IN RE: RECONSTITUTION OF TRANSFER CERTIFICATES OF TITLE NOS.

303168
AND 303169 AND ISSUANCE OF OWNERS DUPLICATE CERTIFICATES OF TITLE
IN LIEU OF THOSE LOST, ROLANDO EDWARD G. LIM, Petitioner
G.R. NO. 156797 (July 6, 2010)
J. BERSAMIN

Forum shopping is the act of a party litigant against whom an adverse judgment has
been rendered in one forum seeking and possibly getting a favorable opinion in another
forum, other than by appeal or the special civil action of certiorari, or the institution of
two or more actions or proceedings grounded on the same cause or supposition that
one or the other court would make a favorable disposition. Forum shopping happens
when, in the two or more pending cases, there is identity of parties, identity of rights or
causes of action, and identity of reliefs sought. Where the elements of litis pendentia are
present, and where a final judgment in one case will amount to res judicata in the other,
there is forum shopping.

For litis pendentia to be a ground for the dismissal of an action, there must be: (a)
identity of the parties or at least such as to represent the same interest in both actions;
(b) identity of rights asserted and relief prayed for, the relief being founded on the same
acts; and (c) the identity in the two cases should be such that the judgment which may
be rendered in one would, regardless of which party is successful, amount
to res judicata in the other.  For forum shopping to exist, both actions must involve the
same transaction, same essential facts and circumstances and must raise identical
causes of action, subject matter and issues. 

Facts: 
 
On December 29, 1998, Lim filed in the RTC his petition for judicial reconstitution
of TCT No. 303168 and TCT No. 303169 and for the issuance of owners duplicate
copies of said TCTs. He alleged that he was a registered co-owner of the parcels of land
covered by the TCTs, that the original copies of the TCTs kept in the custody of the
Registry of Deeds for Quezon City had been lost or destroyed as a consequence of the
fire that had burned certain portions of the Quezon City Hall. The petition prayed the
declaration of nullity of the originals of the OWNER'S DUPLICATE of TRANSFER
CERTIFICATE OF TITLE nos. 303168 and 303169 which are lost.
 
On April 27, 1999, the RTC issued an order, setting the petition for hearing
on September 3, 1999. As the RTC required, a copy of the order was published in the
Official Gazette on July 19, 1999 and July 26, 1999; and posted at the main entrance of
the Quezon City Hall, and in other specified places. On October 15, 1999, when the
petition was called for hearing, no oppositors appeared despite notice. Whereupon, Lim
was allowed to present evidence ex parte.

On August 23, 2000, the RTC received the report from the LRA that relevantly
stated that Transfer Certificates of Title Nos. 303168 and 303169 are are also applied for
reconstitution of titles under Administrative Reconstitution Proceedings, (Republic Act
6732). On the basis of the LRA report, the RTC dismissed Lims petition on the ground of
forum-shopping. Lims motion for reconsideration filed on January 3, 2001 was denied for
lack of merit.
 
Issue:

Whether or not the RTC correctly dismiss the petition of Lim on the ground of
forum shopping?
 
Ruling:

No, petitioner was not guilty of forum shopping, because the factual bases of his
application for the administrative reconstitution of the TCTs and of his petition for their
judicial reconstitution, and the reliefs thereby sought were not identical. When he applied
for the administrative reconstitution in the LRA on July 21,1988, he still had his co-
owners duplicate copies of the TCTs in his possession, but by the time the LRA resolved
his application on November 3, 1998, allowing the relief prayed for, his co-owners
duplicate copies of the TCTs had meanwhile been destroyed by fire. Thus, the
intervening loss of the owners duplicate copies that left the favorable ruling of the LRA
no longer implementable gave rise to his need to apply for judicial reconstitution in the
RTC pursuant to Section 12 of Republic Act No. 26.

Although the bases for the administrative reconstitution were the owners
duplicate copies of TCT No. 303168 and TCT No. 303169, those for judicial
reconstitution would be other documents that in the judgment of the court, are sufficient
and proper basis for reconstituting the lost or destroyed certificate of title. The petitioner
came to court as the law directed him to do, unlike the litigant involved in the undesirable
practice of forum shopping who would go from one court to another to secure a
favorable relief after being denied the desired relief by another court. Neither did the
petitioners omission from the petition for judicial reconstitution of a reference to the
application for administrative reconstitution in the LRA justify the dismissal of the
petition.

The motu proprio dismissal of the petition for judicial reconstitution by the RTC

although the Government did not file a motion to dismiss grounded on the petitioners
supposed failure to comply with the contents of the required certification was yet another
glaring error of the RTC. A violation of the rule against forum-shopping other than a
willful and deliberate forum shopping did not authorize the RTC to dismiss the
proceeding without motion and hearing. Specifically, the submission of a false
certification of non-forum shopping did not automatically warrant the dismissal of the
proceeding, even if it might have constituted contempt of court.

The petition for the judicial reconstitution of the petitioners Transfer Certificate of
Title No. 303168 and Transfer Certificate of Title No. 303169 of the Registry of Deeds
for Quezon City, and for the issuance of the owners duplicate copies thereof, is
reinstated.

CITYTRUST BANKING CORPORATION VS CRUZ

G.R. No. 157049, August 11, 2010
BERSAMIN, J

It is never overemphasized that the public always relies on a banks profession of

diligence and meticulousness in rendering irreproachable service. Its failure to exercise
diligence and meticulousness warranted its liability for exemplary damages and for
reasonable attorneys fees.

 Facts:
 
In the time material to the case, the respondent, an architect and businessman,
maintained savings and checking accounts at the petitioners Loyola Heights Branch.
The savings account was considered closed due to the oversight committed by one of
the latters tellers. The closure resulted in the extreme embarrassment of the respondent,
for checks that he had issued could not be honored although his savings account was
sufficiently funded and the accounts were maintained under the petitioners check-o-
matic arrangement (whereby the current account was maintained at zero balance and
the funds from the savings account were automatically transferred to the current account
to cover checks issued by the depositor like the respondent).
 
Unmoved by the petitioners apologies and the adjustment made on his accounts
by its employees, the respondent sued in the RTC to claim damages from the petitioner.

After trial, the RTC ruled in the respondents favor, and ordered the petitioner to
pay him P100,000.00 as moral damages, P20,000.00 as exemplary damage,
and P20,0000.00 as attorneys fees. The RTC found that the petitioner had failed to
properly supervise its teller; and that the petitioners negligence had made the
respondent suffer serious anxiety, embarrassment and humiliation, entitling him to
damages.

Issue: Whether or not the damages were correctly imposed?

Held: Yes, it was correctly imposed.

In several decisions of the Court, the banks, defendants therein, were made
liable for negligence, even without sufficient proof of malice or bad faith on their part, and
the Court awarded moral damages of P100,000.00 each time to the suing depositors in
proper consideration of their reputation and their social standing. The respondent should
be similarly awarded for the damage to his reputation as an architect and businessman.
 
The CA properly affirmed the RTCs award of exemplary damages and attorneys
fees. It is never overemphasized that the public always relies on a banks profession of
diligence and meticulousness in rendering irreproachable service. Its failure to exercise
diligence and meticulousness warranted its liability for exemplary damages and for
reasonable attorneys fees.

ABLAZE VS REPUBLIC OF THE PHILIPPINES

G.R. No. 158298, August 11, 2010
J. Bersamin

It is clarified, however, that the absence of a provision in the old and new Civil
Codes cannot be construed as giving a license to just any person to bring an action to
declare the absolute nullity of a marriage. According to Carlos v. Sandoval, the plaintiff
must still be the party who stands to be benefited by the suit, or the party entitled to the
avails of the suit, for it is basic in procedural law that every action must be prosecuted
and defended in the name of the real party in interest. Thus, only the party who can
demonstrate a proper interest can file the action. Interest within the meaning of the rule
means material interest, or an interest in issue to be affected by the decree or judgment
of the case, as distinguished from mere curiosity about the question involved or a mere
incidental interest. One having no material interest to protect cannot invoke the
jurisdiction of the court as plaintiff in an action. When the plaintiff is not the real party in
interest, the case is dismissible on the ground of lack of cause of action.
 
Facts:

On October 17, 2000, the petitioner filed in the RTC in Cataingan, Masbate a
petition for the declaration of the absolute nullity of the marriage contracted on
December 26, 1949 between his late brother Cresenciano Ablaza and Leonila Honato.

The petitioner alleged that the marriage between Cresenciano and Leonila had
been celebrated without a marriage license, due to such license being issued only on
January 9, 1950, thereby rendering the marriage void ab initio for having been
solemnized without a marriage license. He insisted that his being the surviving brother of
Cresenciano who had died without any issue entitled him to one-half of the real
properties acquired by Cresenciano before his death, thereby making him a real party in
interest; and that any person, himself included, could impugn the validity of the marriage
between Cresenciano and Leonila at any time, even after the death of Cresenciano, due
to the marriage being void ab initio.

On October 18, 2000, the RTC dismissed the petition on the ground that petition
is filed out of time and that petitioner is not a party to marriage. Motion for
reconsideration was likewise denied. On appeal, the Court of Appeals affirmed the
dismissal order of the RTC on the ground that the action must be filed by the proper
party, which in this case should be filed by any of the parties to the marriage. Hence, this
appeal.

Issue:

Whether the petitioner is a real party in interest in the action to seek the
declaration of nullity of the marriage of his deceased brother?

Ruling:

Yes. The applicable law when marriage was contracted between Cresenciano
and Leonila on December 26, 1949, is the old Civil Code, the law in effect at the time of
the celebration of the marriage. Hence, the rule on the exclusivity of the parties to the
marriage as having the right to initiate the action for declaration of nullity of the marriage
under A.M. No. 02-11-10-SC had absolutely no application to the petitioner. The case
was reinstated and its records returned to RTC for further proceedings.

Section 2, paragraph (a), of A.M. No. 02-11-10-SCexplicitly provides the

limitation that a petition for declaration of absolute nullity of void marriage may be filed
solely by the husband or wife. Such limitation demarcates a line to distinguish between
marriages covered by the Family Code and those solemnized under the regime of the
Civil Code. This specifically extends only to marriages covered by the Family Code,
which took effect on August 3, 1988, but, being a procedural rule that is prospective in
application, is confined only to proceedings commenced after March 15, 2003.

Assuming that the petitioner was as he claimed himself to be, then he has a
material interest in the estate of Cresenciano that will be adversely affected by any
judgment in the suit. Indeed, a brother like the petitioner, albeit not a compulsory heir,
has the right to succeed to the estate of a deceased brother under the conditions stated
in Article 1001 and Article 1003 of the Civil Code. The plaintiff must still be the party who
stands to be benefited by the suit, or the party entitled to the avails of the suit, for it is
basic in procedural law that every action must be prosecuted and defended in the name
of the real party in interest. Thus, only the party who can demonstrate a “proper interest”
can file the action. One having no material interest to protect cannot invoke the
jurisdiction of the court as plaintiff in an action. When the plaintiff is not the real party in
interest, the case is dismissible on the ground of lack of cause of action.

AGGABAO VS PARULAN
GR No. 165803, September 1, 2010
Bersamin, J.

The sale was made on March 18, 1991, or after August 3, 1988, the effectivity of the
Family Code. The proper law to apply is, therefore, Article 124 of the Family Code, for it
is settled that any alienation or encumbrance of conjugal property made during the
effectivity of the Family Code is governed by Article 124 of the Family Code.

Facts:

In January 1991, real estate broker Marta K.Atanacio offered 2 lots located in
Parañaque to the petitioners. On February 2, 1991, the petitioners met up with Elena
Parulan at the site of the property and showed them the following documents: (a.)
Owner’s original copy of the TCT of the 2 lots; (b.) tax declarations; (c.) a copy of the
special power of attorney dated January 7, 1991 executed by Dionisio authorizing Elena
to sell the property. The petitioners paid P200,000.00 as earnest money for which Elena
executed a handwritten Receipt of Earnest Money which stipulated that the peitioners
would pay an additional payment of P130, 000.00 on February 4, 1991; P650,000.00 on
or before February 15, 1991 and P700, 000.00 on March 31, 1991 once Elena turned
over the property.

On February 4, 1991, the petitioners, accompanied by the broker, went to the

Office of the Register of Deeds to verify the TCTs shown by Elena. There they
discovered that one of the lots had been encumbered to Banco Filipino, but that the
encumbrance had been cancelled due to the full payment of the obligation. They noticed
that the loan was effected through and SPA executed by Dionisio in favor of Elena. The
other lot on the other hand had an annotation of an existing mortgage in favor of Los
Baños Rural Bank, with the same SPA with a court order authorizing Elena to mortgage
the lot to secure the loan.
 The petitioners and the broker next inquired about the mortgage and the court
order at the Los Baños Rural Bank. There, they met with Atty. Zarate, related that the
bank had asked for the court order because the lot involved was conjugal property.

Following their verification, the petitioners delivered P130,000.00 as additional

down payment on February 4, 1991; and P650,000.00 to the Los Baños Rural Bank on
February 12, 1991, which then released the owner’s duplicate copy of TCT to them.

On March 18, 1991, the petitioners delivered the final amount of P700,000.00 to
Elena, who executed a deed of absolute sale in their favor. However, Elena did not turn
over the owner’s duplicate copy of the TCT claiming that said copy was in the
possession of a relative who was then in Hongkong. She assured them that the owner’s
duplicate copy of TCT would be turned over after a week.

On March 19, 1991, TCT was cancelled and a new one was issued in the name
of the petitioners. Elena did not turn over the duplicate owner’s copy of TCT as
promised. In due time, the petitioners learned that the duplicate owner’s copy of TCT
had been all along in the custody of Atty. Jeremy Z. Parulan, who appeared to hold an
SPA executed by his brother Dionisio authorizing him to sell both lots. At Atanacio’s
instance, the petitioners met on March 25, 1991 with Atty. Parulan at the Manila
Peninsula. They were accompanied by one Atty. Olandesca. They recalled that Atty.
Parulan “smugly demanded P800,000.00” in exchange for the duplicate owner’s copy of
TCT, because Atty. Parulan represented the current value of the property to be P1.5
million. As a counter-offer, however, they tendered P250,000.00, which Atty. Parulan
declined, giving them only until April 5, 1991 to decide. Hearing nothing more from the
petitioners, Atty. Parulan decided to call them on April 5, 1991, but they informed him
that they had already fully paid to Elena.

Thus, on April 15, 1991, Dionisio, through Atty. Parulan, commenced an action
(Civil Case No. 91-1005 entitled Dionisio Z. Parulan, Jr., represented by Jeremy Z.
Parulan, as attorney in fact, v. Ma. Elena Parulan, Sps. Rex and Coney Aggabao),
praying for the declaration of the nullity of the deed of absolute sale executed by Ma.
Elena, and the cancellation of the title issued to the petitioners by virtue thereof. In turn,
the petitioners filed on July 12, 1991 their own action for specific performance with
damages against the respondents. Both cases were consolidated for trial and judgment
in the RTC.

On July 26, 2000, the Regional Trial Court (RTC), Branch 136, in Makati City
annulled the deed of absolute sale executed in favor of the petitioners covering two
parcels of registered land the respondents owned for want of the written consent of
respondent husband Dionisio Parulan, Jr. The CA affirmed the RTC decision.

Issue:

Which between Article 173 of the Civil Code and Article 124 of the Family Code
should apply to the sale of the conjugal property executed without the consent of
Dionisio?
Ruling:

Article 124, Family Code, applies to sale of conjugal properties made after the
effectivity of the Family Code

The petitioners submit that Article 173 of the Civil Code, not Article 124 of the
Family Code, governed the property relations of the respondents because they had been
married prior to the effectivity of the Family Code; and that the second paragraph of
Article 124 of the Family Code should not apply because the other spouse held the
administration over the conjugal property. They argue that notwithstanding his absence
from the country Dionisio still held the administration of the conjugal property by virtue of
his execution of the SPA in favor of his brother; and that even assuming that Article 124
of the Family Code properly applied, Dionisio ratified the sale through Atty. Parulan’s
counter-offer during the March 25, 1991 meeting.

To start with, Article 25427 the Family Code has expressly repealed several titles
under the Civil Code, among them the entire Title VI in which the provisions on the
property relations between husband and wife, Article 173 included, are found.

Secondly, the sale was made on March 18, 1991, or after August 3, 1988, the
effectivity of the Family Code. The proper law to apply is, therefore, Article 124 of the
Family Code, for it is settled that any alienation or encumbrance of conjugal property
made during the effectivity of the Family Code is governed by Article 124 of the Family
Code.

Article 124 of the Family Code provides:

“Article 124. The administration and enjoyment of the conjugal partnership

property shall belong to both spouses jointly. In case of disagreement, the husband’s
decision shall prevail, subject to recourse to the court by the wife for proper remedy,
which must be availed of within five years from the date of the contract implementing
such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in

the administration of the conjugal properties, the other spouse may assume sole powers
of administration. These powers do not include disposition or encumbrance without
authority of the court or the written consent of the other spouse. In the absence of such
authority or consent, the disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the part of the consenting spouse
and the third person, and may be perfected as a binding contract upon the acceptance
by the other spouse or authorization by the court before the offer is withdrawn by either
or both offerors.”

Thirdly, according to Article 256 of the Family Code, the provisions of the Family
Code may apply retroactively provided no vested rights are impaired. In Tumlos v.
Fernandez, the Court rejected the petitioner’s argument that the Family Code did not
apply because the acquisition of the contested property had occurred prior to the
effectivity of the Family Code, and pointed out that Article 256 provided that the Family
Code could apply retroactively if the application would not prejudice vested or acquired
rights existing before the effectivity of the Family Code. Herein, however, the petitioners
did not show any vested right in the property acquired prior to August 3, 1988
that exempted their situation from the retroactive application of the Family Code.

Fourthly, the petitioners failed to substantiate their contention that Dionisio, while
holding the administration over the property, had delegated to his brother, Atty. Parulan,
the administration of the property, considering that they did not present in court the SPA
granting to Atty. Parulan the authority for the administration.

Nonetheless, we stress that the power of administration does not include acts of
disposition or encumbrance, which are acts of strict ownership. As such, an authority to
dispose cannot proceed from an authority to administer, and vice versa, for the two
powers may only be exercised by an agent by following the provisions on agency of the
Civil Code (from Article 1876 to Article 1878). Specifically, the apparent authority of Atty.
Parulan, being a special agency, was limited to the sale of the property in question, and
did not include or extend to the power to administer the property.

Lastly, the petitioners’ insistence that Atty. Parulan’s making of a counter-offer

during the March 25, 1991 meeting ratified the sale merits no consideration. Under
Article 124 of the Family Code, the transaction executed sans the written consent of
Dionisio or the proper court order was void; hence, ratification did not occur, for a void
contract could not be ratified. On the other hand, we agree with Dionisio that the void
sale was a continuing offer from the petitioners and Ma. Elena that Dionisio had the
option of accepting or rejecting before the offer was withdrawn by either or both Ma.
Elena and the petitioners. The last sentence of the second paragraph of Article 124 of
the Family Code makes this clear, stating that in the absence of the other spouse’s
consent, the transaction should be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be perfected as a binding contract
upon the acceptance by the other spouse or upon authorization by the court before the
offer is withdrawn by either or both offerors.