Civil Law Case Digests - Justice M.V.

Lopez

Void Marriage - Psychological Incapacity

Sumilhig v Sumilhig G.R. No. 230711…………………………………………..3
Quiogue v. Quiogue G.R. No. 203992…………………………………………..5
Dedicatoria v. Dedicatoria G.R. No. 250618……………………………………7

Conjugal Property
Alexander v. Sps. Escalona G.R. No. 256141…………………………………9

Conjugal Property - Validity of Real Estate Mortgage

Strong Fort Warehousing Corp. v. Banta………………………………………11
G.R. Nos. 222369 and 222502

Validity of Contracts
Felix Chingkoe v. Faustino Chingkoe G.R. No. 244076………………………13

Satisfaction by levy
Metropolitan Bank and Trust Co. v. Radio Philippines Network Inc. ……….14
G.R. No. 190517

Sale - Pacto de Retro

Spouses Avelarde v. Heirs of Candari G.R. No. 190057…………………….16

Contract of Loan - Interest per annum

BPI v. LCL Capital, Inc . G.R. No. 243396…………………………………….17

Contracts - Lease
Privatization and Management Office v. Nocom G.R. No. 250477…………19

Contracts - Prescription of Action

Alba v. Arollado G.R. No. 237140………………………………………………21

Contracts - Reformation of Instruments

Banico v. Stager G.R. No. 232825……………………………………………..23

Torts - Civil Liability arising Delict

Motobato v. People G.R. No. 229265………………………………………….25
Cacdac v. Mercado G.R. No. 242731………………………………………….27
Collado v. Dele Vega G.R. No. 219511………………………………………..28

Torts - Liability of a Public Officer

Hon. Zaldy Ampatuan v. COA G.R. No. 252007……………………………..29

Naturalization of an Alien
Mohamed v. Republic G.R. No. 220674………………………………………31

Wills - Allowance of Foreigner’s Will

Kuckskar v. Sekito G.R. No. 237449………………………………………….33

Wills - 3 Witness Requirement in Testamentary Succession

Kuckskar v. Sekito G.R. No. 237449………………………………………….34

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Unlawful Detainer
Galacgac v. Bautista G.R. No. 221384………………………………………36

Interpretation of Real Estate Mortgage Contract

The Commoner Lending Corp. v. Alcala G.R. No. 235260………………..38

Donation of Immovable Property

Patenia-Kinatac-an v. Patenia-Decena G.R. No. 238325…………………40

Rights of a Purchaser in a Foreclosure Sale

Santiago v. Jimenez G.R. No. 228011………………………………………42

Right of Redemption
Rama v. Sps. Nogra G.R. No. 219556………………………………………44

Principle of Unjust Enrichment

National Power Corp. v. Benguet Electric Cooperative……………………46
G.R. No. 218378

Contracts - Real Estate Mortgage

Quiambao v. China Banking Corp. G.R. No. 238462………………………48

Wills - Right of Administration of the Estate of the Decedent

Gozum v Pappas G.R. No. 197147…………………………………………50

Marriage - Who can assail the Validity

Thomas v. Trono G.R. No. 241032…………………………………………52

Change of Name
Republic v. Peleño G.R. No. 232053……………………………………….53

Repeal of laws - NCC 7, and 8

Abrenica et al v. COA G.R. No. 218185……………………………………55

Submitted to:

Atty. Crisostomo A. Uribe

Prepared and Submitted by:

Vanessa S. Ocampo
Student No.: 17
School: SSCR

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Void marriage - Psychological Incapacity

Sumilhig v Sumilhig G.R. No. 230711

Facts:

Carolyn met respondent Joselito T. Sumilhig (Joselito) in February 1984 on her first day
of work as a waitress at Daungan Restaurant. Joselito also worked there as an
assistant cook. They became good friends and eventually lovers. During their
relationship, Carolyn noticed Joselito's gambling and drinking habits. He would pass the
time playing tong-its and mahjong with bystanders while waiting for her. When Carolyn
worked at Syvel's Department Store, there were instances when Joselito was already
drunk when he would fetch her. In 1987, Carolyn got pregnant with their first child, Jay
Charles M. Sumilhig (Jay). Blinded by his promise to reform, Carolyn married Joselito
on October 20, 1987. Joselito did not visit his wife and baby at the hospital. When
Carolyn was discharged from the hospital two days after giving birth, Carolyn saw that
Joselito was playing basketball with his friends.Thereafter, Jay had to be hospitalized for
two months because he was defacating through the umbilical cord. However, when Jay
got sick, Joselito was easily irrititated because of the baby's cries and he neither
showed love nor bothered to take care of Jay. To make matters worse, Joselito stopped
working and busied himself with mahjong, drinking, and gambling in the neighborhood.
On May 24, 1989, Carolyn gave birth to their second child, Jennalyn M. Sumilhig
(Jennalyn). Jennalyn was born premature because Carolyn was stressed during her
pregnancy due to her frequent quarrels with Joselito. Despite his growing family,
Joselito did not change his ways and remained jobless. He still drank and his gambling
habits became worse. He would also steal Carolyn's savings or borrow money from loan
sharks to fund his gambling addiction. Joselito then started physically and verbally
abusing Carolyn and their son, Jay. Because of Joselito's behavior, Carolyn developed
trauma and would hide in their room whenever Joselito came home drunk. On October
18, 2010, Carolyn filed a Petition for Declaration of Nullity of Marriage based on
psychological incapacity.

Issue:

WON the marriage between Carolyn and Joselito is void ab initio due to Joselito’s
psychological incapacity.

Held:

Yes. Article 36 explicitly requires the psychological incapacity to be existing at the time
of the celebration of the marriage, even if such incapacity becomes manifest only after
its solemnization. As contemplated under the law, psychological incapacity depicts an
enduring aspect of a spouse's personality structure, existing at the time of the
celebration of marriage, that renders them incapable of understanding and complying
with their essential marital obligations, manifested through clear acts of dysfunctionality
that undermines the family.

Here, Carolyn testified on how Joselito failed to observe mutual love, respect, and
fidelity, and refused to render mutual help and support to her. She averred that Joselito
physically abused her and their children, and he spent time gambling and drinking
instead of providing for the needs of the family. Joselito's defective superego and
Antisocial-Dependent Personality Disorder, which existed prior to his marriage, are parts
of his personality structure manifesting through clear acts of dysfunctionality. Joselito
was also found to have alcohol dependence and pathological gambling. These factors

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make it impossible for him to understand and comply with his essential marital
obligations. The clear and understandable causation between Joselito's condition
pre-existing before his marriage and its incapacitating nature regarding the performance
of the essential marital covenants clearly proved the juridical antecedence requirement.
Second, the psychological incapacity contemplated in Article 36 of the Family Code is
incurable, not in the medical, but in the legal sense. There are no medications that may
be taken or intervention that may be done as treatment for Joselito's psychological
incapacity to enable him to fulfill his obigations as husband to Carolyn because what is
involved here is Joselito's personality structure.Third, as to gravity, psychological
incapacity must be caused by a genuinely serious psychic cause and excludes "mild
characterological peculiarities, mood changes, occasional emotional outbursts[.]"
Joselito's psychological incapacity exemplifies gravity since he was not able to carry out
the normal and ordinary duties of marriage performed by any married person under
ordinary circumstances. He did not exert any effort at all to keep his marriage and
support his family. He did not work, he chose to drink and gamble, and he physically
and verbally abused Carolyn.

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Void marriage - Psychological Incapacity

Quiogue v. Quiogue G.R. No. 203992

Facts:

Antonio S. Quiogue, Jr. (Antonio) and his wife, respondent Maria Bel B. Quiogue
(Maribel), were married on October 16, 1980. They have four children: Marie Antonette,
Jose Antonio, Anabel, and Maritoni. They have been separated in fact since the year
1998 after Maribel drove him out of the conjugal home. He was forced to temporarily
stay in his office in the family-owned Nacional Memorial Homes. He went home to ask
his wife for reconciliation for the sake of their children, but his efforts failed. He now
stays at 407-A Valencia Hills Condominium in Quezon City. Antonio claimed that he and
Maribel are both psychologically incapacitated to comply with the basic marital
obligations. They did not observe mutual love and respect and also failed to provide the
necessary emotional, psychological, and moral support for each other. Maribel denied
the allegations in the Petition. She did not drive Antonio out of their home because he
voluntarily left their conjugal dwelling to pursue his womanizing and perennial nocturnal
gambling. Maribel stated that Antonio would only come home in the wee hours of the
morning only to leave again. He stayed in his office for a month during their separation
and came back. Thereafter, he would often come home from work drunk and violent.
There were even times when he would threaten and harass Maribel. Antonio was
verbally abusive to the extent of humiliating her in front of their children and neighbors.
During trial, Antonio testified that his wife Maribel did not love and respect him. She has
no ability to maintain a peaceful married and family life because she is ill-tempered,
tactless, irritable, and confrontational. She has no respect for him as she divulged
vulgar and demeaning matters about him even to his office staff. She often called his
office and shouted at his employees if she could not get information about his
whereabouts. His wife would find ways to embarrass him. Although Antonio admitted
that he had "flings" with other women during their marriage, his wife made the situation
more difficult as she was constantly nagging about it.

Issue:

WON Antonio is psychologically incapacitated to declare the marriage between him and
Maribel void from the beginning.

Held:

Yes. Psychological incapacity is a ground to declare a marriage void under Article 36 of

the Family Code. The provision speaks of two requisites. First is gravity, or that the
person who contracted the marriage is psychologically incapacitated to assume the
essential marital obligations and not merely refuses or neglects to do so because of
difficulty or ill will. The second one, antecedence, requires that the incapacity exists at
the time of the solemnization of the marriage, even if it manifests only thereafter. The
aspect of incurability is now approached in the legal sense. This contemplates of a
situation wherein the person's personality structure manifests through clear acts of
dysfunctionality which undermine the marital union and there must be clear and
convincing proof that the incapacity is enduring or persistent with respect to a specific
partner. To be considered as a form of psychological incapacity, infidelity must satisfy
the requirements of (1) gravity or severity, (2) antecedence, and (3) legal incurability or
persistence during the marriage.

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In this case, Antonio's Chronic infidelity is not only comprised of multiple illicit amorous
relations. As detailed in the Psychiatric Evaluation by Dr. Garcia, his affairs are not
casual mistakes as these were shown to be deeply rooted in his psychopathology which
was in place even before his marriage. Apart from the chronicity of Antonio's infractions,
the Court also notes that there is no clear recognition on his part that fidelity is one of
his essential obligations to his wife Maribel. In the Psychiatric Evaluation, Dr. Garcia
quoted Antonio saying: "As a husband, I'm practically a good husband; but I would
always be cheating on my wife." From his perspective, his illicit affairs are minor
incidents which Maribel should have overlooked or dealt with differently. It also did not
escape the Court's attention that Antonio has a distorted concept of a wife. Moreover,
Antonio blamed Maribel's nagging and tactlessness for the demise of their marriage,
saying that her actions drove him away. He admitted that he was weak in not being able
to control his womanizing, but Maribel is at fault for not doing anything to win him back.

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Void Marriage - Psychological Incapacity

Dedicatoria v. Dedicatoria G.R. No. 250618

Facts:

Jennifer and Ferdinand were married on December 20, 1995. However, on October 23,
2014, Jennifer filed a Petition for Declaration of Nullity of Marriage due to Ferdinand's
psychological incapacity. Jennifer testified that she noticed how irresponsible, immature,
insensitive, self-centered, and dependent on his parents Ferdinand was, since they
lived in her in-laws' residence after the exchange of vows. Ferdinand's mother
continued to take care of him so he found no reason to look for a permanent job. She
experienced how her in-laws' interests prevail over hers. She was also made to do all
the household chores for Ferdinand's entire family. Distressed, she decided to leave
and move in to her parents' house. But Ferdinand never visited her so she eventually
decided to go back to her in-laws' house to be with Ferdinand. When she got pregnant,
her father rented an apartment for her and Ferdinand to have their own place, but
Ferdinand still opted to go to his parents' house every day and return to the apartment
only at night. When confronted about it, Ferdinand reasoned: "Ewan ko, hinahanap ko
aruga ng nanay ko. Hindi ka naman katulad ng nanay ko. Dapat bumalik na tayo sa
amin." After Jennifer gave birth, the couple returned to live with Ferdinand's family.
Jennifer expected Ferdinand to change his ways for their baby, but her ordeal only
became worse as Ferdinand remained unemployed and took no part in looking after
their newborn. Distraught, Jennifer decided to move out with their son in 1999 for good
and all. Like before, Ferdinand never visited them. Worse, she became completely
estranged from her husband upon the passing of her mother-in-law. Later on, Jennifer
discovered that Ferdinand was already living with another woman with whom he had
sired a child.

Issue:

WON Ferdinand’s psychological incapacity is sufficient to declare the marriage between

him and Jennifer void ab initio.

Held:

Yes. Psychological incapacity as a ground for declaring a marriage void. As

contemplated under the law, psychological incapacity plainly depicts an enduring aspect
of a spouse's personality structure, existing at the time of the celebration of marriage,
that render [them] incapable of understanding and complying with [their] essential
marital obligations, manifested through clear acts of dysfunctionality that undermines
the family. The psychological incapacity must also be grave to distinguish it from "mild
characterological peculiarities, mood changes, occasional emotional outbursts"
generally brought about by human nature and the natural dynamics of every personal
relationship. Finally, the psychological incapacity must be incurable, but unlike in
Molina, such incurability should not be confused with medical or clinical permanence.

The testimonies sufficiently established that Ferdinand had developed and exhibited
extreme dependency upon his family, which rendered him incapable of standing on his
own as a family man, and ultimately, incapacitated him to understand and discharge his
essential marital and parental obligations to his wife and child. Evidence shows that
"from the beginning of the marriage, Ferdinand has not contributed — emotionally or
financially — to their marriage. Ferdinand consistently seeks support and reassurance
from his family, which causes pernicious effects on the decisions he made for his own

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family. Ferdinand, by continuously engaging [himself] in a carefree lifestyle such as
being over dependent on his parent, patent irresponsibility and immaturity, manifests an
obvious failure to fully appreciate the duties and responsibilities of parenthood at the
time he made his marital vows.Ferdinand's psychological disorder is incurable because
his family traits is deeply rooted and already embedded in his psyche. As aptly stated by
the expert witness, it is gleaned that Ferdinand's psychological disorder is permanent,
chronic and pervasive affecting many aspects of his life such as social, functioning and
close relationships. He just cannot perform his duties as husband, as he entered into
marriage for his own self-satisfaction and gratification

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Conjugal Property

Alexander v. Sps. Escalona G.R. No. 256141

Facts:

Respondents Spouses Jorge Escalona (Jorge) and Hilaria Escalona (Hilaria;

collectively, Spouses Escalona) were married on November 14, 1960. Thereafter,
Spouses Escalona acquired unregistered parcels of land identified as Lot Nos. 1 and 2
with a combined area of 100,375 square meters in Barangay Sta. Rita, Olongapo City.
On June 16, 1998, Jorge waived his right over Lot No. 1 in favor of his illegitimate son,
respondent Reygan Escalona (Reygan). On July 28, 2005, Reygan relinquished his
right over Lot No. 1 to petitioner Belinda Alexander (Belinda). On August 8, 2005,
Reygan likewise transferred Lot No. 2 to Belinda through a Deed of Renunciation and
Quitclaim. On August 10, 2005, Reygan and Belinda entered into a Deed of Absolute
Sale covering Lot Nos. 1 and 2 for P1,600,000.00. Spouses Escalona confronted
Belinda and explained that Reygan cannot validly sell the lots. However, Belinda
invoked the legitimacy of her contracts with Reygan. Aggrieved, Spouses Escalona filed
on September 5, 2005 a Complaint for annulment of documents with damages against
Belinda and Reygan before the Regional Trial Court of Olongapo City. Belinda sought to
dismiss the case on the grounds of laches and prescription. Belinda likewise argued
that she was a buyer in good faith and that Jorge's waiver of rights in favor of Reygan
was unconditional.

Issue:

WON the alienation of a conjugal property is valid when the marriage was solemnized
prior to the effectivity of the Family Code.

Held:

No. Any alienation or encumbrance of the conjugal property concluded after the
effectivity of the Family Code requires the other spouse's written consent or a court
order allowing the transaction, otherwise, the disposition is void. This is because before
the liquidation of the conjugal partnership, the interest of each spouse in the conjugal
assets is inchoate, a mere expectancy, which constitutes neither a legal nor an
equitable estate, and does not ripen into a title until it appears that there are assets in
the community as a result of the liquidation and settlement. The interest of each spouse
is limited to the net remainder resulting from the liquidation of the affairs of the
partnership after its dissolution. Thus, the right of the husband or wife to one-half of the
conjugal assets does not vest until the dissolution and liquidation of the conjugal
partnership, or after dissolution of the marriage, when it is finally determined that, after
settlement of conjugal obligations, there are net assets left which can be divided
between the spouses or their respective heirs. In this case, the contract is void
notwithstanding the fact that Spouses Escalona were married during the effectivity of
the Civil Code. The Family Code expressly repealed Title VI, Book I of the Civil Code on
Property Relations Between Husband and Wife. The Family Code has retroactive effect
to existing conjugal partnerships without prejudice to vested rights. More importantly,
the action to nullify the void alienation or encumbrance of the conjugal property, without
authority of the court or the written consent of the other spouse, is not imprescriptible.
The nature, effect, and availability of the remedy in transactions under Article 124 of the
Family Code are distinct from void and inexistent contracts under Article 1409 in relation
to Article 1410 of the Civil Code. Since petitioners have not presented strong, clear,
convincing evidence that the subject property was exclusive property of Juan, its

9
alienation to them required the consent of Juliana to be valid pursuant to Article 124 of
the Family Code. Here, Reygan and Belinda did not show any vested right over Lot No.
1 acquired before August 3, 1988 that exempted their situation from the retroactive
application of the Family Code. The transactions over Lot No. 1 in favor of Reygan and
Belinda happened in 1998 and 2005, respectively, or after the effectivity of the Family
Code. It is also undisputed that Hilaria did not give her written consent to these
contracts. Hence, the applicable law is Article 124 of the Family Code, not the Civil
Code, which renders void any alienation or encumbrance of the conjugal property
without the consent of the other spouse.

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Conjugal Property - Validity of Real Estate Mortgage

Strong Fort Warehousing Corp. v. Banta G.R. Nos. 222369 and 222502

Facts:

Antonio Banta (Antonio), married to Remedios Banta (Remedios), formed Metro Isuzu
Corporation (MIC) and obtained a series of loans from Westmont Bank in the name of
MIC. The loans were evidenced by several promissory notes signed by Antonio and
Remedios. On November 23, 1995, Antonio executed a deed of Real Estate Mortgage
(REM), covering several of their conjugal properties, to secure a loan of P25 million
from Westmont Bank. On February 6, 1997, Antonio and Westmont Bank amended the
REM to increase the loan to P36 million. On October 27, 1998, Remedios filed a
complaint with the Regional Trial Court (RTC) of Malabon City, docketed as Civil Case
No. 2907-MN, to nullify the REM and the amendment to the REM, including the various
promissory notes and credit agreements that were executed by Antonio and Westmont
Bank. Remedios alleged that her signatures on the loan documents were forged. She
did not sign these documents as she and Antonio had been separated since 1991. As
proof of the forgery, she submitted Questioned Documents Report No. 519-798 dated
August 13, 1998 (QDR), issued by the National Bureau of Investigation (NBI), and the
PNP Crime Laboratory Document Examination Report No. 131-98 dated August 20,
1998 (PNP Crime Laboratory Report), stating that the questioned signatures on the
documents and standard signatures of Remedios "as not having been written or signed
by one and the same person." In its answer to the complaint, Westmont Bank invoked
the principle of mortgagee in good faith and insisted that the loan documents are
genuine.

Issue:

WON a valid Real Estate Mortgage can be executed by the husband without the
consent of his wife.

Held:

No. The nullity of the 1995 REM and its 1997 amendment, and the 2000 REM,
notwithstanding, does not invalidate the loan as embodied in the promissory notes
executed by Antonio. A mortgage is merely an accessory agreement and does not
affect the principal contract of loan. The mortgages, while void, can still be considered
as instruments evidencing the indebtedness. In arguing that Remedios is guilty of
inexcusable negligence by failing to file an action for judicial separation of property to
protect her interest, Strong Fort is apparently shifting the blame on Remedios. To be
sure, there is no law imposing an obligation upon Remedios to file an action in court to
protect her interest in the conjugal properties because her interest is already protected
and reserved for her by law as a conjugal partner. On the contrary, it is Westmont Bank
that failed to observe the required level, of caution in ascertaining the identity of the
mortgagor and the genuineness of her signature. We note that the bank approved the
REMs without conducting a credit investigation on Remedios. It did not also take steps
to ascertain if the woman introduced by Antonio as his wife was actually Remedios.
Accordingly, Westmont Bank must bear the consequences of its negligence.

Equally baseless is Strong Fort's argument that the subject deeds of mortgage should
remain valid with respect to the conjugal properties that belong to Antonio. Antonio and
Remedios were married on April 5, 1975, or before the Family Code took effect in 1988.
Hence, the applicable law is the Civil Code of the Philippines. Article (Art.) 160 of the

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Civil Code provides that "[a]ll property of the marriage is presumed to belong to the
conjugal' partnership, unless it be proved that it pertains exclusively to the husband or to
the wife." The subject deeds of mortgage were executed in various years beginning
1995, or after the effectivity of the Family Code. Any alienation or encumbrance of
conjugal property made during the effectivity of the Family Code is governed by Art.
124.

Consequently, even on the assumption that Antonio mortgaged only his portion of the
conjugal partnership, the mortgage is still theoretically void because his right to one-half
of the conjugal assets does not vest until the liquidation of the conjugal partnership.
Notably, when Antonio executed the assailed deeds of mortgage in 1995, 1997, and
2000, his marriage with Remedios was still existing and the conjugal partnership was
not yet dissolved. As such, it could not be determined yet which of the conjugal assets
belong to Antonio that he can validly mortgage.

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Validity of Contracts

Felix Chingkoe v. Faustino Chingkoe G.R. No. 244076

Facts:

Faustino Chingkoe (Faustino) and his wife, Gloria Chingkoe (Gloria), were the
registered owners of a parcel of land in Lopez Jaena St., Ayala Heights, Quezon City
covered by Transfer Certificate of Title (TCT) No. 8283 (subject property). Faustino
alleged that sometime in 1990, he allowed his brother, Felix Chingkoe (Felix), to occupy
the subject property. Upon the request of Tan Po Chu, their mother, Faustino signed an
undated Deed of Sale over the subject property in favor of Felix. Tan Po Chu assured
Faustino that she will keep the undated Deed of Sale because she just wanted to
appease Felix who was then becoming an alcoholic. On the other hand, Felix averred
that he had been in possession of the subject property since 1989. After five years of
occupying the subject property or on October 10, 1994, Felix purchased it from Faustino
for P3,130,000.00. Both parties then signed the Deed of Sale before a notary public,
Atty. Reynaldo Z. Calabio (Atty. Calabio). Despite repeated demands, Faustino refused
to surrender the Owner's Duplicate of TCT No. 8283 which prevented Felix from having
it transferred to his name. Felix later discovered that Faustino had mortgaged the
subject property to Rizal Commercial Banking Corporation (RCBC). This discovery
prompted Felix to file a complaint for specific performance with damages to compel
Faustino to turn over the TCT, and facilitate its transfer pursuant to the Deed of Sale.

Issue:

WON the notarized Deed of Sale executed by Felix and Faustino is valid.

Held:

The rule is that one who signs a contract is presumed to know its contents, especially if
the person who signed has caused the preparation of the document. It is, thus,
reasonable to conclude that Faustino knew the contents of the Deed of Sale which was
executed with legal formalities. The CA's conclusion that the Deed of Sale was an
absolute simulation contradicts the evidence presented. Apropos, Articles 1345 and
1346 of the Civil Code provide:
Art. 1345. Simulation of a contract may be absolute or relative. The former takes place
when the parties do not intend to be bound at all; the latter, when the parties conceal
their true agreement.

Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation,

when it does not prejudice a third person and is not intended for any purpose contrary to
law, morals, good customs, public order or public policy binds the parties to their real
agreement.
The main characteristic of an absolute simulation is that the apparent contract is not
really desired or intended to produce a legal effect or alter the parties' juridical situation.
Faustino conceded that there was such a Deed of Sale, but only that he and his wife
were induced by his mother to draw up the document and sign it. According to Faustino,
his mother even asked him to assure his brother that the house in question will
eventually be the latter's property. These circumstances support the true nature of the
document. Faustino's excuses are therefore flimsy and specious.

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Satisfaction by levy

Metropolitan Bank and Trust Co. v. Radio Philippines Network Inc. G.R. No.
190517

Facts:

On February 17, 1995, the Regional Trial Court (RTC) rendered a judgment in Civil
Case No. Q-89-3580 ordering Traders Royal Bank (Traders Royal) and Security Bank
and Trust Company (Security Bank) to pay actual damages, exemplary damages, and
attorney's fees to Radio Philippines Network (RPN), Intercontinental Broadcasting
Corporation (IBC), and Banahaw Broadcasting Corporation (BBC). Traders Royal and
Security Bank appealed to the CA docketed as CA-G.R. No. CV 54656. The CA
absolved Security Bank from any liability and held Traders Royal solely liable to RPN,
IBC, and BBC for damages and costs of suit. Aggrieved, Traders Royal elevated the
case to this Court docketed as G.R. No. 138510. Meantime, Traders Royal and Bank of
Commerce (BankCom) entered into a Purchase and Sale Agreement (PSA). The
Bangko Sentral ng Pilipinas approved the agreement on the condition that the parties
must set up a P50,000,000.00 escrow fund to be kept for fifteen (15) years. Accordingly,
Traders Royal deposited the required amount with the Metropolitan Bank and Trust Co.
(Metrobank). On October 10, 2002, the Court in G.R. No. 138510 affirmed with
modification the CA's judgment in CA-G.R. No. CV 54656. The Court deleted the award
of exemplary damages but granted attorney's fees to RPN, IBC, and BBC. The parties'
motions for reconsideration were denied. In April 2003, the Court's judgment in G.R. No.
138510 became final and executory. Thereafter, RPN, IBC, and BBC filed their
respective motions before the RTC for the issuance of a writ of execution and subpoena
duces tecum requiring Metrobank to submit a detailed report of the status of the escrow
fund. March 31, 2004, the RTC granted the motion for issuance of the subpoena. Thus,
Metrobank submitted a report showing that the escrow fund had already been depleted.
Metrobank filed a Motion for Clarification and/or Reconsideration Ad Cautelam and
asserted that it is not a party in the case and that there is nothing that the RTC could
execute against it. Metrobank questions the RTC's jurisdiction over its person and
maintains that it is not a party to the case nor a judgment debtor against whom the
money judgment could be enforced.

Issue:

WON the escrow fund from Metrobank can be levied upon a court order.

Held:

Under the rules, the executing officer is required to first demand from the judgment
debtors the immediate payment of the full amount stated in the writ of execution and all
lawful fees. The executing officer shall demand the payment either in cash, certified
bank check or any other mode of payment that is acceptable to the judgment creditor. If
the judgment debtors cannot pay the judgment obligation using these methods, they
can opt to choose which among their personal properties can be levied upon. If the
judgment debtors do not exercise this option immediately or when they are absent or
cannot be located, they then waive such right and the executing officer can levy the
judgment debtors' personal properties, if any, and then the real properties if the personal
properties are insufficient to answer for the judgment. The executing officer may also
levy personal property by garnishment by reaching credits belonging to the judgment
debtors and owing to them from a stranger to the litigation. In this mode of satisfying the

14
judgment known as garnishment, the executing officer levies on the debts due the
judgment debtors including bank deposits, financial interests royalties, commissions,
and other personal property not capable of manual delivery in the possession or under
the control of third parties. The levy may be done only if the judgment obligor cannot
pay all or part of the obligation in cash or in such other manner acceptable to the
judgment obligee.

15
Sale - Pacto de Retro

Spouses Avelarde v. Heirs of Candari G.R. No. 190057

Facts:

In a notarized Deed of Sale with Right of Repurchase dated April 20, 1978, respondent
Concepcion Candari (Concepcion) sold seven parcels of land located in Aklan to
Isagani with the right to repurchase within five years. Concepcion failed to redeem the
lots. Thus, in a notarized Deed of Quitclaim and Waiver of Rights dated February 11,
1986, Concepcion relinquished absolute ownership of the lots in favor of Isagani and
petitioner. Petitioners averred that after Isagani's death on February 22, 1987,
Concepcion began to represent herself as the owner of the parcels of land by instituting
tenants on portions of the vast lands, collecting rentals, and appropriating the lands'
produce. Their demand upon Concepcion to desist from usurping their proprietary rights
fell on deaf ears, prompting them to file a complaint for quieting of title and damages.

Concepcion, on the other hand, denied having sold or relinquished ownership and
possession of the properties to Isagani or petitioners. She intimated that she inherited
the disputed properties from her father in 1977, and that she has never shared
rentals/produce to Isagani or petitioners. She claimed that Isagani was merely her
lessee, to whom she entrusted the TDs of all her properties for safekeeping and
payment of realty taxes.

Issue:

WON Conception in a pacto de retro sale relinquished her ownership of the parcels of
land after the expiration of the stipulated period.

Held:

Yes. Considering Concepcion's failure to impugn the conveyance under the pacto de
retro sale, the case presents no more basis to invalidate the OCTs issued to petitioners.
"The essence of a pacto de retro sale is that title and ownership of the property sold are
immediately vested in the vendee a retro, subject [only] to the resolutory condition of
repurchase by the vendor a retro within the stipulated period." Once the vendor a retro
fails to redeem the property within the agreed period, absolute ownership is vested
upon the vendee a retro by operation of law. Here, as agreed upon under the Deed of
Sale with Right of Repurchase, Concepcion had five years or until 1983 to repurchase
the properties, but as admitted in the quitclaim and waiver of rights, she failed to do so.
Without anything more required from both parties, thus, irrevocable title to the properties
were automatically transferred to Isagani in 1983 since the resolutory condition was not
fulfilled.

It is of no moment that the Deed of Quitclaim and Waiver of Rights was executed only
after more than two years from the lapse of the redemption period, and in favor of
petitioners who are not vendees a retro. We stress, by the very nature of a pacto de
retro sale, ownership is automatically vested upon the vendee a retro by operation of
law when the vendor a retro failed to exercise the right to redeem the properties.
Inevitably, the vendor a retro no longer owns the property sold at that point. Thus,
subsequent conveyance of the unredeemed properties through quitclaim and waiver of
rights was, improper, unnecessary, and a mere surplusage. The irrevocable title of
petitioners' predecessor-in-interest, Isagani, remained intact with or without such
quitclaim and waiver.

16
Contract of Loan - Interest per annum

BPI v. LCL Capital, Inc . G.R. No. 243396

Facts:

In 1997, LCL Capital, Inc. (LCL) obtained a loan from Far East Bank & Trust Co.
(FEBTC) in the amount of P3,000,000.00 subject to 17% interest per annum. As
security, LCL executed a deed of Real Estate Mortgage over its two condominium units.
In 2000, the Bank of the Philippine Islands (BPI) merged with FEBTC. As the surviving
corporation, BPI absorbed FEBTC's assets and liabilities. When LCL failed to pay the
indebtedness including interests and penalties, BPI applied for extrajudicial foreclosure
of the real estate mortgage before the Office of the Clerk of Court and Ex-Officio Sheriff
of the Regional Trial Court of Pasig City. At the public auction sale, BPI emerged as the
highest bidder and was issued a Certificate of Sale on May 21, 2003. After almost two
months, or on July 11, 2003, BPI executed an Affidavit of Consolidation of ownership
over the foreclosed condominium units. Consequently, new condominium certificates of
title were issued in favor of BPI. Aggrieved, LCL filed an action against BPI for the
annulment of the certificates of title before the Regional Trial Court of Pasig City. In a
Decision dated November 14, 2008, the RTC declared the consolidation void and
directed the Register of Deeds of Pasig City to reinstate the certificates of title of LCL
subject to the exercise of its right of redemption. BPI elevated the case to the CA.
Subsequently, BPI moved to withdraw the appeal. On April 4, 2014, the CA granted the
motion and considered the case closed and terminated. Later, LCL asked the RTC to
determine the cost of redemption. In its comment, BPI manifested that the redemption
amount as of March 15, 2015 is P9,339,362.93. In its Order dated January 27, 2017,
the RTC computed the redemption price at P2,513,583.15. The RTC applied the interest
rate of 6% per annum and excluded the real estate taxes that BPI paid

Issue:

WON the stipulated interest of 17% per annum be the basis of the court in imposing the
interest after determining the redemption price.

Held:

On the correct computation of the redemption price, the Court had ruled that Section 78
of Republic Act (RA) No. 337 or the "General Banking Act," as amended, (now Section
47 of RA No. 8791 or the "General Banking Law of 2000") shall govern in cases where
the mortgagee is a bank, and not the Rules of Court in relation to Section 6 of Act No.
3135, as amended by Act No. 4118. In this case, the mortgagee BPI is a banking
institution. Hence, Section 78 of RA No. 337, as further amended by Presidential
Decree No. 1828 the effective law at the time the contract of loan and the deed of real
estate mortgage were executed in 1997, shall govern in computing the redemption price
for the foreclosed properties, , viz.:

SEC. 78. x x x. In the event of foreclosure, whether judicially or extrajudicially, of any

mortgage on real estate which is security for any loan granted before the passage of
this Act or under the provisions of this Act, the mortgagor or debtor whose real property
has been sold at public auction, judicially or extrajudicially, for the full or partial payment
of an obligation to any bank, banking or credit institution, within the purview of this Act
shall have the right, within one year after the sale of the real estate as a result of the
foreclosure of the respective mortgage, to redeem the property by paying the amount
fixed by the court in the order of execution, or the amount due under the mortgage

17
deed, as the case may be, with interest thereon at the rate specified in the mortgage,
and all the costs, and judicial and other expenses incurred by the bank or institution
concerned by reason of the execution and sale and as a result of the custody of said
property less the income received from the property.

Applying the above provision pertaining to extrajudicial foreclosure, the redemption

price must consist of the following: (1) the principal obligation or the amount due under
the mortgage deed; (2) interest at the rate specified in the mortgage; (3) expenses of
foreclosure, i.e., Judicial Commission, Publication Fee, and Sheriffs Fee; and (4) other
expenses as a result of the custody of the property less the income received. Obviously,
both the CA and the RTC did not adhere to the letters of the law and committed
mistakes in their computation. As part of the redemption price, Section 78 of RA No.
337, as further amended, is explicit that the principal obligation shall earn interest at the
rate specified in the mortgage contract. Thus, the Court affirms the CA's imposition of
interest rate at 17% per annum which the parties specified in the contract of loan and
the mortgage deed.

18
Contracts - Lease

Privatization and Management Office v. Nocom G.R. No. 250477

Facts:

In 1990, the Board and Mariano executed a lease contract with a right to renovate the
building in the South Harbor, Port Area, Manila. However, there was a delay in the
transfer of the building which halted the rehabilitation works. On October 18, 1991, the
Board and Mariano executed an amended contract of lease for a period of 20 years to
commence on October 1, 1993, and to end on September 30, 2013. The contract may
be renewed for another 20 years upon agreement of the parties provided the lessee
notifies in writing the lessor within 90 days before its expiration. They also agreed on a
10% increase in monthly rental every four years. On March 7, 1995, however, the
Commission on Audit (COA) disallowed the lease because Mariano did not submit a
duly approved construction/rehabilitation plan. On even date, the Board refused to
accept rental payments. Mariano appealed to the COA En Banc which lifted the
disallowance. Thereafter, Mariano filed an action for specific performance against the
Board and its officers including the resident auditor before the RTC. In 1996, the
Board's functions were transferred to the Asset Privatization Trust (Asset Privatization)
which was then impleaded in the case. On February 12, 1998, the RTC, Branch 22,
approved a Compromise Agreement between Asset Privatization and Mariano where
they ratified the amended contract of lease. A dispositive portion of the Compromise
Agreement provides: 2. All the parties further acknowledge and affirm an extension of
the lease period of the said Amended Contract of Lease corresponding to the period
covered from March 7, 1995 (the date of BOL's refusal to accept rental payments from
PLAINTIFF/LESSEE) until the actual date of the Order of the Regional Trial Court of
Manila, Branch XXII (before whom the civil case referred to above is pending) approving
this Compromise Agreement. In 2001, Asset Privatization's powers and duties were
transferred to the Privatization and Management Office (PMO). In a Letter dated
February 24, 2011, the PMO demanded from Mariano the payment of the 10% increase
in monthly rental, thus:Under the Amended Contract of Lease executed between you
and the Board of Liquidators covering Reparations Building, the monthly rental shall be
increased by ten percent (10%) every four (4) years for twenty years starting February
12, 1998.
On August 24, 2016, the PMO sent another letter to Mariano informing him that the
contract of lease will expire on September 3, 2016, and reminding him to peacefully
vacate the building. The PMO likewise stopped accepting rental payments from
Mariano. On September 6, 2016, Mariano replied insisting that the contract is yet to
expire on February 11, 2018, and notified PMO that he is exercising his right to renew
the contract for another 20 years. Also, Mariano tendered rental payments but was
refused.

Issue:

WON the compromise agreement between Mariano and the PMO renewed the lease
period for another 20 years.

Held:

No. In this case, the issue as to the correct expiration date of the amended contract of
lease entails an interpretation of the compromise agreement vis-à-vis the respective
rights of the parties. Hence, direct recourse to this Court is allowed.It is a cardinal rule in
the interpretation of contracts that "if the terms of a contract are clear and leave no

19
doubt upon the intention of the contracting parties, the literal meaning of its stipulations
shall control. The process of interpreting a contract requires the court to make a
preliminary inquiry as to whether the contract before it is ambiguous. A contract
provision is ambiguous if it is susceptible of two reasonable alternative interpretations.
Where the written terms of the contract are not ambiguous and can only be read one
way, the court will interpret the agreement as a matter of law. Here, there is no
ambiguity in the language of the compromise agreement. The parties explicitly provided
for an extension of the lease period. There is nothing in the agreement showing that the
parties intended to renew the contract of lease for another 20 years. Otherwise, they
could have expressly done so. Indeed, a fine distinction exists between a stipulation to
renew a lease and one to extend it beyond the original term. A renewal clause creates
an obligation to execute a new lease for the additional period. It connotes the cessation
of the old agreement and the emergence of a new one. On the other hand, an extension
clause operates of its own force to create an additional term. It does not require the
execution of a new contract between the parties. In this case, the compromise
agreement did not require the parties to enter into another lease contract.

20
Contracts - Prescription of Action

Alba v. Arollado G.R. No. 237140

Facts:

Regina is the sole proprietor of Libra Fishing engaged in selling crude oil, petroleum
products and related merchandise. On various dates beginning 2000, Nida purchased
on credit from Libra Fishing crude oil and other petroleum products. As payment for the
July 26, 2000, November 12, 2000, and November 27, 2000 purchases, Nida issued
three checks which were dishonored by the drawee banks. On May 15, 2013, Regina
demanded payment for the outstanding balance but Nida failed to heed the demand.
Thus, on June 4, 2013, Regina filed a complaint for sum of money against Nida. Nida
admitted that she issued the three dishonored checks but claimed that she already
settled the amounts through installment payments. Granting there are still unpaid
amounts, Regina's right to collect had already prescribed since the transaction took
place more than 10 years ago.

Issue:

WON the reckoning period shall be counted from the date of last partial payment of the
outstanding debt of Nida.

Held:

In this case, the check issued to settle the obligation for the July 26, 2000 purchases
was dishonored by the drawee bank on August 25, 2000, and the November 12, 2002
and November 27, 2002 checks were both dishonored on April 4, 2003. The dishonor of
the three checks resulted in a breach of contract for non-payment. It is at this point that
the right to bring an action for collection of a sum of money accrues. Counting six years
therefrom, Regina had until August 25, 2006 to collect the amount covered by the July
26, 2000 check and until April 4, 2009 for the November 12 and 27, 2002 checks.
Regina filed the complaint on June 4, 2013; hence, the action had already prescribed.

To be sure, prescription of actions is interrupted when (1) they are filed before the court,
(2) when there is a written extrajudicial demand by the creditors, or (3) when there is
any written acknowledgment of the debt by the debtor.[31] In this case, however, Regina
filed the complaint in court only on June 4, 2013 and issued the demand letter only on
May 15, 2013 when the prescriptive period to collect has already set in. Further, we
cannot lend credence to Regina's contention that Nida acknowledged her obligation
when she made partial payments on November 8, 2012; hence, the prescriptive period
should commence on that date. Regina failed to present evidence to corroborate her
claim.

With respect to the alleged partial payments, it is worthy of notice that, Art. 1973 of the
Civil Code of Spain provided:
"The prescription of actions is interrupted by the commencement of a suit for their
enforcement, by an extra-judicial demand by the creditor, and by any act of
acknowledgment of the debt by the debtor."Under this article, a partial payment could,
as an "act of acknowledgment of the debt," interrupt the prescriptive period. Said
provision was amended, however, by Article 1155 of the Civil Code of the Philippines, to
read:
"The prescription of actions is interrupted when they are filed before the court, when
there is a written extra-judicial demand by the creditors, and when there is any written

21
acknowledgment of the debt by the debtor."Under this provision, not all acts of
acknowledgment of a debt interrupt prescription. To produce such effect, the
acknowledgment must be "written[,"] so that payment, if not coupled with a
communication signed by the payor, would not interrupt the running of the period of the
prescription. The evidence attached to the records shows that the last receipt issued to
Nida for payment of purchases on credit was dated November 21, 2006 for P2,000.00.
As such, Regina may bring an action to collect any outstanding liability from Nida only
until November 21, 2012.

22
Contracts - Reformation of Instruments

Banico v. Stager G.R. No. 232825

Facts:

Lydia Bernadette M. Stager (Lydia) owns a 6,100-square meter (sq m) real property
identified as Lot No. 199 and situated in Barangay Manoc-Manoc, Boracay Island. The
land adjoins the sea on its eastern part and is generally flat at the center but has an
elevated rocky northern part. In 1991, Lydia offered to sell the entire lot to Ulysses Rudi
Banico (Ulysses) but he only agreed to buy an area suitable for building a beach resort.
Accordingly, Ulysses' lawyer drafted a Deed of Absolute Sale over the 800-sq m portion
of the land for P350,000.00. On February 8, 1992, Lydia and Ulysses signed the
contract. Upon payment of the purchase price, Ulysses took possession of the flat
terrain and hired a surveyor. However, Ulysses discovered that the land described in the
deed of sale refers to the elevated and rocky portion and not the flat area which he
bought and occupied. Lydia convinced Ulysses to buy an additional 400-square meter
portion of Lot No. 199 that is adjacent to the flat terrain for P160,000.00 on installment
basis. Ulysses agreed on the condition that Lydia will amend the deed of sale reflecting
the correct location, area and consideration. On October 19, 1992, the parties entered
into a contract to sell over the 400-square meter lot. Ulysses gave initial payment and
Lydia issued the corresponding receipt. Meantime, Ulysses began constructing the
resort and paid the remaining amount. In 1997, Ulysses asked Lydia to prepare the
amended deed of sale but she refused because he still has an unpaid balance of
P12,000.00. Yet, Ulysses maintained that he already paid Lydia more than
P160,000.00. In 2001, Lydia honored the transaction over the 800-square meter lot and
presented a notarized Deed of Absolute Sale dated December 6, 2001.

Issue:

WON there was a reformation of the contract of sale between Lydia and Ulysses.

Held:

Yes. An action for reformation of instrument may prosper only upon the concurrence of
the following requisites: (1) there must have been a meeting of the minds of the parties
to the contract; (2) the instrument does not express the true intention of the parties; and
(3) the failure of the instrument to express the true intention of the parties is due to
mistake, fraud, inequitable conduct or accident.

First, there was a meeting of minds between the contracting parties. In executing the
Deed of Absolute Sale dated February 8, 1992, Lydia conveyed the 800-sq m portion of
Lot No. 199 to Ulysses who accepted it in consideration of P350,000.00. Inarguably,
there is a perfected contract of sale at the moment the parties agreed upon the thing
that is the object of the contract and upon the price.

Second, the written instrument did not express the true intention of the parties. It bears
emphasis that Ulysses bought an area suitable for building a beach resort. Upon
payment of the purchase price, Ulysses occupied the flat terrain, surveyed it and began
constructing the resort. Verily, Ulysses would not possess the flat terrain if it was not the
lot sold to him. Besides, the flat terrain is a proper location for building the resort and not
the elevated rocky northern part. At any rate, Lydia should have objected when Ulysses
occupied the flat terrain if it were true that she was still the owner of such area. Quite
the contrary, Lydia promised to rectify the erroneous description of the lot in the deed of

23
sale. She did not protest the construction of the resort and instead, offered Ulysses an
additional 400-sq m portion of Lot No. 199 that is adjacent to the flat terrain. Moreover,
Lydia acknowledged the transaction over the 800-sq m lot before the barangay and
presented a notarized Deed of Absolute Sale dated December 6, 2001, containing the
accurate description of the flat terrain. At this juncture, we stress that Lydia never
rebutted these acts and even admitted them in her answer.

Third, there is a mistake in identifying the exact location of the lot which caused the
failure of the instrument to disclose the parties’ real agreement.

24
Torts - Civil Liability arising Delict

Motobato v. People G.R. No. 229265

Bucao v. Hon. Sandiganbayan-Special Fifth Division G.R. No. 229624

Facts:

On September 22, 1994, the Sangguniang Bayan of the Municipality of Pantukan,

Compostela Valley, passed Resolution No. 164, Series of 1994 authorizing Silvino B.
Matobato, Sr. (Silvino), the Municipal Treasurer, to transfer an unspecified amount of
municipal funds from the Land Bank of the Philippines (LBP) to Davao Cooperative
Bank (DCB). Accordingly, Silvino opened a time deposit account with DCB and
transferred therein various amounts from 1994 to 1998. However, DCB suffered
insolvency in 1998, and was placed under receivership. As a result, the Municipality of
Pantukan failed to withdraw the deposited amounts. In its Annual Audit Report for 1998,
the Commission on Audit (COA) found that the Sangguniang Bayan of Pantukan treated
the funds deposited with DCB as idle funds. The COA also noted that the Sangguniang
Bayan should have allocated the funds to certain municipal projects. Yet, the
implementation of these projects was jeopardized since the funds cannot be withdrawn.
Thus, the COA recommended the filing of criminal and administrative charges against
the municipal officials involved in the transaction with DCB. Acting on the COA's report,
the Ombudsman filed an Information for violation of Section 3(e) of Republic Act (RA)
No. 3019 against Silvino and Sangguniang Bayan members Walter B. Bucao (Walter),
and Cirila A. Engbino (Cirila), along with seven other municipal officials before the
Sandiganbayan. After trial, the Fifth Division of the Sandiganbayan acquitted Silvino,
Walter, and Cirila, as well as their co-accused based on reasonable doubt. The
Sandiganbayan held that the prosecution failed to prove the second element of the
offense, i.e., that the accused committed gross and inexcusable negligence, which
entails an omission of care that even inattentive and thoughtless men never take in their
own property, and in cases involving public officials, takes place only when breach of
duty is flagrant and devious. The Sandiganbayan explained that even if the accused
were not grossly and inexcusably negligent to be held criminally liable under Section
3(e) of RA No. 3019, they were still negligent enough to incur civil liability.

Issue:

WON the dismissal of the criminal case against petitioners absolves their civil liability.

Held:

Every person criminally liable for a felony is also civilly liable. Yet, the dismissal of the
criminal action does not carry with it the extinction of the civil liability where: "(a) the
acquittal is based on reasonable doubt as only preponderance of evidence is required;
(b) the court declares that the liability of the accused is only civil; and (c) the civil liability
of the accused does not arise from or is not based upon the crime of which the accused
is acquitted." The quantum of proof to establish civil liability is preponderance of
evidence which is defined as the "weight, credit, and value of the aggregate evidence
on either side and is usually considered to be synonymous with the term 'greater weight
of the evidence' or 'greater weight of the credible evidence.' It is evidence which is more
convincing to the court as worthy of belief than that which is offered in opposition
thereto." Notably, the Sandiganbayan acquitted Silvino, Walter, and Cirila because their
guilt were not proven beyond reasonable doubt. Thus, any civil liability survives
because only preponderant evidence is necessary to establish it. Here, the required

25
quantum of proof was met to sustain the Sandiganbayan's findings on the civil liability of
Silvino, Walter, and Cirila.

26
Torts - Civil Liability arising Delict

Cacdac v. Mercado G.R. No. 242731

Facts:

On December 8, 2004, Roberto Mercado (Mercado), a gasoline station owner and fuel
retailer, through his employee Manolo Rasco (Rasco), delivered to Byron Express Bus
Company (Byron Express) 10,000 liters of diesel fuel worth P235,000.00. On the same
day, Byron Express' clerk Jaivi Mar Juson (Juson) received the fuel and executed a trust
receipt with the duty to remit the proceeds on December 15, 2004. On the due date,
Juson reneged on his obligation to Mercado despite the latter's demand. Aggrieved,
Mercado filed a complaint for estafa, involving unfaithfulness or abuse of confidence,
under Article 315 paragraph 1 (b) of the Revised Penal Code (RPC) in relation to the
Trust Receipts Law against Juson and petitioner Byron Cacdac (Cacdac), the alleged
owner of Byron Express. On July 28, 2015, the RTC dismissed the criminal case against
Cacdac but held him liable to pay Mercado the amount of P235,000.00 with interest
computed from the date of delivery of the fuel.

Issue:

WON Cacdac’s acquittal in the criminal case relieves him from civil liability.

Held:

No. Every person criminally liable for a felony is also civilly liable. Yet, the dismissal of
the criminal action does not carry with it the extinction of the civil liability where: (a) the
acquittal is based on reasonable doubt as only preponderance of evidence is required;
(b) the court declares that the liability of the accused is only civil; and (c) the civil liability
of the accused does not arise from or is not based upon the crime of which the accused
is acquitted. Notably the quantum of proof to establish civil liability is preponderance of
evidence, which is defined as the weight, credit, and value of the aggregate evidence on
either side and is usually considered to be synonymous with the term "greater weight of
the evidence" or "greater weight of the credible evidence." It is evidence that is more
convincing to the court as worthy of belief than that which is offered in opposition
thereto.

In this case, both the CA and the RTC held that Cacdac's liability is purely civil being the
owner of the bus company, the employer of Juson, and the real buyer of the diesel fuel.
Nevertheless, the required quantum of proof was not met to sustain these findings.

27
Torts - Civil Liability arising Delict

Collado v. Dele Vega G.R. No. 219511

Facts:

The case under discussion started when Eduardo invested in Victoria's stock business.
He gave Victoria an initial cash out of P100,000.00 with the promise that he would earn
interest at the rate of 7.225% per month. However, Eduardo did not receive any stock
certificate and demanded the return of his investments. In response, Victoria issued
checks in the amount of P340,000.00 and P400,000.00, but these checks were
dishonored upon presentment. Aggrieved, Eduardo charged Victoria with Estafa before
the Regional Trial Court (RTC). The RTC, in its ruling, acquitted Victoria based on
reasonable doubt and stated that there was no preponderant evidence to prove her civil
liability. However, it did not explain the factual basis for exonerating her from civil
liability. On the other hand, the Court of Appeals (CA) reviewed the testimonial and
documentary evidence and concluded that Victoria is liable to pay Eduardo the total
amount of P2,905,000.00.

Issue:
WON Victoria is civilly liable despite her acquittal on the criminal charge of
Estafa.

Held:

Yes. As a rule, every person criminally liable is also civilly liable. However, an acquittal
will not bar a civil action in the following cases: (1) where the acquittal is based on
reasonable doubt as only preponderance of evidence is required in civil cases; (2)
where the court declared that the accused's liability is not criminal, but only civil in
nature; and (3) where the civil liability does not arise from, or is not based upon the
criminal act of which the accused was acquitted. Here, the RTC acquitted Victoria
because her guilt was not proven beyond reasonable doubt. Thus, any civil liability
survived because only a preponderant evidence is necessary to establish it.Notably,
however, the RTC did not explain the facts why it exonerated Victoria from civil liability.
It also did not mention that the act or omission from which the civil liability may arise did
not at all exist. The RTC simply stated in the dispositive portion of the decision that
there was no preponderant evidence to prove Victoria's civil liability. In contrast, the CA
reviewed the testimonial and documentary evidence in support of its conclusion that
Victoria is liable to pay Eduardo the total amount of P2,905,000.00.
Thus, there was ample foundation for Victoria’s civil liability to the extent of
P2,905,000.00 in favor of private complainant-appellant Dela Vega as demonstrated by
the deposit slips. However, with respect to the US$82,000.00, the prosecution failed to
fortify its claim with sufficient evidence.

28
Torts - Liability of a Public Officer

Hon. Zaldy Ampatuan v. COA G.R. No. 252007

Facts:

The COA, through its Special Audit Office (SAO), conducted a special audit of the Office
of the Regional Governor (ORG) in the Autonomous Region in Muslim Mindanao
(ARMM) for the period of January 2008 to September 2009. Petitioner was then
ARMM's Regional Governor.[5] Based on the special audit, SAO Notice of Disallowance
(ND) No. ORG-12-002-MDS/LF (08 & 09) dated January 13, 2012 was issued,
disallowing an aggregate amount of P79,162,435.00, representing several payments to
a certain supermarket (Superama). Petitioner, as Regional Governor, was among those
held liable to settle the disallowed amount for his alleged "failure to monitor the activities
undertaken by [Patadon] considering the amounts and frequency of [the] cash advances
drawn;"

Issue:

WON a public officer can be held civilly liable for the wrongful acts of his subordinate.

Held:

No. As will be discussed, governing laws and rules unequivocally specify that certain
factors relative to the functions and the extent of participation of each public officer in
the questioned transaction must be taken into account in determining whether an officer
may be held financially liable for a disallowance. The corresponding civil liability in
disallowances does not automatically fall upon the head or chief of the government
agency.

Section 103 of PD No. 1445 explicitly states that "[e]xpenditures of government funds x
x x in violation of law or regulations shall be a personal liability of the official or
employee found to be directly liable therefor." This was exactly reiterated in Section 52,
Chapter 9, Subtitle B, Title I, Book V of the Administrative Code of 1987. Similarly, under
Section 43, Chapter 5, Book VI of the same Code, solidary liability for illegal
expenditures falls on the "official or employee authorizing or making [the] payment, or
taking part therein, and [to] every person receiving such payment x x x."Section 38,
Chapter 9, Book I thereof also finds relevance:
SEC. 38. Liability of Superior Officers. — (1) A public officer shall not be civilly liable for
acts done in the performance of his official duties, unless there is a clear showing of bad
faith, malice or gross negligence.

Verily, the sole proposition that an official is the head of the audited agency does not
suffice to hold him or her personally liable for disallowances on account of his or her
subordinate's actions. Liability depends upon the wrong committed and not solely by
reason of being the head of an agency. In the recent case of Madera v. COA, we
confirmed the long-standing rule that acts or omissions committed by public officers are
not actionable, absent a clear showing that they were motivated by bad faith, malice, or
gross negligence amounting to bad faith in the performance of their official duties. This
rule proceeds from the presumption of good faith and regularity in the performance of
official duties enjoyed by public officials. To overcome such presumption and hold them
liable for their acts or omissions, manifest bad faith, malice, or gross negligence in the
performance of their official duties must be proven.

29
Here, it is of record that petitioner had no knowledge or participation in the approval or
authorization of the disallowed disbursements. There was even no showing that the
questioned transactions were submitted, or required to be submitted, to petitioner for
approval. In fact, none of the documents upon which the ND was based were
approved/signed by petitioner.

Notably, in the foregoing cases, the public officers had direct participation in the
approval or certification of the disallowed transaction, yet they were excluded from civil
liability in view of the absence of bad faith, malice, or gross negligence. With greater
reason in this case, petitioner should be absolved from civil liability because he had no
participation or knowledge at all in the disallowed transaction/s. We stress, the public
officer's position, without anything more, is insufficient to make such officer the party
ultimately liable for the disallowed amount. Absent a clear showing of wrongdoing and
bad faith, malice, or gross negligence on the part of the public officer, the presumptions
of good faith and regularity in the performance of official duty shall prevail.

30
Naturalization of an Alien

Mohamed v. Republic G.R. No. 220674

Facts:

Sefyan Abdelhakim Mohamed (Mohamed), a Sudanese national, is married to Lailanie

N. Piano, a Filipino citizen, with whom he begot a child named Ahmed Sefyan Piano
Mohamed. In 1991, Mohamed arrived in Manila. In 2005, Mohamed was recognized as
a convention refugee. Mohamed currently works as a Public Relations Officer at the
Qatar Embassy with a monthly income of $800. On June 2, 2006, Mohamed applied for
Philippine citizenship and filed a Declaration of Intention with the Office of the Solicitor
General (OSG). On July 20, 2007, Mohamed submitted a Supplemental Declaration of
Intention stating that he is not only known as "Sefyan Abdelhakim Mohamed" but also
as "Sefyan Abdelhakim Mohamed Hussin." On August 21, 2007, Mohamed filed a
Petition for Naturalization before the Regional Trial Court of Pasay City. On September
20, 2011, Mohamed moved before the RTC to take his oath as a Filipino citizen and
manifested that he had complied with the requirements of the law. Specifically, within
two years from promulgation of the judgment granting his petition for naturalization,
Mohamed has not left the Philippines; dedicated himself continuously to a lawful calling
or profession; has not been convicted of any offense, or violated Government
promulgated rules; and has not committed any act prejudicial to the interest of the
nation or contrary to the Government's policies. On October 7, 2011, Mohamed moved
before the RTC to admit new evidence that he went to the United States of America
three times during the two-year intervening period for assignments related to his duties
as Public Relations Officer of the Qatar Embassy. RTC granted Mohamed's motion to
take his oath as a Filipino citizen on September 24, 2012. On October 24, 2012,
Mohamed took his oath of allegiance. Meanwhile, the OSG elevated the case to the CA.
The OSG argued that the Declaration of Intention must be submitted one year before
the filing of a petition for admission to Philippine citizenship. Yet, Mohamed filed his
petition for naturalization on August 21, 2007 or less than one year after he submitted
his Supplemental Declaration of Intention on July 20, 2007.

Issue:

WON the one-year period to file the application for naturalization is reckoned from the
filing of the original Declaration of Intention on June 2, 2006.

Held:

Section 5 of C.A. No. 473 strictly enjoins the applicant to file with the OSG a declaration
under oath that it is his or her bona fide intention to become a citizen of the Philippines
one year prior to the filing of the petition for admission to Philippine citizenship. As aptly
discussed in Republic v. Li Ching Chung, the purpose of the one-year period is to give
the OSG sufficient time to investigate the qualifications of the applicant and adduce
evidence to protect the interest of the State, to wit:
[T]he period of one year required therein is the time fixed for the State to make inquiries
as to the qualifications of the applicant. If this period of time is not given to it, the State
will have no sufficient opportunity to investigate the qualifications of the applicants and
gather evidence thereon. An applicant may then impose upon the courts, as the State
would have no opportunity to gather evidence that it may present to contradict whatever
evidence that the applicant may adduce on behalf of his petition." The period is
designed to give the government ample time to screen and examine the qualifications of

31
an applicant and to measure the latter's good intention and sincerity of purpose. Stated
otherwise, the waiting period will unmask the true intentions of those who seek
Philippine citizenship for selfish reasons alone, such as, but not limited to, those who
are merely interested in protecting their wealth, as distinguished from those who have
truly come to love the Philippines and its culture and who wish to become genuine
partners in nation building.
The filing of such declaration of intention, upon faithful compliance with the statutory
requirements, is mandatory and an absolute prerequisite to naturalization. In this case,
among the contents of Mohamed's Declaration of Intention are the names for which he
is known for. However, Mohamed's original declaration provided the name "Abdelkahim
Mohamed," and it was only in the supplemental declaration that the name "Abdelhakim
Mohamed Hussin" was incorporated. Contrary to Mohamed's theory, the change he
introduced in the declaration as to the names he was known for is substantial. It is only
after the inclusion of Mohamed's other name that the State may proceed with its
investigation and gather evidence pertaining to his qualifications. It is also at this point
that the State may verify whether Mohamed is authorized to use alternative names.
Significantly, in cases of substantial changes in the original declaration, the mandatory
one-year period to file the petition for naturalization must be computed from the
submission of the supplemental declaration. Otherwise, it will deprive the OSG of
sufficient time to investigate the qualifications of the applicant and adduce evidence to
protect the interest of the State. In this case, Mohamed filed his petition for
naturalization on August 21, 2007 or only a month after he submitted his Supplemental
Declaration of Intention on July 20, 2007. Obviously, the period of one month is
insufficient for the OSG to verify the person of the applicant "Abdelkahim Mohamed"
a.k.a. "Abdelhakim Mohamed Hussin" and to conduct inquiries as to his qualifications.

32
Wills - Allowance of Foreigner’s Will

Kuckskar v. Sekito G.R. No. 237449

Facts:

On October 28, 1999, Aida A. Bambao (Aida), a naturalized American citizen, executed
a Last Will and Testament (will) in California where she nominated her cousin, Cosme
B. Sekito, Jr. (Cosme), as a special independent executor over her assets located in the
Philippines. On February 5, 2000, Aida died a widow in her residence at Long Beach,
California. On March 27, 2000, Cosme filed a Petition for the Allowance of
Will/Appointment of Guardian Ad Litem (allowance of the will), before the Regional Trial
Court (RTC) of Pasig City, Branch 264, docketed as Sp. Proc. No. 11042. Cosme
prayed that he be appointed as the Special Administrator of Aida's estate pending the
issuance of letters testamentary, and as guardian ad litem of Aida's adopted minor child,
Elsa Bambao (Elsa). Meanwhile, Linda A. Kucskar (Linda), the decedent's sister, and
one of the heirs named in the will, opposed the petition and claimed that she is the one
defraying all of Elsa's expenses. Linda added that Aida left a real estate property in
Calbayog City which was excluded in the petition. In due course, the RTC appointed
Cosme as special administrator of Aida's estate, but designated Cosme and Linda as
Elsa's co-guardians. Thereafter, the petition for allowance of the will was submitted for
resolution. On August 4, 2011, the RTC granted the petition and ordered the issuance of
a certificate of allowance of the will.

Issue:

WON an Aida’s will should be allowed for probate in the Philippines.

Held:

Yes. Aida's will should have been disallowed because it failed to comply with the legal
formalities.37 It is regrettable that this case has dragged on and up to this Court
unnecessarily only for Us to come to the conclusion that the foreign law was not alleged
and proven, and that the Will does not comply with Philippine laws. On this score, We
stress that the requirements for proving foreign laws and judgments are not mere
technicalities, and Our courts are not at liberty to exercise judicial notice without
contravening Our own rules on evidence.

Here, it is undisputed that Aida is a naturalized American citizen and that she executed
the will in California, United States of America where she was residing at the time of her
death. As such, the Philippine courts must examine the formalities of Aida's will in
accordance with California law. Yet, it is settled that foreign laws do not prove
themselves in this jurisdiction, and our courts are not authorized to take judicial notice of
them.19 Like any other fact, they must be properly pleaded and proved. Under the
Rules of Court, the record of public documents of a sovereign authority or tribunal may
be proved by (1) an official publication thereof, or (2) a copy attested by the officer
having the legal custody thereof. Such official publication or copy must be
accompanied, if the record is not kept in the Philippines, with a certificate that the
attesting officer has the legal custody thereof.

33
Wills - 3 Witness Requirement in Testamentary Succession

Kuckskar v. Sekito G.R. No. 237449

Facts:

On October 28, 1999, Aida A. Bambao (Aida), a naturalized American citizen, executed
a Last Will and Testament (will) in California where she nominated her cousin, Cosme
B. Sekito, Jr. (Cosme), as a special independent executor over her assets located in the
Philippines. On February 5, 2000, Aida died a widow in her residence at Long Beach,
California. On March 27, 2000, Cosme filed a Petition for the Allowance of
Will/Appointment of Guardian Ad Litem (allowance of the will), before the Regional Trial
Court (RTC) of Pasig City. Cosme prayed that he be appointed as the Special
Administrator of Aida's estate pending the issuance of letters testamentary, and as
guardian ad litem of Aida's adopted minor child, Elsa Bambao (Elsa). Meanwhile, Linda
A. Kucskar (Linda), the decedent's sister, and one of the heirs named in the will,
opposed the petition and claimed that she is the one defraying all of Elsa's expenses.
Linda added that Aida left a real estate property in Calbayog City which was excluded in
the petition. In due course, the RTC appointed Cosme as special administrator of Aida's
estate, but designated Cosme and Linda as Elsa's co-guardians. Thereafter, the petition
for allowance of the will was submitted for resolution. On August 4, 2011, the RTC
granted the petition and ordered the issuance of a certificate of allowance of the will.
Linda filed a petition before the CA, she points out the defects in the attestation clause
in that it did not mention the number of pages used and it fails to state that the testator
signed the will and every page thereof and in the presence of three witnesses. Also,
there were only two attesting witnesses which is less than the required number.

Issue:

WON an Aida’s will satisfies the requirement of making a testamentary will under Article
805 of the Civil Code.

Held:

No. At most, the will may be classified as a notarial will. However, an examination of the
will reveals that only two witnesses attested its execution. The witnesses did not sign on
each and every page of the will. The attestation clause failed to state the total number of
pages. Worse, Aida and the witnesses did not acknowledge the will before a notary
public. It bears emphasis that the CA adopted the substantial compliance rule in
allowing the will despite the defects in its attestation clause. In Taboada v. Hon. Rosal
and Azuela v. Court of Appeals, the Court permitted the probate although the number of
pages was not stated in the attestation clause but elsewhere in the will. In Lopez v.
Lopez, however, We held that the attestation must state the number of pages used
upon which the will is written. The purpose is to safeguard against possible
interpolation, or omission of one, or some of its pages and prevent any increase or
decrease in the pages. Further, the substantial compliance rule applies only to
imperfections which can be explained through examination of the will itself.

Assuming the CA correctly appreciated substantial compliance with the formalities of

the attestation clause undt!r [under] Art. 805, the same cannot be applied to the
requirement of acknowledgment under Art. 806. To reiterate, Aida and the witnesses did
not acknowledge the will before a notary public. The CA did not even bother to discuss
this requirement. Viewed from this light, we cannot, by any stretch of imagination,
accept the supposed validity of the will absent total compliance with the requisite

34
acknowledgement. The CA likewise, cannot conveniently rely on Aida's Revocable
Living Trust in allowing the will. The living trust simply provides the proportion of the
United States and Philippine shares to be given to the beneficiaries.33 Also, the living
trust was presented to the District Court, Clark Country, Nevada,34 which is a distinct
proceeding from the probate of the will here in the Philippines. Hence, the living trust is
evidence aliunde that is not allowed to fill a void or to supply missing details that should
appear in the will itself.35

Lastly, Linda's failure to object at the onset of the probate proceedings does not relieve
the proponent of the will from establishing that it complied with the legal formalities.
Estoppel is not applicable in probate proceedings because they involve public interest.
Otherwise, the truth as to the circumstances surrounding the execution of a testament
may not be ascertained which is inimical to public policy.

35
Unlawful Detainer

Galacgac v. Bautista G.R. No. 221384

Facts:

In 2012, Benigno M. Galacgac (Benigno) filed against Reynaldo Bautista (Reynaldo) an

action for unlawful detainer over a 180-square meter portion of Lot No. 10973 before the
Municipal Trial Court in Cities (MTCC) of Laoag City. Allegedly in 1993, the heirs of Ines
Mariano, namely: Cirila Dannug-Martin, Maxima Dannug-Dannug (Maxima), Arcadia
Dannug-Pedro (Arcadia), and Isabel Dannug-Bulos (Cirila, et al.), partitioned and
adjudicated the disputed area in favor of Benigno pursuant to a contingency fee
agreement in consideration of his legal services in a civil case involving the property. In
the same year, Benigno allowed Cirila, et al.'s caretaker, Saturnino Bautista (Saturnino),
to occupy the land on condition that he will construct a house of light materials and will
surrender its possession when needed. Later, Benigno learned that Saturnino's son,
Reynaldo, started building a house of strong materials. Accordingly, Benigno sent
demand letters to Reynaldo asking to defer the construction and to vacate the premises.
On the other hand, Reynaldo claimed ownership of the disputed portion and averred
that Maxima and Arcadia sold to him their shares over Lot No. 10973. Also, Reynaldo
argued that the adjudication of the property to Benigno is void because he is prohibited
from acquiring properties in litigation. Lastly, the contingency fee agreement and the
partition were not recorded in the Register of Deeds and could not affect third persons.
On June 29, 2012, the MTCC dismissed the complaint and ruled that Reynaldo's
authority to possess the land emanated from the heirs of Ines Mariano and not from
Benigno.

Issue:

WON Reynaldo is an unlawful detainer of the adjudicated property.

Held:

Yes. A complaint for unlawful detainer must sufficiently allege and prove the following
key jurisdictional facts, to wit: (1) initially, possession of property by the defendant was
by contract with or by tolerance of the plaintiff; (2) eventually, such possession became
illegal upon notice by plaintiff to defendant of the termination of the latter's right of
possession; (3) thereafter, the defendant remained in possession of the property and
deprived the plaintiff of the enjoyment thereof; and (4) within one year from the last
demand on defendant to vacate the property, the plaintiff instituted the complaint for
ejectment.

Here, the complaint for unlawful detainer alleged that Benigno permitted Saturnino to
occupy the 180-square meter portion of Lot No. 10973.
Unfortunately, his son, herein defendant, is constructing a building of strong materials
without herein plaintiff s permission and consent over the mentioned portion ceded to
him as above-stated, violating the agreement between the plaintiff and the defendant's
father[.]

Admittedly, Benigno and Reynaldo have no agreement on the disputed area and even
asserted opposing claims over its ownership. Benigno insisted that Cirila, et al.
partitioned and adjudicated the portion in his favor. On the other hand, Reynaldo
maintained that Maxima and Arcadia sold to him their shares over the land.

36
Given the dismissal of the complaint for lack of cause of action, there is no need to
discuss the parties' respective claim of ownership. Besides, it is settled that even the
registered owner of a real property cannot simply wrest possession from whoever is in
its actual possession. This is especially true where the occupation of the property was
not obtained through the means, or held under the circumstances contemplated by the
rules on summary ejectment. We reiterate that in giving recognition to ejectment suits,
the purpose of the law is to protect the person who in fact has actual possession, and in
case of a controverted proprietary right, the law requires the parties to preserve the
status quo until one or the other sees fit to invoke the decision of a court of competent
jurisdiction upon the question of ownership.

37
Interpretation of Real Estate Mortgage Contract

The Commoner Lending Corp. v. Alcala G.R. No. 235260

Facts:

On August 13, 2002, Spouses Voltaire and Ella Villanueva borrowed P100,000.00 from
The Commoner Lending Corporation (TCLC) payable within one year and with 24%
interest per annum. As security, Spouses Villanueva executed a real estate mortgage
over Lot No. 380-D. Thereafter, Spouses Villanueva paid TCLC a total of P82,680.00
but were unable to settle the balance of P41,340.00. Thus, TCLC sent a final demand
letter. Yet, Spouses Villanueva failed to comply. Accordingly, TCLC applied with the
Office of the Provincial Sheriff to foreclose the real estate mortgage. After notice and
publication, an auction sale on December 7, 2004 was held and the mortgaged property
was sold to TCLC as the sole bidder. On December 14, 2004, TCLC was issued a
certificate of sale which it recorded with the register of deeds. On January 31, 2006, a
final deed of sale was executed in favor of TCLC. Aggrieved, Spouses Villanueva filed
an action against TCLC to annul the extrajudicial foreclosure sale, certificate of sale and
final deed of sale before the Regional Trial Court (RTC). Spouses Villanueva alleged
that TCLC had no right to foreclose the mortgaged property because paragraph 3 of the
real estate mortgage did not expressly grant it the power to sell. Moreover, the
mortgage transaction between the parties is void because it gave TCLC the power to
possess the property without judicial order amounting to a pactum commissorium that is
prohibited under the law. Lastly, Spouses Villanueva claimed that they learned of the
foreclosure only in January 2005. They denied receiving any notice of foreclosure and
its publication.

Issue:

WON the mortgage transaction between the parties is void.

Held:

Yes. Here, it is undisputed that no special power to sell was attached to the real estate
mortgage. TCLC relied on the express provision of paragraph 3 of the agreement
allowing it "to take any legal action as may be necessary to satisfy the mortgage debt."
Yet, the CA construed the provision as a mere grant of authority to foreclose but not to
sell the property. On this point, we find reversible error on the part of the appellate court.

Indeed, while it has been held that a power of sale will not be recognized as contained
in mortgage unless it is given by express grant and in clear and explicit terms, and that
there can be no implied power of sale where a mortgage holds by a deed absolute in
form, it is generally held that no particular formality is required in the creation of the
power of sale. Any words are sufficient which evince an intention that the sale may be
made upon default or other contingency.[24] In this case, paragraph 3 of the real estate
mortgage sufficiently incorporated the required special power of attorney to sell. It
expressly provides that the mortgaged property shall be foreclosed, judicially or extra
judicially, upon failure to satisfy the debt, and that TCLC, the mortgagee, is appointed as
attorney-in-fact of Spouses Villanueva, the mortgagors, to do any legal action as may
be necessary to satisfy the mortgage debt, thus:

3. That in case of non-payment or violation of the terms of the mortgage or any of the
provision of the Republic Act No. 728 as amended this mortgage shall immediately be
foreclosed judicially or extra-judicially as provided by law and the mortgagee is hereby

38
appointed attorney-in-fact of the mortgagor(s) with full power and authority to take
possession of the mortgaged properties without the necessity of any judicial order or
any other permission of power, and to take any legal action as may be necessary to
satisfy the mortgage debt, but if the mortgagor(s) shall well and truly fulfill the obligation
above stated according to the terms thereof then this mortgage shall become null and
void. (Emphases supplied.).

The provision is pellucid and the CA cannot limit the authority granted to TCLC. Also,
Spouses Villanueva cannot claim, contrary to their plain agreement, that they granted
TCLC merely the power to possess but not to sell the mortgaged property. Clearly
stipulated in the real estate mortgage was the appointment of TCLC as attorney-in-fact,
with authority to sell or otherwise dispose of the subject property, and to apply the
proceeds to the payment of the loan. This provision is customary in mortgage contracts,
and is in conformity with the principle that when the principal obligation becomes due,
the things in which the mortgage consists may be alienated for the payment to the
creditor.

It is basic that obligations arising from contracts have the force of law between the
parties and should be complied with in good faith. The stipulations are binding between
the contracting parties unless they are contrary to law, morals, good customs, public
order or public policy. Corollary, Spouses Villanueva, who freely signed the real estate
mortgage contract, cannot now be allowed to renege on their obligation. The validity or
compliance of a contract cannot be left to the will of one of the parties.

39
Donation of Immovable Property

Patenia-Kinatac-an v. Patenia-Decena G.R. No. 238325

Facts:

Spouses Ramiro and Amada Patenia (Spouses Patenia) owned a 9,600-square meter
(sq m) lot situated in Magugpo, Tagum City, Davao del Norte and registered under
Transfer Certificate of Title (TCT) No. T-168688. After Spouses Patenia's death, their
children consisting of the petitioners discovered that TCT No. T-168688 has been
canceled by virtue of a Deed of Donation dated January 18, 2002 that their parents
supposedly executed in favor of the respondents. Aggrieved, the petitioners filed an
action against the respondents to annul the donation before the Regional Trial
Court.The petitioners alleged that Spouses Patenia's signatures on the deed were
forged and that the donation impaired their legitimes. On the other hand, the
respondents claimed their parents owned a 30,644-sq m parcel of land which includes
the donated property. Ramiro, being the eldest child, was entrusted by their parents to
divide and distribute the land to his siblings. Accordingly, the deed of donation was just
part of the distribution of their share on the property.

Issue:

WON the Deed of Donation is valid.

Held:

Yes. As a rule, contracts are obligatory in whatever form they may have been entered
into, provided all the essential requisites for their validity are present. When, however,
the law requires that a contract be in some form to be valid, that requirement is absolute
and indispensable. Its non-observance renders the contract void and of no effect. Here,
what transpired between Spouses Patenia and the respondents was a donation of an
immovable property that requires strict compliance with Article 749 of the Civil Code, to
wit:
Art. 749. In order that the donation of the immovable may be valid, it must be made in a
public document, specifying therein the property donated and the value of the charges
which the donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in
an authentic form, and this step shall be noted in both instruments. (Emphasis
supplied.)Unlike ordinary contracts, which are perfected by the concurrence of the
requisites of consent, object and cause, solemn contracts like donations of immovable
property are valid only when they comply with legal formalities. Absent the solemnity
requirements for validity, the mere intention of the parties and concurrence to the
agreement will not give rise to a contract.

The present deed of donation, however, was executed and acknowledged before the
notary public on January 18, 2002, when there is no rule yet that requires the parties to
sign the notarial register. In Heirs of Pedro Alilano v. Atty. Examen, the Court discussed
in brief the history of notarial rules in the Philippines, viz.:
Prior to 1917, governing law for notaries public in the Philippines was the Spanish
Notarial law of 1889. However, the law governing Notarial Practice is changed with the

40
passage of the January 3, 1916 Revised Administrative Code, which took effect in 1917.
In 2004, the Revised Rules on Notarial Practice was passed by the Supreme Court.

Indeed, the new rules cannot be given retroactive effect if they would work injustice or
impair vested rights. In Tan, Jr. v. Court of Appeals we discussed the exceptions to the
rule that procedural laws are applicable to pending actions or proceedings, to wit:

x x x file rule does not apply where the statute itself expressly or by necessary
implication provides that pending actions are excepted from its operation, or where to
apply it to pending proceedings would impair vested rights. Under appropriate
circumstances, courts may deny the retroactive application of procedural laws in the
event that to do so would not be feasible or would work injustice. Nor may procedural
laws be applied retroactively to pending actions if to do so would involve intricate
problems of due process or impair the independence of the courts. (Emphasis ours.)

In sum, the deed of donation between Spouses Ramiro and Amada Patenia and the
respondents is valid and compliant with the solemnities in Article 749 of the Civil Code.

41
Rights of a Purchaser in a Foreclosure Sale

Santiago v. Jimenez G.R. No. 228011

Facts:

Corona F. Jimenez (Corona) is the registered owner of a 532-square meter lot[6]

covered by Transfer Certificate of Title (TCT) No. RT-122097 (126876). Danilo Santiago
F. Jimenez (Danilo), Sonia F. Jimenez-Catarroja (Sonia), Vilma T. Jimenez-Lagdameo,
Federico Dalton F. Jimenez, and Chona F. Jimenez-Veluz (collectively, Jimenez siblings)
and Damian F. Jimenez, Jr. (Damian) are her children. Corona died on January 16,
2002. During the settlement of the estate, the Jimenez siblings discovered a Deed of
Donation allegedly executed by Corona in favor of Damian on August 31, 2000 over the
532-square meter property. By virtue of the Deed of Donation, TCT No. RT-122097
(126876) was canceled and in lieu thereof TCT No. N-217728 was issued in the name
of Damian on September 7, 2000. On May 21, 2001, Damian mortgaged the property to
Calubad and Keh in consideration of a P7,000,000.00 - loan. On the same day, the
mortgage was annotated on TCT No. N-21 7728. The Jimenez siblings learned about
the mortgage, but only Sonia registered her Affidavit of Adverse Claim, which was
annotated at the back of TCT No. N-217728 on July 12, 2002. On October 12, 2002,
Sonia was informed that the property was scheduled for auction on October 24, 2002.
This prompted the Jimenez siblings to file a complaint for the annulment of the Deed of
Donation and TCT No. N-217728, as well as the cancellation and annulment of the
Deed of Real Estate Mortgage, with prayer for preliminary injunction before the RTC.
The RTC denied the prayer for injunction, hence, the extrajudicial sale pushed through
as scheduled. Calubad and Keh emerged as the highest bidders. Consequently, a
Certificate of Sale dated November 3, 2002 was issued. On December 11, 2003, the
title to the property was consolidated and TCT No. N-257432 was issued in favor of
Calubad and Keh.

Issue:

WON the subsequent lien of a foreclosed property will affect the rights of a purchaser in
a foreclosure sale.

Held:

No. The Court ruled that any subsequent lien or encumbrance cannot defeat the rights
of an innocent mortgagee as a purchaser in a foreclosure sale. Once the subject
property is foreclosed, it passes to the purchaser at a public auction free from any lien
or encumbrance. Any subsequent lien or encumbrance annotated at the back of the
certificates of title cannot in any way prejudice the mortgage previously registered, and
the lots subject thereto pass to the purchaser at the public auction sale free from any
lien or encumbrance. Otherwise, the value of the mortgage could be easily destroyed by
a subsequent record of an adverse claim, for no one would purchase at a foreclosure
sale if bound by the posterior claim. (Emphases supplied.)

However, it has also been held that any subsequent lien or encumbrance annotated at
the back of the certificate of title cannot in any way prejudice the mortgage previously
registered, and the lots subject thereto pass to the purchaser at the public auction sale
free from any lien or encumbrance. Otherwise, the value of the mortgage could be
easily destroyed by a subsequent record of an adverse claim, for no one would
purchase at a foreclosure sale if bound by the posterior claim.

42
In the case at bar, it is the respondent bank, the mortgagee itself, which purchased the
subject property in the foreclosure sale. Being an innocent mortgagee with a superior
lien over that of petitioner, its right to a foreclosure of the property is reserved. The
notice of lis pendens which antedated the foreclosure and sale at public auction of
subject property could not affect the rights of the respondent bank because the
foreclosure sale retroacts to the date of registration of the mortgage. Its character of
being an innocent mortgagee continues up to the date of actual foreclosure and sale at
public auction.

In sum, jurisprudence dictates that a subsequent lien or encumbrance annotated at the

back of a certificate of title of a foreclosed property will not affect the rights of a
purchaser in a foreclosure sale because such sale retroacts to the date of the
registration of the mortgage, making the sale prior in time to the lien or encumbrance.
The foreclosure sale retroacts to the date of registration of the mortgage because it is
incidental to the fulfilment of the mortgagor's obligation in the mortgage contract upon
his default. In turn, the purchaser in a foreclosure sale essentially derives his right from
the previously registered mortgage. To rule otherwise would be to render nugatory the
purpose of the mortgage as security. Furthermore, we stress that the nullity of the
mortgagor's certificate of title does not automatically carry with it the nullity of a
registered mortgage if the mortgagee acted in good faith. Once the mortgagor defaulted
in the fulfillment of his obligation, the mortgagee in good faith can still cause the
foreclosure of the mortgage. In such case, the purchaser in the foreclosure sale
acquires the right of the mortgagee in good faith, making the sale prior in time as
against any subsequent lien or encumbrance.

43
Right of Redemption

Rama v. Sps. Nogra G.R. No. 219556

Facts:

The controversy involves an undivided portion of Lot No. 6034-C-2-H-4 with an area of
129 square meters, situated along V. Rama St., Barangay Guadalupe, Cebu City,
registered under the Heirs of Felix Rama, namely: petitioner Hermelina Rama
(Hermelina), respondent Ricardo Rama (Ricardo), Lucina Rama Yamyamin (Lucina)
and Victoria Rama Fajardo in Transfer Certificate of Title (TCT) No. 117504. On
September 10, 1992, Ricardo sold his one-fourth undivided share for P35,000.00,
payable in installments, to respondents Spouses Medardo and Purita Nogra (Spouses
Nogra). Upon full payment, Ricardo and Spouses Nogra executed a Deed of Absolute
Sale dated July 13, 2001. Petitioners claimed that they had no knowledge of this sale. It
was only when they sought the assistance of the barangay, through conciliation
proceedings that Ricardo and Spouses Nogra confirmed the sale. Hermelina offered to
redeem the property despite respondents' refusal to give a copy of the Deed of Absolute
Sale and the details about it. The offer to redeem was rejected. Few days after the
second day of the barangay proceedings, Spouses Nogra entered into the property and
had it surveyed for partition. This prompted petitioners to confront Ricardo once again
on September 26, 2007, and there Ricardo gave them a copy of the Deed of Absolute
Sale. Petitioners then filed a Complaint for Annulment of Sale, Redemption, and Other
Reliefs before the RTC. On October 26, 2007, petitioners consigned the full redemption
price.

Issue:

WON Hermelina has the right of redemption as a co-owner over the property.

Held:

Yes. As earlier adverted to, the focal point of the controversy is the 30-day written notice
requirement under Article 1623 of the New Civil Code, which states:

ART. 1623. The right of legal pre-emption or redemption shall not be exercised except
within thirty days from the notice in writing by the prospective vendor, or by the vendor,
as the case may be. The deed of sale shall not be recorded in the Registry of Property,
unless accompanied by an affidavit of the vendor that he has given written notice
thereof to all possible redemptioners.

The Court has been consistent in ruling that the required written notice by the seller is
mandatory and indispensable for the 30-day redemption period to commence

The written notice of sale is mandatory. This Court has long established the rule that
notwithstanding actual knowledge of a co-owner, the latter is still entitled to a written
notice from the selling co-owner in order to remove all uncertainties about the sale, its
terms and conditions, as well as its efficacy and status.
Indeed, Article 1623 is clear. A cardinal rule in statutory construction is that when the
law is clear and free from any doubt or ambiguity, there is no room for construction or
interpretation; there is only room for interpretation

The explicit requirement of written notice may only be dispensed with upon a showing
that the co-owners already had sufficient knowledge of the sale and they were guilty of

44
laches in the exercise of their redemption right. Absent these factors, the strict letter of
the law must apply – the written notice from the seller remains to be an indispensable
requirement to commence the running of the 30-day redemption period.

Strikingly, unlike in Alonzo, Spouses Nogra did not demonstrate any physical act of
dominion over the property that would have evoked Hermelina's inquiry on the
alienation of Ricardo's share. The sale was negotiated way back in 1992 and finalized in
2001, but it was only after the conciliation proceedings in 2007 when Spouses Nogra
initiated the survey of the property for partition. There was nothing on record that could
have given petitioners the knowledge, or at least an indication to elicit inquiry, that
Ricardo had already sold his share in the co-owned property.

In all, the 30-day redemption period under Article 1623 should be reckoned from
Hermelina's receipt of the Deed of Absolute Sale on September 26, 2007. Hermelina,
therefore, validly exercised and enforced her right by filing the complaint for redemption
on October 16, 2007, which is within the 30-day period under Article 1623. As well, the
redemption price was consigned within the 30-day period on October 26, 2007.

45
Principle of Unjust Enrichment

National Power Corp. v. Benguet Electric Cooperative G.R. No. 218378

Facts:

On January 1, 1998, NPC and BENECO entered into a Contract of Sale of Electricity.
Subsequently, the parties executed a Transition Contract for the Supply of Electricity
(Transition Contract) whereby NPC will supply electric power and energy to BENECO at
multiple points of delivery, including the Irisan Substation. In February 2004, BENECO's
employee, Engineer Lawrence Umaming (Umaming), studied BENECO's operations
and discovered its low systems losses. Because of this, Engineer Umaming called the
attention of the National Transmission Corporation (TRANSCO), the company which
took over NPC's transmission functions in 2004. TRANSCO conducted tests on
BENECO's billing meter and noticed that the CTR was set at 75/5 instead of 150/5,
which means that NPC had been billing BENECO at half the correct amount of
electricity delivered to it. Consequently, in a demand letter dated May 13, 2004, NPC
informed BENECO of its underbilling from May 2000 to February 2004, amounting to
PI57,743,314.43 and requested BENECO to pay the amount. BENECO refused to pay
the underbilling and argued that it resulted from NPC's failure to discover the error in the
metering device. In consequence, NPC revoked BENECO's PPD privilege on June 23,
2004. NPC also billed BENECO an additional amount of P7,870,456.14, representing
the PPD and the interest charges from April 2004 to July 2004. Too, NPC notified
BENECO that it will issue a disconnection order if it does not pay the balance. For these
reasons, BENECO filed a Complaint for injunction, damages, and other relief on
September 30, 2004, before the RTC.

Issue:

WON the non-payment of the underbilling by Beneco constitutes unjust enrichment.

Held:

No. BENECO's liability for the underbilling is based on contract, not the principle of
unjust enrichment. Unjust enrichment exists when a person unfairly retains a benefit,
money, or property against the fundamental principles of justice, equity, and good
conscience. The principle against unjust enrichment is embodied in Article 22 of the
Civil Code, which provides that a person who acquires or comes into possession of
something at the expense of another without just or legal ground must return it. To be
applicable, Article 22 requires that: (a) a person is benefited without a valid basis or
justification, and (b) such benefit is derived at another's expense or damage.

Thus, the principle of unjust enrichment does not automatically apply when one party
benefits from the efforts or obligations of another. It is necessary to show that the
enrichment of one party is without a just or legal ground, and that the plaintiff has no
other action against the other party. In other words, there is no unjust enrichment when
the person who benefited has a valid claim to such benefit.[48] Relevantly, the Court
ruled in Shinryo (Phil) Company, Inc. v. RRN,[49] that the principle of unjust enrichment
is not applicable because the petitioner's claim is based on contract.

Here, NPC and BENECO executed a Contract of Sale of Electricity and a Transition
Contract for the Supply of Electricity to govern their rights and obligations in the supply
of electric power and energy. Therefore, any action that one may bring against the other

46
shall be based on the provisions of their contract. The principle of unjust enrichment will
not apply.

47
Contracts - Real Estate Mortgage

Quiambao v. China Banking Corp. G.R. No. 238462

Facts:

On April 3, 1990, Elena R. Quiambao (Elena) borrowed P1,400,000.00 from China

Banking Corporation to increase the working capital of her general merchandising
business.[6] On even date, Elena and her common-law husband and business partner
Daniel S. Sy (Daniel) executed a Real Estate Mortgage (REM) over a parcel of land
registered under Transfer Certificate of Title (TCT) No. 227449-PR21432 as security for
the loan. Later, the REM was amended several times increasing the loan to
P1,770,000.00 on April 29, 1993, P2,600,000.00 on April 28, 1995; and P4,000,000.00
on April 29, 1997. The amendments contained a "blanket mortgage clause" stating that
the REM would secure the payment of obligations already incurred or which may be
subsequently incurred. On March 1, 2005, China Banking Corporation filed a petition for
foreclosure of the REM with the Regional Trial Court (RTC) alleging that Elena and
Daniel obtained P5,000,000.00 succeeding loan accommodations covered by eight
promissory notes (PNs). In due course, the RTC issued a notice of extra-judicial sale
scheduled on May 5, 2005. The notice was published in a newspaper of general
circulation and posted in public places. At the public auction sale, the mortgaged
property was sold to China Banking Corporation for the amount of P5,254,708.00. On
May 6, 2005, the Certificate of Sale was issued to China Banking Corporation. However,
Elena and Daniel failed to redeem the property. Thus, the title was consolidated in the
name of China Banking Corporation. Thereafter, Elena filed against China Banking
Corporation a petition to annul the mortgage and the extra-judicial foreclosure
proceedings with prayer for injunctive relief before the RTC. Elena argued that the REM
only covered the loan secured on April 3, 1990, and its amendments but not her
succeeding loans for P5,000,000.00. In contrast, China Banking Corporation maintained
that Elena's loan on April 3, 1990, was extended and renewed up to March 2004. Yet,
Elena merely paid the interests but not the principal.

Issue:

WON the REM dated April 29, 1997 covers the P5,000,000.00 succeeding loans.

Held:

No. Notably, there is a controversy on whether the "blanket mortgage clause" in the
latest amendment to the REM dated April 29, 1997 covers the P5,000,000.00
succeeding loans under the eight PNs for which the mortgage was foreclosed. We
stress that a "blanket mortgage clause" or "dragnet clause" subsumes all debts of past
or future origins and makes additional funds available to a borrower without the need to
execute separate security documents, thus, saving time, costs, and other resources.
Jurisprudence recognizes the validity of this clause but its terms must still be judiciously
examined.

Here, the eight PNs likewise failed to allude to Elena and Daniel's liability under the
latest amendment to the REM dated April 29, 1997. The PNs do not even make any
reference to the REM as a security. Further, China Banking Corporation did not adduce
any evidence proving that the REM and its amendments secured these obligations.
Worse, China Banking Corporation's loan assistant categorically testified that one of the
PNs was not subject of the REM. Hence, the doubt on whether the rest of the PNs are
secured or not must be construed against China Banking Corporation or the party who

48
prepared the contracts. The bank could have avoided the ambiguity had it exercised a
little more care in drafting the instruments. Consequently, the latest amendment to the
REM cannot be interpreted to cover the P5,000,000.00 succeeding loans under the
eight PNs for which the mortgage was foreclosed. As such, the foreclosure proceedings
are void. The bank cannot validly foreclose a mortgage based on non-payment of
unsecured PNs.

The peculiar nature of such contracts behooves the Court to closely scrutinize the
factual milieu to which the provisions are intended to apply. Thus, just as consistently
and unhesitatingly, but without categorically invalidating such contracts, the Court has
construed obscurities and ambiguities in the restrictive provisions of contracts of
adhesion strictly albeit not unreasonably against the drafter thereof when justified in
light of the operative facts and surrounding circumstances.We reiterate that the validity
or enforceability of the impugned contracts will have to be determined by the peculiar
circumstances obtaining in each case and the situation of the parties concerned. The
stringent treatment towards a contract of adhesion is pursuant to the mandate that in all
contractual, property, or other relations, when one of the parties is at a disadvantage on
account of his moral dependence, ignorance, indigence, mental weakness, tender age
or other handicap, the courts must be vigilant for his protection.

49
Wills - Right of Administration of the Estate of the Decedent

Gozum v Pappas G.R. No. 197147

Facts:

Edmundo died intestate. He was survived by his wife Gloria and their children -Diana
who claimed to be a legitimate child, Norma, who was incontestably a legitimate child.
He was also survived by Edmundo Jr., who claimed to be an illegitimate son of
Edmundo by Leonila. Edmundo, Jr. filed a petition for the settlement of the intestate
estate of Edmundo with the RTC. Gloria, joined by Diana, filed an opposition to the
petition. Diana was appointed as the administratrix of the estate as next of
kin. Norma was left out as she was domiciled in the United States and was
unaware of the settlement proceedings until years later. Gloria died testate. In her
last will and testament, she named Salvio as executor. Salvio then filed a petition for the
probate of the will and the issuance of letters testamentary to himself likewise with the
RTC. Norma filed an opposition. She sought the disallowance of the will and his
appointment as administrator. She also claimed that Diana was not
Edmundo's daughter, but a daughter of one named Prudencia to an unknown father.
Edmundo's intestate estate, Diana was issued letters of administration. A year
later, Diana was removed as administratrix and was replaced by Norma. Diana
moved for reconsideration, partly granted such that Salvio, instead of Norma, was
designated as administrator. The RTC found that Norma cannot be the administratrix
since she is an American citizen and a non-resident of the Philippines. Edmundo, Jr.
filed a motion to remove Salvio as administrator, the motion was granted and Norma
was restored to the position she took over from Diana. Salvio moved for reconsideration
reviving the issue of Norma's American citizenship and non-residency in the
Philippines. RTC denied Salvio's motion for reconsideration.

Salvio and Diana appealed this order.

Issue:

WON an alien residing in the Philippines can be an administrator of the estate of the
decedent.

Held:

Yes. A special administrator is a representative of the decedent appointed by the

probate court to care for and preserve the estate until the appointment of the executor
or administrator. He is considered an officer of the court who is in charge of the estate,
nota representative of the agent of the parties recommending his appointment. Hence,
he is subject to the probate court's supervision and control and is expected to work for
the best interests of the entire estate, particularly towards its smooth administration and
earliest settlement.

The probate court may appoint or remove special administrators based on grounds
other than those enumerated in the Rules at its discretion, such that the need to first
pass upon and resolve the issues of fitness or unfitness and the
application of the order of preference under Section 6 of Rule 78, as would be proper in
the case of a regular administrator, do not obtain. As long as the discretion is exercised
without grave abuse, and is based on reason, equity, justice, and legal
principles, interference by higher courts is unwarranted.

50
A perusal of the Order dated August 21, 2008 reveals that while it was Salvio who was
named by Gloria in her will as executor, the RTC found it logical,
practical, and economical to appoint Norma as special administratrix of Gloria's estate.
After all, she was already appointed as administratrix of Edmundo's estate
and that the conjugal properties of Edmundo and Gloria remained undivided.

With this setup, she could facilitate the requisite division of the estates. As aptly
observed by the RTC: Norma has been residing in the Philippines since 2003. She is
not disqualified to be appointed as special administrator. While there are instances that
she goes to the United States, she always immediately returns to the country. She even
vowed in open court to stay in Camarines Sur until the estate proceeding is finally
resolved. Clearly, regardless of Norma's citizenship, we hold that she can effectively
and reasonably discharge her duties as a special administrator and the RTC did not err
in appointing her. Lest it be forgotten, her appointment is temporary and may be
revoked anytime when she fails to perform her functions or her appointment is no longer
necessary.

51
Marriage - Who can assail the Validity

Thomas v. Trono G.R. No. 241032

Facts:

On 02 August 1997, the Regional Trial Court (RTC) had initially declared Alphonso's
marriage to Rachel as void due to Alphonso's existing marriage with Nancy Thomas.
Alphonso subsequently cohabited with Jocelyn Ledres. In 21 August 21 1998 they had
a child named Charnnel. Thereafter, on 22 July 2007 Alphonso and Jocelyn got married
in Makati City to legitimize the status of their child. However, after Alphonso's death,
Jocelyn Lendres requested certified copies of the RTC's decision on the annulment of
marriage of Alphonso with Rachel. During this process, it was discovered that the Office
of the Solicitor General (OSG) was not furnished a copy of the decision thus, the
decision has not yet attained it’s finality. The RTC provided the OSG with a copy of the
decision on 08 March 2011. The OSG sought reconsideration, arguing that the evidence
of Alphonso's previous marriage with Nancy Thomas was insufficient, and that there
was no definitive determination of collusion between the parties. In June 2011, the RTC
granted the OSG's motion, reversing its previous decision and declaring the marriage
between Alphonso and Rachel as valid and subsisting.

Issue:

Whether Charnnel has the right to assail the validity of marriage of Alphonso and
Rachel.

Held:

Yes. The petition is meritorious. In this case, Charnnel, as an heir of Alphonso, is vested
with the legal standing to assail the marriage of Alphonso and Rachel by seeking the
annulment of the RTC's Order dated 28 June 2011.

In Niñal v. Bayadog, the Court ruled that void marriages governed by the New Civil
Code can be questioned even after the death of either party. The death of a party does
not extinguish the action for petition for declaration of absolute nullity of marriage as the
deceased may have heirs with legal standing to assail the void marriage. Charnnel was
neither made a party to the proceedings nor was she duly notified of the case. Also, she
was a minor at the time the RTC granted the OSG's motion. While Jocelyn was able to
file a Manifestation and Special Appearance on the OSG's motion for reconsideration,
this should not bind, much less prejudice, Charnnel as a perusal of it readily shows that
Charnnel's interests as Alphonso's heir were not directly raised and threshed out in this
pleading. To hold otherwise, would be tantamount to depriving a then innocent child,
now rightfully asserting her rights, of due process of law.
Moreover, the CA overlooked the fact that the OSG's motion for reconsideration
was belatedly filed. Considering that the OSG received a copy of the August 22, 1997
Decision on March 8, 2011, it had until March 23, 2011 to file its motion for
reconsideration.

52
Change of Name

Republic v. Peleño G.R. No. 232053

Facts:

Annabelle Ontuca y Peleño gave birth to her daughter, Zsanine Kimberly Jariol y
Ontuca. However, when the birth certificate was issued, Annabelle discovered several
erroneous entries such as a misspelled middle name, an incorrect date and place of
marriage, and an incorrect name of the informant. To correct these errors, Annabelle
filed a petition under Rule 108 of the Rules of Court before the Regional Trial Court
(RTC). The petition sought the correction of her child's first name, middle name, and the
date and place of marriage of her parents. The RTC granted the petition, but the Office
of the Solicitor General (OSG) argued that the RTC had no jurisdiction over the
correction of Annabelle's first name and middle name under Rule 108. The OSG
contended that these errors could be corrected through administrative proceedings
under Republic Act (RA) No. 9048. However, Annabelle contends that the correction
should be pursued through the petition filed under Rule 108 since the correction of the
date and place of marriage is considered substantial as it would alter the child's status
from legitimate to illegitimate.

Issue:

WON the error in Annabelle's first name is clerical that will affect or prejudice her
substantial rights.

Held:

No. Similarly, the error in Annabelle's first name is clerical that will neither affect nor
prejudice her substantial rights. Annabelle's postal ID and passport satisfactorily show
that her first name is "ANNABELLE" and not "MARY ANNABELLE." Verily, by referring
to Annabelle's existing records, or documents, the innocuous errors in her first name
and middle name may be corrected under RA No. 9048, as amended.

Furthermore, Annabelle may file the petition to correct her personal information in the
birth certificate of her child. The application of RA No. 9048, as amended, is not limited
to cases in which the erroneous entries in the birth certificate sought to be corrected
pertain to the owner of the birth certificate. Rule 3 of the Implementing Rules and
Regulations of RA No. 9048, as amended, provides:

Rule 3. Who may file the petition. - Any person of legal age, having direct and personal
interest in the correction of a clerical or typographical error in an entry and/or change of
first name or nickname in the civil register, may file the petition. A person is considered
to have direct and personal interest when he is the owner of the record, or the owner's
spouse, children, parents, brothers, sisters, grandparents, guardian, or any other person
duly authorized by law or by the owner of the document sought to be corrected:
Provided, however, That when a person is a minor or physically or mentally
incapacitated, the petition may be filed on his behalf by his spouse, or any of his
children, parents, brothers, sisters, grandparents, guardians, or persons duly authorized
by law. (Emphasis ours.)

Meanwhile, the correction of the date and place of the parent's marriage from "May 25,
1999 at Occ. Mindoro" to "NOT MARRIED" is substantial since it will alter the child's

53
status from legitimate to illegitimate. To be sure, the correction of entries in the civil
register pertaining to citizenship, legitimacy of paternity or filiation, or legitimacy of
marriage involves substantial alterations, which may be corrected, and the true facts
established, provide the parties aggrieved by the error to avail themselves of the
appropriate adversary proceedings.

54
Repeal of laws - NCC 7, and 8

Abrenica et al v. COA G.R. No. 218185

Facts:

There is no dispute that our public health workers are entitled to hazard allowances
under Section 21 of RA No. 7305. Pursuant to its mandate under Section 35 of RA No.
7305, the DOH, in collaboration with various government agencies and health workers'
organizations, promulgated a Revised IRR in November 2009. Recognizing that RA No.
7305 and even its Revised IRR merely prescribed minimum rates of hazard pay due all
public health workers, as well as the need to set a policy to serve as basis in claiming
hazard pay, then Secretary of Health issued DOH AO No. 2006-001. Petitioners invoke
this DOH AO as legal basis of the P4,898.75 per month hazard pay that they received.
The COA Proper, however, ruled that this issuance is not in accord with RA No. 7305
and its IRR, and thus cannot be used to legitimize petitioners' hazard pay at that fixed
rate. Petitioners, however, impute grave abuse of discretion on the part of the COA in
adhering to our pronouncement in A.M. No. 03-9-02-SC, pointing out that the Court was
merely exercising its administrative supervision over its employees, not its power of
judicial review, in issuing the resolution. As it is, thus, DOH AO No. 2006-0011 remains
to enjoy the presumption of validity. The OSG for the COA, on the other hand, asserts
that the Court's disquisition on the invalidity of DOH AO No. 2006-0011 in the
administrative matter is a valid and binding jurisprudential precedent.

Issue:

Whether the Court's determination on the invalidity of the fixed rate of hazard pay under
DOH AO No. 2006-0011 formed part of the legal system.

Held:

Yes. NEW CIVIL CODE. ART. 8. Judicial decisions applying or interpreting the laws, or
the Constitution shall form a part of the legal system of the Philippines.

The settled rule supported by numerous authorities is a restatement of the legal maxim
"legis interpretatio legis vim obtinet" — the interpretation placed upon the written law by
a competent court has the force of law. In light of our constitutional mandate,
interpretations upon a law by this Court in an actual controversy constitute a part of the
law since our construction merely establishes the contemporaneous legislative intent
that the construed law intends to effectuate, whether such interpretation was applied in
a judicial matter or in adversarial administrative proceedings. Our interpretations merely
evidence the law's meaning, breadth, and scope and, therefore, have the same binding
force as the laws themselves.

In this regard, a cursory reading of A.M. No. 03-9-02-SC discloses that the ruling of the
Court on the invalidity of the fixed rate under DOH AO No. 2006-0011 is not an obiter
dictum, but a direct ruling on an issue raised in that case. It was not a mere "judicial
comment made while delivering a judicial opinion" nor was it unnecessary to make the
ruling. On the contrary, it was the ratio decidendi of the Court's disposition in the
administrative matter or "the principle or rule of law [upon] which [the Court's] decision
was founded." The ruling was absolutely essential to the determination of questions of
fact and law directly in the issue. The Court, in resolving the issue of whether it can
grant its medical and dental staff's request to conform with the provisions of DOH AO

55
No. 2006-0011, could not have avoided determining the issue of validity without the peril
of rendering an incomplete and improper decision.

To be sure, the COA does not have the discretion to review the validity or
conclusiveness of the Court's application and interpretation of the law. In applying our
pronouncements to affirm the disallowance, the COA Proper merely acted pursuant to
its constitutional mandate to determine whether government entities complied with the
law and prevailing jurisprudence in disbursing public funds, and thereafter, to disallow
such disbursements which are found to be illegal or contrary to law. After all, like this
Court, the COA cannot turn a blind eye to the fundamental principles set out under
Article 7 of the New Civil Code, viz.:

ART. 7. Laws are repealed only by subsequent ones, and their violation or
non-observance shall not be excused by disuse, or custom or practice to the contrary.

When the courts declare a law to be inconsistent with the Constitution, the former shall
be void and the latter shall govern. Administrative or executive acts, orders and
regulations shall be valid only when they are not contrary to the laws or the Constitution.

56