This action might not be possible to undo. Are you sure you want to continue?
Assignment of credits. Was Reyes’ sale of the property to the Vegas binding on PDC (one of Reyes’ creditors) which tried to enforce the judgment credit against Reyes in its favor on the property? The CA ruled that Reyes’ assignment of the property to the Vegas did not bind PDC, which had a judgment credit against Reyes, since such assignment neither appeared in a public document nor was registered with the register of deeds as Article 1625 of the Civil Code required. Article 1625 reads:
they are deemed in pari delicto or in equal fault. This rule, however, is not absolute. Article 1412 of the Civil Code provides an exception, and permits the return of that which may have been given under a void contract. Thus: Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed:
Art. 1625. An assignment of a credit, right or action (1) When the fault is on the part of both contracting shall produce no effect as against third persons, unless it parties, neither may recover what he has given by virtue appears in a public instrument, or the instrument is of the contract, or demand the performance of the other’s recorded in the Registry of Property in case the assignment undertaking; involves real property. (1526) (2) When only one of the contracting parties is at fault, But Article 1625 referred to assignment of credits and he cannot recover what he has given by reason of the other incorporeal rights. Reyes did not assign any credit or contract, or ask for the fulfillment of what has been incorporeal right to the Vegas. She sold the Vegas her promised him. The other, who is not at fault, may demand house and lot. They became owner of the property from the return of what he has given without any obligation to the time she executed the deed of assignment covering comply with his promise. the same in their favor. PDC had a judgment for money against Reyes only. A court’s power to enforce its judgment The evidence on record established that petitioners applies only to the properties that are indisputably owned indeed permitted an unlicensed trader and salesman, like by the judgment obligor. Here, the property had long Mendoza, to handle respondent’s account. On the other ceased to belong to Reyes when she sold it to the Vegas in hand, the record is bereft of proof that respondent had 1981. Sps. Antonio and Leticia Vega vs. Social Security knowledge that the person handling his account was not a System, et al., G.R. No. 181672, September 20, 2010 licensed trader. Respondent can, therefore, recover the amount he had given under the contract. The SEC Hearing Attorney’s fees. Article 2208(2) of the Civil Code allows Officer and the CA, therefore, committed no reversible the award of attorney’s fees in cases where the error in holding that respondent is entitled to a full defendant’s act or omission has compelled the plaintiff to recovery of his investments. Queensland-Tokyo litigate with third persons or to incur expenses to protect Commodities, Inc., et al. vs. Thomas George, G.R. No. his interest. Attorney’s fees may be awarded by a court to 172727, September 8, 2010 one who was compelled to litigate with third persons or to incur expenses to protect his or her interest by reason of Damages; moral; exemplary. Moral damages are meant to an unjustified act or omission of the party from whom it is compensate the claimant for any physical suffering, sought. Metropolitan Bank & trust Company, Inc. vs. The mental anguish, fright, serious anxiety, besmirched Board of Trustees of Riverside Mills Corp. Provident and reputation, wounded feelings, moral shock, social Retirement Fund, et al., G.R. No. 176959, September 8, humiliation, and similar injuries unjustly caused. Although 2010 incapable of pecuniary estimation, the amount must somehow be proportional to and in approximation of the Conjugal property and sale thereof; various rules. (1) What suffering inflicted. Moral damages are not punitive in law applies to a sale or purported sale of a conjugal nature and were never intended to enrich the claimant at property entered into after the Family Code’s effectivity? the expense of the defendant. The Family Code, even if the couple owning the conjugal property were married before the Family Code took As for exemplary damages, Article 2229 of the Civil Code effect. (2) Under the Family Code, conjugal property can provides that such damages may be imposed by way of only be sold with the consent of both spouses. (3) For a example or correction for the public good. While buyer of conjugal property to be considered a purchaser in exemplary damages cannot be recovered as a matter of good faith, he must observe two kinds of requisite right, they need not be proved, although plaintiff must diligence, namely: (a) the diligence in verifying the show that he is entitled to moral, temperate, or validity of the title covering the property; and (b) the compensatory damages before the court may consider the diligence in inquiring into the authority of the transacting question of whether or not exemplary damages should be spouse to sell conjugal property in behalf of the other awarded. Exemplary damages are imposed not to enrich spouse. Sps. Rex and Concepcion Aggabao vs. Dionisio Z. one party or impoverish another, but to serve as a Parulan, Jr. and Ma. Elena Parulan, G.R. No. 165803, deterrent against or as a negative incentive to curb September 1, 2010. socially deleterious actions. Contract; void contract; consequences. It is settled that a void contract is equivalent to nothing; it produces no civil effect. It does not create, modify, or extinguish a juridical relation. Parties to a void agreement cannot expect the aid of the law; the courts leave them as they are, because
However, the same statutory and jurisprudential standards dictate reduction of the amounts of moral and exemplary damages fixed by the SEC. Certainly, there is no hard-andfast rule in determining what would be a fair and reasonable amount of moral and exemplary damages,
since each case must be governed by its own peculiar facts. Courts are given discretion in determining the amount, with the limitation that it should not be palpably and scandalously excessive. Indeed, it must be commensurate to the loss or injury suffered. QueenslandTokyo Commodities, Inc., et al. vs. Thomas George, G.R. No. 172727, September 8, 2010 Donation mortis causa vs. donation inter vivos. That a document is captioned “Donation Mortis Causa” is not controlling. If a donation by its terms is inter vivos, this character is not altered by the fact that the donor styles it mortis causa. “Irrevocability” is a quality absolutely incompatible with the idea of conveyances mortis causa, where “revocability” is precisely the essence of the act. A donation mortis causa has the following characteristics: 1. It conveys no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor should retain the ownership (full or naked) and control of the property while alive; 2. That before his death, the transfer should be revocable by the transferor at will, ad nutum; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the properties conveyed; and
it was immediately operative and final. The reason is that such kind of donation is deemed perfected from the moment the donor learned of the donee’s acceptance of the donation. The acceptance makes the donee the absolute owner of the property donated. Jarabini G. Del Rosario vs. Asuncion F. Ferrer, et al., G.R. No. 187056, September 20, 2010. Lease; return of leased property in the leased premises. Here is the first paragraph of this case, with Digester’s responses in capitals: “What happens when personal properties inside leased premises are stipulated as included in the contract of lease?” THE PARTIES CAN DO THIS UNDER FREEDOM TO CONTRACT. “Does a judgment on a suit for unlawful detainer ejecting the lessees from the subject property carry with it the return of these personal properties as well?” YES, BECAUSE UPON THE ISSUANCE OF THE EJECTMENT ORDER, THE LEASE TERMINATES AND CLAUSE REQURING RETURN OR REPLACEMENT OF CERTAIN PERSONAL PROPERTIES FOUND IN THE LEASED PREMISES, IS TRIGGERED. “Finally, the trickier part which is the crux of this petition: what if some of these personal properties are lost, destroyed or sold by the lessor? May the ejected lessees still be ordered to pay for their value?” YES. University Physicians Services, Inc. vs. Marian Clinics, Inc. and Dr. Lourdes Mabanta, G.R. No. 152303, September 1, 2010.
Mortgaged property; what happens when mortgagor sells 3. That the transfer should be void if the transferor should property without mortgagee’s consent. The question is: survive the transferee. was Reyes’ disposal of the property in favor of the Vegas valid given a provision in the mortgage agreement In this case, the donors plainly said that it is “our will that (between Reyes and SSS) that she could not do so without this Donation Mortis Causa shall be irrevocable and shall the written consent of the SSS? The CA ruled that, under be respected by the surviving spouse.” The intent to make Article 1237 of the Civil Code, the Vegas who paid the donation irrevocable becomes even clearer by the amortizations to the SSS except the last on behalf of proviso that a surviving donor shall respect the Reyes, without the latter’s knowledge or against her irrevocability of the donation. Consequently, the donation consent, cannot compel the SSS to subrogate them in her was in reality a donation inter vivos. rights arising from the mortgage. Further, said the CA, the Vegas’ claim of subrogation was invalid because it was The donors in this case of course reserved the “right, done without the knowledge and consent of the SSS as ownership, possession, and administration of the required under the mortgage agreement. But Article 1237 property” and made the donation operative upon their cannot apply in this case since Reyes consented to the death. But this Court has consistently held that such transfer of ownership of the mortgaged property to the reservation (reddendum) in the context of an irrevocable Vegas. Reyes also agreed for the Vegas to assume the donation simply means that the donors parted with their mortgage and pay the balance of her obligation to SSS. naked title, maintaining only beneficial ownership of the donated property while they lived. Of course, paragraph 4 of the mortgage contract covering the property required Reyes to secure SSS’ consent before Notably, the three donees signed their acceptance of the selling the property. But, although such a stipulation is donation, which acceptance the deed required. This Court valid and binding, in the sense that the SSS cannot be has held that an acceptance clause indicates that the compelled while the loan was unpaid to recognize the donation is inter vivos, since acceptance is a requirement sale, it cannot be interpreted as absolutely forbidding her, only for such kind of donations. Donations mortis causa, as owner of the mortgaged property, from selling the same being in the form of a will, need not be accepted by the while her loan remained unpaid. Such stipulation donee during the donor’s lifetime. contravenes public policy, being an undue impediment or interference on the transmission of property. Finally, as Justice J. B. L. Reyes said in Puig v. Peñaflorida, in case of doubt, the conveyance should be deemed a Besides, when a mortgagor sells the mortgaged property to donation inter vivos rather than mortis causa, in order to a third person, the creditor may demand from such third avoid uncertainty as to the ownership of the property person the payment of the principal obligation. The reason subject of the deed. for this is that the mortgage credit is a real right, which follows the property wherever it goes, even if its Since the donation in this case was one made inter vivos, ownership changes. Article 2129 of the Civil Code gives the
mortgagee, here the SSS, the option of collecting from the third person in possession of the mortgaged property in the concept of owner. More, the mortgagor-owner’s sale of the property does not affect the right of the registered mortgagee to foreclose on the same even if its ownership had been transferred to another person. The latter is bound by the registered mortgage on the title he acquired. After the mortgage debt to SSS had been paid, however, the latter had no further justification for withholding the release of the collateral and the registered title to the party to whom Reyes had transferred her right as owner. Under the circumstance, the Vegas had the right to sue for the conveyance to them of that title, having been validly subrogated to Reyes’ rights. Sps. Antonio and Leticia Vega vs. Social Security System, et al., G.R. No. 181672, September 20, 2010. Mortgaged Property; what happens when a person sells property, and then borrows, and lender seeks to recover on loan by attaching the property that had been sold. A party with a judgment for money can only go against properties that undisputably belong to the borrower. If prior to the judgment, the borrower had sold the property, a creditor can no longer go after that property. Sps. Antonio and Leticia Vega vs. Social Security System, et al., G.R. No. 181672, September 20, 2010 Obligations; solidary liability with a corporation. Doctrine dictates that a corporation is invested by law with a personality separate and distinct from those of the persons composing it, such that, save for certain exceptions, corporate officers who entered into contracts in behalf of the corporation cannot be held personally liable for the liabilities of the latter. Personal liability of a corporate director, trustee, or officer, along (although not necessarily) with the corporation, may validly attach, as a rule, only when – (1) he assents to a patently unlawful act of the corporation, or when he is guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the corporation, its stockholders, or other persons; (2) he consents to the issuance of watered down stocks or who, having knowledge thereof, does not forthwith file with the corporate secretary his written objection thereto; (3) he agrees to hold himself personally and solidarily liable with the corporation; or (4) he is made by a specific provision of law personally answerable for his corporate action. Queensland-Tokyo Commodities, Inc., et al. vs. Thomas George, G.R. No. 172727. September 8, 2010
executed without including some of the heirs, who had no knowledge of the partition and did not consent thereto, is merely fraudulent and not void. They stress that the action to rescind the partition based on fraud prescribes in four (4) years counted from the date of registration, which is constructive notice to the whole world. We affirm the ruling of the CA. As the records show, the heirs of Doroteo and Esteban did not participate in the extrajudicial partition executed by Salina with the other compulsory heirs, Leona, Maria and Pedro. Undeniably, the said deed was fraudulently obtained as it deprived the known heirs of Doroteo and Esteban of their shares in the estate. A deed of extrajudicial partition executed without including some of the heirs, who had no knowledge of and consent to the same, is fraudulent and vicious. Hence, an action to set it aside on the ground of fraud could be instituted. Such action for the annulment of the said partition, however, must be brought within four (4) years from the discovery of the fraud. Eugenio Feliciano, et al. vs. Pedro Canoza, et al., G.R. No. 161746, September 1, 2010. Property; co-ownership; prescription. Co-heirs or coowners cannot acquire by acquisitive prescription the share of the other co-heirs or co-owners absent a clear repudiation of the co-ownership, as expressed in Article 494 of the Civil Code which states: Art. 494. x x x No prescription shall run in favor of a coowner or co-heir against his co-owners or co-heirs as long as he expressly or impliedly recognizes the co-ownership. Since possession of co-owners is like that of a trustee, in order that a co-owner’s possession may be deemed adverse to the cestui que trust or other co-owners, the following requisites must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or other co-owners, (2) that such positive acts of repudiation have been made known to the cestui que trust or other co-owners, and (3) that the evidence thereon must be clear and convincing. Heirs of Juanita Padilla, represented by Claudio Padilla vs. Dominador Magdua, G.R. No. 176858, September 15, 2010 Retirement funds; trust. RMC was a company that set up a fund for its employees called RMCPRF. Petitioner contends that RMC’s closure in 1984 rendered the RMCPRF Board of Trustees functus officio and devoid of authority to act on behalf of RMCPRF. It thus belittles the RMCPRF Board Resolution dated June 2, 1998, authorizing the release of the Fund to several of its supposed beneficiaries. Without known claimants of the fund for 11 years since RMC closed shop, it claims that fund had “technically reverted” to, and formed part of RMC’s assets. Hence, it could be applied to satisfy RMC’s debts to Philbank. The court disagreed with the petitioner in this case.
Prescription. Petitioners argue that the CA erroneously treated the action they filed at the trial court as one (1) for annulment of the extrajudicial settlement and applied the four (4)-year prescriptive period in dismissing the same. They contend that the action they filed was one (1) for Declaration of Nullity of Documents and Titles, Recovery of Real Property and Damages, and as such, their action was imprescriptible pursuant to Article 1410 of the A trust is a “fiduciary relationship with respect to property Civil Code. which involves the existence of equitable duties imposed upon the holder of the title to the property to deal with it Respondents, for their part, maintain that the CA did not for the benefit of another.” A trust is either express or err in holding that the deed of extrajudicial partition implied. Express trusts are those which the direct and
positive acts of the parties create, by some writing or deed, or will, or by words evincing an intention to create a trust. Here, an express trust was created to provide retirement benefits to the regular employees of RMC. RMC retained legal title to the Fund but held the same in trust for the employees-beneficiaries. Employees’ trusts or benefit plans are intended to provide economic assistance to employees upon the occurrence of certain contingencies, particularly, old age retirement, death, sickness, or disability. They give security against certain hazards to which members of the Plan may be exposed. They are independent and additional sources of protection for the working group and established for their exclusive benefit and for no other purpose. Here, while the plan provides for a reversion of the fund to RMC, this cannot be done until all the liabilities of the plan have been paid. And when RMC ceased operations in 1984, the fund became liable for the payment not only of the benefits of qualified retirees at the time of RMC’s closure but also of those who were separated from work as a consequence of the closure. Metropolitan Bank & trust Company, Inc. vs. The Board of Trustees of Riverside Mills Corp. Provident and Retirement Fund, et al., G.R. No. 176959, September 8, 2010.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.