CIVIL LAW Q&A

(J. Leonen Cases in Q&A Format from November 2012 – December 2019)

UST FACULTY OF CIVIL LAW

Q: Alejandro filed several Complaints against
respondents to have the promissory note he
executed in favor of Sterling Shipping Lines,
Inc. to be declared as null and void and that
he be absolved from any liability. According
to him, Ruperto exercised deceit and fraud in
causing him to bind himself jointly and
severally to pay DBP the amount of the
mortgage loan. Additionally, when he was
made director and stockholder of SSL, he was
invited to attend the board meeting only once
and he was never compensated.
Furthermore, none of the conditions he set
were complied with.
Can the promissory note be declared null and
void on the grounds of deceit and fraud?
A: NO. The promissory note Alejandro executed
cannot be declared null and void as only
incidental fraud exists in this case. Therefore, it
was not sufficient to warrant the annulment of
the contract. However, respondent Ruperto is
still liable to pay him damages. There are two
types of fraud contemplated in the performance
of contracts: dolo incidente or incidental fraud
and dolo causante or fraud serious enough to
render a contract voidable. The distinction
between fraud as a ground for rendering a
contract voidable or as basis for an award of
damages is provided in Article 1344: “ In order
that fraud may make a contract voidable, it
should be serious and should not have been
employed by both contracting parties. Incidental
fraud only obliges the person employing it to pay
damages.” (Alejandro V. Tankeh v. Dev’t Bank of
the Philippines, et al., G.R. No. 171428, November
11, 2013 )
Q: A complaint was filed against Judge Rojo
for allegedly violating the Code of Judicial
Conduct and for gross ignorance of the law.
Rojo solemnized marriages without the
required marriage license. He instead
notarized affidavits of cohabitation and
issued them to the contracting parties. He
notarized these affidavits on the day of the
parties’ marriage.
Was Judge Rojo’s notarization of affidavits of
cohabitations proper?
A: NO. Judge Rojo is guilty for violating the Code
of Judicial Conduct and for gross ignorance of the
law. As a solemnizing officer, the judge’s only
duty involving the affidavit of cohabitation is to
examine whether the parties have indeed lived
together for at least five years without legal
impediment to marry. The Guidelines does not
state that the judge can notarize the parties’
affidavit of cohabitation. Affidavits of
cohabitation are documents not connected with
the judge’s official function and duty to
solemnize marriages. Notarizing affidavits of
cohabitation is inconsistent with the duty to
examine the parties’ requirements for marriage.
If the solemnizing officer notarized the affidavit
of cohabitation, he cannot objectively examine
and review the affidavit’s statements before
performing the marriage ceremony. (Rex M.
Tupal v. Judge Remegio V. Rojo, A.M. No. Mtj-14-
1842, February 24, 2014)
Q: Ortigas and Company Limited Partnership
is the owner of a parcel of land in Pasig City,
whose title was then inscribed with an
encumbrance that it was for road widening
and subject to Section 50 of Presidential
Decree No. 1529 or the Property Registration
Decree. After the C-5 Ortigas Avenue flyover
was completed, Ortigas filed a petition for
authority to sell to the government the
unutilized portion, which was granted by the
RTC. The Republic contends that Ortigas can
only donate the property to the government
in accordance with Section 50.
Is the Ortigas not allowed to sell the
unutilized portion of the property to the
government in accordance with Section 50 of
Presidential Decree No. 1529?
A: NO. Ortigas is still allowed to sell the
unutilized portion of the property. Section 50 of
Presidential Decree No. 1529 does not apply in a
case that is the proper subject of an
expropriation proceeding. Respondent Ortigas
may sell its property to the government. It must
be compensated because its property was taken
and utilized for public road purposes. Section 50
contemplates roads and streets in a subdivided
property, not public thoroughfares built on a
private property that was taken from an owner
for public purpose. A public thoroughfare is not a
subdivision road or street. More importantly,
when there is taking of private property for
some public purpose, the owner of the property
taken is entitled to be compensated. (Republic of
the Philippines, represented by the DPWH v.
Ortigas and Company Limited Partnership, G.R.
No. 171496, March 3, 2014)
Q: Respondent Salamanca and petitioner
Gadnirab entered into a compromise
agreement, which was approved by the RTC
and later on became final and executory.
However, parties failed to finalize the
appraisal of the property. Thus, respondent
Salamanca moved for the physical partition
of the property before the RTC. She prayed
for the physical partition of the property
instead of having it sold.
Is it proper for the RTC to grant the physical
partition of the property despite the
conditions contained in the compromise
agreement?
A: NO. It would not be proper for the RTC to
grant the physical partition of the property. This
is because a judicial compromise has the effect of
res judicata and is immediately executory and
not appealable unless set aside by mistake, fraud,
violence, intimidation, undue influence, or falsity
of documents that vitiated the compromise
agreement. Additionally, a judicial compromise
agreement is in the nature of both an agreement
between the parties and a judgment on the
merits, it is covered by the Civil Code provisions
on contracts. It can be avoided on grounds that
may avoid an ordinary contract (e.g., it is not in
accord with the law; lack of consent by a party;
and existence of fraud or duress). (Nestor T.
Gadrinab v. Nora T. Salamanca, Antonio Talao,
and Elena Lopez, G.R. No. 194560, June 11, 2014)
Q: Dan T. Lim is engaged in the paper mill
business and delivered scraps of paper to
Arco Pulp and Paper company. The parties
allegedly agreed that Arco Pulp and Paper
would either pay Dan T. Lim the value of the
raw materials or deliver to him their finished
products of equivalent value. Dan T. Lim
alleged that when he delivered the raw
materials, Arco Pulp and Paper issued a post-
dated check dated April 18, 2007 in the
amount of 1,487,766.68 as partial payment,
with the assurance that the check would not
bounce. When he deposited the check on
April 18, 2007, it was dishonored for being
drawn against a closed account. On the same
day, Arco Pulp and Paper and a certain Eric
Sy executed a memorandum of agreement
where Arco Pulp and Paper bound
themselves to deliver their finished products
to Megapack Container Corporation, owned
by Eric Sy, for his account. According to the
memorandum, the raw materials would be
supplied by Dan T. Lim, through his company
Quality Paper and Plastic Products. A
memorandum of agreement was created
which modified some of the prior
agreements. Is there novation in this case?
A: NO. There was no novation in this case.
Novation is a mode of extinguishing an
obligation by changing its objects or principal
obligations, by substituting a new debtor in place
of the old one, or by subrogating a third person
to the rights of the creditor. Novation must be
stated in clear and unequivocal terms to
extinguish an obligation. It cannot be presumed
and may be implied only if the old and new
contracts are incompatible on every point. (Arco
Pulp and Paper CO., Inc v. Dan Lim, G.R. No.
206806, June 25, 2014)
Q: Laguna West Multi-Purpose Cooperative is
a cooperative recognized under Republic Act
No. 6657 or the Comprehensive Agrarian
Reform Law. It allegedly entered into a joint
venture agreement with farmer-beneficiaries
through Certificates of Land Ownership
Award (CLOA) in Silang, Cavite. While
respondent was negotiating with the farmer-
beneficiaries, petitioner Cathay Metal
Corporation entered into Irrevocable
Exclusive Right to Buy (IERB) contracts with
the same farmer-beneficiaries.
In 1996, respondent caused the annotation of
its adverse claim on the farmer-beneficiaries’
certificates of title. Petitioner and the farmer-
beneficiaries executed contracts of sale of the
properties. Transfer certificates of title were
also issued in the name of petitioner in the
same year. The annotations in the original
titles were copied to petitioner’s titles.
Respondent’s Vice- President, Orlando dela
Peña, sent two letters to petitioner, informing
it of respondent’s claim to the properties.
Petitioner did not respond. On September 15,
2000, petitioner filed a consolidated petition
for cancellation of adverse claims on its
transfer certificates of title with the Regional
Trial Court of Tagaytay City.
Does the respondent have a claim over the
property under the Joint Venture Agreement?
A: NO. The purpose of annotations of adverse
claims on title is to apprise the whole world of
the controversy involving a property. These
annotations protect the adverse claimant's rights
before or during the pendency of a case involving
a property. It notifies third persons that rights
that may be acquired with respect to a property
are subject to the results of the case involving it.
Section 70 of Presidential Decree No. 1529 or the
Property Registration Decree governs adverse
claims. It describes an adverse claim as a
statement in writing setting forth a subsequent
right or interest claimed involving the property,
adverse to the registered owner. A claim based
on a future right does not ripen into an adverse
claim as defined in Section 70 of Presidential
Decree No. 1529. A right still subject to
negotiations cannot be enforced against a title
holder or against one that has a legitimate title to
the property based on possession, ownership,
lien or any valid deed of transfer. (Cathay Metal
Corporation v. Laguna West Multi-Purpose
Cooperative, Inc., G.R. No. 172204, July 2, 2014)
Q:  The AFP-RSBS filed an application for
original registration of parcels of land
consisting of 48, 151 square meters in Silang,
Cavite. The parcels of land were allegedly
acquired from Narciso Ambrad, Alberto
Tibayan, and Restituto Tibayan on March 13,
1997. It was also alleged that their
predecessors-in-interest had been in
possession of the properties since June 12,
1945. Can the AFP-RSBS acquire the land
through acquisitive prescription?  amounts paid by Olivarez Realty.
A: YES. The period of possession prior to the
declaration that land is alienable and disposable
agricultural land is included in the computation
of possession for purposes of acquiring
registration rights over a property if the land has
already been declared as such at the time of the
application for registration. Petitioner’s right to
the original registration of title over the property
is, therefore, dependent on the existence of: a) a
declaration that the land is alienable and
disposable at the time of the application for
registration and b) open and continuous
possession in the concept of an owner through
itself or through its predecessors-in-interest
since June 12, 1945 or earlier.
In this case, there is no dispute that the
properties were already declared alienable and
disposable land on March 15, 1982.  Hence, the
property was already alienable and disposable at
the time of petitioner’s application for
registration on July 10, 1997.  Further, the open,
continuous, exclusive, notorious possession of
the petitioner was proven by testimonies and
pieces of evidence.  (AFP Retirement and
Separation Benefits System v. Republic of the
Philippines, G.R. No. 180086, July 2, 2014)
Q: Castillo was the owner of a parcel of land
covered by TCT 19972. The Philippine
Tourism Authority allegedly claimed
ownership of the same parcel of land based
on TCT 18493. Castillo and Olivarez Realty
Corporation, represented by Dr. Pablo
Olivarez, entered into a contract of
conditional sale over the property. The
details were as follows: 
1. Under the deed of conditional sale, Castillo
agreed to sell his property to Olivarez Realty;
with Olivarez Realty delivering the
downpayment and the rest to be paid in 30
equal monthly installments every 8th of the
month beginning in the month that the
parties would receive a decision voiding the
PTA’s title to the property. 
2. Under the same deed, Olivarez Realty will
file the action against PTA with full assistance
of Castillo; and that should the petition be
denied, Castillo shall reimburse all the
 
3. Under the same contract, Olivarez Realty
undertook to pay the legitimate tenants of
the land disturbance compensation, while
Castillo undertook to clear the land of the
tenants within 6 months from the signing of
the deed; that should Castillo fail to clear the
land within 6 months, Olivarez Realty may
suspend its monthly downpayment until the
tenants vacate the property.  A: NO. The obligations of the surety to the
4. The parties agreed that Olivarez Realty
Corporation may immediately occupy the
property upon signing of the deed. Should the
contract be cancelled, Olivarez Realty
Corporation agreed to return the property’s
possession to Castillo and forfeit all the
improvements it may have introduced on the
property. Olivarez Realty failed to comply
with the conditions. Can Castillo rescind the
contract?  No. 172404, August 13, 2014)
A: No. Article 1191 of the Civil Code on the right
to rescind reciprocal obligations does not apply
to contracts to sell. Failure to fully pay the
purchase price in contracts to sell is not the
breach of contract under Art. 1191. Failure to
fully pay the purchase price is merely an event
which prevents the seller’s obligation to convey
title from acquiring binding force. This is
because there can be no rescission of an
obligation that is still nonexistent, the suspensive
condition (the condition of having the buyer pay
the full purchase price) having not happened.
(Olivarez Realty Corporation and Dr. Pablo R.
Olivarez v. Benjamin Castillo, G.R. No. 196251, July
9, 2014)
Q: Doctors of New Millennium Holdings, Inc
entered into a construction and development
agreement with Million State Development
Corporation for the construction of a 200-bed
capacity hospital in Cainta, Rizal. Million
State Development submitted a surety bond
to Doctors of New Millennium issued by
People’s Trans-East Asia Insurance
Corporation, now known as People’s General
Insurance Corporation. Million State
Development, however, failed to comply with
its obligation and so Doctors of New
Millennium filed a complaint for breach of
contract with damages with prayer for the
issuance of preliminary attachment against
Million State Development and People’s
General Insurance with the Regional Trial
Court of Pasig City. Can a surety bond which
guarantees initial payment be impliedly
novated by an insertion of a clause in the
principal contract waiving the conditions for
the initial payment’s release? 
principal under the surety bond are different
from the obligations of the contractor to the
client under the principal contract. The surety
guarantees the performance of the contractor’s
obligations upon the contractor’s default, its
client may demand against the surety bond even
if there was no privity of contract between them
and this is the essence of a surety agreement.
(People's Trans-East Asia Insurance Corporation
v. Doctors of New Millennium Holdings, Inc., G.R.
Q: In 1993, BF Corporation filed a collection
complaint with the Regional Trial Court
against Shangri-La and the members of its
board of directors. BF Corporation entered
into agreements with Shangri-La wherein it
undertook to construct for Shangri-La a mall
and a multilevel parking structure along
EDSA. Shangri-La had been consistent in
paying BF Corporation in accordance with its
progress billing statements. However, by
October 1991, Shangri-La started defaulting
in payment. BF Corporation alleged that
Shangri-La induced BF Corporation to
continue with the construction of the
buildings using its own funds and credit
despite Shangri-La’s default. According to BF
Corporation, Shangri-La misrepresented that
it had funds to pay for its obligations with BF
Corporation, and the delay in payment was
simply a matter of delayed processing of BF
Corporation’s progress billing statements. BF
Corporation eventually completed the
construction of the buildings. Shangri-La
allegedly took possession of the buildings
while still owing BF Corporation an
outstanding balance. BF Corporation alleged
that despite repeated demands, Shangri-La
refused to pay the balance owed to it. It also
alleged that the Shangri-La’s directors were
in bad faith in directing Shangri-La’s affairs.
Therefore, they should be held jointly and
severally liable with Shangri-La for its
obligations as well as for the damages that BF
Corporation incurred as a result of Shangri-
La’s default. On August 3, 1993, Shangri-La,
and its board directors filed a motion to
suspend the proceedings in view of BF
Corporation’s failure to submit its dispute to
arbitration, in accordance with the
arbitration clause provided in its contract. BF
Corporation opposed the motion to suspend
proceedings.
Should the petitioners be made parties to the
arbitration proceedings, pursuant to the
arbitration clause provided in the contract
between BF Corporation and Shangri-La?
A: YES. The directors may be compelled to
submit to the arbitration proceedings in
accordance with Shangri-Laand BF Corporation’s
agreement, in order to determine if the
distinction between Shangri-La’s personality and
their personalities should be disregarded.
This jurisdiction adopts a policy in favor of
arbitration. Arbitration allows the parties to
avoid litigation and settle disputes amicably and
more expeditiously by themselves and through
their choice of arbitrators.
The policy in favor of arbitration has been
affirmed in our Civil Code, which was approved
as early as 1949. It was later institutionalized by
the approval of Republic Act No. 876, which
expressly authorized, made valid, enforceable,
and irrevocable parties’ decision to submit their
controversies, including incidental issues, to
arbitration. (Gerardo Lanuza, Jr. & Antonio Obles
v. BF Corp, Shangri-la Properties, Inc., G.R. No.
174938, October 01, 2014)
Q: The RTC declared Celerina presumptively
dead after her husband, Ricardo, had filed a
petition for declaration of absence or
presumptive death for the purpose of
remarriage. Ricardo remarried thereafter. In
his petition for declaration of absence or
presumptive death, Ricardo alleged that he
and Celerina rented an apartment
somewhere in San Juan, Metro Manila, after
they had gotten married. After a year, they
moved to Tarlac City. They were engaged in
the buy and sell business. Ricardo claimed
that their business did not prosper.  first spouse that his or her marriage to the
As a result, Celerina convinced him to allow
her to work as a domestic helper in Hong
Kong. Ricardo initially refused but because of
Celerina's insistence, he allowed her to work
abroad. She allegedly applied in an
employment agency in Ermita, Manila. She
left Tarlac two months after and was never
heard from again. Ricardo further alleged
that he exerted efforts to locate Celerina. He
went to Celerina's parents in Cubao, Quezon
City, but they, too, did not know their
daughter's whereabouts. He also inquired
about her from other relatives and friends,
but no one gave him any information.  
Ricardo claimed that it was almost 12 years
from the date of his RTC petition since
Celerina left. He believed that she had passed
away. According to Celerina, her true
residence was in Neptune Extension,
Congressional Avenue, Quezon City. This
residence had been her and Ricardo's
conjugal dwelling until Ricardo left. As a
result of Ricardo's misrepresentation, she
was deprived of any notice of and
opportunity to oppose the petition declaring
her presumptively dead. Celerina claimed
that she never resided in Tarlac. She also
never left and worked as a domestic helper
abroad. Neither did she go to an employment
agency. She also claimed that it was not true
that she had been absent for 12 years.
Ricardo was aware that she never left their
conjugal dwelling in Quezon City. It was he
who left the conjugal dwelling to cohabit with
another woman. Celerina referred to a joint
affidavit executed by their children to
support her contention that Ricardo made
false allegations in his petition. 
Is the reappearance not a sufficient remedy
since it will only terminate the subsequent
marriage but not nullify the effects of the
declaration of her presumptive death and the
subsequent marriage?
A: YES. The Family Code provides the
presumptively dead spouse with the remedy of
terminating the subsequent marriage by mere
reappearance. The filing of an affidavit of
reappearance is an admission on the part of the
present spouse was terminated when he or she
was declared absent or presumptively dead.
Moreover, a close reading of the entire Article 42
reveals that the termination of the subsequent
marriage by reappearance is subject to several
conditions. The existence of these conditions
means that reappearance does not always
immediately cause the subsequent marriage's
termination. Reappearance of the absent or
presumptively dead spouse will cause the
termination of the subsequent marriage only
when all the conditions enumerated in the
Family Code are present. Hence, the subsequent
marriage may still subsist despite the absent or
presumptively dead spouse's reappearance.
A subsequent marriage contracted in bad faith,
even if it was contracted after a court declaration
of presumptive death, lacks the requirement of a
well-founded belief that the spouse is already
dead. The first marriage will not be considered
as validly terminated. Marriages contracted prior
to the valid termination of a subsisting marriage
are generally considered bigamous and void.
Only a subsequent marriage contracted in good
faith is protected by law.  reconciled in 1969. Rosario gave birth to
Therefore, the party who contracted the
subsequent marriage in bad faith is also not
immune from an action to declare his
subsequent marriage void for being bigamous.
The prohibition against marriage during the
subsistence of another marriage still applies.
Since an undisturbed subsequent marriage
under Article 42 of the Family Code is valid until
terminated, the "children of such marriage shall
be considered legitimate, and the property
relations of the spouses in such marriage will be
the same as in valid marriages." If it is
terminated by mere reappearance, the children
of the subsequent marriage conceived before the
termination shall still be considered legitimate.
Moreover, a judgment declaring presumptive
death is a defense against prosecution for
bigamy. It is true that in most cases, an action to
declare the nullity of the subsequent marriage
may nullify the effects of the subsequent
marriage, specifically, in relation to the status of
children and the prospect of prosecuting a
respondent for bigamy.  the Court of Appeals, seeking to annul the
However, "a Petition for Declaration of Absolute
Nullity of Void Marriages may be filed solely by
the husband or wife." This means that even if
Celerina is a real party in interest who stands to
be benefited or injured by the outcome of an
action to nullify the second marriage, this
remedy is not available to her. Therefore, for the
purpose of not only terminating the subsequent
marriage but also of nullifying the effects of the
declaration of presumptive death and the
subsequent marriage, mere filing of an affidavit
of reappearance would not suffice. Celerina's
choice to file an action for annulment of
judgment will, therefore, lie. (Celerina J. Santos v.
Ricardo T. Santos, G.R. No. 187061, October 8,
2014)
Q: Rosario alleged that she and Jose were
married on August 5, 1962 in Laoag City.
Their marriage had allegedly been troubled.
They had a child, Rose Marie, who was born
in 1963, but succumbed to congenital heart
disease and only lived for nine days. Rosario
allegedly left Jose after a couple of months
because of the incompatibilities between
them. Rosario and Jose, however, briefly
Joanne a year later. She and Jose allegedly
lived as husband and wife for about a year
even if she lived in Manila and Jose stayed in
Laoag City. Jose would visit her in Manila
during weekends. Afterwards, they separated
permanently because Rosario alleged that
Jose had homosexual tendencies. She
insisted, however, that they "remained
friends for fifteen (15) years despite their
separation(.)" 
On August 1, 2000, Jose filed a petition for
adoption before the Regional Trial Court of
Batac, Ilocos Norte. In the petition, he alleged
that Jed and Regina were his illegitimate
children with Lilibeth Fernandez Gregorio
(Lilibeth), whom Rosario alleged was his
erstwhile housekeeper. At the time of the
filing of the petition, Jose was 70 years old.
The petition for adoption was granted. On
October 18, 2007, Rosario and Joanne filed a
petition for annulment of judgment under
Rule 47 of the Rules of Civil Procedure with
October 16, 2000 decision of the trial court
approving Jed and Regina's adoption. 
In their petition, Rosario and Joanne allege
that they learned of the adoption sometime in
2005. They allege that Rosario's affidavit of
consent, marked by the trial court as "Exh. K,"
was fraudulent. They also allege that Jed and
Regina's birth certificates showed different
sets of information, such as the age of their
mother, Lilibeth, at the time she gave birth.
They argue that one set of birth certificates
states the father to be Jose and in another set
of National Statistic Office certificates shows
the father to be Larry, Jose's driver and
alleged lover. It was further alleged that Jed
and Regina are not actually Jose's illegitimate
children but the legitimate children of
Lilibeth and Larry who were married at the
time of their birth. On May 26, 2009, the
Court of Appeals denied the petition.  returned to Ludolfo. Carlos then collected ₱
Should the petition for adoption be denied?
A: YES. It is settled that "the jurisdiction of the
court is determined by the statute in force at the
time of the commencement of the action." As Jose
filed the petition for adoption on August 1, 2000,
it is Republic Act No. 8552 which applies over
the proceedings. The law on adoption requires
that the adoption by the father of a child born
out of wedlock obtain not only the consent of his
wife but also the consent of his legitimate
children. The law provides for several exceptions
to the general rule, as in a situation where a
spouse seeks to adopt his or her own children
born out of wedlock. In this instance, joint
adoption is not necessary. However, the spouse
seeking to adopt must first obtain the consent of
his or her spouse. In the absence of any decree of
legal separation or annulment, Jose and Rosario
remained legally married despite their de facto
separation. For Jose to be eligible to adopt Jed
and Regina, Rosario must first signify her
consent to the adoption. Jose, however, did not
validly obtain Rosario's consent. His submission
of a fraudulent affidavit of consent in her name
cannot be considered compliance of the
requisites of the law. Had Rosario been given
notice by the trial court of the proceedings, she
would have had a reasonable opportunity to
contest the validity of the affidavit. Since her
consent was not obtained, Jose was ineligible to
adopt. (Raul S. Imperi Rosario Mata Castro and
Joanne Benedicta Charissima M. Castro v.  Jose
Maria Jed Lemuel Gregorio and Ana Maria Regina
Gregorio, G.R. No. 188801, October 15, 2014)
Q: Ludolfo owns a construction company. One
day, Carlos visited Ludolfo in his office
wherein, he invited Ludolfo to advance
₱2,000,000.00 for a subcontract of a
₱50,000,000.00 river-dredging project in
Guinobatan. He guaranteed Ludolfo that
Ludolfo’s construction company will be
subcontracted by the lowest bidder of the
project. Ludolfo accepted the proposal.
Ludolfo requested his bank to release
₱3,000,000.00 to a certain Grace delos
Santos. Carlos then obtained the money from
Grace. After four days, ₱1,800,000.00 was
800,000.00 balance. However, after
deducting Carlos’ personal loans Ludolfo
issued a check worth ₱ 481,800.00 which was
accepted by Carlos.  
The project to dredge the Masarawag and San
Francisco Rivers in Guinobatan was subjected
to public bidding. The project was awarded to
the lowest bidder, Sunwest Construction and
Development Corporation. However, the
project was completed without Ludolfo’s
construction company being subcontracted.
Thus, Ludolfo demanded Carlos to return his
₱2,000,000.00 which Carlos did not do so. 
Carlos arguing that the principle of unjust
enrichment does not apply in this situation.
He further argued that Ludolfo paid him for a
subcontract of a government project and as
such the subcontract is void for being
contrary to law, specifically, the Anti-Graft
and Corrupt Practices Act, the Revised Penal
Code, and Section 6 of Presidential Decree No.
1594. Also, according to Carlos, he followed
up the project’s approval with the Central
Office of the Department of Public Works and
Highways as the parties agreed upon. He was,
therefore, entitled to his representation
expenses.
Is Carlos liable to return the ₱2,000,000.00
under the principle of unjust enrichment?
A: YES. Carlos is liable to return ₱2,000,000.00
under the principle of unjust enrichment. Under
Article 22 of the Civil Code of the Philippines,
"every person who through an act of
performance by another, or any other means,
acquires or comes into possession of something
at the expense of the latter without just or legal
ground, shall return the same to him." There is
unjust enrichment "when a person unjustly
retains a benefit to the loss of another, or when a
person retains money or property of another
against the fundamental principles of justice,
equity and good conscience. The principle of
unjust enrichment has two conditions. First, a
person must have been benefited without a real
or valid basis or justification. Second, the benefit
was derived at another person’s expense or
damage.  indiviso. This document also provides that,
In this case, Carlos received ₱2,000,000.00 from
Ludolfo for a subcontract of a government
project to dredge the Masarawag and San
Francisco Rivers in Guinobatan, Albay. However,
contrary to the parties’ agreement, Ludolfo was
not subcontracted for the project. Nevertheless,
Carlos retained the ₱2,000,000.00.
Thus, Carlos was unjustly enriched. He retained
Ludolfo’s money without valid basis or
justification. Under Article 22 of the Civil Code of
the Philippines, Carlos must return the
₱2,000,000.00 to Ludolfo.
Contrary to Carlos’ claim, Section 6 of the
Presidential Decree No. 1594 does not prevent
Ludolfo from recovering his money because it is
premature to rule on the legality of the parties’
agreement since the subcontract did not push
through. At any rate, even assuming that there
was a subcontracting arrangement between
Sunwest Construction and Development
Corporation and Ludolfo, this court has allowed
recovery under a void subcontract as an
exception to the in pari delicto doctrine.  Onofre Andres, claiming ownership over the
SC discussed that in Gonzalo vs. Tarnate Jr.,
Tarnate, Jr. performed his obligations under the
subcontract and the deed of assignment, this
court ruled that he was entitled to the agreed fee.
According to this court, Gonzalo "would be
unjustly enriched at the expense of Tarnate if the
latter was to be barred from recovering because
of the rigid application of the doctrine of in pari
delicto. However, in this case, Carlos never
denied that he failed to fulfill his agreement with
Ludolfo. Carlos, therefore, is retaining the
₱2,000,000.00 without just or legal ground. This
cannot be done. Under Article 22 of the Civil
Code of the Philippines, he must return the
₱2,000,000.00 to Ludolfo. (Carlos A. Loria v.
Ludolfo P. Munoz, Jr., G.R. No. 187240, October 15,
2014)
Q: The Spouses Victor and Filomena Andres
own a 4,634-square-meter parcel of land.
After Victor’s death, Filomena, and six of their
children — Onofre, Roman, Juana, Guillermo,
Felisa, and Maxima — agreed in an
extrajudicial partition with sale to adjudicate
one half of the land to each of them pro
they all sold, transferred, and conveyed to
Roman Andres their respective rights and
participation to the one-half portion of the
property. This was annotated on the title.
Consequently, a new title was issued in the
name of Roman Andres and his wife, Lydia
Andres, under TCT No. NT-57731. Spouses
Roman and Lydia Andres mortgaged the
property to PNB for 3,000.00. PNB alleged
that the Nueva Ecija Regional Trial Court
cancelled the guardianship issued in favor of
the Security Bank and Trust Company and
transferred ownership of the properties of
the deceased, Spouses Roman and Lydia
Andres, to their only living heir, Reynaldo
Andres. TCT No. NT-57731 was consequently
cancelled, and title was transferred to the
Spouses Reynaldo Andres and Janette de
Leon on December 27, 1994. On September 4,
1995, the Spouses Reynaldo Andres and
Janette de Leon used this title and mortgaged
the property to PNB for a 1.2 million
loan. This was without the consent of Onofre
Andres.
property, filed a complaint for cancellation of
title, reconveyance of property and damages,
with prayer for the issuance of a preliminary
injunction against his nephew Reynaldo
Andres and Reynaldo’s wife, Janette de Leon,
PNB, Lydia Andres, and the Register of Deeds
of Nueva Ecija. The complaint alleged that
Reynaldo Andres was in collusion with his
mother, Lydia Andres, in executing a falsified
document denominated as "Self-Adjudication
of Sole Heir." 
PNB denied the material allegations in the
complaint. It argued that it conducted an
investigation on the property. The title
presented to PNB by Reynaldo Andres and his
wife was clear and free from adverse claims.
Is PNB an innocent mortgagee for value and
in good faith?
A: YES. A bank that accepts a mortgage based
upon a title which appears valid on its face and
after exercising the requisite care, prudence, and
diligence appropriate to the public interest
character of its business can be deemed a
mortgagee in good faith. The subsequent
consolidation of title in its name after a valid
foreclosure shall be respected notwithstanding
later proof showing that the title was based upon
a void transaction. The standard operating
practice for banks when acting on a loan
application is "to conduct an ocular inspection of
the property offered for mortgage and to verify
the genuineness of the title to determine the real
owner(s) thereof." PNB complied with the
standard operating practice of banks, which met
the requisite level of diligence, when it sent
Gerardo Pestano to conduct an ocular inspection
of the property and verify the status of its
ownership and title. Consequently, PNB is a
mortgagee in good faith. The title resulting from
the foreclosure sale, therefore, is to be protected.
The bank is an innocent purchaser for value.
(Abraham, and AFRICA, all surnamed ANDRES v.
Philippine National Bank, G.R. No. 173548,
October 15, 2014)
Q: Luzviminda A. Canlas applied for the
original registration of title, under
Presidential Decree No. 1529, of the 9,751-
square-meter parcel of land located in Rizal
and technically described as Cadastral Lot No.
11566, Psu-04-006561. There was no
opposition to Canlas’ application. Respondent
Republic of the Philippines (Republic) did not
submit its comment or opposition despite the
opportunity given by the trial court. The case
was then submitted for decision.
The Regional Trial Court granted Canlas’
application. According to the trial court,
Canlas complied with the procedural
requirements and substantiated her
application. She sufficiently proved that,
through her predecessors-in-interest, she has
been in “open, continuous, exclusive and
notorious possession of an alienable and
disposable parcel of land of the public
domain under a bona fide claim of ownership
for more than 30. Years. 
The Republic of the Philippines, however,
filed a notice of appeal. Acting on the
Republic’s appeal, the Court of Appeals
reversed and set aside the decision of the
trial court.  The Court of Appeals held that
Canlas was not able to prove open,
continuous, exclusive, and notorious
possession and occupation of the property.
According to the Court of Appeals, Canlas
failed to discharge the burden of proof placed
on applicants for land registration.
Canlas comes before this court, arguing that
she has duly overcome the burden of proof by
showing open, continuous, exclusive,
adverse, and notorious possession and
occupation of the property.  
Is Canlas in  open, continuous, exclusive, and
notorious possession and occupation of the
land described in plan Psu-04-006561? 
A: YES. To qualify as open, continuous, exclusive,
and notorious possession and occupation, the
possession must be of the following character:
Possession is open when it is patent, visible,
apparent, notorious and not clandestine. It is
continuous when uninterrupted, unbroken and
not intermittent or occasional; exclusive when
the adverse possessor can show exclusive
dominion over the land and an appropriation of
it to his own use and benefit; and notorious
when it is so conspicuous that it is generally
known and talked of by the public or the people
in the neighborhood.
This court puts more premium on the findings of
the trial court that petitioner has sufficiently
shown acts of dominion before 1945 and
throughout the years.  It is settled that the trial
court’s appreciation of the evidence presented is
entitled to great respect since it is in a better
position to evaluate the testimonies of witnesses.
Petitioner has sufficiently shown that she,
through her predecessors-in-interest, have been
in open, continuous, exclusive, and notorious
possession and occupation of the 9,751-square-
meter parcel of land located in Barrio Macamot,
Municipality of Binangonan, Province of Rizal,
since June 12, 1945 or earlier. Documentary
evidence to prove possession was presented and
substantiated by the witnesses’ testimonies.
There were sufficient pieces of evidence to show
that petitioner and her predecessors-in-interest
exercised specific acts of ownership such as:
farming activities; allowing the excavation of
land for “pulang lupa” to make clay pots; paying
realty taxes; declaring the property for tax
purposes; employing a caretaker; causing
corrections in entries in public documents with
regard to the land; and demanding unlawful
occupants to vacate the premises. (Luzminda
Apran Canlas v. Republic of the Philippines, G.R.
No. 200894 , November 10, 2014)
Q:  The respondent in this case borrowed
money from the petitioner. By way of
security, the parties verbally agreed that
petitioner would take physical possession of
the property, cultivate it, then use the
earnings from the cultivation to pay the loan
and realty taxes. It was further agreed that
upon full payment of the loan,  the petitioner
would return the property to the
respondents. The petitioner however sold the
property to other people, thus the
respondents filed before the Regional Trial
Court for annulment of sale and transfers and
relied on the agreement (antichresis) they
had with the petitioner. Petitioner argues
that the antichresis claim of the Revilla
spouses was not reduced into writing, thus, it
is void under Article 2134 of the Civil Code. Is
the contract of antichresis void in this case?  going to be applied as payment for overdue
A: YES. The contract of antichresis is void in this
case. Well-settled is the rule that "conveyances
by virtue of a forged signature ... are void ab
initio as the absence of the essential requisites of
consent and cause or consideration in these
cases rendered the contract inexistent” Further,
similar to the prohibition against pactum
commissorium since creditors cannot
"appropriate the things given by way of pledge
or mortgage, or dispose of them," an an
antichretic creditor also cannot appropriate the
real property in his or her favor upon the non-
payment of the debt. Antichresis also requires
that the amount of the principal and the interest
be in writing for the contract to be valid.
(Cotoner-Zacharias v. Sps. Alfredo, G.R. No.
190901, November 12, 2014)
Q: Henry Ysaac leased out portions of the
property to several lessees. Juan Cabrera, one
of the lessees, leased a 95-square-meter
portion of the land beginning in 1986. On May
6, 1990, Henry Ysaac needed money and
offered to sell the 95-square-meter piece of
land to Juan Cabrera. He told Henry Ysaac
that the land was too small for his needs
because there was no parking space for his
vehicle. Juan Cabrera accepted the new offer.
Henry Ysaac and Juan Cabrera settled on the
price of ₱250.00 per square meter, but Juan
Cabrera stated that he could only pay in full
after his retirement on June 15, 1992. Henry
Ysaac agreed but demanded for an initial
payment of ₱1,500.00, which Juan Cabrera
paid. On June 15, 1992, Juan Cabrera tried to
pay the balance of the purchase price to
Henry Ysaac. However,at that time, Henry
Ysaac was in the United States. The only
person in Henry Ysaac’s residence was his
wife who refused to accept Juan Cabrera’s
payment. On September 21, 1994, Henry
Ysaac’s counsel, Atty. Luis Ruben General,
wrote a letter addressed to Atty. Leoncio
Clemente, Juan Cabrera’s counsel informing
the latter that his client is formally rescinding
the contract of sale because Juan Cabrera
failed to pay the balance of the purchase
price of the land between May 1990 and May
1992. The letter also stated that Juan
Cabrera’s initial payment of ₱1,500.00 and
the subsequent payment of ₱6,100.00 were
rent of the parcel of land Juan Cabrera was
leasing from Henry Ysaac. Due to Juan
Cabrera’s inability to enforce the contract of
sale between him and Henry Ysaac, he
decided to file a civil case for specific
performance. Was there a valid contract of
sale between Ysaac and Cabrera?
A: NO. There was no valid contract of sale
between petitioner and respondent as the
contract was null ab initio. The object of the sales
contract between petitioner and respondent was
a definite portion of a co-owned parcel of land.
At the time of the alleged sale between petitioner
and respondent, the entire property was still
held in common. The rules allow respondent to
sell his undivided interest in the co-ownership.
However, this was not the object of the sale
between him and petitioner. The object of the
sale was a definite portion. Even if it was
respondent who was benefiting from the fruits of
the lease contract to petitioner, respondent has
"no right to sell or alienate a concrete, specific or
determinate part of the thing owned in common,
because his right over the thing is represented
by quota or ideal portion without any physical
adjudication. Sale of a portion of the property is
considered an alteration of the thing owned in
common. Under the Civil Code, such disposition
requires the unanimous consent of the other co-
owners. However, the rules also allow a co-
owner to alienate his or her part in the co-
ownership. These two rules are reconciled
through jurisprudence. If the alienation precedes
the partition, the co-owner cannot sell a definite
portion of the land without consent from his or
her co-owners. He or she could only sell the
undivided interest of the co-owned property. As
summarized in Lopez v. Ilustre, "if he is the
owner of an undivided half of a tract of land, he
has a right to sell and convey an undivided half,
but he has no right to divide the lot into two
parts, and convey the whole of one part by metes
and bounds." (Juan P. Cabrera v.  Henry Ysaac,
G.R. No. 166790, November 19, 2014)
Q: Gregorio, Enrique, Simplicio and Severino
Lopez inherited a 2734-square-meter
property in Bustos, Bulacan originally owned
by their grandmother Gregoria Lopez, over
which a tax declaration was issued under the
name, “Heirs of Lopez.” On 29 November
1990, Enrique Lopez executed an affidavit of
self-adjudication declaring himself to be the
sole heir of Gregoria, and sold the property to
Marietta Yabut (“Yabut”). In 1993, Yabut
obtained a loan from Development Bank of
the Philippines (“DBP”) and mortgaged the
property to DBP as security. At the time of the
loan, the property was covered by Tax
Declaration No. 18727 under Yabut’s name,
but subsequently on 26 July 1993, an original
certificate of title was issued in Yabut’s
favour and the mortgage was annotated
thereon. Petitioners filed a complaint with
the Regional Trial Court (“RTC”) for the
annulment of Enrique’s affidavit of self-
adjudication, the deed of sale in favour of
Yabut, and the deed of real estate mortgage in
favour DBP, with a prayer for the re-
conveyance of their ¾ share in the property.
Meanwhile, foreclosure proceedings were
instituted by DBP upon Yabut’s default, and
there, DBP became the highest bidder,
eventually resulting in the title of the
property being consolidated in its favour. 
Did Yabut and eventually, DBP acquire valid
title to the property under the doctrine of
innocent purchaser or mortgagee for value?
A: NO. Under Article 493 of the NCC, Enrique had
no right to sell the undivided portions belonging
to his siblings or their respective heirs, and the
sale to Yabut should be void with respect to the
shares of the other heirs who did not consent
thereto. While as a rule, an ordinary buyer may
rely on the certificate of title issued in the name
of the seller, and need not look beyond what
appears on the face of the title, the ordinary
buyer will not be considered an innocent
purchaser for value if there is anything on the
certificate of title that arouses suspicion, and the
buyer failed to inquire or take steps to ensure
that there is no cloud on the title, right or
ownership of the property being sold. Yabut
could not be an innocent purchaser for value,
because there was no certificate of title to rely on
when she purchased the property from Enrique,
at which time the only available document
presented her was a tax declaration under “Heirs
of Lopez.” The defense of having purchased the
property in good faith may be availed of only
where registered land is involved and the buyer
had relied in good faith on the clear title of the
registered owner. It does not apply when the
land is not yet registered with the Registry of
Deeds. Similarly, DBP could not be held to be a
mortgagee in good faith because at the time of
the mortgage, the mortgagor Yabut had yet to
register the property under her name. The rule
on “innocent purchasers or mortagees for value”
is applied more strictly when the purchaser or
mortgagee is a bank as banks are expected to
exercise higher degree of diligence in their
dealings, including those involving lands. DBP
failed to exercise the degree of diligence
required of banks when it accepted the
unregistered property as security for Yabut’s
loan despite circumstances that should have
aroused its suspicion.  (Heirs of Gregorio Lopez v.
Development Bank of the Philippines, G.R. No.
193551, November 19, 2014)
Q: On May 16, 1998, Wellex and U-Land
entered into a Memorandum of Agreement
(First Memorandum of Agreement) to expand
their respective airline operations in Asia.
The First Memorandum of Agreement stated
that within 40 days from its execution date,
Wellex and U-Land would execute a share
purchase agreement covering U-Land’s
acquisition of the shares of stock of both APIC
(APIC shares) and PEC (PEC shares). In this
share purchase agreement, U-Land would
purchase from Wellex its APIC shares and
PEC shares. Both parties agreed that the
purchase price of APIC shares and PEC shares
would be paid upon the execution of the
share purchase agreement and Wellex’s
delivery of the stock certificates covering the
shares of stock. The transfer of APIC shares
and PEC shares to U-Land was conditioned on
the full remittance of the final purchase price
as reflected in the share purchase
agreement.  even the payment of damages. It is a principal
Further, the transfer was conditioned on the
approval of the Securities and Exchange
Commission of the issuance of the shares of
stock and the approval by the Taiwanese
government of U-Land’s acquisition of these
shares of stock. Wellex and U-Land also
agreed to enter into a joint development
agreement simultaneous with the execution
of the share purchase agreement. U-Land
agreed to remit the sum of US$3 million not
later than May 22, 1998. This sum was to
serve as initial funding for the development
projects that Wellex and U-Land were to
undertake pursuant to the joint development
agreement. In exchange for the US$3 million,
Wellex would deliver stock certificates
covering 57,000,000 PEC shares to U-Land.
The execution of a joint development
agreement was also conditioned on the
execution of a share purchase agreement.
Wellex and U-Land agreed that if they were
unable to agree on the terms of the share
purchase agreement and the joint
development agreement within 40 days from
signing, then the First Memorandum of
Agreement would cease to be effective. 
In case no agreements were executed, the
parties would be released from their
respective undertakings, except that Wellex
would be required to refund within three (3)
days the US$3 million given as initial funding
by U-Land for the development projects. If
Wellex was unable to refund the US$3 million
to U-Land, U-Land would have the right to
recover on the 57,000,000 PEC shares that
would be delivered to it. The 40-day period
lapsed on June 25, 1998. Wellex and U-Land
were not able to enter into any share
purchase agreement although drafts were
exchanged between the two. 
Can the rescission of the First Memorandum
of Agreement can be subject of rescission?
A: YES. Respondent U-Land is praying for the
rescission or resolution under Article 1191, and
not rescission under Art. 1381. The failure of one
of the parties to comply with the reciprocal
obligation allows the wronged party to seek the
remedy of Article 1191. The wronged party is
entitled to rescission under Article 1191, and
action precisely because it is a violation of the
original prestation. Article 1381 and Article
1383, pertains to rescission where creditors or
even 3rd persons not privy to the contract can file
an action due to lesion or damage as a result of
the contract. Rescission or resolution under Art.
1191, therefore is a principal action due to lesion
or damage as a result of the contract and it is a
principal action that is immediately available to
the party at the time that the reciprocal
prestation was breached. The order is valid.
Enforcement of Sec. 9 of the First MOA has the
same effect as rescission or resolution under Art.
1191. The parties are obligated to return to each
other all that they may have received as a result
of the breach by petitioner Wellex of the
reciprocal obligation. (The Wellex Group, Inc. v.
U-Land Airlines, Co., Ltd., G.R. No. 167519, January
14, 2015)
Q: Reyes is the owner of a 450-sqm parcel of
land in Barangay Malibong Bata, Pandi,
Bulacan. She filed for a Complaint for
Easement of Right of Way before the RTC,
alleging that the Spouses Valentin’s
1,500sqm. property surrounded hers was the
only adequate outlet from her property to the
highway. Respondents contend that the
property chosen as easement was most
burdensome for them, as there was another
open space which connected the petitioner’s
property to another public road. The RTC
found that the Reyes’ proposed right of way
was not the least onerous to the servient
estate of the respondents, as there were
permanent structures such as a garage,
garden, and grotto placed upon it. It also
noted the existence of an irrigation canal;
that limited access to the public road, where a
nearby landowner was able to construct a
bridge to connect a property to the public
road. Hence the way through the irrigation
canal would appear to be the shortest and
easiest way to reach the barangay road.  Does
the petitioner have the compulsory easement
of right of way over the respondents’
property?
A: NO. The petition has no merit. Reyes failed to
satisfy the requirements for the easement of
right of way under the New Civil Code. It was
shown that there is an adequate exit to a public
highway. In the case of Dichoso, Jr. v. Marcos, the
Supreme Court ruled that the convenience of the
dominant estate’s owner is not the basis for
granting an easement of right if way, especially if
the owner’s needs may be satisfied without
imposing the easement. The court is not bound
to establish what the shortest distance is; a
longer way may be adopted to avoid injury to the
servient estate. The cost of having to destroy the
structures on the Valentin’s estate, coupled with
the fact that there is an available outlet that can
be utilized for the right of way, negates the claim
that petitioner was not really disallowed from
constructing a bridge. (Alicia B. Reyes v. Sps.
Valentin Ramos, Francisco S., and Anatalia, G.R.
No. 194488, February 11, 2015)
Q: National Power Corporation instituted
expropriation proceedings for the acquisition
of a right-of-way easement and for the
construction of the Substation Island Grid
Project over the parcels of land owned by
respondents. During the pendency of the
proceedings, NPC filed a motion to
discontinue the proceedings since the delay
in the possession of the properties would
adversely affect the project. NPC also claims
that the properties were no longer needed as
it was set to acquire an alternative site.
May NPC be allowed to discontinue the
expropriation proceedings?
A: YES. No expropriation proceeding can
continue if the property to be expropriated will
not be for public use. In Metropolitan Water
District v. De Los Angeles, the Court held that the
fundamental basis then of all actions brought for
the expropriation of lands, under the power of
eminent domain, is public use. That being true,
the very moment that it appears at any stage of
the proceedings that the expropriation is not for
a public use, the action must necessarily fail and
should be dismissed, for the reason that the
action cannot be maintained at all except when
the expropriation is for some public use.
Considering that the National Power Corporation
is no longer using respondents' properties for
the purpose of building the Substation Project, it
may be allowed to discontinue with the
expropriation proceedings, subject to the
approval of the court. (NPC v. Socorro T. Posada,
et al., G.R. No. 191945, March 11, 2015)
Q: Alfredo V. de Ocampo (de Ocampo) filed an
application before the Court of First Instance
of Negros Occidental to register two parcels
of prime sugar land, Lot No. 2509 of the
cadastral survey of Escalante and Lot No. 817
of the cadastral survey of Sagay. The
registration was contested by the Republic of
the Philippines' Bureau of Education (the
Republic). According to the Republic, the lots
de Ocampo sought to register were
bequeathed to the Bureau of Education by the
late Esteban Jalandoni. Due to the donation,
the Bureau of Education owned the lots as
evidenced by Transfer Certificate of Title
(TCT) No. 6014. While registration
proceedings were pending, de Ocampo
entered into an agreement with Oscar Anglo,
Sr. (Anglo, Sr.). Their agreement,
denominated as a Deed of Conditional Sale,
included an undertaking that de Ocampo
would cede, transfer, and convey Lot No.
2509 and part of Lot No. 817 under certain
conditions. Anglo, Sr. and Anglo Agricultural
Corporation filed a Complaint for Recovery of
Damages from the Assurance Fund against
the Register of Deeds of Negros Occidental
and the National Treasurer of the Republic of
the Philippines before the Regional Trial
Court of Bacolod City, Negros Occidental.
According to their Complaint, Anglo, Sr.
acquired the lots in good faith and for value
without any negligence on his part.
Considering that de Ocampo passed away and
left no property to his heirs before the
finality of the Court of Appeals' Decision, the
only available remedy for Anglo, Sr. and
Anglo Agricultural Corporation was to
recover the value of the lots from the
Assurance Fund as provided for under Act No.
496 and Presidential Decree No. 1529. Are
the respondents Oscar Anglo, Sr. and Anglo
Agricultural Corporation entitled to an award
of damages from the Assurance Fund under
Section 95 of Presidential Decree No. 1529?
A: NO. The Torrens system is not infallible. It is
possible that through fraud or error, a person
who is not the owner acquires a certificate of
title over property. The law thus created an
Assurance Fund to address this possibility.
Under Presidential Decree No. 1529, for every
certificate of title issued to a registered owner of
the property, building, or other improvements,
the registered owner contributes "one-fourth of
one per cent of the assessed value of the real
estate on the basis of the last assessment for
taxation purposes, as contribution to the
Assurance Fund." If the property has not yet
been assessed for taxation purposes, the
contribution will be based on the value
determined by two disinterested persons.  These
collections are pooled together under the
custody of the National Treasurer. This court
further explained that "the Assurance Fund is
intended to relieve innocent persons from the
harshness of the doctrine that a certificate is
conclusive evidence of an indefeasible title to
land." An individual who relied on the validity of
a certificate of title should not be prejudiced by
fraud committed during the original registration,
nor should he or she be prejudiced by the error,
omission, mistake, or misdescription in the
certificate of title caused by court personnel or
the Register of Deeds, his or her deputy, or other
employees of the Registry. (The Register of Deeds
of Negros Occidental and The National Treasurer
of the Republic of the Philippines v. Oscar Anglo,
Sr., and Anglo Agricultural Corporation, G.R.
171804, August 5, 2015)
Q: PNCC and Asiavest Holdings (M) Sdn. Bhd.
(Asiavest Holdings) caused the incorporation
of an associate company known as Asiavest-
CDCP Sdn. Bhd. (Asiavest CDCP), through
which they entered into contracts to
construct rural roads and bridges for the
State of Pahang, Malaysia. In connection with
this construction contract, PNCC obtained
various guarantees and bonds from Asiavest
Merchant Bankers (M) Berhad to guarantee
the due performance of its obligations. The
four contracts of guaranty stipulate that
Asiavest Merchant Bankers (M) Berhad shall
guarantee to the State of Pahang "the due
performance by PNCC of its construction
contracts . . . and the repayment of the
temporary advances given to PNCC." These
contracts were understood to be governed by
the laws of Malaysia. There was failure to
perform the obligations under the
construction contract, prompting the State of
Pahang to demand payment against Asiavest
Merchant Bankers (M) Berhad's performance
bonds. It "entered into a compromise
agreement with the State of Pahang by paying
. . . the reduced amount of [Malaysian Ringgit
(MYR)] 3,915,053.54." Consequently, the
corporation demanded indemnity from PNCC
by demanding the amount it paid to the State
of Pahang. Asiavest Merchant Bankers (M)
Berhad filed a Complaint for recovery of sum
of money against PNCC before the Regional
Trial Court of Pasig. It based its action on
Malaysian laws. Specifically, it invoked
Section 98 of the Malaysian Contracts Act of
1950 and Section 11 of the Malaysian Civil
Law Act of 1956. The trial court declared
PNCC in default for failure to file any
responsive pleading, and allowed Asiavest
Merchant Bankers (M) Berhad to present its
evidence ex parte. PNCC submits that the trial
court could have invoked the principle of
forum non conveniens and refused to take
cognizance of the case considering the
difficulty in acquiring jurisdiction over the
two Malaysian corporations and in
determining PNCC's exact liability. Can the
trial court assume jurisdiction on the ground
of forum non-conveniens?
A: YES. PNCC argues that "in view of the
compelling necessity to implead the two foreign
corporations, the Trial Court should have refused
to assume jurisdiction over the case on the
ground of forum non-conveniens, even if the
Court might have acquired jurisdiction over the
subject matter and over the person of the PNCC."
We find that the trial court correctly assumed
jurisdiction over the Complaint. "Forum non
conveniens literally translates to 'the forum is
inconvenient.'" This doctrine applies in conflicts
of law cases. It gives courts the choice of not
assuming jurisdiction when it appears that it is
not the most convenient forum and the parties
may seek redress in another one. It is a device
"designed to frustrate illicit means for securing
advantages and vexing litigants that would
otherwise be possible if the venue of litigation
(or dispute resolution) were left entirely to the
whim of either party." On the other hand, courts
may choose to assume jurisdiction subject to the
following requisites: "(1) that the Philippine
Court is one to which the parties may
conveniently resort to; (2) that the Philippine
Court is in a position to make an intelligent
decision as to the law and the facts; and (3) that
the Philippine Court has or is likely to have
power to enforce its decision." The
determination of whether to entertain a case is
addressed to the sound discretion of the court,
which must carefully consider the facts of the
particular case. A mere invocation of the doctrine
of forum non conveniens or an easy averment
that foreign elements exist cannot operate to
automatically divest a court of its jurisdiction. It
is crucial for courts to determine first if facts
were established such that special circumstances
exist to warrant its desistance from assuming
jurisdiction. PNCC is a domestic corporation with
its main office in the Philippines. It is safe to
assume that all of its pertinent documents in
relation to its business would be available in its
main office. Most of PNCC's officers and
employees who were involved in the
construction contract in Malaysia could most
likely also be found in the Philippines. Thus, it is
unexpected that a Philippine corporation would
rather engage this civil suit before Malaysian
courts. Our courts would be "better positioned to
enforce the judgment and, ultimately, to
dispense" in this case against PNCC. (Philippine
National Construction Corporation v. Asiavest
Merchant Bankers (M) Berhad, G.R. No. 172301,
August 19, 2015)
Q: Reynosa Valte (Valte) filed a free patent
application dated July 6, 1978 for a 7.2253-
hectare parcel of land in San Isidro, Lupao,
Nueva Ecija. The application listed Procopio
Vallega and Pedro Mendoza (Mendoza) as
witnesses who would testify to the truth of
the allegations in Valte's application. The
Director of Lands then issued the Notice of
Application for Free Patent stating that "all
adverse claims to the tract of land above-
described must be filed in the Bureau of
Lands on or before the 7th day of August
1978. Any claim not so filed will be forever
barred." The land was first occupied and
cultivated by Francis Maglaya, Nemesio
Jacala, and Laureano Pariñas, who sold all
their rights to the portions adjudicated to
them to Spouses Policarpio Valte and Miguela
dela Fuente in May 1941. The spouses
immediately took possession. Miguela dela
Fuente assumed the responsibilities over the
land after her husband died. When she aged,
she transferred all her rights to their only
daughter, Reynosa Valte, who was found in
actual possession of the land. The Bureau of
Lands approved Valte's application and
issued Free Patent No. 586435. The
Cabanatuan City Register of Deeds issued OCT
No. P-10119. Mendoza and Jose Gonzales
(Gonzales) filed a protest against Valte's
application, claiming to be "the lawful owners
and possessors since 1930 thru predecessor-
in-interest and who had been in actual
uninterrupted, open, peaceful, exclusive, and
adverse possession in the concept of an
owner of the above-described property."
Mendoza and Gonzales alleged that Valte
procured Free Patent No. 586435 by means of
fraud, misrepresentation, and connivance. Is
there is fraud and misrepresentation by
respondent Reynosa Valte in her free patent
application?
A: NO. The burden of proving that respondent
employed fraud in her free patent application
falls on petitioners who made this assertion.
Petitioners failed to overcome this burden.
Different kinds of fraud exist, but the law
allowing fraud as a ground for a review or
reopening of a land registration decree
contemplates actual and extrinsic fraud.  Actual
fraud "proceeds from an intentional deception
practiced by means of the misrepresentation or
concealment of a material fact." Extrinsic fraud
"is employed to deprive parties of their day in
court and thus prevent them from asserting their
right to the property registered in the name of
the applicant." Petitioners did not allege nor
show any irregularity in the free patent
application proceedings conducted before the
Director of Lands. The presumption that official
duty has been regularly performed stands.  In
any event, petitioners failed to overcome their
burden to prove fraud by respondent in her
claim of continuous occupation and cultivation of
the land. As observed by the Court of Appeals,
petitioner Mendoza admitted against his interest
when he stated in his Joint Affidavit that
respondent "has continuously occupied and
cultivated the land." Elmirando Sabado's
testimony regarding petitioners' occupation of
the land in 1929 also lacks credibility as he was
only four years old in 1929.  This court has
disregarded similar testimonies when it was
shown that the witness was then too young to
understand the concept of the possession of a
large tract of land. This court has ruled that an
applicant's failure to state in the free patent
application that other parties are also in
possession of the land applied for "clearly
constitutes a concealment of a material fact
amounting to fraud and misrepresentation
within the context of [Section 91 of
Commonwealth Act No. 141, as amended],
sufficient enough to cause ipso facto the
cancellation of their patent and title." (Pedro
Mendoza v. Reynosa Valte, G.R. No. 172961,
September 7, 2015)
Q: Sunrise executed an undertaking to
construct a city road at its own expense,
subject to reimbursement through tax
credits. The trial court issued a writ of
preliminary injunction to enjoin persons
from obstructing Sunrise Garden in
proceeding with the construction of the city
road. The Court of Appeals directed the
Division Clerk of Court  to issue the writ of
preliminary injunction enjoining
respondents, its agents or representatives
from implementing the trial court’s amended
writ of injunction. Sunrise Garden cited PD
No. 1818 which prohibits a court from issuing
preliminary injunction in any case involving
an infrastructure project. When this case was
filed, RA No. 8975 was already effective which
provides for an express repeal of PD No.
1818. RA No. 8975 prohibits the issuance of
preliminary injunction against the
government or any person to restrain the
development of any national government
project. 
Is the allegation of Sunrise acceptable?
A: NO. PD No. 1818 has been repealed by RA No.
8975. The repealing clause of RA No. 8975
provides for an express repeal. The Supreme
Court has held that implied repeals are not
favored, and "the failure to add a specific
repealing clause indicates that the intent was not
to repeal any existing law." The express repeal of
Presidential Decree No. 1818 clearly indicates
Congress' intent to replace Presidential Decree
No. 1818 with Republic Act No. 8975. The new
law covers only national government
infrastructure projects. This case involves a local
government infrastructure project. Hence,
Sunrise’s contention is untenable. (Sunrise
Garden Corporation v. CA and First Alliance Real
Estate Development, Inc., G.R. No. 158836,
September 30, 2015)
Q: MV Lorcon Luzon, a commercial vessel
owned by Lorenzo Shipping, hit and rammed
National Power Corporation’s Power Barge
104. NPC submitted pieces of evidence to the
court as basis for actual damages it has
suffered. However, Lorenzo Shipping pointed
out that these pieces of evidence fall short of
the standard required for proving pecuniary
loss, which shall be the basis for awarding
actual damages. The CA awarded temperate
damages to NPC in lieu of actual damages as
the amount of damages was not proven by
NPC. 
Is Lorenzo Shipping liable for actual
damages?
A: NO. Article 2199 of the Civil Code spells out
the basic requirement that compensation by way
of actual damages is awarded only to the extent
that pecuniary loss is proven. NPC failed to
establish the precise amount of pecuniary loss it
suffered. Nevertheless, it remains that Power
Barge 104 sustained damage — which may be
reckoned financially — as a result of the MV
Lorcon Luzon's ramming into it. National Power
Corporation suffered pecuniary loss, albeit its
precise extent or amount had not been
established. Accordingly, the Court of Appeals'
conclusion that National Power Corporation is
entitled to temperate damages should be
sustained. (Lorenzo Shipping Corporation v.
National Power Corporation, G.R. No. 181683,
October 07, 2015)
Q: G & P Builders obtained a loan from
Metrobank and mortgaged parcels of land as
a collateral. The parties executed a
Memorandum of Agreement where they
agreed that some parcels of the land
mortgaged would be released and sold. The
proceeds amounting to P15,000,000.00 were
deposited with Metrobank. Elite Union and
Metrobank entered into a Loan Sale and
Purchase Agreement where the latter sold G
& P’s loan account to Elite Union. Metrobank
claims that it is still entitled to the
P15,000,000.00 proceeds despite the sale of
G & P’s loan account to Elite Union.  As a consequence, the burden of proof shifts to
Is Metrobank entitled to the P15,000,000.00
deposit?
A: NO. Through the assignment of credit, the new
creditor is entitled to the rights and remedies
available to the previous creditor. Moreover,
under Article 1627 of the Civil Code, "the
assignment of a credit includes all the accessory
rights, such as a guaranty, mortgage, pledge, or
preference." The Loan Sale and Purchase
Agreement entitled Elite Union to all the rights
and interests that petitioner had had as creditor
of respondent G & P, including the securities of
the loan account. What was sold to Elite Union
under the Loan Sale and Purchase Agreement
was respondent G & P's total loan obligation
inclusive of the remaining securities and
proceeds from the sale of some of the securities
as stated in the first MOA. (Metropolitan Bank &
Trust Company v. G & P Builders, Incorporated,et
al., G.R. No. 189509, November 23, 2015)
Q: Jesmariane Reyes was hit by a van owned
and registered by Caravan Travel and Tours
International, Inc. Bautista who was
employed as the driver of Caravan, was found
to be grossly negligent in driving the vehicle.
Reyes’ aunt, Abejar, presented a copy of the
Certification of Registration of the van which
attests to Caravan’s ownership thereof.
Caravan argues that it cannot be held liable
since Abejar offered no documentary or
testimonial evidence to prove that Bautista
acted within the scope of his assigned tasks
when the accident occurred. 
Is Caravan liable as employer of Bautista?
A: YES. Article 2180 requires proof of two things:
first, an employment relationship between the
driver and the owner; and second, that the driver
acted within the scope of his or her assigned
tasks. The registered-owner rule only requires
the plaintiff to prove that the defendant-
employer is the registered owner of the vehicle.
In cases where both the registered-owner rule
and Article 2180 apply, the plaintiff must first
establish that the employer is the registered
owner of the vehicle in question. Once the
plaintiff successfully proves ownership, there
arises a disputable presumption that the
requirements of Article 2180 have been proven.
the defendant to show that no liability under
Article 2180 has arisen. Here, respondent
presented a copy of the Certificate of
Registration of the van that hit Reyes. The
Certificate attests to petitioner's ownership of
the van. Petitioner itself did not dispute its
ownership of the van. Consistent with the rule, a
presumption that the requirements of Article
2180 have been satisfied arises. It is now up to
petitioner to establish that it incurred no liability
under Article 2180, which it failed to do.
(Caravan Travel and Tours International, Inc. v. 
Ermilinda R. Abejar, G.R. No. 170631, February 10,
2016)
Q: Edna filed an action for support against
Colonel Otamias. A deed of assignment was
executed by Otamias where he waived 50% of
his pension benefits in favor of Edna and his
children. The RTC issued a notice of
garnishment to AFP Pension and Gratuity
Management Center and ordered the
automatic deduction of support from the
pension benefits of Colonel Otamias. The CA
annulled the order of the RTC and cited PD
No. 1638 which provides for the exemption of
the monthly pension of retired military
personnel from execution and attachment.  the National Power Corporation since 2005.
Did Colonel Otamias validly waive the
exemption granted by PD no. 1638 upon the
execution of the deed of assignment?
A: YES. Under Article 6 of the Civil Code, rights
may be waived, unless the waiver is contrary to
law, public order, public policy, morals or good
customs, or prejudicial to a third person with a
right recognized by law. When Colonel Otamias
executed the Deed of Assignment, he effectively
waived his right to claim that his retirement
benefits are exempt from execution. The right to
receive retirement benefits belongs to Colonel
Otamias. His decision to waive a portion of his
retirement benefits does not infringe on the right
of third persons, but even protects the right of
his family to receive support. The Deed of
Assignment executed by Colonel Otamias was
not contrary to law; it was in accordance with
the provisions on support in the Family Code.
Hence, there was no reason for the AFP PGMC
not to recognize its validity. (Edna Mabugay-
Otamias, et al. v.  Republic of the Philippines,
Represented By Col. Virgilio O. Domingo, in his
capacity as the Commanding Officer of the
Pension and Gratuity Management Center (PGMC)
Of The Armed Forces Of The Philippines, G.R. No.
189516, June 08, 2016)
Q: The consortium of ALSONS Power Holdings
Corporation and TOMEN Corporation entered
into an Energy Conversion Agreement with
NAPOCOR for a 50-megawatt bunker- C fired
diesel-generating power project in General
Santos City. Southern Philippines Power
Corporation assumed the obligations of the
consortium to the Energy Conversion
Agreement through the Accession
Undertaking. The cooperation period
between Southern Philippines Power
Corporation and the National Power
Corporation started when the Power Station
was declared completed.
Southern Philippines Power Corporation
requested payment in the amount of
P45,840,673.22, attributable to the
additional 10% capacity made available to
NAPOCOR refused to pay. Does the Petitioner
have the right to collect payment from the
project?
A: NO. Section 3.1 of the Agreement's First
Schedule, which provides for the construction of
a five (5)-engine Power Station, cannot be
construed alone. Various stipulations of a
contract must be interpreted or read together to
arrive at its true meaning. The legal effect of a
contract is not determined by any particular
provision alone, disconnected from all others,
but from the language used and gathered from
the whole instrument.
Specifically, respondent is given the right to "do
all other things necessary or desirable for the
completion of the Power Station" under the
specifications set forth in the First Schedule, as
well as to "do all other things necessary or
desirable for the running of the Power Station
within the Operating Parameters."
Although it is clear that respondent is given an
allowance of five (5)- megawatt contracted
capacity or up to a maximum of 55 megawatts, it
is not specified in the Agreement that the
additional five (5)-megawatt contracted capacity
must be produced only from the original five (5)
generating units. This omission in the Agreement
binds petitioner. (National Power Corporation, v.
Southern Philippines Power Corporation, G.R. No.
219627, July 4, 2016)
Q: The Development Bank of the Philippines
(DBP) and Clarges Realty Corporation
(Clarges) executed a Deed of Absolute Sale for
the property. The parties agreed that all
expenses to be incurred in connection with
the transfer of title to Clarges would be borne
by the DBP. Moreover, the DBP bound itself
under Clause 6 of the Deed of Absolute Sale to
deliver a title to the property "free from any
and all liens and encumbrances on or before
December 15, 1987." The DBP succeeded in
having the property registered under its
name. TCT No. S-16279 was cancelled and, in
its place, TCT No. 151178 was issued.
However, TCT No. 151178 contained
annotations from the former TCT No. S-
16279, specifically, the mortgage lien of the
Philippine National Bank and a tax lien for
unpaid taxes incurred by Marinduque Mining
and Industrial Corporation. DBP delivered to
Clarges the owner's duplicate copy of TCT No.
151178 with the mortgage and tax liens still
annotated on it. Clarges demanded a clean
title from the DBP, but the bank failed to
deliver a clean title. Thus, Clarges Realty
Corporation filed before the RTC of Makati
City a Complaint for Specific Performance and
Damages.
Clarges had already rested its case when the
DBP moved for leave of court to file a third-
party complaint. The DBP sought to implead
the Asset Privatization Trust as a third-party
defendant and maintained that the Asset
Privatization Trust had assumed the "direct
and personal" obligation to pay for
Marinduque Mining and Industrial
Corporation's tax liability and to have the
partially reduced tax lien cancelled. Clarges
opposed the Motion for Leave. Consequently,
the trial court denied the Motion for Leave.
Should the Motion for Leave to File Third-
Party Complaint be denied?
A: YES. A lien, until discharged, follows the
property. Hence, when petitioner acquired the
property, the bank also acquired the liabilities
attached to it, among them being the tax liability
to the Bureau of Internal Revenue. That the
unpaid taxes were incurred by the defunct
Marinduque Industrial and Mining Corporation
is immaterial. In acquiring the property,
petitioner assumed the obligation to pay for the
unpaid taxes. With petitioner capable of having
the tax lien cancelled, it cannot insist on the
admission of its third-party complaint against
the Asset Privatization Trust. The admission of a
third-party complaint requires leave of court; the
discretion is with the trial court. If leave is
denied, the proper remedy is to file a complaint
to be docketed as a separate case. There was no
grave abuse of discretion in denying leave to
admit the third-party complaint against the Asset
Privatization Trust. As the Court of Appeals
observed, the trial court would have wasted time
and effort had it admitted the third-party
complaint. Respondent, the original plaintiff, had
already rested its case when the Motion for
Leave was filed. The original case would have
dragged on with the addition of a new party at a
late stage of the trial. (Development Bank of the
Philippines v. Clarges Realty Corp., G.R. No.
170060, August 17, 2016)
Q. Venancio is married to Lilia since 1973.
During their union, they acquired three (3)
parcels of land in Malolos, Bulacan. The
properties were mortgaged to Philippine
National Bank on August 25, 1994 to secure a
loan worth P1,100,000.00, and was increased
to P3,000,000.00. According to PNB, the
spouses duly consented with the loan.
When the Reyes Spouses failed to pay the
loan obligations, Philippine National Bank
foreclosed the mortgaged real properties.
The auction sale happened and PNB emerged
as the highest bidder and a certificate of sale
was issued in its favor. Venancio claimed that
his wife undertook the loan and the mortgage
without his consent and his signature was
falsified on the promissory notes and the
mortgage. Can Venancio invoked the
disposition or encumbrance of conjugal
properties?
A. YES. The conjugal partnership can be held
liable. The lower courts may have declared the
mortgage void, but the principal obligation is not
affected. It remains valid. Article 122 applies to
debts that were contracted by a spouse and
redounded to the benefit of the family. It applies
specifically to the loan that respondent's wife
Lilia contracted, but not to the mortgage.
(Philippine National Bank v. Venancio C. Reyes, Jr.,
G.R. No. 212483, October 5, 2016)
Q: Filipinas Palm Oil Plantation Inc. is a
private organization engaged in palm oil
plantation with a total land area of more than
7,000 hectares of National Development
Company (NDC) lands in Agusan del Sur.
Harvested fruits from oil palm trees are
converted into oil through Filipinas' milling
plant in the middle of the plantation area.
Within the plantation, there are also three (3)
plantation roads and a number of residential
homes constructed by Filipinas for its
employees.
The LBAA found that the P207.00 market
value declared in the assessment by the
Provincial Assessor was unreasonable. It
found that the market value should not have
been more than P85.00 per oil palm tree. The
sudden increase of realty tax assessment
level from P42.00 for each oil palm tree in
1993 to P207.00 was confiscatory. The LBAA
adopted Filipinas' claim that the basis for
assessment should only be 98 trees. Although
one (1) hectare of land can accommodate 124
oil palm trees, the mountainous terrain of the
plantation should be considered. Because of
the terrain, not every meter of land can be
fully planted with trees. The LBAA found that
roads of any kind, as well as all their
improvements, should not be taxed since
these roads were intermittently used by the
public.
Should the roads the respondent constructed
within the leased area be assessed with real
property taxes?
A: NO, the roads that respondent constructed
within the leased area should not be assessed
with real property taxes.
The roads that respondent constructed became
permanent improvements on the land owned by
the NGPI-NGEI by right of accession under the
Civil Code, thus:
Article 440. The ownership of property gives the
right by accession to everything which is produced
thereby, or which is incorporated or attached
thereto, either naturally or artificially.
Article 445. Whatever is built, planted or sown on
the land of another and the improvements or
repairs made thereon, belong to the owner of the
land[.]
Despite the land being leased by respondent
when the roads were constructed, the ownership
of the improvement still belongs to NGPI-NGEI.
As provided under Article 440 and 445 of the
Civil Code, the land is owned by the cooperatives
at the time respondent built the roads. Hence,
whatever is incorporated in the land, either
naturally or artificially, belongs to the NGPI-NGEI
as the landowner. (Provincial Assessor of Agusan
Del Sur v. Filipinas Palm Oil Plantation, Inc., G.R.
No.183416, October 5,2016)
Q: City Advertising Ventures Corporation
entered into a lease agreement with the
MERALCO Financing Services Corporation for
the use of 5,000 of Manila Electric Company's
lampposts to display advertising
banners. After the hit of Typhoon Milenyo,
President Gloria Macapagal-Arroyo issued
Administrative Order No. 160 "directing the
Department of Public Works and Highways
(DPWH) to conduct field investigations,
evaluations and assessments of all billboards
and determine those that are hazardous and
pose imminent danger to life, health, safety
and property of the general public and to
abate and dismantle the same.” Thereafter,
the DPWH was able to remove 250 of City
Advertising Ventures Corporation's lamppost
banners and frames, 12 pedestrian overpass
banners, 17 pedestrian overpass frames, and
36 halogen lamps. Aggrieved, the City
Advertising Ventures Corporation fi before
the RTC of Makati City its Complaint for
"Violation of Administrative Order No. 160,
Tort, and Injunction with Prayer for
Temporary Restraining Order, Preliminary
Injunction, and Preliminary Mandatory
Injunction.” The trial court granted City
Advertising Ventures Corporation's prayer
for a temporary restraining order. It also
issued a writ of preliminary injunction. The
DPWH and the MMDA opposed this asserting
that City Advertising Ventures Corporation
failed to show a clear legal right worthy of
protection and that it did not stand to suffer
grave and irreparable injury. They likewise
asserted that the Regional Trial Court
exceeded its authority in issuing a writ of
preliminary injunction. Did the RTC erred in
its issuance of a writ of preliminary
injunction?
A: NO. For a writ of preliminary injunction to be
issued, the applicant must show, by prima facie
evidence, an existing right before trial, a material
and substantial invasion of this right, and that a
writ of preliminary injunction is necessary to
prevent irreparable injury. Respondent satisfied
the standards for the issuance of a writ of
preliminary injunction. Respondent's lease
agreement with MERALCO Financing Services 
Corporation and its having secured permits from
local government units, for the specific purpose
of putting up advertising banners and signages,
gave it the right to put up such banners and
signages. Respondent had in its favor a property
right, of which it cannot be deprived without due
process. This is respondent's right in esse, that is,
an actual right. It is not merely a right in
posse, or a potential right. At the point when the
RTC was confronted with respondent’s prayer
for temporary relief, all that respondent needed
was a right ostensibly in existence. Precisely, a
writ of preliminary injunction is
issued "before parties' claims can be thoroughly
studied and adjudicated." (Department of Public
Works and Highways v. City Advertising Ventures
Corp., G.R. No. 182944, November 9, 2016)
Q: The Delfin Spouses claimed that they were
the owners of a 28,800 square meter parcel
of land in Iligan City. They had been declaring
the Iligan Property in their names for tax
purposes since 1952, and had been planting
it with mangoes, coconuts, corn, seasonal
crops, and vegetables. They alleged that NHA
took possession of a 10,798 square meter
portion of the property. Despite their
repeated demands for compensation, the
National Housing Authority failed to pay the
value of the property.
The NHA alleged that the Delfin Spouses'
property was part of a military reservation
area. It reserved the area in which property is
situated for Iligan City's slum improvement
and resettlement program as cited in
Proclamation No. 2143, and the relocation of
families who were dislocated by the National
Steel Corporation's five-year expansion
program. Does the Spouses have the right to
claim the just compensation?
A: YES. Section 48 of Commonwealth Act
141(Public Land Act) enabled the confirmation
of claims and issuance of titles in favor of citizens
occupying or claiming to own lands of the public
domain or an interest therein. Section 48 (b)
specifically pertained to those who "have been in
open, continuous, exclusive, and notorious
possession and occupation of agricultural lands
of the public domain, under a bona fide claim of
acquisition or ownership, since June 12, 1945”.
Section 48(b) of the Public Land Act therefore
requires that two (2) requisites be satisfied
before claims of title to public domain lands may
be confirmed: first, that the land subject of the
claim is agricultural land; and second, open,
continuous, notorious, and exclusive possession
of the land since June 12, 1945. That the Iligan
property was alienable and disposable,
agricultural land, has been admitted. What is
claimed instead is that petitioners' possession is
debunked by how the Iligan Property was
supposedly part of a military reservation area57
which was subsequently reserved for Iligan
City's slum improvement and resettlement
program, and the relocation of families who were
dislocated by the National Steel Corporation's
five-year expansion program. (Heirs of Leopoldo
Delfin and Soledad Delfin v. National Housing
Authority, G.R. No. 193618, November 28, 2016)
Q: On April 23, 1990, the Department of
Public Works and Highways initiated an
action for expropriation for the widening of
Dr. A. Santos Ave, which also known as Sucat
Road. This action was brought against 26
defendants, none of whom are respondents in
this case. On November 2, 1993, the
Commissioners appointed by the Regional
Trial Court in the expropriation case
submitted a resolution recommending that
just compensation for the expropriated areas
be set to P12, 000.00 per square meter. After
years of not obtaining a favorable ruling, the
Llamas Spouses filed a "Motion for Issuance
of an Order to Pay and/or Writ of Execution
dated May 14, 2002. In this Motion, the
Llamas Spouses faulted the Department of
Public Works and Highways for what was
supposedly its deliberate failure to comply
with the Regional Trial Court's previous
Orders and even with its own undertaking to
facilitate the payment of just compensation to
the Llamas Spouses. On October 8, 2007, the
Regional Trial Court issued the Order
directing the payment to the Llamas Spouses
of just compensation at P12,000.00 per
square meter for 41 square meters for the lot
covered by TCT No. 217267. It denied
payment for areas covered by TCT No.
179165 and noted that these were
subdivision road lots, which the Llamas
Spouses "no longer owned" and which
"belonged to the community for whom they
were made." In the Order dated May 19,
2008, the Regional Trial Court denied the
Llamas Spouses' Motion for Reconsideration.
WON the just compensation must be paid to
the subdivision roads?
A: YES, Delineated roads and streets, whether
part of a subdivision or segregated for public use,
remain private and will remain as such until
conveyed to the government by donation or
through expropriation proceedings. An owner
may not be forced to donate his or her property
even if it has been delineated as road lots
because that would partake of an illegal taking.
He or she may even choose to retain said
properties. Respondents have not made any
positive act enabling the City Government of
Parañ aque to acquire dominion over the
disputed road lots. Therefore, they retain their
private character. Accordingly, just
compensation must be paid to respondents as
the government takes the road lots in the course
of a road widening project. (Republic of The
Philippines, v. Sps. Francisco R. Llamas and
Carmelita C. Llamas, G.R. No. 194190, January 25,
2017)
Q: Royal Ferry Services Inc. is a corporation
duly organized and existing under Philippine
law. According to its Articles of
Incorporation, Royal Ferry's principal place
of business is located in Makati City.
However, it currently holds office in
Intramuros, Manila. Royal Ferry filed a
verified Petition for Voluntary Insolvency
before the Regional Trial Court of Manila. The
Regional Trial Court declared Royal Ferry
insolvent. Pilipinas Shell Petroleum
Corporation filed before the Regional Trial
Court of Manila a Formal Notice of Claim and
a Motion to Dismiss. Pilipinas Shell asserted
that Royal Ferry owed them the amount of
P2,769,387.67. Moreover, Pilipinas Shell
alleged that the Petition was filed in the
wrong venue. It argued that the Insolvency
Law provides that a petition for insolvency
should be filed before the court with
territorial jurisdiction over the corporation's
residence. Since Royal Ferry's Articles of
Incorporation stated that the corporation's
principal office is located in Makati City, the
Petition should have been filed before the
Regional Trial Court of Makati and not before
the Regional Trial Court of Manila. Was the
Petition for Voluntary Insolvency properly
filed?
A: YES. The Petition for Insolvency was properly
filed before the Regional Trial Court of Manila.
The venue for a petition for voluntary insolvency
proceeding under the Insolvency Law is the
Court of First Instance of the province or city
where the insolvent debtor resides. A
corporation is considered a resident of the place
where its principal office is located as stated in
its Articles of Incorporation. However, when it is
uncontroverted that the insolvent corporation
abandoned the old principal office, the
corporation is considered a resident of the city
where its actual principal office is currently
found. (Pilipinas Shell Petroleum Corp. v. Royal
Ferry Services, G.R. No. 188146, February 1, 2017)
Q: DBP guaranteed Galleon’s foreign loans. In
return, Galleon undertook to secure a first
mortgage on its five new vessels and two
second-hand vessels. Pursuant to Letter of
Instructions No. 1155, Galleon's stockholders
and NDC entered into a Memorandum of
Agreement, where NDC and Galleon
undertook to prepare and sign a share
purchase agreement covering 100% of
Galleon's equity for P46,740,755.00. The
share purchase agreement also provided for
the release of Sta. Ines, Cuenca, Tinio and
Construction Development Corporation of the
Philippines from the personal counter-
guarantees they issued in DBP's favor under
the Deed of Undertaking. Sta. Ines, Cuenca,
Tinio, Cuenca Investment, and Universal
Holdings claimed that DBP can no longer go
after them for any deficiency judgment since
NDC had been subrogated in their place as
borrowers, hence the Deed of Undertaking
between Sta. Ines, Cuenca Investment,
Universal Holdings, Cuenca, and Tinio and
DBP had been extinguished and novated." Did
the Memorandum of Agreement novated the
Deed of Undertaking executed between DBP
and Sta. Ines, Cuenca Investment, Universal
Holdings, Cuenca, and Tinio?
A: NO. It should be noted that in order to give
novation its legal effect, the law requires that the
creditor should consent to the substitution of a
new debtor. The general rule is that, “in the
absence of an authority from the board of
directors, no person, not even the officers of the
corporation, can validly bind the corporation.”
Aside from Ongpin being the concurrent head of
DBP and NDC at the time the Memorandum of
Agreement was executed, there was no proof
presented that Ongpin was duly authorized by
the DBP to give consent to the substitution by
NDC as a co-guarantor of Galleon’s debts. Ongpin
is not DBP, therefore, it is wrong to assume that
DBP impliedly gave its consent to the
substitution simply by virtue of the personality
of its Governor. Novation is never presumed.
The animus novandi, whether partial or total,
“must appear by express agreement of the
parties, or by their acts which are too clear and
unequivocal to be mistaken.” There was no
such animus novandi in the case at bar between
DBP and respondents, thus, respondents have
not been discharged as Galleon’s co-guarantors
under the Deed of Undertaking and they remain
liable to DBP. (Development Bank of the
Philippines v. Sta. Ines Melale Forest Products
Corp., G.R. No. 193068, February 1, 2017)
Q: Romeo F. Ara and William A. Garcia
(petitioners), and Dra. Fely S. Pizarro and
Henry A. Rossi (respondents) all claimed to
be children of the late Josefa A. Ara (Josefa).
Petitioners, together with Ramon and herein
respondent Rossi (collectively, plaintiffs a
quo), filed a Complaint for judicial partition
of properties left by the deceased Josefa. The
RTC rendered a decision among which is the
declaration that the other properties are
under the co-ownership of all the plaintiffs
and defendant and in equal shares. In
omitting petitioners from the enumeration of
Josefa's descendants, the CA reversed the
finding of the RTC. The CA found that RTC
erred in allowing petitioners to prove their
status as illegitimate sons of Josefa after her
death. May the petitioners prove their
filiation to Josefa through their open and
continuous possession of the status of
illegitimate children, found in the second
paragraph of Article 172 of the Family Code?
A: NO. In Uyguangco v. Court of Appeals, While
the private respondent has admitted that he has
none of the documents mentioned in the first
paragraph (which are practically the same
documents mentioned in Article 278 of the Civil
Code except for the "private handwritten
instrument signed by the parent himself), he
insists that he has nevertheless been "in open
and continuous possession of the status of an
illegitimate child," which is now also admissible
as evidence of filiation.
The problem of the private respondent, however,
is that, since he seeks to prove his filiation under
the second paragraph of Article 172 of the
Family Code, his action is now barred because of
his alleged father's death in 1975. The action
must be brought within the same period
specified in Article 173, except when the action is
based on the second paragraph of Article 172, in
which case the action may be brought during the
lifetime of the alleged parent. 
It is clear that the private respondent can no
longer be allowed at this time to introduce
evidence of his open and continuous possession
of the status of an illegitimate child or prove his
alleged filiation through any of the means
allowed by the Rules of Court or special laws.
The simple reason is that Apolinario Uyguangco
is already dead and can no longer be heard on
the claim of his alleged son's illegitimate filiation.
(Romeo F. Ara and William A. Garcia v. Dra. Fely S.
Pizarro and Henry Rossi, G.R. No. 187273,
February 15, 2017)
Q: Lorenzo Musni filed before the Regional
Trial Court of Tarlac City a complaint for
reconveyance of land and cancellation of TCT
No. 333352 against Spouses Nenita Sonza
Santos and Ireneo Santos, Eduardo Sonza,
and Land Bank of the Philippines. Musni
alleged that Nenita Sonza Santos falsified a
Deed of Sale, and caused the transfer of title
of the lot in her and her brother Eduardo's
names. He claimed that the Spouses Santos
and Eduardo mortgaged the lot to Land Bank
as security for their loan. Musni said that he
was dispossessed of the lot when Land Bank
foreclosed the property upon Nenita and
Eduardo's failure to pay their loan. Musni
also claimed that Nenita and Eduardo was
convicted for falsification of a public
document which he filed against them before
the MTC of Tarlac. In defense, the Spouses
Santos alleged that they, together with
Eduardo, ran a lending business. As security
for their loan, Musni and his wife executed a
Deed of Sale over the lot in favor of the
Spouses Santos. The title of the lot was then
transferred to Nenita and Eduardo. The lot
was then mortgaged to Land Bank, and was
foreclosed later. Land Bank countered that its
transaction with the Spouses Santos and
Eduardo was legitimate, and that it verified
the authenticity of the title with the Register
of Deeds. Further, the bank loan was secured
by another lot owned by the Spouses Santos,
and not solely by the lot being claimed by
Musni. Is Land Bank a mortgagee in good
faith and an innocent purchaser for value?
A: NO. Land Bank is neither a mortgagee in good
faith nor an innocent purchaser for value. Land
Bank's defense that it could not have known the
criminal action since it was not a party to the
case and that there was no notice of lis
pendens filed by Musni, is unavailing. The rule on
"innocent purchasers or mortgagees for value" is
applied more strictly when the purchaser or the
mortgagee is a bank. Banks are expected to
exercise higher degree of diligence in their
dealings, including those involving lands. Banks
may not rely simply on the face of the certificate
of title.  Had Land Bank exercised the degree of
diligence required of banks, it would have
ascertained the ownership of one of the
properties mortgaged to it. (Land Bank of the
Philippines v. Lorenzo Musni, G.R. No. 206343,
February 22, 2017)
Q: Spouses Briones took out a loan of
₱3,789,216.00 from iBank to purchase a
BMW Z4 Roadster. The monthly amortization
for two (2) years was ₱78,942.00. They
executed a promissory note with chattel
mortgage that required them to take out an
insurance policy on the vehicle. The
promissory note also gave iBank, as the
Spouses Briones' attorney-in fact, irrevocable
authority to file an insurance claim in case of
loss or damage to the vehicle.
The mortgaged BMW Z4 Roadster was
carnapped by three (3) armed men in
Tandang Sora, Quezon City. Spouses Briones
declared the loss to iBank, which instructed
them to continue paying the next three (3)
monthly installments "as a sign of good faith,"
a directive they complied with. The Spouses
Briones finished paying the three (3)-month
installment, iBank sent them a letter
demanding full payment of the lost vehicle.
The Spouses Briones submitted a notice of
claim with their insurance company, which
denied the claim due to the delayed reporting
of the lost vehicle.
iBank filed a complaint for the default of the
Spouses to pay monthly amortizations. RTC
ruled that as the duly constituted attorney-in-
fact of the Spouses Briones, iBank had the
obligation to facilitate the filing of the notice
of claim and then to pursue the release of the
insurance proceeds. The CA also dismissed
the complaint. Do the parties have an agency
relationship existed?
A: NO. In a contract of agency, "a person binds
himself to render some service or to do
something in representation or on behalf of
another, with the consent or authority of the
latter." Furthermore, Article 1884 of the Civil
Code provides that "the agent is bound by his
acceptance to carry out the agency, and is liable
for the damages which, through his non-
performance, the principal may suffer.
The determination of agency is ultimately factual
in nature and this Court sees no reason to
reverse the findings of the Regional Trial Court
and the Court of Appeals. They both found the
existence of an agency relationship between the
Spouses Briones and iBank, based on the clear
wording of Sections 6 and 22 of the promissory
note with chattel mortgage, which petitioner
prepared and respondents signed. (International
Exchange Bank now Union Bank Of The
Philippines v. Sps. Jerome And Quinnie Briones,
and John Doe, G.R. No.205657, March 29, 2017)
Q: Augusto Salas, Jr. (Salas) was the
registered owner of a vast tract of
agricultural land traversing five barangays in
Lipa City, Batangas while the respondents
Marciano Cabungcal, et al. were tenant
farmers thereof and agrarian reform
beneficiaries under the Comprehensive
Agrarian Reform Program. And Salas'
agricultural land was reclassified as a farmlot
subdivision for cultivation, livestock
production, or agro-forestry. On June 15,
1988, Republic Act No. 6657 came into effect
seeking to expand the coverage of the
government's agrarian reform program with
Salas' landholdings among those
contemplated for acquisition and distribution
to qualified farmer beneficiaries. On
December 8, 1995, petitioners filed an action
for the cancellation of the Certificates of Land
Ownership Award, with a prayer for the
issuance of a temporary restraining order to
enjoin the distribution of their landholdings
to qualified farmer beneficiaries before the
Department of Agrarian Reform Adjudication
Board but was denied. Teresita as the
administrator, filed an Application for
Exemption/Exclusion from the
Comprehensive Agrarian Reform Program for
the 17 lots before the Department of Agrarian
Reform but it was allegedly not acted upon.
On April 29, 2001, the Estate of Salas again
filed an application for exemption from the
coverage of the Comprehensive Agrarian
Reform Program for the 17 parcels of land
before the Department of Agrarian Reform
Center for Land Use, Policy, Planning, and
Implementation II claiming that the property
had been reclassified as non-agricultural
prior to the effectivity of Republic Act No.
6657. Whether or not the reclassification of
petitioners' agricultural land as a farmlot
subdivision exempts the Estate of Salas from
the coverage of the Comprehensive Agrarian
Reform Program under Republic Act No.
6657?
A: YES. As a general rule, agricultural lands that
were reclassified as commercial, residential, or
industrial by the local government, as approved
by the HLURB, before June 15, 1988 are excluded
from the Comprehensive Agrarian Reform
Program. A farmlot is not included in any of
these categories as such, Salas' landholdings
were contemplated in the definition of an
agricultural land under Republic Act No. 3844
which does not exclude a farmlot subdivision
from the definition of an agricultural land.
Petitioners never denied the continued existence
of agricultural activity within these lots. (Heirs Of
Augusto Salas, v. Marciano Cabungcal et al., G.R.
No. 191545, March 29, 2017)
Q: Lot No. 2835 originally belonged to the late
Mariano Seno. Mariano executed a Deed of
Absolute Sale in favor of his son, Ciriaco Seno,
over a 1.0120-hectare land in Cebu.  This
property included two lots: Lot No. 2807 and
the land subject of this case, Lot No. 2835.
Ciriaco then sold the two lots to Victoria Po.
The parties executed a Deed of Absolute
Sale. Subsequently, Mariano died and was
survived by his five children (Mariano Heirs).
In 1990, Peter Po (Peter) discovered that
Ciriaco "had executed a [q]uitclaim
renouncing [his] interest over Lot [No.] 2807
in favor of [petitioner] Roberto." In the
quitclaim, Ciriaco stated that he was "the
declared owner of Lot [Nos.] 2835 and 2807."
By way of remedy, Ciriaco and the Spouses Po
executed a Memorandum of Agreement in
which Ciriaco agreed to pay Peter the
difference between the amount paid by the
Spouses Po as consideration for the entire
property and the value of the land the
Spouses Po were left with after the quitclaim. 
However, Lot No. 2835 was also sold to
Roberto. The Mariano Heirs, including
Ciriaco, executed separate deeds of absolute
sale in favor of Roberto. Thereafter, Roberto
immediately developed the lot as part of a
subdivision called North Town Homes.
Eventually, Roberto filed an application for
original registration of Lot No. 2835 which
was granted.
The Spouses Po then filed a complaint to
recover the land. The trial court ruled in
favor of the Spouses Po. On appeal, the Court
of Appeals, partially affirmed the trial court
decision, declaring the Spouses Po as the
rightful owner of the land. However, it ruled
that the titles issued to respondents Jose,
Ernesto, and Isabel should be respected. Has
the action of Spouses Po prescribed?
A: NO. An action for reconveyance based on
implied or constructive trust prescribes in ten
years from the alleged fraudulent registration or
date of issuance of the certificate of title over the
property.
It is now well-settled that the prescriptive period
to recover property obtained by fraud or
mistake, giving rise to an implied trust under Art.
1456 of the Civil Code, is 10 years pursuant to
Art. 1144. This ten-year prescriptive period begins
to run from the date the adverse party repudiates
the implied trust, which repudiation takes place
when the adverse party registers the land.  Mahinay filed his Complaint for annulment of
Considering that the Spouses Po's complaint was
filed on November 19, 1996, less than three (3)
years from the issuance of the Torrens title over
the property on April 6, 1994, it is well within
the 10-year prescriptive period imposed on an
action for reconveyance. (Sps. Aboitiz v. Sps. Po,
G.R. No. 208450, June 5, 2017)
Q: The subject property was mortgaged to
Dura Tire and Rubber Industries, Inc. as
security for credit purchases to be made by
Move Overland Venture and Exploring, Inc.
Under the mortgage agreement, Dura Tire
was given the express authority to
extrajudicially foreclose the property should
Move Overland fail to pay its credit
purchases.
On June 5, 1992, A&A Swiss sold the property
to Mahinay. In the Deed of Absolute Sale,
Mahinay acknowledged that the property had
been previously mortgaged by A&A Swiss to
Dura Tire, holding himself liable for any
claims that Dura Tire may have against Move
Overland.  Therafter, Mahinay sought to pay
Move Overland's obligation to release the
property from the mortgage. Dura Tire,
however, ignored Mahinay's request.  foreclosure sale or to enforce the right to redeem
For Move Overland's failure to pay its credit
purchases, Dura Tire applied for extrajudicial
foreclosure of the property. Mahinay
protested the impending sale and filed a
third-party claim before the Office of the
Provincial Sheriff of Cebu. Despite the
protest, Sheriff Romeo Laurel proceeded with
the sale and issued a Certificate of Sale in
favor of Dura Tire, the highest bidder at the
sale.  The property was purchased at
₱950,000.00, and the Certificate of Sale was
registered on February 20, 1995.
Relying on the Court of Appeals' finding that
he was a "substitute mortgagor," Mahinay
filed a Complaint for judicial declaration of
right to redeem. In the Judgment on the
Pleadings, the Regional Trial Court dismissed
Mahinay's Complaint for judicial declaration
of right to redeem. On a pure question of law,
Mahinay directly filed a Petition for Review
on Certiorari before this Court. Was the one
(1)-year period of redemption tolled when
foreclosure sale?
A: NO. The right of redemption being
statutory, the mortgagor may compel the
purchaser to sell back the property within the
one (1 )-year period under Act No. 3135. If the
purchaser refuses to sell back the property, the
mortgagor may tender payment to the Sheriff
who conducted the foreclosure sale.  Here,
Mahinay should have tendered payment to
Sheriff Laurel instead of insisting on directly
paying Move Overland's unpaid credit purchases
to Dura Tire.
Since the period of redemption is fixed, it cannot
be tolled or interrupted by the filing of cases to
annul the foreclosure sale or to enforce the right
of redemption. "To rule otherwise ... would
constitute a dangerous precedent. A likely
offshoot of such a ruling is the institution of
frivolous suits for annulment of mortgage
intended merely to give the mortgagor more
time to redeem the mortgaged property." 
With Mahinay failing to redeem the property
within the one (1)-year period of redemption, his
right to redeem had already lapsed. As discussed,
the pendency of an action to annul the
does not toll the running of the period of
redemption. The trial court correctly dismissed
the Complaint for judicial declaration of right to
redeem. (Makilito Mahinay v. Dura Tire & Rubber
Industries, Inc., G.R. No. 194152, June 5, 2017)
Q: In view of a complaint for damages filed by
1,843 Filipino claimants against the foreign
corporations—Chiquita Brands, Inc., Chiquita
Brands International, Inc. (collectively,
Chiquita), Dow Chemical Company,
Occidental Chemical Corporation, Shell Oil
Company, Del Monte Fresh Produce, N.A., and
Del Monte Tropical Fruit Co. (collectively, Del
Monte)—the parties entered into a
worldwide settlement in the United States
with all the banana plantation workers. The
parties executed a document denominated as
the "Compromise Settlement, Indemnity, and
Hold Harmless Agreement".
The Compromise Agreement provided,
among others, that the settlement amount
should be deposited in an escrow account,
which should be administered by a mediator.
After the claimants execute individual
releases, the mediator shall give the checks
representing the settlement amounts to the
claimants' counsel, who shall then distribute
the checks to each claimant. The Compromise
Agreement also provided that the laws of
Texas, United States should govern its
interpretation.
The Regional Trial Court approved the
Compromise Agreement by way of judgment
on compromise. Accordingly, it dismissed
Civil Case No. 95-45 in the Omnibus Order.
Shortly after the dismissal of Civil Case No.
95-45, several claimants moved for the
execution of the judgment on compromise.
Petitioners opposed the execution on the
ground of mootness. They argued that they
had already complied with their obligation
under the Compromise Agreement by
depositing the settlement amounts into an
escrow account, which was administered by
the designated mediator. Hence, there was
nothing left for the court to execute.
The Regional Trial Court eventually granted
the Motion for Execution because there was
no proof that the settlement amounts had
been withdrawn and delivered to each
individual claimant. Accordingly, a Writ of
Execution was issued. Is the Writ of Execution
ordering the collection of the settlement
amount directly for petitioner valid?
A: NO. A judgment on compromise may be
executed just like any other final judgment in the
manner provided in the Rules of Court. The writ
of execution derives its validity from the
judgment it seeks to enforce and must essentially
conform to the judgment's terms. It can neither
be wider in scope nor exceed the judgment that
gives it life. Otherwise, it has no validity. Thus, in
issuing writs of execution, courts must look at
the terms of the judgment sought to be enforced.
Under the judicially approved Compromise
Agreement, petitioners are obliged to deposit the
settlement amount in escrow within 10 business
days after they receive a signed Compromise
Agreement from the counsel of the claimants. 
There was nothing in the Compromise
Agreement that required petitioners to ensure
the distribution of the settlement amount to each
claimant. Petitioners' obligation under the
Compromise Agreement was limited to
depositing the settlement amount in escrow. On
the other hand, the actual distribution of the
settlement amounts was delegated to the chosen
mediator, Mr. Mills. To require proof that the
settlement amounts have been withdrawn and
delivered to each claimant would enlarge the
obligation of petitioners under the Compromise
Agreement. (Chiquita Brands, Inc. and Chiquita
Brands International, Inc., v.. Hon. George E.
Omelio, et.al., G.R. No. 189102, June 7, 2017)
Q: Andres and Pedro are the owners Lot
2535. Pedro sold to Faustina his portion of
the subject land as evidenced by a notarized
Deed of Sale. After the death of Faustina and
her husband, their heirs executed a notarized
Extra-Judicial Declaration of Heirs and Deed
of Absolute Sale. Lot 2535 consisting of
"1,000 square meters, more or less," was
conveyed to one of their heirs, Alejandra.
Alejandra sold the land through a Deed of
Absolute Sale to Edith N. Deen, who in turn
sold it to Atty. Eddy A. Deen.
Upon Atty. Deen's death, an extra-judicial
settlement of estate, which did not include
Lot 2535, was executed by his heirs. Later,
they executed an Additional Extra-Judicial
Settlement with Absolute Deed of Sale, which
sold the land to Norberto, who took
possession of and built a house on it.
Norberto then died without a will and was
succeeded by his niece and only heir, Lolita.
Subsequently, Lolita learned that a Transfer
Certificate of Title was issued in the names of
Andres and Pedro on the basis of a
reconstituted Deed of Conveyance. 
Lolita sought to register her portion in Lot
2535 but was denied by the Register of
Deeds, citing the need for a court order. 
Lolita then filed a for the cancellation of the
titles. After trial, the Regional Trial Court
ruled in favor of Lolita. On appeal, the Court
of Appeals reversed the Regional Trial Court
Decision and dismissed the complaint.
According to the Court of Appeals, Lolita must
first be declared as the sole heir to the estate
of Norberto in a proper special proceeding. Is
a prior judicial declaration necessary in
order that Lolita may assert her right to the
property of her predecessor?
A: NO. This Court has stated that no judicial
declaration of heirship is necessary in order that
an heir may assert his or her right to the
property of the deceased. In Marabilles v. Quito:
The right to assert a cause of action as an heir,
although he has not been judicially declared to be
so, if duly proven, is well settled in this
jurisdiction. This is upon the theory that the
property of a deceased person, both real and
personal, becomes the property of the heir by the
mere fact of death of his predecessor in interest,
and as such he can deal with it in precisely the
same way in which the deceased could have dealt,
subject only to the limitations which by law or by
contract may be imposed upon the deceased
himself. Thus, it has been held that "[t]here is no
legal precept or established rule which imposes
the necessity of a previous legal declaration
regarding their status as heirs to an intestate on
those who, being of age and with legal capacity,
consider themselves the legal heirs of a person,
in order that they may maintain an action arising
out of a right which belonged to their ancestor."
(Lolita Bas Capablanca v. Heirs of Pedro Bas,
represented by Josefina Bas Espinosa and Register
of Deeds of the Province of Cebu, G.R. No. 224144,
June 28, 2017)
Q: Alfredo and his family were sound asleep
in their home. At about 1:00 a.m., he was
roused from sleep by the sound of stones
hitting his house. Alfredo went to the living
room and peered through the jalousie
window. The terrace light allowed him to
recognize his neighbor and co-worker,
Bacerra. Just as he was about to leave,
Bacerra exclaimed, "Vulva of your mother,
Old Fred, I'll burn you now." At around
4:00a.m., he heard dogs barking outside.
Alfredo looked out the window and saw
Bacerra walking towards their nipa hut,
which was located around 10 meters from
their house. Bacerra paced in front of the
nipa hut and shook it. Moments later, Alfredo
saw the nipa hut burning. Alfredo sought help
from his neighbors to smother the fire. Edgar
contacted the authorities for assistance but it
was too late. The nipa hut and its contents
were completely destroyed. RTC held Baccera
guilty, and awarded ₱50,000.00 to Alfredo as
temperate damages.
Was the award of temperate damages
amounting to ₱50,000.00 was proper?
A: YES. Under Article 2224 of the Civil Code,
temperate damages may be awarded when there
is a finding that "some pecuniary loss has been
suffered but its amount cannot, from the nature
of the case, be proved with certainty." The
amount of temperate damages to be awarded in
each case is discretionary upon the courts as
long as it is "reasonable under the
circumstances."
Private complainant clearly suffered some
pecuniary loss as a result of the burning of his
nipa hut. However, private complainant failed to
substantiate the actual damages that he suffered.
Nevertheless, he is entitled to be indemnified for
his loss. The award of temperate damages
amounting to ₱50,000.00 is proper and
reasonable under the circumstances. (Marlon
Bacerra Y Tabones v. People of the Philippines,
G.R. No. 204544, July 03, 2017)
Q: The Cascayan Heirs alleged that by virtue
of a free patent application, they were co-
owners of a parcel of land denominated as
Lot No. 20028. The Cascayan Heirs affirmed
that the Spouses Gumallaoi bought Lot No.
20029, an adjacent lot. The Spouses
Gumallaoi built a residential house on Lot No.
20029 which the Cascayan Heirs alleged
encroached on Lot No. 20028 after
renovations and improvements. The Spouses
Gumallaoi ignored the notifications that they
had encroached into Lot No. 20028. On May
31, 2001, the Spouses Gumallaoi applied for a
Building Permit. Due to renovations on their
residential house, they further encroached on
Lot No. 20028. Thus, the Cascayan Heirs
prayed that the Spouses Gumallaoi be
directed to vacate Lot No. 20028 and to
restore it to their possession. They likewise
prayed that the municipal engineer of Bangui
issue the necessary demolition permit as well
as cause the demolition of the portion of the
house that encroached on Lot No. 20028.
Finally, they prayed to be paid damages.
In response, and by way of counterclaim, the
Spouses Gumallaoi maintained that they
were the true owners of both Lot Nos. 20029
and 20028. They claimed that the Cascayan
Heirs secured a free patent to Lot No. 20028
through manipulation. They asserted that the
supporting affidavits for the Cascayan Heirs'
free patent application were obtained
through fraud and deception.
Were the Spouses Gumallaoi were the legal
owners of Lot No. 20028?
A: YES. In this case, Spouses Gumallaoi
presented sufficient evidence to show that the
Heirs of Cascayan obtained their title through
fraud and misrepresentation. Moreover, the
evidence did not sufficiently prove the heirs'
claims of possession or ownership over Lot No.
20028. The only basis for their claim of
possession was tax declarations.
The spouses, on the other hand, sufficiently
identified Lot No. 20028 and proved their title
thereto. Hence, considering the foregoing, it is
proper to say that Spouses Gumallaoi are the
lawful owners of the subject property. (Heirs Of
Cayetano Cascayan, represented by La Paz
Martinez v. Sps. Oliver and Evelyn Gumallaoi, and
the Municipal Engineer of Bangui, Ilocos Norte,
G.R. No. 211947, July 03, 2017)
Q: Gotesco obtained from Solidbank a term
loan of ₱300 million. To secure the loan,
Gotesco was required to execute a Mortgage
Trust Indenture naming Solidbank-Trust
Division as Trustee. The Indenture obliged
Gotesco to mortgage several parcels of land
in favor of Solidbank. When the loan was
about to mature, Gotesco found it difficult to
meet its obligation because of the 1997 Asian
Financial Crisis. Solidbank sent a demand
letter to Gotesco as the loan became due.
Despite having received this demand letter,
Gotesco failed to pay the outstanding
obligation. Solidbank then filed a Petition for
the Extrajudicial Foreclosure of the lot.
Gotesco filed a complaint before the RTC for
Annulment of Foreclosure Proceedings,
Specific Performance, and Damages against
Solidbank. Gotesco assailed the validity of the
foreclosure proceeding claiming that it was
premature and without legal basis. Was the
foreclosure premature?
A: NO. Petitioner defaulted in its obligation.
Thus, respondent was within its rights to
foreclose the property. Under the Civil Code,
there is default when a party obliged to deliver
something fails to do so. In Social Security System
v. Moonwalk Development & Housing Corp. this
Court enumerated the elements of default:
In order that the debtor may be in default it is
necessary that the following requisites be
present: (1) that the obligation be demandable
and already liquidated; (2) that the debtor delays
performance; and (3) that the creditor requires
the performance judicially and extrajudicially.
Default generally begins from the moment the
creditor demands the performance of the
obligation. (Gotesco Properties, Inc. v. Solid Bank
Corporation, G.R. No. 209452, July 26, 2017)
Q: On August 26, 2006, respondents Spouses
Go applied for the registration and
confirmation of title over a parcel of land in
Batangas City covering an area of 1,000
square meters. The Spouses Go registered the
lot in their names for taxation purposes. They
had paid the real property taxes, including
the arrears, from 1997 to 2006. They had also
established a funeral parlor, San Sebastian
Funeral Homes, on the lot. According to them,
there were no other claimants over the
property. The Spouses Go claimed to be in an
open, continuous, exclusive, notorious, and
actual possession of the property for seven
(7) years since they bought it. They also
tacked their possession through that of their
predecessors-in-interest. However, the
Republic of the Philippines opposed spouses’
application for registration; it claimed that
Lot No. 4699-B was part of the public domain.
Are the spouses the rightful owner of the
land?
A: NO. Even assuming that there is sufficient
evidence to establish their claim of possession in
the concept of an owner since June 12, 1945, the
Spouses Go nevertheless failed to prove the
alienable and disposable character of the land.
The 1987 Constitution declares that the State
owns all public lands. Public lands are classified
into agricultural, mineral, timber or forest, and
national parks. Of these four (4) types of public
lands, only agricultural lands may be alienated.
Article XII, Sections 2 and 3 of the Constitution
provide:
Section 2. All lands of the public domain,
waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential
energy, fisheries, forests or timber,
wildlife, flora and fauna, and other
natural resources are owned by the State.
With the exception of agricultural lands,
all other natural resources shall not be
alienated . . .
Section 3. Lands of the public domain are
classified into agricultural, forest or
timber, mineral lands, and national
parks. Agricultural lands of the public
domain may be further classified by law
according to the uses [to] which they
may be devoted. Alienable lands of the
public domain shall be limited to
agricultural lands . . .
Thus, an applicant has the burden of proving that
the public land has been classified as alienable
and disposable. To do this, the applicant must
show a positive act from the government
declassifying the land from the public domain
and converting it into an alienable and
disposable land. (Republic of the Philippines v.
Sps. Danilo Go and Amorlina Go, G.R. No. 197297,
August 02, 2017)
Q: On October 16, 2001, Keihin-Everett
entered into a Trucking Service Agreement
with Matsushita. These services were
subcontracted by Keihin-Everett to Orient
Freight. In April 2002, Matsushita called
Keihin-Everett's Sales Manager, Salud Rizada,
about a column in the April 19, 2002 issue of
the tabloid newspaper Tempo. This news
narrated the April 17, 2002 interception by
Caloocan City police of a stolen truck filled
with shipment of video monitors and CCTV
systems owned by Matsushita. When
contacted by Keihin-Everett about this news,
Orient Freight stated that the tabloid report
had blown the incident out of proportion.
They claimed that the incident simply
involved the breakdown and towing of the
truck. However, when the shipment arrived
in Yokohama, Japan on May 8, 2002, it was
discovered that 10 pallets of the shipment's
218 cartons, worth US$34,226.14, were
missing.
Keihin-Everett independently investigated
the incident. During its investigation, it was
found out that during the incident, Cudas told
Aquino to report engine trouble to Orient
Freight and Aquino also later on reported
that the truck was missing. When the truck
was intercepted by the police, Cudas escaped.
When confronted with Keihin-Everett's
findings, Orient Freight wrote back to admit
that its previous report was erroneous and
that pilferage was apparently proven. In a
letter, Matsushita terminated its In-House
Brokerage Service Agreement with Keihin-
Everett. Matsushita cited loss of confidence
for terminating the contract, stating that
Keihin-Everett's way of handling the incident
and its nondisclosure of this incident's
relevant facts "amounted to fraud and
signified an utter disregard of the rule of
law." Keihin-Everett demanded
P2,500,000.00 as indemnity for lost income.
It argued that Orient Freight's mishandling of
the situation caused the termination of
Keihin-Everett's contract with Matsushita.
When Orient Freight refused to pay, Keihin-
Everett filed a complaint for damages.
Was Orient Freight negligent for failing to
disclose the facts surrounding the hijacking
incident, which led to the termination of the
Trucking Service Agreement between Keihin-
Everett and Matsushita?
A: YES. Orient Freight's conduct showed its
negligent handling of the investigation and its
failure to timely disclose the facts of the incident
to Keihin-Everret and Matsushita. Orient Freight
was clearly negligent in failing to investigate
properly the incident and make a factual report
to Keihin and Matsushita. Orient Freight failed to
exercise due diligence in disclosing the true facts
of the incident to plaintiff Keihin and Matsushita.
As a result, Keihin suffered income losses by
reason of Matsushita's cancellation of their
contract which primarily was caused by the
negligence of Orient Freight. (Orient Freight
International, Inc. v. Keihin-Everett Forwarding
Company, Inc., G.R. No. 191937, August 09, 2017)
Q: Richelle alleged that while she was still a
minor in the years 2000 to 2002, she was
repeatedly sexually abused by respondent
Cabañero inside his rest house at Barangay
Masayo, Tobias Fornier, Antique. As a result,
she allegedly gave birth to a child on August
21, 2002. Richelle added that on February 27,
2002, she initiated a criminal case for rape
against Cabañero. This, however, was
dismissed. Later, she initiated another
criminal case, this time for child abuse under
Republic Act No. 7610. This, too, was
dismissed. Richelle prayed for the child's
monthly allowance in the amount of
P3,000.00. She presented the child’s birth
certificate in evidence.
Cabañero denied sexually abusing Richelle,
or otherwise having any sexual relations with
her. Thus, he asserted that he could not have
been the father of Richelle’s child.
Is Richelle’s child entitled for support?
A: NO. The obligation to give support shall only
be demandable from the time the person entitled
to it needs it for maintenance, but it shall not be
paid except from the date of judicial or
extrajudicial demand. Support pendente lite may
also be claimed, in conformity with the manner
stipulated by the Rules of Court.
An illegitimate child, "conceived and born
outside a valid marriage," as is the admitted case
with petitioner's daughter, is entitled to support.
To claim it, however, a child should have first
been acknowledged by the putative parent or
must have otherwise previously established his
or her filiation with the putative parent." When
"filiation is beyond question, support shall then
follow as a matter of obligation."
Having thus far only presented her child's birth
certificate, which made no reference to
respondent as the child's father, the necessary
condition of filiation had yet to be established.
(Richelle P. Abella, for and in behalf of her minor
daughter, Marl Jhorylle Abella v. Policarpio
Cabañero, G.R. No. 206647, August 09, 2017)
Q: On 15 March 2002, the annual meeting of
the stockholders of Philadelpia School, Inc.
(“PSI”) was held, wherein a new board of
directors was elected, a transfer of certain
shares was approved, and a 300% stock
dividend was distributed. During the
meeting, King was asked to leave the board
room because allegedly, he was not a PSI
stockholder, while Lim was allowed to vote
only for one share during the elections
despite the proxies he held for other
stockholders who were his brothers. Prior to
the meeting, the SEC and the RTC had
previously ordered that the 1997 General
Information Sheet (“GIS”) of which Lim and
King were listed as stockholders be used as
basis for the 2000 and 2001 elections of PSI
Board of Directors. Thus, on 26 March 2002,
Lim and King filed a petition before the RTC
of Quezon City, seeking to annul the
proceedings and acts resolved on the 15
March 2002 meeting. 
Should King and Lim be awarded indemnity
for damages?
A: YES. King and Lim should be entitled to an
award of damages because they were
unjustifiably and obstinately refused recognition
of their shareholdings in PSI as well as
participation in the annual stockholders’
meeting. The right to vote is inherent in and
incidental to the ownership of a capital stock,
and the deprivation of which is a violation of
property right that entitles the injured party to
an award of damages.  Articles 2217 and 2220 of
the New Civil Code (“NCC”) allow recovery of
moral damages in case of willful injury to
property. The acts of the other stockholders who
refused to recognize the rights of the plaintiffs
caused mental anguish, serious anxiety and
social humiliation to the latter. Furthermore,
under Article 2224 of the NCC, temperate or
moderate damages, which are more than
nominal but less than compensatory damages,
may be recovered even though not specifically
prayed for in the complaint, when the court finds
that some pecuniary loss has been suffered but
its amount cannot, from the nature of the case,
be provided with certainty. Similarly, the award
of attorney’s fees and litigation expenses was
proper because plaintiffs were compelled to
litigate to protect or vindicate their stockholders’
rights against the unlawful acts of the other
stockholders. (Lydia Lao, et al v. Yao Bio Lim, et
al, G.R. No. 201306, August 09, 2017)

Q: Spouses Floro and Eufema Roxas
(“Spouses”) entered into a Contract of
Building Construction dated 22 May 1979
with Rosendo P. Dominguez, Jr.
(“Dominguez”), who undertook to be the
building contractor of a housing project
known as “Vista Del Mar Executive Houses.”
Philtrust Bank (“Philtrust”) would finance the
cost of materials and supplies to the extent of
P 900,000.00, while the Spouses would
shoulder the labor cost of P 300,000.00.
Paragraph 7 or the “whereas clause” of the
said project contract provided, however, that
whether or not the Spouses could provide the
funds for the labor costs, Dominguez would
bind himself to finish the project within 150
working days. Furthermore, a clause for
liquidated damages amounting to P 1,000.00
per day was stipulated against Dominguez in
case of breach. On 24 May 1979, Dominguez
secured a performance bond from FGU
Insurance Corporation (“FGU”) wherein they
both agreed to jointly and severally pay Floro
Roxas (“Floro”) and Philtrust the amount of P
450,000.00 in the event of Dominguez’s non-
performance of his obligation under the
contract. However, the Spouses borrowed P
73,136.75 of the project-allocated funds from
Dominguez and they also failed to make the
promised payments for the labor cost; hence,
Dominguez refused further work on the
project. Thus, a complaint was filed against
Spouses and Philtrust before the Court of
First Instance of Manila (“CFI”).
a. Should FGU be liable for the full
amount of P 450,000 under the performance
bond?
b. Should the liabilities of the Spouses to
Dominguez be set off against any liability of
FGU under the performance bond?
c. Should the Spouses be entitled to
liquidated damages under the contract for
building construction?
A:  debtor and thus binds himself to pay if the
a. YES.  insurer of the debt and he obligates himself to
FGU should be liable for the full amount
of P 450,000.00 solidarily with Dominguez. A
performance bond is a kind of suretyship
agreement that is designed to afford the project
owner security that the contractor will faithfully
comply with the requirements of the contract
and make good on the damages sustained by the
project owner in case of the contractor’s failure
to so perform. As a surety, FGU’S liability is
direct, primary, absolute, and solidary with the
principal debtor, and is determined strictly in
accordance with the actual terms of the
performance bond it issued. The FGU Surety
Bond was conditioned upon the full and faithful
performance by Dominguez of his obligations,
wherein FGU guaranteed to solidarily pay the
amount of P 450,000.00 in case of Dominguez’
default. The terms of the bond were clear; hence,
the literal meaning of its stipulation should
control. If it were true that FGU’s intention was
to limit its liability to the cost overrun or
additional cost to the Spouses to complete the
project up to a maximum cap of P 450,000.00,
then it should have included in the Surety Bond
specific words indicating this intention. Its
failure to do so must be construed against it,
given the fact that a suretyship agreement is a
contract of adhesion ordinarily prepared by the
surety or insurance company; thus, calling for a
liberal construction in favour of the insured and
strict application against the insurer, which
insurer as the drafter, had the opportunity to
state plainly the terms of its obligation. (FGU
Insurance v. Sps. Roxas, G.R. Nos. 189526 &
189656, August 09, 2017)
b. YES. 
The liabilities of the Spouses to
Dominguez could be set off against any liability
of FGU under the performance bond. Under
Article 1280 of the NCC, a guarantor may set up
compensation as regards what the creditor may
owe the principal debtor. While this provision
specifically speaks of a guarantor, it nevertheless
applies to a surety as well.  Contracts of guaranty
and surety are closely related in the sense that in
both, there is a promise to answer for the debt or
default of another. The difference lies in that a
guarantor is the insurer of the solvency of the
principal is unable to pay, while a surety is the
pay if the principal does not pay. Hence, FGU
could offset its liability under the Surety Bond
against Dominguez’ collectibles from the
Spouses. (FGU Insurance v. Sps. Roxas, G.R. Nos.
189526 & 189656, August 09, 2017)
c. YES.  tender, but still no formal contracts were
The Spouses should be entitled to
liquidated damages under the contract for
building construction. The parties agreed and
articulated on the payment of liquidated
damages in case of breach; hence, the deciding
factor for the recovery of liquidated damages in
this case would be the fact of delay in the
completion of the works. A clause on liquidated
damages is normally added to construction
contracts not only to provide indemnity for
damages but also to ensure performance of the
contractor by the threat of greater responsibility
in the event of breach. Here, it was clearly
provided that liquidated damages would be
recoverable for delay in the completion of the
project; hence, there should be more reason in
case of non-completion. To hold otherwise would
be to diminish or disregard the coercive force of
this stipulation. (FGU Insurance v. Sps. Roxas, G.R.
Nos. 189526 & 189656, August 09, 2017)
Q: In response to Araneta Center Inc.’s (“ACI”)
invitation to bid on the design and
construction of the Gateway Mall under a
lump-sum, fixed price arrangement, CE
Construction Corporation (“CECON”)
submitted its proposal on 30 August 2002,
which bid was made valid for acceptance only
for ninety days. However, ACI informed
CECON that the contract was being awarded
to it only at such time that the bid had
already expired, and instructed it to proceed
with excavation work. While no formal
documents were prepared for the contract
although construction was already underway,
ACI introduced major changes in the plans
and specifications, changing it into a straight
construction contract from a former design-
and-construct scheme. ACI decided to change
and take over the design, such as the change
from concrete to structural steel framing, and
took out certain equipment from the scope of
the contract. Meanwhile, the price levels of
cement and steel products had increased, of
which CECON notified ACI, with a stern
warning that further delays in the formal
award of the contract might affect the
contract sum. It was only on 2 June 2003 that
ACI finally wrote a letter to CECON, indicating
its acceptance of the latter’s 30 August 2002
executed. With the many changes to the
project coupled with ACI’s delays in
delivering drawings and specifications,
CECON increasingly found itself unable to
complete the project on time, noting that it
had to file a total of 15 requests for time
extension, all of which ACI failed to timely act
on. Exasperated, CECON filed with the
Construction Industry Arbitration
Commission (“CIAC”) its request for
adjudication, praying for project cost
adjustment. In the meantime, CECON
completed the project and turned over
Gateway Mall to ACI, which had its blessing
on 26 November 2004. 
Could ACI insist on the initial bid price of
CECON under the supposed lump-sum fixed
price arrangement of the construction
contract?
A: NO. CECON and ACI should not be bound by
the supposed lump-sum fixed price arrangement.
There was never a meeting of minds on the
contract price, and the contention of ACI with
regard to supposed immutability of the
stipulated contract sum should fall.
Advertisements for bidders are simply
invitations to make proposals, and the advertiser
is not bound to accept the highest or lowest
bidder, unless the contrary appears. The
exchanges of offers between CECON and ACI
failed to satisfy the requirement of absolute and
unqualified acceptance as to comply with the
essential requisite of consent in the perfection of
a contract. In order to judge the intention of the
contracting parties, their contemporaneous and
subsequent acts shall be principally considered.
It should be mentioned that ACI had drastically
changed the scope and character of the
agreement. To tie down CECON to the unit prices
for the proposal for a different scope of work
would be grossly unfair. Reference to prevailing
industry practices in the valuation of the project
cost was also warranted and necessary because
of the absence of definitive governing
instruments. Under Articles 1375 and 1376 of
the NCC, the nature and object of the contract as
well as the usage or custom of the place shall be
borne in mind in the interpretation of the
ambiguities of the contract, and shall fill the
omission of stipulations which are ordinarily
established. (CE Construction Corporation v.
Araneta Center, Inc., G.R. No. 192725, August 09,
2017)
Q: On 2 August 2002, Dee Hwa Liong
Foundation Medical Center (“DHLFMC”)
entered into a contract to purchase a
GammaMed Plus Brachytheraphy machine
and a Gammacell Ellan 3000 blood irradiator
from Asiamed Supplies and Equipment
Corporation (“Asiamed”) at a total price of P
31,000,000.00. The machines were delivered
on 20 May 2003 and on 17 July 2003,
whereupon two delivery invoices that
provided for a 12% annual interest and 25%
attorney’s fees charge on overdue accounts,
were signed by petitioner Anthony Dee
(“Dee”) and DHFLMC Vice President for
Administration. After the demand for the
collection of the unpaid remaining balance of
P 25,700,000.00 went unheeded, Asiamed
was constrained to file a complaint for sum of
money against the DHLFMC and Dee before
the Regional Trial Court (“RTC”) on 26
January 2004.  Annulment of Real Estate Mortgage and
Should DHLFMC be held liable for 12%
interest and 25% attorney’s fees stipulated in
the delivery invoices?
A: YES. DHLFMC should be held liable for the
interest and attorney’s fees stipulated in the
delivery invoices, although the attorney’s fees
should properly be reduced to 10%. These
delivery invoices formed part of the Contract of
Sale, given that a contract need not be contained
in a single writing but may be collected from
several different writings which do not conflict
with each other and which, when connected,
show the parties, subject matter, terms and
consideration, as in contracts entered into by
correspondence. A contract may be
encompassed in several instruments even
though every instrument is not signed by the
parties, since it is sufficient if the unsigned
instruments are clearly identified or referred to
and made part of the signed instrument or
instruments. Similarly, a written agreement of
which there are two copies, one signed by each
of the parties, is binding on both to the same
extent as though there had been only one copy of
the agreement and both had signed it. (DHLFMC,
et al v. Asiamed, G.R. No. 205638, August 23,
2017)
Q: Marilyn R. Soliman (“Marilyn”), allegedly
acting on behalf of Ricarcen Development
Corporation (“Ricarcen”) of which she was
president, took out a total of P 7,000,000.00
loan from Arturo C. Calubad (“Calubad”) at a
compounded monthly interest rate, which
was secured by a real estate mortgage over
Ricarcen’s real property in Quezon City.  To
prove her authority to execute the three
mortgage contracts on Ricarcen’s behalf,
Marilyn presented Calubad with a Board
Resolution and Secretary Certificates, later
alleged to be falsified. After Ricarcen failed to
pay its loan, the mortgage was foreclosed,
eventually resulting to the issuance of a
Certificate of Sale in favour of Calubad as the
highest bidder, and thus, the issuance of a
certificate of title in his name. When Ricarcen
discovered these transactions of Marilyn, it
filed before the Regional Trial Court of
Quezon City (“RTC”) a complaint for
Extrajudicial Foreclosure of Mortgage and
Sale, with Damages against Marilyn and
Calubad. 
a. Should Ricarcen be bound by the
allegedly representative acts of Marilyn?
b. Should Calubad be entitled to
damages on account of the annulment suit
brought by Ricarcen?
A:
a. YES. 
Ricarcen should be bound by the acts of
Marilyn, whom it had clothed with apparent
authority. The doctrine of apparent authority
that is based on the principle of estoppel, in
accordance with Articles 1431 and 1869 of the
New Civil Code, provides that even if no actual
authority has been conferred on an agent, his or
her acts, as long as they are within his or her
apparent scope of authority, bind the principal. 
 In the case at bar, it was within Marilyn’s
scope of authority as president to act for and
enter into contracts in Ricarcen’s behalf. This
could be seen with how the corporate secretary
entrusted her with blank yet signed sheets of
paper to be used at her discretion, which
apparently caused the execution of the allegedly
falsified secretary certificates. It reasonably
appeared that Ricarcen’s officers knew of the
mortgage contracts entered into by Marilyn in
Ricarcen’s behalf as proved by the checks drawn
and issued by Ricarcen as payments to Calubad
for the monthly interest and principal loans.
Calubad, as an innocent third party dealing in
good faith with Marilyn, should not be made to
suffer because of Ricarcen's negligence in
conducting its own business affairs. If a private
corporation intentionally or negligently clothes
its officers or agents with apparent power to
perform acts for it, the corporation will be
estopped to deny that such apparent authority is
real, as to innocent third persons dealing in good
faith with such officers or agents. (Arturo
Calubad v. Ricarcen Development Corporation,
G.R. No. 202364, August 30, 2017)
b. NO.  Princess Cruise Lines, Ltd. v. Cynthia De Jesus, G.R.
For moral damages to be awarded, it
must be proven that the party who breached the
contract acted fraudulently or in bad faith, in
wanton disregard of the contracted obligation. In
addition, the following conditions must be met:
a. There must be an injury, whether
physical, mental or psychological, clearly
sustained by the claimant;  alleging that what she paid did not really
b. There must be culpable act or omission
factually established;
c. The wrongful act or omission of the
defendant is the proximate cause of the injury
sustained by the claimant; and  Maceda Law speaks of paying "at least two years
d. The award of damages is predicated on
any of the cases stated in Article 2219 of the NCC.
Here, it was not sufficiently shown that
Ricarcen was spurred by a dishonest purpose or
was motivated by ill will or fraud when it
assailed the contract entered into by Marilyn and
Calubad.  In the same manner, exemplary
damages cannot be awarded in the absence of
evidence that Ricarcen acted fraudulently or
wantonly; and consequently, without an award
of exemplary damages, no attorney’s fees and
costs of suit can be recovered. (Arturo Calubad v.
Ricarcen Development Corporation, G.R. No.
202364, August 30, 2017)
Q: Magsaysay and Cynthia entered into a
compromise agreement wherein Magsaysay
will Cynthia a partial amount of the NLRC
pending an appeal with CA. However, it also
stated that if Magsaysay wins, Cynthia will be
prohibited from seeking any further redress
against Magsaysay. Can CA dismiss the appeal
being moot and academic in light of the
compromise agreement?
A: YES. CA can dismiss the case because it is
moot and academic. A conditional settlement of a
judgment award may be treated as a
compromise agreement and a judgment on the
merits of the case if it turns out to be highly
prejudicial to one of the parties. The clause
stating that Cynthia could no longer seek any
redress puts her in a disadvantage. Hence, the
compromise agreement stands and the appeal is
rendered moot and academic. (Magsaysay
Maritime Corporation/Eduardo Manese and
No. 203943, August 30, 2017)
Q: Orbe purchased a land from Filinvest. She
paid a total of P608,648.20 for the past two
years and later on failed to pay the balance.
She claims that she is entitled to get 50% of
her payments because she paid for at least 2
years. However, Filinvest denied her claim
amount to two years’ worth of payments. Is
Orber allowed to get the 50%?
A: NO. When Republic Act No. 6552 or the
of installments" in order for the benefits under
its Section 3 to become available, it refers to the
buyer's payment of two (2) years' worth of the
stipulated fractional, periodic payments due to
the seller. (Priscilla Zafra Orbe v. Filinvest Land,
Inc., G.R. No. 208185, September 06, 2017)
Q: Team Image and Solar Team both
breached each other’s  duties in their
compromise agreement. As a result, both owe
each other 2,000,000. Is compensation
proper?
A: YES. In order that compensation may be
proper, it is necessary:(1) That each one of the
obligors be bound principally, and that he be at
the same time a principal creditor of the other;
(2) That both debts consist in a sum of money, or
if the things due are consumable, they be of the
same kind, and also of the same quality if the
latter has been stated;(3) That the two debts be
due;(4) That they be liquidated and demandable;
(5) That over neither of them there be any
retention or controversy, commenced by third
persons and communicated in due time to the
debtor. (Team Image Entertainment, Inc., and
Felix S. Co. v. Solar Team Entertainment, Inc., G.R.
No. 191652, September 13, 2017; Solar Team
Entertainment, Inc. v. Team Image Entertainment,
Inc., and Felix S. Co, G.R. No. 191658, September
13, 2017)
Q: DPWH and a Joint Venture entered into a
construction contract. However, during the
construction, the joint venture’s equipment
were set on fire. Joint venture made a
demand for payment from DPWH but DPWH
could not pay them all. Hence, they decided to
mutually terminate the contract. Is the court
intervention then rendered moot and
academic?
A: NO. There is a practical use or value to decide
on the issues raised by the parties despite the
mutual termination of the Contract between
them. These issues include the determination of
amounts payable to respondent by virtue of the
time extensions, respondent's entitlement to
price adjustments due to the delay of the
issuance of the Notice to Proceed, additional
costs, actual damages, and interest on its claims.
(Department of Public Works and Highways v.
CMC/Monark/Pacific/Hi-Tri Joint Venture, G.R.
No. 179732, September 13, 2017)
 
Q: The applicants sought the registration of
their titles over the subdivided portions of a
land. The applicants provided ample
evidence to their favor. However, the
Solicitor General opposed the application
using a pro forma opposition. Does the
Solicitor General have to produce evidence
that that the land is a public domain despite
the theory that all lands belong to the State?
A: YES. When the State has no effective
opposition, except for a pro forma opposition, to
controvert an applicant's convincing evidence of
possession and occupation, presumptions are
tilted to this applicant's favor. (Republic of the
Philippines v.  Spouses Noval, et al., G.R. No.
170316, September 18, 2017)
Q: A parcel of land owned by Capitol Hills Golf
and Country Club, Inc. was levied by the
Quezon City Treasurer on account of unpaid
real estate taxes. Alvarado was noted the
highest bidder and was issued the Certificate
of Sale of Deliquent property. A complaint
against Alvarado e.t. al. was filed before the
QC RTC to question the validity of the tax sale.
Plaintiffs are some members of the golf club,
Ayala Hillside “association of lot owners
residing in Ayala Hillside Estate, and Ayala
Land Inc who has an agreement with Capitol
Hills. Alvarado in his answer contends,
among others, that plaintiffs failed to state a
cause of action because they are not the
registered owners of the auctioned property
of Capitol Hills. Whether members of Capitol
Hills, and Ayala Land Inc. has a valid cause of
action.
A: YES. Members of the Capitol Hills club and
Ayala Land Inc. has valid cause of action. Capitol
is a juridical entity with its own, distinct
personality. Consistent with Article 46 of the
Civil Code, it may "acquire and possess property''
such as the lot put up for a tax delinquency sale.
As owner, it exclusively enjoyed the entire
bundle of rights associated with dominion over
this parcel.
Though having its own personality, as a golf and
country club, Capitol primarily exists for the
utility and benefit of its members. While legal
title in its properties is vested in Capitol,
beneficial use redounds to its membership. Apart
from this, proprietary interest in Capitol is
secured through club shares. Thus, members and
shareholders having rights to use and enjoy the
subject property has a valid cause of action
against Alvarado since they stood to be deprived
of their rights. 
Also, in accordance with Article 46 of the Civil
Code, Capitol is capacitated to incur obligations.
This includes obligations voluntarily incurred
through contracts, as well as encumbrances
assumed or imposed as easements. It is in
keeping with a contract entered into by Capitol
and with easements in which Capitol was the
subservient estate that respondents Ayala Land,
Inc. and Ayala Hillside initiated the Complaint
assailing the tax sale.
With respect to Ayala Land, Inc., the allegations
were not limited to its being a dominant estate to
an easement of right of way but even included a
claim of ownership to a smaller parcel. (Samuel
Alvarado v. Ayala Land, Inc. et al., G.R. No. 208426,
September 20, 2017)
Q: Vicente executed a Special Power of
Attorney in favor of Nanette. Nanette used the
authorization in applying for a loan with BAP
Credit Guaranty Corp. and used Vicente’s
property as collateral. However, since
Nanette failed to settle her account with BAP,
this resulted to the foreclosure and extra-
judicial sale of Vicente’s real property, which
was used as collateral. Vicente and Nanette
file an action for annulment of the mortgage
contract because they did not receive the
loaned amount and for that reason, since
there is no consideration, the contract of loan
is also void. Is the mortgage contract void?
A: NO. As an accessory contract, a mortgage
contract's validity depends on the loan contract's
validity. Thus, the contract of loan between
petitioners and private respondent must be
valid. In this case however, it was proven that
petitioners received the loan proceeds as they
failed to present any evidence, besides mere
denials. Hence, since the object of a contract, the
loan proceeds, an essential element in a contract
of loan, is present, the contract of loan is valid
and thus, the contract of mortgage is perforce
valid. (Vincente Lutao v. BAP Credit Guaranty
Corp., G.R. No. 204412, September 20, 2017)
Q: Cruz is the owner of property in San Juan
which she inherited from her late mother.
She alleged that Christensen had been
occupying the property during her mother’s
lifetime, as they had a verbal agreement. Cruz
claimed that ever since she inherited the
property, she tolerated Susan's occupancy of
the property. However, due to Susan's failure
and refusal to pay rentals of P1,000.00 per
month, she was constrained to demand that
Susan vacate the property and pay all unpaid
rentals. The matter was referred to barangay
conciliation but the parties was not able to
enter into a compromise. Three years later,
Cruz, through counsel, sent Susan a final
demand letter, demanding her to pay unpaid
rentals. Cruz filed an unlawful detainer case
in MTC. Cruz alleged that despite Susan
receiving the final demand refused to vacate
and pay. Susan, in her Answer, contends that
they had only month to month lease and
continuously paying rent until sometime,
Cruz refused to accept payment for the
accrued rents. Also, she claims that she did
not receive the final demand letter.  Whether
final demand letter is necessary in an
unlawful detainer case due to expiration of
lease contract.
 A: NO.  Although the demand letter in this case
contains only demand to pay unpaid rentals and
as such, the case would have been enough to
categorize the complaint for unlawful detainer as
one for non-payment of rentals, this case is still
considered as unlawful detainer case for
expiration of lease and therefore, final demand
letter is not necessary. SC ruled that the month-
month lease contract between Cruz and
Christensen had long been expired when Cruz
refused to receive the rent in the past as
Christensen admitted in her Answer. Also,
Christensen cannot feign ignorance of
petitioner's demand to vacate since the matter
was brought to barangay conciliation
proceedings. The demand letter would have been
unnecessary since respondents' continued
refusal to vacate despite the expiration of their
verbal lease was sufficient ground to bring the
action. (Velia Cruz v. Spouses Christensen, G.R. No.
205539, October 4, 2017)
Q: A parcel of land located in Tarlac which
were inherited by Taar. CFI approved the
partition agreement of the subject property.
Based on the CFI’s decision, Taar et.al.
prepared a subdivision plan which was
approved later on. They then applied for free
patents over the property. Lawan et. al. filed a
verified protest alleging that their
predecessors-in-interests had been in actual,
physical, exclusive and notorious possession
and occupation of land.  DENR Director ruled
that Lawan et. al. are the rightful owners of
the subject property and cancelled the
subdivision plan. It also denied the free
patent application. Title was issued in favor
of Lawan et al. DENR under the legal affairs
conducted an investigation and concluded
that Taar et. al. is entitled for the property.
Secretary of DENR adopted the findings of the
investigating team and ordered cancellation
of free patents and the title issued in favor of
Lawan et. al. Office of the President reversed
the decision of Secretary of DENR. Whether
Lawan et. al. are barred by the principle of
res judicata from instituting free patent
applications over the Property claimed by
Taar et. al.
A: NO.  In this case, only the first three (3)
elements of res judicata are present. The
principle of res judicata does not require
absolute identity of parties. It requires, at the
very least, substantial identity of parties. There is
substantial identity of parties when there exists a
"community of interest between a party in the
first case and a party in the second case even if
the latter was not impleaded in the first case."
For instance, there is substantial identity of
parties when one intervenes as a party-
defendant and creates a common cause with the
original defendant.
The February 18, 1948 Decision of the Court of
First Instance involved an agreement between
petitioners' predecessors-in-interest, namely:
Alipio Duenas, Fortunata Duenas, Spouses
Primitivo T. Adaoag and Pilar Tandoc, Spouses
Ignacio Gragasin and Genoveva Adaoag,
Pantaleon Taar, Lucia Taar, Joaquina Taar,
Feliciano Taar, Paulino Taar, and Oscar Galo.
Clearly, private respondents were not parties to
the agreement. Moreover, there is no clear
showing that private respondents or their
predecessors-in-interest shared a common
interest with any of the parties to the agreement.
However, assuming that there is identity or
substantial identity of parties, there is no
identity of subject matter between the February
18, 1948 Decision of the Court of First Instance
and private respondents' free patent
applications. Although both relate to the same
Property, the February 18, 1948 Decision of the
Court of First Instance was simply an agreement
partitioning the bigger parcel of land, which
embraced the smaller portion claimed by
petitioners and private respondents. On the
other hand, private respondents' free patent
applications involved the establishment of their
rights as the purported occupants and
cultivators of the Property. Evidently, there is no
identity of subject matter. The principle of res
judicata does not apply. 
In addition, the Court of First Instance did not
recognize, expressly or impliedly, that private
petitioners' predecessors-in-interest occupied
and cultivated the Property for more than 30
years since 1915. It also did not declare
petitioners' predecessors-in-interest as the ipso
jure owners of the same.
Therefore, the February 18, 1948 Decision of the
Court of First Instance cannot bar the filing of a
subsequent free patent application over the
Property, Likewise, petitioners cannot rely solely
on this Decision to obtain free patents.
Entitlement to agricultural lands of the public
domain requires compliance with the provisions
of Commonwealth Act No. 141, otherwise known
as the Public Land Act. (Taar v. Lawan et al., G.R.
No. 190922, October 11, 2017)
Q: Mabunay who is a seafarer was hired by
Sharpe Sea. One day after boarding the ship,
Mabunay slipped and hit his back on the
purifier, while he was cleaning the second
floor of the engine room. Mabunay then
informed 2nd Engineer Castro who advised
him to continue with his assigned duties.
Despite the persistent pain in his back and
numbness in his legs, Mabunay continued
working for 3 days, until Chief Engineer
Manuel De Leon allowed him to have a
medical checkup when the ship docked in
Nanjing, China. He was diagnosed with chest
and spinal bone damage and was declared
unfit to work. He was then repatriated to
Manila. Mabunay reported to Sharpe Sea
office and was told to report to its company
designated physician. Mabunay underwent
surgery and was discharged from the
hospital. Mabunay filed a complaint against
Sharpe Sea for the payment of medical
expenses, total disability benefits, damages,
and attorney’s fees. LA ruled in favor of
Mabunay. NLRC affirmed LA’s ruling. MR was
filed. In its MR, Sharp Sea attached the
medical report showing the findings of the
company designated physician. The medical
report showed that Mabunay is diagnosed of
Grade 8 disability. The NLRC pointed out that
while Dr. Cruz's medical report might not
have been presented before the Labor
Arbiter, it was not disputed that Mabunay
was under the care of Dr. Cruz from the time
he was medically repatriated. Whether
Mabunay is entitled to moral and exemplary
damages when Sharp Sea withheld the
company physician’s medical report showing
that he was diagnosed of Grade 8 disability.   where the case was transferred from Branch
A: YES. Mabunay is entitled to moral and
exemplary damages because Sharp Sea was
found to be in bad faith. Bad faith is not simply
bad judgment or negligence. "It imports a
dishonest purpose or some moral obliquity and
conscious doing of wrong. It means a breach of a
known duty through some motive or interest or
ill-will that partakes of the nature of fraud."
SC ruled that by not timely releasing Dr. Cruz's
interim disability grading, petitioners revealed
their intention to leave respondent in the dark
regarding his future as a seafarer and forced him
to seek diagnosis from private physicians.
Petitioners' bad faith was further exacerbated
when they tried to invalidate the findings of
respondent's private physicians, for his
supposed failure to move for the appointment of
a third-party physician as required by the POEA-
SEC, despite their own deliberate concealment of
their physician's interim diagnosis from
respondent and the labor tribunals. (Sharpe Sea
Personnel Inc., et al v. Macario Mabunay Jr., G.R.
No. 206113, November 6, 2017)
Q: Sometime in 1974, Simeon Piedad filed a
case for annulment of an absolute deed of
sale against Candelaria and Mariano Bobilles.
The case was docketed as Civil Case No. 435-
T. The trial court, ruled in Piedad's favor and
declared the deed of sale as null and void for
being a forgery. On appeal, the Court of
Appeals dismissed the appeal and affirmed
the trial court ruling. The Court of Appeals
Decision became final and executory on
November 1, 1998. Judge Gaviola, upon
motion, then issued an order for the issuance
of a writ of demolition on October 22, 2001.
However, the writ of demolition was never
served on respondents due to their dilatory
tactics and the gross ignorance of the law and
undue delay caused by Judges Estrera and
Villarin. The case only began to gain traction
on July 12, 2010, when petitioners filed their
motion for the revival of judgment. But by
this time, almost 12 years had passed since
the Court of Appeals September 15, 1998
Decision became final and executory. This led
Branch 29, Regional Trial Court, Toledo City,
9, Regional Trial Court, Cebu City, to deny the
motion in its Order dated May 15, 2012 for
being the wrong remedy.
Whether or not the prescription had already
set in requiring the Piedads to file an action
for revival of judgment? 
A: YES. Prescription had already set in. However,
a mere motion will suffice for reasons of equity.
In one jurisprudence, the Supreme Court
provides that if manifest wrong or injustice
would result with the strict adherence to the
statute of limitations or doctrine of laches, it
would be better for courts to rule under the
principle of equity. This Court, in a long line of
cases, has allowed for the execution of a final and
executory judgment even if prescription has
already set in, if the delay was caused by the
judgment obligor for his or her benefit or
advantage. (Simeon Trinidad Piedad v. Candelaria
Linehan Bobilles and Mariano Bobilles, G.R. No.
208614, November 27, 2017)
Q: On the night of January 6, 1998, a fire
broke out which burned down the house and
store of respondent Emilio and his son,
respondent Gilbert (the Alfeches), and the
adjacent watch repair shop owned by
respondent Manugas. It was admitted that
the cause of the fire was the constant
abrasion of VECO' s electric wire with M.
Lhuillier's signboard.  The close proximity
and constant abrasion of the wire and
signboard was due to the transfer of the
VECO’s post which was made by reason of the
road-widening and the drainage construction
of the road. The signage was installed long
before the said projects were made. The CA
found that VECO’s negligence in the transfer
and installation of the posts and wires was
the proximate cause of the fire.
Was VECO negligent?  Article 1338 of the Civil Code "[t]here is fraud
A: YES. VECO is a public utility tasked with
distributing electricity to consumers. It is its duty
to ensure that its posts are properly and safely
installed. As the holder of a public franchise, it is
to be presumed that it has the necessary
resources and expertise to enable a safe and
effective installation of its facilities. By installing
its posts and wires haphazardly, without regard
to how its wires could come in contact with a
previously installed signage, VECO failed to act in
keeping with the diligence required of it. Had it
not been for the transfer, VECO's wires would
not have touched M. Lhuillier's signage. (Visayan
Electric Company, Inc. v. Emilio G. Alfeche, et al.,
G.R. No. 209910, November 29, 2017)
Q: Sometime in March 2001, Poole-Blunden
came across an advertisement of Unit 2-C of
T-Tower Condominium. The Unit was
advertised to have an area of 95 square
meters. Thinking that it was sufficient and
spacious enough for his residential needs,
Poole-Blunden won the bid and entered into
a Contract to Sell with UnionBank. Poole-
Blunden started occupying. Thereafter, he
decided to construct two (2) additional
bedrooms in the Unit. Upon examining it, he
noticed apparent problems in its dimensions.
He took rough measurements of the Unit,
which indicated that its floor area was just
about 70 square meters, not 95 square
meters, as advertised by UnionBank. Poole-
Blunden wrote to UnionBank, informing it of
the discrepancy. He asked for a rescission of
the Contract to Sell, along with a refund of the
amounts he had paid, in the event that it was
conclusively established that the area of the
unit was less than 95 square meters which
was denied by the UnionBank. Aggrieved, he
filed an action for rescission of the Contract
to Sell under Article 1390 of the Civil Code. 
Will the action prosper? 
A: YES.  Article 1390 of the Civil Code stipulates
that a contract is voidable or annullable even if
there is no damage to the contracting parties
where "consent is vitiated by mistake, violence,
intimidation, undue influence or fraud." Under
when, through insidious words or machinations
of one of the contracting parties, the other is
induced to enter into a contract which, without
them, he would not have agreed to."
The fraud required to annul or avoid a contract
"must be so material that had it not been
present, the defrauded party would not have
entered into the contract."  Poole-Blunden's
contention on how crucial the dimensions and
area of the Unit are to his decision to proceed
with the purchase is well-taken. As he
emphasized, he opted to register for and
participate in the auction for the Unit only after
determining that its advertised area was
spacious enough for his residential needs.
Therefore, there is fraud for the reason that had
Poole-Blunden was informed by the UnionBank
that the floor area was actually less than the
stipulated, he would not have entered the
Contract to Sell. (Joseph Harry Walter Poole-
Blunden v. Union Bank of the Philippines, G.R. No.
205838, November 29, 2017)
Q: ERMA obtained credit facility from
Security Bank Co. by virtue of the Credit
Agreement they executed. They also executed
Suretyship Agreement whereby Ernesto
Marcelo, President, and Sergio Ortiz – Luiz, Jr,
Vice-President are bound by the Credit
Agreement and solidariliy liable with ERMA
for payment. Erma obtained various peso and
dollar denominated loans from Security Bank
evidenced by promissory notes. Under these
promisorry notes, the Interest on the
principal at varying rates (7.5% per annum
for dollar obligation and 16.75% or 21% per
annum on peso obligation). In default of
payment, ERMA requested for restructuring
of the agreement and offered a certain
property as collateral. However, Security
Bank restructured only partially which ERMA
did not accept. Security Bank demanded
payment against ERMA and the sureties for
the loans inclusive of interest and penalty
charges with additional claim for Interest of
20% per annum on the peso obligation and
7.5% per annum on the dollar obligation
from November 1, 1994 until fully paid and
penalty charge of 2% per month of the total
outstanding principal and interest due and
unpaid. The RTC ruled in favor of SBC but did
not impose the additional claims.  and Sergio Ortiz-Luis, Jr., G.R. No. 191274,
A) Whether ERMA and sureties are liable for
the additional claim? 
B) Whether there is novation which would
release the sureties from liability?  Bohol. They boarded a cargo truck which
A:  would transfer them from the wharf to
A. NO.  getting on the truck, Simolde called Caballes,
The Regional Trial Court denied Security
Bank's additional claims for interests and
penalty charges for being iniquitous, and
imposed instead a 12% legal interest on the total
outstanding obligation. In making this ruling, the
Regional Trial Court took into account the partial
payments made by petitioners, their efforts to
settle/restructure their loan obligations and the
serious slump in their export business in 1993.
The Regional Trial Court held that, under those
circumstances, it would be "iniquitous, and
tantamount to merciless forfeiture of property" if
the interests and penalty charges would be
continually imposed. (Erma Industries, Inc.,
Ernesto B. Marcelo and Flerida O. Marcelo v.
Security Bank Corporation and Sergio Ortiz-Luis,
Jr., G.R. No. 191274, December 06, 2017)
B. NO.  should be awarded to Vivian, wife of
The Regional Trial Court and the Court of
Appeals were in agreement that while there
were ongoing negotiations between Erma and
Security Bank for the restructuring of the loan,
the same did not materialize. Erma offered to
restructure its entire outstanding obligation and
delivered TCT No. M-7021 as collateral, to which
Security Bank counter-offered a partial
restructuring or only up to P5,000,000. This
counter-offer was not accepted by Erma. There
was no new contract executed between the
parties evidencing the restructured loan. The
nature and extent of respondent Ortiz's liability
are set out in clear and unmistakable terms in
the Continuing Suretyship agreement. Under its
express terms, respondent Ortiz, as surety, is
"bound by all the terms and conditions of the
credit instruments." His liability is solidary with
the debtor and co-sureties; and the surety
contract remains in full force and effect until full
payment of Erma's obligations to the Bank.
(Erma Industries, Inc., Ernesto B. Marcelo and
Flerida O. Marcelo v. Security Bank Corporation
December 06, 2017)
Q: Rodolfo, Monalisa, Johanna and Abellana
arrived at the municipal wharf of Jetafe,
Poblacion, Jetafe. While passengers were
the official truck driver. Caballes approached
Simolde but left the engine running. While
Simolde and Caballes were talking, Aparra,
chief diesel mechanic, started driving the
truck. Upon seeing the truck move, Caballes
rushed to the truck and sat beside Aparra.
However, instead of taking control of the
vehicle, Caballes allowed Aparra to drive.
Shortly thereafter, Aparra lost control of the
truck and they fell off the wharf.
Consequently, Rodolfo and Monalisa died
while Johanna and Abellana were injured.
Vivian, the widow of Rodolfo and the mother
of Johanna, filed a complaint. 
A) Whether or not quasi-delict was
committed? 
B) Whether or not loss of earning capacity
Rodolfo? 
A: 
A) YES. The requisites for quasi-delict are: (1)
damages to the plaintiff; (2) negligence, by act or
omission, of which defendant, or some person
for whose-acts he must respond, was guilty; and
(3) the connection of cause and effect between
such negligence and the damages. Caballes was
grossly negligent in allowing Aparra to drive the
truck despite being an inexperienced driver.
Aparra's inexperience caused the accident that
led to the deaths of Rodolfo and Monalisa. It is
undisputed that the deaths of Vivian's husband
and daughter caused damage to her. Clearly, the
requisites for a quasi-delict are present in this
case. (Vivian B. Torreon and Felomina F. Abellana
v. Generoso Aparra, Jr., Felix Caballes, and
Carmelo Simolde, G.R. No. 188493, December 13,
2017)
B) YES. Article 2206 provides that the amount
of damages for death caused by a crime or
quasi-delict shall be at least Three thousand
pesos [P50,000.00], even though there may have
been mitigating circumstances. In addition, the
defendant shall be liable, among others, for
the loss of the earning capacity of the
deceased, and the indemnity shall be paid to the
heirs of the latter; such indemnity shall in every
case be assessed and awarded by the court,
unless the deceased on account of permanent
physical disability not caused by the defendant,
had no earning capacity at the time of his death.
The indemnity for the deceased's lost earning
capacity is meant to compensate the heirs for the
income they would have received had the
deceased continued to live. (Vivian B. Torreon
and Felomina F. Abellana v. Generoso Aparra, Jr.,
Felix Caballes, and Carmelo Simolde, G.R. No.
188493, December 13, 2017)
Q: MRT thru Parsons Inc., had invited
Gammon Philippines to bid on the
construction of the Podium structure of the
MRT 3 and it later won the bidding. Then the
2 parties signed the contract where it stated
that there would be three notices that would
be sent to Gammon for the project to proceed.
But later on Parsons informed Gammon that
MRT was temporarily rescinding the Third
Notice to Proceed, noting that it remained
unaccepted by Gammon. On June 19, 1998,
Gammon qualifiedly accepted the Fourth
Notice to Proceed. MRT treated Gammon's
qualified acceptance as a new offer. In a
Letter dated June 22, 1998, MRT rejected
Gammon's qualified acceptance and informed
Gammon that the contract would be awarded
instead to Filsystems if Gammon would not
accept the Fourth Notice to Proceed within
five (5) days. In a Letter dated July 8, 1998,
Gammon wrote MRT, acknowledging the
latter's intent to grant the Fourth Notice to
Proceed to another party despite having
granted the First Notice to Proceed to
Gammon. Thus, it notified MRT of its claims
for reimbursement for costs, losses, charges,
damages, and expenses it had incurred due to
the rapid mobilization program in response
to MRT's additional work instructions,
suspension order, ongoing discussions, and
the consequences of its award to another
party. In a Letter dated July 15, 1998, MRT
expressed its disagreement with Gammon
and its amenability to discussing claims for
reimbursement. Whether or not there is a
perfected contract between MRT and
Gammon Philippines?
A: YES. There is a perfected contract between
MRT and Gammon this Court finds that there is a
perfected contract between the parties. MRT has
already awarded the contract to Gammon, and
Gammon's acceptance of the award was
communicated to MRT before MRT rescinded the
contract. The first Letter shows that Gammon
fully consented to the contents and accepted the
prestations of the First Notice to Proceed.
Gammon's acceptance is also manifested in its
undertakings to mobilize resources, to prepare
the Performance and Advance Payment Bonds,
and to procure materials necessary for the
Project. All that remained was the formality of
returning the contract documents and the Letter
of Comfort, which eventually was complied with
by Gammon. Thus, there is already mutual
consent on the object of the contract and its
consideration, and an absolute acceptance of the
offer. (Metro Rail Transit Development
Corporation v. Gammon Philippines Inc., G.R. No.
200401, January 17, 2018)
Q: Gallo has never been known as “Michael
Soriano Gallo”. She has always been female.
For her, in her petition before
the Regional Trial Court, her Certificate
of Live Birth contained errors,
which should be corrected. For her, she was
not changing the name that was given to her;
she was merely correcting its entry. To
accurately reflect these facts in her
documents, Gallo prayed before the Regional
Trial Court of Ilagan City, Isabela in for the
correction of her name from "Michael" to
"Michelle" and of her biological sex from
"Male" to "Female" under Rule 108 of the
Rules of Court. In addition, Gallo asked for
the inclusion of her middle name, "Soriano";
her mother's middle name, "Angangan"; her
father's middle name, "Balingao"; and her
parent's marriage date, May 23, 1981, in her
Certificate of Live Birth, as these were not
recorded. Whether or not there it involves
substantive change?
A: NO. Gallo is not filing the petition to change
her current appellation. She is merely correcting
the misspelling of her name. To correct simply
means "to make or set aright; to remove the
faults or error from." To change means "to
replace something with something else of the
same kind or with something that serves as a
substitute. Gallo is not attempting to replace her
current appellation. She is merely correcting the
misspelling of her given name. "Michelle" could
easily be misspelled as "Michael," especially
since the first four (4) letters of these two (2)
names are exactly the same. The differences only
pertain to an additional letter "a" in "Michael,"
and "le" at the end of "Michelle." "Michelle" and
"Michael" may also be vocalized similarly,
considering the possibility of different accents or
intonations of different people. In any case, Gallo
does not seek to be known by a different
appellation. The lower courts have determined
that she has been known as "Michelle" all
throughout her life. She is merely seeking to
correct her records to conform to her true given
name. (Republic of the Philippines v. Michelle
Soriano Gallo, G.R. No. 207074, January 17, 2018)
Q: In August 2001, the Spouses Javier offered
to purchase the Marikina property. However,
they could not afford to pay the price of
₱3,500,000.00. They offered instead to lease
the property while they raise enough money.
Racelis hesitated at first but she eventually
agreed.  The parties agreed on a month-to-
month lease and rent of ₱10,000.00 per
month. This was later increased to
₱11,000.00. The Spouses Javier used the
property as their residence and as the site of
their tutorial school. Sometime in 2002,
Racelis inquired whether they are still
interested to purchase the property then Sps.
Javier agreed and even said that they would
pay Php 100,000.00 to buy them more time
within which to pay the purchase price. But
they only delivered Php 78,000.00 but they
consistently paid rent until February 2004.
Then Racelis wrote to inform them that her
family had decided to terminate the lease
agreement and to offer the property to other
interested buyers.  In the same letter, Racelis
demanded that they vacate the property by
May 30, 2004.  The Spouses Javier refused to
vacate due to the ongoing operation of their
tutorial business. They insisted that the sum
of ₱78,000.00 was advanced rent and
proposed that this amount be applied to their
outstanding liability until they vacate the
premises. Whether or Not they can suspend
their payment?
A: NO. In this case, the disconnection of electrical
service over the leased premises on May 14,
2004 was not just an act of physical disturbance
but one that is meant to remove respondents
from the leased premises and disturb their legal
possession as lessees. Ordinarily, this would
have entitled respondents to invoke the right
accorded by Article 1658 of the Civil Code.
However, this rule will not apply in the present
case because the lease had already expired when
petitioner requested for the temporary
disconnection of electrical service. Petitioner
demanded respondents to vacate the premises
by May 30, 2004. Instead of surrendering the
premises to petitioner, respondents unlawfully
withheld possession of the property.
Respondents continued to stay in the premises
until they moved to their new residence on
September 26, 2004.  At that point, petitioner
was no longer obligated to maintain respondents
in the "peaceful and adequate enjoyment of the
lease for the entire duration of the contract."
(Victoria Racelis v. Sps. Javier, G.R. No. 189609,
January 29, 2018)
Q: In 1998, Intramuros leased certain real
properties of the national government which
it administered to Offshore Construction.
Three properties were subjects of the
Contracts of Lease: Baluarte De San Andres,
Baluarte De San Francisco De Dilao and
Revellin De Recoletos. All three properties
were leased for five years from September
1,1998 to August 31,2003. Offshore
Construction occupied and introduced
improvements in the leased premises.
However, Intramuros and the DOT halted the
projects due to Offshore Construction’s non-
conformity with PD 1616, which required
16th to 19th centuries Philippine-Spanish
Architecture in the area. During the lease
period, Offshore Construction failed to pay its
utility bills and rental fees, despite several
demand letters. Intramuros tolerated the
continuing occupation, hoping that Offshore
Construction would pay its arrears. To settle
its arrears, Offshore Construction proposed
to pay the DOT’s monthly operational
expenses and the parties executed a
Memorandum of Agreement covering the
period of August 15,2004 to August 25,2005.
But Offshore Construction failed to pay its
arrears amounting to Php 13,448,867.45. Is
Intramuros entitled to possession to the said
leased properties to Offshore Construction?
A: YES. Intramuros tolerance of respondent's
occupation and use of the leased premises after
the end of the lease contracts does not give the
latter a permanent and indefeasible right of
possession in its favor. When a demand to vacate
has been made, as what petitioner had done,
respondent’s possession became illegal and it
should have left the leased premises. More than
once has this Court adjudged that a person who
occupies the land of another at the latter's
tolerance or permission without any contract
between them is necessarily bound by an
implied promise that he will vacate upon
demand, failing which a summary action for
ejectment is the proper remedy against him. The
situation is not much different from that of a
tenant whose lease expires but who continues in
occupancy by tolerance of the owner, in which
case there is deemed to be an unlawful
deprivation or withholding of possession as of
the date of the demand to vacate. In other words,
one whose stay is merely tolerated becomes a
deforciant illegally occupying the land or
property the moment he is required to
leave. More than once has this Court adjudged
that a person who occupies the land of another at
the latter's tolerance or permission without any
contract between them is necessarily bound by
an implied promise that he will vacate upon
demand, failing which a summary action for
ejectment is the proper remedy against him.
(Intramuros Administration v. Offshore
Construction Development Company, G.R. No.
196795, March 7,2018)
Q: Laureana and Iden's application for
registration of land title over a parcel
situated in Barangay Tranca, Talisay,
Batangas filed in June 2009 before the
Municipal Circuit Trial Court of Talisay-
Laurel, Batangas. The land, regarded as Lot
No. 1591, Cad. 729, Talisay Cadastre, had an
area of 9,629 square meters. The application
of Laureana and Iden was docketed as Land
Registration Case No. 09-001 (LRA Record No.
N- 79691). On September 10, 2009, Republic
of the Philippines (Republic) filed an
Opposition to the application based on the
following grounds: (1) Ne[i]ther the
applicants nor their predecessors-in-interest
have been in open, continuous, exclusive and
notorious possession and occupation of the
land in question in the concept of an owner
since June 12, 1945 or earlier; (2) The tax
declarations relied upon by appellees do not
constitute competent and sufficient evidence
of a bona fide acquisition of the land by the
appellees; and (3) The parcel of land applied
for is a land of public domain and, as such,
not subject to private appropriation.  And the
Republic further avers that a CENRO
Certification is not sufficient to prove the
land's classification as alienable and
disposable. The MTC and CA ruled in granting
the Application for registration. Whether or
Not Laureana is entitled for the registration
of the land in her name?
A: NO. In this case, although respondents were
able to present a CENRO certification, a DENR-
CENRO report with the testimony of the DENR
officer who made the report, and the survey plan
showing that the property is already considered
alienable and disposable, these pieces of
evidence are still not sufficient to prove that the
land sought to be registered is alienable and
disposable. Absent the DENR Secretary's
issuance declaring the land alienable and
disposable, the land remains part of the public
domain. Thus, even if respondents have shown,
through their testimonial evidence, that they and
their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession
and occupation of the property since June 12,
1945, they still cannot register the land for
failing to establish that the land is alienable and
disposable. (Republic of the Philippines v.
Laureana Malijan Javier, G.R. No. 214367, April 4,
2018)
Q: Multi-Realty Development Corporation
(Multi-Realty) built Makati Tuscany, a 26-
storey condominium building located at the
corner of Ayala Avenue and Fonda Street,
Makati City. Makati Tuscany had a total of
160 units, with 156 ordinary units from the
2nd to the 25th floors and four (4) penthouse
units on the 26th floor. It also had 270
parking slots which were apportioned as
follows: one (1) parking slot for each
ordinary unit; two (2) parking slots for each
penthouse unit; and the balance of 106
parking slots were allocated as common
areas. Pursuant to Republic Act No. 4726, or
the Condominium Act, Multi-Realty created
and incorporated Makati Tuscany
Condominium Corporation (MATUSCO) to
hold title over and manage Makati Tuscany's
common areas. That same year, Multi-Realty
executed a Deed of Transfer of ownership of
Makati Tuscany's common areas to
MATUSCO. Multi-Realty filed a complaint for
damages and/or reformation of instrument
with prayer for temporary restraining order
and/or preliminary injunction against
MATUSCO. Multi-Realty alleged in its
complaint that of the 106 parking slots
designated in the Master Deed as part of the
common areas, only eight (8) slots were
actually intended to be guest parking slots;
thus, it retained ownership of the remaining
98 parking slots.  Multi-Realty claimed that
its ownership over the 98 parking slots was
mistakenly not reflected in the Master Deed
"since the documentation and the terms and
conditions therein were all of first
impression," considering that Makati
Tuscany was one of the first condominium
developments in the Philippines. Is there is a
need to reform the Master Deed and the Deed
of Transfer?
A: NO. Reformation of an instrument is a remedy
in equity where a valid existing contract is
allowed by law to be revised to express the true
intentions of the contracting parties. The
rationale is that it would be unjust to enforce a
written instrument which does not truly reflect
the real agreement of the parties. In reforming
an instrument, no new contract is created for the
parties, rather, the reformed instrument
establishes the real agreement between the
parties as intended, but for some reason, was not
embodied in the original instrument. MATUSCO
does not deny that it stayed silent when Multi-
Realty sold the parking slots on several
occasions or that it offered to buy the parking
slots from Multi-Realty on at least two (2)
occasions. It excuses itself by saying that just like
Multi-Realty, it "also labored under a mistaken
appreciation of the nature and ownership of the
ninety-eight (98) parking slots in question." Both
parties recognized Multi-Realty's ownership of
the parking slots. MATUSCO initially respected
Multi-Realty's ownership despite the Master
Deed's and Deed of Transfer's stipulations. It was
MATUSCO that changed its position decades
after it acted as if it accepted Multi-Realty's
ownership. (Makati Tuscany Condominium
Corporation v. Multi-Realty Development
Corporation, G.R. No. 185530, April 18, 2018)
Q: Meralco was contracted to supply
electricity to Marvex Industrial Corporation
(Marvex) under an Agreement for Sale of
Electric Energy. It installed metering devices
at Marvex's premises. Marvex was billed
according to the monthly electric
consumption recorded in its meter. Meralco
service inspectors inspected Marvex's
electric metering facilities and found that the
main meter terminal and cover seals had
been tampered with. During a second
inspection, Meralco found that the metering
devices were tampered with again.
Subsequently, Meralco assessed Marvex a
differential billing. Meralco sent demand
letters and disconnected Marvex's electric
service when it did not pay. Nordec, the new
owner of Marvex, sued Meralco for damages
with prayer for preliminary mandatory
injunction. It alleged that Meralco's service
inspectors conducted the inspections without
its consent or approval. Following the
inspections, Meralco's inspectors gave an
unnamed Nordec employee a Power Field
Order that did not mention the alleged
defects in the metering devices. Nordec
further claimed that the parties exchanged
letters on the alleged unregistered electric
bill, and that it requested a recomputation,
which Meralco denied in its letter. However,
Meralco asked Nordec to show the basis for
its recomputation request, to which Nordec
complied in its letter. Meralco required
Nordec to pay P371,919.58 for the
unregistered electricity bill. Nordec then
informed Meralco of the pending resolution
of the recomputation. Nordec claimed that
Meralco then disconnected its service
without prior notice, resulting to loss of
income and cancellation of other business
opportunities. Is Nordec Philippines is
entitled to actual, temperate, moral or
exemplary damages, attorney's fees, and legal
interest?
A: NO.  The requirement in Article 2234 of the
Civil Code, which requires proof of entitlement to
moral, temperate or compensatory damages
before exemplary damages may be awarded.
Exemplary damages, which cannot be recovered
as a matter of right, may not be awarded if no
moral, temperate, or compensatory damages
have been granted. Since exemplary damages
cannot be awarded, the award of attorney's fees
should likewise be deleted.
Moral damages are also not proper, in line with
Manila Electric Company v. T.E.A.M. Electronics
Corporation:  accepted the invitation of Performance Forex
As a rule, a corporation is not entitled to moral
damages because, not being a natural person, it
cannot experience physical suffering or
sentiments like wounded feelings, serious
anxiety, mental anguish and moral shock. Here,
the records are bereft of evidence that would
show that Nordec's name or reputation suffered
due to the disconnection of its electric supply.
Moreover, contrary to Nordec's claim, it cannot
be awarded temperate or moderate damages.
Under Article 2224 of the Civil Code. When the
court finds that a party fails to prove the fact of
pecuniary loss, and not just the amount of this
loss, then Article 2224 does not apply. Here, the
Court of Appeals found that Meralco's
disconnection had a "domino effect" on Nordec's
business, but that Nordec did not offer actual
proof of its losses. Nordec even admitted in its
petition for review that there was an "oversight"
on its part in "adducing proof of the accurate
amount of damages it sustained" due to
Meralco's acts. No pecuniary loss has been
established in this case, apart from the claim in
Nordec's complaint that the "serious anxiety" of
the disconnection had caused Nordec's president
to cancel business appointments, purchase
orders, and fail to fulfill contractual obligations,
among others. 
In this instance, nominal damages may be
awarded. Nominal damages are awarded to
vindicate the violation of a right suffered by a
party, in an amount considered by the courts
reasonable under the circumstances.  Meralco's
negligence in not providing Nordec sufficient
notice of disconnection of its electric supply,
especially when there was an ongoing dispute
between them concerning the re-computation of
the electricity bill to be paid, violated Nordec's
rights. Because of this, Nordec is entitled to
nominal damages in the amount of P30,000.00.
(Manila Electric Company, et al. v. Nordec
Philippines and/or Marvex Industrial Corp.
Represented By Its President, Dr. Potenciano R.
Malvar, G.R. No. 196020, April 18, 2018)
Q: Performance Forex Corp. is a corporation
operating as a financial broker/agent
between market participants in foreign
exchange transactions. Cancio and Pampolina
Corp.’s agent, Hipol, to open a joint account
with Performance Forex Corp. Hipol was
authorized by Performance Forex Corp. to
follow and execute the trade orders of Cancio
and Pampolina. However, it was later found
out that Hipol did not execute the orders of
Cancio and Pampolina and instead made
unauthorized transactions resulting into the
loss of all of their money. Hence, Cancio and
Pampolina filed a complaint for damages
against both Performance Forex Corp. and its
agent, Hipol for what happened. Is
Performance Forex Corp. solidarily liable to
Cancio and Pampolina for Hipol’s acts? 
A: NO. A principal who gives broad and
unbridled authorization to his or her agent
cannot later hold third persons who relied on
that authorization liable for damages that may
arise from the agent's fraudulent acts. Hipol was
not employed with Performance Forex Corp. He
was categorized as an independent broker for
commission. Cancio and Pampolina conferred
trading authority to Hipol and thus made him
their agent. Performance Forex Corp. was not
privy to how Cancio and Pampolina instructed
Hipol to carry out their orders. Thus, since the
acts of Hipol were the direct cause of the injury,
there is no reason to hold Performance Forex
Corp. liable for actual and moral damages. If
there was any fault, the fault remains with Hipol
and him alone. (Belina Cancio and Jeremy
Pampolina v. Performance Foreign Exchange
Corporation, G.R. No. 182307, June 6, 2018)
Q: Rhodora Tanaka, a Filipino wife married to
Seiichi Tanaka, a Japanese national filed a
Petition for Judicial Determination and
Declaration of Capacity to Marry with the
Regional Trial Court in order to judicially
recognize her divorce against her husband.
She presented a “Certificate of Acceptance of
the Report of Divorce” she obtained from
Japan, which was issued by the Mayor of
Fukaya City, Japan, which was duly
authenticated by the Philippine Consul in
Japan. Is the “Certificate of Acceptance of the
Report of Divorce” sufficient to prove that she
and her husband have legally divorced and
capacitated her to marry?  deliver. The shipment shall then be considered
A: YES. Under Article 26 of the Family Code,
where a marriage between a Filipino citizen and
a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the
Filipino spouse shall have capacity to remarry
under Philippine law. The Certificate of
Acceptance of the Report of Divorce was
accompanied by an Authentication issued by
Consul of the Embassy of the Philippines in
Tokyo, Japan. Considering that the Certificate of
Acceptance of the Report of Divorce was duly
authenticated, the divorce was validly obtained
according to foreign spouse’s law. Here, the
national law of the foreign spouse states that the
matrimonial relationship is terminated by
divorce. The Certificate of Acceptance of the
Report of Divorce does not state any
qualifications that would restrict the remarriage
of any of the parties. There can be no other
interpretation than that the divorce procured by
them completely terminates their marital tie.
(Rhodora Ilumin Racho v. Seiichi Tanaka, Local
Civil Registrar of Las Piñas City, and the
Administrator and Civil Registrar General of the
National Statistics Office, G.R. No. 199515, June
25, 2018)
Q: Eliza is a condo unit owner and delivered a
check to Sison who will be paying in behalf of
Eliza, however, Sison did not receive the
package. Later, it was found out that the
check was delivered to Sison’s neighbor, but
there was no signed receipt. Hence, Eliza sent
a demand letter to FedEx, the delivery
courier for payment of damages since the
check was supposed to be used for payment
of the balance for the condo unit, which was
foreclosed since it was unpaid. FedEx refused
and thus Eliza filed a complaint for damages
with the Regional Trial Court.
Is FedEx liable? 
A: YES. The Civil Code mandates common
carriers to observe extraordinary diligence in
caring for the goods they are transporting.
Common carriers must ascertain the identity of
the recipient. Failing to deliver shipment to the
designated recipient amounts to a failure to
lost, and liability for this loss ensues. FedEx is
unable to prove that it exercised extraordinary
diligence in ensuring delivery of the package to
its designated consignee. It claimed to have made
a delivery but it even admits that it was not to
the designated consignee. (Federal Express
Corporation v. Luwalhati R. Antonino and Eliza
Bettina Ricasa Antonino, G.R. No. 199455, June 27,
2018)
Q: Tarcisius was hired as a project
coordinator/manager of Your Own Home
Development Corp. (YOHDC). Tarcisius
received all 4 checks. However, instead of
delivering them to Rosillas and Delos Reyes,
the payees of the checks, Tarcisius and his
wife, Iris, deposited the checks into their
personal bank account with BPI and
requested BPI to suspend its action on
YOHDC’s claim and instructed it not to deduct
the amount they deposited until they have
clarified the matter. BPI denied this request,
and sent Metrobank, the Drawee Bank, to
reimburse the amounts of the checks, which
was then credited to YOHDC. Hence, Tarcisius
and his wife filed a Complaint for Damages
against YOHDC on the ground of unjust
enrichment.  Is YOHDC liable for unjust
enrichment?  equity demanded that Asuten be awarded only
A: NO. Unjust enrichment has two (2) elements:
a person benefited without a real or valid basis
or justification, and the benefit was at another
person's expense or damage. Here, Metrobank
rightfully returned to YOHDC the amounts of the
checks considering that Metrobank, as the
drawee bank, is obligated to return the full
amounts of the checks upon discovering that
they were not paid to the correct payees. The
amounts returned were not at the expense of
Tarcisius and his wife considering that the
amounts were not meant for them but for
Rosillas and Delos Reyes. (Iris Rodriguez v. Your
Own Home Development Corporation, G.R. No.
199451, August 15, 2018)
Q: Enriquez filed a replevin case against
Asuten for the recovery of the Toyota Hi-Ace
van valued at P300,000.00. She applied for a
bond in the amount of P600,000.00 with The
Mercantile Insurance Company, Inc.
(Mercantile Insurance) in Asuten's favor. The
Regional Trial Court (RTC) approved the
bond and ordered the sheriff to recover the
van from Asuten and to deliver it to
petitioner. While the van was in petitioner's
custody, the RTC dismissed the case without
prejudice for failure to prosecute. Thus, it
ordered the sheriff to restore the van to
Asuten. When petitioner failed to produce the
van, the RTC directed Mercantile Insurance to
pay Asuten the amount of the bond.
Is Enriquez liable for the replevin bond
despite her failure to return the van,
considering that its effectivity has lapsed
without any renewal?
A: YES. A surety bond remains effective until the
action or proceeding is finally decided, resolved,
or terminated. This a rare instance where the
writ of seizure is dissolved due to the dismissal
without prejudice, but the bond stands because
the case has yet to be finally terminated by the
Regional Trial Court.
Forfeiture of the replevin bond requires first, a
judgment on the merits in the defendant's favor,
and second, an application by the defendant for
damages. Neither circumstance appears in this
case. When petitioner failed to produce the van,
an amount equal to the value of the van. The RTC
would have erred in ordering the forfeiture of
the entire bond in Asuten's favor, considering
that there was no trial on the merits or an
application by Asuten for damages. This
judgment could have been reversed had
petitioner appealed the RTC's Order.
Unfortunately, she did not. Respondent was,
thus, constrained to follow the RTC's directive to
pay Asuten the full amount of the bond.
(Milagros P. Enriquez v. The Mercantile Insurance
Co., Inc., G.R. No. 210950, August 15, 2018)
Q: In 1933, Daquer applied for a homestead
patent grant over a parcel of land in Palawan
for his "exclusive personal use and benefit."
In 1936, Director of the Bureau of Lands
approved Daquer's application and issued
him Homestead Patent. After registration of
the homestead patent in the Register of
Deeds, an Original Certificate of Title (OCT)
was issued in Daquer's name. Daquer passed
away and was survived by his children (Heirs
of Daquer).
Upon investigation by the Community
Environment and Natural Resource Office
(CENRO), it was discovered that the subject
land covered by Homestead Application and
OCT in Daquer's name fell within the zone of
unclassified public forest. Consequently, the
Republic filed a Complaint for Cancellation of
Free Patent, Original Certificate of Title and
Reversion of land to public domain in 2003.
a. Does the mere issuance of a
homestead patent could classify an otherwise
unclassified public land into an alienable and
disposable agricultural land of the public
domain?
b. Will the action for reversion prosper?
Explain.
A:
a. NO.
The issuance of the Homestead Patent in
favor of Daquer, pursuant to the Public Land Act,
did not, by itself, reclassify the subject lot into
alienable and disposable public agricultural land.
In classifying lands of the public domain
as alienable and disposable, there must be a
positive act from the government declaring them
as open for alienation and disposition. An act of
the government may only be considered as
"express or positive if [it] is exercised directly for
the very purpose of lifting land from public
ownership."  The Republic of the Philippines, through the
In this case, the records are bereft of any
evidence showing that the land has been
classified as alienable and disposable. A
homestead patent is a gratuitous grant from the
government "designed to distribute disposable
agricultural lots of the State to land-destitute
citizens for their home and cultivation." Being a
gratuitous grant, a homestead patent applicant
must strictly comply with the requirements laid
down by the law. (Republic of the Philippines v.  bona fide claim of ownership since June 12,
Heirs Of Ignacio Daquer and the Register of Deeds,
Province of Palawan, G.R. No. 193657, September
04, 2018)
b. YES.  dated to as far back as 1931, as these
As a rule, a certificate of title issued
pursuant to a homestead patent partakes the
nature of a certificate of title issued through a
judicial proceeding and becomes
incontrovertible upon the expiration of one (1)
year. Nevertheless, the rule that "a certificate of
title issued pursuant to a homestead patent
becomes indefeasible after one year, is subject to
the proviso that the land covered by said
certificate is a disposable public land within the
contemplation of the Public Land Law."
When the property covered by a
homestead patent is part of the inalienable land
of the public domain, the title issued pursuant to
it is null and void, and the rule on indefeasibility
of title will not apply. The State may still file an
action for reversion of a homestead land that
was granted in violation of the law. The action is
not barred by the statute of limitations,
especially against the State. (Republic of the
Philippines v.  Heirs Of Ignacio Daquer and the
Register of Deeds, Province of Palawan, G.R. No.
193657, September 04, 2018)
Q: Kawayan Hills Corp. filed an application
for confirmation and registration of Lot No.
2512's title in its name before the MCTC. It
claimed to have acquired the lot in 1995
through a Deed of Adjudication with Sale
executed by the successors-in-interest of
Andres Dafun (Andres). Andres had been Lot
No. 2512's real property tax declarant since
1931.
OSG, filed its Opposition to the application. It
asserted that Kawayan Hills failed to comply
with the requirements of Section 14(1) of
Presidential Decree No. 1529 for judicial
confirmation of imperfect title.
The MCTC ruled in favor of Kawayan Hills. On
appeal, the CA reversed the MCTC Decision. It
maintained that Kawayan Hills failed to
establish its or its predecessors-in-interest's
1945 or earlier, as to enable confirmation of
title under Section 14(1) of the Property
Registration Decree. It decried petitioner's
reliance on tax declarations, even if they
supposedly did not prove ownership:
Is Kawayan Hills Corporation entitled to have
title over Lot No. 2512 confirmed and
registered in its favor?
A: YES. The payment of real property taxes since
as far back as 1931 by petitioner Kawayan Hills'
predecessor-in interest, Andres, should not be
dismissed so easily. To the contrary, coupled
with evidence of continuous possession, it is a
strong indicator of possession in the concept of
owner.
Although tax declarations or realty tax payments
of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of
possession in the concept of owner for no one in
his right mind would be paying taxes for a
property that is not in his actual or at least
constructive possession. They constitute at least
proof that the holder has a claim of title over the
property. The voluntary declaration of a piece of
property for taxation purposes manifests not
only one's sincere and honest desire to obtain
title to the property and announces his adverse
claim against the State and all other interested
parties, but also the intention to contribute
needed revenues to the Government. Such an act
strengthens one's bona fide claim of acquisition
of ownership.
When an applicant in the registration of property
proves his or her open, continuous, exclusive,
and notorious possession of a land for the period
required by law, he or she has acquired an
imperfect title that may be confirmed by the
State. The State may not, in the absence of
controverting evidence and in a pro forma
opposition, indiscriminately take a property
without violating due process. (Kawayan Hills
Corporation v. CA, G.R. No. 203090, September 05,
2018)
Q: Years after the issuance of TCT or CLOA to
Diopenes and Villanueva, Padillo filed before
the Agrarian Reform Regional Office a
Petition for Inclusion a Farmer-Beneficiary
over the subject lots. The Regional Director
granted the petition and declared Padillo a
qualified beneficiary. A Writ of Execution was
subsequently issued. Thus, Padillo filed a
Petition for Cancellation of Diopenes’ and
Villanueva’s Certificates of Land Ownership
Award before the Provincial Adjudicator. The
Department of Agrarian Reform Adjudication
Board ordered the cancellation of the TCT
and CLOA. It ruled that the Regional Director
had jurisdiction to order Padillo's inclusion
as farmer-beneficiary. On appeal, the CA
annulled the Decision on the ground of
indefeasibility of title.
Is the cancellation of the registered
Certificates of Land Ownership Award (CLOA)
or Transfer Certificates of Title (TCT) four (4)
years after their issuance proper?
A: NO, under Section 48 of Presidential Decree
No. 1529, a registered certificate of land
ownership award may be altered, modified, or
canceled only through an action for annulment of
the certificate itself. The petition incidentally
questioned the validity of the TCT issued in
Diopenes’ and Villanueva’s favor in an action
seeking a different relief—purportedly for
petitioner to be included as farmer-beneficiary in
the subject lots. This is a collateral attack on the
title, and as such, prohibited by law.
Similar to a certificate of title issued in
registration proceedings, the registration of a
CLOA places the subject land under the
operation of the Torrens system. Once under the
Torrens system, a CLOA becomes indefeasible
and incontrovertible upon the expiration of one
year from the date of registration with the Office
of the Registry of Deeds.  It may only be attacked
through a direct proceeding before the court.
Moreover, Regional Director has no jurisdiction
in a Petition for Inclusion as farmer-beneficiary
over lots covered by the Certificates of Title or
registered Certificates of Land Ownership
Award. Thus, all subsequent proceedings are
void for lack of jurisdiction.
Under Batas Pambansa Blg. 129, or the Judiciary
Reorganization Act of 1980, an action for
annulment of a registered certificate of land
ownership award, like the annulment of a
certificate of title, involves title to or possession
of real property or any interest therein. This falls
under the exclusive original jurisdiction of either
the Regional Trial Court or the Municipal Trial
Court, depending on the assessed value. (Aurelio
Padillo v. Rolly Villanueva and Joseph Diopenes,
G.R. No. 209661, October 03, 2018)
Q: A van and a tricycle figured in an accident
along Sumulong Highway in Antipolo City.
The van was owned and registered under
Imperial's name, and was driven by Laraga.
The tricycle was driven by Mercado.
The Bayaban Spouses, who were on board the
tricycle, sustained injuries requiring therapy
and post-medical treatment. The Bayaban
Spouses demanded compensation from
Imperial, Laraga, and Mercado for the
hospital bills and loss of income that they
sustained while undergoing treatment. When
neither Imperial, Laraga, nor Mercado
heeded their demand, the Bayaban Spouses
filed a Complaint for damages.
The RTC ruled in favor of the Bayaban
Spouses. It found Laraga negligent and the
proximate cause of the accident. On appeal,
the CA maintained Laraga’s liability, ruling
that "the registered owner of a motor vehicle
is primarily and directly responsible for the
consequences of its operation, including the
negligence of the driver, with respect to the
public and all third persons."
1. Does the burden of proof falls upon
Imperial to prove that his employee,
Laraga, was not acting within the
scope of his assigned tasks?
2. Should Imperial be vicariously liable
for the damages sustained by the
Bayaban Spouses?
A:
1. NO.  considering that it had allowed the series of
The burden of proving the existence of an
employer-employee relationship and that the
employee was acting within the scope of his or
her assigned tasks rests with the plaintiff under
the Latin maxim "ei incumbit probatio qui dicit,
non qui negat" or "he who asserts, not he who
denies, must prove." Therefore, it is not
incumbent on the employer to prove that the
employee was not acting within the scope of his
assigned tasks. Once the plaintiff establishes the
requisite facts, the presumption that the
employer was negligent in the selection and
supervision of the employee arises, disputable
with evidence that the employer has observed all
the diligence of a good father of a family to
prevent damage.
2. YES.  Rainier a pre-approved credit card. The Yulo
Specifically for employers, they are
deemed liable or morally responsible for the
fault or negligence of their employees but only if
the employees are acting within the scope of
their assigned tasks. An act is deemed an
assigned task if it is "done by an employee, in
furtherance of the interests of the employer or
for the account of the employer at the time of the
infliction of the injury or damage."
Considering that petitioner failed to
dispute the presumption of negligence on his
part, he was correctly deemed liable for the
damages incurred by the Bayaban Spouses when
the tricycle they were riding collided with the
van driven by petitioner's employee, Laraga.
(Raul S. Imperia v. Heirs of Neil Bayaban, and
Mary Lou Bayaban, G.R. No. 197626, October 03,
2018)
Q: Sindophil anchors its right to the Tramo
property on Transfer Certificate of Title,
which was purportedly issued by the Register
of Deeds of Pasay City. The Republic alleged
that the Tramo property was initially
registered under the name of Teodoro.
Despite the issuance of certificates of title
over the Tramo property, the Republic
claimed that the TCT in the name of Teodoro
was "spurious or of doubtful authenticity."
Sindophil countered that the Republic was
estopped from questioning the transfers
transfers and even accepted the "tremendous
amounts paid" as capital gains tax. Is
Sindophil a purchaser in good faith?
A: NO, Sandophil is not a purchaser in good faith.
The presumption of good faith and that a holder
of a title is an innocent purchaser for value may
be overcome by contrary evidence. These
annotations show that the Tramo property is
controversial and has been the subject of several
adverse claims, belying Sindophil's contention
that it acquired the property in good faith. With
Sindophil failing to prove that it was a buyer in
good faith, it cannot recover damages. (Sindophil,
Inc. v. Republic of the Philippines, G.R. No. 204594,
November 07, 2018)
Q: The Bank of the Philippine Islands issued
Spouses regularly settled their accounts with
the Bank of the Philippine Islands at first, but
started to be delinquent with their payments.
They also alleged that the Bank of the
Philippine Islands did not fully disclose to
them the Terms and Conditions on their use
of the issued credit cards. Are the Yulo
Spouses liable?
A: YES. When petitioners accepted respondent's
credit card by using it to purchase goods and
services, a contractual relationship was created
between them, "governed by the Terms and
Conditions found in the card membership
agreement. When the credit card provider failed
to prove its client's consent, even if the latter did
not deny availing of the credit card by charging
purchases on it, the credit card client may only
be charged with legal interest. (Sps. Rainier Jose
M. Yulo and Juliet L. Yulo v. BPI, G.R. No. 217044,
January 16, 2019)
Q: Melinda is the widow of Jose. They
acquired a 310-square meter lot.
Subsequently, a TCT was issued to "Jose,
married to Melinda[,]"  covering the disputed
property. Melinda discovered that the TCT
had long been canceled through a string of
transactions, and that the property was
registered under the name of Spouses
Montano. The Court found that since Jose
acquired the gift by gratuitous title during
marriage, the property was excluded from
the conjugal partnership of gains. As it was
his exclusive property, Jose can dispose it
without Melinda's consent. Is the property in
dispute a conjugal property?
A: YES, it is a conjugal property. The
circumstances here transpired prior to the
effectivity of the Family Code on August 3,
1988. Thus, petitioner and Jose's marriage and
property relations are governed by the Civil
Code. Under the Civil Code, property acquired
during marriage is presumed to be
conjugal. What must be established is that the
property was acquired during marriage.  Only
through "clear, categorical, and
convincing"  proof to the contrary will it be
considered the paraphernal property of one
(1) of the spouses. (Melinda M. Malabanan v.
Francisco Malabanan, Jr., et al., G.R. No. 187225,
March 06, 2019)
Q: Metro Bottled Water and Andrada
Construction entered into a Construction
Agreement for the construction of a
reinforced concrete manufacturing plant in
Gateway Business Park, General Trias, Cavite
for the contract price of ₱45,570,237.90. The
Construction Agreement covered all
materials, labor, equipment, and tools,
including any other works required. It
provided: 8. Change Order Without
invalidating this Agreement, the OWNER may,
at any time, order additions, deletions or
revisions in the Work by means of a Change
Order. The CONTRACTOR shall determine
whether the Change Order causes a decrease
or increase in the Purchase Price or
shortening or extension of the Contract
Period. Within three (3) days from receipt of
the Change Order, CONTRACTOR shall give
written notice to the OWNER of the value of
the works required under the Change Order
which will increase the Contract Price and of
the extension in the Contract Period
necessary to complete such works. 
On the other hand, if the Change Order
involves deletions of some works required in
the original Contract Documents, the value of
the works deleted shall be deducted from the
Contract Price and the Contract Period
shortened accordingly. In either case, any
addition or reduction in the Contract Price or
extension or shortening of the Contract
Period shall be mutually agreed in writing by
the OWNER and the CONTRACTOR prior to
the execution of the works covered by the
Change Order. The project was to be
completed within 150 calendar days or by
October 10, 1995, to be reckoned from
Andrada Construction's posting of a
Performance Bond to answer for liquidated
damages, costs to complete the project, and
third party claims. Is there Unjust
Enrichment? 
A:NO. Article 1724. The contractor who
undertakes to build a structure or any other
work for a stipulated price, in conformity with
plans and specifications agreed upon with the
land- owner, can neither withdraw from the
contract nor demand an increase in the price on
account of the higher cost of labor or materials,
save when there has been a change in the plans
and specifications, provided: (1) Such change has
been authorized by the proprietor in writing;
and (2) The additional price to be paid to the
contractor has been determined in writing by
both parties. It is settled that the contract is the
law between the parties. Without any ambiguity
in Item No. 8 of the Construction Agreement,
there was no need to resort to other aids in
interpretation, such as Article 1724 of the Civil
Code, to resolve the issue. (Metro Bottled Water
Corporation v.  Andrada Construction &
Development Corporation, Inc., G.R. No. 202430,
March 6, 2019)
Q: The Spouses Abucay purchased a 182-
hectare parcel of land from Cabahug.
Sometime in 1986, 22.8409 hectares of the
lot were declared covered under the
Operation Land Transfer Program pursuant
to Presidential Decree No. 27.  Emancipation
patents were then issued to the farmer-
beneficiaries.  The Heirs of Spouses Abucay
alleged that they inherited the 182-hectare
property upon their parents' death and
enjoyed its ownership and possession. They
claimed that they did not receive any just
compensation for the 22 hectares of the
property. Are the Heirs of Abucay the proper
parties to file the complaint for cancellation
of original certificates?
A: NO. The complaint filed by the respondents is
not proper. The Complaint for cancellation of
original certificates of title and emancipation
patents filed by respondents should be referred
to the Office of the Provincial Agrarian Reform
Adjudicator of Leyte for case buildup. Then, the
case shall be decided by the Department of
Agrarian Reform Secretary. Cases involving
registered certificates of land ownership awards,
emancipation patents, and titles emanating from
them are agrarian reform disputes, of which the
Department of Agrarian Reform Adjudication
Board takes cognizance. (Sec. of the Department
of Agrarian Reform v. Heirs of Redemptor and
Elisa Abucay, G.R. Nos. 186432 & 186964, March
12, 2019)
Q: Great Harvest hired Tan to transport 430
bags of soya beans from Tacoma to Selecta
Feeds. At Selecta Feeds, however, the
shipment was rejected. The truck and its
shipment never reached Great Harvest's
warehouse. Great Harvest asked Tan about
the missing delivery but to no avail. Is Anita
Tan liable for the lost bags of soya beans?
A: YES. Annie Tan should be liable. Common
carriers are mandated to internalize or shoulder
the costs under the contracts of carriage. This is
so because a contract of carriage is structured in
such a way that passengers or shippers
surrender total control over their persons or
goods to common carriers, fully trusting that the
latter will safely and timely deliver them to their
destination. Here, petitioner is a common carrier
obligated to exercise extraordinary
diligence over the goods entrusted to her. Her
responsibility began from the time she received
the soya beans from respondent's broker and
would only cease after she had delivered them to
the consignee or any person with the right to
receive them. (Annie Tan v. Great Harvest
Enterprises, Inc., G.R. No. 220400, March 20, 2019)
Q: BNL Management owned six (6)
condominium units at the Imperial Bayfront
Tower Condominium. BNL Management,
through its president Romeo David (David),
wrote a letter and brought up  some
concerns. It stated therein that if problems
remain unresolved, it will withold all future
payments of association dues until the issue
are resolved satisfactorily. Sevilla sent a
letter to BNL Management containing a
breakdown of its arrears in the payment of
association dues. BNL Management received
the Second Notice of Billing informing it of its
pending arrears representing unpaid
association dues. The Second Notice also
contained a warning that after a third notice
had been sent, the Association would
terminate utility services. BNL Management
received the Third Notice of Billing, still, did
not pay the arrears. Because of this, the
Association's Board of Directors, who are the
respondents herein, resolved to disconnect
the electricity and water services in the six
(6) units owned by BNL Management. This
prompted BNL Management to file a
Complaint against Uy, et al. for damages. Is
BML Management entitled to moral damages?
A: NO. Petitioner BNL Management, being a
corporation, is not entitled to moral damages.
There is no standing doctrine that corporations
are, as a matter of right, entitled to moral
damages. The existing rule is that moral damages
are not awarded to a corporation since it is
incapable of feelings or mental anguish.
Exceptions, if any, only apply pro hac vice. There
is no showing here that an exception should
apply pro hac vice in favor of petitioner BNL
Management. (Bnl Management Corporation and
Romeo David v. Reynaldo Uy, et al., G.R. No.
210297, April 03, 2019)
Q: An article written by Raffy Tulfo, and was
published in Abante Tonite, reported that a
certain Michael C. Guy (Guy), who was being
investigated for tax fraud, went to former
Department of Finance Secretary Juanita
Amatong (Secretary Amatong)'s house to ask
for help. Claiming that the article had tainted
his reputation, Guy filed a Complaint-
Affidavit against Tulfo and the following
representatives of Abante Tonite's publisher.
The RTC convicted Tulfo and Macasaet, et al.
of the crime of libel and ordered them to pay
Guy: (1) ₱5,000,000 as actual damages, and
(2) ₱5,000,000 as moral damages. The CA
affirmed the RTC’s decision, however,
modified it – awarding exemplary damages in
the amount of ₱500,000 and reduced moral
damages to ₱500,000. Later on, in its
Amended Decision, the CA deleted the
exemplary damages, as well as the actual
damages awarded by the RTC.  marriage, the two filed a Notification of
a. Is Guy entitled to actual damages?
b. Is Guy entitled to exemplary damages?
c. Is the reduction of moral damages
proper?
A:  recognition
a. NO.  declaration of capacity to remarry. In support
This Court has, time and again, emphasized
that actual damages cannot be presumed and
courts, in making an award, must point out
specific facts which could afford a basis for
measuring whatever compensatory or actual
damages are borne. An award of actual damages
is "dependent upon competent proof of the
damages suffered and the actual amount
thereof. The award must be based on the evidence
presented, not on the personal knowledge of the
court; and certainly not on flimsy, remote,
speculative and unsubstantial proof."(Michael
C. Guy v. Raffy Tulfo, et al., G.R. No. 213023, April
10, 2019)
b. YES. 
Contrary to the Court of Appeals'
pronouncement, exemplary damages may be
awarded even in the absence of aggravating
circumstances. It may be awarded "where the
circumstances of the case show the highly
reprehensible or outrageous conduct of the
offender." (Michael C. Guy v. Raffy Tulfo, et al.,
G.R. No. 213023, April 10, 2019)
c. YES.  Japanese laws;" rather, it is in the KANPO or the
Article 2219 of the Civil Code specifically
states that moral damages may be recovered in
cases of libel, slander, or defamation. The
amount of moral damages that courts may award
depends upon the set of circumstances for each
case. There is no fixed standard to determine the
amount of moral damages to be given. Courts are
given the discretion to fix the amount to be
awarded in favor of the injured party, so long as
there is sufficient basis for awarding such
amount. (Michael C. Guy v. Raffy Tulfo, et al., G.R.
No. 213023, April 10, 2019)
Q: Genevieve, a Filipino citizen, and Tetsushi
Toyo (Tetsushi), a Japanese citizen, were
married in Quezon City. After 19 years of
Divorce by Agreement, which the Mayor of
Konohana-ku, Osaka City, Japan received and
was later recorded in Tetsushi's family
register as certified by the Mayor of
Toyonaka City. Genevieve filed before the
Regional Trial Court a Petition for judicial
of foreign divorce and
of her Petition, Genevieve submitted a copy of
their (1) Divorce Certificate, (2) Tetsushi's
Family Register, (3) the Certificate of
Acceptance of the Notification of Divorce, and
(4) an English translation of the Civil Code of
Japan. The RTC rendered a Judgment denying
Genevieve's Petition noting that the copy of
the Civil Code of Japan and its English
translation submitted by Genevieve were not
duly authenticated by the Philippine Consul
in Japan, the Japanese Consul in Manila, or
the Department of Foreign Affairs. Are the
copy of the Japan Civil Code and its English
translation sufficient to prove Japan's law on
divorce, requiring no further authentication
by the Philippine Consul in Japan, the
Japanese Consul in Manila, or the Department
of Foreign Affairs?
A: NO. The English translation submitted by
petitioner was published by Eibun-Horei-Sha,
Inc., a private company in Japan engaged in
publishing English translation of Japanese laws,
which came to be known as the EHS Law Bulletin
Series. However, these translations are "not
advertised as a source of official translations of
Official Gazette where all official laws and
regulations are published, albeit in Japanese.
Accordingly, the English translation submitted
by petitioner is not an official publication
exempted from the requirement of
authentication. (Genevieve Rosal Arreza v.
Tetsushi Toyo, et al., G.R. No. 213198, July 01,
2019)
Q: Camp John Hay Development entered into
a Contractor's Agreement with Charter
Chemical. Although the Contractor's
Agreement contained no date of the units'
turnover, it allowed Charter Chemical to
choose the units for offsetting under an
offsetting scheme against the 2 Units chosen
by Charter Chemical. The contract price was
P13,239,734.16, for which Camp John Hay
Development paid P7,339,734.16. The
balance of P5,900,000.00 was ought to be
settled by offsetting the price of the two (2)
studio units. Camp John Hay Development
had initially estimated that the construction
would be completed by 2006. Because of its
failure to follow this timetable, the Camp
John Hay Suites was estimated to be
completed by 2012. Due to the subsisting
construction delay, Charter Chemical,
through counsel, wrote Camp John Hay
Development, demanding that it transfer the
units or pay the value of these units in the
sum of P6,996,517.48. Charter Chemical, filed
before the Construction Industry Arbitration
Commission a Request for Arbitration. The
arbitral tribunal ruled that Charter Chemical
was entitled to its claim for the value of the
two (2) units because Camp John Hay
Development failed to deliver the units
within the targeted completion date. Is the
remedy of rescission proper?
A: YES. Rescission on account of breach of
reciprocal obligations is provided under Article
1191 of the Civil Code:  found that John's holographic will, where he gave
ARTICLE 1191. The power to rescind
obligations is implied in reciprocal ones, in case
one of the obligors should not comply with what
is incumbent upon him. The injured party may
choose between the fulfillment and the
rescission of the obligation, with the payment of
damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if
the latter should become impossible. (Camp John
Hay Development Corporation v. Charter
Chemical and Coating Corporation, G.R. No.
19884, August 07, 2019)
Q: After John's death, Joan Miller (Joan),
through her mother Lennie Espenida
(Lennie), filed before the Regional Trial Court
a Petition for Partition and Accounting of
John's estate with a prayer for preliminary
attachment, receivership, support, and
damages. Alleging that she is John's
illegitimate child with Lennie, Joan presented
her Certificate of Live Birth which showed
John to be her registered father. 
Glenn filed a separate Petition praying that
Joan's Certificate of Live Birth be canceled.
With it, he also prayed that the Local Civil
Registrar of Gubat, Sorsogon be directed to
replace Joan's surname, Miller, with
Espenida, and that Joan use Espenida instead
of Miller in all official documents. Glenn
claimed that John did not acknowledge Joan
as a natural child, pointing out that John's
signature was not in her birth certificate.
Joan countered that while she admitted that
John did not sign her birth certificate, he
"openly and continuously recognized her as
his child during his lifetime." They alleged
that, despite John's failure to acknowledge
Joan in the birth certificate, their evidence-
the letters, the holographic will, and the
document assigning Betty as Joan's guardian-
preponderantly prove that he acknowledged
Joan as his illegitimate child. 
Is Joan Miller an acknowledged illegitimate
child?
A: YES. Applying Article 173 in relation to Article
172 of the Family Code, the Court of Appeals
Joan 1/8 of his estate, sufficiently established his
paternity. Citing Gono-Javier v. Court of Appeals,
the Court of Appeals added that "judicial
imprimatur on the holographic will is no longer
required before the paternal filiation based
thereon may be established." It held that it is
sufficient that the child is recognized in the will.
The law instantly recognizes the father's
recognition of his child the moment he executed
his will. (Glenn M Miller v. Joan Miller and the
Local Civil Registrar of Gubat, Sorsogon, G.R. NO.
200344, August 28, 2019)
Q: The Senior Vice President of TERP
Construction Corp., Escalona, made a
commitment to Banco Filipino Savings and
Mortgage Bank that TERP Corp. would pay
interest differentials to the same. However,
after TERP Corp. subsequently paid the
interests as agreed upon, it thereafter
refused to pay its unpaid balance because it
argues that Escalona was not authorized to
make such commitment. Is act of Escalona, as
Senior Vice President of TERP Corp. binding
upon it? 
A: YES. A corporation exercises its corporate
powers through its board of directors. This
power may be validly delegated to its officers,
committees, or agencies. The authority of the
board of directors to delegate its corporate
powers may either be: (1) actual; or (2)
apparent. Actual authority may be express or
implied. Express actual authority refers to the
corporate powers expressly delegated by the
board of directors. Implied actual authority, on
the other hand, can be measured by his or her
prior acts which have been ratified by the
corporation or whose benefits have been
accepted by the corporation. Here, TERP Corp.'s
subsequent act of twice paying the additional
interest Escalona committed to Banco Filipino
Bank is considered a ratification of Escalona's
acts. Moreover, Escalona likewise had apparent
authority to transact on behalf of petitioner.
Here, Banco Filipino Bank relied on Escalona’s
apparent authority to promise interest
payments, considering that Escalona was TERP
Corp.’s then senior vice president. His apparent
authority was further demonstrated by TERP
Corp. paying Banco Filipino Bank after Escalona
promised it. (Terp Construction Corporation v.
Banco Filipino Savings and Mortgage Bank, G.R.
No. 221771, September 18, 2019)