the condition for the instruments to become effective was fulfilled, the obligation on the part
of the [petitioners] to be bound thereby did not arise and World Cars did not thus acquire rights
thereunder following Art. 1181 of the Civil Code. As no right against the [petitioner] was acquired by
World Cars under the promissory note and chattel mortgage, it had nothing to assign to [respondent].
Consequently, [respondent] cannot enforce the instruments against the [petitioner], for an assignee
cannot acquire greater rights than those pertaining to the assignor. World Cars, Inc. was ordered to pay
the petitioner and the respondent relevant fees, damages and litigation expenses.
Leave a comment
Posted by Jhez on December 10, 2012 in Case Digests, Civil Law
Tags: chattel mortgage, manager's check
First Metro Investment Corporation vs. Este del Sol Mountain Reserve, Inc. (362 SCRA 101)
10
DEC
FACTS:
Petitioner FMIC granted respondent a loan of Seven Million Three Hundred Eighty Five Thousand Five
Hundred Pesos (P7,385,500.00) to finance the construction of a sports complex at Montalban, Rizal.
Respondent also executed, as provided for by the Loan Agreement, an Underwriting Agreement with
underwriting fee, annual supervision fee and consultancy fee with Consultancy Agreement for four (4)
years, coinciding with the term of the loan. The said fees were deducted from the first release of loan.
Respondent failed to meet the schedule of repayment. Petitioner instituted an instant collection suit.
The trial court rendered its decision in favor of petitioner. The Court of Appeals reversed the decision of
the trial court in favor of herein respondents after its factual findings and conclusion.
ISSUE:
Whether or not the Underwriting and Consultancy Agreements were mere subterfuges to camouflage
the usurious interest charged by the petitioner.
RULING:
YES. In the instant case, several facts and circumstances taken altogether show that the Underwriting
and Consultancy Agreements were simply cloaks or devices to cover an illegal scheme employed by
petitioner FMIC to conceal and collect excessively usurious interest. “Art. 1957. Contracts and
stipulations, under any cloak or device whatever, intended to circumvent the laws against usury shall be
void. The stipulated penalties, liquidated damages and attorney’s fees, excessive, iniquitous and
unconscionable and revolting to the conscience as they hardly allow the borrower any chance of survival
in case of default. Hence, the instant petition was denied and the assailed decision of the appellate
court is affirmed.
Leave a comment

Tags: usurious interest, usury
Philippines Free Press, Inc. vs. Court of Appeals (473 SCRA 639)
10
DEC
FACTS:
Petitioner, thru Teodoro Locsin, Sr., filed a case of Annulment of Sale of its building, lot and printing
machineries during the regime of Martial Law to private respondent then represented by late B/Gen.
Menzi on February 26, 1987. Petitioner contends that there was vitiated consent and gross inadequacy
of purchase price during its sale on October 23, 1973. The trial court dismissed petitioner’s complaint
and granted private respondent’s counterclaim. It was elevated to the Court of Appeals but was also
dismissed for lack of merit.
ISSUE:
Whether or not the action for annulment has already prescribed.
RULING:
YES. Article 391 of the Civil Code pertinently reads “The action for annulment shall be brought within
four years. This period shall begin: In cases of intimidation, violence or undue influence, from the time
the defect of consent ceases x x x”.
[The Supreme Court] can not accept the petitioners’ contention that the period during which
authoritarian rule was in force had interrupted prescription and that the same began to run only on
February 25, 1986, when the Aquino government took power. It is true that under Article 1154 [of the
Civil Code] xxx fortuitous events have the effect of tolling the period of prescription. However, [the
Supreme Court] can not say, as a universal rule, that the period from September 21, 1972 through
February 25, 1986 involves a force majeure. Plainly, [the Supreme Court] can not box in the “dictatorial”
period within the term without distinction, and without, by necessity, suspending all liabilities, however
demandable, incurred during that period, including perhaps those ordered by this Court to be paid.
Leave a comment
Tags: annulment, force majeure, Martial Law, prescription
Schmitz Transport & Brokerage Corporation vs. Transport Venture, Inc. (458 SCRA 557)
10
DEC
FACTS:
Petitioner, who was in charge of securing requisite clearances, receive the cargoes from the shipside and
deliver it to the consignee Little Giant Steel Pipe Corporation warehouse at Cainta, Rizal, hired the
services of respondent Transport Venture Incorporation (TVI)’s tugboat for the hot rolled steel sheets in
coil. Coils were unloaded to the barge but there was no tugboat to pull the barge to the pier. Due to
strong waves caused by approaching storm, the barge was abandoned. Later, the barge capsized
washing 37 coils into the sea. Consignee was executed a subrogation receipt by Industrial Insurance
after the former’s filing of formal claim. Industrial Insurance filed a complaint against both petitioner
and respondent herein. The trial court held that petitioner and respondent TVI were jointly and severally
liable for the subrogation.
ISSUE:
Whether or not the loss of cargoes was due to fortuitous event.
RULING:
NO. In order, to be considered a fortuitous event: (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, or 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 fulfill his obligation in any manner; and (4) the obligor must be free from any participation
in the aggravation of the injury resulting to the creditor.
Petitioner and respondent TVI were jointly and severally liable for the amount of paid by the consignee
plus interest computed from the date of decision of the trial court.
Leave a comment
Tags: fortuitous events, negligence
International Corporate Bank vs. Gueco (351 SCRA 516)
10
DEC
FACTS:
The respondents obtained a loan from the petitioner to purchase a motor vehicle (car). The respondents
defaulted in payment of installments. A civil case was filed by the petitioner which resulted later into
negotiations in lowering the remaining unpaid balance from P184,000.00 to P150,000.00, detaining the
car until payment thereof. Respondent delivered a manager’s check but petitioner insisted on the
signing of “Joint Motion to Dismiss”, still holding the motor vehicle. Respondent initiated civil action for
damages before MTC but the case was dismissed for lack of merit. On appeal to RTC, the decision of
MTC was reversed ordering herein petitioners to indemnify the respondents. The Court of Appeals
likewise affirmed the decision of the RTC.
ISSUE:
Whether or not the respondents are entitled of indemnification for damages.
RULING:
NO. Petitioner’s act of requiring respondents to sign the Joint Motion to Dismiss can not be said to be a
deliberate attempt on the part of petitioner to renege on the compromise agreement of the parties. The
law presumes good faith. In fact, the act of petitioner bank in lowering the debt of respondent from
P184,000.00 to P150,000.00 is indicative of its good faith and sincere desire to settle the case.
The decision of the Court of Appeals affirming the decision of the RTC was set aside. Respondents were
ordered to pay the original obligation amounting to P150,000.00 to the petitioner upon surrender or
cancellation of the manager’s check in the latter’s possession, afterwhich, petitioner is to return the
subject motor vehicle in good working condition.
Leave a comment
Tags: novation, writ of replevin
Presumptive Death under Article 41 of Family Code
20
OCT
There is a complicated situation under the Family Code where it allows, as an exception to the general
accepted rule, the validity of two marriages involving a present spouse and a reappearing absent
spouse. In Article 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 spouse present had a 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 for only two years shall be sufficient.
For the purposes of contracting the subsequent marriage under the preceding paragraph, the spouse
present must institute a summary proceeding as provided for in this Code for the declaration of
presumptive death of the absentee, without prejudice to the reappearance of the absent spouse.
First, let us first establish what is meant by “well-founded belief”. Obviously, it is easy for a present
spouse, especially when the said spouse wishes to remarry, to believe that the other spouse is already
dead. In Republic of the Philippines vs. Court of Appeals (G.R. No. 159614, December 9, 2005), the
Supreme Court said that:
Belief is a state of the mind or condition prompting the doing of an overt act. It may be proved by direct
evidence or circumstantial evidence which may tend, even in a slight degree, to elucidate the inquiry or
assist to a determination probably founded in truth. Any fact or circumstance relating to the character,
habits, conditions, attachments, prosperity and objects of life which usually control the conduct of men,
and are the motives of their actions, was, so far as it tends to explain or characterize their disappearance
or throw light on their intentions, competence evidence on the ultimate question of his death.
The belief of the present spouse must be the result of proper and honest to goodness inquiries and
efforts to ascertain the whereabouts of the absent spouse and whether the absent spouse is still alive or
is already dead. Whether or not the spouse present acted on a well-founded belief of death of the
absent spouse depends upon the inquiries to be drawn from a great many circumstances occurring
before and after the disappearance of the absent spouse and the nature and extent of the inquiries
made by present spouse.
If the well-founded belief within the periods stated under Article 41 is acceptable to the court, a
summary proceeding is to be instituted. Full blown trial is no longer necessary. Once the Declaration of
Presumptive Death is issued by the competent court, it will be immediately be final and executory. This
is not subject to ordinary appeal. In Republic of the Philippines vs. Tango (G.R. No. 161062, July 31,
2001), the Supreme Court settled the rule regarding appeal judgments rendered in such proceeding
under the Family Code:
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 court’s
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.
Once a decision becomes final and executory, it cannot be directly or collaterally attacked again by way
of appeal other than that resulting from excess or lack of jurisdiction. In the recent ruling of Chan-Tan vs.
Tan (G.R. No. 167139, February 25, 2010):
Nothing is more settled in law than that when a judgment becomes final and executory, it becomes
immutable and unalterable. The same may no longer be modified in any respect, even if the
modification is meant to correct what is perceived to be an erroneous conclusion of fact or law. The
reason is grounded on the fundamental considerations of public policy and sound practice that, at the
risk of occasional error, the judgments or orders of courts must be final at some definite date fixed by
law. Once a judgment has become final and executory, the issues there should be laid to rest.
Now suppose the present spouse validly remarry another person after the summary proceeding. Then
after a few years, the absent spouse of the previous marriage suddenly reappeared. This will now be a
case where a present spouse is “validly” married to two persons. Remember that the marriage with
reappearing spouse was never severed. The subsequent marriage cannot be bigamous either.
However, the conflict may be resolved by the filing of the reappearing spouse of an Affidavit of
Reappearance in accordance with Article 42 of the Family Code. In such case, the subsequent marriage
will automatically be terminated upon the recording of the Affidavit of Reappearance, except when the
previous marriage is declared void ab initio.
But what will happen if the reappearing spouse, or any interested person, did not institute any action?
Take the case of Social Security System vs. Teresita Jarque Vda. De Bailon (G.R. No. 165545, March 24,
2006):
If the absentee reappears, but no step is taken to terminate the subsequent marriage, either by affidavit
or by court action, such absentee’s mere reappearance, even if made known to the spouses in the
subsequent marriage, will not terminate such marriage. Since the second marriage has been contracted
because of a presumption that the former spouse is dead, such presumption continues inspite of the
spouse’s physical reappearance, and by fiction of law, he or she must still be regarded as legally an
absentee until the subsequent marriage is terminated as provided by law.
By this ruling of the Supreme Court, the appearance of the absentee spouse, per se, does not ipso jure
terminate the subsequent marriage. This may cause some complications later. There will be no further
issue if the reappearing spouse will assert locus standi on their marriage. The subsequent marriage will
be void after some administrative procedures. This is without prejudice to the outcome of any judicial
proceeding questioning the reappearance.
An argumentative situation now comes if the reappearing spouse chooses to do nothing to reclaim the
previous marriage. The reappearing spouse cannot contract a subsequent marriage because of a valid
and subsisting marriage with the present spouse. But can the former maintain a (sexual) relationship
with the latter without being penalized under the law? Technically, yes. Is there no cause of action for
the subsequent spouse to sue the present spouse? The possibility of suing with bigamy was explained in
the case of Manuel vs. People of the Philippines (G.R. No. 165842, November 29, 2005):
Such judgment is proof of the good faith of the present spouse who contracted a subsequent marriage;
thus, even if the present spouse is later charged with bigamy if the absentee spouse reappears, he
cannot be convicted of the crime. As explained by former Justice Alicia Sempio-Diy:
[S]uch rulings, however, conflict with Art. 349 of the Revised Penal Code providing that the present
spouse must first ask for a declaration of presumptive death of the absent spouse in order not to be
guilty of bigamy in case he or she marries again.
The above Article of the Family Code now clearly provides that for the purpose of the present spouse
contracting a second marriage, he or she must file a summary proceeding as provided in the Code for
the declaration of the presumptive death of the absentee, without prejudice to the latter’s
reappearance. This provision is intended to protect the present spouse from a criminal prosecution for
bigamy under Art. 349 of the Revised Penal Code because with the judicial declaration that the missing
spouses presumptively dead, the good faith of the present spouse in contracting a second marriage is
already established. (Underscoring supplied.)
A lot of legal conflicts and infirmities will rise from the above scenario. It may also appear that the
subsequent spouse has no cause of action against any right deprived of him. Take for instance the
knowledge of the subsequent spouse of the infidelity of the present spouse. The former’s claim on
either criminal case of adultery or infidelity as a ground for Legal Separation is questionable. This is from
the fact that the reappearing spouse and the present spouse are still considered to be married for any or
all legal purposes.
In conclusion, Article 41 of the Family Code provides a speedy and efficient way of declaring absentees
especially for the purposes of remarriage. It also provides a reckoning point in the recovery of civil rights
that might have been lost from the absenteeism. However, there are still gray areas that need to be
reinforced. There can be more impaired or prejudiced rights if the situation will involve presence of
children in both marriages. Such unwanted situations may be avoided if there would be a more
straightforward rule like the case where appearance of the absentee per se, provided that it is authentic,
will cause the judicial declaration of presumptive death immediately rendered functus officio,
concurring to the view of Atty. Mel Sta. Maria in his book “Persons and Family Relations Law”, Fifth
Edition (2010), pages 282-284.
42 Comments
Posted by Jhez on October 20, 2012 in Civil Law

Tags: family code, presumptive death, reappearance
Benitez-Badua vs. C.A. [G.R. No. 105625. January 24, 1994]
05
OCT
Ponente: PUNO, J.:
FACTS:
[S]pouses Vicente Benitez and Isabel Chipongian owned various properties especially in Laguna both
died intestate. The fight for administration of Vicente’s estate ensued. Private respondents Victoria
Benitez-Lirio and Feodor Benitez Aguilar (Vicente’s sister and nephew, respectively) instituted a Special
Proceeding before the RTC of San Pablo City. They prayed for the issuance of letters of administration of
Vicente’s estate in favor of private respondent Aguilar. Petitioner opposed the petition. She alleged that
she is the sole heir of the deceased Vicente Benitez and capable of administering his estate. The parties
further exchanged reply and rejoinder to buttress their legal postures. The trial court decided in favor of
the petitioner. However, the Decision of the trial court was reversed by the Court of Appeals.
ISSUE:
Whether or not Articles 164, 166, 170 and 171 of the Family Code is applicable in favor of the petitioner.
HELD:
NO. Petition was dismissed for lack of merit. Costs against petitioner.
RATIO:
A careful reading of the above articles will show that they do not contemplate a situation, like in the
instant case, where a child is alleged not to be the child of nature or biological child of a certain couple.
Rather, these articles govern a situation where a husband (or his heirs) denies as his own a child of his
wife. Thus, under Article 166, it is the husband who can impugn the legitimacy of said child by proving:
(1) it was physically impossible for him to have sexual intercourse, with his wife within the first 120 days
of the 300 days which immediately preceded the birth of the child; (2) that for biological or other
scientific reasons, the child could not have been his child; (3) that in case of children conceived through
artificial insemination, the written authorization or ratification by either parent was obtained through
mistake, fraud, violence, intimidation or undue influence. Articles 170 and 171 reinforce this reading as
they speak of the prescriptive period within which the husband or any of his heirs should file the action
impugning the legitimacy of said child. 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.
Leave a comment
Posted by Jhez on October 5, 2012 in Case Digests, Civil Law
Tags: heir, intestate, legitimacy, natural child
Ramos vs. Mañalac, 89 Phil. 270
24
JUL
FACTS:
Petition for certiorari was filed seeking annulment of the decision of the Court of First Instance of
Pangasinan regarding a foreclosed parcel of land. Petitioners question the validity of the CFI ruling that
they will be held in contempt for refusing to vacate the land. The said property, being collateral for a
loan to a Mr. Rivera, was foreclosed due to non-payment of loan amount and its interest within the
prescribed periods. Mr. Rivera later sold the property to Ms. Lopez, who later filed petition that she be
placed in possession of the land. The petitioners question the ruling of the court.
ISSUES:
Whether or not:
(1) The decision of the lower court (CFI) is valid;
(2) Directing the issuance of a writ of possession in favor of Felipa Lopez is valid; and,
(3) (Possible Legal Ethics Issue) the term “appearance” would include only presence in courts.
HELD:
YES on first two issues. NO on the third issue. Petition was dismissed. Cost against the petitioners.
RATIO:
Claim of the petitioners as to the validity of the decision cannot be sustained for the reason that it is in a
nature of collateral attack to judgment which on its face is valid and regular for a long time. It is a well
known rule that a judgment, which on its face is valid and regular, can only be attacked in separate
action brought principally for the purpose (Gomez vs. Concepcion, 47 Phil. 717).
The second issue was also not taken for the simple reason that the issuance of writ of possession in
foreclosure proceedings is not an execution of judgment within the purview of Section 6 Rule 39 of the
Rules of Court, but is merely ministerial and complementary duty of the court.
In the third issue, the word or term “appearance” includes not only arguing a case before any such body
but also filing a pleading in behalf of a client as “by simply filing a formal motion, plea or answer”.

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Chua, et al. v. United Coconut Planters Bank, et al., G.R. No.

215999, 16 August 2017

Posted by Jhez on January 27, 2018 in Case Digests, Civil Law

Gabucan v. Judge Manta, G.R. No. L-51546, January 28, 1980.

Tags: admissibility, documentary stamp, probate

Cruz v. Judge Villasor, G.R. No. L-32213, November 26, 1973.

Tags: acknowledgment, credible, instrumental, witness

Icasiano v. Icasiano, G.R. No. L-18979, June 30, 1964.

[REYES, J.B.L., J.]

Tags: inadvertent, signing, substantial compliance, witness

Lopez v. Lopez, G.R. No. 189984, November 12, 2012.

Tags: donation, formalities, mortis causa, will

Taboada v. Rosal, G.R. No. L-36033, November 5, 1982.

[GUTIERREZ, JR., J.]

Nera v. Rimando, G.R. No. L-5971, February 21, 1911.

Tags: in the presence, instrumental witness, physical obstruction

Tags: express direction, notarial will, testator

Tags: attestation clause, cross, surplusage, thumbmark

Suroza v. Judge Honrado, A.M. 2026 CFI, December 19, 1981.

Tags: igorot, language, notarial will

Baltazar v. Laxa, G.R. No. 174489, April 11, 2012.

[DEL CASTILLO, J.]

Tags: forgetfulness, spinster, unsound mind

Solla v. Ascuenta, G.R. No. L-24955, September 4, 1926.

Tags: bequests, legacies, pious

[GUTIERREZ, JR., J.]

Bough v. Modesto, 94 Phil, January 28, 1954.

Cruz v. Cruz, G.R. No. 173292, September 1, 2010.

Posted by Jhez on July 25, 2017 in Civil Law, Succession

Tags: death, evidence in chief, survive

Bonilla v. Barcena, G.R. No. L-41715, June 18, 1976.

Tags: legal personality, substitute, survive

[REYES, J.B.L., J.]

Tags: compromise agreement, extrajudicial, partition

Uson v. Del Rosario, G.R. No. L-4963, January 29, 1953.

[BAUTISTA ANGELO, J.]

Tags: retroactive effect, successional rights

Guinto v. Medina, 50 O.G. #1 p. 199, October 7, 1953.

Tags: damages, forcible entry, liability

Reyes v. Court of Appeals, SC L-5620, July 31, 1954.

Tags: estate, fraud, sale, void

Tags: bequest, devisee

Cayetano v. Leonidas, G.R. No. L-54919, May 30, 1984.

[GUTIERREZ, JR., J.]

Bellis v. Bellis, G.R. No. 23678, June 6, 1967.

[BENGZON, J.P., J.]

Tags: domicile, renvoi

Tags: conjointly, joint will, probate, reciprocal

Dela Cerna v. Potot, G.R. No. L-20234, December 23, 1964.

[REYES, J.B.L., J.]

Tags: de novo, joint will

Tags: holographic, probate, will

Tags: foreign law. judicial notice, probate

Tags: holographic, intestate, will

Dr. Solidum v. People, G.R. No. 192123, 10 March 2014.

HELD#2: NO, it does not follow.

HELD#2: NO, the decree is not correct.

HELD: NO, the contention is not correct.

Posted by Jhez on April 22, 2017 in Case Digests, Lease

Tags: agreement, implied renewal, Lease

HELD#1: NO, the notice of perfected sale is not sufficient.

HELD#2: No, petitioners’ contention cannot be sustained.