2008du Civil

Doctrinal Updates
Civil Law
Michael Vernon Guerrero Mendiola 2008 Shared under Creative Commons Attribution !onCommercial ShareAli"e #$0 %hilippines license$
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This document was prepared by Michael Vernon M. Guerrero for the Project Phoenix (200 ! of the "rellano #ni$ersity %chool of &aw ("#%&! under the direction of "tty. 'aime (. %oriano. )ompiled as P*+, 'uly 20--. .erne Guerrero entered "#%& in 'une 2002 and e$entually /raduated from "#%& in 2000. 1e passed the Philippine bar examinations immediately after ("pril 2002!.
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Doctrinal Updates (Atty. Berne Guerrero)
Doctrines declared and reiterated by the Supreme Court Samples from January September 2007 Preliminary Provisions Publication As regards the implementing guidelines of Republic Act No. 6758, i.e., DBM No. !", it is alread# settled in De $esus %. ommission on Audit,&'55 (hil. 58), 5*" +!**8,- that the same is in the nature of an administrati%e circular, because the purpose is to enforce or implement an e.isting la/, /hich is Republic Act No. 67580 hence, it must be published in the 1fficial 2a3ette or in a ne/spaper of general circulation in the countr#, as re4uired b# la/. +Magno %s. ommission on Audit, 2R !)**)!, 58 August 5""70 6n Banc, hico7 Na3ario $., Unjust enrichment 8he principle that no person ma# un9ustl# enrich himself at the e.pense of another +Nemo cum alterius detrimento locupletari potest, is embodied in Article 55 of the Ne/ i%il ode. &8-here is un9ust enrichment /hen +!, a person is un9ustl# benefited, and +5, such benefit is deri%ed at the e.pense of or /ith damages to another. 8he main ob9ecti%e of the principle of un9ust enrichment is to pre%ent one from enriching oneself at the e.pense of another. :t is commonl# accepted that this doctrine simpl# means that a person shall not be allo/ed to profit or enrich himself ine4uitabl# at another;s e.pense. 1ne condition for in%o<ing this principle is that the aggrie%ed part# has no other action based on contract, 4uasi7contract, crime, 4uasi7delict or an# other pro%ision of la/. + hieng %s. =pouses =antos, 2R !6*6)7, '! August 5""70 8hird Di%ision, hico7 Na3ario $., Persons Name 8he sub9ect of rights must ha%e a fi.ed s#mbol for indi%iduali3ation /hich ser%es to distinguish him from all others0 this s#mbol is his name.> ?nderstandabl#, therefore, no person can change his name or surname /ithout 9udicial authorit#. 8his is a reasonable re4uirement for those see<ing such change because a person;s name necessaril# affects his identit#, interests and interactions. 8he =tate must be in%ol%ed in the process and decision to change the name of an# of its citi3ens. +Republic %s. apote, 2R !57")', 5 @ebruar# 5""70 @irst Di%ision, orona $., &8he- ruling in the case of :n ReA (etition for hange of Name andBor orrectionB ancellation of 6ntr# in i%il Registr# of $ulian Cin arulasan Dang &2.R. No. !5**66, '" March 5""5, )5) = RA !55- is enlighteningA E1ur la/s on the use of surnames state that legitimate and legitimated children shall principall# use the surname of the father. 8he @amil# ode gi%es legitimate children the right to bear the surnames of the father and the mother, /hile illegitimate children shall use the surname of their mother, unless their father recogni3es their filiation, in /hich case the# ma# bear the father;s surname. Appl#ing these la/s, an illegitimate child /hose filiation is not recogni3ed b# the father bears onl# a gi%en name and his mother; surname, and does not ha%e a middle name. 8he name of the unrecogni3ed illegitimate child therefore identifies him as such. :t is onl# /hen the illegitimate child is legitimated b# the subse4uent marriage of his parents or ac<no/ledged b# the father in a public document or pri%ate hand/ritten instrument that he bears both his mother;s surname as his middle name and his father;s surname as his surname, reflecting his status as a legitimated child or an ac<no/ledged child.> +Republic %s. apote, 2R !57")', 5 @ebruar# 5""70 @irst Di%ision, orona $., Family Relations amily! "e#uisites 8he marriage in%ol%ed haing been solemni3ed prior to the effecti%it# of the @amil# ode, the applicable la/ to determine its %alidit# is the i%il ode /hich /as the la/ in effect at the time of its celebration. A %alid
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marriage license is a re4uisite of marriage under Article 5' of the i%il ode, the absence of /hich renders the marriage %oid ab initio pursuant to Article 8"+', in relation to Article 58 of the same ode. 8he re4uirement and issuance of a marriage license is the =tate;s demonstration of its in%ol%ement and participation in e%er# marriage, in the maintenance of /hich the general public is interested. +Alcantara %s. Alcantara, 2R !677)6, 58 August 5""70 8hird Di%ision, hico7Na3ario $., &8-o be considered %oid on the ground of absence of a marriage license, the la/ re4uires that the absence of such marriage license must be apparent on the marriage contract, or at the %er# least, supported b# a certification from the local ci%il registrar that no such marriage license /as issued to the parties. +Alcantara %s. Alcantara, 2R !677)6, 58 August 5""70 8hird Di%ision, hico7Na3ario $., :ssuance of a marriage license in a cit# or municipalit#, not the residence of either of the contracting parties, and issuance of a marriage license despite the absence of publication or prior to the completion of the !"7da# period for publication are considered mere irregularities that do not affect the %alidit# of the marriage. An irregularit# in an# of the formal re4uisites of marriage does not affect its %alidit# but the part# or parties responsible for the irregularit# are ci%ill#, criminall# and administrati%el# liable. +Alcantara %s. Alcantara, 2R !677)6, 58 August 5""70 8hird Di%ision, hico7Na3ario $., 8he authorit# of the officer or clerg#man sho/n to ha%e performed a marriage ceremon# /ill be presumed in the absence of an# sho/ing to the contrar#. Moreo%er, the solemni3ing officer is not dut#7bound to in%estigate /hether or not a marriage license has been dul# and regularl# issued b# the local ci%il registrar. All the solemni3ing officer needs to <no/ is that the license has been issued b# the competent official, and it ma# be presumed from the issuance of the license that said official has fulfilled the dut# to ascertain /hether the contracting parties had fulfilled the re4uirements of la/. +Alcantara %s. Alcantara, 2R !677)6, 58 August 5""70 8hird Di%ision, hico7Na3ario $., =emper praesumitur pro matrimonio. 8he presumption is al/a#s in fa%or of the %alidit# of the marriage. 6%er# intendment of the la/ or fact leans to/ard the %alidit# of the marriage bonds. 8he ourts loo< upon this presumption /ith great fa%or. :t is not to be lightl# repelled0 on the contrar#, the presumption is of great /eight. +Alcantara %s. Alcantara, 2R !677)6, 58 August 5""70 8hird Di%ision, hico7Na3ario $., Se$erance of marital relationship Di$orce by forei%n spouse &:n the- case of Fan Dorn %. Romillo, $r. &2.R. No. C768)7", 1ctober 8, !*85, !'* = RA !'*-, &t-he ourt recogni3ed the %alidit# of the di%orce and held that the alien spouse had no interest in the properties ac4uired b# the @ilipino /ife after the di%orce. As to the effect of the di%orce on the @ilipino /ife, the ourt ruled that she should no longer be considered married to the alien spouse. @urther, she should not be re4uired to perform her marital duties and obligations. 8his principle /as thereafter applied in (ilapil %. :ba#7=omera &2.R. No. 8"!!6, $une '", !*8*, !7) = RA 65'- /here the ourt recogni3ed the %alidit# of a di%orce obtained abroad. :n the said case, it /as held that the alien spouse is not a proper part# in filing the adulter# suit against his @ilipino /ife. 8he ourt stated that Ethe se%erance of the marital bond had the effect of dissociating the former spouses from each other, hence the actuations of one /ould not affect or cast oblo4u# on the other.> Ci<e/ise, in Guita %. ourt of Appeals,&2.R. No. !5)865, December 55, !**8, '"" = RA )"6- the ourt stated that /here a @ilipino is di%orced b# his naturali3ed foreign spouse, the ruling in Fan Dorn applies. 8he significance of the Fan Dorn case to the de%elopment of limited recognition of di%orce in the (hilippines cannot be denied. 8he ruling has long been interpreted as se%ering marital ties bet/een parties in a mi.ed marriage and capacitating the @ilipino spouse to remarr# as a necessar# conse4uence of upholding the %alidit# of a di%orce obtained abroad b# the alien spouse. As such, the Fan Dorn case is sufficient basis in resol%ing a situation /here a di%orce is %alidl# obtained abroad b# the alien spouse. Dith the enactment of the @amil# ode and paragraph 5, Article 56 thereof, our la/ma<ers codified the la/ alread# established through 9udicial precedent. +=an Cuis %s. =an Cuis, 2R !''7)', 6 @ebruar# 5""70 8hird Di%ision, Hnares7=antiago $., &D-hen the ob9ect of a marriage is defeated b# rendering its continuance intolerable to one of the parties and
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producti%e of no possible good to the communit#, relief in some /a# should be obtainable. Marriage, being a mutual and shared commitment bet/een t/o parties, cannot possibl# be producti%e of an# good to the societ# /here one is considered released from the marital bond /hile the other remains bound to it. =uch is the state of affairs /here the alien spouse obtains a %alid di%orce abroad against the @ilipino spouse. +=an Cuis %s. =an Cuis, 2R !''7)', 6 @ebruar# 5""70 8hird Di%ision, Hnares7=antiago $., Declaration of &bsolute Nullity of 'arria%es 8he Rule on Declaration of Absolute Nullit# of Foid Marriages and Annulment of Foidable Marriages as contained in A.M. No. "57!!7!"7= +=ection !. =cope, is e.plicit in its scope, to /itA E8his Rule shall go%ern petitions for declaration of absolute nullit# of %oid marriages and annulment of %oidable marriages under the @amil# ode of the (hilippines. 8he Rules of ourt shall appl# suppletoril#.> 8he categorical language of A.M. No. "57!!7!"7= lea%es no room for doubt. 8he co%erage e.tends onl# to those marriages entered into during the effecti%it# of the @amil# ode /hich too< effect on ' August !*88. &8-here is no need to reconcile the pro%isions of A.M. No. "57!!7!"7= /ith the ruling in NiIal %s. Ba#adog +'8) (hil. 66!, 6757675 &5"""-,, because the# %ar# in scope and application. As has been emphasi3ed, A.M. No. "57!!7!"7= co%ers marriages under the @amil# ode of the (hilippines, and is prospecti%e in its application. +6nrico %s. Jeirs of =pouses Medinaceli, 2R !7'6!), 58 =eptember 5""70 8hird Di%ision, hico7Na3ario $., 8he Rationale of the Rules on Annulment of Foidable Marriages and Declaration of Absolute Nullit# of Foid Marriages, Cegal =eparation and (ro%isional 1rders e.plicates on =ection 5+a, in the follo/ing manner, %i3A &!- 1nl# an aggrie%ed or in9ured spouse ma# file petitions for annulment of %oidable marriages and declaration of absolute nullit# of %oid marriages. =uch petitions cannot be filed b# the compulsor# or intestate heirs of the spouses or b# the =tate. &=ection 50 =ection ', paragraph a- 1nl# an aggrie%ed or in9ured spouse ma# file a petition for annulment of %oidable marriages or declaration of absolute nullit# of %oid marriages. =uch petition cannot be filed b# compulsor# or intestate heirs of the spouses or b# the =tate. 8he ommittee is of the belief that the# do not ha%e a legal right to file the petition. ompulsor# or intestate heirs ha%e onl# inchoate rights prior to the death of their predecessor, and hence can onl# 4uestion the %alidit# of the marriage of the spouses upon the death of a spouse in a proceeding for the settlement of the estate of the deceased spouse filed in the regular courts. 1n the other hand, the concern of the =tate is to preser%e marriage and not to see< its dissolution. +6nrico %s. Jeirs of =pouses Medinaceli, 2R !7'6!), 58 =eptember 5""70 8hird Di%ision, hico7Na3ario $., Psycholo%ical incapacity :t is true that the case of =antos %. A &'!" (hil. 5! +!**5,- did not specificall# mention that the presentation of e.pert opinion is a %ital and mandator# re4uirement in filing a petition for the declaration of nullit# of marriage grounded on ps#chological incapacit# referred to under Article '6 of the @amil# ode. 6%en in the subse4uent case of Republic %. ourt of Appeals &2.R. No. !"876', @ebruar# !', !**7, 568 = RA !*8- +also <no/n as the Molina case,, /herein the ourt laid do/n the guidelines in the interpretation and application of the aforementioned article, e.amination of the person b# a ph#sician in order for the former to be declared ps#chologicall# incapacitated /as li<e/ise not considered a re4uirement. Dhat is important, ho/e%er, as stated in Marcos %. Marcos, &2.R. No. !'6)*", 1ctober !*, 5""", ')' = RA 755, 76)- is the presence of e%idence that can ade4uatel# establish the part#;s ps#chological condition. :f the totalit# of e%idence presented is enough to sustain a finding of ps#chological incapacit#, then actual medical e.amination of the person concerned need not be resorted to. +Kamora %s. ourt of Appeals, 2R !)!*!7, 7 @ebruar# 5""70 @irst Di%ision, A3cuna $., &1-ne;s unfitness as a la/#er does not automaticall# mean one;s unfitness as a husband or %ice %ersa. 8he #ardstic<s for such roles are simpl# different. 8his is /h# the disposition in a disbarment case cannot be conclusi%e on an action for declaration of nullit# of marriage. +Hap7(aras %s. (aras, 2R !)785), 5 August 5""70 @irst Di%ision, =ando%al72utierre3 $., &8-he Ne/ Rules on Declaration of Absolute Nullit# of Foid Marriages and Annulment of Foidable Marriages,&A.M. No. "!7!!7!"7= - promulgated b# this ourt on March !5, 5""', geared to/ards the
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rela.ation of the re4uirement of e.pert opinion. =ection 5, paragraph +d, statesA E+d, Dhat to allege.7 A petition under Article '6 of the @amil# ode shall specificall# allege the complete facts sho/ing that either or both parties /ere ps#chologicall# incapacitated from compl#ing /ith the essential marital obligations of marriage at the time of the celebration of marriage e%en if such incapacit# becomes manifest onl# after its celebration. 8he complete facts should allege the ph#sical manifestations, if an#, as are indicati%e of ps#chological incapacit# at the time of the celebration of the marriage but e.pert opinion need not be alleged. :n Barcelona %. ourt of Appeals,&2.R. No. !'""87, =eptember 5), 5""', )!5 = RA )!- this ourt categoricall# e.plained that under the Ne/ Rules, a petition for declaration of nullit# under Article '6 of the @amil# ode need not allege e.pert opinion on the ps#chological incapacit# or on its root cause. Dhat must be alleged are the ph#sical manifestations indicati%e of said incapacit#. 8he ourt further held that the Ne/ Rules, being procedural in nature, appl# to actions pending and unresol%ed at the time of their adoption. Cater, in 5""5, the ourt reiterated the Marcos doctrine in Republic %. :#o#.&2.R. No. !55577, =eptember 5!, 5""5, )7" = RA 5"8- 8husA EA later case, Marcos %. Marcos, further clarified that there is no re4uirement that the defendantBrespondent spouse should be personall# e.amined b# a ph#sician or ps#chologist as a condition sine 4ua non for the declaration of nullit# of marriage based on ps#chological incapacit#. Accordingl#, it is no longer necessar# to allege e.pert opinion in a petition under Article '6 of the @amil# ode of the (hilippines. =uch ps#chological incapacit#, ho/e%er, must be established b# the totalit# of the e%idence presented during the trial.> +Hap7(aras %s. (aras, 2R !)785), 5 August 5""70 @irst Di%ision, =ando%al72utierre3 $., &A-s earl# as !**5, in =antos %. ourt of Appeals,&2.R. No. !!5"!*, $anuar# ), !**5, 5)" = RA 5", ''- /e categoricall# said that ps#chological incapacit# re4uired b# Art. '6 must be characteri3ed b# +a, gra%it#, +b, 9uridical antecedence, and +c, incurabilit#. (s#chological incapacit# should refer to no less than a mental +not ph#sical, incapacit# that causes a part# to be trul# incogniti%e of the basic marital co%enants that concomitantl# must be assumed and discharged b# the parties to the marriage. 8hese include the obligations to li%e together, obser%e mutual lo%e, respect and fidelit#, and render mutual help and support. +Na%arro $r. %s. ecillo7Na%arro, 2R !65")*, !' April 5""70 =econd Di%ision, Guisumbing $., &8he ourt has- repeatedl# reminded that the intention of the la/ is to confine the meaning of Eps#chological incapacit#> to the most serious cases of personalit# disorders clearl# demonstrati%e of an utter insensiti%it# or inabilit# to gi%e meaning and significance to the marriage. :n Republic %. ourt of Appeals,& 2.R. No. !"876', @ebruar# !', !**7, 568 = RA !*8- the ourt ga%e the guidelines in the interpretation and application of Art. '6. +Na%arro $r. %s. ecillo7Na%arro, 2R !65")*, !' April 5""70 =econd Di%ision, Guisumbing $., (s#chological incapacit# must be more than 9ust a Edifficult#,> Erefusal> or Eneglect> in the performance of some marital obligations, it is essential that the# must be sho/n to be incapable of doing so, due to some ps#chological illness e.isting at the time of the celebration of the marriage. &8he spouses;- bic<erings and arguments e%en before their marriage and respondent;s scandalous outbursts in public, at most, sho/ their immaturit#, and immaturit# does not constitute ps#chological incapacit#. +Na%arro $r. %s. ecillo7Na%arro, 2R !65")*, !' April 5""70 =econd Di%ision, Guisumbing $., Conju%al property Parties to a bi%amous marria%e As &a- bigamous marriage, the propert# regime of the spouses in the subse4uent bigamous marriage- is co%ered b# Article !)8 of the @amil# ode pro%iding that all properties ac4uired b# the parties out of their actual 9oint contribution of mone#, propert#, or industr# shall be go%erned b# the rules on co7o/nership. Jence, if there is no contribution from either or both of the spouses, there can be no co7o/nership. +Acre %s. Hutti<<i, 2R !5'"5*, 57 =eptember 5""70 @irst Di%ision, =ando%al 2utierre3, $., Paternity and iliation &8-he due recognition of an illegitimate child in a record of birth, a /ill, a statement before a court of record, or in an# authentic /riting is, in itself, a consummated act of ac<no/ledgement of the child, and no further
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court action is re4uired. :n fact, an# authentic /riting is treated not 9ust a ground for compulsor# recognition0 it is in itself a %oluntar# recognition that does not re4uire a separate action for 9udicial appro%al. +Ferceles %s. (osada, 2R !5*785, 57 April 5""70 =econd Di%ision, Guisumbing $., (uardianship 8he legal guardian onl# has the plenar# po/er of administration of the minor;s propert#. :t does not include the po/er of alienation /hich needs 9udicial authorit#. + abales %s. ourt of Appeals, 2R !65)5!, '! August 5""70 @irst Di%ision, (uno $., Property and Land Re&istration )uilders in (ood aith 2ood faith is an intangible and abstract 4ualit# /ith no technical meaning or statutor# definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to see< an unconscionable ad%antage. :t implies honest# of intention, and freedom from <no/ledge of circumstances /hich ought to put the holder upon in4uir#. 8he essence of good faith lies in an honest belief in the %alidit# of one;s right, ignorance of a superior claim and absence of intention to o%erreach another. Applied to possession, one is considered in good faith if he is not a/are that there e.ists in his title or mode of ac4uisition an# fla/ /hich in%alidates it. +1choa %s. Apeta, 2R !)655*, !' =eptember 5""70 @irst Di%ision, =ando%al72utierre3 $., &8-o be entitled to reimbursement for impro%ements introduced on the propert#, the petitioner must be considered a builder in good faith. @urther, Articles ))8 and 5)6 of the i%il ode, /hich allo/ full reimbursement of useful impro%ements and retention of the premises until reimbursement is made, appl# onl# to a possessor in good faith, i.e., one /ho builds on land /ith the belief that he is the o/ner thereof. A builder in good faith is one /ho is una/are of an# fla/ in his title to the land at the time he builds on it. :n 2eminiano %. ourt of Appeals, '58 (hil. 685, 68*76*" +!**6,, &the =upreme- ourt /as emphatic in declaring that lessees are not possessors or builders in good faithA EArticle ))8 of the i%il ode, in relation to Article 5)6 of the same ode, /hich allo/s full reimbursement of useful impro%ements and retention of the premises until reimbursement is made, applies onl# to a possessor in good faith, i.e., one /ho builds on land /ith the belief that he is the o/ner thereof. :t does not appl# /here one;s onl# interest is that of a lessee under a rental contract0 other/ise, it /ould al/a#s be in the po/er of the tenant to Eimpro%e> his landlord out of his propert#.> +@lorentino %s. =uper%alue :nc., 2R !75'8), !5 =eptember 5""70 8hird Di%ision, hico7Na3ario $., *+nership 6lementar# is the rule that simple possession of a certificate of title is not necessaril# conclusi%e to a holder;s genuine o/nership of propert#. :f a person obtains title that includes land to /hich he has no legal right, that person does not, b# %irtue of said certificate alone, become the o/ner of the land illegall# or erroneousl# included. 8his ourt has held time and again that the rule on indefeasibilit# of title cannot be used for the perpetration of fraud against the legal o/ner. Jence, registration proceedings could not be used as a shield for fraud. 8o hold other/ise /ould be to put a premium on land7grabbing and transgress the broader principle in human relations that no person shall un9ustl# enrich himself at the e.pense of another. +Jeirs of =alonga Bituin, 2R !57567, !" August 5""70 @irst Di%ision, A3cuna $., &:-t is /ell7established that o/nership and possession are t/o entirel# different legal concepts. $ust as possession is not a definite proof of o/nership, neither is non7possession inconsistent /ith o/nership. 8he first paragraph of Article !)*8 of the i%il ode states that /hen the sale is made through a public instrument, the e.ecution thereof shall be e4ui%alent to the deli%er# of the thing /hich is the ob9ect of the contract, if from the deed the contrar# does not appear or cannot clearl# be inferred. (ossession, along /ith o/nership, is transferred to the %endee b# %irtue of the notari3ed deed of con%e#ance. +8ating %s. Marcella , 2R !555"8, 57 March 5""70 8hird Di%ision, Austria7Martine3 $., Co,o+nership
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Co,o+ners in estate &8-he la/ and 9urisprudence ha%e categoricall# held that e%en /hile an estate remains undi%ided, co7o/ners ha%e each full o/nership of their respecti%e ali4uots or undi%ided shares and ma# therefore alienate, assign or mortgage them. 8he co7o/ner, ho/e%er, has no right to sell or alienate a specific or determinate part of the thing o/ned in common, because such right o%er the thing is represented b# an ali4uot or ideal portion /ithout an# ph#sical di%ision. :n an# case, the mere fact that the deed purports to transfer a concrete portion does not per se render the sale %oid. 8he sale is %alid, but onl# /ith respect to the ali4uot share of the selling co7o/ner. @urthermore, the sale is sub9ect to the results of the partition upon the termination of the co7 o/nership. +=antos %s. Cumbao, 2R !6*!5*, 58 March 5""70 8hird Di%ision, hico7Na3ario $., -e%al "edemption :n (aulmitan %s. ourt of Appeals &5!5 = RA 867 +!**5,, the ourt- held that a co7o/ner /ho redeemed the propert# in its entiret# did not ma<e her the o/ner of all of it. 8he propert# remained in a condition of co7 o/nership as the redemption did not pro%ide for a mode of terminating a co7o/nership. But the one /ho redeemed had the right to be reimbursed, holds a lien upon the sub9ect propert# for the amount due. + abales %s. ourt of Appeals, 2R !65)5!, '! August 5""70 @irst Di%ision, (uno $., Cegal redemption can onl# be e.ercised b# the co7o/ner /ho did not part /ith his or their pro indi%iso share in the propert# held in common. + abales %s. ourt of Appeals, 2R !65)5!, '! August 5""70 @irst Di%ision, (uno $., Partition 8here are t/o stages in e%er# action for partition. 8he first phase is the determination of /hether a co7 o/nership in fact e.ists and a partition is proper, i.e., not other/ise legall# proscribed, and ma# be made b# %oluntar# agreement of all the parties interested in the propert#. 8his phase ma# end eitherA +a, /ith a declaration that plaintiff is not entitled to ha%e a partition either because a co7o/nership does not e.ist, or partition is legall# prohibited0 or +b, /ith a determination that a co7o/nership does in truth e.ist, partition is proper in the premises, and an accounting of rents and profits recei%ed b# the defendant from the real estate in 4uestion is in order. :n the latter case, the parties ma#, if the# are able to agree, ma<e partition among themsel%es b# proper instruments of con%e#ance, and the court shall confirm the partition so agreed upon. 8he second phase commences /hen it appears that the parties are unable to agree upon the partition directed b# the court. :n that e%ent, partition shall be done for the parties b# the court /ith the assistance of not more than three +', commissioners. 8his second stage ma# /ell also deal /ith the rendition of the accounting itself and its appro%al b# the court after the parties ha%e been accorded opportunit# to be heard thereon, and an a/ard for the reco%er# b# the part# or parties thereto entitled of their 9ust share in the rents and profits of the real estate in 4uestion. +Austria %s. Cichauco, 2R !7""8", ' April 5""70 =econd Di%ision, 8inga $., Possession 8he i%il ode states that possession is the holding of a thing or the en9o#ment of a right. :n the grammatical sense, to possess means to ha%e, to actuall# and ph#sicall# occup# a thing, /ith or /ithout right E(ossession al/a#s includes the idea of occupation . . .. :t is not necessar# that the person in possession should himself be the occupant. 8he occupanc# can be held b# another in his name.> Dithout occupanc#, there is no possession. 8/o things are paramount in possession. @irst, there must be occupanc#, apprehension or ta<ing. =econd, there must be intent to possess +animus possidendi,. +Hu %s. (acleb, 2R !'"'!6, 5) $anuar# 5""70 @irst Di%ision, orona $., ?nder the la/, possession is ac4uired b# the material occupation of a thing or the e.ercise of a right, or b# the fact that it is sub9ect to the action of our /ill, or b# the proper acts and legal formalities established for ac4uiring such right. :n short, possession can be either actual or merel# constructi%e. Actual possession consists in the manifestation of acts of dominion o%er propert# of such a nature as a part# /ould naturall# e.ercise o%er his o/n L as /hen respondent himself is ph#sicall# in occupation of the propert#, or e%en /hen another person /ho recogni3es the former;s rights as o/ner is in occupanc#. onstructi%e possession on the
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other hand, ma# be had through succession, donation, e.ecution of public instruments, or the possession b# a sheriff b# %irtue of a court order. +Remington :ndustrial =ales orporation %s. hinese Houng Men;s hristian Association of the (hil. :slands, 2R !7!858, 55 $anuar# 5""70 8hird Di%ision, Hnares7=antiago $., .asement 8o be entitled to an easement of right of /a#, the follo/ing re4uisites should be metA &!- the dominant estate is surrounded b# other immo%ables and has no ade4uate outlet to a public high/a# +Art. 6)*, par. !,0 &5- there is pa#ment of proper indemnit# +Art. 6)*, par. !,0 &'- the isolation is not due to the acts of the proprietor of the dominant estate +Art. 6)*, last par.,0 and &)- the right of /a# claimed is at the point least pre9udicial to the ser%ient estate0 and insofar as consistent /ith this rule, /here the distance from the dominant estate to a public high/a# ma# be the shortest +Art. 65",. +Cee %s. =pouses arreon, 2R !)*"5', 57 =eptember 5""70 @irst Di%ision, =ando%al72utierre3, $., &=-ince a right7of7/a# is an interest in the land, an# agreement creating it should be dra/n and e.ecuted /ith the same formalities as a deed to a real estate, and ordinaril# must be in /riting. +1bra %s. Badua, 2R !)*!55, * August 5""70 =econd Di%ision, Felasco $r. $., .stoppel! Prescription and -aches .stoppel E8he doctrine of estoppel M is not onl# that /hich prohibits a part# from assuming inconsistent positions, based on the principle of election, but that /hich precludes him from repudiating an obligation %oluntaril# assumed after ha%ing accepted benefits therefrom. 8o countenance such repudiation /ould be contrar# to e4uit#, and /ould put a premium on fraud or misrepresentation.> +6scueta %s. Cim, 2R !'7!65, 5) $anuar# 5""70 @irst Di%ision, A3cuna $., 6stoppel cannot gi%e %alidit# to an act that is prohibited b# la/ or one that is against public polic#. learl#, the collection of interests /ithout an# stipulation therefor in /riting is prohibited b# la/. + hing %s. Nicdao, 2R !)!!8!, 57 April 5""70 8hird Di%ision, alle9o =r. $., Prescription Ci$il /nterruption Article !!5' of the i%il ode is categorical. i%il interruption is produced b# 9udicial summons to the possessor. Moreo%er, e%en /ith the presence of 9udicial summons, Article !!5) sets limitations as to /hen such summons shall not be deemed to ha%e been issued and shall not gi%e rise to interruption, to /itA !, if it should be %oid for lac< of legal solemnities0 5, if the plaintiff should desist from the complaint or should allo/ the proceedings to lapse0 or ', if the possessor should be absol%ed from the complaint. Both Article !!5' and Article !!5) of the i%il ode underscore the 9udicial character of ci%il interruption. @or ci%il interruption to ta<e place, the possessor must ha%e recei%ed 9udicial summons. +Jeirs of Ar3adon7 risologo %s. Ranon, 2R !7!"68, 5 =eptember 5""70 8hird Di%ision, hico7Na3ario $., "e%istered -and &N-o title to registered land in derogation to that of the registered o/ner shall be ac4uired b# prescription or ad%erse possession. Neither can prescription be allo/ed against the hereditar# successors of the registered o/ner, because the# step into the shoes of the decedent and are merel# the continuation of the personalit# of their predecessor7in7interest. +1choa %s. Apeta, 2R !)655*, !' =eptember 5""70 @irst Di%ision, =ando%al7 2utierre3 $., &ction for annulment of 0itle 1 "econ$eyance &A-n action for annulment of title or recon%e#ance based on fraud is imprescriptible /here the plaintiff is in possession of the propert# sub9ect of the acts. +Clemos %s. Clemos, 2R !5"!65, 56 $anuar# 5""70 8hird Di%ision, Austria7Martine3 $.,
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&ction for "econ$eyance Dell entrenched is the rule that an action for recon%e#ance prescribes in ten #ears, the rec<oning point of /hich is the date of registration of the deed or the date of issuance of the certificate of title o%er the propert#. :n an action for recon%e#ance, the decree of registration is highl# regarded as incontro%ertible. Dhat is sought instead is the transfer of the propert# or its title, /hich has been erroneousl# or /rongfull# registered in another person;s name to its rightful or legal o/ner, or to one /ho has a better right. Jo/e%er, in a number of cases in the past, the ourt declared that if the person claiming to be the o/ner of the propert# is in actual possession thereof, the right to see< recon%e#ance, /hich in effect see<s to 4uiet title to the propert#, does not prescribe. 8he reason for this is that one /ho is in actual possession of a piece of land claiming to be the o/ner thereof ma# /ait until his possession is disturbed or his title is attac<ed before ta<ing steps to %indicate his right, the rationale for the rule being that his undisturbed possession pro%ides him a continuing right to see< the aid of a court of e4uit# to ascertain and determine the nature of the ad%erse claim of a third part# and its effect on his o/n title, /hich right can be claimed onl# b# the one /ho is in possession. +Jeirs of =alonga Bituin, 2R !57567, !" August 5""70 @irst Di%ision, A3cuna $., -aches Dhile 9urisprudence is settled on the imprescriptibilit# and indefeasibilit# of a 8orrens title, there is e4uall# an abundance of cases /here /e une4ui%ocall# ruled that registered o/ners ma# lose their right to reco%er possession of propert# through the e4uitable principle of laches. &Caches meansA- E. . . the failure or neglect, for an unreasonable and une.plained length of time, to do that /hich, b# e.ercising due diligence, could or should ha%e been done earlier0 it is negligence or omission to assert a right /ithin a reasonable time, /arranting the presumption that the part# entitled to assert it either has abandoned or declined to assert it. 8he defense of laches is an e4uitable one and does not concern itself /ith the character of the defendant;s title, but onl# /ith /hether or not b# reason of plaintiff;s long inaction or ine.cusable neglect, he should be barred from asserting his claim at all, because to allo/ him to do so /ould be ine4uitable and un9ust to defendant.> M Caches is poles apart from prescription. M ECaches> has been defined as Esuch neglect or omission to assert a right, ta<en in con9unction /ith lapse of time and other circumstances causing pre9udice to an ad%erse part#, as /ill operate as a bar in e4uit#.> :t is a dela# in the assertion of a right E/hich /or<s disad%antage to another> because of the Eine4uit# founded on some change in the condition or relations of the propert# or parties.> :t is based on public polic# /hich, for the peace of societ#, ordains that relief /ill be denied to a stale demand /hich other/ise could be a %alid claim. :t is different from and applies independentl# of prescription. Dhile prescription is concerned /ith the fact of dela#, laches is concerned /ith the effect of dela#. (rescription is a matter of time0 laches is principall# a 4uestion of ine4uit# of permitting a claim to be enforced, this ine4uit# being founded on some change in the condition of the propert# or the relation of the parties. (rescription is statutor#0 laches is not. Caches applies in e4uit#, /hereas prescription applies at la/. (rescription is based on a fi.ed time, laches is not. +Fda. de 8irona %s. 6ncarnacion, 2R !68*"5, 58 =eptember 5""70 8hird Di%ision, Nachura $., 8he four +), elements of laches first prescribed b# &the =upreme- ourt in 2o hi 2un, et al %. o ho, et al, as subse4uentl# reiterated, are as follo/sA &!- conduct on the part of the defendant, or of one under /hom he claims, gi%ing rise to the situation of /hich complaint is made for /hich the complaint see<s a remed#0 &5dela# in asserting the complainant;s rights, the complainant ha%ing had <no/ledge or notice, of the defendant;s conduct and ha%ing been afforded an opportunit# to institute a suit0 &'- lac< of <no/ledge or notice on the part of the defendant that the complainant /ould assert the right on /hich he bases his suit0 and &)- in9ur# or pre9udice to the defendant in the e%ent relief is accorded to the complainant, or the suit is not held to be barred. +Fda. de 8irona %s. 6ncarnacion, 2R !68*"5, 58 =eptember 5""70 8hird Di%ision, Nachura $.0 Note that these re4uisites /ere also reiterated in @angonil7Jerrera %s, @angonil, 2R !5*'56, 58 August 5""70 8hird Di%ision, hico7Na3ario $., :t is a /ell7settled doctrine that laches cannot be used to defeat 9ustice or perpetuate fraud and in9ustice. Neither should its application be used to pre%ent the rightful o/ners of a propert# from reco%ering /hat has been fraudulentl# registered in the name of another. +Clemos %s. Clemos, 2R !5"!65, 56 $anuar# 5""70 8hird
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Di%ision, Austria7Martine3 $., 8he doctrine of laches or of Estale demands> is based upon grounds of public polic# /hich re4uires, for the peace of societ#, the discouragement of stale claims and, unli<e the statute of limitation, is not merel# a 4uestion of time but is principall# a 4uestion of the ine4uit# or unfairness of permitting a right or claim to be enforced or asserted. 8here is no absolute rule as to /hat constitutes laches or staleness of demand0 each case is to be determined according to its particular circumstances. ?ltimatel#, ho/e%er, the 4uestion of laches is addressed to the sound discretion of the court and, since it is an e4uitable doctrine, its application is controlled b# e4uitable consideration. +?nited 1%erseas Ban< %s. Ros, 2R !7!5'5, 7 August 5""70 8hird Di%ision, hico7Na3ario $., 'ort%a%ee in %ood faith2 :n a%ite De%elopment Ban< %. =pouses Cim, &8! (hil. '55, '68 +5""", as cited in 6reIa %. Guerrer7 Nauffman, 2.R. No. !6585', 55 $une 5""6, )*5 = RA 5*8, '!*- the ourt e.plained the doctrine of mortgagee in good faith, thusA E8here is, ho/e%er, a situation /here, despite the fact that the mortgagor is not the o/ner of the mortgaged propert#, his title being fraudulent, the mortgage contract and an# foreclosure sale arising there from are gi%en effect b# reason of public polic#. 8his is the doctrine of Ethe mortgagee in good faith> based on the rule that all persons dealing /ith propert# co%ered b# the 8orrens ertificates of 8itle, as bu#ers or mortgagees, are not re4uired to go be#ond /hat appears on the face of the title. 8he public interest in upholding the indefeasibilit# of a certificate of title, as e%idence of la/ful o/nership of the land or of an# encumbrance thereon, protects a bu#er or mortgagee /ho, in good faith, relied upon /hat appears on the face of the certificate of title.> :ndeed, a mortgagee has a right to rel# in good faith on the certificate of title of the mortgagor of the propert# gi%en as securit#, and in the absence of an# sign that might arouse suspicion, the mortgagee has no obligation to underta<e further in%estigation. 8his doctrine pre7supposes, ho/e%er, that the mortgagor, /ho is not the rightful o/ner of the propert#, has alread# succeeded in obtaining 8orrens title o%er the propert# in his name and that, after obtaining the said title, he succeeds in mortgaging the propert# to another /ho relies on /hat appears on the title. +Ban< of ommerce %s. =an (ablo $r., 2R !678)8, 57 April 5""70 8hird Di%ision, hico7Na3ario $., 3uietin% of 0itle As a general rule, a cloud /hich ma# be remo%ed b# suit to 4uiet title is not created b# mere %erbal or parol assertion of o/nership of or an interest in propert#. 8his rule is sub9ect to 4ualification, /here there is a /ritten or factual basis for the asserted right. 8hus, a claim of right based on ac4uisiti%e prescription or ad%erse possession has been held to constitute a remo%able cloud on title. +8andog %s. Macapagal, 2R !))5"8, !! =eptember 5""70 @irst Di%ision, =ando%al72utierre3 $., -and "e%istration 0orrens system,BpO 8he issue of the %alidit# of title +e.g. /hether or not it /as issued fraudulentl# or in breach of trust, can onl# be assailed in an action e.pressl# instituted for that purpose. A certificate of title cannot be attac<ed collaterall#. +:ngusan %s. Jeirs of Re#es, 2R !)5*'8, 58 August 5""70 @irst Di%ision, orona $., 8he rationale behind the 8orrens =#stem is that the public should be able to rel# on a registered title. 8he 8orrens =#stem /as adopted in this countr# because it /as belie%ed to be the most effecti%e measure to guarantee the integrit# of land titles and to protect their indefeasibilit# once the claim of o/nership is established and recogni3ed. :n @il7estate Management, :nc. %. 8rono, &2.R. No. !'"87!, !7 @ebruar# 5""6, )85 = RA 578, the ourt- e.plainedA E:t has been in%ariabl# stated that the real purpose of the 8orrens =#stem is to 4uiet title to land and to stop fore%er an# 4uestion as to its legalit#. 1nce a title is registered, the o/ner ma# rest secure, /ithout the necessit# of /aiting in the portals of the court, or sitting on the Emirador su casa> to a%oid the possibilit# of losing his land.> +:ngusan %s. Jeirs of Re#es, 2R !)5*'8, 58 August 5""70 @irst Di%ision, orona $.,
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&An 1 8- /hich /as registered under the 8orrens =#stem on the basis of a free patent became indefeasible and incontro%ertible after the lapse of one #ear as pro%ided in =ection '5 &Re%ie/ of decree of registration0 :nnocent purchaser for %alue- of (D !55*A E8he decree of registration shall not be reopened or re%ised b# reason of absence, minorit#, or other disabilit# of an# person ad%ersel# affected thereb#, nor b# an# proceeding in an# court for re%ersing 9udgment, sub9ect, ho/e%er, to the right of an# person, including the go%ernment and the branches thereof, depri%ed of land or of an# estate or interest therein b# such ad9udication or confirmation of title obtained b# actual fraud, to file in the proper ourt of @irst :nstance a petition for reopening and re%ie/ of the decree of registration not later than one #ear from and after the date of the entr# of such decree of registration, but in no case shall such petition be entertained b# the court /here an innocent purchaser for %alue has ac4uired the land or an interest therein /hose rights ma# be pre9udiced. Dhene%er the phrase Einnocent purchaser for %alue> or an e4ui%alent phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for %alue. ?pon the e.piration of said period of one #ear, the decree of registration and the certificate of title issued shall become incontro%ertible. An# person aggrie%ed b# such decree of registration in an# case ma# pursue his remed# b# action for damages against the applicant or an# other person responsible for the fraud.> +:ngusan %s. Jeirs of Re#es, 2R !)5*'8, 58 August 5""70 @irst Di%ision, orona $., &6-%er# person dealing /ith registered land ma# safel# rel# on the correctness of the certificate of title issued therefor and the la/ /ill in no /a# oblige him to go be#ond the certificate to determine the condition of the propert#. Dhere there is nothing in the certificate of title to indicate an# cloud or %ice in the o/nership of the propert#, or an# encumbrance thereon, the purchaser is not re4uired to e.plore further than /hat the 8orrens 8itle upon its face indicates in 4uest for an# hidden defects or inchoate right that ma# subse4uentl# defeat his right thereto. Jo/e%er, /hen a person /ho deals /ith registered land through someone /ho is not the registered o/ner, he is e.pected to loo< behind the certificate of title and e.amine all the factual circumstances, in order to determine if the %endor has the capacit# to transfer an# interest in the land. Je has the dut# to ascertain the identit# of the person /ith /hom he is dealing and the latter;s legal authorit# to con%e#. 8he la/ Ere4uires a higher degree of prudence from one /ho bu#s from a person /ho is not the registered o/ner, although the land ob9ect of the transaction is registered. Dhile one /ho bu#s from the registered o/ner does not need to loo< behind the certificate of title, one /ho bu#s from one /ho is not the registered o/ner is e.pected to e.amine not onl# the certificate of title but all factual circumstances necessar# for him to determine if there are an# fla/s in the title of the transferor, or in his capacit# to transfer the land.> +=pouses hua %s. =oriano, 2R !5""66, !' April 5""70 8hird Di%ision, Austria7Martine3 $., A person /ho deliberatel# ignores a significant fact that could create suspicion in an other/ise reasonable person is not an innocent purchaser for %alue. +Ban< of ommerce %s. =an (ablo $r., 2R !678)8, 57 April 5""70 8hird Di%ision, hico7Na3ario $., "econstituted titles ?nder section 7 of Republic Act No. 56, EReconstituted titles shall ha%e the same %alidit# and legal effect as the originals thereof> unless the reconstitution /as made e.tra9udiciall#. :n this case, 8 8s No. 5""65* and 5""6'" /ere reconstituted administrati%el#, hence, e.tra9udiciall#. :n contrast to the 9udicial reconstitution of a lost certificate of title /hich is in rem, the administrati%e reconstitution is essentiall# e.7parte and /ithout notice. 8he reconstituted certificates of title do not share the same indefeasible character of the original certificates of title for the follo/ing reasonA E. . . 8he nature of a reconstituted 8ransfer ertificate 1f 8itle of registered land is similar to that of a second 1/ner;s Duplicate 8ransfer ertificate 1f 8itle. Both are issued, after the proper proceedings, on the representation of the registered o/ner that the original of the said 8 8 or the original of the 1/ner;s Duplicate 8 8, respecti%el#, /as lost and could not be located or found despite diligent efforts e.erted for that purpose. Both, therefore, are subse4uent copies of the originals thereof. A cursor# e.amination of these subse4uent copies /ould sho/ that the# are not the originals. An#one dealing /ith such copies are put on notice of such fact and thus /arned to be e.tra7careful.> +Barsto/e (hilippines orporation %s. Republic, 2R !''!!", 58 March 5""70 8hird Di%ision, hico7Na3ario $., &lienable land
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8o be entitled to registration of a land, the applicant must pro%e that +a, the land applied for forms part of the disposable and alienable agricultural lands of the public domain0 and +b, he has been in open, continuous, e.clusi%e, and notorious possession and occupation of the same under a bona fide claim of o/nership either since time immemorial or since $une !5, !*)5. All lands not other/ise appearing to be clearl# /ithin pri%ate o/nership are presumed to belong to the =tate, and unless it has been sho/n that the# ha%e been reclassified b# the =tate as alienable or disposable to a pri%ate person, the# remain part of the inalienable public domain. 8o pro%e that a land is alienable, an applicant must conclusi%el# establish the e.istence of a positi%e act of the go%ernment, such as a presidential proclamation or an e.ecuti%e order, or administrati%e action, in%estigation reports of the Bureau of Cands in%estigator or a legislati%e act or statute. +Domingo %s. Candicho, 2R !7""!5, 5* August 5""70 =econd Di%ision, arpio7Morales $., Fer# e%ident from Republic %. Manna (roperties, :nc. &2.R. No. !)6557, )5" = RA 5)7 +'! $anuar# 5""5,is that the rec<oning date under the (ublic Cand Act for the ac4uisition of o/nership of public lands is $une !5, !*)5 or earlier, and that e%idence of possession from that date or earlier is essential for a grant of an application for 9udicial confirmation of imperfect title. +Republic %s. Coren3o De%elopment orp., 2R !7"75), 5* $anuar# 5""70 @irst Di%ision, 2arcia $., (ossession of lands of the public domain must be from at least $une !5, !*)5 for the same to be ac4uired through 9udicial confirmation of imperfect title. 8hrough the #ears, =ection )8+b,, supra, of the (ublic Cand Act has been amended se%eral times. 8he case of Republic %. Doldol &2.R. No. !'5*6', =eptember !", !**8, 5*5 = RA '5*, '6)- pro%ides a summar# of these amendments. As the la/ no/ stands, a mere sho/ing of possession for thirt# #ears or more is not sufficient. :t must be sho/n, too, that possession and occupation had started on $une !5, !*)5 or earlier. +Republic %s. Coren3o De%elopment orp., 2R !7"75), 5* $anuar# 5""70 @irst Di%ision, 2arcia $., 4omestead patent =ettled in this 9urisdiction is the rule that the rights of a holder of a homestead patent are superior o%er the rights of the tenants guaranteed b# the Agrarian Reform Ca/, as enunciated in &Alita %s. ourt of Appeals, 2.R. No. 785!7, @ebruar# 57, !*8*, !7" = RA 7"*-A E8he Jomestead Act has been enacted for the /elfare and protection of the poor. 8he la/ gi%es a need# citi3en a piece of land /here he ma# build a modest house for himself and famil# and plant /hat is necessar# for subsistence and for the satisfaction of life;s other needs. 8he right of the citi3ens to their homes and to the things necessar# for their subsistence is as %ital as the right to life itself. 8he# ha%e a right to li%e /ith a certain degree of comfort as . . . human beings, and the =tate /hich loo<s after the /elfare of the people;s happiness is under a dut# to safeguard the satisfaction of this %ital right.> +(atricio %. Ba#og, !!5 = RA )5,> +8aguinod %s. ourt of Appeals, 2R !5)65), !) =eptember 5""70 =econd Di%ision, Felasco $r. $., "e%istration proper :t is elementar# that a court must render 9udgment confirming the title of the applicant onl# if it finds that the latter has sufficient title proper for registration. An application for land registration ma# include t/o or more parcels of land, but the court ma# at an# time order an application to be amended b# stri<ing out one or more of the parcels or order a se%erance of the application. +Jerce $r. %s. Municipalit# of abu#ao Caguna, 2R !666)5, 5' $anuar# 5""70 =pecial @irst Di%ision, Hnares7=antiago $., 'aceda -a+ R.A. No. 6555, other/ise <no/n as the ERealt# :nstallment Bu#er (rotection Act,> recogni3es in conditional sales of all <inds of real estate +industrial, commercial, residential, the right of the seller to cancel the contract upon non7pa#ment of an installment b# the bu#er, /hich is simpl# an e%ent that pre%ents the obligation of the %endor to con%e# title from ac4uiring binding force. Jo/e%er, the cancellation of the contract b# the seller must be in accordance /ith =ec. ' +b, of R.A. No. 6555, /hich re4uires a notarial act of rescission and the refund to the bu#er of the full pa#ment of the cash surrender %alue of the pa#ments on the propert#. Actual cancellation of the contract ta<es place after '" da#s from receipt b# the bu#er of the notice of cancellation or
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the demand for rescission of the contract b# a notarial act and upon full pa#ment of the cash surrender %alue to the bu#er. +(agtalunan %s. dela ru3 %da. de Man3ano, 2R !)76*5, !' =eptember 5""70 @irst Di%ision, A3cuna $., 8he demand letter &to %acate the premises- is not the same as the notice of cancellation or demand for rescission b# a notarial act re4uired b# R.A No. 6555. &Ca#ug %. :ntermediate Appellate ourt, No. C775'6), No%ember 5', !*88, !67 = RA 657, 6'5, cannot be relied on- to support &the- contention that the demand letter /as sufficient compliance. Ca#ug held that Ethe additional formalit# of a demand on &the seller;s- part for rescission b# notarial act /ould appear, in the premises, to be merel# circuitous and conse4uentl# superfluous> since the seller therein filed an action for annulment of contract, /hich is a <indred concept of rescission b# notarial act. 6%identl#, the case of unla/ful detainer filed b# petitioner does not e.empt him from compl#ing /ith the said re4uirement. +(agtalunan %s. dela ru3 %da. de Man3ano, 2R !)76*5, !' =eptember 5""70 @irst Di%ision, A3cuna $., +uccession 5ills Before an# /ill can ha%e force or %alidit# it must be probated. 8his cannot be dispensed /ith and is a matter of public polic#. Article 8'8 of the i%il ode mandates that E&n-o /ill shall pass either real or personal propert# unless it is pro%ed and allo/ed in accordance /ith the Rules of ourt.> As the /ill /as not probated, the (artition Agreement /hich /as e.ecuted pursuant thereto can not be gi%en effect. 8hus, the fact that petitioner /as a part# to said agreement becomes immaterial in the determination of the issue of possession. +Rodrigue3 %s. Rodrigue3, 2R !7575", !! =eptember 5""70 8hird Di%ision, Hnares7=antiago $., ,-li&ations and Contracts *bli%ations Dhen the ser%ice has become so difficult as to be manifestl# be#ond the contemplation of the parties, total or partial release from a prestation and from the counter7prestation is allo/ed. ?nder the theor# of rebus sic stantibus, the parties stipulate in the light of certain pre%ailing conditions, and once these conditions cease to e.ist, the contract also ceases to e.ist. +1smena ::: %s. ===, 2R !65575, !' =eptember 5""70 6n Banc, 2arcia $., Contracts "e#uisites :n general, the cause is the /h# of the contract or the essential reason /hich mo%es the contracting parties to enter into the contract. @or the cause to be %alid, it must be la/ful such that it is not contrar# to la/, morals, good customs, public order or public polic#. + amacho %s. ourt of Appeals, 2R !5755", * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., 8he failure of the parties to state its e.act location in the contract is of no moment0 this is a mere error occasioned b# the parties; failure to describe /ith particularit# the sub9ect propert#, /hich does not indicate the absence of the principal ob9ect as to render the contract %oid. + amacho %s. ourt of Appeals, 2R !5755", * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., )ilateral Contracts 8he elementar# principle is that it is perfectl# legitimate for a bilateral contract to be embodied in t/o or more separate /ritings, and that in such an e%ent the /ritings should be read and interpreted together in such a /a# as to eliminate seeming inconsistencies and render the intention of the parties effectual. :n construing a /ritten contract, the reason behind and the circumstances surrounding its e.ecution are of paramount importance to place the interpreter in the situation occupied b# the parties concerned at the time the /riting /as e.ecuted. onstruction of the terms of a contract, /hich /ould amount to impairment or loss of right, is not fa%ored. onser%ation and preser%ation, not /ai%er, abandonment or forfeiture of a right, is the rule. :n
case of doubts in contracts, the same should be settled in fa%or of the greatest reciprocit# of interests. + onstantino %s. =andiganba#an, 2R !)"656, !' =eptember 5""70 =econd Di%ision, 8inga $., Stipulations 8he la/ states that if the terms of a contract are clear and lea%e no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.&56- Dhen the language of the contract is e.plicit, lea%ing no doubt as to the intention of the drafters, the courts ma# not read into it an# other intention that /ould contradict its plain import. 8he clear terms of the contract should ne%er be the sub9ect matter of interpretation. Neither abstract 9ustice nor the rule of liberal interpretation 9ustifies the creation of a contract for the parties /hich the# did not ma<e themsel%es, or the imposition upon one part# to a contract or obligation to assume simpl# or merel# to a%oid seeming hardships. 8heir true meaning must be enforced, as it is to be presumed that the contracting parties <no/ their scope and effects. +Roberts %s. (apio, 2R !667!), * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., :f some stipulations of an# contract should admit of se%eral meanings, it shall be understood as bearing that import /hich is most ade4uate to render it effectual. 8he %arious stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense /hich ma# result from all of them ta<en 9ointl#. Dhen it is impossible to settle doubts b# the rules established in the preceding articles, and the doubts refer to incidental circumstances of an onerous contract, the doubt shall be settled in fa%or of the greatest reciprocit# of interests. +=ecurit# Ban< orp. %s. ourt of Appeals, 2R !)!7'', 8 @ebruar# 5""70 @irst Di%ision, (uno $., &Article !'7" of the i%il ode- is a<in to the Eplain meaning rule> applied b# (enns#l%ania courts, /hich assumes that the intent of the parties to an instrument is Eembodied in the /riting itself, and /hen the /ords are clear and unambiguous the intent is to be disco%ered onl# from the e.press language of the agreement.> :t also resembles the Efour corners> rule, a principle /hich allo/s courts in some cases to search beneath the semantic surface for clues to meaning. A court;s purpose in e.amining a contract is to interpret the intent of the contracting parties, as ob9ecti%el# manifested b# them. 8he process of interpreting a contract re4uires the court to ma<e a preliminar# in4uir# as to /hether the contract before it is ambiguous. A contract pro%ision is ambiguous if it is susceptible of t/o reasonable alternati%e interpretations. Dhere the /ritten terms of the contract are not ambiguous and can onl# be read one /a#, the court /ill interpret the contract as a matter of la/. :f the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resol%e the ambiguit# in the light of the intrinsic e%idence. +Abad %s. 2oldloop (roperties :nc., 2R !68!"8, !' April 5""70 8hird Di%ision, alle9o =r. $., A contract is simulated if the parties do not intend to be bound at all +absolutel# simulated, or if the parties conceal their true agreement +relati%el# simulated,. 8he primar# consideration in determining the true nature of a contract is the intention of the parties. =uch intention is determined from the e.press terms of their agreement as /ell as from their contemporaneous and subse4uent acts. :n =unta# %. ourt of Appeals,&'5! (hil. 8"*, 8'!78'5 +!**5,- the ourt ruled that the most protuberant inde. of simulation is the complete absence, on the part of the %endee, of an# attempt in an# manner to assert his rights of o/nership o%er the disputed propert#. +8ating %s. Marcella , 2R !555"8, 57 March 5""70 8hird Di%ision, Austria7Martine3 $., Penal clause A penal clause is an accessor# underta<ing to assume greater liabilit# in case of breach. :t is attached to an obligation in order to insure performance and has a double functionA +!, to pro%ide for li4uidated damages, and +5, to strengthen the coerci%e force of the obligation b# the threat of greater responsibilit# in the e%ent of breach. 8he obligor /ould then be bound to pa# the stipulated indemnit# /ithout the necessit# of proof of the e.istence and the measure of damages caused b# the breach. +@lorentino %s. =uper%alue :nc., 2R !75'8), !5 =eptember 5""70 8hird Di%ision, hico7Na3ario $., As a general rule, courts are not at libert# to ignore the freedoms of the parties to agree on such terms and conditions as the# see fit as long as the# are not contrar# to la/, morals, good customs, public order or public polic#. Ne%ertheless, courts ma# e4uitabl# reduce a stipulated penalt# in the contracts in t/o instancesA +!, if
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the principal obligation has been partl# or irregularl# complied /ith0 and +5, e%en if there has been no compliance if the penalt# is ini4uitous or unconscionable in accordance /ith Article !55* of the i%il ode. +@lorentino %s. =uper%alue :nc., 2R !75'8), !5 =eptember 5""70 8hird Di%ision, hico7Na3ario $., :n ascertaining /hether the penalt# is unconscionable or not, this court set out the follo/ing standard in Cigutan %. ourt of Appeals, )57 (hil. )5, 55 +5""5,, to /itA>8he 4uestion of /hether a penalt# is reasonable or ini4uitous can be partl# sub9ecti%e and partl# ob9ecti%e. :ts resolution /ould depend on such factor as, but not necessaril# confined to, the t#pe, e.tent and purpose of the penalt#, the nature of the obligation, the mode of breach and its conse4uences, the super%ening realities, the standing and relationship of the parties, and the li<e, the application of /hich, b# and large, is addressed to the sound discretion of the court. ....> +@lorentino %s. =uper%alue :nc., 2R !75'8), !5 =eptember 5""70 8hird Di%ision, hico7Na3ario $., /nterests 8he pa#ment of regular interest constitutes the price or cost of the use of mone# and thus, until the principal sum due is returned to the creditor, regular interest continues to accrue since the debtor continues to use such principal amount. :t has been held that for a debtor to continue in possession of the principal of the loan and to continue to use the same after maturit# of the loan /ithout pa#ment of the monetar# interest, /ould constitute un9ust enrichment on the part of the debtor at the e.pense of the creditor. +@rias %s. =an Diego7=ison, 2R !5555', ' April 5""70 8hird Di%ision, Austria7Martine3 $., &A-lthough the ?sur# Ca/ /as suspended b# entral Ban< ircular No. *"5, s. !*85, effecti%e on ! $anuar# !*8', and conse4uentl# parties are gi%en a /ide latitude to agree on an# interest rate, nothing in the said ircular grants lenders carte blanche authorit# to raise interest rates to le%els /hich /ill either ensla%e their borro/ers or lead to a hemorrhaging of their assets. =tipulation authori3ing ini4uitous or unconscionable interests are contrar# to morals, if not against the la/. ?nder Article !)"* of the i%il ode, these contracts are ine.istent and %oid from the beginning. 8he# cannot be ratified nor the right to set up their illegalit# as a defense be /ai%ed. 8he nullit# of the stipulation on the usurious interest does not, ho/e%er, affect the lender;s right to reco%er the principal of the loan. Nor /ould it affect the terms of the real estate mortgage. 8he right to foreclose the mortgage remains /ith the creditors, and said right can be e.ercised upon the failure of the debtors to pa# the debt due. 8he debt due is to be considered /ithout the stipulation of the e.cessi%e interest. A legal interest of !5P per annum /ill be added in place of the e.cessi%e interest formerl# imposed. +Jeirs of 6spiritu %s. =pouss Candrito, 2R !6*6!7, ' April 5""70 8hird Di%ision, hico7Na3ario $., Statute of -imitations 8he statute of limitations /as de%ised to operate primaril# against those /ho slept on their rights and not against those desirous to act but could not do so for causes be#ond their control. +Antonio %s. Morales, 2R !65555, 5' $anuar# 5""70 @irst Di%ision, =ando%al72utierre3 $., .stoppel 8he principle of estoppel in pais applies /herein Q b# one;s acts, representations or admissions, or silence /hen one ought to spea< out Q intentionall# or through culpable negligence, induces another to belie%e certain facts to e.ist and to rightfull# rel# and act on such belief, so as to be pre9udiced if the former is permitted to den# the e.istence of those facts. +Cope3 %s. Bodega it#, 2R !557'!, ' =eptember 5""70 8hird Di%ision, Austria7Martine3 $., Pari Delicto :n pari delicto is Ea uni%ersal doctrine /hich holds that no action arises, in e4uit# or at la/, from an illegal contract0 no suit can be maintained for its specific performance, or to reco%er the propert# agreed to be sold or deli%ered, or the mone# agreed to be paid, or damages for its %iolation0 and /here the parties are in pari delicto, no affirmati%e relief of an# <ind /ill be gi%en to one against the other.> 8his rule, ho/e%er, is sub9ect to e.ceptions that permit the return of that /hich ma# ha%e been gi%en under a %oid contract toA +a, the innocent part# +Arts. !)!!7!)!5, i%il ode,0 +b, the debtor /ho pa#s usurious interest +Art. !)!', i%il
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ode,0 +c, the part# repudiating the %oid contract before the illegal purpose is accomplished or before damage is caused to a third person and if public interest is subser%ed b# allo/ing reco%er# +Art. !)!), i%il ode,0 +d, the incapacitated part# if the interest of 9ustice so demands +Art. !)!5, i%il ode,0 +e, the part# for /hose protection the prohibition b# la/ is intended if the agreement is not illegal per se but merel# prohibited and if public polic# /ould be enhanced b# permitting reco%er# +Art. !)!6, i%il ode,0 and +f, the part# for /hose benefit the la/ has been intended such as in price ceiling la/s +Art. !)!7, i%il ode, and labor la/s +Arts. !)!87!)!*, i%il ode,. +Julst %s. (R Builders :nc., 2R !56'6), ' =eptember 5""70 8hird Di%ision,Austria7 Martine3 $., 0orts 1 3uasi,delict ortuitous e$ent $urisprudence defines the elements of a Efortuitous e%ent> as follo/sA +a, the cause of the unforeseen and une.pected occurrence must be independent of human /ill0 +b, it must be impossible to foresee the e%ent /hich constitutes the caso fortuito, or if it can be foreseen, it must be impossible to a%oid0 +c, the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner0 and +d, the obligor must be free from an# participation in the aggra%ation of the in9ur# resulting to the creditor. Article !!7) of the i%il ode pro%ides that no person shall be responsible for a fortuitous e%ent /hich could not be foreseen, or /hich, though foreseen, /as ine%itable. :n other /ords, there must be an entire e.clusion of human agenc# from the cause of in9ur# or loss. +Real %s. Belo, 2R !)655), 56 $anuar# 5""70 8hird Di%ision, Austria7Martine3 $., "es /psa -o#uitur Citerall#, res ipsa lo4uitur means Ethe thing spea<s for itself.> :t is the rule that the fact of the occurrence of an in9ur#, ta<en /ith the surrounding circumstances, ma# permit an inference or raise a presumption of negligence, or ma<e out a plaintiff;s prima facie case, and present a 4uestion of fact for defendant to meet /ith an e.planation. =tated differentl#, /here the thing /hich caused the in9ur#, /ithout the fault of the in9ured, is under the e.clusi%e control of the defendant and the in9ur# is such that it should not ha%e occurred if he, ha%ing such control used proper care, it affords reasonable e%idence, in the absence of e.planation that the in9ur# arose from the defendant;s /ant of care, and the burden of proof is shifted to him to establish that he has obser%ed due care and diligence. @rom the foregoing statements of the rule, the re4uisites for the applicabilit# of the doctrine of res ipsa lo4uitur areA +!, the occurrence of an in9ur#0 +5, the thing /hich caused the in9ur# /as under the control and management of the defendant0 +', the occurrence /as such that in the ordinar# course of things, /ould not ha%e happened if those /ho had control or management used proper care0 and +), the absence of e.planation b# the defendant. 1f the foregoing re4uisites, the most instrumental is the Econtrol and management of the thing /hich caused the in9ur#. +(rofessional =er%ices :nc. %s. Agana, 2R !565*7, '! $anuar# 5""70 @irst Di%ision, =ando%al72utierre3 $., :n this 9urisdiction, res ipsa lo4uitur is not a rule of substanti%e la/, hence, does not per se create or constitute an independent or separate ground of liabilit#, being a mere e%identiar# rule. :n other /ords, mere in%ocation and application of the doctrine does not dispense /ith the re4uirement of proof of negligence. +(rofessional =er%ices :nc. %s. Agana, 2R !565*7, '! $anuar# 5""70 @irst Di%ision, =ando%al72utierre3 $., Ar-itration Arbitration, as an alternati%e mode of settling disputes, has long been recogni3ed and accepted in our 9urisdiction. 8he i%il ode is e.plicit on the matter. R.A. No. 876 also e.pressl# authori3es arbitration of domestic disputes. @oreign arbitration, as a s#stem of settling commercial disputes of an international character, /as li<e/ise recogni3ed /hen the (hilippines adhered to the ?nited Nations E on%ention on the Recognition and the 6nforcement of @oreign Arbitral A/ards of !*58,> under the !" Ma# !*65 Resolution No. 7! of the (hilippine =enate, gi%ing reciprocal recognition and allo/ing enforcement of international arbitration agreements bet/een parties of different nationalities /ithin a contracting state. 8he enactment of R.A. No. *585 on 5 April 5"") further institutionali3ed the use of alternati%e dispute resolution s#stems,
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including arbitration, in the settlement of disputes. +2on3ales %s. lima. Mining Ctd., 2R !6!*57, 55 $anuar# 5""70 =pecial =econd Di%ision, 8inga $., Disputes do not go to arbitration unless and until the parties ha%e agreed to abide b# the arbitrator;s decision. Necessaril#, a contract is re4uired for arbitration to ta<e place and to be binding. R.A. No. 876 recogni3es the contractual nature of the arbitration agreement. &As held- in Manila 6lectric o. %. (asa# 8ransportation o. &57 (hil. 6"" +!*'5,- that a submission to arbitration is a contract. A clause in a contract pro%iding that all matters in dispute bet/een the parties shall be referred to arbitration is a contract, and in Del Monte orporation7?=A %. ourt of Appeals&)") (hil. !*5 +5""!,- that E&t-he pro%ision to submit to arbitration an# dispute arising therefrom and the relationship of the parties is part of that contract and is itself a contract. As a rule, contracts are respected as the la/ bet/een the contracting parties and produce effect as bet/een them, their assigns and heirs.> +2on3ales %s. lima. Mining Ctd., 2R !6!*57, 55 $anuar# 5""70 =pecial =econd Di%ision, 8inga $., 8he special proceeding under =ec. 6 of R.A. No. 876 recogni3es the contractual nature of arbitration clauses or agreements. 8his special proceeding is the procedural mechanism for the enforcement of the contract to arbitrate. +2on3ales %s. lima. Mining Ctd., 2R !6!*57, 55 $anuar# 5""70 =pecial =econd Di%ision, 8inga $., 8he doctrine of separabilit#, or se%erabilit# as other /riters call it, enunciates that an arbitration agreement is independent of the main contract. 8he arbitration agreement is to be treated as a separate agreement and the arbitration agreement does not automaticall# terminate /hen the contract of /hich it is part comes to an end. 8he separabilit# of the arbitration agreement is especiall# significant to the determination of /hether the in%alidit# of the main contract also nullifies the arbitration clause. :ndeed, the doctrine denotes that the in%alidit# of the main contract, also referred to as the Econtainer> contract, does not affect the %alidit# of the arbitration agreement. :rrespecti%e of the fact that the main contract is in%alid, the arbitration clauseBagreement still remains %alid and enforceable. +2on3ales %s. lima. Mining Ctd., 2R !6!*57, 55 $anuar# 5""70 =pecial =econd Di%ision, 8inga $., +ale Contract of sale 1 Contract to Sell 8he follo/ing are the differences bet/een a ontract 1@ =ale and a ontract 81 =ellA +a, :n a ontract 1@ =ale, the non7pa#ment of the price is a resolutor# condition /hich e.tinguishes the transaction that, for a time, e.isted and discharges the obligations created thereunder0 in a ontract 81 =ell, full pa#ment of the purchase price is a positi%e suspensi%e condition, failure of /hich is not a breach but an e%ent that pre%ents the obligation of the %endor to con%e# title from becoming effecti%e0 +b, :n the first, title o%er the propert# generall# passes to the bu#er upon deli%er#0 in the second, o/nership is retained b# the seller, regardless of deli%er# and is not to pass until full pa#ment of the price0 and +c, :n the first, after deli%er# has been made, the seller has lost o/nership and cannot reco%er it unless the contract is resol%ed or rescinded0 in the second, since the seller retains o/nership, despite deli%er#, he is enforcing and not rescinding the contract if he see<s to oust the bu#er for failure to pa#. +Fidad %s. 8a#amen, 2R !6"55), 5) August 5""70 =econd Di%ision, Guisumbing $., 8he ontract to =ell is not %oid merel# because it does not bear the signature of the &%endee-. +1esmer s. (araiso De%elopment orp., 2R !57)*', 5 @ebruar# 5""70 8hird Di%ision, hico7Na3ario $., Double Sale Art. !5)) of the i%il ode, /hich pro%ides the rule on double sale, applies onl# to a situation /here the same propert# is %alidl# sold to different %endees. :n Remalante %. 8ibe, &No. C75*5!), 55 @ebruar# !*88, !58 = RA !'8, the =upreme- ourt ruled that the i%il Ca/ pro%ision on double sale is not applicable /here there is onl# one %alid sale, the pre%ious sale ha%ing been found to be fraudulent. Ci<e/ise, in 6spiritu and Apostol %. Falerio, &!!* (hil. 6* +!*6',- /here the same parcel of land /as purportedl# sold to t/o different parties, the ourt held that despite the fact that one deed of sale /as registered ahead of the other, Art. !5)) of the i%il ode /ill not appl# /here said deed is found to be a forger#, the result of this being that the right of
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the other %endee should pre%ail. +@udot %s. Di%ision, 8inga $.,
attle#a Cand, :nc., 2R !7!""8, !' =eptember 5""70 =econd
8he la/ is clear that /hen the thing sold t/ice is an immo%able, the one /ho ac4uires it and first records it in the Registr# of (ropert# shall be deemed the o/ner. (rimus tempore, potior 9ure. @irst in time, stronger in right. Jo/e%er, the act of registration must be coupled /ith good faith. 8hat is, the registrant must ha%e no <no/ledge of an# defect in the title of the %endor or must not ha%e been a/are of facts /hich should ha%e put him upon such in4uir# and in%estigation as might be necessar# to ac4uaint him /ith an# such defect. +Bernarde3 %s. ourt of Appeals, 2R !65888, !) =eptember 5""70 =econd Di%ision, Guisumbing $., :n interpreting &Art. !5))-, the ourt declared that the go%erning principle is primus tempore, potior 9ure +first in time, stronger in right,. Nno/ledge gained b# the first bu#er of the second sale cannot defeat the first bu#er;s rights, e.cept /here the second bu#er registers in good faith the second sale ahead of the first as pro%ided b# the afore4uoted pro%ision of the i%il ode. =uch <no/ledge of the first bu#er does not bar him from a%ailing of his rights under the la/, among them to register first his purchase as against the second bu#er. Jo/e%er, <no/ledge gained b# the second bu#er of the first sale defeats his rights e%en if he is first to register the second sale, since such <no/ledge taints his prior registration /ith bad faith. :t is thus essential, to merit the protection of Art. !5)), second paragraph, that the second realt# bu#er must act in good faith in registering his deed of sale. +@udot %s. attle#a Cand, :nc., 2R !7!""8, !' =eptember 5""70 =econd Di%ision, 8inga $., :n hina Airlines, Ctd. %. ourt of Appeals,& 2.R. No. !5**88, $ul# !), 5""', )"6 = RA !!', !56, citing @ord (hilippines, :nc. %. ourt of Appeals, 567 = RA '5" +!**7,, the =upreme ourt- held that bad faith does not simpl# connote bad 9udgment or negligence. :t imports a dishonest purpose or some moral obli4uit# and conscious doing of a /rong. :t means breach of a <no/n dut# through some moti%e, interest or ill /ill that parta<es of the nature of fraud. +Dau3 %s. 6cha%e3, 2R !55)"7, 5! =eptember 5""70 @irst Di%ision, =ando%al7 2utierre3 $., 8he registration contemplated in &Article !5)) of the Ne/ i%il ode- refers to registration under the 8orrens =#stem, /hich considers the act of registration as the operati%e act that gi%es %alidit# to the transfer or creates a lien upon the land. 8his rule precisel# applies to cases in%ol%ing conflicting rights o%er registered propert# and those of innocent transferees /ho relied on the clean title of the properties. M &R-egistration must be done in the proper registr# in order to bind the same. Act '')) pro%ides for the s#stem of recording of transactions or claims o%er unregistered real estate /ithout pre9udice to a third part# /ith a better right. But if the land is registered under the Cand Registration Act +and therefore has a 8orrens 8itle,, and it is sold and the sale is registered not under the Cand Registration Act but under Act '')), as amended, such sale is not considered registered, as the term is used under Art. !5)) of the Ne/ i%il ode. 8he fact that the certificate of title o%er the registered land is lost does not con%ert it into unregistered land. After all, a certificate of title is merel# an e%idence of o/nership or title o%er the particular propert# described therein. M &8-he 8orrens s#stem /as adopted in this countr# because it /as belie%ed to be the most effecti%e measure to guarantee the integrit# of land titles and to insure their indefeasibilit# once the claim of o/nership is established and recogni3ed. :f a person purchases a piece of land on the assurance that the seller;s title thereto is %alid, he should not run the ris< of losing his ac4uisition. :f this /ere permitted, public confidence in the s#stem /ould be eroded and land transactions /ould ha%e to be attended b# complicated and not necessaril# conclusi%e in%estigations and proof of o/nership. +Amodia %s. de Melencion %s. ourt of Appeals, 2R !)88)6, 55 =eptember 5""70 8hird Di%ision, Nachura $., Sale throu%h &uction Article !)76, paragraph 5 of the i%il ode pro%ides &that- E:n the case of a sale b# auctionA . . . +5, A sale b# auction is perfected /hen the auctioneer announces its perfection b# the fall of the hammer, or in other customar# manner. ?ntil such announcement is made, an# bidder ma# retract his bid0 and the auctioneer ma# /ithdra/ the goods from the sale unless the auction has been announced to be /ithout reser%e.> onsidering that the auction sale had alread# been perfected &since the sheriff declared petitioner the highest bidder-, a
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supplemental sale /ith higher consideration at the instance of onl# one part# could no longer be %alidl# e.ecuted. +Di3on %s. Di3on, 2R !565'*, 5 =eptember 5""70 @irst Di%ision, =ando%al72utierre3 $., .#uitable mort%a%e An e4uitable mortgage is one that, although lac<ing in some formalit#, form or /ords, or other re4uisites demanded b# a statute, ne%ertheless re%eals the intention of the parties to change a real propert# as securit# for a debt and contain nothing impossible or contrar# to la/. A contract bet/een the parties is an e4uitable mortgage if the follo/ing re4uisites are presentA +a, the parties entered into a contract denominated as a contract of sale0 and +b, the intention /as to secure an e.isting debt b# /a# of mortgage. 8he decisi%e factor is the intention of the parties. +Roberts %s. (apio, 2R !667!), * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., :n an e4uitable mortgage, the mortgagor retains o/nership o%er the propert# but sub9ect to foreclosure and sale at public auction upon failure of the mortgagor to pa# his obligation. :n contrast, in a pacto de retro sale, o/nership of the propert# sold is immediatel# transferred to the %endee a retro sub9ect onl# to the right of the %endor a retro to repurchase the propert# upon compliance /ith legal re4uirements for the repurchase. 8he failure of the %endor a retro to e.ercise the right to repurchase /ithin the agreed time %ests upon the %endee a retro, b# operation of la/, absolute title o%er the propert#. +Roberts %s. (apio, 2R !667!), * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., 1ne repurchases onl# /hat one has pre%iousl# sold. 8he right to repurchase presupposes a %alid contract of sale bet/een the same parties. +Roberts %s. (apio, 2R !667!), * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., As the ourt held in Fillarica, et al. %. ourt of AppealsA& !'5 (hil. !66 +!*68,- E8he right of repurchase is not a right granted the %endor b# the %endee in a subse4uent instrument, but is a right reser%ed b# the %endor in the same instrument of sale as one of the stipulations of the contract. 1nce the instrument of absolute sale is e.ecuted, the %endor can no longer reser%e the right to repurchase, and an# right thereafter granted the %endor b# the %endee in a separate instrument cannot be a right of repurchase but some other right li<e the option to bu# ....> +Roberts %s. (apio, 2R !667!), * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., :n Ramos %. :casiano,&5! (hil. ')' +!*57,, the ourt- held that an agreement to repurchase becomes a promise to sell /hen made after the sale because /hen the sale is made /ithout such agreement the purchaser ac4uires the thing sold absolutel#0 and, if he after/ards grants the %endor the right to repurchase, it is a ne/ contract entered into b# the purchaser as absolute o/ner. An option to bu# or a promise to sell is different and distinct from the right of repurchase that must be reser%ed b# means of stipulations to that effect in the contract of sale. +Roberts %s. (apio, 2R !667!), * @ebruar# 5""70 8hird Di%ision, alle9o =r. $., -ease :t is the dut# of the lessor to place the lessee in the legal possession of the premises and to maintain the peaceful possession thereof during the entire term of the lease. 8o full# appreciate the importance of &Article !65) of the i%il ode-, the comment of Manresa on said article is /orth mentioningA E8he lessor must see that the en9o#ment is not interrupted or disturbed, either b# others; acts . . . or b# his o/n. B# his o/n acts, because, being the person principall# obligated b# the contract, he /ould openl# %iolate it if, in going bac< on his agreement, he should attempt to render ineffecti%e in practice the right in the thing he had granted to the lessee0 and b# others; acts, because he must guarantee the right he created, for he is obligated to gi%e /arrant# in the manner /e ha%e set forth in our commentar# on article !55', and, in this sense, it is incumbent upon him to protect the lessee in the latter;s peaceful en9o#ment.> 8he obligation of the lessor arises onl# /hen acts, termed as legal trespass +perturbacion de derecho,, disturb, dispute, ob9ect to, or place difficulties in the /a# of the lessee;s peaceful en9o#ment of the premises that in some manner or other cast doubt upon the right of the lessor b# %irtue of /hich the lessor himself e.ecuted the lease, in /hich case the lessor is obligated to ans/er for said act of trespass. 8he lessee has the right to be respected in his possession and should he be disturbed therein, he shall be restored to said possession b# the means established b# the la/ or b# the Rules of ourt. (ossession is not protection against a right but against the e.ercise of a right b# one;s o/n authorit#.
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+Bercero %s. Martine3 $.,
apitol De%elopment
orporation, 2R !5)765, 5* March 5""70 8hird Di%ision, Austria7
5or6 and -abor &Article !75*- imposes a direct liabilit# on an o/ner of a piece of /or< in fa%or of suppliers of materials +and laborers, hired b# the contractor Eup to the amount o/ing from the &o/ner- to the contractor at the time the claim is made.> 8hus, to this e.tent, the o/ner;s liabilit# is solidar# /ith the contractor, if both are sued together. B# creating a constructi%e %inculum bet/een suppliers of materials +and laborers,, on the one hand, and the o/ner of a piece of /or<, on the other hand, as an e.ception to the rule on pri%it# of contracts, Article !75* protects suppliers of materials +and laborers, from unscrupulous contractors and possible conni%ance bet/een o/ners and contractors. +$C :n%estment R De%elopment :nc. %s. =ta. Maria $r., 2R !)85*6, 55 $anuar# 5""70 =econd Di%ision, arpio $., Although Article !75* protects suppliers, it is no license to oppress o/ners. +$C :n%estment R De%elopment :nc. %s. =ta. Maria $r., 2R !)85*6, 55 $anuar# 5""70 =econd Di%ision, arpio $., A&ency &A- po/er of attorne# must be strictl# construed0 the instrument /ill be held to grant onl# those po/ers that are specified, and the agent ma# neither go be#ond nor de%iate from the po/er of attorne#. Jo/e%er, the rule is not absolute and should not be applied to the e.tent of destro#ing the %er# purpose of the po/er. :f the language /ill permit, the construction that should be adopted is that /hich /ill carr# out instead of defeat the purpose of the appointment. lauses in a po/er of attorne# that are repugnant to each other should be reconciled so as to gi%e effect to the instrument in accordance /ith its general intent or predominant purpose. @urthermore, the instrument should al/a#s be deemed to gi%e such po/ers as essential or usual in effectuating the e.press po/ers. +1laguer %s. (urugganan $r., 2R !58*"7, !5 @ebruar# 5""70 8hird Di%ision, hico7Na3ario $., Article !885 of the i%il ode pro%ides that the limits of an agent;s authorit# shall not be considered e.ceeded should it ha%e been performed in a manner more ad%antageous to the principal than that specified b# him. +1laguer %s. (urugganan $r., 2R !58*"7, !5 @ebruar# 5""70 8hird Di%ision, hico7Na3ario $., &A- person /ho underta<es to act as agent for another cannot be permitted to deal in the agenc# matter on his o/n account and for his o/n benefit /ithout the consent of his principal, freel# gi%en, /ith full <no/ledge of e%er# detail <no/n to the agent /hich might affect the transaction. 8he prohibition against agents purchasing propert# in their hands for sale or management is, ho/e%er, clearl#, not absolute. :t does not appl# /here the principal consents to the sale of the propert# in the hands of the agent or administrator. +1laguer %s. (urugganan $r., 2R !58*"7, !5 @ebruar# 5""70 8hird Di%ision, hico7Na3ario $., Article !8*7 reinforces the familiar doctrine that an agent, /ho acts as such, is not personall# liable to the part# /ith /hom he contracts. 8he same pro%ision, ho/e%er, presents t/o instances /hen an agent becomes personall# liable to a third person. 8he first is /hen he e.pressl# binds himself to the obligation and the second is /hen he e.ceeds his authorit#. :n the last instance, the agent can be held liable if he does not gi%e the third part# sufficient notice of his po/ers. +6urotech :ndustrial 8echnologies :nc. %s. uison, 2R !67555, 5' April 5""70 8hird Di%ision, hico7Na3ario $., .rust :t is alread# settled in 9urisprudence that an implied trust, as opposed to an e.press trust, is sub9ect to prescription and laches. +(ilapil %s. Briones, 2R !5"!75, 5 @ebruar# 5""70 8hird Di%ision, hico7Na3ario $., &A-n action for recon%e#ance of real propert# based on implied trust prescribes ten #ears from registration andBor issuance of the title to the propert#, not onl# because registration under the 8orrens s#stem is a constructi%e notice of title, but also because b# registering the disputed properties e.clusi%el# in &the registrant;s- name, &the registrant- had alread# une4ui%ocall# repudiated an# other claim to the same. +(ilapil %s. Briones, 2R !5"!75, 5 @ebruar# 5""70 8hird Di%ision, hico7Na3ario $.,
Civil Law Updates ( !!") ( #* )
+uretys/ip Article 5"8" of the i%il ode does not appl# in a contract of suret#ship. Art. 5")7 of the i%il ode states that if a person binds himself solidaril# /ith the principal debtor, the pro%isions of =ection ), hapter ', 8itle :, Boo< :F of the i%il ode must be obser%ed. Accordingl#, Articles !5"7 up to !555 of the ode +on 9oint and solidar# obligations, shall go%ern the relationship. +Ang %s. Associated Ban<, 2R !)65!!, 5 =eptember 5""70 @irst Di%ision, A3cuna $., 8he e.tent of a suret#;s liabilit# is determined b# the language of the suret#ship contract or bond itself. :t cannot be e.tended b# implication, be#ond the terms of the contract. +2aron %. (ro9ect Mo%ers Realt# R De%elopment orp., 2R !66"58, ' April 5""70 8hird Di%ision, alle9o =r. $., 0ort&a&e Nature &A- mortgage contract is, b# nature, indi%isible. onse4uent to this feature, a debtor cannot as< for the release of an# portion of the mortgaged propert# or of one or some of the se%eral properties mortgaged unless and until the loan thus secured has been full# paid, not/ithstanding the fact that there has been partial fulfillment of the obligation. Jence, it is pro%ided that the debtor /ho has paid a part of the debt cannot as< for the proportionate e.tinguishments of the mortgage as long as the debt is not completel# satisfied. +Metropolitan Ban< and 8rust ompan# :nc. %s. =C28 Joldings :nc., 2R !75!8!785, !) =eptember 5""70 @irst Di%ision, 2arcia $., /ndi$isibility :t ma# be that =ection !8 of (D *57 allo/s partial redemption of the mortgage in the sense that the bu#er is entitled to pa# his installment for the lot or unit directl# to the mortgagee so as to enable him 7 the said bu#er 7 to obtain title o%er the lot or unit after full pa#ment thereof. =uch accommodation statutoril# gi%en to a unitBlot bu#er does not, ho/e%er, render the mortgage contract also di%isible. 2enerall#, the di%isibilit# of the principal obligation is not affected b# the indi%isibilit# of the mortgage. +Metropolitan Ban< and 8rust ompan# :nc. %s. =C28 Joldings :nc., 2R !75!8!785, !) =eptember 5""70 @irst Di%ision, 2arcia $., "emedies A mortgage7creditor ma#, in the reco%er# of a debt secured b# a real estate mortgage, institute against the mortgage7debtor either a personal action for debt or a real action to foreclose the mortgage. 8hese remedies a%ailable to the mortgage7creditor are deemed alternati%e and not cumulati%e. An election of one remed# operates as a /ai%er of the other. :n sustaining the rule that prohibits a mortgage7creditor from pursuing both remedies of a personal action for debt or a real action to foreclose the mortgage, /e held in Bachrach Motor o., :nc. %. :carangal,&68 (hil. 587, 5*'75*) +!*'*,- that a rule /hich /ould authori3e the mortgage7creditor to bring a personal action against the mortgage7debtor and simultaneousl# or successi%el# another action against the mortgaged propert#, /ould result not onl# in multiplicit# of suits so offensi%e to 9ustice and obno.ious to la/ and e4uit#, but /ould also sub9ect the mortgage7debtor to the %e.ation of being sued in the place of his residence or of the residence of the mortgage7creditor, and then again in the place /here the propert# lies. Jence, a remed# is deemed chosen upon the filing b# the mortgage7creditor of the suit for collection or upon his filing of the complaint in an action for foreclosure of mortgage, pursuant to the pro%isions of Rule 68 of the Rules of ourt. + hieng %s. =pouses =antos, 2R !6*6)7, '! August 5""70 8hird Di%ision, hico7Na3ario $., Dhen &the mortgage7creditor- filed riminal ases for %iolation of Batas (ambansa Blg. 55 against &the mortgage7debtor-, &the mortgage7creditor-;s ci%il action for the reco%er# of the amount of the dishonored chec<s /as impliedl# instituted therein pursuant to =ection !+b, of Rule !!! of the 5""" Rules on riminal (rocedure. &Jence,- he /as deemed to ha%e alread# a%ailed himself of the remed# of collection suit. @ollo/ing the rule on the alternati%e remedies of a mortgage7creditor, petitioner is barred from subse4uentl# resorting to an action for foreclosure. + hieng %s. =pouses =antos, 2R !6*6)7, '! August 5""70 8hird
Civil Law Updates ( !!") ( ! )
Di%ision, hico7Na3ario $., Notice of oreclosure &=-tatutor# pro%isions go%erning publication of notice of mortgage foreclosure sales must be strictl# complied /ith, and that e%en slight de%iations therefrom /ill in%alidate the notice and render the sale at least %oidable. Nonetheless, /e must not also lose sight of the fact that the purpose of the publication of the Notice of =heriff;s =ale is to inform all interested parties of the date, time and place of the foreclosure sale of the real propert# sub9ect thereof. Cogicall#, this not onl# re4uires that the correct date, time and place of the foreclosure sale appear in the notice, but also that an# and all interested parties be able to determine that /hat is about to be sold at the foreclosure sale is the real propert# in /hich the# ha%e an interest. +=pouses =uico %s. (NB, 2R !7"5!5, 58 August 5""70 8hird Di%ision, hico7Na3ario $., Notices are gi%en for the purpose of securing bidders and to pre%ent a sacrifice of the propert#. :f these ob9ects are attained, immaterial errors and mista<es /ill not affect the sufficienc# of the notice0 but if mista<es or omissions occur in the notices of sale, /hich are calculated to deter or mislead bidders, to depreciate the %alue of the propert#, or to pre%ent it from bringing a fair price, such mista<es or omissions /ill be fatal to the %alidit# of the notice, and also to the sale made pursuant thereto. +=pouses =uico %s. (NB, 2R !7"5!5, 58 August 5""70 8hird Di%ision, hico7Na3ario $., "edemption &8-he mortgagor or his successor7in7interest ma# redeem the foreclosed propert# /ithin one #ear from the registration of the sale /ith the Register of Deeds. After the one7#ear redemption period, the mortgagor loses all interest o%er the foreclosed propert#. 8he purchaser, /ho has a right to possession that e.tends after the e.piration of the redemption period, becomes the absolute o/ner of the propert# /hen no redemption is made. :n such a situation, the bond re4uired under =ection 7 of Act No. '!'5, as amended, is no longer needed. 8he possession of land becomes an absolute right of the purchaser as confirmed o/ner. 8he purchaser can demand possession at an# time follo/ing the consolidation of o/nership in his name and the issuance to him of a ne/ 8 8. After the consolidation of title in the purchaser;s name for failure of the mortgagor to redeem the propert#, the /rit of possession becomes a matter of right. :ts issuance to a purchaser in an e.tra9udicial foreclosure sale becomes merel# a ministerial function. As such, the court cannot e.ercise its discretion. +=pouses 1li%eros %s. (residing $udge, R8 , Branch 5), Binan Caguna, 2R !65*6', ' =eptember 5""70 8hird Di%ision, hico7Na3ario $.,

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attle#a Cand, :nc., 2R !7!""8, !' =eptember 5""70 =econd

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+Bercero %s. Martine3 $.,

orporation, 2R !5)765, 5* March 5""70 8hird Di%ision, Austria7

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