persons and family relations provcas

8/12/2019 Persons and Family Relations ProvCas

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SUMMARY OF DOCTRINES

I. PERSONS AND FAMILY RELATIONS

Art. 26, NCC

The philosophy behind Art. 26,NCC underscores the necessity for itsinclusion in our Civil Law. The CodeCommission stressed in no uncertainterms that the human personality beexalted. Thus, under this article, therihts of a person are amply protected,and damaes are provided for violationsof a person!s dinity, personality, privacyand peace of mind. "urther, theviolations mentioned in this codalprovision are not exclusive but merelyexamples and do not preclude othersimilar or analoous acts such as theone involved in thiscase. (CONCEPCION vs. COURT OFAPPEALS, G.R. No. 120706, Ja!a"#$1, 2000%

#re$udicial %uestion A pre$udicial &uestion is one

that arises in a case the resolution ofwhich is a loical antecedent of the issueinvolved therein, and the coni'ance ofwhich pertains to another tribunal. Thepre$udicial &uestion must bedeterminative of the case before thecourt but the $urisdiction to try andresolve the &uestion must be loded inanother court or tribunal.

(ore simply, for the court toappreciate the pendency of a pre$udicial&uestion, the law re&uires theconcurrence of two essential re&uisites,to wit)

a* The civil action involves an issuesimilar or intimately related to the issueraised in the criminal action+ andb* The resolution of such issuedetermines whether or not the criminalaction may proceed. (C&ING vs.COURT OF APPEALS, G.R. No.110', A)"*+ 27, 2000%

#endency of a civil action fornullity of marriae does not pose apre$udicial &uestion in a criminal case forconcubinae. The rationale behind theprinciple of pre$udicial &uestion is toavoid two conflictin decisions. "or a civilcase to be considered pre$udicial to a

criminal act ion as to cause thesuspension of the latter pendin the finaldetermination of the civil case, it mustappear not only that the said civil caseinvolves the same facts upon which thecriminal prosecution would be based, butalso that in the resolution of the issue orissues raised in the aforesaid civil action,the uilt or innocence of the accusedwould necessarily be determined. (ELTRAN vs. PEOPLE, G.R. No.1$7-67, J! 20, 2000%

P"o)"/# R* o U*os3*/4o!/ Ma""*a (A"/. 1', FC%5S!))o"/5 R/"oa/*v A))+*a/*o o/4 Fa*+# Co

Actual contribution is re&uiredby Art. - of the "amily Code, incontrast to Art. -/ . which states thatefforts in the care and maintenance ofthe family and household are reardedas contributions to the ac&uisition ofcommon property by one who has nosalary or income or wor0 or industry.The care iven by one party 1to thehome, children, and household, orspiritual or moral inspiration provided tothe other, is not included in Art.-.3ence, if actual contribution of the partyis not proved, there will be no co4ownership and no presumption of e&ualsharesThe riht to support 5for shelter* ofilleitimate children does not prevailover the riht of the spouses to e$ectthem. Article 27 of the "amily Codeexpressly provides that the obliation toive support shall be demandable from

the time the person who has the riht toreceive the same needs it formaintenance, but it shall not be paidexcept from the date of the $udicial orextra4$udicial demand. (TUMLOS vs.FERNANDE8, G.R. No. 1$76-0, A)"*+12, 2000%

8udicial 9eclaration of #resumptive9eath of a :pouse

:ince the marriae wascontracted in ;<, the applicableprovision is Art. 7, NCC which providesthat a subse&uent marriae contracteddurin the lifetime of the first spouse isilleal and void ab initio unless the prior

marriae is first annulled or dissolved,except when the first spouse 5* hasbeen absent for seven consecutive yearsat the time of the second marriaewithout the spouse present havin newsof the absentee bein alive, or 52* ifabsent for less than seven years, isenerally considered as dead andbelieved to be so by the spouse presentat the time of contractin suchsubse&uent marriae, or 57* is presumeddead accordin to Articles 7; and 7;of the Civil Code. "or the exception toapply, the subse&uent marriae musthave been made in ood faith. A $udicialdeclaration of absence of the absentee

spouse is not necessary as lon as theprescribed period of absence is met.The marriae under these exceptionalcases is deemed to be valid =untildeclared null and void by a competentcourt.> ?n contrast, under the ;"amily Code, in order that a subse&uentbiamous marriae may exceptionally beconsidered valid, the followin conditionsmust concur) 5a* the prior spouse of thecontractin party must have been absentfor four consecutive years, or two yearswhere the daner of death under thecircumstances in Article 7; of the CivilCode at the time of disappearance+ 5b*

the spouse present has a well foundedbelief that the absent spouse is alreadydead+ and 5c* there is, unli0e the old rule,a $udicial declaration of presumptivedeath of the absentee for which purposethe spouse present can institute asummary proceedin in court to as0 forthat declaration. (ARMAS vs.CALISTERIO, G. R. No. 1$667, A)"*+6, 2000% @alidity of (arriae+ (arriae Licensee&uired

A marriae license is a formalre&uirement, its absence renders themarriae void ab initio. Absence anyclaim of an exceptional character, thepurported marriae between the partiescould not be classified amon thoseexempt from the marriae licensere&uirement. (SY vs. COURT OFAPPEALS , G.R. No. 12726$, A)"*+ 12,2000%

E9)/*o "o Ma""*a L*s5

D+a"a/*o o N!++*/# o a :o*Ma""*a

The five4year period providedby law in order to exempt the futurespouses from securin a marriaelicense should be computed on the basisof a cohabitation as Bhusband and wifeBwhere the only missin factor is thespecial contract of marriae to validatethe union. ?n other words, the five4yearcommon4law cohabitation period, whichis counted bac0 from the date ofcelebration of marriae, should be aperiod of leal union had it not been forthe absence of the marriae. This <4yearperiod should be the years immediately

before the day of the marriae and itshould be a period of cohabitationcharacteri'ed by exclusivity meaninno third party was involved at any timewithin the < years and continuity thatis unbro0en. Dtherwise, if thatcontinuous <4year cohabitation iscomputed without any distinction as towhether the parties were capacitated tomarry each other durin the entire fiveyears, then the law would be sanctioninimmorality and encourain parties tohave common law relationships andplacin them on the same footin withthose who lived faithfully with theirspouse.

The "amily Code is silent as towho can file a petition to declare thenullity of a marriae. A void marriae canbe attac0ed collaterally and can be&uestioned even after the death of eitherparty. That is why the action or defensefor nullity is imprescriptible. Any properinterested party may attac0 a voidmarriae. (NI;AL vs. AYADOG, G.R.No. 1$$77', Ma"4 1, 2000%

P"o)"/# R+a/*os o U*os 3*/4o!/Ma""*a



The co4ownership in Article-- of the Civil Code re&uires that theman and woman livin toether ashusband and wife without the benefit ofmarriae must not in any way beincapacitated to marry. ?f the property isac&uired durin the time when the otherparty to the cohabitation has a subsistinmarriae, such property is presumed tobe con$ual unless it be proved that itpertains exclusively to the husband or tothe wife. (ADRIANO vs. COURT OFAPPEALS, G.R. No. 1211', Ma"4 27,2000%

II. PROPERTY

P"o)"/# o P!<+* Do**o

Li0e public street, public par0sare beyond the commerce of man and,thus, could not be the sub$ect of a leasecontract. (LANSANG vs. COURT OFAPPEALS, G.R. No. 102667, F<"!a"#2$, 2000%

!*+" * Goo Fa*/4

Eoth Article -- and Article<-6, NCC which allow full reimbursementof useful improvements and retention ofthe premises until reimbursement ismade, apply only to a possessor in oodfaith, i.e., one who builds on land with thebelief that he is the owner thereof. @erily,persons whose occupation of a realty isby sheer tolerance of its owners are notpossessors in ood faith. Neither did thepromise of the alleed owners that theywere oin to donate the premises topetitioners convert them into builders inood faith for at the time the

improvements were built on thepremises, such promise was not yetfulfilled, i.e., it was a mere expectancy ofownership that may or may not bereali'ed. (:ERONA PADA=>ILARIOvs. COURT OF APPEALS, G.R. No.1$$2?, Ja!a"# 1?, 2000%

@!*/* o T*/+5 T"*a/*o o Co=o"s4*) <# P"s"*)/*o

An action to &uiet title, under Art. -/6, NCC, is a common4law remedyfor the removal of any cloud or doubt oruncertainty on the title to real property. ?t

is essential for the plaintiff orcomplainant to have a leal or ane&uitable title to or interest in the realproperty which is the sub$ect matter ofthe action. Also, the deed, claim,encumbrance or proceedin that is beinalleed as a cloud on plaintiffFs title mustbe shown to be in fact invalid orinoperative despite its prima facieappearance of validity or leal efficacy.?t is a fundamental principle that a co4owner cannot ac&uire by prescription theshare of the other co4owners, absent anyclear repudiation of the co4ownership. ?norder that the title may prescribe in favor

of a co4owner, the followin re&uisitesmust concur) 5* the co4owner hasperformed une&uivocal acts ofrepudiation amountin to an ouster of theother co4owners+ 52* such positive acts ofrepudiation have been made 0nown tothe other co4owners+ and 57* theevidence thereof is clear and convincin.(ROLES vs. COURT OFAPPEALS, G.R. No. 12$-0?, Ma"4 1,2000%

@!*/* o T*/+5 La4s5 F"o /oE/" */o Co/"a/s5 3a*v" o R*4/s

#ersons havin leal as wellas e&uitable title to or interest in a realproperty may brin an action for &uietinof title and BtitleB here does notnecessarily denote a certificate of titleissued in favor of the person filin thesuit.

(oreover, if the plaintiff in anaction for &uietin of title is in possessionof the property bein litiated, suchaction is imprescriptible. Dne who is in

actual possession of a land, claimin tobe the owner thereof may wait until hispossession is disturbed or his title isattac0ed before ta0in steps to vindicatehis riht because his undisturbedpossession ives him a continuin rihtto see0 the aid of the courts to ascertainthe nature of the adverse claim and itseffects on his title. Althouh prescriptionand laches are distinct concepts,nonetheless in some instances, thedoctrine of laches is inapplicable wherethe action was fi led within theprescriptive period provided by law.(oreover, since laches is a creation ofe&uity, acts or conduct alleed toconstitute the same must be intentional

and une&uivocal so as to avoid in$ustice.Laches operates not really to penali'enelect or sleepin on oneFs rihts, butrather to avoid reconi'in a riht whento do so would result in a clearlyine&uitable situation.

The act of reistration of avoluntary instrument is the operative actwhich conveys or affects reistered landinsofar as third persons are concerned.3ence, even without reistration, thecontract 5oral partition* is still valid asbetween the parties. Neither a TransferCertificate of Title nor a subdivision planis essential to the validity of an oralpartition.

%uitclaims are valid contractsof waiver of property rihts. The freedomto enter into contracts, such as the&uitclaims, is protected by law and thecourts are not &uic0 to interfere with suchfreedom unless the contract is contraryto law, morals, ood customs, publicpolicy or public order. @!*/+a*s,<* o/"a/s o a*v", *vo+v /4"+*B!*s4/ o "*4/s, */4o+ o /4*" 9*s/ a*// /o "+*B!*s4 /4. The intent towaive rihts must be clearly andconvincinly shown. (oreover, when theonly proof of intent is the act of a party,

such act should be manifestly consistentand indicative of an intent to voluntarilyrelin&uish a particular riht such that noother reasonable explanation of hisconduct is possible. ( MAESTRADO vs.COURT OF APPEALS, G.R. No.1$$$- 1$$$2, Ma"4 ?, 2000%

P"" o Possss*o5 O"s4*)

Eetween the claimants,ownership shall be vested to the onewho has proven ac&uisitive prescription.Tax receipts and declarations ofownership for taxation, when coupledwith proof of actual possession of theproperty, can be the basis of a claim forownership throuh prescription.

?t is settled that o"s4*)ao/ < aB!*" <# "o!)a/*o. Gnless it is hostile,occupation and use, however lon, willnot confer title by prescription or adversepossession. The /a9 +a"a/*os a"*)/s a" o+# )"*a a*, o/o+!s*v, v* o o"s4*) *

/4 a<s o a/!a+ )!<+* aav"s )ossss*o.(CE@UENA vs.OLANTE, G. R. No. 1$7?, A)"*+ 6,2000%

Doa/*o I/" :*vos5 R)!*a/*o OI4"*/a5 Es4a/

There are 7 essential elementsof a donation) 5a* the reduction of thepatrimony of the donor+ 5b* the increasein the patrimony of the donee+ and 5c* theintent to do an act of liberality or animusdonandi . Hhen applied to a oa/*o oa *ova<+ )"o)"/#, the law furtherre&uires that the oa/*o < a * a)!<+* o!/ a /4a/ /4"

s4o!+ < a a)/a /4"oa * /4 sa o oa/*o o"* a s)a"a/ )!<+* o!/. ?ncases where the acceptance is made ina separate instrument, it is mandatedthat the donor should be notified thereofin an authentic form, to be noted in bothinstruments.

The inexistence of a donationdoes not render the repudiation of theinheritance valid. There is no validrepudiation of inheritance as there wasalready an acceptance and where thereis no showin that such acceptance wasmade thru any of the causes whichvitiate consent or there is no proof of the

existence of an un0nown will. Art. <6of the Civil Code provides I =Theacceptance or repudiation of aninheritance is irrevocable and cannot beimpuned except when it was made thruany of the causes that vitiate consent orwhen and un0nown will appears.>

Nevertheless, the nullity of therepudiation does not ipso facto operateto convert the parcels of land into resnullius to be escheated in favor of theJovernment. The repudiation, bein ofno effect whatsoever, the parcels of landshould revert to their private owner, whoalthouh bein an American citi'en is



&ualified by hereditary succession to ownthe property sub$ect of thelitiation. (REPULIC vs.GU8MAN, G.R. No.1$2?6, F<.1',2000%

9onation ?nter @ivos

A donation as a mode ofac&uirin ownership results in aneffective transfer of title over the propertyfrom the donor to the donee and thedonation is perfected from the momentthe donor 0nows of the acceptance bythe donee. And once a donation isaccepted, the donee becomes theabsolute owner of the propertydonated. 5@KLA:%GK vs. CDGT D"

A##KAL:, J.. No. 26;;6, "ebruary<,2*

PRESCRIPTION

eal actions over immovables

prescribe after thirty years. Jood faithconsists in the reasonable belief that theperson from whom the possessorreceived the thin was its owner butcould not transmit the ownershipthereof. (SERASPI vs. COURT OFAPPEALS, G.R. No. 1$-602, A)"*+ 2',2000%

P"s"*)/*o * A/*o o"Rov#a

#rescription cannot be invo0edin an action for reconveyance when theclaimant is in possession of the land tobe reconveyed. (MILLENA vs. COURT

OF APPEALS, G.R. No. 1277?7,Ja!a"# $1, 2000%

O"s4*) T4"o!4 AB!*s*/*vP"s*)/*o

Toether with actualpossession of the land, tax declarationsconstitute stron evidence of ownershipof the land occupied by aperson. U*/""!)/ av"s)ossss*o o /4 +a o" o" /4a$0 #a"s o!+ o+# "*) */oo"s4*) o /4 +a /4"o!4aB!*s*/*v )"s"*)/*o 4*4 *s ao o aB!*"* o"s4*) ao/4" "a+ "*4/s ov" *ova<+)"o)" ty. Prescription requires public,

peaceful, uninterrupted and adverse possession of the property in theconcept of an owner for ten (10)years, in case the possession is ingood faith and with a just title. (DPvs. COURT OF APPEALS, G.R. No.12?71. A)"*+ 2', 2000.%

III. SUCCESSION

S!ss*oa+ R*4/s5T"as*ss*o o5 So)

?t is a eneral rule under thelaw on succession that successionalrihts are transmitted from the momentof death of the decedent andcompulsory heirs are called to succeedby operation of law. Gnder Article //6NCC, inheritance includes all theproperty, rihts and obliations of aperson, not extinuished by his death.

?n a modal institution, thetestator states 5* the ob$ect of theinstitution, 52* the purpose or applicationof the property left by the testator, or 57*the chare imposed by the testator uponthe heir. A BmodeB imposes an obliationupon the heir or leatee but it does notaffect the efficacy of his rihts to thesuccession. Dn the other hand, in aconditional testamentary disposition, thecondition must happen or be fulfilled inorder for the heir to be entitled tosucceed the testator. The conditionsuspends but does not obliate+ and themode obliates but does not suspend.

To some extent, it is similar to aresolutory condition.S!<s/*/!/*o is the desination by thetestator of a person or persons to ta0ethe place of the heir or heirs firstinstituted. Gnder substitutions in eneral,the testator may either 5* provide for thedesination of another heir to whom theproperty shall pass in case the oriinalheir should die before himMher, renouncethe inheritance or be incapacitated toinherit, as in a simple substitution, or 52*leave hisMher property to one person withthe express chare that it be transmittedsubse&uently to another or others, as ina fideicommissary substitution.

A Hill is a personal, solemn,

revocable and free act by which a persondisposes of his property, to ta0e effectafter his death. :ince the Hill expressesthe manner in which a person intendshow his properties be disposed,the wishes and desires of the testatormust be strictly followed. Thus, a Hillcannot be the sub$ect of a compromiseareement which would thereby defeatthe very purpose of ma0in aHill. (RAADILLA vs. COURT OFAPPEALS, G.R. No. 12?71. A)"*+ 2',2000.%

#artition+ #reterition

Kvery act intended to put an

end to indivision amon co4heirs andleatees or devisees would be a partitionalthouh it would purport to be a sale, anexchane, a compromise, a donation oran extra$udicial settlement. The deed ofdonation and deed of extra4$udicialsettlement consolidated the title solely toone of the heirs and ceased the co4ownership.

The exclusion of one of thechildren of the decedent from the deedof extra$udicial settlement has the effectof preterition. This 0ind of preterition, inthe absence of proof and bad faith, doesnot $ustify a collateral attac0 on the new

TCT. The relief instead rests on Art.-, NCC to the effect that wherethe preterition is not attended by badfaith and fraud, the partition shall not berescinded but the preterited heir shall bepaid the value pertainin to her. 5@?A9DNDN vs. CDGT D" A##KAL:, J..No. 7/2/, "ebruary <, 2*

Fo"a+ RB!*"/s o a :a+*Pa"/*/*o

The intrinsic validity of partitionnot executed in a public instrument isnot undermined when no creditors areinvolved. The partition of inheritedproperty need not be embodied in apublic document so as to be effective asreards the heirs that participatedtherein. The re&uirement of Article 7<of the Civil Code that acts which have fortheir ob$ect the creation, transmission,modification or extinuishment of realrihts over immovable property, mustappear in a public instrument, is only forconvenience, non4compliance with which

does not affect the validity orenforceability of the acts of the parties asamon themselves. And neither does the:tatute of "rauds under Article -7 ofthe New Civil Code apply becausepartition amon heirs is not leallydeemed a conveyance of real property,considerin that it involves not a transferof property from one to the other butrather, a confirmation or ratification oftitle or riht of property that an heir isrenouncin in favor of another heir whoaccepts and receives theinheritance. (:ERONA PADA=>ILARIOvs. COURT OF APPEALS, G.R. No.1$$2?, Ja!a"# 1?, 2000%

I:. OLIGATIONS AND CONTRACTS

Nova/*o

Novation is never presumed+ itmust be proven as a fact either byexpress stipulation of the parties or byimplication derived from an irreconcilableincompatibility between old and newobliations or contracts. Dtherwise, theoriinal contract remains in force. (ESPINA vs. COURT OF APPEALS,G.R. No. 116'0- J! 22, 2000%

R+a/*v*/# o Co/"a/s

The eneral rule under Article7, NCC is that heirs are bound bycontracts entered into by theirpredecessors4in4interest except when therihts and obliations arisin therefromare not transmissible by 5* their nature,52* stipulation or 57* provision of law.

A ood measure for determininwhether a contract terminates upon thedeath of one of the parties is whether it isof such character that it may beperformed by the promissor!s personal



representative. "urthermore, the sub$ectmatter of the contract is a lease, which isa property riht. The death of a partydoes not excuse nonperformance of acontract which involves a property riht,and the rihts and obliations thereunderpass to the personal representatives ofthe deceased. :imilarly,nonperformance is not excused by thedeath of the party when the other partyhas a property interest in the sub$ectmatter of the contract. (D>C &OLDINGSCORP. vs. COURT OF APPEALS, G. R.No. 11'2', A)"*+ -, 2000%

O"o!s Co/"a/

The fact that no renewal wasranted removed the basis for thecontinued payment of the monthly royaltyfee. ?t is the essence of a royalty fee thatit is paid in consideration of an existinriht. ?n its ordinary acceptation, royaltiesrefer to payments made to the owner forpermittin another to use his property.oyalties are similar to the rents payable

for the use or riht to use an inventionand after the riht to use it hasterminated there is no obliation to ma0efurther royalty payments.

The MOA *s a o"o!so/"a/, 4"* /4 o/"a/*)a"/*s a" o<+* /o """*)"oa+ )"s/a/*os. Kntitlement tothe royalty fee is wholly dependent uponthe existence and subsistence of theriht for which the royalty was ranted. ?fthe reason which ave rise to thecontract has ceased to exist, the result isthat the obliation too, has ceased toexist. (GOLDEN DIAMOND vs. COURTOF APPEALS, G.R. No. 1$1$6, Ma#$1, 2000%

Po" /o Rs* * R*)"oa+O<+*a/*os

The power to rescind or resolve isiven to the in$ured party. (ore, therescission of the contracts re&uires theparties to restore to each other what theyhave received by reason of thecontracts. The rescission has the effectof abroatin the contracts in all parts.5RELIANCE COMMODITIES INC. vs.INTERMEDIATE APPELLATE COURT,G.R. No. 772?, Ma# $1, 2000%

The riht to rescind a contractinvolvin reciprocal obliations isprovided for in Article ; of the CivilCode. The law spea0s of the riht of theBin$ured partyB to choose betweenrescission or fulfillment of the obliation,with the payment of damaes in eithercase. The parties should not be allowedto rescind the contract where theythemselves did not perform theiressential obliation thereunder . ?tshould be emphasi'ed that a contract ofsale involves reciprocity between theparties.(CENTRAL AN> OF

T&E P&ILIPPINES vs. IC&ARA, G.R.No. 1$107, Ma"4 27, 2000%

Co/"a/ /o S++5 Rs*ss*o

Article ;,NCC onrescission, spea0s of obliations alreadyexistin. ?n a contract to sell, the fullpayment of the purchase price is apositive suspensive condition, the failureof which is not considered a breach,casual or serious, but simply an eventwhich prevented the obliation of thevendor to convey title from ac&uirin anyobliatory force. There can be norescission of an obliation that is non4existent, considerin that the suspensivecondition therefor has not yethappened. (PADILLA vs. PAREDES,G.R. No. 12'7, Ma"4 17, 2000%

I/")"/a/*o o Co/"a/s5Rs*ss*o

The various stipulations in a

contract should be interpreted toether. Ambiuous ones should be so construedas to conform to the sense that wouldresult if all the provisions arecomprehended $ointly.The act of treatin a contract ascancelled or rescinded on account ofinfractions by the other contractin partyis always provisional+ that is, contestableand sub$ect to $udicial determination.Hhen one party resolved or rescindedthe Areement without previous courtaction, it proceeded at its own ris0. Dnlythe final $udment of a court willconclusively and finally settle whethersuch recourse was correct in law.

?f breach is insubstantial,

rescission is not $ustified. (P&IL.NATIONAL CONSTRUCTION CORP.vs. MARS CONSTRUCTION ENT., G.R.No.1$$?0?, F<"!a"# 1-, 2000%

Eades of "raud

Gnder Article 757* of theCivil Code, contracts which areunderta0en in fraud of creditors when thelatter cannot in any manner collect theclaims due them, are rescissible. Theexistence of fraud with intent to defraudcreditor may either be presumed inaccordance with Article 7/, NCC or

duly proved in accordance with theordinary rules of evidence. 3ence, thelaw presumes that there is fraud ofcreditors when) a* There is alienationof property by ratuitous title by thedebtor who has not reserved sufficientproperty to pay his debts contractedbefore such alienation+ or b* There isalienation of property by onerous titlemade by a debtor aainst whom some

$udment has been rendered in anyinstance or some writ of attachment hasbeen issued. The decision or attachmentneed not refer to the property alienated

and need not have been obtained by theparty see0in rescission.

?n determinin whether or nota certain conveyance is fraudulent, the&uestion in every case is whether theconveyance was a bona fide transactionor a tric0 and contrivance to defeatcreditors or whether it conserves to thecreditor to the debtor or a special riht. ?tis not sufficient that it is founded on oodconsiderations or is made with bona fideintent. ?t must have both elements. ?fdefective in either of these, althouhood between the parties, it is voidableas to creditors. The &uestion as towhether or not the conveyance isfraudulent is) does it pre$udice the rihtsof the creditors The mere fact that theconveyance was founded on valuableconsideration does not necessarilyneate the presumption of fraud under

Art. 7/, NCC. There has to be avaluable consideration and thetransaction must have been made bonafide. (C4*a a* Co"). vs. Co!"/o A))a+s, G.R. No. 12?6, Ma"4 7,2000%

:o* a :o*a<+ Co/"a/s Gnder Art. -; 52*,NCC, one type ofcontract which can be declared void andinexistent is that which is absolutelysimulated or fictitious, as when there areseveral bades of simulation provin thatthe sale between the parties was notintended to have any leal effectbetween them..

Nonetheless, a sale of theentire property by a co4heir isunenforceable havin been entered intoin behalf of the co4heirs who ave noauthority or leal representation.3owever, such a contract is susceptible

of ratif ication. Hhere there is aratification, then the sale is consideredvalid and bindin. (SEN PO E>MAR>ETING CORP. vs.MARTINE8,G.R. No. 1$117, F<"!a"# ?, 2000%

Ca)a*/# /o E/" */o Co/"a/

A person is not incapacitatedto contract merely because of advancedyears of AJK or by reason of physicalinfirmities. Dnly when such ae orinfirmities impair his mental faculties tosuch extent as to prevent him fromproperly, intelliently, and fairlyprotectin his property rihts is he

considered incapacitated. (LOYOLA vs.COURT OF APPEALS, G.R. No.11-7$, F<"!a"# 2$, 2000%

Gnenforceable Contract

Article <2; of the old CivilCode, which was the prevailin law in;- and thus overned the &uestioned9eed of :ale, clearly provided that acontract is unenforceable when there isan absence of authority on the part ofone of the contractin parties. The merelapse of time cannot ive efficacy to such



a contract. The defect is such that itcannot be cured except by thesubse&uent ratification of theunenforceable contract by the person inwhose name the contract wasexecuted. (:ILLANUE:A=MIJARES vs.COURT OF APPEALS, G.R. No.10'?21, A)"*+ 12, 2000%

S*!+a/*o o Co/"a/s

:imulation is the declaration ofa fictitious will deliberately made byareement of the parties, in order toproduce, for the purposes of deception,the appearances of a $uridical act whichdoes not exist or is different what thatwhich does not exist or is different whatthat which was really executed.>Characteristic of simulation is that theapparent contract is not really desired orintended to produce leal effect or in anyway alter the $udicial situation of theparties. The re&uisites for simulationare) 5a* an outward declaration of willdifferent from the will of the parties+ 5b*the false appearance must have been

intended by mutual areement+ and 5c*the purpose is to deceive thirdpersons. (LOYOLA vs. COURT OFAPPEALS, G.R. No. 11-7$, F<"!a"#2$, 2000%

La4s5 P"s"*)/*o

Hhile a review of the decree ofreistration is no loner available afterthe expiration of the one4year periodfrom entry thereof pursuant to thedoctrine of res $udicata, an e&uitableremedy is sti ll available. Thosewronfully deprived of their property mayinitiate an action for reconveyance of the

property.(:ILLANUE:A=MIJARES vs.COURT OF APPEALS, G.R. No.10'?21, A)"*+ 12, 2000%

The essence of laches is thefailure, or nelect, for an unreasonableand unexplained lenth of time to do thatwhich, by exercisin due dilience, couldor should have been done earlier+ it isthe negligence or omission to assert aright within a reasonable time,warranting a presumption that the partyentitled to assert it either has abandonedit or declined to assert it . (GASTON vs.COURT OF APPEALS, G.R. No.116$0 J! 2?, 2000%

TRUST

E9)"ss T"!s/

Trust is the riht to thebeneficial en$oyment of property, theleal title to which is vested in another. ?tis a fiduciary relationship that oblies thetrustee to deal with the property for thebenefit of the beneficiary. Trust relationsbetween parties may either be expressor implied. An express trust is createdby the intention of the trustor or of the

parties. An implied trust comes intobeing by operation of law . Gnder Art.---, NCC Ono particular words arere&uired for the creation of an expresstrust, it bein sufficient that a trust isclearly intended.!

Hhile no time limit is imposedfor the enforcement of rihts underexpress trusts, prescription may,however, bar a beneficiary!s action forrecovery, if a repudiation of the trust isproven by clear and convincin evidenceand made 0nown to thebeneficiary. (SECUYA vs. :DA.DE SELMA, G.R. No. 1$6021,F<"!a"# 22, 2000%

SALES AND LEASE

E+/s o a Co/"a/ o Sa+

:ince the lot subse&uently soldis said to ad$oin the Bpreviously paid lotBon three sides thereof, the sub$ect lot iscapable of bein determined without theneed of any new contract. The fact thatthe exact area of these ad$oininresidential lots is sub$ect to the result of asurvey does not detract from the fact thatthey are determinate or determinable.Concomitantly, the ob$ect of the sale iscertain and determinate. Gnder Article-6,NCC, a thin sold is determinate ifat the time the contract is entered into,the thin is capable of bein determinedwithout necessity of a new or furtherareement between the parties.

There is also no reservation ofownership nor a stipulation providin fora unilateral rescission by either party.The stipulation that the Bpayment of thefull consideration based on a survey shall

be due and payable in five 5<* years fromthe execution of a formal deed of saleB isnot a condition which affects the efficacyof the contract of sale. ?t merely providesthe manner by which the fullconsideration is to be computed and thetime within which the same is to be paid.Eut it does not affect in any manner theeffectivity of the contract. (SAN ANDRESvs. RODRIGUE8, G.R. No. 1$72'7,F<"!a"# 1-, 2000%

O)/*o Mo# vs. Ea"s/ Mo#

An option contract is a preparatorycontract in which one party rants to theother, for a fixed period and under

specified conditions, the power to decide,whether or not to enter into a principalcontract, it binds the party who has iventhe option not to enter into the principalcontract with any other person durin theperiod desinated, and within that period,to enter into such contract with the one towhom the option was ranted, if the lattershould decide to use the option. ?t is aseparate areement distinct from thecontract to which the parties may enterupon the consummation of the option. Anoption contract is therefore a contractseparate from and preparatory to a

contract of sale which, if perfected, doesnot result in the perfection orconsummation of the sale.

?N T3?: CA:K, A"TK T3K#AP(KNT D" T3K Q D#T?DN(DNKP, T3K D""K TD #GC3A:K#D@?9K: "D T3K #AP(KNT DNLPD" T3K EALANCK D" T3K#GC3A:K #?CK, ?(#LP?NJ T3ATT3K BD#T?DN (DNKPB "D(: #AT

D" T3K #GC3A:K #?CK. T3?: ?:#KC?:KLP T3K K:GLT D" #AP?NJKANK:T (DNKP GN9K AT. -2D" T3K C?@?L CD9K. ?T ?: CLKAT3KN T3AT T3K #AT?K: ?N T3?:CA:K ACTGALLP KNTKK9 ?NTD ACDNTACT D" :ALK, #AT?ALLPCDN:G((ATK9 A: TD T3K#AP(KNT D" T3K #?CK. (CA:ITEDE:ELOPMENT AN> :S. CYRUSLIM, G.R. NO. 1$167?, FERUARY 1,2000%

D+*v"# * Co/"a/ o Sa+

"or while a contract of sale is

perfected by the meetin of minds uponthe thin which is the ob$ect of thecontract and upon the price, theownership of the thin sold is nottransferred to the vendee until actual orconstructive delivery of the property.3ence, the maxim non nudis pactis, sedtraditione dominiadominica rerumtransferuntur 5not mere areements buttradition transfers the ownership ofthins*.(SERASPI vs. COURT OFAPPEALS, G.R. No. 1$-602, A)"*+ 2',2000%

Gnder Article -;/, NCC, athin sold shall be understood asdelivered when it is placed in the controlor possession of the vendee. 9elivery isenerally evidenced by a writtenac0nowledment of a person that he orshe has actually received the thin or theoods, as in delivery receipts. A bill ofladin cannot substitute for a deliveryreceipt. This is because it is a writtenac0nowledment of the receipt of theoods by the carrier and an areementto transport and deliver them at a specificplace to a person named or upon hisorder. ?t does not evidence receipt of theoods by the consinee or the personnamed in the bill of ladin+ rather, it isevidence of receipt by the carrier of theoods from the shipper for transportation

and delivery. Li0ewise, a factoryconsinment invoice is not evidence ofactual delivery of the oods. An invoiceis nothin more than a detailedstatement of the nature, &uantity andcost of the thin sold. ?t is not proof thatthe thin or oods were actuallydelivered to the vendee or theconsinee. (LAO vs. COURT OFAPPEALS, G.R. No. 701$, 6067 60?-'=-?, F<"!a"# 17, 2000%

Sa+ */4 R*4/ o R)!"4as



The mere fact that the price isinade&uate does not prove support theconclusion that the contract was a loanor that the property was not at all sold.The price fixed in the sale with a riht torepurchase is not necessarily the truevalue of the land sold. The rationale isthat the vendor has the riht to fix arelatively reduced price, althouh not arossly inade&uate one, in order to affordthe vendor a retro every facility toredeem the land. Thus, inade&uacy ofthe price is not sufficient to set aside asale unless it is rossly inade&uate orpurely shoc0in to theconscience. (AAPO vs. COURT OFAPPEALS, GR No. 12'677, Ma"4 2,2000%

Coso+*a/*o o T*/+ * Pa/o R/"o Sa+

Art. 6/, NCC re&uirin a $udicial order for the consolidation of theownership in the vendee a retro to berecorded in the eistry of #roperty is

intended to minimi'e the evils which thepacto de retro sale has caused in thehands of usurers. A $udicial order isnecessary in order to determine the truenature of the transaction and to preventthe interposition of buyers in ood faithwhile the determination is bein made.Notwithstandin Art. 6/, the recordinin the eistry of #roperty of theconsolidation of ownership of the vendeeis not a condition sine &ua non to thetransfer of ownership. The essence ofthe pacto de retro sale is that title andownership of the property sold areimmediately vested in the vendee a retro,sub$ect to the resolutory condition ofrepurchase by the vendor a retro within

the stipulated period. "ailure thus of thevendor a retro to perform said resolutorycondition vests upon the vendee byoperation of law absolute title andownership over the property sold. As titleis already vested in the vendee a retro,his failure to consolidate his title under

Article 6/, NCC does not impair suchtitle or ownership for the methodprescribed thereunder is merely for thepurpose of reisterin the consolidatedtitle. 5CRU8 vs. LEIS, G.R. No. 12-2$$,Ma"4 ?, 2000%

DOULE SALE

The prior reistration of thedisputed property by the second buyerdoes not by itself confer ownership or abetter riht over the property. Article<--,NCC re&uires that such reistrationmust be coupled with ood faith. Primustempore, potior jure 5first in time,stroner in riht*. Knowledge gained bythe first buyer of the second sale cannotdefeat the first buyer's rights exceptwhere the second buyer registers ingood faith the second sale ahead of thefirst . :uch 0nowlede of the first buyer

does not bar him from availin of hisrihts under the law, amon them, toreister first his purchase as aainst thesecond buyer. Eut inconverso, knowledge gained by thesecond buyer of the first sale defeatshis rights even if he is first to registerthe second sale, since suchknowledge taints his prior registrationwith bad faith. This is the price exactedby Art. <-- for the second buyer beinable to displace the first buyer+ thatbefore the second buyer can obtainpriority over the first, he must show thathe acted in ood faith throuhout 5i.e. ininorance of the first sale and of the firstbuyerFs rihts* from the time ofac&uisition until the title is transferred tohim by reistration or failin reistration,by delivery of possession. The secondbuyer must show continuing good faithand innocence or lack of knowledge ofthe first sale until his contract ripens intofull ownership through prior registrationas provided by law . To merit protectionunder Art. <--, the second buyerust act in good faith fro the tie

of the sale until the registration of thesae. (ARICUATRO, JR. vs. COURTOF APPEALS, G.R. No. 10-?02,F<"!a"# ?, 2000%

Gnder Article <-- of the Civi lCode before the second buyer canobtain priority over the first, he ustshow that he acted in good faiththroughout (i.e., in ignorance of thefirst sale and of the first buyer!srights) " fro the tie of acquisitionuntil title is transferred to hi byregistration or failing registration, bydelivery of possession. #nowledgegained by the second buyer of the

first sale defeats his rights even if heis first to register the second sale,since such knowledge taints his priorregistration with bad faith. (ANGELAUTISTA vs. COURT OF APPEALS,G.R. No. 12$6--, Ja!a"# 1?, 2000%

La+ R)/*o

A letter iven by the vendeenotifyin the co4owner of the sale of theco4owned property cannot beconsidered compliance with the noticere&uirement of Art. 627, NCC forpurposes of leal redemption. Art. 627of the Civil Code is clear in re&uirin that

the "*// o/**a/*o s4o!+ o"o /4 vo" o" )"os)/*vvo", o/ "o a# o/4" )"so. ?nthe second place, it ma0es sense tore&uire that the notice required in rt!"#$% be given by the vendor and bynobody else. The vendor of an undividedinterest is in the best position to 0nowwho are his co4owners who under thelaw must be notified of the sale. ?t is thenotification from the seller, not fromanyone else, which can remove alldoubts as to the fact of the sale, itsperfection, and its validity, for in acontract of sale, the seller is in the best

position to confirm whether consent tothe essential obliation of sellin theproperty and transferrin ownershipthereof to the vendee has beeniven. (FRANCISCO vs. OISER, G.R.No. 1$7677, Ma# $1, 2000%

:a+**/# o S/*)!+a/*os * a LasCo/"a/

8urisprudence supports theview that when parties to a contractexpressly reserve an option to terminateor rescind a contract upon the violation ofa resolutory condition, notice ofresolution must be iven to the otherparty when such riht is exercised. ?nulueta vs. (ariano, the :C ruled thatresort to courts may be necessary whenthe riht involves the reta0in of propertywhich is not voluntarily surrendered bythe other party. The rationale for suchrulin is based on the thesis that no oneshould ta0e the law into his own hands.?n this sense, the stipulation is leallyvulnerable. #ermittin the use of

un&ualified force to repossess theproperty and without condition of noticeupon the lessee is frauht withdanerous possibilities. :uch a broadstipulation cannot be sanctioned for thereason that it would allow thelessorMowner to ta0e the law into his ownhands, and undermine the philosophybehind the remedy of forcible entry whichis to prevent breach of the peace andcriminal disorder and to compel theparty out of possession to respect andresort to the law alone to obtain what heclaims to be his.(CAMPO ASSETSCORP. vs. CLU . O. COMPANY,G.R. No. 1$?'6, Ma"4 17, 2000%

Nature of Lease of Chattels

?n the lease of chattels,the lessor loses complete control overthe chattel leased although the lesseecannot be reckless in the use thereof,otherwise, he would be responsible forthe damages to the lessor . ?n the caseof jeepney owners&operators and

jeepney drivers, the former exercisesupervision and control over the latter.The management of the business is in

the owners hands. The owner as holderof the certificate of public conveniencemust see to it that the driver follows the

route prescribed by the franchisingauthority and the rules promulgated asregards its operations. This relationshipmay be applied by analoy to taxiownersMoperators and taxidrivers. 58A9?N vs. NLC, J.. No.;26, "ebruary 27, 2*

R*4/ o F*"s/ R!sa+ o a Lss

Art. 622, NCC which onlydeals with small urban lands that arebouht for speculation where onlyad$oinin lot owners can exercise the



riht of pre4emption or redemption is notavailable to one who is not an ad$oininlot owner, but a lessee tryin to buy theland that it was leasin. ?ndeed the rihtof first refusal may be provided for in alease contract. 3owever, such rant ofthe riht of first refusal must be clearlyembodied in a written contract. 5:KN #DKR (ARKT?NJ CD#. vs.(AT?NK,J.. No. 7-/, "ebruary ;, 2* Ra+ o T" o Las

#ursuant to Art. ;6, NCC, theperiod of the lease contract is deemed tohave been set for the benefit of bothparties. enewal of the contract may behad only upon their mutual areement orat the will of both of them. ?t is the owner4lessor!s preroative to terminate thelease at its expiration. The continuance,effectivity and fulfillment of a contract oflease cannot be made to dependexclusively upon the free anduncontrolled choice of the lesseebetween continuin the payment of therentals or not, completely deprivin the

owner of any say in the matter. (utualitydoes not obtain in such a contract oflease and no e&uality exists between thelessor and the lessee since the life of thecontract would be dictated solely by thelessee. (UCE vs. COURT OFAPPEALS, G.R. No. 1$6?1$, Ma# 12,2000%

Kxtension of Lease

The provisions of a contractshould not be read in isolation from therest of the instrument but, on thecontrary, interpreted in the liht of theother related provisions in order to fix themeanin of any of its parts.

"urthermore, in a reciprocal contract li0ea lease, the period of the lease must bedeemed to have been areed upon forthe benefit of both parties, absentlanuae showin that the term wasdeliberately set for the benefit of thelessee or lessor alone. (UNI:ERSITYP&YSICIANS SER:ICES, INC. vs. CA,G.R. No. 11-0-, Ja!a"# $1,2000%

Co)/ o I)+* N Las

The prescriptive period for anaction of reformation should be countedfrom the date of execution of the lease

contract and not from the date ofextension of the same. "irst, Art. 6/spea0s of an implied new lease 5 tacitareconduccion* where at the end of thecontract, the lessee continues to en$oythe thin leased Bwith the ac&uiescenceof the lessorB, so that the duration of thelease is Bnot for the period of the oriinalcontract, but for the time established in

Article 62 and 6/.B 3ence, if theextended period of lease was expresslyareed upon by the parties, then theterm should be exactly what the partiesstipulated, not more, not less. :econd,even if the supposed -4year extended

lease be considered as an implied newlease under Art. 6/, Bthe other termsof the oriinal contractB contemplated insaid provision are only those terms whichare ermane to the lessee!s riht ofcontinued en$oyment of the propertyleased. The prescriptive period of years provided for in Art. -- forreformation of an instrument applies byoperation of law, not by the will of theparties. (ROSELLO=ENTIR vs.LEANDA, G.R. No. 12'??1, A)"*+ 12,2000%

:. TORTS AND DAMAGES

Daas

?n see0in recovery for actualdamaes it is necessary that theclaimant produce competent proof or thebest evidence obtainable such asreceipts to $ustify an award therefor.

Actual or compensatory damaescannot be presumed but must be proved

with reasonable deree of certainty.Dnly substantiated and proven expensesor those which appear to have beenenuinely incurred in connection with thedeath, wa0e or burial of the victim will bereconi'ed by the court.

Civil indemnity 5ex delicto*re&uires no proof other than the fact ofdeath of the victim and assailant!sresponsibility therefor.

Compensation for lost incomeis in the nature of damaes and as suchre&uires due proof of the damaessuffered+ there must be unbiased proofof the deceased!s averaeincome. (PEOPLE vs. EREO, G.R.122706, F<. 22, 2000%

The award authori'ed bycriminal law as civil indemnity 5ex delicto*for the offended party is mandatory uponthe findin of the fact of rape+ it isdistinct from and should not bedenominated as moral damaes whichare based on different $ural foundationand assessed by the court in theexercise of sound discretion. (PEOPLEvs. MENDIONA, G.R. No. 12?0-6, F<.21, 2000%

As a eneral rule, moral damaesare not recoverable in actions fordamaes predicated on a breach of

contract for it is not one of the itemsenumerated under Art. 22; of the CivilCode. As an exception, such damaesare recoverable) 5* in cases in which themishap results in the death of apassener, as provided in Art. /6-, inrelation to Art. 22657* of the Civil Code+and 52* in the cases in which the carrieris uilty of fraud or bad faith, as providedin Art. 222. (CALALAS vs. COURT OFAPPEALS, G.R. No. 1220$?, Ma# $1,2000%

?ndemnity for death ispresently fixed at #<,.. As to

actual damaes. Art. 2;;,NCC providesthat Bexcept as provided by law or bystipulation, one is entitled to an ade&uatecompensation only for such pecuniaryloss suffered by him as he has dulyproved.B

The civil liability of accused forindemnity for death and actual and moraldamaes is solidary

Gnder Art. 227,NCC,Bexemplary damaes as a part of the civilliability may be imposed when the crimewas committed with one or morearavatin circumstances.B (PEOPLEvs. AUTISTA, G.R. No. 1$1'0, A)"*+27, 2000%

As to the matter of moraldamaes, the law clearly states that onemay only recover moral damaes if theyare the proximate result of the otherparty!s wronful act or omission. Twoelements are re&uired. "irst, the act oromission must be the proximate result ofthe physical sufferin, mental anuish,friht, serious anxiety, besmirchedreputation, wounded feelins, moral

shoc0, social humiliation and similarin$ury. :econd, the act must bewronful. The rule has always been thatmoral damaes cannot be recoveredfrom a person who has filed a complaintaainst another in ood faith.

Hhere a party is not entitled toactual or moral damaes, an award ofexemplary damaes is li0ewisebaseless.

No premium should be placedon the riht to litiate and not everywinnin party is entitled to an automaticrant of attorney!s fees. The party mustshow that he falls under one of theinstances enumerated in Article 22 ofthe Civil Code. Hhere the award of

moral and exemplary damaes iseliminated, so must the award forattorney!s fees be deleted. (OROSA vs.COURT OF APPEALS, G. R. No.1110'0, A)"*+ -, 2000%

The amount of indemnity forloss of earnin capacity is based on theincome at the time of death and theprobable life expectancy of the victim. ?tshould be stressed that the amountrecoverable is not the entire earnins,but only that portion which thebeneficiaries would have received.Thus, indemnity for lost income refers tothe victimFs total earnins minus the

necessary livin expenses. 5#KD#LK vs.CAEAN9K, J.. No. 72/-/, "ebruary, 2*

Any person who see0s to be awardedactual or compensatory damaes due toacts of another has the burden of provinsaid damaes as well as the amountthereof. Actual damaes cannot beallowed unless supported by evidence onthe record. The court cannot rely onspeculation, con$ectures or uesswor0 asto the fact and amount of damaes. To

$ustify a rant of actual or compensatorydamaes, it is necessary to prove with a



reasonable deree of certainty, theactual amount of loss.

(oral damaes may berecovered in cases involvin actsreferred to in Art. 2, NCC. As a rule, apublic official may not recover damaesfor chares of falsehood related to hisofficial conduct unless he proves that thestatement was made with actualmalice. (A;AS, JR. vs. COURT OFAPPEALS, G.R. No. 102?67, F<"!a"#10, 2000%

The Court can only rant suchamount for expenses if they aresupported by receipts. ?n the absencethereof, no award for actual damaescan be ranted. (PEOPLE vs.ALAGON, G.R. Nos. 126-$6=$7,F<"!a"# 10, 2000%

The heirs are also entitled toreceive a compensation for the loss ofearnin capacity of the victim. Theformula for computin the same asestablished in decided cases is asfollows)

Jross NecessaryNet Karnin S Life x Annual 4LivinCapacity Kxpectancy?ncome Kxpenses.(PEOPLE vs. DANDO, G.R. No.12066, F<"!a"# 1, 2000%

AttorneyFs fees may beawarded if one who claims it iscompelled to litiate with third persons orto incur expenses to protect oneFsinterests by reason of an un$ustified actor omission on the part of the party fromwhom it is souht. 5?N9G:T?AL?N:GANCK CD(#ANP vs. EDN9A9,J.. No. 76/22, April 2, 2*

The re&uisites for an action for

damaes based on mal iciousprosecution are) 5* the fact of theprosecution and the further fact that thedefendant was himself the prosecutor,and that the action was finally terminatedwith an ac&uittal+ 52* that in brinin theaction, the prosecutor acted withoutprobable cause+ and 57* the prosecutorwas actuated or impelled by lealmalice. (AYANI vs. PANAYELECTRIC CO., G.R. No. 1$?6'0, A)"*+12, 2000%

The adverse result of an action

does not ma0e the prosecution thereofwronful neither does it sub$ect theaction to payment of damaes. The lawdoes not impose a penalty to the riht tolitiate. esort to $udicial processes, byitself, is not an evidence of ill will. As themere act of filin criminal complaint doesnot ma0e the complainant liable formalicious prosecution. There must beproof that the suit was performed byleal malice, an inexcusable intent tooppress, vex, annoy or humiliate. Acontrary rule would discourae peacefulresources to the court and un$ustlypenali'e the exercise of a citi'en!s riht

to litiate. Hhere the action is filed inood faith, no penalty should be imposedthereon. (:ILLANUE:A vs. UNITEDCOCONUT PLANTERS AN>, G.R.No. 1$'2?1, Ma"4 7, 2000%

Rov"# o Daas * N+*/A/s

?n &uasi4delict, the nelienceor fault should be clearly establishedbecause it is the basis of the action,whereas in breach of contract, the actioncan be prosecuted merely by provin theexistence of the contract and the fact thatthe oblior, in this case the commoncarrier, failed to transport his passenersafely to his destination. (CALALAS vs.COURT OF APPEALS, G.R. No.1220$?, Ma# $1, 2000%

N+*5 Eas/

Kven if the heavy rains constituted an actof Jod, one may still be held liable fordamaes to the other. The event was

not occasioned exclusively by an act ofJod or force ma$eure+ a human factor Inelience or imprudence I hadintervened. The effect then of the forcema$eure in &uestion may be deemed tohave, even if only partly, resulted fromthe participation of man. Thus, the wholeoccurrence was thereby humani'ed, as itwere, and removed from the rulesapplicable to acts of Jod. Article 67/, NCC provides that lowerestates are imposed the obliation toreceive the waters which naturally andwithout the intervention of man descendfrom hiher estates. 3owever, where thewaters which flow from a hiher state arethose which are artificially collected in

man4made laoons, any damaeoccasioned thereby entitles the owner ofthe lower or servient estate tocompensation. (REMMANENTERPRISES vs. COURT OFAPPEALS, G. R. No. 12-01', A)"*+ 6,2000%

ule Aainst 9ouble ecovery inNelience Cases

?n nelience cases, thearieved party has the choice between5* an action to enforce civil liabilityarisin from crime under Article of

the evised #enal Code+ and 52* aseparate action for &uasi delict under Article 2/6 of the Civil Code. Dnce thechoice is made, the in$ured party can notavail himself of any other remedybecause he may not recover damaestwice for the same nelient act oromission of the accused. This is the ruleaainst double recovery. ?n other words,the same act or omission can create two0inds of liability on the part of theoffender, that is, civil liability ex delicto,and civil liability quasi delicto,either ofwhich may be enforced aainst theculprit, sub$ect to the caveat under Article

2// of the Civil Code that the offendedparty can not recover damaes underboth types of liability. (RAFAEL REYESTRUC>ING CORPORATION vs.PEOPLE, G.R. No. 12?02?, A)"*+ $,2000%

L*a<*+*/# o a E!a/*oa+ Is/*/!/*o

?t is the contractual obliation of theschool to timely inform and furnishsufficient notice and information to eachand every student as to whether he orshe had already complied with all there&uirements for the conferment of aderee or whether they would beincluded amon those who will raduate.The nelient act of professor who failsto observe the rules of the school, forinstance by not promptly submitted astudent!s rade, is not only imputable tothe professor but is an act of the school,bein his employer. Kducationalinstitutions are duty4bound to inform thestudent of their academic status and notwait for the latter to in&uire from theformer. The conscious indifference of a

person to the rihts or welfare of thepersonMpersons who may be affected byhis act or omission can support a claimfor damaes. (ant of care to theconscious disregard of civil obligationcoupled with a conscious knowledge thecause naturally calculated to producethem would make the erring partyliable! 5GN?@K:?TP D" T3K KA:T vs.8A9K, J.. ND. 727--, "ebruary /,2*

:I. CREDIT TRANSACTIONS

Esa+a/*o C+a!s5 I/"s/

#ursuant to #.9. No. 6- which

became effective (arch ; wherein tobe valid, escalation clauses shouldprovide) * that there can be an increasein interest if increased by law or by the(onetary Eoard+ and 2* in order for suchstipulation to be valid, it must include aprovision for the reduction of thestipulated interest in the event that themaximum rate of interest is reduced bylaw or by the (onetary Eoard. 9espitethe validity of the escalation clause, thecontractin party may not, however,increase the stipulated interest pursuantto the Central Ean0 Circular -;- from

2Q to /Q. CE Circular -;-, althouhit has the force and effect of law, is not alaw and is not the law contemplated bythe parties. (ANCO FILIPINOSA:INGS MORTGAGE AN> vs.COURT OF APPEALS, G.R. No.12?227, Ma# $0, 2000%

Ra+ Es/a/ Mo"/a ?n a real estate mortae

contract, it is essential that the mortaorbe the absolute owner of the property tobe mortaed+ otherwise, the mortae



is void. Euyers of unreistered realproperty, especially ban0s, must exertdue dilience in ascertainin the titles ofmortaors and sellers, lest someinnocent parties be pre$udiced. "ailure toobserve such dilience may amount tobad faith and may result in the nullity ofthe mortae, as well as of thesubse&uent foreclosure andMor auctionsale. (ROLES vs. COURT OFAPPEALS, G.R. No. 12$-0?, Ma"4 1,2000%

R*4/s o a Mo"/a

A mortae is a contractentered into in order to secure thefulfillment of a principal obliation. ?t isconstituted by recordin the document inwhich it appears with the proper eistryof #roperty, althouh, even if it is notrecorded, the mortae is neverthelessbindin between the parties. Thus, theonly riht ranted by law in favor of themortaee is to demand the executionand the recordin of the document in

which the mortae is formali'ed. As aeneral rule, the mortaor retainspossession of the mortaed propertysince a mortae is merely a lien andtitle to the property does not pass to themortaee. 3owever, even thouh amortaee does not have possession ofthe property, there is no impairment ofhis security since the mortae directlyand immediately sub$ects the propertyupon which it is imposed, whoever thepossessor may be, to the fulfillment ofthe obliation for whose security it wasconstituted. ?f the debtor is unable to payhis debt, the mortae creditor mayinstitute an action to foreclose themortae, whether $udicially or

extra$udicially, whereby the mortaedproperty will then be sold at a publicauction and the proceeds therefromiven to the creditor to the extentnecessary to dischare the mortaeloan. eardless of its possessor, themortaed property may still be sold,with the prescribed formalities, in theevent of the debtorFs default in thepayment of his loan obliation.(ISAGUIRRE vs. DE LARA, G.R. No.1$'0-$, Ma# $1, 2000%

Leal edemption+ (ortae

Gnder ) *o! %+, -ection"$, B?n case the landholdin is sold to athird person without the 0nowlede of thearicultural lessee, the latter shall havethe riht to redeem the same at areasonable price and consideration.#rovided, that the entire landholdin soldmust be redeemed. #rovided further, thatwhere there are two or more ariculturallessees, each shall be entitled to saidriht of redemption only to the extent ofthe area actually cultivated by him. Theriht of redemption under this sectionmay be exercised within two 52* years

from the reistration of the sale and shallhave priority over any other riht of lealredemption.B (P&ILANCOR FINANCEvs. COURT OF APPEALS, G.R. No.12?-72, J! 26, 2000%

Co!"" a P"" o C"*/

Art. 22-2, NCC provides thatthe claims of contractors enaed in theconstruction, reconstruction or repair ofbuildins or other wor0s shall bepreferred with respect to the specificbuildin or other immovable propertyconstructed. 3owever, this provisiononly finds application when there is aconcurrence of credits, i.e. when thesame specific property of the debtor issub$ected to the claims of severalcreditors and the value of such propertyof the debtor is insufficient to pay in fullall the creditors. ?n such a situation, the&uestion of preference will arise, that is,there will be a need to determine whichof the creditors will be paid ahead of theothers. This statutory lien should only beenforced in the context of some 0ind of a

procedure where the claims of allpreferred creditors may be bindinlyad$udicated, such as in insolvencyproceedins. (J.L. ERNARDOCONSTRUCTION vs. COURT OFAPPEALS, G.R. No. 10-'27, Ja!a"#$1, 2000%

:II. LAND TITLES ANDDEEDSAGRICULTURAL TENANCYLA3S

R*s/"a/*o o La U"/4 To""sS#s/

eistration has never been amode of ac&uirin ownership over animmovable property. The purpose of theLand eistration Act is not to create orvest title but to confirm and reisteralready created and alreadyvested. (DP vs. COURT OFAPPEALS, G.R. No. 12?71, A)"*+ 2',2000%

P"oo "B!*" * La R*s/"a/*oP"o*s

The burden of proof in landreistration cases is incumbent on the

applicant who must show that he is thereal and absolute owner in fee simple ofthe land applied for. Dn him also reststhe burden to overcome the presumptionthat the land souht to be reisteredforms part of the public domainconsiderin that the inclusion in a title ofa part of the public domain nullifies thetitle.

The declaration by theapplicant that the land applied for hasbeen in the possession of herpredecessor4in4interest for a certainperiod, does not constitute the Bwell4nihincontrovertibleB and BconclusiveB

evidence re&uired in land reistration."urther, it should be noted that taxdeclaration, by itself, is not consideredconclusive evidence of ownership in landreistration cases. osario should havesubstantiated her claim with clear andconvincin evidence specifically showinthe nature of her claim. The applicantmust li0ewise prove the identity of theland. ?t must be borne in mind that whatdefines a piece of land is not the si'e orarea mentioned in its description, but theboundaries therein laid down, asenclosin the land and indicatin itslimits.

Considerin that the writ ofpossession was souhtby osario aainst persons who were inBactual possession under claim ofownership,B the latterFs possession raisesa disputable presumption of ownership.This unrebutted presumption militatesaainst the claim of osario, especiallyconsiderin the evidentiary rule under

Article -7- of the Civil Code that aclaimant of a parcel of land, suchas osario, must rely on the strenth of

his title and not on the wea0ness of thedefendantFs claim. (MARIANOTUR@UESA, ET AL.vs. ROSARIO :ALERA, G.R. No.76$71, Ja!a"# 20, 2000%

Kvidence of Dwnership

A Torrens Certificate of Titlecovers only the land described thereintoether with improvements existinthereon, if any, nothin more.

True, tax declarations do notprove ownership. 3owever, taxdeclarations can be stron evidence ofownership when accompanied bypossession for a period sufficient for

prescription. (SANTIAGO vs. COURTOF APPEALS, G.R. No. 10?111, J!2', 2000%

G"a/ o T*/+Co*"a/*o oI)"/ T*/+ o Las

Gnder the ealian doctrine,all lands of the public domain belon tothe :tate, and that the :tate is thesource of any asserted riht to ownershipin land and chared with conservation ofsuch patrimony. This same doctrine alsostates all lands not otherwise appearinto be clearly within private ownership are

presumed to belon to the :tate. 3ence,the burden of proof in overcomin thepresumption of :tate ownership of landsof the public domain is on the personapplyin for reistration. The applicantmust also show that the land sub$ect ofthe application is alienable ordisposable. The adverse possessionwhich may be the basis of a rant of titleor confirmation of an imperfect title refersonly to alienable or disposable portionsof the public domain. (RACE3ELL vs.COURT OF APPEALS, G.R. No.10727, Ja!a"# 2-, 2000%



emedies Available to Arieved #artyin eistration #roceedins

?n land reistrationproceedins, the rule is that whoever firstac&uires title to a piece of land shallprevail. This rule refers to the date of thecertificate of title and not to the date offilin of the application for reistration oftitle. 3ence, even thouh an applicantprecedes another, he may not bedeemed to have priority of riht toreister title. As such, while hisapplication is bein processed, anapplicant is duty4bound to observeviilance and to ta0e care that his riht orinterest is duly protected.

An applicant for reistrationhas but a one4year period from theissuance of the decree of reistration infavor of another applicant, within whichto &uestion the validity of the certificateof title issued pursuant to such decree.Dnce the one4year period has lapsed,the title to the land becomesindefeasible. 3owever the arieved

party is without a remedy at law. ?f theproperty has not yet passed to aninnocent purchaser for value, an actionfor reconveyance is still available. ?f theproperty has passed into the hands of aninnocent purchaser for value, the remedyis an action for damaes aainst thosewho employed the fraud, and if the latterare insolvent, an action aainst theTreasurer of the #hilippines for recoveryaainst the Assurance "und.econi'in the futility of these actions,arieved applicants souht protectionunder the provisions of the ules ofCourt by an action for revival andexecution of $udment. 3owever, theprovisions of the ules are merely

suppletory to special laws overnin landreistration proceedins and hence,cannot prevail over the latter. 53K?: D"#K9D LD#K vs. 9K CA:TD, J..No. 2;<, "ebruary 7, 2*

G"a/T"as" o F"*a" Las

?n case the holder of thecertificate shall have sold his interest inthe land before havin complied with allthe conditions thereof, the purchaserfrom the holder of the certificate shall beentitled to all the rihts of the holder ofthe certificate upon presentin hisassinment to the Chief of the Eureau of

#ublic Lands for reistration. ?n orderthat a transfer of the rihts of a holder ofa certificate of sale of friar lands may beleally effective, it is necessary that aformal certificate of transfer be drawn upand submitted to the Chief of the Eureauof #ublic Lands for his approval andreistration. The law authori'es no otherway of transferrin the rihts of a holderof a certificate of sale of friarlands. (DELA TORRE vs. COURT OFAPPEALS, G.R. No. 11$0?-, F<"!a"#', 2000%

F" Pa// ?n the liht of their open,

continuous and notorious possessionand occupation of the land, petitionersare deemed to have ac&uired byoperation of law, a riht to a rant, aovernment rant without a necessity ofa certificate of title bein issued. Theland was =sereated from the publicdomain>. Accordinly, the 9irector ofLands had no authority to issue a freepatent thereto in favor of another person.@erily, $urisprudence holds that freepatent coverin private land isvoid. (ROLES vs. COURT OFAPPEALS, G.R. No. 12$-0?, Ma"4 1,2000%

P"s!)/*v Co+!s*vsso To""s T*/+

?f a property covered byTorrens title is involved, the presumptiveconclusiveness of such title should beiven due weiht, and in the absence ofstron compellin evidence to the

contrary, the holder thereof should beconsidered as the owner of the propertyin controversy until his title is nullified ormodified in an appropriate ordinaryaction, particularly, when possession ofthe property itself is in the personsnamed in the title. (LIM vs. COURT OFAPPEALS, G.R. No. 1271-, Ja!a"#2, 2000%

Ta# The re&uisites of a tenancy

relationship are) 5* the parties are thelandowner and the tenant+ 52* thesub$ect is aricultural land+ 57* there is

consent by the landowner+ 5-* there ispersonal cultivation+ and 5<* there issharin of harvest. Tenancy relationshipcan only be created with the consent ofthe true and lawful landholder who iseither the owner, lessee, usufructuary orleal possessor of the land, and not thruthe acts of the supposed landholder whohas no riht to the land sub$ect of thetenancy. (AUTISTA vs. ARANETA,G.R. No. 1$-'2?, F<"!a"# 22, 2000%

A tenant is defined under :ection < 5a* ofepublic Act No. ;; as a person whohimself and with the aid available fromwithin his immediate farm household

cultivates the land belonin to orpossessed by another, with the latterFsconsent, for purposes of production,sharin the produce with the landholderunder the share tenancy system, orpayin to the landholder a price certainor ascertainable in produce or in moneyor both under the leasehold tenancysystem. Eriefly stated, for thisrelationship to exist, it is necessary that). The parties are the landowner andthe tenant+2. The sub$ect is aricultural land+7. There is consent+

-. The purpose is ariculturalproduction+<. There is personal cultivation+ and6. There is sharin of harvests.

Gpon proof of the existence ofthe tenancy relationship, a tenant couldavail of the riht of redemption under A7--. This riht of redemption is validlyexercised upon compliance with thefollowin re&uirements) a* theredemptioner must be an ariculturallessee or share tenant+ b* the land musthave been sold by the owner to a thirdparty without prior written notice of thesale iven to the lessee or lessees andthe 9A in accordance with :ec. , A7--, as amended+ c* only the areacultivated by the aricultural lessee maybe redeemed+ d* the riht of redemptionmust be exercised within days fromnotice+ and e* there must be an actualtender or valid consination of the entireamount which is the reasonable price ofthe land souht to be redeemed. (RUPA,SR. vs. COURT OF APPEALS, G.R.No. '012?, Ja!a"# 2-, 2000%

The riht of tenancy attachesto the landholdin by operation of law.The leasehold relation is notextinuished by the alienation or transferof the leal possession of thelandholdin. (P&ILANCOR FINANCEvs. COURT OF APPEALS, G.R. No.12?-72, J! 26, 2000%

A 7-- allows only one heirto succeed to the tenancy of thedeceased tenant in the order ofpreference prescribed by :ection ; of thesaid law. 3owever, where the land isnot cultivated by one tenant alone5predecessor of the present claimants*but with other tenants who are li0ewise

&ualified and who are related to him, thisprovision does not apply. Thus, it can besaid that the entitlement of the otherpossessors is not by virtue of successionto the rihts of a predecessor4in4interest,but in their individual capacity as tenantstherein simultaneously with anascendant.

Gnder :ection 22 of A 66</,the Comprehensive Ararian eformLaw, those entitled to the award of theland are) =:ection 22. %ualifiedEeneficiaries I the lands covered by theCA# shall be distributed as much aspossible to landless residents of thesame baranay or in the absence

thereof, landless residents of the samemunicipality in the followin order ofpriority)

a.* aricultural lessees and share tenantsb.* reular farm wor0ersc.* seasonal farmwor0ersd.* other farmwor0erse.* actual tillers or occupants of public

landsf.* collective or cooperatives of the above

beneficiaries.* others directly wor0in on the land.

(GREENFIELD REALTY CORP. vs.CARDAMA, G.R. No. 12?26, Ja!a"#2-, 2000%



#referential ihts of Tenantsunder #.9. </

:ale to one tenant alone,amon the many tenants, is sufficientcompliance with #.9. </ where thelandowner had offered his tenants thechance to buy the land which theyrespectively occupied. 59KKv. CDGTD" A##KAL:, J.. No.2<,"ebruary <, 2*

J!"*s*/*oa+ RB!*"/s

o" Ros/*/!/*o o T*/+

The re&uirements forreconstitution of title, under .A. 26,:ecs. 2 and 7, are the followin)That the petition must state 5* thenature and description of the buildinsand improvements, if any, which do notbelon to the owner of the land, and thenames and addresses of the owners ofsuch buildin and improvements, 52* thenames and addresses of the occupants

of the ad$oinin properties and of allpersons who may have any interest inthe property, and 57* that no deeds orother instrument affectin the propertymay have been presented forreistration+ and That there should benotice and publication of said petition.The failure to comply with there&uirements of publication and postinof notices prescribed in A 26 :ec. 2 7 is fatal to the $urisdiction of the court.3ence, non4compliance with the

$urisdictional re&uirements renders itsdecision approvin the reconstitution andall proceedins therein utterly null andvoid. (&EIRS OF EULALIO RAGUA vs.COURT OF APPEALS, G.R. ''-21=22

'?$66=67, Ja!a"# $1, 2000%



CASE DIGESTS

I. PERSONS AND FAMILYRELATIONS

ART. 26, NCC

CONCEPCION vs. COURT OFAPPEALS

G.R. No. 120706, Ja!a"# $1, 2000

Fa/sH :pouses Nestor and AllemNicolas reside in an apartment leased tothem by "lorence Concepcion. Thespouses enae in a $oint venture bysupplyin overnment aencies withoff ice supplies and e&uipment.:ometime in 8uly ;<, petitionerodrio, brother of the deceasedhusband of "lorence accosted Nestorand accused him of conductin anadulterous relationship with "lorence. As

a result of the incident, Nestor feltextreme embarrassment and shame thathe could no loner face his neihbors.Conse&uently, Nestor demanded publicapoloy and payment of damaes.odrio inored the demand for whichreason, the :pouses Nicolas filed a civilsuit. The TC ordered odrio to payfor moral and exemplary damaes. CAaffirmed the award.

Iss!H ?s there a leal basis for theaward of damaes

&+H Pes. The incident chared ofodrio was no less than an invasion onthe riht of Nestor as a person. Thephilosophy behind Art. 26, NCCunderscores the necessity for itsinclusion in our Civil Law. The CodeCommission stressed in no uncertainterms that the human personality beexalted. Thus, under this article, therihts of a person are amply protected,and damaes are provided for violationsof a person!s dinity, personality, privacyand peace of mind. "urther, theviolations mentioned in this codalprovision are not exclusive but merelyexamples and do not preclude othersimilar or analoous acts such as theone involved in this case.

P"!**a+ @!s/*o

C&ING vs. COURT OF APPEALSG.R. No. 110', A)"*+ 27, 2000

Fa/sH Dn - "ebruary ;;2,petitioner Chin was chared before theTC of (a0ati with four counts of estafapunishable under Article 7< par. 5b* ofthe evised #enal Code, in relation to#residential 9ecree <, otherwise0nown as the BTrust eceipts LawB. Dn

< (arch ;;2, Chin, toether with#hilippine Eloomin (ills Co. ?nc., filed acase before the TC of (anila fordeclaration of nullity of documents andfor damaes doc0eted as Civil Case No.;2466, entitled B#hilippine Eloomin(ills, ?nc. et. al. vs. Allied Ean0inCorporation.B

Dn / Auust ;;2, Chinfiled a petition before the TC4(a0ati,for the suspension of the criminalproceedins on the round of pre$udicial&uestion in a civil action. :aid courtdenied the petition to suspend.

Iss!H 9oes the pendency of a civilaction for damaes and declaration ofnullity of documents constitute apre$udicial &uestion as to warrant thesuspension of criminal proceedins

&+H ND. As defined, a pre$udicial&uestion is one that arises in a case theresolution of which is a loicalantecedent of the issue involved therein,and the coni'ance of which pertains toanother tribunal. The pre$udicial &uestion

must be determinative of the case beforethe court but the $urisdiction to try andresolve the &uestion must be loded inanother court or tribunal. ?t is a &uestionbased on a fact distinct and separatefrom the crime but so intimatelyconnected with it that it determines theuilt or innocence of the accused, and forit to suspend the criminal action, it mustappear not only that said case involvesfacts intimately related to those uponwhich the criminal prosecution would bebased but also that in the resolution ofthe issue or issues raised in the civilcase, the uilt or innocence of theaccused would necessarily bedetermined. ?t comes into play enerally

in a situation where a civil action and acriminal action are both pendin andthere exists in the former an issue whichmust be preemptively resolved beforethe criminal action may proceed,because howsoever the issue raised inthe civil action is resolved would bedeterminative $uris et de $ure of the uiltor innocence of the accused in thecriminal case. (ore simply, for the court toappreciate the pendency of a pre$udicial&uestion, the law re&uires theconcurrence of two essential re&uisites,to wit)a* The civil action involves an issue

similar or intimately related to the issueraised in the criminal action+ andb* The resolution of such issuedetermines whether or not the criminalaction may proceed.@erily, under the prevailincircumstances, the alleed pre$udicial&uestion in the civil case for declarationof nullity of documents and for damaes,does not $uris et de $ure determine theuilt or innocence of the accused in thecriminal action for estafa. Assuminaruendo that the court hearin the civilaspect of the case ad$udicates that thetransaction entered into between the

parties was not a trust receiptareement, nonetheless the uilt of theaccused could still be established andhis culpability under penal lawsdetermined by other evidence. To put itdifferently, even on the assumption thatthe documents are declared null, it doesnot ipso facto follow that such declarationof nullity shall exonerate the accusedfrom criminal prosecution and l iability.

Therefore, the civil action fordeclaration of nullity of documents andfor damaes does not constitute apre$udicial &uestion to the criminal casesfor estafa filed aainst petitioner.

ELTRAN vs. PEOPLEG.R. No. 1$7-67, J! 20, 2000

Fa/sH #etitioner (eynardo Eeltransouht a declaration of nullity of hismarriae on the round of psycholoicalincapacity before the TC of %C. 3iswife, Charmaine "elix alleed that it waspetitioner who abandoned the con$ual

home and lived with a certain womannamed (ilaros :altin. Later on, uponcomplaint of Charmaine, a criminal casefor concubinae was instituted before the(etropolitan TC of (0ti. City aainstpetitioner and his paramour. #etitionermoved to defer the proceedins aruinthat the pendency of the civil case fordeclaration of nullity of his marriaeposed a pre$udicial &uestion to thedetermination of the criminal case.

Iss!H 9oes a pendin petition fordeclaration of nullity of marriaeconstitute a pre$udicial &uestion thatshould merit the suspension of thecriminal case for concubinae

&+H ND. #endency of a civil actionfor nullity of marriae does not pose apre$udicial &uestion in a criminal case forconcubinae.

The rationale behind theprinciple of pre$udicial &uestion is toavoid two conflictin decisions. ?t has twoessential elements) 5a* the civil actioninvolves an issue similar or intimatelyrelated to the issue raised in the criminalaction+ and 5b* the resolution of suchissue determines whether or not thecriminal action may proceed. "or a civilcase to be considered pre$udicial to acriminal action as to cause the

suspension of the latter pendin the finaldetermination of the civil case, it mustappear not only that the said civil caseinvolves the same facts upon which thecriminal prosecution would be based, butalso that in the resolution of the issue orissues raised in the aforesaid civil action,the uilt or innocence of the accusedwould necessarily be determined.

?n a case for concubinae, theaccused, li0e the herein petitioner neednot present a final $udment declarin hismarriae void for he can adduceevidence in the criminal case of thenullity of his marriae other than proof of



a final $udment declarin his marriaevoid. Article - of the "amily Codeprovides)

BThe absolute nullity of aprevious marriae may be invo0ed forpurposes of remarriae on the basissolely of a final $udment declarin suchprevious marriae void.B?n 9omino vs. CA, this Court ruled thatthe import of said provision is that forpurposes of remarriae, the only leallyacceptable basis for declarin a previousmarriae an absolute nullity is a final

$udment declarin such previousmarriae void, whereas, for purposes ofother than remarriae, other evidence isacceptable.Hith reard to petitionerFs arument thathe could be ac&uitted of the chare ofconcubinae should his marriae bedeclared null and void, suffice it to statethat even a subse&uent pronouncementthat his marriae is void from thebeinnin is not a defense. #arties tothe marriae should not be permitted to

$ude for themselves its nullity, for thesame must be submitted to the $udment

of the competent courts and only whenthe nullity of the marriae is so declaredcan it be held as void, and so lon asthere is no such declaration thepresumption is that the marriae existsfor all intents and purposes. Therefore,he who cohabits with a woman not hiswife before the $udicial declaration ofnullity of the marriae assumes the ris0of bein prosecuted for concubinae.

P"o)"/# R* o U*os 3*/4o!/Ma""*a (A"/. 1', FC%5 S!))o"/5R/"oa/*v A))+*a/*o o /4 Fa*+#Co

TUMLOS vs. FERNANDE8G.R. No. 1$76-0, A)"*+ 12, 2000

Fa/sH espondent4spouses (arioand Lourdes "ernande' filed an actionfor e$ectment aainst petitioner JuillermaTumlos and her two children. ?n her

Answer, Juillerma averred that the"ernande' spouses had no cause ofaction aainst her, since she is a co4owner of the sub$ect premises asevidenced by a Contract to :ell whereinit was stated that she is a co4vendee of

the property in &uestion toether with(ario. The (TC ruled for the spouses"ernande'. Gpon appeal to the TC,Juillerma alleed that (ario andJuillerma had an amorous relationship,and that they ac&uired the property in&uestion as their love nest, that theylived toether in the apartment buildinsub$ect of the e$ectment suit with their 2children for around years, and thatJuillerma administered the property bycollectin rentals from the lessees of theother apartments, until she discoveredthat (ario deceived her as to the

annulment of his marriae. The TCruled that Juillerma and (ario ac&uiredthe property durin their cohabitation ashusband and wife, althouh without thebenefit of marriae, it concluded thatJuillerma Tumlos was a co4owner of thesub$ect property and could not be e$ectedtherefrom.

Iss!sH . 9id Juillerma have theriht of co4ownership over the property in&uestion 2. 9oes the riht to support 5forshelter* of illeitimate children prevailover the riht of the spouses to e$ectthem

&+H . ND. There was no proof ofactual contribution by Juillerma in thepurchase of the sub$ect property. 3eronly evidence was her bein named inthe Contract to :ell as the wife of (ario.:ince she failed to prove that shecontributed money to the purchase priceof the sub$ect apartment buildin, there isno basis to $ustify her co4ownership with(ario. The said property is thus

presumed to belon to the con$ualpartnership property of (ario andLourdes "ernande', it bein ac&uireddurin the subsistence of their marriaeand no other proof to the contrary. ?t isclear that actual contribution is re&uiredby Art. - of the "amily Code, incontrast to Art. -/ . which states thatefforts in the care and maintenance ofthe family and household are reardedas contributions to the ac&uisition ofcommon property by one who has nosalary or income or wor0 or industry.The care iven by one party 1to thehome, children, and household, orspiritual or moral inspiration provided tothe other, is not included in Art.-.

3ence, if actual contribution of the partyis not proved, there will be no co4ownership and no presumption of e&ualshares

2. ND. Article 27 of the"amily Code expressly provides that theobliation to ive support shall bedemandable from the time the personwho has the riht to receive the sameneeds it for maintenance, but it shall notbe paid except from the date of the

$udicial or extra4$udicial demand. Thus, itcannot be presumed. No demand wasmade by Juil lerma to ma0e theobliation to ive support for dwellin

demandable.

J!**a+ D+a"a/*o o P"s!)/*vDa/4 o a S)o!s

ARMAS vs. CALISTERIOG. R. No. 1$667, A)"*+ 6, 2000

Fa/sH Dn April 2-, ;;2, TeodoricoCalisterio died intestate, leavin parcelsof land. 3e was survived by his wife,respondent (arietta Calisterio.Teodorico was the second husband

of (arietta who had previously beenmarried to 8ames Hilliam Eounds on8anuary 7, ;-6. 8ames disappearedwithout a trace on "ebruary , ;-/.Kleven years after,(arietta found a newromance in the lovin arms of Teodoricowhen the two ot married on (ay ,;<, without (arietta havin priorlysecured a court declaration that 8ameswas presumptively dead. Dn Dctober ;, ;;2, hereinpetitioner Antonia, a survivin sister ofTeodorico, filed with the TC of %ue'onCity a petition for the rantin of letters ofadministration, claimin herself to be thesole survivin heir of Teodorico, themarriae between the latter andrespondent (arietta bein alleedlybiamous and thereby null and void.The trial court rendered a $udmentdeclarin Antonia as the sole heir of theestate of Teodorico.

Iss!H Has the subse&uent marriaebetween Teodorico and (arietta invaliddue to (arietta!s failure to secure the

$udicial declaration of the presumptive

death of 8ames

&+H ND. The subse&uent marriaewas valid. Hhen the marriae betweenTeodorico and (ariettawas solemni'edon (ay , ;<, the law in force at thattime was the Civil Code, not the "amilyCode which too0 effect only on Auust 7,;. Article 2<6 of the "amily Codeitself limited its retroactive applicationonly to cases where it thereby would notpre$udice or impair vested or ac&uiredrihts in accordance with the Civil Codeor other laws. 3ence, the applicable provision is

Art. 7, NCC which provides that asubse&uent marriae contracted durin

the lifetime of the first spouse is illealand void ab initio unless the priormarriae is first annulled or dissolved,except when the first spouse 5* hasbeen absent for seven consecutive yearsat the time of the second marriaewithout the spouse present havin newsof the absentee bein alive, or 52* ifabsent for less than seven years, isenerally considered as dead andbelieved to be so by the spouse presentat the t ime of contract in suchsubse&uent marriae, or 57* is presumeddead accordin to Articles 7; and 7;ofthe Civil Code. "or the exception toapply, the subse&uent marriae must

have been made in ood faith. A $udicialdeclaration of absence of the absenteespouse is not necessary as lon as theprescribed period of absence is met.The marriae under these exceptionalcases is deemed to be valid =untildeclared null and void by a competentcourt.> ?n contrast, under the ;"amily Code, in order that a subse&uentbiamous marriae may exceptionally beconsidered valid, the followin conditionsmust concur) 5a* the prior spouse of thecontractin party must have been absentfor four consecutive years, or two yearswhere the daner of death under the



circumstances in Article 7; of the CivilCode at the time of disappearance+ 5b*the spouse present has a well foundedbelief that the absent spouse is alreadydead+ and 5c* there is, unli0e the old rule,a $udicial declaration of presumptivedeath of the absentee for which purposethe spouse present can institute asummary proceedin in court to as0 forthat declaration.

?n the case at bar, (arietta!s firsthusband, 8ames Eounds, has beenabsent or had disappeared for more thaneleven years before she entered into asecond marriae with Teodorico. Thissecond marriae, havin beencontracted durin the reime of the CivilCode, should thus be deemed validnotwithstandin the absence of a $udicialdeclaration of presumptive death of8ames Eound. (oreover, there is nofindin that the said second marriaewas contracted in bad faith.

:a+**/# o Ma""*a5 Ma""*a L*sRB!*"

SY vs. COURT OF APPEALSG.R. No. 12726$, A)"*+ 12, 2000

Fa/sH "ilipina :y filed a petition forthe declaration of absolute nullity of hermarriae to "ernando :y on the roundof psycholoical incapacity. To show themanifestations of her husband!spsycholoical incapacity, she presentedthe followin proofs) * final $udmentrendered in her favor, in her previouspetitions for separation of property andleal separation+ 2* "ernandoFs inflictionof physical violence on her which led tothe previous conviction of her husband

for sliht physical in$uries+ 7* habitualalcoholism+ -* refusal to live with herwithout fault on her part, choosin to livewith his mistress instead+ and <* refusalto have sex with her, performin themarital act only to satisfy himself. Thepetition was denied. 3ence the present petition whereby"ilipina raises for the first time the nullityof their marriae on the round of thelac0 of marriae license at the time of thecelebration of the marriae.

Iss!H ?s the marriae between"ilipina and "ernando void from thebeinnin for lac0 of a marriae license

at the time of the ceremony

&+H The documents 5marriaecertificate, photocopies of birthcertificates of their children, marriaelicense* and pleadins submitted by"ilipina show the inconruity between thedate of the actual celebration of theirmarriae 5November <, ;/7* and thedate of the issuance of their marriaelicense 5:eptember /, ;/-*. Theineluctable conclusion is that themarriae was indeed contracted withouta marriae license. A marriae license is

a formal re&uirement, its absencerenders the marriae void ab initio.There bein no claim of an exceptionalcharacter, the purported marriaebetween "ilipina and "ernando could notbe classified amon those exempt fromthe marriae license re&uirement.

E9)/*o "o Ma""*a L*s5

D+a"a/*o o N!++*/# o a :o*Ma""*a

N*a+ vs. a#aoG.R. No. 1$$77', Ma"4 1, 2000

Fa/sH #epito NiUal was married toTeodulfa Eellones on :eptember 26,;/-. Dut of their marriae were bornherein petitioners. Teodulfa was shot by#epito resultin in her death on April 2-,;<. Dne year and eiht monthsthereafter #epito and Norma Eadayoot married without any marriae license.

?n line thereof, #epito and Normaexecuted an affidavit statin that theyhave lived toether at least five yearsand more thus exempt for securin amarriae license. #epito died in a caraccident. After their father!s death,petitioners filed a petition for declarationof nullity of the marriae of #epito andNorma allein that said marriae wasvoid for lac0 of marriae license. Normafiled a motion to dismiss on the roundthat the petitioners have no cause ofaction since they are not amon thepersons who can file action forannulment of marriae under Article -/of the "amily Code.

Iss!sH . Hhat nature ofcohabitation is contemplated by law towarrant the countin of the five4yearperiod in order to exempt the futurespouses from securin a marriaelicense

2. 9o the petitioners havethe personality to file a petition to declaretheir father!s marriae void ab initio afterhis death

&+H The <4year period should becomputed on the basis of a cohabitationas =husband and wife> where the onlymissin factor is the special contract ofmarriae to validate the union.

The two marriaes involvedherein havin been solemni'ed prior tothe effectivity of the "amily Code 5"C*,the applicable law to determine theirvalidity is the Civil Code which was thelaw in effect at the time of theircelebration. A valid marriae license is are&uisite of marriae under Art. <7 of theCivil Code, the absence of which rendersthe marriae void ab initio. 3oweverthere are several instances reconi'edby the Civil Code wherein a marriaelicense is dispensed with, one of which isthat provided in Art. /6, referrin to the

marriae of a man and a woman whohave lived toether and exclusively witheach other as husband and wife for acontinuous and unbro0en period of atleast five years before the marriae.There is no dispute that the marriae ofpetitionersF father to respondent Normawas celebrated without any marriaelicense. ?n lieu thereof, they executed anaffidavit statin that Bthey have attainedthe ae of ma$ority, and, beinunmarried, have lived toether ashusband and wife for at least five years,and that we now desire to marry eachother.B Hor0in on the assumption that#epito and Norma have lived toether ashusband and wife for five years withoutthe benefit of marriae, that five4yearperiod should be computed on the basisof a cohabitation as Bhusband and wifeBwhere the only missin factor is thespecial contract of marriae to validatethe union. ?n other words, the five4yearcommon4law cohabitation period, whichis counted bac0 from the date ofcelebration of marriae, should be aperiod of leal union had it not been for

the absence of the marriae. This <4yearperiod should be the years immediatelybefore the day of the marriae and itshould be a period of cohabitationcharacteri'ed by exclusivity meaninno third party was involved at any timewithin the < years and continuity thatis unbro0en. Dtherwise, if thatcontinuous <4year cohabitation iscomputed without any distinction as towhether the parties were capacitated tomarry each other durin the entire fiveyears, then the law would be sanctioninimmorality and encourain parties tohave common law relationships andplacin them on the same footin withthose who lived faithfully with their

spouse.

2. PK:. #etitioners have thepersonality to file the petition. 3avindetermined that the second marriaeinvolved in this case is not covered bythe exception to the re&uirement of amarriae license, it is void ab initiobecause of the absence of such element.The "amily Code is silent as to who canfile a petition to declare the nullity of amarriae. A void marriae can beattac0ed collaterally and can be&uestioned even after the death of eitherparty. That is why the action or defensefor nullity is imprescriptible. Any proper

interested party may attac0 a voidmarriae. Contrary to the trial courtFsrulin, the death of petitionerFs fatherextinuished the alleed marital bondbetween him and respondent. Theconclusion is erroneous and proceedsfrom a wron premise that there was amarriae bond that was dissolvedbetween the two. ?t should be noted thattheir marriae was void hence it isdeemed as if it never existed at all andthe death of either extinuishednothin.



P"o)"/# R+a/*os o U*os 3*/4o!/Ma""*a

ADRIANO vs. COURT OF APPEALSG.R. No. 1211', Ma"4 27, 2000.

Fa/sH The testator Lucio Adriano,married Jliceria 9orado in ;77 and theyhad 7 children, herein privaterespondents. :ometime in ;-2 or priorthereto, Lucio cohabited with @icenta@illa, with whom he had children. Allhis children by @icenta are the namedpetitioners in the instant case, with theexception of 8ose @erel, who diedbefore the inception of the proceedins.

After the death of Jliceria in;6, Lucio married @icenta. ?n ;,Lucio executed a will disposin of all hisproperties to his second wife @icenta andall his children by his first and secondmarriaes. Hhile estate settlementproceedins were pendin before theTC, petitioners instituted an action forannulment of Lucio!s will. ?n the

complaint, petitioners alleed that beforethe marriae of Lucio and their mother,@icenta, the two lived toether ashusband and wife and as such, ac&uiredproperties which became the sub$ect ofinventory and administration in thepetition for probate of the will. #etitionersclaimed that the properties be&ueathedin LucioFs will are undivided Bcivilpartnership andMor con$ual properties ofLucio and @icenta B, and thus, the willsouht to be probated should bedeclared void and ineffective insofar as itdisposes of the rihtful share orproperties of @icenta.The trial court favored the evidence ofprivate respondents, which indicated that

the purchase money for the contestedproperties came from the earnins ofLucio durin the subsistence of hismarriae to Jliceria.

Iss!H ?s @icenta a co4owner withrespect to V of the properties in &uestionor does the entire property belon to thecon$ual partnership of Lucio andJliceria

&+H ND. #etitionersF insistence thata co4ownership of properties existedbetween Lucio and @icenta durin theirperiod of cohabitation before theirmarriae in ;6 is without lawful basis

considerin that LucioFs marriae withJliceria was then subsistin. The co4ownership in Article -- of the CivilCode re&uires that the man and womanlivin toether as husband and wifewithout the benefit of marriae must notin any way be incapacitated to marry.Considerin that the property wasac&uired in ;6-, or while LucioFsmarriae with Jliceria subsisted, suchproperty is presumed to be con$ualunless it be proved that it pertainsexclusively to the husband or to the wife.

?n Eelcodero vs. CA, the :Cheld that property ac&uired by a man

while livin with a common4law wifedurin the subsistence of his marriae iscon$ual property, even when theproperty was titled in the name of thecommon4law wife. ?n such cases, aconstructive trust is deemed to havebeen created by operation of Article -<6of the Civil Code over the property whichlawfully pertains to the con$ualpartnership of the subsistin marriae.

?n @icentaFs case, it is clearthat her desination as a co4owner of theproperty in the TCT is a mista0e whichneeds to be rectified by the application ofthe foreoin provisions of Article -<6and the rulin in Eelcodero. The principlethat a trustee who ta0es aTorrens title inhis or her name cannot repudiate thetrust by relyin on the reistration, is awell40nown exception to the principle ofconclusiveness of a certificate of title.#D#KTP P"o)"/# o P!<+* Do**o

LANSANG vs. COURT OF APPEALSG.R. No. 102667, F<"!a"# 2$, 2000

Fa/sH #rivate respondents Jeneral Assembly of the Elind, ?nc. 5JAE?* and8ose ?lesias were alleedly iven officeand library space as well as 0ios0s areafor sale of food and drin0sin i'al #ar0throuh an alleed =verbalcontract of lease> awarded in ;/ bythe National #ar0s 9evelopmentCommittee 5N#9C*. To clean up i'al #ar0, the newchairman of the N#9C sent a writtennotice to JAE? and ?lesias of thetermination of the so4called verbalareement and the demand for the latterto vacate the premises and the 0ios0s.

Iss!H 9id petitioner Amado Lansanabuse his authority in orderin thee$ectment of private respondents JAE?and ?lesias

&+H ND. There is no evidence ofabuse of authority on the part of thepetitioner. Li0e public street, public par0s arebeyond the commerce of man and, thus,could not be the sub$ect of a leasecontract. Admittedly, there was nowritten contract. That privaterespondents were allowed to occupyoffice and 0ios0 spaces in the par0 was

only a matter of accommodation by theprevious administrator. This bein so,petitioner may validly discontinue theaccommodation to private respondents,who may be e$ected from the par0 whennecessary. #rivate respondents cannotand does not claim a vested riht tocontinue to occupy i'al #ar0.

!*+" * Goo Fa*/4

:ERONA PADA=>ILARIO vs. COURTOF APPEALS

G.R. No. 1$$2?, Ja!a"# 1?, 2000.

Fa/sH Dne 8acinto #ada diedintestate leavin 6 children. 3is estateincluded a parcel of land located at#oblacion, (atalom, Leyte.

9urin the lifetime of 8acinto#ada, his half4brother, "eliciano #ada,obtained permission from him to build ahouse on the northern portion of sub$ectland. Hhen "eliciano died, his son,#astor, continued livin in the housetoether with his children. #etitioner@erona #ada4Rilario, one of #astorFschildren, has been livin in that housesince ;6.

?n ;;7, private respondent:ilverio #ada bouht the co4ownershipriht over the sub$ect land of one of theheirs of 8acinto. Thereafter, hedemanded that petitioner spouses vacatethe northern portion of the sub$ect landso his family can utili'e the said area.They went throuh a series of meetinswith the baranay officials concerned forthe purpose of amicable settlement, butall earnest efforts toward that end,

failed. Conse&uently, :ilverio instituted acomplaint for e$ectment with prayer fordamaes aainst petitioner spouses.The petitioner spouses were eventuallyordered to remove their house at theirexpense unless :ilverio exercises theoption of ac&uirin the same.

Iss!H Are the petitioner spouses#ada4Rilario builders in ood faith as tobe entitled to reimbursement forimprovements made on the property

&+H No. #etitioner spousesexplicitly admitted in their Answer thatthey had been occupyin the sub$ectproperty since ;6 without ever payin

any rental as they only relied on theliberality and tolerance of the #adafamily. Considerin that they were inpossession of the sub$ect property bysheer tolerance of its owners, they 0newthat their occupation of the premises maybe terminated any time. Thus, theycannot be considered possessors norbuilders in ood faith. ?t is well4settledthat both Article -- and Article <-6,NCC which allow full reimbursement ofuseful improvements and retention of thepremises until reimbursement is made,apply only to a possessor in ood faith,i.e., one who builds on land with thebelief that he is the owner thereof. @erily,

persons whose occupation of a realty isby sheer tolerance of its owners are notpossessors in ood faith. Neither did thepromise of the alleed owners that theywere oin to donate the premises topetitioners convert them into builders inood faith for at the time theimprovements were built on thepremises, such promise was not yetfulfilled, i.e., it was a mere expectancy ofownership that may or may not bereali'ed. As such, petitioner spousescannot be said to be entitled to the valueof the improvements that they built onthe said lot.



!*+" * a Fa*/4

ISAGUIRRE vs. DE LARAG.R. No. 1$'0-$, Ma# $1, 2000

Fa/sH #etitioner ?sauirre andrespondent 9e Lara were parties in acase involvin a parcel of land whereinthere was dispute as to its ownership as

well as the nature of the transaction theyentered into reardin the disputed land.The case was resolved by the :upremeCourt which declared that 9e Lara wasthe lawful owner of the land and held thatthe contract they entered into was ane&uitable mortae and not a sale. Dn the basis of the Court!s decision,9e Lara filed a motion for execution withthe trial court for the delivery ofpossession of the land. ?sauirreopposed the motion, assertin that, asmortaee, he had the riht of retentionover the property until payment of thevalue of the improvements, aruin thathe is builder in ood faith with respect tothe said improvements he made before

the transaction was declared to be ane&uitable mortae.

Iss!H Can ?sauirre be considered abuilder in ood faith

&ELDH ND. ?:AJG?K ?: NDT AEG?L9K ?N JDD9 "A?T3. 3K ?: A#D::K::D ?N EA9 "A?T3. ?T ?:K@?9KNT T3AT #KT?T?DNK RNKH"D( T3K @KP EKJ?NN?NJ T3ATT3KK HA: KALLP ND :ALK AN9T3AT 3K 3KL9 K:#DN9KNTF:#D#KTP A: (KK :KCG?TP "DT3K #AP(KNT D" T3K LDAN

DEL?JAT?DN T3KK"DK,#KT?T?DNK (AP CLA?(K?(EG:K(KNT DNLP "DNKCK::AP KW#KN:K:+ 3DHK@K,3K ?: NDT KNT?TLK9 TDK?(EG:K(KNT "D ANP G:K"GLKW#KN:K: H3?C3 3K (AP 3A@K?NCGK9.

@!*/* o T*/+5 T"*a/*o o Co=o"s4*) <# P"s"*)/*o

ROLES vs. COURT OF APPEALSG.R. No. 12$-0?, Ma"4 1, 2000

Fa/sH The property sub$ect of thiscase is oriinally owned by Leonobles. Hhen he died, it passed to hisson :ilvino who declared the property inhis name and paid the taxes thereon.Gpon the latter!s death, his widow andchildren inherited the property.#etitioners Lucio obles, et al. were thechildren of :ilvino, and 3ilario obles istheir half4brother. The tas0 of cultivatinwas assined to Lucio while thepayment of the land taxes was entrustedto 3ilario. "or un0nown reason, the taxdeclaration of the parcel of land in the

name of :ilvino was cancelled andtransferred to Kxe&uiel Eallena. Eallenasecured a loan from Antipolo ural Ean0usin the tax declaration as security.:omehow the tax declaration wastransferred to the name of Antipolo uralEan0 and later was transferred to thename of respondent4 spouses 3ilarioand Andrea obles. Andrea secured aloan from Cardona ural Ean0 usin thetax declaration as security. "or failure topay the mortae debt, the property wasforeclosed with Cardona ural Ean0emerin as the hihest bidder. Theban0 sold the property to spouses@erel and uth :antos. ?n :ept. ;/,petitioners discovered the mortae andattempted to redeem the property butwas unsuccessful. ?n ;, thespouses :antos too0 possession of thepropertry and was able to secure a "ree#atent. #etitioners then filed an actionfor &uietin of title. espondents&uestioned their standin to sue for&uietin of tit le, contendin thatpetitioners no loner have any interest tothe property in &uestion due to the

mortae effected by 3ilario and theconse&uent foreclosure thereof by theEan0. espondents arued that 3ilariohad become the absolute owner of theproperty at the time he mortaed thesame. The CA ruled that the severaltransfers of the tax declaration of theproperty in &uestion from :ilvino until tothe spouses :antos had the effect ofdivestin petitioners of their title byprescription to 3ilario.

Iss!sH . 9o the petitioners haveappropriate title that will entitle them tothe remedy of the &uietin of title

2. 9id 3ilario ac&uire theshare of his co4owners in the disputed

property by prescription

&+H . PK:. An action to &uiet title,under Art. -/6, NCC, is a common4lawremedy for the removal of any cloud ordoubt or uncertainty on the title to realproperty. ?t is essential for the plaintiff orcomplainant to have a leal or ane&uitable title to or interest in the realproperty which is the sub$ect matter ofthe action. Also, the deed, claim,encumbrance or proceedin that is beinalleed as a cloud on plaintiffFs title mustbe shown to be in fact invalid orinoperative despite its prima facieappearance of validity or leal efficacy.

That there is an instrument or adocument which, on its face, is valid andefficacious is clear in the present case.#etitioners allee that their title asowners and possessors of the disputedproperty is clouded by the tax declarationand, subse&uently, the free patentthereto ranted to :pouses :antos.#etitioners anchor their claim on theiropen and continuous possession asowners. :pouses :antos, on the otherhand, trace their claims to Kxe&uiel, andthen to 3ilario who mortaed the sameto the Ean0 as absolute owner. ?t wasfrom Kxe&uiel that 3ilario!s claim is

rooted. 3owever, in this case, there is afailure to show Kxe&uiel!s title to theproperty in &uestion. Hhen 3ilario,therefore, mortaed the property, he didso in his capacity as mere co4ownerthereof. Conse&uently, the saidtransaction did not divest the petitioner ofthe title to the property at the time of theinstitution of the complaint for &uietin oftitle.

2. ND. 3ilario effected noclear and evident repudiation of the co4ownership. ?t is a fundamental principlethat a co4owner cannot ac&uire byprescription the share of the other co4owners, absent any clear repudiation ofthe co4ownership. ?n order that the titlemay prescribe in favor of a co4owner, thefollowin re&uisites must concur) 5* theco4owner has performed une&uivocalacts of repudiation amountin to anouster of the other co4owners+ 52* suchpositive acts of repudiation have beenmade 0nown to the other co4owners+ and57* the evidence thereof is clear andconvincin. ?n the present case, 3ilario

did not have possession of the sub$ectproperty+ neither did he exclude thepetitioners from the use and theen$oyment thereof, as they hadindisputably shared in its fruits.Li0ewise, his act of enterin into amortae contract with the ban0 cannotbe construed to be a repudiation of theco4ownership. As absolute owner of hisundivided interest in the land, he had theriht to alienate his share, as he in factdid. Neither should his payment of landtaxes in his name, as areed upon by theco4owners, be construed as arepudiation of the co4ownership. Theassertion that the declaration ofownership was tantamount to repudiation

was belied by the continued occupationand possession of the disputed propertyby the petitioners as owners.

@!*/* o T*/+5 La4s5F"o /o E/" */o Co/"a/s53a*v" o R*4/s

MAESTRADO vs. COURT OFAPPEALS

G.R. No. 1$$$- 1$$$2, Ma"4 ?,2000.

Fa/sH The spouses amon and

osario Chaves died intestate leavinseveral properties. They were survivedby their six children who later enteredinto a pro$ect of partition which wasapproved by the court. Accordinly, theestate was divided and distributed to theheirs. Lot </2, for some reasonhowever, was not included in the pro$ectof partition, nor in the inventory. 9urinthe actual partition in ;<6, Lot</2 wasdelivered to petitioners 8osefa (aestradoand her children, one of the heirs. Thenon4inclusion of said lot was discoveredonly in ;/6. ?n an effort to set thinsriht, petitioners prepared a &uitclaim in



their favor to confirm to the alleed oralareement, which notari'ed &uitclaimwas sined by the other heirs. :ix yearsafter the execution of said &uitclaim, or in;7, respondents, children of the otherheirs, discovered that Lot </2 is still inthe name of the deceased spousesChaves. They re&uested that theproperty be divided and distributed to theheirs. ?n response, petitioners filed anaction for &uietin of title. espondentsarued, amon others, that petitionershave no standin to sue for the &uietinof title and that their action is barred bylaches. They li0ewise assailed thevalidity and due execution of the&uitclaim. The trial court declaredthat Lot </2 is still common propertyand ordered its division amon the heirs.

Iss!sH . 9o the petitioners have theleal standin to sue for &uietin of title?f so, is such action barred by laches

2. ?s Lot No. </2 still acommon property

&+H . PK:. #etitioners are proper

parties to brin an action for &uietin oftitle. #ersons havin leal as well ase&uitable title to or interest in a realproperty may brin such action and BtitleBhere does not necessarily denote acertificate of title issued in favor of theperson filin the suit. (oreover, if theplaintiff in an action for &uietin of title isin possession of the property beinlitiated, such action is imprescriptible.Dne who is in actual possession of aland, claimin to be the owner thereofmay wait until his possession is disturbedor his title is attac0ed before ta0in stepsto vindicate his riht because hisundisturbed possession ives him acontinuin riht to see0 the aid of the

courts to ascertain the nature of theadverse claim and its effects on his title.

Althouh prescription and laches aredistinct concepts, nonetheless in someinstances, the doctrine of laches isinapplicable where the action was filedwithin the prescriptive period provided bylaw. Thus, laches does not apply in thiscase because petitionersF possession ofthe sub$ect lot has rendered their riht tobrin an action for &uietin of titleimprescriptible and, hence, not barred bylaches. (oreover, since laches is acreation of e&uity, acts or conductalleed to constitute the same must beintentional and une&uivocal so as to

avoid in$ustice. Laches operates notreally to penali'e nelect or sleepin ononeFs rihts, but rather to avoidreconi'in a riht when to do so wouldresult in a clearly ine&uitable situation. ?nthe case at bench, the cloud onpetitionersF title to the sub$ect propertycame about only on 9ecember , ;7when Anel Chaves transmittedrespondentsF letters to petitioners, whilepetitionersF action was filed on 9ecember22, ;7. Clearly, no laches could set inunder the circumstances sincepetitioners were prompt and viilant inprotectin their rihts.

2. ND. Lot No. </2 is noloner common property of the heirs ofthe deceased spouses Chaves.#etitionersF ownership over said lot wasac&uired by reason of the oral partitionareed upon by the deceased spousesFheirs sometime before ;<6. That oralareement was confirmed by thenotari'ed &uitclaims executed by the saidheirs. Nevertheless, respondent courtwas convinced that Lot No. </2 is stillcommon property of the heirs of thespouses Chaves because the TCTcoverin the said property is stillreistered in the name of the saidspouses. Gnfortunately, respondent courtwas oblivious to the doctrine that the actof reistration of a voluntary instrument isthe operative act which conveys oraffects reistered land insofar as thirdpersons are concerned. 3ence, evenwithout reistration, the contract is stillvalid as between the parties. Neither aTransfer Certificate of Title nor asubdivision plan is essential to thevalidity of an oral partition. :ince the oral

partition has been duly established, thenotari'ed &uitclaims confirmed such priororal areement as well as the petitionersFtitle of ownership over the sub$ect LotNo. </2. (ore importantly, independentof such oral partition, the &uitclaims inthe instant case are valid contracts ofwaiver of property rihts. The freedom toenter into contracts, such as the&uitclaims, is protected by law and thecourts are not &uic0 to interfere with suchfreedom unless the contract is contraryto law, morals, ood customs, publicpolicy or public order. %uitclaims, beincontracts of waiver, involve therelin&uishment of rihts, with 0nowledeof their existence and intent to relin&uish

them. The intent to waive rihts must beclearly and convincinly shown.(oreover, when the only proof of intentis the act of a party, such act should bemanifestly consistent and indicative of anintent to voluntarily relin&uish a particularriht such that no other reasonableexplanation of his conduct is possible. ?nthe instant case, the terms of the sub$ect&uitclaims are clear+ and the heirsFsinatures thereon have no othersinificance but their conformity theretoresultin in a valid waiver of propertyrihts.

P"" o Possss*o5 O"s4*)

CE@UENA vs. OLANTEG. R. No. 1$7?, A)"*+ 6, 2000

Fa/sH :ince ;26, a parcel of landwas declared in the name of :inforoso(endo'a, father of respondent Eolante.Hhen :inforoso died in ;7, his brother(ararito (endo'a, father of petitionersCe&uena and Lirio, too0 possession ofthe land and cultivated it with his son(iuel 5brother of petitioners*. At thesame time, respondent and her mother

continued residin in the lot. Hhenrespondent came of ae in ;-, shepaid realty taxes for the years ;724;-, and thereafter. Dn the basis of anaffidavit alleedly sined by respondentand her mother, the tax declaration in thename of :inforoso of the contested lotwas cancelled and subse&uentlydeclared in the name of (ararito in;<7 who paid its realty taxes beinnin;<2. Hhen (ararito died, (iuelcontinued cultivatin the land until ;<when he was physically ousted by therespondent. Eased on the foreoin, the trialcourt resolved the issue of lawfulownership and possession favor ofpetitioners.

Iss!H As between the claimants, whois the preferred possessor and the lawfulowner of the sub$ect parcel of land

&+H espondent is the preferredpossessor and lawful owner of thedisputed land. 9espite theirdispossession in ;<, the petitioners did

not lose leal possession becausepossession cannot be ac&uired throuhforce or violence. A possessor, even ifphysically ousted, is still deemed theleal possessor. 3owever, possessionby the petitioners does not prevail overthat of the respondent. Their possessionbefore ;< was not exclusive, as thelatter also ac&uired it before ;<.#etitioner!s father and brother, as well asthe respondent and her mother weresimultaneously in adverse possession ofthe land. Eased on Article <7 of the CivilCode, respondent is the preferredpossessor because, benefitin from herfather!s tax declaration of the sub$ect lotsince ;26, respondent has been in

possession thereof for a loner period.Dn the other hand, petitioners! fatherac&uired $oint possession only in ;<2.

As to the issue of ownership, respondentarues that she was leally presumed topossess the sub$ect land with a $ust titlesince she possessed it in the concept ofowner. Gnder Article <- of the CivilCode, she could not be oblied to showor prove such title. This is untenablesince the presumption in Article <- ismerely disputable. Article <7 settlesonly the &uestion of possession, andpossession is different from ownership.Dwnership in this case should beestablished in one of the ways provided

by law. Eetween the claimants,ownership shall be vested to the onewho has proven ac&uisitive prescription.espondent!s possession was notdisturbed until ;<7 when petitioners!father claimed the land. Eut by then, herpossession, which was in the concept ofowner I public, peaceful, anduninterrupted I had already ripened intoownership. "urthermore she herselfdeclared and paid realty taxes for thedisputed land. Tax receipts anddeclarations of ownership for taxation,when coupled with proof of actual



possession of the property, can be thebasis of a claim for ownership throuhprescription. ?n contrast, petitioners didnot ac&uire ownership despite 72 years5;<74;<* of farmin the sub$ect land.?t is settled that ownership cannot beac&uired by mere occupation. Gnless itis hostile, occupation and use, howeverlon, will not confer title by prescriptionor adverse possession. (oreover, thepetitioners cannot claim that theirpossession was public, peaceful anduninterrupted. Althouh their father andbrother aruably ac&uired ownershipthrouh extraordinary prescriptionbecause of their adverse possession of72 years, this supposed ownership cannot extend to the entire disputed lot, butmust be limited to the portion that theyactually farmed. The tax declarationsand receipts of petitioners are only primafacie, not conclusive, evidence ofownership in the absence of actual publicand adverse possession.

Doa/*o I/" :*vos5 R)!*a/*o O

I4"*/a5 Es4a/

REPULIC vs. GU8MANG.R. No.1$2?6, F<. 1', 2000

Fa/sH espondent 9avid eyJu'man, a natural born American citi'enis the son of spouses :imeon Ju'man ,naturali'ed American citi'en and 3elen(eyers Ju'man, American citi'en. ?n;6, :imeon died livin to his sole heirs3elen and 9avid an estate consistin ofseveral parcels of land located inEulacan. Thereafter, 3elen and 9avidexecuted a 9eed of Kxtra$udicial

settlement dividin and ad$udicatin tothemselves the property belonin tothe estate of :imeon. The documentwas reistered in the eister of 9eedsand the parcels of land were accordinlyreistered in the name of 3elen and9avid in undivided e&ual shares. ?n;, 3elen executed a %uitclaim 9eedconveyin to 9avid her undivided Vinterest on said lands. Dn Au. ;, ;;,she executed another 9eed of %uitclaimconfirmin the earlier &uitclaim in ;as well as modifyin the document toencompass all her other property in the#hilippines. (ore than a wee0 later,9avid executed a :pecial #ower of

Attorney 5:#A* where he ac0nowlededthat he became the owner of the parcelsof land sub$ect of the Au. ;, ;; 9eedof %uitclaim and empowerin Atty. Abellato sell or otherwise dispose of the lot.Dn "eb. , ;;, Atty. Abella, uponinstruction of 3elen, paid donor!s taxesto facilitate the reistry of the parcels ofland in the name of 9avid.

?n ;;-, upon informationfurnished by a certain Atty. Eatonbacal,showin that 9avid!s ownership of V of:imeon!s estate was defective, theJovernment filed before the TC ofEulacan a petition for escheat prayin

that V of 9avid!s interest in each of thesub$ect parcels of land be forfeited in itsfavor. #etitioner anchors its arument on

Art. W??, :ecs. / of the Constitution,which sets the rule that only "ilipinociti'en can ac&uire private lands inthe#hilippines. The exceptions are in thecase of hereditary succession and if hewas formerly a natural4born "ilipinociti'en who lost his "ilipino citi'enship.:ince 9avid!s ac&uisition of said landsdoes not fall under any of theseexceptions, 9avid could not validlyac&uire V interest in each of the sub$ectparcels of land in dispute by way of thetwo 9eed of %uitclaims as they are inreality donation inter vivos. 9avidmaintains, on the other hand, that heac&uired the property by riht ofaccretion and not by way of donation.

Iss!H :hould respondent!s V interestof the disputed parcels of land beescheated in favor of the overnment

&+H ND. Kscheat is not properunder the circumstances.

?n the first place, there is novalid donation. There are 7 essentialelements of a donation) 5a* the reductionof the patrimony of the donor+ 5b* theincrease in the patrimony of the donee+and 5c* the intent to do an act of liberalityor animus donandi . Hhen applied to adonation of an immovable property, thelaw further re&uires that the donation bemade in a public document and thatthere should be an acceptance thereofmade in the same deed of donation or ina separate public document. ?n caseswhere the acceptance is made in aseparate instrument, it is mandated thatthe donor should be notified thereof in anauthentic form, to be noted in both

instruments. Not all the elements of adonation of an immovable property arepresent in the instant case. The transferof the property by virtue of the 9eed of%uitclaim executed by 3elen resulted inthe reduction of her patrimony as donorand the conse&uent increase in thepatrimony of 9avid as donee. 3owever,3elen!s intention to perform an act ofliberality in favor of 9avid was notsufficiently established. A perusal ofthe 9eeds of %uitclaim reveals that3elen intended to convey to her son9avid certain parcels of land located inthe#hilippines, and to re4affirm the&uitclaim she executed in ; which

li0ewise declared a waiver andrenunciation of her rihts over theparcels of land . The lanuae of the9eed is clear that 3elen merelycontemplated a waiver of her rihts, titleand interest over the land in favor of9avid, and not a donation. The elementof animus donandi, therefore, wasmissin. Li0ewise the two 9eeds of%uitclaim may have been in the nature ofa public document but they lac0ed theessential element of acceptance in theproper form re&uired by law to ma0e thedonation valid. The :#A does not &ualifyas an implied acceptance by 9avid of the

alleed donation but merelyac0nowledes that 9avid owns theproperty referred to and that heauthori'es Atty. Abella to sell the same inhis name. There is no intimation,expressly or impliedly, that 9avid!sac&uisition of the parcels of land is byvirtue of 3elen!s possible donation to himand we cannot loo0 beyond the lanuaeof the document to ma0e a contraryconstruction. (oreover, it is mandatedthat if an acceptance is made in aseparate public writin the notice ofacceptance must be noted not only in thedocument containin the acceptance butalso in the 9eed of 9onation. Thesere&uisites have not been complied withand no proof of compliance appears inthe record. .The 2 %uitclaims set out theconveyance of the parcels of land by3elen in favor of 9avid but itsacceptance by 9avid does not appear inthe 9eeds, nor in the :#A.

3owever, the inexistence of adonation does not render the repudiationmade by 3elen in favor of 9avid valid.There is no valid repudiation of

inheritance as 3elen had alreadyaccepted her share of the inheritancewhen she toether with 9avid executed a9eed of Kxtra$udicial :ettlement of theKstate of :imeon. Ey virtue of suchextra$udicial settlement, the parcels ofland were reistered in her and her son!sname in undivided e&ual share and for years they possessed the lands in theconcept of owner. Art. <6 of the CivilCode provides I =The acceptance orrepudiation of an inheritance isirrevocable and cannot be impunedexcept when it was made thru any of thecauses that vitiate consent or when andun0nown will appears.> Nothin onrecord shows that 3elen!s acceptance of

her inheritance from :imeon was madethru any of the causes which vitiated herconsent nor is there any proof of theexistence of an un0nown will executedby :imeon. Thus, 3elen cannotbelatedly execute an instrument whichhas the effect of revo0in or impuninher previous acceptance of her V share.3ence, the 2 %uitclaims which sheexecuted years after her acceptancehave no leal force and effect.

Nevertheless, the nullity of therepudiation does not ipso facto operateto convert the parcels of land into resnullius to be escheated in favor of theJovernment. The repudiation, bein of

no effect whatsoever, the parcels of landshould revert to their private owner,3elen, who althouh bein an Americanciti'en is &ualified by hereditarysuccession to own the property sub$ectof the litiation.

Doa/*o I/" :*vos

:ELAS@UE8 vs. COURT OF APPEALSG.R. No. 126??6, F<"!a"# 1-, 2000



Fa/sH The spouses Cornelio A&uinoand Leoncia de Ju'man ac&uired sixpieces of real properties durin theirmarriae. They were childless and diedintestate. Leoncia de Ju'man wassurvived by her sisters Anatalia andTran&uilina. The heirs of Anatalia filed acomplaint for partition of the sixproperties aainst the heirs of Cesario@elas&ue' 5son of Tran&uilina*. ?n theiranswer, the heirs of Cesario were able toadduce uncontroverteddocumentary evidences showin thatdurin the lifetime of the spouses

A&uino, they had already disposed offour of the six properties in favor of theirpredecessors4in4interest throuhdonation or conveyance.

Iss!H 9id the heirs of Cesarioac&uire absolute ownership over theproperty in dispute as to bar an action forpartition

&+H PK:. The heirs of Cesario haveac&uired absolute and exclusiveownership over the property in

&uestion. A donation as a mode ofac&uirin ownership results in aneffective transfer of title over the propertyfrom the donor to the donee and thedonation is perfected from the momentthe donor 0nows of the acceptance bythe donee. And once a donation isaccepted, the donee becomes theabsolute owner of the property donated.The donation of the first parcel made bythe A&uino spouses to petitioners 8oseand Anastacia @elas&ue' who were thenminors was accepted throuh their fatherCesario @elas&ue', and the acceptancewas incorporated in the body of the samedeed of donation and made part of it, andwas sined by the donor and the

acceptor. Leally spea0in there wasdelivery and acceptance of the deed, andthe donation existed perfectly andirrevocably. The donation inter vivos maybe revo0ed only for the reasons providedin Articles /6, /6- and /6< of the CivilCode. The donation propter nuptias infavor of Cesario @elas&ue' and Camilade Ju'man over the third and sixthparcels includin a portion of the secondparcel became the properties of thespouses @elas&ue' since ;;. Thedeed of donation propter nuptias can berevo0ed by the non4performance of themarriae and the other causesmentioned in article 6 of the "amily

Code. The alleed reason for therepudiation of the deed, i.e., that the A&uino spouses did not intend to iveaway all their properties since Anatalia5LeonciaFs sister* had several children tosupport is not one of the rounds forrevocation of donation either inter vivosor propter nuptias, althouh the donationmiht be inofficious.

PRESCRIPTION

SERASPI vs. COURT OF APPEALSG.R. No. 1$-602, A)"*+ 2', 2000

Fa/sH (arcelino ecasa was theowner of two parcels of land. 9urin hislifetime, (arcelino contracted 7marriaes. At the time of his death in;-7, he had < children from his threemarriaes. ?n ;-, his intestate estatewas partitioned into three parts by hisheirs, each part correspondin to theshare of the heirs in each marriae. Theheirs of the first marriae, sold theirshare to 9ominador ecasa, an heir ofthe second marriae. 9ominador,representin the heirs of the secondmarriae, in turn sold the share of theheirs to %uirico and #urificacion :eraspiwhose heirs are the present petitioners.?n ;<, the :eraspis obtained a loanfrom the Ralibo ural Ean0, ?nc. 5RE?*on the security of the lands in &uestion tofinance improvements on the lands.3owever, they failed to pay the loan forwhich reason the mortae wasforeclosed and the lands were sold to

RE? as the hihest bidder.:ubse&uently, the lands were sold byRE? to (anuel ata, brother4in4law of%uirico :eraspi. ?t appears that ata, asowner of the property, allowed %uirico:eraspi to administer the property.

?n ;/-, private respondent:imeon ecasa, (arcelino!s child by histhird wife, ta0in advantae of the illnessof %uirico :eraspi, forcibly entered thelands in &uestion and too0 possessionthereof. ?n ;7, the :eraspispurchased the lands from (anuel ataand afterwards filed a complaint aainst:imeon ecasa for recovery ofpossession of the lands.

Iss!sH . ?s the action for recovery ofpossession 5 accion publiciana* barredby extinctive prescription

2. 3as :imeon ac&uiredthe ownership of the land byprescription &+H . ND. Art. - NCC providesthat real actions over immovablesprescribe after thirty years. "rom ;/-to April 2, ;/ when the action wasfiled, only thirteen years has elapsed.

2. ND. :imeon has no $ust titleor not in ood faith to ac&uire the land byac&uisitive prescription. #rivate

respondent could not have ac&uiredownership over the property throuhoccupation since, under Art. /- of theCivil Code, the ownership of a piece ofland cannot be ac&uired by occupation.Nor can he base his ownership onsuccession for the property was not partof those distributed to the heirs of thethird marriae, to which privaterespondent belons. ?t must beremembered that in the partition of theintestate estate of (arcelino ecasa, theproperties were divided into three parts,each part bein reserved for each roupof heirs belonin to one of the three

marriaes (arcelino entered into. :incethe contested parcels of land weread$udicated to the heirs of the first andsecond marriaes, it follows that privaterespondent, as heir of the third marriae,has no riht over the parcels of land.Hhile, as heir to the intestate estate ofhis father, private respondent was co4owner of all of his father!s properties,such co4ownership rihts were effectivelydissolved by the partition areed upon bythe heirs of (arcelino ecasa. Neithercan private respondent claim ood faithin his favor. Jood faith consists in thereasonable belief that the person fromwhom the possessor received the thinwas its owner but could not transmit theownership thereof. #rivate respondententered the property without the consentof the previous owner. "or all intents andpurposes, he is a mere usurper.

P"s"*)/*o * A/*o o"Rov#a

MILLENA vs. COURT OF APPEALSG.R. NO. 1277?7, JANUARY $1, 2000

Fa/sH ?n ;26, a parcel of land in9araa, Albay 5Lot /-* was dividedbetween Jreoria Listana and#otenciana (aramba) X was iven toJreoria and Y to #otenciana. Theportion owned by Jreoria was sold toJaudencia 8acob who entered the sameand started harvestin the coconutsfound therein. ?n ;66, the land waspassed on to Jaudencia!s dauhter,"elisa 8acob by virtue of an extra$udicialsettlement. :ometime in ;, "elisadiscovered that #otenciana!s son5"lorencio* was able to ac&uire a freepatent over the entire lot includin theportion ad$udicated to her.Notwithstandin "elisa!s protest filedbefore the Eureau of Lands, the heirs of"lorencio sold the entire lot to Ale$andro(illena. ?n ;;2, "elisa filed a complaintaainst Ale$andro for annulment of titleand reconveyance of the portion ownedby the former. TC ordered thereconveyance of the X portion of theland. CA affirmed the TC.

Iss!H ?s the action for reconveyancebarred by prescription

&+H ND. #rescription cannot beinvo0ed in an action for reconveyancewhen the claimant is in possession of theland to be reconveyed. Apparently,"elisa 8acob met the re&uisite elementsof possession. :he exercised controlover the parcel of land in litiationthrouh her careta0er. (oreover, herdeclaration that the land was herproperty and the payment of realproperty taxes manifested clearly thatshe was in possession of the land.Conse&uently, Ale$andro may not validly



invo0e prescription as defense aainst"elisa.

O"s4*) T4"o!4 AB!*s*/*vP"s*)/*o

DP vs. COURT OF APPEALSG.R. No. 12?71. A)"*+ 2', 2000.

Fa/sH The land in dispute consistinof ;.- hectares was oriinally owned byGlipiano (umar, whose ownership since;/ was evidenced by Tax 9eclarationNo. 7-. ?n ;<, (umar sold the landto respondent Ca$es who was issued Tax9eclaration No. 4-/< that same year.Ca$es occupied and cultivated the saidland. ?n ;6;, un0nown to Ca$es, 8ose

Alvare' succeeded in obtainin thereistration of a parcel of land with anarea of ,<2, -6. s&uare meters, inhis name for which he was issued DCTNo. <-6 on 8une 6, ;6;. The parcel ofland included the ;.- hectares occupied

by respondent. Alvare' never occupiednor introduced improvements on saidland.?n ;/2, Alvare' sold the land to thespouses Jaudencio and osario Eeduyato whom TCT No. was issued.That same year, the spouses Eeduyaobtained a loan from petitioner 9E# for#<26,. and, as security, mortaedthe land covered by TCT No. tothe ban0. ?n ;/, the :AA9 ?nvestmentCorp., and the :AA9 Aro4?ndustries,?nc., represented by Jaudencio Eeduya,and the spouses Eeduya personallyexecuted another mortae over the landin favor of 9E# to secure a loan of#,-7,.. The spouses Eeduya

later failed to pay their loans, as a resultof which, the mortae on the propertywas foreclosed and sold to 9E# as thehihest bidder. As the spouses Eeduyafailed to redeem the property, 9E#consolidated its ownership. ?t appearsthat Ca$es had also applied for a loanfrom 9E# in ;/, offerin his ;.-hectare property under Tax 9eclarationNo. 9422-/ as security for the loan.Ca$es! loan application was laterapproved. 3owever, it was found that theland mortaed by Ca$es was included inthe land covered by TCT No. inthe name of the spouses Eeduya. 9E#,therefore, cancelled the loan and

demanded immediate payment of theamount. Ca$es paid the loan to 9E# forwhich the former was issued aCancellation of (ortae releasin theproperty in &uestion from encumbrance.9E# as0ed Ca$es to vacate theproperty. As the latter refused to do so,9E# filed a complaint for recovery ofpossession with damaes aainst him.The TC of Tabilaran City declared9E# the lawful owner of the entire landcovered by TCT No. on theround that the decree of reistrationwas bindin upon the land.

Iss!H Hho has better riht to the landin dispute, 9E# or Ca$es &+H Ca$es has better riht. ?n thepresent case, Ca$es has been in actual,open, peaceful and continuouspossession of the property since ;<.3is claim based on actual occupation ofthe land is bolstered by the Tax9eclarations issued in his name.Toether with his actual possession ofthe land, these tax declarationsconstitute stron evidence of ownershipof the land occupied by him. (oreimportantly, it was established thatrespondent, havin been in possessionof the land since ;<, was the owner ofthe property when it was reistered by8ose Alvare' in ;6;, his possessiontac0ed to that of his predecessor4in4interest, (umar, which dates bac0 to;/. Clearly, more than 7 year hadelapsed before a decree of reistrationwas issued in favor of Alvare'. Thisuninterrupted adverse possession of theland for more than 7 years could onlyripen into ownership of the land throuh

ac&uisitive prescription which is a modeof ac&uirin ownership and other realrihts over immovable property.#rescription re&uires public, peaceful,uninterrupted and adverse possession ofthe property in the concept of an ownerfor ten 5* years, in case the possessionis in ood faith and with a $ust title.

Accordinly, the land in &uestion must bereconveyed in favor of Ca$es, the trueand actual owner thereof, reconveyancebein clearly the proper remedy in thiscase.

??. :GCCK::?DN

S!ss*oa+ R*4/s5 T"as*ss*o

o5 So)

RAADILLA vs. COURT OF APPEALSG.R. No. 11$72-, J! 2?, 2000

Fa/sH ?n a Codicil appended to thewill of testatrix Ale$a Eelle'a, 9r. 8oreabadilla was instituted as a devisee ofa parcel of land in Eacolod City with theobliation to deliver piculs of suaryearly to private respondent (arlenaEelle'a. :uch obliation is li0ewiseimposed upon the heirs of 9r. abadillaand their buyer, lessee, or mortaee

should they sell, lease, mortae orotherwise neotiate the propertyinvolved. The Codicil further providesthat in case of failure to comply with suchobliation, private respondent shall sei'ethe sub$ect property and shall turn it overto the near descendants of the testatrix.The Codicil allows the alienation of theproperty but only to the testatrix!s neardescendants and sister.

The lot was transferred to 9r.abadilla, who died in ;7 and wassurvived by his wife and children, one ofwhich is petitioner herein. ?n ;;,private respondent souht before the

TC of Eacolod City, the reconveyanceof the property to the survivin heirs ofthe testatrix. 9urin pre4trial, partiesadmitted that in ;;, the privaterespondent and a certain Alan A'urin, alessee of the property, arrived at anamicable settlement and assumed theobliation to deliver one hundred piculsof suar. There was no compliance withthe areement.

?n ;;, the TC dismissedthe complaint for lac0 of cause action.Dn appeal, the CA reversed the decisionof the TC. The CA orderedreconveyance of the lot to the estate of

Ale$a Eelle'a on the round of non4compliance of petitioner, as heirs of themodal heir abadilla, of the obliationunder the codicil, since ;<. 3ence thispetition.

Iss!H 9oes the private respondenthave a cause of action to institute thepresent case for reconveyance of theland in controversy aainst petititoner

&+H PK:. #rivate respondent has a

cause of action aainst petitioner. ?t is aeneral rule under the law on successionthat successional rihts are transmittedfrom the moment of death of thedecedent and compulsory heirs arecalled to succeed by operation of law.The petitioner, his mother and sisters, ascompulsory heirs of the instituted heir,9r. abadilla, succeeded the latter byoperation of law, without need of furtherproceedins, and the successional rihtswere transmitted to them from themoment of death of the decedent.Gnder Article //6 NCC, inheritanceincludes all the property, rihts andobliations of a person, not extinuishedby his death. Conformably, whatever

rihts and obliations 9r. abadilla hadby virtue of sub$ect Codicil weretransmitted to his forced heirs, at thetime of his death. :uch obliation of theinstituted heir reciprocally corresponds tothe riht of private respondent over theusufruct, the fulfillment or performance ofwhich is now bein demanded by thelatter throuh the institution of the caseat bar.

Moa+ Is/*/!/*o vs. Co*/*oa+*s/*/!/*o5 S!<s/*/!/*o

Iss!H ?s the testamentary institutionof 9r. abadilla a modal institution

&+H PK:. The institution of 9r.abadilla under sub$ect Codicil is in thenature of a modal institution.

?n a modal institution, thetestator states 5* the ob$ect of theinstitution, 52* the purpose or applicationof the property left by the testator, or 57*the chare imposed by the testator uponthe heir. A BmodeB imposes an obliationupon the heir or leatee but it does notaffect the efficacy of his rihts to thesuccession. Dn the other hand, in a



conditional testamentary disposition, thecondition must happen or be fulfilled inorder for the heir to be entitled tosucceed the testator. The conditionsuspends but does not obliate+ and themode obliates but does not suspend.To some extent, it is similar to aresolutory condition. The manner ofinstitution of 9r. abadilla under sub$ectCodicil is evidently modal in naturebecause it imposes a chare upon theinstituted heir without, however, affectinthe efficacy of such institution. "urther,since testamentary dispositions areenerally acts of liberality, an obliationimposed upon the heir should not beconsidered a condition unless it clearlyappears from the Hill itself that such wasthe intention of the testator. ?n case ofdoubt, the institution should beconsidered as modal and notconditional.

The Codicil sued upon does notcontemplate a substitution. :ubstitutionis the desination by the testator of aperson or persons to ta0e the place of

the heir or heirs first instituted. Gndersubstitutions in eneral, the testator mayeither 5* provide for the desination ofanother heir to whom the property shallpass in case the oriinal heir should diebefore himMher, renounce the inheritanceor be incapacitated to inherit, as in asimple substitution, or 52* leave hisMherproperty to one person with the expresschare that it be transmittedsubse&uently to another or others, as ina fideicommissary substitution. Theprovisions of sub$ect Codicil do notprovide that should 9r. abadilla defaultdue to predecease, incapacity orrenunciation, the testatrixFs neardescendants would substitute him. Hhat

the Codicil provides is that, should 9r.abadilla or his heirs not fulfill theconditions imposed in the Codicil, theproperty referred to shall be sei'ed andturned over to the testatrixFs neardescendants. Neither is there afideicommissary substitution. ?n afideicommissary substitution, the first heiris strictly mandated to preserve theproperty and to transmit the same later tothe second heir. ?n this case, theinstituted heir is in fact allowed under theCodicil to alienate the property providedthe neotiation is with the neardescendants or the sister of the testatrix.

Also, the near descendantsF riht to

inherit from the testatrix is not definite.The property will only pass to themshould 9r. abadilla or his heirs not fulfillthe obliation to deliver part of theusufruct to private respondent. Gnder

Article 67, the second heir or thefideicommissary to whom the property istransmitted must not be beyond onederee from the first heir or the fiduciary.?n this case, the near descendants arenot at all related to the instituted heir, 9r.abadilla.

3*++s

Iss!H Can the provisions of a Codicilbe a valid sub$ect of an amicablesettlement subse&uently entered intobetween the private respondent and thelessee of the sub$ect land whicheffectively relieves the petitioner from theobliation

&+H ND. The amicable settlementwhereby the lessee assumed theobliation in the codicil, cannot bedeemed to be a substantial andconstructive compliance of petitioner!sobliation therein as to effectivelyrelease the latter from his obliation. AHill is a personal, solemn, revocable andfree act by which a person disposes ofhis property, to ta0e effect after hisdeath. :ince the Hill expresses themanner in which a person intends howhis properties be disposed, the wishesand desires of the testator must bestrictly followed. Thus, a Hill cannot bethe sub$ect of a compromise areementwhich would thereby defeat the very

purpose of ma0in a Hill.

Pa"/*/*o5 P"/"*/*o

:IADO NON :S. COURT OF APPEALS

G.R. No. 1$72'7, F<"!a"# 1-, 2000

Fa/sH 9urin their lifetime, spouses8ulian and @irinia @iado owned a houseand lot in %ue'on City.@irinia died in;2, while 8ulian died in ;<.:urvivin them were their four children INilo, Leah, ebecca, and 9elia. Nilo and

Leah both died in ;/. The propertywas occupied and shared by ebecca,9elia and the heirs of Nilo. ?n ;,petitioners ebecca and 9elia filed acase for partition aainst the heirs ofNilo. The latter claimed absoluteownership based on two documents, 5*a deed of donation executed by 8uliancoverin his one4half con$ual share ofthe property in favor of Nilo and 52* adeed of extra$udicial settlement in which8ulian, Leah and ebecca waived infavor of Nilo their rihts and interestsover their share of the property inheritedfrom @irinia, which documents were thebasis of the cancellation of DCT and theissuance of a TCT in the their name.#etitioners attac0ed the validity of theforeoin instruments, contendin thatNilo employed forery and undueinfluence to coerce 8ulian to execute thedeed of donation. ebecca averred thatNilo employed fraud to procure hersinature to the deed of extra$udicialsettlement. :he added that the exclusionof her retardate sister, 9elia, in theextra$udicial settlement, resulted in thelatterFs preterition that should warrant itsannulment.

Iss!sH . 9id the heirs of Nilo ac&uireabsolute ownership over the property in&uestion

2. Hhat is the effect of theexclusion of 9elia in the extra$udicialsettlement

&+H . Hhen @irinia died intestatein ;2, her part of the con$ual propertywas transmitted to her heirs herhusband 8ulian and their children. Theinheritance, which vested from themoment of death of the decedent,remained under a co4ownership reimeamon the heirs until partition. Kvery actintended to put an end to indivisionamon co4heirs and leatees or deviseeswould be a partition althouh it wouldpurport to be a sale, an exchane, acompromise, a donation or anextra$udicial settlement. The deed ofdonation and deed of extra4$udicialsettlement consolidated the title solely toNilo and ceased the co4ownership.

2. The exclusion of 9elia@iado from the deed of extra$udicial

settlement has the effect of preterition.This 0ind of preterition, in the absence ofproof and bad faith, does not $ustify acollateral attac0 on the new TCT. Therelief instead rests on Art.-, NCC tothe effect that where the preterition is notattended by bad faith and fraud, thepartition shall not be rescinded but thepreterited heir shall be paid the valuepertainin to her. Therefore, the value ofthe property must be ascertained todetermine the amount due to 9elia.

Fo"a+ "B!*"/s o a va+*)a"/*/*o

:ERONA PADA=>ILARIO vs. COURTOF APPEALS

J.. No. 7-72;, 8anuary ;, 2.

Fa/sH :ometime in (ay, ;<, theheirs of 8acinto #ada entered into anextra4$udicial partition of his estate whichincludes a parcel of land in Leyte. Thepartition was not reistered as it waswritten in a private document. The landwas allocated to 2 of the heirs, Ananiasand (arciano. (eanwhile, petitionerspouses occupied the northern portion ofthe sub$ect land with the consent of theheirs of 8acinto.

?n ;;7, (aria #ada sold theco4ownership riht of her father,(arciano to private respondent, :ilverio#ada. Thereafter, :ilverio demandedthat petitioner spouses vacate thenorthern portion of the sub$ect land sohis family can utili'e the said area. Hhenconciliation proceedins failed, :ilveriofiled in the (CTC of (atalom, Leyte, acomplaint for e$ectment aainst petitionerspouses.

The (CTC sustained thepossession of petitioner spouses andheld that the extra4$udicial partition wasnot valid since it was executed in a



private document and was neverreistered. Dn appeal, the TC reversedthe decision of the lower court holdinthat (aria #ada was the leal owner ofthe property sold. The CA affirmed thedecision of the TC holdin that the;< extra$udicial partition bein lealand effective as amon 8acinto!s heirs,(aria #ada validly transferred herownership rihts over the sub$ect land to:ilverio.

Iss!H ?s it necessary for the validity ofthe extra$udicial partition that the samebe embodied in a public instrument

&+H No. The intrinsic validity ofpartition not executed in a publicinstrument is not undermined when nocreditors are involved. The partition ofinherited property need not be embodiedin a public document so as to beeffective as reards the heirs thatparticipated therein. The re&uirement of

Article 7< of the Civil Code that actswhich have for their ob$ect the creation,transmission, modification or

extinuishment of real rihts overimmovable property, must appear in apublic instrument, is only forconvenience, non4compliance with whichdoes not affect the validity orenforceability of the acts of the parties asamon themselves. And neither does the:tatute of "rauds under Article -7 ofthe New Civil Code apply becausepartition amon heirs is not leallydeemed a conveyance of real property,considerin that it involves not a transferof property from one to the other butrather, a confirmation or ratification oftitle or riht of property that an heir isrenouncin in favor of another heir whoaccepts and receives the inheritance.

III. OLIGATIONS AND CONTRACTS

Nova/*o

ESPINA vs. COURT OF APPEALSG.R. No. 116'0-, J! 22, 2000

Fa/sH #etitioner (ario Kspina is thereistered owner of a Condominium Gnitin Antipolo, i'al. ?n ;/, thecondominium unit in &uestion was leasedto respondent ene 9ia'. ?n ;; while9ia' occupied the premises as lessee,

(ario executed a #rovisional 9eed of:ale whereby he areed to sell thecondominium unit to respondent for theinitial downpayment of #,. tobe paid upon the execution of thecontract and the balance to be paid in 6installments throuh #C? Ean0 postdatedchec0s. 9ia'!s chec0s all bounced andwere dishonored upon presentment forthe reason that the ban0 account wasclosed. Conse&uently, on 8uly 26, ;;2,(ario terminated the provisional deed ofsale by a notarial notice of cancellation.Nonetheless, 9ia' continued to occupythe premises, as lessee, but failed to pay

the rentals due. Dn Dctober 2, ;;2,9ia' made a payment of #,.which was accepted by (ario. Dn"ebruary 2-, ;;7, (ario filed with the(TC4Antipolo i'al, an action forunlawful detainer aainst 9ia'. The TCordered 9ia' to vacate the premises andto pay bac0 current rentals, attorneysfees and costs. Dn appeal to the TC,the latter court affirmed the decision ofthe (TC. 9ia' filed with the CA apetition for review. The CA reversed theappealed decision and dismissed thecomplaint for unlawful detainer. ("filed by (ario was denied. 3ence, thisappeal via petition for review oncertiorari.

Iss!H 9id the provisional deed of salenovate the existin lease contract

&+H ND. The provisional deed ofsale that was subse&uently executed bythe parties did not novate the oriinalexistin contract of lease.

Novation is never presumed+ itmust be proven as a fact either by

express stipulation of the parties or byimplication derived from an irreconcilableincompatibility between old and newobliations or contracts. Dtherwise, theoriinal contract remains in force.

R+a/*v*/# o Co/"a/s

D>C &OLDINGS CORP. vs. COURTOF APPEALS

G. R. No. 11'2', A)"*+ -, 2000

Fa/sH Dn (arch 6, ;, petitionercorporation entered into a Contract ofLease with Dption to Euy with

Kncarnacion Eartolome, wherebypetitioner was iven the option to leaseor lease with purchase the sub$ect land.

#etitioner reularly paid the monthly#7,. reservation fee until thedeath of Kncarnation in 8anuary ;;.Thereafter, petitioner coursed itspayment to private respondent @ictorEartolome, the sole heir of Kncarnacion.@ictor, however, refused to accept. Dn(arch -, ;;, petitioner served upon@ictor a written notice that it wasexercisin its option to lease theproperty. Aain, @ictor refused to acceptthe rental fee and to surrenderpossession of the property to petitioner.

#etitioner thus opened a savins accountwith a ban0 in the name of @ictorEartolome and deposited therein theaforesaid rental fee as well as #6,.reservation fees. #etitioner then filed aComplaint for specific performance anddamaes aainst @ictor. The trial court dismissed thecomplaint, holdin that the sub$ectcontract was terminated upon the deathof Kncarnacion Eartolome and did notbind @ictor because he was not a partythereto.

Iss!H Has the Contract of Lease withDption to Euy entered into byKncarnacion with petitioner terminatedupon her death, hence not bindin upon@ictor

&+H ND. The contract was notterminated upon Kncarnacion!s death. ?tremains bindin upon @ictor. Theeneral rule under Article 7, NCC isthat heirs are bound by contracts enteredinto by their predecessors4in4interestexcept when the rihts and obliationsarisin therefrom are not transmissibleby 5* their nature, 52* stipulation or 57*provision of law. ?n the case at bar, thereis neither contractual stipulation nor lealprovision ma0in the rihts andobliations under the contractintansmissible. ?n fact, the nature of therihts and obliations therein are, bytheir nature, transmissible. A ood measure for determininwhether a contract terminates upon thedeath of one of the parties is whether it isof such character that it may beperformed by the promissor!s personal

representative. ?n the case at bar, thereis no personal act re&uired from the lateKncarnacion Eartolome. ather, theobliation of Kncarnaction in the contractto deliver the possession of the sub$ectproperty to petitioner upon the exerciseby the latter of its option to lease thesame may very well be performed by herheir @ictor. There exists a privity ofinterest between @ictor and his deceasedmother. @ictor cannot escape the lealconse&uence of a transaction enteredinto by his predecessor4in4interestbecause he has inherited the propertysub$ect to the liability affectin the latter. "urthermore, the sub$ect matter ofthe contract is a lease, which is a

property riht. The death of a party doesnot excuse nonperformance of a contractwhich involves a property riht, and therihts and obliations thereunder pass tothe personal representatives of thedeceased. :imilarly, nonperformance isnot excused by the death of the partywhen the other party has a propertyinterest in the sub$ect matter of thecontract.

O"o!s Co/"a/

GOLDEN DIAMOND vs. COURT OFAPPEALS

G.R. No. 1$1$6, Ma# $1, 2000

Fa/sH #etitioner Jolden 9iamond,?nc. 5J9?* entered into a 9ealer

Areement with ?nternational "amily"ood :ervices, ?nc. 5?"":?*, the exclusivelicensee in the #hilippines of:ha0eyFs G.:.A., for the operation of:ha0eyFs pi''a parlorsin Caloocan Cityfor a period of ten years,from "ebruary ; to "ebruary ;;renewable for another ten years. J9?subse&uently entered into a(emorandum of Areement 5(DA* with



private respondent Chen, whereby J9?assined to the latter, its rihts, interestsand obliations under its areement with?"":? over the :ha0eyFs outlet atJotesco Jrand Central, in exchane forthe payment of a monthly royalty fee offive per cent 5<Q* of the ross dealersales for a period of five 5<* years, from

Auust ; to Auust ;;7.Dn "ebruary ;;, Chen

stopped payment of the royalty fees onthe round that the contract betweenJ9? and ?"":? had expired. Cheninsisted that his payment of the royaltyfees is conditioned on the existence ofthe areement between petitioner J9?and ?"":?.

Iss!H ?s Chen oblied to pay theroyalty fee to J9? even after theexpiration of J9?!s area franchise

&+H ND. Chen is no loner obliedto pay the royalty fee. The fact that norenewal was ranted removed the basisfor the continued payment of the monthlyroyalty fee. ?t is the essence of a royalty

fee that it is paid in consideration of anexistin riht. ?n its ordinary acceptation,royalties refer to payments made to theowner for permittin another to use hisproperty. oyalties are similar to therents payable for the use or riht to usean invention and after the riht to use ithas terminated there is no obliation toma0e further royalty payments.

The (DA is an onerouscontract, wherein the contractin partiesare oblied to render reciprocalprestations. J9? is entitled to receive theroyalty fee in return for Chen!s use of its5J9?* exclusive riht to the :ha0eyFsoutlet at the Jotesco Jrand Central.?ndelibly, the very reason which impelled

Chen to assume the obliation to paythe royalty fee was that of J9?!srepresentation that it has the exclusiveriht to operate the outlet. To expectChen to continue payin the royalty feeafter "ebruary ;;, or until Auust;;7, when what J9? assined noloner exists is leally untenable.J9?!s entitlement to the royalty fee iswholly dependent upon the existenceand subsistence of the riht for which theroyalty was ranted. ?f the reason whichave rise to the contract has ceased toexist, the result is that the obliation too,has ceased to exist.

Po" /o Rs* * R*)"oa+O<+*a/*os

RELIANCE COMMODITIES INC. vs.INTERMEDIATE APPELLATE COURT

G.R. No. 772?, Ma# $1, 2000

Fa/sH espondent (arvin #ae'entered into contract with elianceCommodities, ?nc. 5C?* whereby thelatter areed to provide the former withfunds and e&uipment for the operation ofa mananese minin claim.

:ubse&uently, #ae' and his wifeexecuted a deed of first real estatemortae 5K(* on their property infavor of C? as security for more cashadvances needed to sustain the mininoperation. C? then made cashadvances to #ae' until subse&uently, adifference arose between #ae' and C?concernin these cash advances. Later,for failure to repay, C? foreclosedextra$udicially the mortae executed by#ae' in its favor.The spouses #ae' thereafter filed anaction to annul the 9eed of "irst ealKstate (ortae, and for damaes. Thetrial court ordered #ae' to pay C? thecash advances they received and liftedthe TD as to the foreclosure, allowinC? to proceed with the extra$udicialforeclosure of the mortae should #ae'fails to pay. The CA however, declaredthe K( and the contract between theparties void, findin that it is C? whichave cause for the rescission of thecontract, and that restitution is notavailable in rescission. C? now claimsthat the violation of the contracts came

from the #ae' spouses because theyfailed to deliver at all the mananeseores stipulated in the contract accordinto the schedule outlined. 3ence, theywere not entitled to rescind the contractsor recover damaes and by reason ofwhich C? was entitled to foreclose onthe security constituted.

Iss!H 9oes C? have the power torescind the contract ?f so, is restitutionavailable

&+H PK:. C? has the power torescind the contract, it havin beenestablished that #ae' failed to complywith his obliation under the contract.

Gnder the areement of C? with #ae',the former was to pay #ae' #/. forevery ton of mananese ores delivered.Dn the other hand, #ae' failed to ma0eeven a sinle delivery of mananeseores to the stoc0pile yard at Jabaldon. ?nfact, there was no minin operation at all.

Conse&uently, C? rescindedthe contracts. The power to rescind orresolve is iven to the in$ured party.(ore, the rescission of the contractsre&uires the parties to restore to eachother what they have received by reasonof the contracts. The rescission has theeffect of abroatin the contracts in allparts.

CENTRAL AN> OFT&E P&ILIPPINES vs. IC&ARAG.R. No. 1$107, Ma"4 27, 2000

Fa/sH Dn 8uly ;, ;7, respondents:pouses Alfonso and Anacleta Eicharasold 2 lots in Lea'piCity, with anareate area of s&. m. topetitioner CKNTAL EANR D" T3K#3?L?##?NK: 5CE#*. The deed of salecontained the followin pertinentstipulations) that the purchase priceshall be paid only after the 9eed of :alehas been duly reistered and a clean titleissued in the name of the vendee and+that the vendors shall underta0e to fill theparcels of land with an escombro freefrom waste materials compacted to thestreet level upon the sinin of the 9eedto suit the round for the construction ofthe reional office of CE#.

Title over the property wasissued in CE#Fs name on :eptember 6,;7. 9espite the issuance of the title,CE# failed to pay the spouses. The latterdid not fill up the lot with escombrodespite several demands made by theformer. CE# was thus constrained tounderta0e the fillin up of the said lots,by contractin the services of EJ@Construction. The fillin up of the lots

cost CE# #-<,., which amountwas deducted from the purchase pricepayable to the spouses.

CE#, however, still did not paythe spouses. Conse&uently, on:eptember /, ;;2, the spouses filed anaction for rescission or specificperformance with damaes, aainst CE#before the TC of Lea'pi City, alleinthat CE# failed to pay the purchase pricedespite demand.

Iss!sH ?s rescission of the contract ofsale a proper remedy available to the:pouses

&+H No. The riht to rescind a

contract involvin reciprocal obliationsis provided for in Article ; of the CivilCode. The law spea0s of the riht of theBin$ured partyB to choose betweenrescission or fulfillment of the obliation,with the payment of damaes in eithercase. 3ere, the spouses claim to be thein$ured party and they aver that they areentitled to cancel the obliationaltoether in view of CE#Fs failure to paythe purchase price when the samebecame due. CE# disputes the spouses!stand, claimin that it was entitled towithhold payment of the purchase pricebecause of the latter!s failure to complywith their contractual obliations.

Ey law, B1the vendee is boundto accept the delivery and to pay theprice of the thin sold at the time andplace stipulated in the contract.B ?n thecase at bench, CE#Fs obliation to payarose as soon as the deed of sale wasreistered and a clean title was issued.CE# $ustifies non4payment on thespousesF breach of several stipulations inthe contract, such as) non4payment oftax and the occupation by s&uatters ofthe premises. 3owever, CE#!s obliationto pay was not sub$ect to the foreoinBconditions,B only that its demandability issuspended until the opportune time. That



arrived upon the reistration of the deedof sale and the issuance of a clean title inits favor.

The :pouses should not beallowed to rescind the contract wherethey themselves did not perform theiressential obliationthereunder . Kvidently, the spouses wereuilty of non4performance of an essentialcontractual obliation. The deed of saleexpressly stipulated that the vendorswere to underta0e, at their expense, thefillin up of the lots with escombro freefrom waste material compacted to thestreet level. This was re&uired in order toma0e the site sui table for theconstruction of a substantial edificewhich will house the reional office ofCE#. This was to be accomplished uponthe sinin of the contract and insofar asCE# was concerned, the spousesobliation was demandable at once.

?t should be emphasi'ed thata contract of sale involves reciprocitybetween the parties. :ince the spouseswere in bad faith, they may not see0 therescission of the areement they

themselves breached.

Co/"a/ /o S++5 Rs*ss*o

PADILLA vs. PAREDESG.R. No. 12'7, Ma"4 17, 2000

Fa/sH #etitioner Albert #adilla andprivate respondents "loresco and

Adelina #aredes entered into a contractto sell a parcel of land in :an 8uan, LaGnion. The land was untitled althouhthe :pouses #aredes were payin taxesthereon. Gnder the contract, #adillaundertoo0 to secure title to the property

in :pouses #aredes! names. Df the#72,-. purchase price, petitionerwas to pay a downpayment of#<,. upon sinin of the contract,and the balance was to be paid within days from the issuance of a court orderdirectin issuance of a decree ofreistration for the property. #adillafailed to pay the balance of the purchaseprice within the period set. Later:pouses #aredes offered to sell to#adilla V of the property for all thepayments the latter had made, sub$ect tothe condition that if #adilla will not aree,they would enforce the automaticrescission of the contract. #adilla did not

accept the proposal. ?nstead, he offeredto pay the balance in full for the entireproperty, plus interest and attorneyFsfees, which the spouses refused.#adilla then instituted an action forspecific performance aainst thespouses, allein that he had alreadysubstantially complied with his obliationunder the contract to sell.

Iss!H Are the :pouses #aredesentitled to rescind their Bcontract to sellBthe land to #adilla

&+H PK:. The spouses may validlycancel the contract to sell their land to#adilla. 3owever, the reason for this isnot that the spouses have the power torescind such contract, but because theirobliation thereunder did not arise.

Article ; of the Civil Code, onrescission, spea0s of obliations alreadyexistin. ?n a contract to sell, the fullpayment of the purchase price is apositive suspensive condition, the failureof which is not considered a breach,casual or serious, but simply an eventwhich prevented the obliation of thevendor to convey title from ac&uirin anyobliatory force. There can be norescission of an obliation that is non4existent, considerin that the suspensivecondition therefor has not yet happened.Eecause of #adillaFs failure to fully paythe purchase price, the obliation of thespouses to convey title to the propertydid not arise. Thus, they are under noobliation, and may not be compelled, toconvey title to #adilla and receive the fullpurchase price.

I/")"/a/*o o Co/"a/s5Rs*ss*o

P&IL. NATIONAL CONSTRUCTIONCORP. vs. MARS CONSTRUCTION

ENT.G.R. No.1$$?0?, F<"!a"# 1-, 2000

Fa/sH (ars Construction Knterprises,?nc. 5(ars* entered into a contract withthe #hil. National Construction Corp.5#NCC* for the supply of approximately/, cubic meters of areates butwith out specification as to the volume ofeach of the items mentioned therein. The

two parties subse&uently amended thecontract by specifyin the volume forthree of the items, totalin the oriinallyareed /, cubic meters ofareate, except the fourth item, thevolume of which was not specified.

Eecause the delivery ofareates was delayed for months,#NCC was constrained to obtainnecessary materials from other sources,incurrin additional costs representinthe difference between the areed pricein the contract and the pricin of outsidesources, which was reimbursed by (arsin accordance with the default clauseunder the contract. Hhen (ars

delivered /, cubic meters of washedravel, #NCC refused to accept, on thefollowin rounds)

. (ars has already delivered areates-<Q over and above the re&uired volumein the amended contract and #NCC hadno more need for the same+

2. #NCC has already informed (ars in aletter of the final &uantities of concreteareates to be delivered and that itwould not accept any further deliveriesfrom (ars+

7. (ars has defaulted on its contractualobliations.

Iss!H (ay #NCC be compelled toaccept the delivery of the /, cu. m.of washed ravel

&+H PK:. #NCC may be compelledto accept.

5* The amendment made theareement ambiuous because the&uantity of sub4base 2> minus crusherrun was not specified. ?f said areatewere included however, the total woulddefinitely be in excess of /, cu. m.#NCC had ordered from (ars more thanwhat was specified in the areement.This act sinified that the maximum limitof /, cu. m. was disreardedbecause of #NCCFs needs. Hhat thenwould be the sinificance of the&uantities stated in the amendment Heinterpret that these are the minimum&uantities that must be delivered by(ars. Eoth parties are bound by thesefiures. ?n this way, both parties would0now exactly how much to demand fromeach other to be able to comply with theirrespective obliations. The variousstipulations in a contract should be

interpreted toether. Ambiuous onesshould be so construed as to conform tothe sense that would result if all theprovisions are comprehended $ointly.

52* Ey sayin that the &uantityspecified in the letter was its last order,#NCC unilaterally amended its Contractwith the (ars. The act of treatin acontract as cancelled or rescinded onaccount of infractions by the othercontractin party is always provisional+that is, contestable and sub$ect to $udicialdetermination. Hhen #NCC resolved orrescinded the Areement withoutprevious court action, it proceeded at itsown ris0. Dnly the final $udment of acourt will conclusively and finally settle

whether such recourse was correct inlaw.

7* The default was aninsubstantial breach. The contractspecifically provided that if (ars failed todeliver the re&uired areates, #NCCcould procure them from other sourcesso as not to $eopardi'e the entireconstruction pro$ect. :ince #NCC wasalready compensated for (ars! defaults,such defaults cannot be considered as asubstantial breach that $ustified therescission of the Contract and the refusalto accept the &uestioned delivery."urthermore, when #NCC exercised itsoptions in case of delay or default on the

part of (ars, the former waived its rihtto rescind and was thus estopped fromrescindin the Contract by reason ofsuch short delivery.

as o F"a!

C4*a a* Co"). vs. Co!"/ oA))a+s

G.R. No. 12?6, Ma"4 7, 2000



Fa/sH ?n connection with a civil casefiled by (etropolitan Ean0 aainst

Alfonso oxas Chua , a notice of levyaffectin theresidential land of Alfonsoand his wifewas issued. (eanwile, in ;<, the trialcourt rendered another decision in favorof China Ean0in Corporation aainst

Alfonso in a collection case. A certificateof sale coverin V of the undividedportion of the property was executed infavor of (etro Ean0. ?n ;, Alfonsoexecuted =Assinment of iht toedeem> to his son #aulino whoredeemed the said property on the sameday. Dn the other hand, another levy onexecution in favor of China Ean0 wasissued on the same property.Thereafter, a certificate of sale onexecution was issued to China Ean0 in;;2. #aulino instituted a civil casearuin that he has a better riht overthe title of China Ean0, the propertyhavin been redeemed by him in ;while China Ean0 ac&uired its riht in;;. The trial court ruled that theassinment was made for a valuable

consideration and was executed twoyears before China Ean0 levied thecon$ual share of Chua. China Ean0arued that the assinment of riht ofredemption made by Alfonso to #aulinowas done in fraud of creditors and maybe rescinded under Article 7/, NCC.

Iss!H Has the assinment by Alfonso to #aulino of the riht ofredemption done to defraud his creditorsand may be rescinded under Art. 7/,NCC

&+H PK:. The assinment wasdone in fraud of creditors. China Ean0is, therefore entitled to rescind the

same. Gnder Article 757* of the CivilCode, contracts which are underta0en infraud of creditors when the latter cannotin any manner collect the claims duethem, are rescissible. The existence offraud with intent to defraud creditor mayeither be presumed in accordance with

Article 7/,NCC or duly proved inaccordance with the ordinary rules ofevidence. 3ence, the law presumes thatthere is fraud of creditors when)a* There is alienation of property byratuitous title by the debtor who has notreserved sufficient property to pay hisdebts contracted before such alienation+or

b* There is alienation of property byonerous title made by a debtor aainstwhom some $udment has beenrendered in any instance or some writ ofattachment has been issued. Thedecision or attachment need not refer tothe property alienated and need not havebeen obtained by the party see0inrescission.

?nasmuch as the $udment ofthe trial court in favor of China Ean0aainst Alfonso was rendered as early as;<, there is a presumption that the; sale of his property, in this case theriht of redemption, is fraudulent under

Article 7/ of the Civil Code. The factthat private respondent #aulinoredeemed the property and caused itsannotation on the TCT more than twoyears ahead of petitioner China Ean0 isof no moment. The Court of Appealsmaintained that althouh the transferwas made between father and son, theconveyance was not fraudulent since#aulino has indeed paid the redemptionfee of #,-67,7/<.7; to (etroban0 andthe sum of #, to his father. ?ndeterminin whether or not a certainconveyance is fraudulent, the &uestion inevery case is whether the conveyancewas a bona fide transaction or a tric0 andcontrivance to defeat creditors orwhether it conserves to the creditor tothe debtor or a special riht. ?t is notsufficient that it is founded on oodconsiderations or is made with bona fideintent. ?t must have both elements. ?fdefective in either of these, althouhood between the parties, it is voidableas to creditors. The &uestion as towhether or not the conveyance isfraudulent is) does it pre$udice the rihts

of the creditors The mere fact that theconveyance was founded on valuableconsideration does not necessarilyneate the presumption of fraud under

Art. 7/, NCC. There has to be avaluable consideration and thetransaction must have been made bonafide. ?n the case at bar, the presumptionthat the conveyance is fraudulent has notbeen overcome. At the time a $udmentwas rendered in favor of China Ean0aainst Alfonso, #aulino was still livinwith his parents in the sub$ect property.#aulino himself admitted that he 0newhis father was heavily indebted and couldnot afford to pay his debts. The transferwas undoubtedly made between father

and son at the the time when the fatherwas insolvent and had no other propertyto pay his creditors. 3ence, it is of noconse&uence whether or not #aulino hadiven valuable consideration for theconveyance. :o* a :o*a<+ Co/"a/s

SEN PO E> MAR>ETING CORP.vs. MARTINE8

G.R. No. 1$117, F<"!a"# ?, 2000

Fa/sH :ofia (artine' was the

reistered owner of 2 parcels of land wholeased the lots to Pu :ion, father of thepresident and stoc0holders of petitioner:en #o K0 for a period of years.Hhen the lease expired it was laterrenewed several times, the last renewalbein on (arch ;2 which is to expireon 8an. ;/. ?n themeantime, :ofia sold the lots and thebuildin to her dauhter, respondentTeodora (artine'. After the leasecontract expired in 8an. ;/, it was noloner renewed by the parties. :en #oK0, however, continued to possess andoccupy the leased properties, and

reularly paid the monthly rentalsto :ofia until her death, and then to herheirs throuh Teodora. Dn November, ;;, Teodora sent a letter topetitioner :en #o K0 informin it of herintention to sell the leased premises andauthori'in a bro0er to neotiate thesale Bwith any and all interested parties.B:en #o K0 offered to purchase thepoperty. Another buyer, Tiu Gypin, wasalso interested. :en #o K0 then filed acomplaint for the annulment of the saleexecuted by :ofia in favor of Teodora.9ays later, the property was sold to TiuGypin. :en #o K0 amended itscomplaint, prayin for the nullity of thesecond sale transaction.

Iss!H Here the two disputed saletransactions valid

&+H The first sale is void. Thesecond sale, however, is valid andbindin. The first sale between :ofiaand Teodora was void for bein fictitious.Gnder Art. -; 52*,NCC, one type ofcontract which can be declared void and

inexistent is that which is absolutelysimulated or fictitious, and this wasestablished by several bades ofsimulation provin that the sale between:ofia and Teodora was not intended tohave any leal effect between them.Thecombination of all of these events leadsone to the inescapable conclusion thatthe first sale transaction was absolutelysimulated, hence void.

Nonetheless, the sale betweenTeodora and the Tiu Gypin, is valid.Teodora, as only one of the co4heirsof :ofia, had no authority to sell theentire lot to the Tiu Gypin. :he can onlysell her undivided portion of the property.Thus, when she sold the leased

premises to Tiu Gypin, the sale isunenforceable havin been entered intoby Teodora in behalf of her co4heirs who,however, ave no authority or lealrepresentation. 3owever, such a contractis susceptible of ratification. ?n this case,the ratification came in the form ofBConfirmation of :ale of Land and?mprovementsB executed by the otherheirs of :ofia. :ince the sale by Teodoraof the leased premises to Tiu Gypin wasratified by her co4heirs, then the sale isconsidered valid and bindin

Ca)a*/# /o E/" */o Co/"a/

LOYOLA vs. COURT OF APPEALSG.R. No. 11-7$, F<"!a"# 2$, 2000

Fa/sH Three years before her death,Jaudencia arraa sold to privaterespondents, the children of one hersiblins, her share in Lot <4A4 for#7-,.. The sale was evidenced bya notari'ed document denominated as=Eilihan Tuluyan n Ralahati n isanLaay na Lupa.> 3er other siblins assailthe validity of the execution of the deedof the absolute sale suestin that the



deed of sale is not valid becauseJaudencia was old and senile andincapable of independent and clear

$udment.

Iss!H ?s the deed of absolute saleinvalid on the round of Jaudencia!sincapacity

&+H ND. A person is not incapacitatedto contract merely because of advancedyears of by reason of physical infirmities.Dnly when such ae or infirmities impairhis mental faculties to such extent as toprevent him from properly, intelliently,and fairly protectin his property rihts ishe considered incapacitated. #etitionersshow no proof that Jaudencia had lostcontrol of her mental faculties at the timeof the sale. The notary public whointerviewed her, testified that when hetal0ed to Jaudencia before preparin thedeed of sale, she answered correctly andhe was convinced that Jaudencia wasmentally fit and 0new what she wasdoin.

Uo"a<+ Co/"a/

:ILLANUE:A=MIJARES vs. COURTOF APPEALS

G.R. No. 10'?21, A)"*+ 12, 2000

Fa/sH #etitioners are the leitimatechildren of the late Leon@illanueva. Leon was one of eihtchildren of "el ipe @illanueva,predecessor4in4interest of the parties inthe present case. 9urin his lifetime,"elipe, owned real property situated inRalibo, A0lan. Gpon "elipe!s death,ownership of the land was passed on to

his children. #edro, one of the childrenof "elipe ot his share e&uivalent to one4sixth 5M6* of the property and had itdeclared under his name. The remaininundivided portion of the land was held intrust by Leon for his co4heirs.9urin Leon!s lifetime, his co4heirs madeseveral seasonable and lawful demandsupon him to subdivide and partition theproperty, but for one reason or another,no subdivision too0 place. After the death of Leon in Auust;/2, private respondents discoveredthat the shares of four of the heirs of"elipe were purchased by Leon asevidenced by a 9eed of :ale executed

on Auust 2<, ;-6 but reistered only in;/. ?t also came to liht that Leonhad,sometime in 8uly ;/, executed a saleand partition of the property in favor ofhis own children, herein petitioners.

Iss!H Are the petitioners the lealowners of the property in &uestion inaccordance with the individual titlesissued to them

&+H No. The 9eed of :ale of Auust2<, ;-6 was Bunenforceable> and thusdid not ma0e the petitioners the lealowners of the property in &uestion in

accordance with the individual titlesissued to them.

Article <2; of the old Civil Code,which was the prevailin law in ;- andthus overned the &uestioned 9eed of:ale, clearly provided that a contract isunenforceable when there is an absenceof authority on the part of one of thecontractin parties. The mere lapse oftime cannot ive efficacy to such acontract. The defect is such that it cannotbe cured except by the subse&uentratification of the unenforceable contractby the person in whose name thecontract was executed. ?n the instantcase, there is no showin of any expressor implied ratification of the assailed9eed of :ale by the private respondents.

S*!+a/*o o Co/"a/s

LOYOLA vs. COURT OF APPEALSG.R. No. 11-7$, F<"!a"# 2$, 2000

Fa/sH Three years before her death,Jaudencia arraa sold to privaterespondents, the children of one hersiblins, her share in Lot <4A4 for#7-,.. The sale was evidenced bya notari'ed document denominated as=Eilihan Tuluyan n Ralahati n isanLaay na Lupa.> 3er other siblins assailthe validity of the execution of the deedof the absolute sale suestin that thedeed of sale is simulated.

Iss!H ?s the deed of absolute salesimulated

&+H ND. :imulation is the declarationof a fictitious will deliberately made by

areement of the parties, in order toproduce, for the purposes of deception,the appearances of a $uridical act whichdoes not exist or is different what thatwhich does not exist or is different whatthat which was really executed.>Characteristic of simulation is that theapparent contract is not really desired orintended to produce leal effect or in inany way alter the $udicial situation of theparties. #erusal of the &uestioned deedwill show that the sale of the propertywould convert the co4owners to vendorsand vendees, a clear alteration of the

$udicial relationships. This is contrary tothe re&uisite of simulation that the

apparent contract was not really meantto produce any leal effect. Also in asimulated contract, the parties have nointention to be bound by the contract.Eut in this case, the parties clearlyintended to be bound by the contract ofsale, an intention they do not deny. There&uisites for simulation are) 5a* anoutward declaration of will different fromthe will of the parties+ 5b* the falseappearance must have been intended bymutual areement+ and 5c* the purpose isto deceive third persons. None of theseare present in the assailed transaction.

La4s5 P"s"*)/*o

:ILLANUE:A=MIJARES vs. COURTOF APPEALS

G.R. No. 10'?21, A)"*+ 12, 2000

Fa/sH #etitioners are the leitimatechildren of the late Leon@illanueva. Leon was one of eihtchildren of "elipe @illanueva,predecessor4in4interest of the parties inthe present case. 9urin his lifetime,"elipe, owned real property situated inRalibo, A0lan. Gpon "elipe!s death,ownership of the land was passed on tohis children. #edro, one of the childrenof "elipe ot his share e&uivalent to one4sixth 5M6* of the property and had itdeclared under his name. The remaininundivided portion of the land was held intrust by Leon for his co4heirs.9urin Leon!s lifetime, his co4heirs madeseveral seasonable and lawful demandsupon him to subdivide and partition theproperty, but for one reason or another,no subdivision too0 place.

After the death of Leon in Auust;/2, private respondents discoveredthat the shares of four of the heirs of"elipe were purchased by Leon asevidenced by a 9eed of :ale executedon Auust 2<, ;-6 but reistered only in;/. ?t also came to liht that Leonhad,sometime in 8uly ;/, executed a saleand partition of the property in favor ofhis own children, herein petitioners.

Iss!H ?s the claim by privaterespondents to recover the property in&uestion barred by laches, estoppel,prescription and res $udicata &+H ND. At the time of sinin of the

9eed of :ale of Auust 26, ;-, privaterespondents #rocerfina, #rosperidad,amon and osa were minors. Kven ifthe case was brouht more than 2;years later, they could not be faulted fortheir failure to file a case to recover theirinheritance from their uncle Leon, sinceup to the ae of ma$ority, they believedand considered Leon their co4heir andadministrator. Gpon learnin of theiruncle!s actions, they filed an action forrecovery. 3ence, the doctrine of staledemands formulated in Ti$am vs.:ibonhanoy cannot be applied here.They did not sleep on their rihts,contrary to petitioners! assertion.

(oreover, there is no impledratification in the instant case becauseno benefit accrued to the children of(aria Ealta'ar, thus the action is notbarred by prescription.

Hhile a review of the decree ofreistration is no loner available afterthe expiration of the one4year periodfrom entry thereof pursuant to thedoctrine of res $udicata, an e&uitableremedy is sti ll available. Thosewronfully deprived of their property mayinitiate an action for reconveyance of theproperty.



GASTON vs. COURT OF APPEALSG.R. No. 116$0, J! 2?, 2000.

Fa/sH ?n ;/2, private respondentJertrudes (edel filed a complaint beforethe TC of :ilay City, aainst petitionerCecilia JastonFs mother :ofia de Dcavda. 9e Jaston and other defendants forrecovery of her share over certainparcels of land ofTalisay Cadastre,claimin that, as her mother is thedauhter of (ariano de Dca by his firstmarriae, she 5Jertrudes* is entitled tothe properties left by (ariano de Dca.TC dismissed the same. Dn appeal,the CA reversed the TC!s decision. TheCA ordered the defendants, :ofiaJaston, et. al, to partition the propertiesinvolved to include the share of privaterespondent (edel within 6 days fromthe finality of the said decision. As thesaid defendants had not complied withthe said CA!s order, despite the lapse ofthe period indicated therein and inspite ofrepresentations made by (edel to the

defendants to submit the pro$ect ofpartition, the private respondent filed withthe respondent TC on November 2/,;;, a motion to re&uire the defendantsto submit a pro$ect of partition. Actin onthe said motion, the respondent court inits order of 9ecember 7, ;;, re&uiredthe defendantsF counsel to commentthereon within < days from receiptthereof, with warnin Fotherwise the courtwill partitionF. The defendants alsoinored the said order of the respondentcourt. Thus, the respondent court, in itsorder dated 8anuary /, ;;2, acted onthe ex4parte motion of the privaterespondent to partition the properties.

Iss!H ?s the petition for nullification ofthe &uestioned order dated 8an. /, ;;2time4barred

&+H PK:.The &uestioned order of the

respondent court is dated 8anuary /,;;2 but the petition was filed only on9ecember 2;, ;;2 or almost a yearafter the issuance of the &uestionedorder. The yardstic0 to measure thetimeliness of a petition for certiorari is thereasonableness of the lenth of time thathad expired from the commission of theactuation complained of up to theinstitution of the proceedin to amend

the same. "ailure to file the certioraripetition within a reasonable time rendersthe petitioner susceptible to the adverseleal conse&uences of laches.

The essence of laches is thefailure, or nelect, for an unreasonableand unexplained lenth of time to do thatwhich, by exercisin due dilience, couldor should have been done earlier+ it isthe nelience or omission to assert ariht within a reasonable time, warrantina presumption that the party entitled toassert it either has abandoned it ordeclined to assert it. This Court has ruledthat an interval of seven 5/* months after

rendition of the last order souht to beset aside is definitely barred by laches.

A petition brouht after ;; days is alsobarred by laches. The special civil actionfor certiorari under ule 6< of the ulesof Court must be filed within areasonable period of only 7 months.

TRUSTS

E9)"ss T"!s/

SECUYA vs. :DA. DE SELMAG.R. No. 1$6021, F<"!a"# 22, 2000

Fa/sH The present petition is rooted

in an action for &uietin of title filedbefore the TC by petitioners, allsurnamed :ecuya aainst Jerarda 9e:elma. The parcel of land sub$ect of thiscase is a portion of Lot <6/; of theTalisay4(inlanilla "riar Lands Kstate.The lot was oriinally sold to (aximaCaballero @da. 9e Carino. 9urin thelifetime of the latter, she entered into an

Areement of #artition dated 8anuary <,;7 with #aciencia :abellona, whereby(axima bound herself to part with M7of Lot<6/; in favor of #aciencia upon theapproval of her application for patent.#aciencia too0 possession andoccupation of said portion ad$udicated to

her. Later she sold the 7, s&. m.portion thereof to 9almacio :ecuya onDctober 2,;<7. After said purchase,9almacio and his siblins too0 physicalpossession of the land and cultivated thesame. The petitioners herein are theheirs of 9almacio. ?n ;/<, Jerardabouht a bul0 of Lot <6/;, whichembraced and included the land bouhtby 9almacio.

Iss!H 9o petitioners have there&uisite title that would enable them toavail themselves of the remedy of&uietin of title

&+H ND. #etitioners do not have there&uisite title to pursue an action for&uietin of title. #etitioners anchor theirclaim of ownership on the Areement of#artition. Notwithstandin itsnomenclature, the Areement is not oneof partition, because there was noproperty to partition and the parties werenot co4owners. ather, it is in the natureof a trust areement. Trust is the riht tothe beneficial en$oyment of property, theleal title to which is vested in another. ?tis a fiduciary relationship that oblies thetrustee to deal with the property for thebenefit of the beneficiary. Trust relations

between parties may either be expressor implied. An express trust is createdby the intention of the trustor or of theparties. An implied trust comes intobein by operation of law. The present Areement involves anexpress trust. Gnder Art. --- of theCivil Code, Ono particular words arere&uired for the creation of an expresstrust, it bein sufficient that a trust isclearly intended.!

Hhile no time limit is imposed for theenforcement of rihts under expresstrusts, prescription may, however, bar abeneficiary!s action for recovery, if arepudiation of the trust is proven by clearand convincin evidence and made0nown to the beneficiary. There was arepudiation of the express trust when theheirs of (axima failed to deliver ortransfer the property to #aciencia, andinstead sold the same to a 7 rd person notprivy to the Areement. The Areementwas not reistered, thus, it could not bind7rd persons. Conse&uently, thesubse&uent sales transactions involvinthe land in dispute, which ultimately led

to its purchase by Jerarda, and the titlescoverin it must be upheld, in theabsence of proof that the saidtransactions were fraudulent andirreular.

SALES AND LEASE

E+/s o a Co/"a/ o Sa+

SAN ANDRES vs. RODRIGUE8G.R. No. 1$-6$, Ma# $1, 2000

Fa/sH 8uan :an Andres sold a parcelof land with an area of 7-< s&uaremeters to respondent @icente odriue'.The sale is evidenced by a 9eed of:ale. Hhen :an Andres died, the

$udicial administrator of the decedentFsestate undertoo0 a survey of the entireland owned by the decedent includinthe land sold to odriue'. ?t was foundthat respondent had enlared the areawhich he purchased from :an Andres by<; s&uare meters. Accordinly, the

$udicial administrator demanded thatodriue' vacate the portion alleedlyencroached by him. Hhen odriue'refused to leave, the $udicial

administrator thereafter brouht anaction for the recovery of possession ofthe <;4s&uare meter lot

odriue' claims the disputedportion was also subse&uently thesub$ect of an absolute sale to him asshown by a receipt sined by the late:an Andres, which reads in full asfollows) =eceived from @icenteodriue' the sum of "ive 3undred5#<.* #esos representin anadvance payment for a residential lotad$oinin his previously paid lot on threesides exceptin on the frontae with theareed price of "ifteen 5<.* #esos per



s&uare meter and the payment of the fullconsideration based on a survey shall bedue and payable in five 5<* years periodfrom the execution of the formal deed ofsale.>

Iss!H Has there a perfected contractof absolute sale for the portion of thedisputed <; s&.m.4land

&+H PK:. There was a perfectedcontract of sale. :ince the lotsubse&uently sold to odriue' is said toad$oin the Bpreviously paid lotB on threesides thereof, the sub$ect lot is capableof bein determined without the need ofany new contract. The fact that the exactarea of these ad$oinin residential lots issub$ect to the result of a survey does notdetract from the fact that they aredeterminate or determinable.Concomitantly, the ob$ect of the sale iscertain and determinate. Gnder Article-6,NCC, a thin sold is determinate ifat the time the contract is entered into,the thin is capable of bein determinedwithout necessity of a new or further

areement between the parties. 3ere,this definition finds reali'ation. Thus, allof the essential elements of a contract ofsale are present, i.e., that there was ameetin of the minds between theparties, by virtue of which :an Andresundertoo0 to transfer ownership of and todeliver a determinate thin for a pricecertain in money. Hithout any doubt, thereceipt profoundly spea0s of a meetin ofthe mind between :an Andres andodriue' for the sale of the propertyad$oinin portion previously sold toodriue'. The price is certain, which is#<. per s&uare meter. Kvidently, thisis a perfected contract of sale on adeferred payment of the purchase price.

All the pre4re&uisite elements for a validpurchase transaction are present.

There is also no reservation ofownership nor a stipulation providin fora unilateral rescission by either party.The stipulation that the Bpayment of thefull consideration based on a survey shallbe due and payable in five 5<* years fromthe execution of a formal deed of saleB isnot a condition which affects the efficacyof the contract of sale. ?t merely providesthe manner by which the fullconsideration is to be computed and thetime within which the same is to be paid.Eut it does not affect in any manner theeffectivity of the contract.

O)/*o Mo# vs. Ea"s/ Mo#

CA:ITE DE:ELOPMENT AN> :S.CYRUS LIM

G.R. No. 1$167?, F<"!a"# 1, 2000

Fa/s) A certain odolfo Juansinobtained a loan from Cavite9evelopment Ean0 5C9E*, to secure

which he mortaed a parcel of land. Asodolfo defaulted in the payment of hisloan, C9E foreclosed the mortae. Atthe foreclosure sale held on (arch <,;-, the mortaed property was soldto C9E as the hihest bidder and latertitle to the property was issued in itsname. Dn 8une 6, ;, privaterespondent Lolita Chan Lim offered topurchase the property from C9E.#ursuant to the terms of the offer, Limpaid C9E #7,. as Dption (oney.3owever, after some time followin upthe sale, Lim discovered that the title ofsub$ect property was oriinally reisteredin the name of #erfecto Juansin, fatherof mortaor odolfo, and that title ofodolfo was cancelled on (arch 27,;- by the TC of %.C as it wasfraudulently secured by the latter. Thisdecision has since become final andexecutory. Lim filed an action for specificperformance and damaes aainst C9Eand its mother company "KETC for thelatter!s alleed misrepresentation on theirability to sell the property.

C9E deny that a contract of

sale was ever perfected between themand Lolita Chan Lim. They contend thatLimFs letter4offer clearly states that thesum of #7,. was iven as optionmoney, not as earnest money. They thusconclude that the contract between C9Eand Lim was merely an option contract,not a contract of sale. The trial courtruled in favor of Lim.

Iss!H ?s there a perfected contract ofsale between Lim and C9E

&+H Pes. The sum of #7,.,althouh denominated in the offer topurchase as Boption money,B is actuallyin the nature of earnest money or down

payment when considered with the otherterms of the offer. ?n determinin thenature of a contract, the courts are notbound by the name or title iven to it bythe contractin parties. ?n Carceler v.CA, the :C has explained the nature ofan option contract)=An option contract is a preparatorycontract in which one party rants to theother, for a fixed period and underspecified conditions, the power to decide,whether or not to enter into a principalcontract, it binds the party who has iventhe option not to enter into the principalcontract with any other person durin theperiod desinated, and within that period,

to enter into such contract with the one towhom the option was ranted, if the lattershould decide to use the option. ?t is aseparate areement distinct from thecontract to which the parties may enterupon the consummation of the option. Anoption contract is therefore a contractseparate from and preparatory to acontract of sale which, if perfected, doesnot result in the perfection orconsummation of the sale.>

?n this case, after the paymentof the Q option money, the Dffer to#urchase provides for the payment onlyof the balance of the purchase price,

implyin that the Boption moneyB formspart of the purchase price. This isprecisely the result of payin earnestmoney under Art. -2 of the Civil Code.?t is clear then that the parties in thiscase actually entered into a contract ofsale, partially consummated as to thepayment of the price.

D+*v"# * Co/"a/ o Sa+

SERASPI vs. COURT OF APPEALSG.R. No. 1$-602, A)"*+ 2', 2000

Fa/sH (arcelino ecasa was theowner of two parcels of land. 9urin hislifetime, (arcelino contracted 7marriaes. At the time of his death in;-7, he had < children from his threemarriaes. ?n ;-, his intestate estatewas partitioned into three parts by hisheirs, each part correspondin to theshare of the heirs in each marriae. Theheirs of the first marriae, sold their

share to 9ominador ecasa, an heir ofthe second marriae. 9ominador,representin the heirs of the secondmarriae, in turn sold the share of theheirs to %uirico and #urificacion :eraspiwhose heirs are the present petitioners.?n ;<, the :eraspis obtained a loanfrom the Ralibo ural Ean0, ?nc. 5RE?*on the security of the lands in &uestion tofinance improvements on the lands.3owever, they failed to pay the loan forwhich reason the mortae wasforeclosed and the lands were sold toRE? as the hihest bidder.:ubse&uently, the lands were sold byRE? to (anuel ata, brother4in4law of%uirico :eraspi. ?t appears that ata, as

owner of the property, allowed %uirico:eraspi to administer the property.?n ;/-, private respondent :imeonecasa, (arcelino!s child by his thirdwife, ta0in advantae of the illness of%uirico :eraspi, forcibly entered thelands in &uestion and too0 possessionthereof. ?n ;7, the :eraspispurchased the lands from (anuel ataand afterwards filed a complaint aainst:imeon ecasa for recovery ofpossession of the lands.

Iss!H 9id the petitioners ac&uireownership over the property in &uestion

&+H ND. "or while a contract of saleis perfected by the meetin of mindsupon the thin which is the ob$ect of thecontract and upon the price, theownership of the thin sold is nottransferred to the vendee until actual orconstructive delivery of the property.3ence, the maxim non nudis pactis, sedtraditione dominia dominica rerumtransferuntur 5not mere areements buttradition transfers the ownership ofthins*. Conse&uently, petitioners arenot the owners of the property since ithas not been delivered to them. At thetime they bouht the property from ata



in ;7, the property was in thepossession of private respondent.

LAO vs. COURT OF APPEALSG.R. No. 701$, 6067 60?-'=-?,

F<"!a"# 17, 2000

Fa/sH The Associated Anlo4 American Tobacco Corporation5Associated* entered into a =Contract of:ales Aent> with petitioner Andres Laowhere Lao would sell ciarettesmanufactured and delivered by

Associated. Lao would in turn remit thesale proceeds to the corporation. 9urinthe effectivity of the contract, Lao failedto accomplish his monthly sales reportdespite a demand letter sent by

Associated. Associated stopped itsshipments to Lao.

Lao filed a complaint foraccountin and damaes aainst

Associated. The C"? ruled in favor of Laoand ordered both parties to undero acourt supervised accountin of their

respective account with the view ofestablishin the true and correctaccountability of Lao to Associated. The

Audit Committee submitted its report tothe court. The committee excludedshipments by Associated covered by billof ladin and factory invoices but withoutthe correspondin delivery receipts.

Iss!H Has the committee correct inexcludin the shipments not supportedby delivery receipts althouh covered bybills of ladin and factory consinmentinvoices

&+H PK:. Gnder Article -;/, NCC,a thin sold shall be understood as

delivered when it is placed in the controlor possession of the vendee. The AuditCommittee was correct when it adoptedas uideline that accountability over theoods shipped was transferred from thecorporation to Andres Lao only uponactual delivery of the oods to him. "or itis only when the oods were actuallydelivered to and received by Lao, did Laohave control and possession oversub$ect oods, and only when he hadcontrol and possession over said oodscould he sell the same.

9elivery is enerally evidencedby a written ac0nowledment of a personthat he or she has actually received the

thin or the oods, as in deliveryreceipts. A bill of ladin cannot substitutefor a delivery receipt. This is because it isa written ac0nowledment of the receiptof the oods by the carrier and anareement to transport and deliver themat a specific place to a person named orupon his order. ?t does not evidencereceipt of the oods by the consinee orthe person named in the bill of ladin+rather, it is evidence of receipt by thecarrier of the oods from the shipper fortransportation and delivery. Li0ewise, afactory consinment invoice is notevidence of actual delivery of the oods.

An invoice is nothin more than adetailed statement of the nature, &uantityand cost of the thin sold. ?t is not proofthat the thin or oods were actuallydelivered to the vendee or theconsinee.

3owever, as to shipmentscovered only by bills of ladin and factoryconsinment invoices but were reportedin Lao!s sales reports, the AuditCommittee correctly considered them inLaoFs account. The fact that Lao includedthem in his sales reports is an impliedadmission that sub$ect oods wereactually delivered to him, and that hereceived the said oods for resale.

Sa+ */4 R*4/ o R)!"4as

AAPO vs. COURT OF APPEALSGR No. 12'677, Ma"4 2, 2000

Fa/sH Crispula Abapo and :antiao Abapo executed in favor of Teodulfo%uimada a contract denominated as

=9eed of :ale under #acto de etro>.Gnder the contract, the land was sold for#<. with riht of repurchase withinfive 5<* years, failin which theconveyance would become absolute andirrevocable without the necessity ofdrawin up a new deed. No redemptionwas made. (ore than seven years later,Teodulfo %uimada sold the property toCrispula and husband #edro Eacalao for#<. . Gpon the death of the spousesEacalao, the land was alloted to theirheirs in e&ual individual shares andsucceeded the possessions anden$oyment of the land and paid each realestate taxes thereon to the exclusion of:antiao Abapo.

?n ;;, :antiao instituted apetition for reconstitution of oriinalcertificate of title over the property. Thepetition was ranted. Gpon the discoveryof the said reconstitution of title, theprivate respondents interposed a petitionto surrender owner!s copy of thereconstituted title in the handsof:antiao. The trial court dismissed thepetition without pre$udice to the filin ofthe appropriate action. #rivaterespondents instituted the complaint for%uietin of Title with damaes. ?n hisanswer,:antiao assailed the dueexecution of both the deed of sale under#acto de etro and the 9eed of Absolute

:ale. :antiao arues that what heentered in ;6/ may be considered onlyas an e&uitable mortae in view of theunusually inade&uate consideration of#< which was the same considerationin the 9eed of Absolute :ale in favor ofspouse Eacalao executed in ;/<.

Iss!H :hould the 9eed of Absolute:ale under #acto de etro beconsidered an e&uitable mortae due tothe alleed inade&uacy of price

&+H ND. The price of #< is notunusually inade&uate. The record

reveals that the assessed value of theland in dispute in ;/ was only #-.Thus, at the time of sale in ;6/, theprice of #< is inade&uately over andabove the assessed value of #-.Eesides, the mere fact that the price isinade&uate does not prove support theconclusion that the contract was a loanor that the property was not at all sold toTeodulfo %uimada. The price fixed in thesale with a riht to repurchase is notnecessarily the true value of the landsold. The rationale is that the vendor hasthe riht to fix a relatively reduced price,althouh not a rossly inade&uate one, inorder to afford the vendor a retro everyfacility to redeem the land. Thus,inade&uacy of the price is not sufficientto set aside a sale unless it is rosslyinade&uate or purely shoc0in to theconscience.

Coso+*a/*o o T*/+ * Pa/o R/"o Sa+

CRU8 vs. LEIS

G.R. No. 12-2$$, Ma"4 ?, 2000

Fa/sH Jertrudes ?sidro, mother orrespondents Leis, et al. obtained a loanfrom the petitioner4spouses Alexanderand Adelaida Cru'. The loan wassecured by a mortae over the propertycovered by TCT No. -7. Gnable topay her outstandin obliation after thedebt became due and payable,Jertrudes executed two contracts infavor of Alexander. The first isdenominated as =Rasunduan> which theparties concede is a #acto de etro salerantin Jertrudes one year torepurchase the property. The second is a

=Rasunduan n Tuwiran Eilihan>, a9eed of Absolute :ale coverin thesame property per the price of#7;,7., the same amount stipulatedin the Rasunduan. "or failure ofJertrudes to repurchase the property,ownership was therefore consolidated inthe name of Alexander in whose name anew TCT was issued. Jertrudes died.Thereafter, her heirs received demandsto vacate the premises from spousesCru', the new owners of the property.The private respondents responded byfilin a complaint for the nullification ofsale. The trial court court ruled that theBRasunduan,B providin for a sale con

pacto de retro, had superseded theBRasunduan n Tuwiran Eilihan,B thedeed of absolute sale. ?t was li0ewisefound that Jertrudes as well as privaterespondents failed to repurchase theproperty within the period stipulated andhas lost all their rihts to it. Nonetheless,the trial court and the CA found forprivate respondents. ?t rationali'ed thatspouses Cru' failed to comply with theprovisions of Article 6/ of the CivilCode re&uirin a $udicial order for theconsolidation of the ownership in thevendee a retro to be recorded in theeistry of #roperty.



Iss!H ?s the recordin in the eistryof #roperty of the consolidation ofownership of the vendee a condition sine&ua non to the transfer of ownership

&+H ND. Art. 6/, NCC re&uirin a $udicial order for the consolidation of theownership in the vendee a retro to berecorded in the eistry of #roperty isintended to minimi'e the evils which thepacto de retro sale has caused in thehands of usurers. A $udicial order isnecessary in order to determine the truenature of the transaction and to preventthe interposition of buyers in ood faithwhile the determination is bein made.Notwithstandin Art. 6/, the recordinin the eistry of #roperty of theconsolidation of ownership of the vendeeis not a condition sine &ua non to thetransfer of ownership. #etitioners are theowners of the sub$ect property sinceneither Jertrudes nor the co4ownersredeemed the same within one yearstipulated in the =Rasunduan>. Theessence of the pacto de retro sale is that

title and ownership of the property soldare immediately vested in the vendee aretro, sub$ect to the resolutory conditionof repurchase by the vendor a retrowithin the stipulated period. "ailure thusof the vendor a retro to perform saidresolutory condition vests upon thevendee by operation of law absolute titleand ownership over the property sold. Astitle is already vested in the vendee aretro, his failure to consolidate his titleunder Article 6/, NCC does not impairsuch title or ownership for the methodprescribed thereunder is merely for thepurpose of reisterin the consolidatedtitle.

DOULE SALE

ARICUATRO, JR. vs. COURT OFAPPEALS

G.R. No. 10-?02, F<"!a"# ?, 2000

Fa/sH Dn Dctober 6, ;6, petitioner:everino Earicuatro, 8r., bouht 2 lots onan installment basis from respondentConstantino Jaleos. Earicuatro,however, was unable to pay the fullamount to Jaleos. At the time theoriinal action for &uietin of title wasfiled in the trial court, Earicuatro had anunpaid balance of #-,.. The titlesto the said lots remained in the name ofJaleos. The contract of sale involvin

Lot No. expressly provided that Btheparties both aree that a final deed ofsale shall be executed, in favor of thebuyer upon full and complete payment ofthe total purchase price areed upon.B

After the sale, Earicuatro introducedcertain improvements on the said lotsand started to reside therein in ;/.:ince then he has been in actual andphysical possession of the 2 lots.3owever, on 9ecember /, ;6, Jaleossold the entire subdivision, includin the2 lots, to Kuenio Amores.:ubse&uently, Earicuatro was informedby Jaleos about the sale to Amores andwas advised to pay the balance of thepurchase price of the 2 lots directly to

Amores. After the sale of the entiresubdivision to Amores, he alleedly too0possession thereof and developed thesame for residential purposes andreistered the deed of sale. Thereafter, Amores sold the 2 lotsto the spouses (ariano and "elisaNemenio. #rior to the sale, however,Earicuatro was informed throuh a letterby Amores about the impendin sale of

the lots but the former failed to respond.The spouses Nemenio caused thetransfer of the titles to the said lots andthe issuance of tax declarations in theirnames. Thereafter, the spousesNemenio demanded from Earicuatro tovacate the said lots but the latter refusedto do so.

Iss!H Hho has better riht over thelots in dispute

&+H #etitioner Earicuatro as the firstbuyer has better riht over the disputedlots. Althouh Amores as the secondbuyer had caused the reistration of the9eed of :ale, the prior reistration of the

disputed property by the second buyerdoes not by itself confer ownership or abetter riht over the property. Article<--,NCC re&uires that such reistrationmust be coupled with ood faith. Primustempore, potior jure 5first in time,stroner in riht*. Rnowlede ained bythe first buyer of the second sale cannotdefeat the first buyerFs rihts exceptwhere the second buyer reisters inood faith the second sale ahead of thefirst. :uch 0nowlede of the first buyerdoes not bar him from availin of hisrihts under the law, amon them, toreister first his purchase as aainst thesecond buyer. Eut in converso,

0nowlede ained by the second buyerof the first sale defeats his rihts even ifhe is first to reister the second sale,since such 0nowlede taints his priorreistration with bad faith. This is theprice exacted by Art. <-- for the secondbuyer bein able to displace the firstbuyer+ that before the second buyer canobtain priority over the first, he mustshow that he acted in ood faiththrouhout 5i.e. in inorance of the firstsale and of the first buyerFs rihts* from the time of ac&uisition until the titleis transferred to him by reistration orfailin reistration, by delivery of

possession. The second buyer mustshow continuin ood faith andinnocence or lac0 of 0nowlede of thefirst sale until his contract ripens into fullownership throuh prior reistration asprovided by law. ?t does not appear that

Amores was in ood faith when hereistered the sale. Assumin aruendo that Amoreswas in ood faith, there is no showin inthe assailed decision that he continuedto act in ood faith as re&uired by Art.<--. A careful and thorouh scrutiny ofthe records of this case reveals that

Amores did not act in ood faith when hereistered his title. (oreover, thepreponderance of evidence supports thefindin that he already had 0nowlede ofthe previous sale of the disputed lots toEaricuatro. :uch 0nowlede tainted hisreistration with bad faith. To meritprotection under Art. <--, the secondbuyer must act in ood faith from thetime of the sale until the reistration ofthe same.

DOULE SALE5 INTERPRETATION OFCONTRACT

ANGEL AUTISTA vs. COURT OFAPPEALS

G.R. No. 12$6--, Ja!a"# 1?, 2000

Fa/sH Dn April 7, ;//, respondents Atien'as sold to petitioner Anel Eautistaa parcel of land inTaaytay City, for#.<(. At the time of the sale, the lotwas still reistered in the names of thedeceased parents of the Atien'as. Thesale is sub$ect to the followin terms andconditions, to wit)a. #,. upon sinin of thecontract+b. #;,. upon the Atien'a!spresentation to Eautista of a newcertificate of title of the property sub$ectof the sale, reistered in their name.3owever, the buyer may advance thenecessary amount to the sellers forpayment of their taxes which miht bere&uired by the eister of 9eeds ofTaaytay City before the TCT from thereistered owners to the sellers can beeffected but not exceedin #;,..

Any and all cash advances made by thebuyer to the sellers shall be deductedfrom the second payment of

#;,.. Eautista made the initialpayment of #,..

?n 8uly ;//, the Atien'aswrote a letter to Eautista, as0in#<,. for the inheritance and realtytaxes due on the sub$ect property andother incidental expenses to facilitate thetransfer of the title of the sub$ect propertyin their names. Eautista refused to ivethe additional money aruin thatadvance payment would be discretionaryon his part. 3ence, the Atien'ascancelled the contract to sell the sub$ectland.



(eanwhile, Eautista discussedwith the Chairman of the Eoard of ealtyEaron Corporation 5EC* the possiblesale of the sub$ect property in favor ofEC which however, did not pushthrouh.

?n Dctober, ;/ the Atien'aswere able to secure title over sub$ectland. Thereafter, they sold a portion ofthe land to EC. TCT was issued in thename of EC.

Iss!sH . 9o the Atien'as have theriht to rescind the contract of salebecause of EautistaFs refusal to advancethe payment intended to pay for taxesand other fees

2. ?s the sale of a portionof the land by the Atien'as to EC valid

&+H . No. The Atien'as have noriht to rescind the contract.

The rule is that where thelanuae of a contract is plain andunambiuous, its meanin should bedetermined without reference to extrinsic

facts or aids. The intention of the partiesmust be athered from that lanuae,and from that lanuae alone unlesssome ood reason can be assined toshow that the words used should beunderstood in a different sense. ?n thecase at bar, the provision of the Contractof :ale is plain and unambiuous thatEautista as buyer (AP advance to the

Atien'as as sellers the necessaryamount 5not exceedin #;,.* forthe payment of such taxes as may bere&uired before the TCT in favor of thesellers can be effected. The use of theword (AP meant that Eautista has thediscretion whether or not to advance the#;,.. 3e has no duty to do it. ?t is

purely optional on his part. Thus,Eautista did not violate the contract whenhe refused to pay the advance money.

2. No. Gnder Article <-- of the CivilCode before the second buyer canobtain priority over the first, he mustshow that he acted in ood faiththrouhout 5i.e., in inorance of the firstsale and of the first buyerFs rihts* from the time of ac&uisition until title istransferred to him by reistration orfailin reistration, by delivery ofpossession. EC cannot pretend to be abuyer in ood faith. ?n Graca vs. Court of

Appeals, the :C held that B . . .

0nowlede ained by the second buyerof the first sale defeats his rihts even ifhe is first to reister the second sale,since such 0nowlede taints his priorreistration with bad faith. There is nodispute that EC 0new that Eautista wasthe first buyer of the sub$ect lot. ?ts initialplan was to buy the whole lot fromEautista. ?t chaned its plan only when itfound s&uatters on the hilly portion of theproperty. Thus, it cannot claim the rihtof an innocent purchaser for value.

BDne who purchases realestate with 0nowlede of a defect or lac0of title in his vendor cannot claim ood

faith as well as one who has 0nowledeof facts which should have put him uponsuch in&uiry or investiation as miht benecessary to ac&uaint him with thedefects in the title of his vendor. . . 3ismere refusal to believe that such defectexists, or his willful closin of his eyes tothe possibility of existence of a defect inthe vendorFs title, will not ma0e him aninnocent purchaser for value if itafterwards develop that title was in factdefective and it appears that he had suchnotice of defect as would have led to itsdiscovery had he acted with thatmeasure of precaution which mayreasonably be re&uired of a prudent manin a li0e situation.B

:OID CONTRACT OF SALE AND ITSEFFECTS

CA:ITE DE:ELOPMENT AN> :S.CYRUS LIM

G.R. No. 1$167?, F<"!a"# 1, 2000

Fa/s) A certain odolfo Juansinobtained a loan from Cavite9evelopment Ean0 5C9E*, to securewhich he mortaed a parcel of land.Gpon default of odolfo in the paymentof his loan, the mortaed property wassold to C9E in a foreclosure sale held in(arch, ;-. ?n 8une, ;, privaterespondent Lolita Chan Lim offered topurchase the property from C9E.#ursuant to the terms of the offer, Limpaid C9E #7,. as Dption (oney.3owever, after some time followin upthe sale, Lim discovered that the title ofsub$ect property was oriinally reisteredin the name of #erfecto Juansin, fatherof mortaor odolfo, and that title of

odolfo was cancelled on (arch 27,;- by the TC of %.C as it wasfraudulently secured by the latter. Thisdecision has since become final andexecutory. :pouses Lim filed an actionfor specific performance and damaesaainst C9E and its mother company"KETC for the latter!s alleedmisrepresentation on their ability to sellthe property. The trial court rendered adecision in favor of spouses Lim. ?t heldC9E and "KETC liable for damaes5#2<,. as moral damaes+#<,. as exemplary and#7,. as attoryney!s fees* arisinfrom the impossibility of the performanceof their obliation under the perfectedcontract of sale.

Iss!H ?s the contract of sale betweenpetitioners C9E and "KETC andrespondents Lim valid ?f not, what isthe effect of the nullity of the contract

&+H No. C9E does not have a validtitle over the property sold. Gnder Art.-<; NCC, at the time of delivery orconsummation stae of the sale, it isre&uired that the seller be the owner ofthe thin sold. Dtherwise, he will not be

able to comply with his obliation totransfer ownership to the buyer.

The foreclosure sale fromwhich C9E derived its title over theproperty cannot be iven effect) *odolfo, the mortaor did not have avalid title over the property sold. Eein asale, the rule that the seller must be theowner of the thin sold also applies in aforeclosure sale. This is the reason Art.2< NCC, re&uires, amon other thins,that the mortaor or pledor be theabsolute owner of the thin pleded ormortaed, in anticipation of a possibleforeclosure sale should the mortaordefault in the payment of the loan+ and2* Neither can the foreclosure sale beiven effect based on the doctrine of =themortaee in ood faith> which providesthe rule that all persons dealin withproperty covered by a Torrens Certificateof Title, as buyers or mortaees, are notre&uired to o beyond what appears onthe face of the title. C9E cannot beconsidered a mortaee in ood faithbecause it failed to observe its duty ofdilience in ascertainin the validity of

odolfo!s title, as is re&uired of ban0ininstitutions. ?t appears that odolfoobtained his fraudulent title by executinan Kxtra48udicial :ettlement of theKstate Hith Haiver where he made itappear that he and #erfecto were theonly survivin heirs entitled to theproperty, and that #erfecto had waivedall his rihts thereto. This self4executeddeed should have placed C9E on uardaainst any possible defect in or&uestion as to the mortaorFs title.?ndeed, C9E and "KETC admit that theyare aware that the sub$ect land wasbein occupied by persons other thanodolfo and that said persons, who arethe heirs of #erfecto, contest the title of

odolfo.#ursuant to Article -252* of

the Civil Code, spouses Lim, bein thenon4uilty parties, are entitled to recoverthe #7.. option money paid bythem with interest at the leal rate to becomputed from the date of the filin ofthe complaint. 3owever, under thisprovision, prior demand is necessary inorder that the obliation to return whatwas iven becomes leally demandable.The filin of the action for damaesaainst C9E and "KETC amounted to ademand by respondents Lim for thereturn of their money. ConsiderinC9EFs nelience, the latter is liable to

pay moral damaes on the basis of Arts.2 and 22; of the Civil Code and the:C!s rulin in Tan v. CA that moraldamaes may be recovered even if aban0Fs nelience is not attended withmalice and bad faith. 3owever, the sumof #2<,. awarded by the trial courtis excessive. (oral damaes are onlyintended to alleviate the moral sufferinunderone by respondents Lim, not toenrich them at the expense of C9E and"KETC. Accordinly, the award of moraldamaes must be reduced to#<,.. Li0ewise, the award of#<,. as exemplary damaes and



#7, as attorneys fees, althouh $ustified under the Civil Code is reducedfor bein excessive.

La+ R)/*o

FRANCISCO vs. OISERG.R. No. 1$7677, Ma# $1, 2000

Fa/sH #etitioner Adalia "rancisco,three of her sisters, and their mother

Adela Elas, were co4owners of land onwhich stands a commercial buildin. Dn

Auust ;6, without the 0nowlede ofthe other co4owners, Adela Elas sold herM< share to respondent enaida Eoiser.Dn Auust <, ;;2, "rancisco receivedsummons concernin a complaint filedby Eoiser demandin her share in therentals from the tenants of the buildin."rancisco then informed Eoiser that shewas exercisin her riht of redemption.Dn Auust 2, ;;2, she deposited theredemption price with the Court.

Dn :eptember -, ;;<, "rancisco fileda case in court for leal redemptionallein that the 74day period forredemption under Art. 627, NCC hadnot yet expired since the vendor, Elas,never informed her and the other ownersabout the sale to respondent. Eoiser,however, claims that "rancisco had0nowlede of the sale as early as (ay7, ;;2 when she sent "rancisco aletter with a copy of the deed of salebetween her 5Eoiser* and Elas attached,informin petitioner of the sale anddemandin that rentals correspondin toher M< share of the property be remittedto her. The trial court dismissed thecomplaint for leal redemption holdin

that Art. 627 does not prescribe anyform of notifyin co4owners about a saleof co4owned property to enable them toexercise leal redemption. The courtconsidered the (ay 7,;;2 letter withthe copy of the deed of sale assubstantial compliance with the re&uirednotice under Art. 627. Conse&uently,the 74day period of redemption shouldbe counted not from Auust <, ;;2,when petitioner received the summons,but at the latest from 8une , ;;2, thedate petitioner wrote the tenants of thebuildin advisin them to continue payinrentals in full to her.

Iss!H Can the (ay 7, ;;2 letter byEoiser to "rancisco notifyin her of thesale of be considered compliance withthe notice re&uirement of Art. 627 forthe purposes of leal redemption

&+H ND. Art. 627 of the Civil Codeis clear in re&uirin that the writtennotification should come from the vendoror prospective vendor, not from any otherperson. There is, therefore, no room forconstruction. ?ndeed, the principaldifference between Art. <2- of theformer Civil Code and Art. 627 of thepresent one is that the former did not

specify who must ive the notice,whereas the present one expressly saysthe notice must be iven by the vendor.Kffect must be iven to this chane instatutory lanuae. ?n the second place,it ma0es sense to re&uire that the noticere&uired in Art. 627 be iven by thevendor and by nobody else. The vendorof an undivided interest is in the bestposition to 0now who are his co4ownerswho under the law must be notified of thesale. ?t is the notification from the seller,not from anyone else, which can removeall doubts as to the fact of the sale, itsperfection, and its validity, for in acontract of sale, the seller is in the bestposition to confirm whether consent tothe essential obliation of sellin theproperty and transferrin ownershipthereof to the vendee has been iven.

Now, it is clear that by notimmediately notifyin the co4owner, thevendor can effectively prevent theexercise of riht of redemption. ?n thepresent case, the sale too0 place in ;6but 0ept secret until ;;2. ?t is, therefore,un$ust when the sub$ect sale has already

been established before both lowercourts and now, before this Court, tofurther delay petitionerFs exercise of herriht of leal redemption by re&uirin thatnotice be iven by the vendor beforepetitioner can exercise her riht. "or thisreason, we rule that the receipt bypetitioner of summons on Auust <, ;;2constitutes actual 0nowlede on thebasis of which petitioner may nowexercise her riht of redemption within 7days from finality of this decision.

:a+**/# o S/*)!+a/*os * a LasCo/"a/

CAMPO ASSETS CORP. vs. CLU .O. COMPANY

G.R. NO. 1$?'6, MARC& 17, 2000

Fa/sH Alma Arambulo 5Arambulo*used to operate a food andentertainment business establishmentin#asay City pursuant to a (emorandumof Areement 5(DA* executed in ;;between her husband and Campo

Assets which had a contract of lease withthe owner of the sub$ect premises. The(DA was renewed in ;;7. ?t appears

that sometime in 8une, ;;-, Arambuloand Chan Por0 Jui 5Allan* entered into apartnership reistered as Club W.D.Company, for the operation of thebusiness. Club W. D. operated thebusiness and introduced improvementsthereon. ?n ;;6, Campo Assets too0possession of the clubFs premises,claimin that Arambulo had abandonedthe premises and that the re4ta0in waspursuant to #araraph @? of the (DAbetween Arambulo and Campo Assets,which reads)

B@?. ?n case the premises shallbe deserted or vacated before theexpiration of this Areement, the "?:T#ATP shall have the riht to enter thesame as the aent of the :KCDN9#ATP either by force or otherwise,without bein liable to any prosecutionthereof, and the "?:T #ATP shallfurthermore have the option to reta0eand operate the business itself or reletthe same as aent of the :KCDN9#ATP xxx.>

Conse&uently, Club W. D.represented by Allan filed a complaint forforcible entry to recover possession ofthe premises and damaes.

The case was dismissed forlac0 of merit. The court held that the actof Campo Assets in ta0in possession ispursuant to #ar. @? of the (DA, whichstipulation is valid, bein in the nature ofa resolutory condition which is notproscribed by law.

Iss!H ?s the stipulation in #ar. @? ofthe lease contract void for bein contraryto public order and public policy

&+H PK:. The stipulation is void. Althouh #ar. @? of the (DA employs theprefatory words Bin case the premisesshall be deserted or vacated before theexpiration of the AreementB, whichwould restrict the operation of the clauseto situations wherein the premises are infact vacated already, and wouldtherefore imply that the re4entry with theuse of force if at all, is aainst propertyonly, the stipulation would not proscribere4ta0in by use of force aainst personsdespite the fact that the premises are stillin the actual possession of another,albeit under a &uestioned riht.(oreover, there is no re&uirement of

notice before re4entry. 8urisprudencesupports the view that when parties to acontract expressly reserve an option toterminate or rescind a contract upon theviolation of a resolutory condition, noticeof resolution must be iven to the otherparty when such riht is exercised. ?nulueta vs. (ariano, the :C ruled thatresort to courts may be necessary whenthe riht involves the reta0in of propertywhich is not voluntarily surrendered bythe other party. The rationale for suchrulin is based on the thesis that no oneshould ta0e the law into his own hands.?n this sense, the stipulation is leallyvulnerable. #ermittin the use of

un&ualified force to repossess theproperty and without condition of noticeupon the lessee is frauht withdanerous possibilities. :uch a broadstipulation cannot be sanctioned for thereason that it would allow thelessorMowner to ta0e the law into his ownhands, and undermine the philosophybehind the remedy of forcible entry whichis to prevent breach of the peace andcriminal disorder and to compel theparty out of possession to respect andresort to the law alone to obtain what heclaims to be his.



Nature of Lease of Chattels

8A9?N vs. NLCG.R. No. 11?26', F<"!a"# 2$, 2000

Fa/sH #etitioners were drivers ofprivate respondent, #hil$ama?nternational, ?nc. 5#??*, a domesticcorporation enaed in the operation of=Joodman Taxi.> #etitioners used todrive #??!s taxicabs every other day on a2-4hr. wor0 schedule under the boundarysystem. Gnder this arranement, thepetitioners earned an averae of #-daily. Nevertheless, #?? deducts fromsaid daily earnins #7. for thewashin of the taxi units. Eelievin thatthe deduction is illeal, petitionersdecided to form a labor union to protecttheir rihts, however their plans were cutshort by their dismissal. #etitioners fileda complaint for unfair labor practice andilleal dismissal with the labor arbiter,who dismissed said complaint. Dnappeal, the NLC dismissed the case on

the round of lac0 of $urisdiction over thecase as petitioners and privaterespondent have no employer4employeerelationship but rather a leaseholdareement which is covered under theCivil Code.

Iss!H ?s there a lessor4lesseerelationship between petitioners and #??

&+H ND. ?n the lease of chattels, thelessor loses complete control over thechattel leased althouh the lesseecannot be rec0less in the use thereof,otherwise, he would be responsible forthe damaes to the lessor. ?n the caseof $eepney ownersMoperators and

$eepney drivers, the former exercisesupervision and control over the latter.The manaement of the business is inthe owner!s hands. The owner as holderof the certificate of public conveniencemust see to it that the driver follows theroute prescribed by the franchisinauthority and the rules promulated asreards its operations. This relationshipmay be applied by analoy to taxiownersMoperators and taxi drivers.

R*4/ o F*"s/ R!sa+ o a Lss

SEN PO E> MAR>ETING CORP.

vs. MARTINE8G.R. No. 1$117, F<"!a"# ?, 2000

Fa/sH :ofia (artine' was thereistered owner of 2 parcels of land wholeased the lots to Pu :ion, father of thepresident and stoc0holders of petitioner:en #o K0 for a period of years.Hhen the lease expired it was laterrenewed several times, the last renewalbein on (arch ;2 which is to expireon 8an. ;/. ?n themeantime, :ofia sold the lots and thebuildin to her dauhter, respondent

Teodora (artine'. After the leasecontract expired in 8an. ;/, it was noloner renewed by the parties. :en #oK0, however, continued to possess andoccupy the leased properties, andreularly paid the monthly rentalsto :ofia until her death, and then to herheirs throuh Teodora. ?n ;;, Teodorasent a letter to petitioner :en #o K0informin it of her intention to sell theleased premises and authori'in abro0er to neotiate the sale Bwith anyand all interested parties.B :en #o K0offered to purchase the poperty. Anotherbuyer, Tiu Gypin, was also interested.:en #o K0 then filed a complaint for theannulment of the sale executed by :ofiain favor of Teodora, invo0in its alleedriht of first refusal or preferential riht tobuy the leased premises 9ays later, theproperty was sold to Tiu Gypin. :en #oK0 amended its complaint, prayin forthe nullity of the second sale transaction.

Iss!H 9oes petitioner :en #o K0have a riht of first refusal

&+H ND. :en #o K0 does not have ariht of first refusal to assert aainstprivate respondents. Neither any law norany contract rants it preference in thepurchase of the leased premises.#etitioner cites #.9. No. </, .A. No.62 and Art. 622,NCC but they are notapplicable to the case at bar. #.9. No.</5The Grban Land eform Act*pertains to areas proclaimed as urbanland reform 'ones. The lots in disputeare located in Tacloban City, which hasnot been declared as an urban landreform 'one. .A. No. 62, on the otherhand, only deals with expropriation ofparcels of land located in the Cityof(anila, which the leased premises are

not. "inally, Art. 622, NCC only dealswith small urban lands that are bouhtfor speculation where only ad$oinin lotowners can exercise the riht of pre4emption or redemption. :en #o K0 is notan ad$oinin lot owner, but a lesseetryin to buy the land that it was leasin.?ndeed the riht of first refusal may beprovided for in a lease contract.3owever in this case, such riht wasnever stipulated in any of the severallease contracts between :en #o K0 and:ofia. :en #o K0 claims that it wasTeodora herself who assured them thatthey can have the first priority to buy thesub$ect parcels of land, but there is

absolutely no proof of this. :uch rant ofthe riht of first refusal must be clearlyembodied in a written contract, but thereis none in the present case.

Ra+ o T" o Las

UCE vs. COURT OF APPEALSG.R. No. 1$6?1$, Ma# 12, 2000

Fa/sH #etitioner entered into a leasecontract over a parcel of land with privaterespondents Tioncos for a period of <

years to commence on 8une ;/; and toend on 8une ;;- Bsub$ect to renewal foranother years, under the same termsand conditions.B #etitioner thenconstructed a buildin and paid there&uired monthly rentals. Hhen privaterespondents later demanded an increasein the rent, petitioner offered to pay theprevious lower rental which the formerrefused to accept. Dn Auust ;;7, petitioner filed withthe TC a complaint for specificperformance prayin that privaterespondents be ordered to accept therentals she tendered and to respect thelease of fifteen years, which wasrenewable for another ten years.

Iss!H Can it be reasonably inferredthat the parties intended an automaticrenewal of the lease contract when theystipulated that the lease shall be for aperiod of < years Bsub$ect to renewal foranother yearsB

&+H ND. There is nothin in thestipulations in the contract and the

parties! actuation that shows that theparties intended an automatic renewal orextension of the term of the contract. Thefact that the lessee was allowed tointroduce improvements on the propertyis not indicative of the intention of thelessors to automatically extend thecontract. Neither the filin of thecomplaint a year before the expiration ofthe <4year term has any bearin on theintention of the parties reardinrenewal. ?n the case at bar, it was notspecifically indicated who may exercisethe option to renew, neither was it statedthat the option was iven for the benefitof herein petitioner. Thus, pursuant to

Art. ;6, NCC, the period of the lease

contract is deemed to have been set forthe benefit of both parties. enewal ofthe contract may be had only upon theirmutual areement or at the will of both ofthem. ?t is the owner4lessor!s preroativeto terminate the lease at its expiration.The continuance, effectivity andfulfillment of a contract of lease cannotbe made to depend exclusively upon thefree and uncontrolled choice of thelessee between continuin the paymentof the rentals or not, completely deprivinthe owner of any say in the matter.(utuality does not obtain in such acontract of lease and no e&uality existsbetween the lessor and the lessee since

the life of the contract would be dictatedsolely by the lessee.

E9/s*o o Las

UNI:ERSITY P&YSICIANS SER:ICES,INC. vs. COURT OF APPEALS

G.R. No. 11-0-, Ja!a"# $1, 2000

Fa/sH :pouses Lourdes and "austo(abanta and Gniversity #hysicians:ervices, ?nc. 5G#:?* entered into alease areement, commencin on 8une



, ;/7 and endin on (ay 7, ;7,with a provision that the Operiod of thislease may be extended for anotherperiod of < years sub$ect only to re4neotiation of rentals, which re4neotiations should start not less than 6months prior to the termination of theoriinal period of this lease.! Dn (ay 2, ;7, G#:? informedthe spouses that it is exercisin its optionto extend the lease for another period of< years and that it is willin to neotiatethe rentals. The spouses, throuh theirlawyers, answered that since there wasno reneotiation on the rentals whichshould have started not less than 6months prior to the termination of theoriinal period, there are no rihts whichhave arisen thereunder. G#:? insistedon its riht to extend the lease. (eanwhile, the lease wasterminated upon the filin of the unlawfuldetainer case by the spouses, which wasultimately resolved aainst G#:? in the?AC. Dn November 2, ;<, :pouses(abanta filed a complaint for

Compensation and 9amaes aainstG#:? before the TC of #asi claiminthat despite the lapse of the oriinalperiod of the lease, the lattercontinuously occupied and used theleased premises without payin thenecessary rent. The trial court rantedthe claim of the spouses. Dn appeal, theCA affirmed the decision of the trial courtwith some modifications. 3ence, thisappeal.

Iss!H 9oes G#:? have the riht toextend the duration of the lease underthe terms of the lease areement

&+H ND. The provisions of a

contract should not be read in isolationfrom the rest of the instrument but, onthe contrary, interpreted in the liht of theother related provisions in order to fix themeanin of any of its parts. A carefulreadin of the renewal clause yields nobasis for reconi'in an exclusiveunilateral riht on the part of the lesseeto extend the term of the lease foranother < years. The word Oextended!was &ualified by the word Omay be! whichconnotes possibility+ it does not connotecertainty. The extension clearly waspremised on the act of both parties, i.e.,reneotiation of rentals, which shouldstart not less than 6 months prior to the

termination of the oriinal period of thelease. "urthermore, in a reciprocalcontract li0e a lease, the period of thelease must be deemed to have beenareed upon for the benefit of bothparties, absent lanuae showin thatthe term was deliberately set for thebenefit of the lessee or lessoralone. G#:? failed to comply withthe 6 month period, hence, no extensionof the lease in its favor has arisen.

Co)/ o I)+* N Las

ROSELLO=ENTIR vs. LEANDAG.R. No. 12'??1, A)"*+ 12, 2000

Fa/sH espondent Leyte JulfTraders, ?nc. 5LJT?* entered into acontract of lease of a parcel of land withEentir for a period of 2 years startin(ay <, ;6, which was extended foranother - years or until (ay 7, ;;2. ?n;;, Eentir sold the leased premises tospouses #ormada. LJT? &uestioned thesale allein that it had a riht of firstrefusal. Dn (ay <, ;;2, LJT? filed acomplaint for reformation of the expiredcontract of lease to incorporate therein,the verbal areement between theparties that in the event Eentir leases orsells the lot after the expiration of thelease, LJT? has the riht of first refusalor the riht to e&ual the hihest offer.The complaint was dismissed on theround of prescription. Dn LJT?!s

motion for reconsideration, respondent $ude reversed the order of dismissal onthe round that the action for reformationhad not yet prescribed.

Eentir and :pouses #ormadafiled a petition for certiorari to the CAsee0in the annulment of the order ofrespondent court. ?n holdin that theaction for reformation has not prescribed,the CA upheld the rulin of the trial courtthat the 4year prescriptive periodshould be rec0oned not from theexecution of the contract of lease in;6, but from the date of the alleed -4year extension of the lease contract afterit expired in ;. Conse&uently, whenthe action for reformation of instrument

was filed in ;;2 it was within yearsfrom the extended period of the lease.LJT? theori'ed, and the CA areed, thatthe extended period of lease was anBimpl ied new leaseB within thecontemplation of Article 6/ of the CivilCode, under which provision, the otherterms of the oriinal contract weredeemed revived in the implied newlease.

Iss!H 3as the complaint forreformation of instrument filed byrespondent Leyte Julf Traders, ?nc.prescribed

&+H PK:. The prescriptive periodshould be counted from the date ofexecution of the lease contract and notfrom the date of extension of the same."irst, Art. 6/ spea0s of an implied newlease 5tacita reconduccion* where at theend of the contract, the lessee continuesto en$oy the thin leased Bwith theac&uiescence of the lessorB, so that theduration of the lease is Bnot for the periodof the oriinal contract, but for the timeestablished in Article 62 and 6/.B3ence, if the extended period of leasewas expressly areed upon by theparties, as in the present case, then the

term should be exactly what the partiesstipulated, not more, not less. :econd,even if the supposed -4year extendedlease be considered as an implied newlease under Art. 6/, Bthe other termsof the oriinal contractB contemplated insaid provision are only those terms whichare ermane to the lessee!s riht ofcontinued en$oyment of the propertyleased. The prescriptive period of years provided for in Art. -- forreformation of an instrument applies byoperation of law, not by the will of theparties. Therefore, the riht of action forreformation accrued from the date ofexecution of the contract of lease in;6. As the action was filed only in;;2 or 2- years after the cause ofaction accrued, the same has becomestale, hence, time4barred.

CREDIT TRANSACTIONS

Esa+a/*o C+a!s5 I/"s/

ANCO FILIPINO SA:INGS MORTGAGE AN> vs. COURT OFAPPEALS

G.R. No. 12?227, Ma# $0, 2000

Fa/sH espondent4spouses Arcillaobtained loans secured by real estatemortaes from the petitioner Eanco"ilipino :avins and (ortae Ean05EANR* where the EANR may increasethe rate of interest on said loans, withinthe limits allowed by law, as its Eoard of9irectors may prescribe for its borrowers.

At that time, under the Gsury Law, asamended, the maximum rate of interestfor loans secured by real estate

mortaes was 2Q per annum.Dn 8anuary ;/6, the Central

Ean0 of the#hilippines issued CECircular No. -;-, increasin themaximum interest rate at ;Q perannum. Dn Dctober ;/, spouses

Arcilla received from the EANR theirB:tatement of AccountB on their loanaccounts with interest computedcomputed at /Q per annum. ?t turnedout that the EANR unilaterally increasedthe rate of interest on the loan accountfrom 2Q as provided in their K(areement to /Q based on theauthority of the afore&uoted CE Circular.Gpon failure of the spouses Arcilla to pay

the amorti'ations due, the ban0 then fileda petition for extra$udicial foreclosure,where at the auction, the ban0purchased the property.

Dn :eptember ;<, thespouses Arcilla filed a complaint for theannulment of the loan contracts andforeclosure sale. They contend, amonothers, that the loan contracts andmortaes between the parties were nulland void because) 5a* the rate ofinterests chared by the EANR wereusurious+ 5b* that they are entitled to therefund inasmuch as the escalationclause incorporated in the loan contracts



do not have a correspondin de4escalation clause and is therefore illeal.

Iss!H ?s the unilateral increase ininterest rate made by petitioner based onan escalation clause in their contractvalid

&+H ND. The unilateral increase ininterest is not valid. The loan contractswith real estate mortae entered into byand between the petitioner andrespondents stated that the petitionermay increase the interest on said loans,within the limits allowed by law, aspetitionerFs Eoard of 9irectors mayprescribe for its borrowers. At the timethe contracts were entered into, saidescalation clause was valid. ?t was onlypursuant to #.9. No. 6- which becameeffective (arch ; wherein to be valid,escalation clauses should provide) *that there can be an increase in interestif increased by law or by the (onetaryEoard+ and 2* in order for suchstipulation to be valid, it must include aprovision for the reduction of the

stipulated interest in the event that themaximum rate of interest is reduced bylaw or by the (onetary Eoard. 9espitethe validity of the escalation clause, thepetitioner may not, however, increasethe stipulated interest pursuant to theCentral Ean0 Circular -;- from 2Q to/Q. CE Circular -;-, althouh it hasthe force and effect of law, is not a lawand is not the law contemplated by theparties which authori'es the petitioner tounilaterally raise the interest rate of theloan. Conse&uently, the reliance by thepetitioner on Central Ean0 Circular -;-to unilaterally raise the interest rates onthe loan in &uestion was without anyleal basis.

Ra+ Es/a/ Mo"/a

ROLES vs. COURT OF APPEALSG.R. No. 12$-0?, Ma"4 1, 2000

Fa/sH The property sub$ect of thiscase is oriinally owned by Leonobles. Hhen he died, it passed to hisson :ilvino who declared the property inhis name and paid the taxes thereon.Gpon the latter!s death, his widow andchildren inherited the property.

#etitioners Lucio obles, et al. were thechildren of :ilvino, and 3ilario obles istheir half4brother. The tas0 of cultivatinwas assined to Lucio while thepayment of the land taxes was entrustedto 3ilario. "or un0nown reason, the taxdeclaration of the parcel of land in thename of :ilvino was cancelled andtransferred to Kxe&uiel Eallena. Eallenasecured a loan from Antipolo ural Ean0usin the tax declaration as security.:omehow the tax declaration wastransferred to the name of Antipolo uralEan0 and later was transferred to thename of respondent4 spouses 3ilario

and Andrea obles. Andrea secured aloan from Cardona ural Ean0 usin thetax declaration as security. "or failure topay the mortae debt, the property wasforeclosed with Cardona ural Ean0emerin as the hihest bidder. Theban0 sold the property to spouses@erel and uth :antos. ?n :ept. ;/,petitioners discovered the mortae andattempted to redeem the property butwas unsuccessful. ?n ;, thespouses :antos too0 possession of thepropertry and was able to secure a "ree#atent. #etitioners then filed an actionfor &uietin of title. espondents&uestioned their standin to sue for&uietin of tit le, contendin thatpetitioners no loner have any interest tothe property in &uestion due to themortae effected by 3ilario and theconse&uent foreclosure thereof by theEan0. espondents arued that 3ilariohad become the absolute owner of theproperty at the time he mortaed thesame.

Iss!H ?s the real estate mortae

constituted by 3ilario valid

&+H ND. ?n a real estate mortaecontract, it is essential that the mortaorbe the absolute owner of the property tobe mortaed+ otherwise, the mortaeis void. ?n the present case, it isapparent that 3ilario was not theabsolute owner of the entire sub$ectproperty+ and that the ural Ean0 ofCardona, ?nc., in not fully ascertainin histitle thereto, failed to observe duedilience and, as such, was a mortaeein bad faith. Euyers of unreistered realproperty, especially ban0s, must exertdue dilience in ascertainin the titles ofmortaors and sellers, lest some

innocent parties be pre$udiced. "ailure toobserve such dilience may amount tobad faith and may result in the nullity ofthe mortae, as well as of thesubse&uent foreclosure andMor auctionsale. Considerin that 3ilario can bedeemed to have mortaed the disputedproperty not as absolute owner but onlyas a co4owner, he can be ad$uded tohave disposed to the ural Ean0 ofCardona, ?nc., only his undivided sharetherein. The said ban0, bein theimmediate predecessor ofthe :antosspouses, was a mortaee inbad faith. Thus, $ustice and e&uitymandate the entitlement of the :antos

spouses, who merely stepped into theshoes of the ban0, only to what leallypertains to the latter 3ilarioFs share inthe disputed property.

R*4/s o a Mo"/a

ISAGUIRRE vs. DE LARAG.R. No. 1$'0-$, Ma# $1, 2000

Fa/sH #etitioner ?sauirre andrespondent 9e Lara were parties in a

case involvin a parcel of land whereinthere was dispute as to its ownership aswell as the nature of the transaction theyentered into reardin the disputed land.The case was resolved by the :upremeCourt which declared that 9e Lara wasthe lawful owner of the land and held thatthe contract they entered into was ane&uitable mortae and not a sale. Dn the basis of the Court!s decision,9e Lara filed a motion for execution withthe trial court for the delivery ofpossession of the land. ?sauirreopposed the motion, assertin that, asmortaee, he had the riht of retentionover the property pendin actualpayment of the loan by 9e Lara.

Iss!H ?s ?sauirre, as mortaee,entitled to retain possession of thesub$ect property until payment of theloan

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ALT3DGJ3, K@KN ?" ?T ?: NDTKCD9K9, T3K (DTJAJK ?:NK@KT3KLK:: E?N9?NJ EKTHKKNT3K #AT?K:. T3G:, T3K DNLP?J3T JANTK9 EP LAH ?N "A@DD" T3K (DTJAJKK ?: TD 9K(AN9T3K KWKCGT?DN AN9 T3KKCD9?NJ D" T3K 9DCG(KNT ?NH3?C3 T3K (DTJAJK ?:"D(AL?K9. A: A JKNKAL GLK,T3K (DTJAJD KTA?N:#D::K::?DN D" T3K (DTJAJK9#D#KTP :?NCK A (DTJAJK ?:(KKLP A L?KN AN9 T?TLK TD T3K#D#KTP 9DK: NDT #A:: TD T3K(DTJAJKK. 3DHK@K, K@KNT3DGJ3 A (DTJAJKK 9DK: NDT3A@K #D::K::?DN D" T3K#D#KTP, T3KK ?: ND?(#A?(KNT D" 3?: :KCG?TP:?NCK T3K (DTJAJK 9?KCTLP

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GNAELK TD #AP 3?: 9KET, T3K(DTJAJK CK9?TD (AP?N:T?TGTK AN ACT?DN TD"DKCLD:K T3K (DTJAJK,H3KT3K 8G9?C?ALLP DKWTA8G9?C?ALLP, H3KKEP T3K(DTJAJK9 #D#KTP H?LL T3KNEK :DL9 AT A #GEL?C AGCT?DN AN9T3K #DCKK9: T3KK"D( J?@KNTD T3K CK9?TD TD T3K KWTKNTNKCK::AP TD 9?:C3AJK T3K(DTJAJK LDAN. KJA9LK:: D"?T: #D::K::D, T3K (DTJAJK9#D#KTP (AP :T?LL EK :DL9,



H?T3 T3K #K:C?EK9"D(AL?T?K:, ?N T3K K@KNT D" T3K9KETDF: 9K"AGLT ?N T3K#AP(KNT D" 3?: LDAN DEL?JAT?DN.

La+ R)/*o5 Mo"/a

P&ILANCOR FINANCE vs. COURTOF APPEALS

G.R. No. 12?-72, J! 26, 2000

Fa/sH #etitioner @icente 3i'on, 8r. isthe owner of aricultural lands located inEalite, :an "ernando, #ampana andthe private respondents Alfredo #are,#ablo Jalan and Amado @ie are theleitimate and bona fide tenants thereof.The said lands were mortaed by 3i'onto petitioner #hilbancor which were lateron extra$udicially foreclosed upon defaultof 3i'on in the payment of hisobliations. :ubse&uently, the landswere sold at public auction to petitioner#hilbancor. :even years after thereistration of the sale with the eisterof 9eeds, private respondents filed withthe #rovincial Ararian eform

Ad$udication Eoard 5#AAE* a complaintfor maintenance of possession withredemption and tenancy riht of pre4emption aainst petitioners #hilbancorand 3i'on. #etitioner #hilbancoralleed, amon others, that it has notenancy or aricultural relationship withprivate respondents considerin that itac&uired ownership over the disputedlots by virtue of an extra$udicialforeclosure sale that privaterespondents! riht to redeem the lots in&uestion, if there is any, has alreadyexpired in accordance with :ection 2 of

. A. 7--. #AAE allowed lealredemption of the sub$ect lands in favorof private respondents. This decisionwas affirmed by the 9epartment of

Ararian eform Ad$udication Eoard59AAE*. #etitioners appealed to theCA. The appeal was dismissed as wellas the (" which was subse&uentlyfiled. 3ence, this appeal.

Iss!H Can the private respondentsstill exercise their leal riht ofredemption over the sub$ect landsconsiderin that they invo0ed their rihtto redeem only on 8uly -, ;;2, sevenyears after the date of reistration of thecertificate of sale with the eister of

9eeds

&+H ND. #rivate respondents canno loner redeem the sub$ect lands.A No. 7--, :ection 2, provides asfollows) B?n case the landholdin is soldto a third person without the 0nowledeof the aricultural lessee, the latter shallhave the riht to redeem the same at areasonable price and consideration.#rovided, that the entire landholdin soldmust be redeemed. #rovided further, thatwhere there are two or more ariculturallessees, each shall be entitled to said

riht of redemption only to the extent ofthe area actually cultivated by him. Theriht of redemption under this sectionmay be exercised within two 52* yearsfrom the reistration of the sale and shallhave priority over any other riht of lealredemption.B

Co!"" a P"" o C"*/

J.L. ERNARDO CONSTRUCTION vs.

COURT OF APPEALSG.R. No. 10-'27, Ja!a"# $1, 2000

Fa/sH The municipal overnmentof :an Antonio, Nueva Kci$a, awarded to8.L. Eernardo Construction 5EC*, theconstruction of the :an Antonio #ublic(ar0et. The municipality areed toassume the expenses for the demolition,clearin and site fillin of the constructionsite. These expenses were advanced byEC. The municipality refused to pay thesame despite repeated demands andthat the public mar0et was almost

complete. Thus, EC filed a complaint forspecific performance with prayer forpreliminary attachment and enforcementof contractor!s lien. The lower court issued the writ ofpreliminary attachment and it alsoranted the riht to maintain possessionof the public mar0et and to operate thesame. ?t held that since EC has not beenreimbursed, it stands in the position of anunpaid contractor and as such is entitledpursuant to Art. 22-2 22-7 NCC to alien upon the public mar0et which itconstructed.

Iss!H (ay the contractor!s lien beenforced

&+H ND. Art. 22-2, NCC providesthat the claims of contractors enaed inthe construction, reconstruction or repairof buildins or other wor0s shall bepreferred with respect to the specificbuildin or other immovable propertyconstructed. 3owever, this provisiononly finds application when there is aconcurrence of credits, i.e. when thesame specific property of the debtor issub$ected to the claims of severalcreditors and the value of such propertyof the debtor is insufficient to pay in fullall the creditors. ?n such a situation, the&uestion of preference will arise, that is,

there will be a need to determine whichof the creditors will be paid ahead of theothers. This statutory lien should only beenforced in the context of some 0ind of aprocedure where the claims of allpreferred creditors may be bindinlyad$udicated, such as in insolvencyproceedins. The action filed by petitioner doesnot parta0e of the nature of aninsolvency proceedin, but is basicallyfor specific performance and damaes.Thus, even if it is finally ad$udicated thatEC is entitled to invo0e the contractor!slien, such lien cannot be enforced in the

present action for there is no way ofdeterminin whether or not there existother preferred creditors with claims overthe public mar0et.

I:. TORTS AND DAMAGES

Daas PEOPLE vs. TOREJOS

G.R. No. 1$2217, F<. 1', 2000

Fa/sH Dn April 2<, ;;/, accusedEonifacio Tore$os was convicted forrapin (ary Cris Cerna and was metedthe supreme penalty of death. Thevictim was, at the time of the commissionof the crime, only 7 years old and ninedays. The $udment of the TC of 9avaoCity, f indin him uilty beyondreasonable doubt of the crime of rape,and orderin him to pay the parents of(ary Cris Cerna, Luciano and osalieCerna, the amount of #7,. as civilindemnity pursuant to Art. in relation

to Art. -,#C, is now before the:upreme Court on automatic review.

Iss!H 3ow much and to whom shouldthe civil indemnity and moral damaesbe awarded

&+H Considerin that the crime wascommitted under circumstances which

$ustify the imposition of death penalty,i.e., the victim is a child below / yearsold, the amount of civil indemnity isincreased to #/<,.. (oreover,accused Tore$os is also ordered to paymoral damaes in the amount#<,.. "inally, the civil indemnityand moral damaes should be awarded

to (ary Cris as the offended party.

PEOPLE vs. GON8ALO PENASOG.R. No. 121?'0, F<"!a"# 2$, 2000

Fa/sH Jon'alo #enaso was founduilty by the TC of Tabilaran of thecrime of rape and sentenced to suffer animprisonment of reclusion perpetua andto pay the victim indemnity and moraldamaes in the amount of #<,.The victim was < years old at the timethe offense was committed.

Iss!H ?s the award of damaesproper

&+H ND. #ursuant to current $urisprudence, the award of #<,.as civil indemnity is mandatory upon thefindin of the fact of rape. ?n addition,moral damaes amountin to#<,. at the least should beimposed in rape cases involvin younand immature irls between the aes of7 and -, without need of further proof.3ence, the amount of damaes awardedshould be #,..



PEOPLE vs. EREOG.R. 122706, F<. 22, 2000

Fa/sH Dn the niht of 8une 2, ;;<,an altercation over a flashliht led to theuntimely death of osanna 3onrubia.The victim died by reason of the stabwounds she sustained at the bac0 and atthe chest. An eyewitness sufficientlyidentified the assailant as the accusedCarlito KreUo. The mother of osannaclaimed she spent #2-,. inconnection with her death and burial.:he was also claimin #/,2. byway of lost income which osanna couldhave earned had she not been untimely0illed. There was also a claim for moraldamaes brouht by the pain and sorrowcaused by osanna!s demise.The trial court found accused uilty ofmurder and ordered him to pay to theheirs of osanna #2-,. forexpenses incurred in connection with herdeath and burial+ #<,. for loss ofthe victim!s life and #<,. by way

of moral damaes. The claim for lossincome was however denied.

Iss!H ?s the award of damaes andthe denial of the award for loss of incomeproper and correct under thecircumstances

&+H As to actual damaes, ND. ?nsee0in recovery for actual damaes it isnecessary that the claimant producecompetent proof or the best evidenceobtainable such as receipts to $ustify anaward therefor. Actual or compensatorydamaes cannot be presumed but mustbe proved with reasonable deree ofcertainty. Dnly substantiated and proven

expenses or those which appear to havebeen enuinely incurred in connectionwith the death, wa0e or burial of thevictim will be reconi'ed by the court.The list of expenses incurred for thewa0e, funeral and burial of the victimamountin to #2-, /. submitted bythe victim!s mother is self4servin andnot substantiated. The :upreme Courtcannot, therefore, affirm the trial court!saward of #2-,. as actualexpenses.

As to the civil indemnity, PK:.?n line with current $urisprudence theaward of #<,. as civil indemnity5ex delicto* is sustained, which re&uires

no proof other than the fact of death ofthe victim and assailant!s responsibilitytherefor.

As to the moral damaes,PK:. The award of #<,. by way ofmoral damaes for the pain and sorrowsuffered by the victim!s family inconnection with osanna!s death issustained. :uch award is ade&uatereasonable and with sufficient basista0in into consideration the pain andmental anuish suffered by the victim!sfamily.

As to denial of the award forloss of income, PK:. The court a &uo

correctly denied for lac0 of factual basisthe claim of the victim!s mother for anaward for loss of income or earnincapacity of the deceased estimated byher at #6 per day or #<,6. amonth or #/,2. a year. Thishandwritten estimate of the deceased!sdaily income as a self4 employed fishvendor durin the past eiht years priorto her death submitted by the victim!smother in the course of her testimony incourt is not supported by competentevidence li0e income tax returns orreceipts. ?t bears stress thatcompensation for lost income is in thenature of damaes and as such re&uiresdue proof of the damaes suffered+there must be unbiased proof of thedeceased!s averae income. ?n theinstant case the victim!s mother aveonly a self4servin hence unreliablestatement of her deceased dauhter!sincome. (oreover, the award for lostincome refers to the net income of thedeceased, that is, her total income lessher averae expenses. No proof of thevictim!s averae expenses was

presented. 3ence, there can be noreliable estimate of the deceased!s lostincome.

*!.! The :C held the accused uiltyonly of the crime of homicide.

PEOPLE vs. DE GU8MANG.R. No.11'670, F<. 22, 2000

Fa/sH Accused enato de Ju'man,et al. were found uilty by the TC ofEauio City of the crime of robbery withhomicide committed aainst the personof 9r. Amadeo Eelmonte and the house

helper Teresa 3ape. Dn the civilaspect, they were ordered to restore orpay the value of the stolen properties, toindemnify #<,. each victim inaccordance with Art. 226, NCC+#-6,2,. representin the lostearnins of 9r. Eelmonte for 2< yearssince he was only 7< years old when0illed and the life expectancy of anaverae "ilipino is 6 years old,#2/-,; representin actual andcompensatory damaes, #,, asmoral damaes and #,. asexemplary damaes to the heirs of 9r.Eelmonte+ and #,. exemplarydamaes to the heirs of 3ape.

Iss!H ?s the award of damaesproper and correct under thecircumstances

&+H The award iven by the trialcourt for loss of earnins is erroneous.

As established, 9r. Eelmonte wasearnin an averae of #<,. aspracticin physician+ #2, asprofessor of medicine per month or#2,, per year. ?t was li0ewiseestablished that 9r. Eelmonte was only7< years old at the time of his death.

Loss of earnin capacity is computed onthe followin formula)

Net Life expectancyJross LivinKarnin S 152M7* 547<* xannual Z expensesCapacity at death income5JA? * 5 <Q of JA?* S152M7* 547<* x#2,,. I #,--.. S152M7* 5-<* x#,--,. S 7 x #,--,. S#7,72,.

Thus the award for loss of earnin isreduced to #7,72,..

As reards the award foractual damaes the same is reducedfrom #2/-,; to #7,/;./< since thisis the amount that was proved and dulyreceipted.

The award for moral damaesto the leal heirs of 9r. Eelmonte isli0ewise reduced to #<,. in linewith prevailin $urisprudence. The lower

court should have awarded moraldamaes for the 0illin of Teresa 3apeconsiderin its findin that aravatincircumstances attended the robbery40illin, in accordance with Art. 227 ofthe Civil Code. Thus, the award of#<,. as moral damaes iswarranted under the circumstances.Li0ewise the award for exemplarydamaes is reduced to #2,.each for the heirs of 9r. Eelmonte andTeresa 3ape.

PEOPLE vs. MENDIONAG.R. No. 12?0-6, F<. 21, 2000

Fa/sH Accused Liberato (endionawas convicted of the crime of rape, andsentenced to suffer the supreme penaltyof death. 3e was also ordered to pay theoffended party, (aricel Caponcol, theamount of #<,. as moraldamaes.

Iss!H :hould the #<,.awarded to the offended party beclassified as moral damaes

&+H ND. He correct the trial court!serroneous classification of the award of#<,. as moral damaes. The

award authori'ed by criminal law as civilindemnity 5ex delicto* for the offendedparty is mandatory upon the findin ofthe fact of rape+ it is distinct from andshould not be denominated as moraldamaes which are based on different

$ural foundation and assessed by thecourt in the exercise of sound discretion."urther, our more recent rulins hold thatthe indemnification for the victim shall bein the increased amount of #/<,. ifthe crime of rape is committed oreffectively &ualified by any of thecircumstances under which the deathpenalty is authori'ed by law. Applyin



the foreoin rulin, the civil indemnity tobe awarded to the complainant is#/<,..

CALALAS vs. COURT OF APPEALSG.R. No. 1220$?, Ma# $1, 2000

Fa/sH Dn the way to #oblacion:ibulan, Neros Dccidental, petitioner@icente Calalas! passener $eepney wasbumped by an ?su'u truc0. #rivaterespondent Kli'a :una, a passener inthe $eepney sustained in$uries. Kli'a fileda complaint for damaes aainst @icentebased on breach of contract of carriaeby the latter in failin to exercise thedilience re&uired of him as a commoncarrier. @icente was ad$uded liable fordamaes to Kli'a, includin #<, asmoral damaes.

Iss!H ?s the award of moral damaesproper

&+H ND. As a eneral rule, moral

damaes are not recoverable in actionsfor damaes predicated on a breach ofcontract for it is not one of the itemsenumerated under Art. 22; of the CivilCode. As an exception, such damaesare recoverable) 5* in cases in which themishap results in the death of apassener, as provided in Art. /6-, inrelation to Art. 22657* of the Civil Code+and 52* in the cases in which the carrieris uilty of fraud or bad faith, as providedin Art. 222.

?n this case, there is no lealbasis for awardin moral damaes sincethere was no factual findin by theappellate court that petitioner acted inbad faith in the performance of the

contract of carriae.

PEOPLE vs. MAGATG.R. No. 1$0026, Ma# $1, 2000

Fa/sH Eefore this court for automaticreview is the $oint decision of the TC of%C, in 2 criminal cases, findin accused

Antonio (aat uilty of rapin hisdauhter, Ann "ideli (aat, on twooccasions and sentencin him to sufferthe extreme penalty of death for eachcase, and to pay the sum of #<,.as compensatory damaes, #2,.as moral damaes and, #<, as

exemplary and corrective damaes.

Iss!H ?s the award of damaesproper

&+H The sum awarded ascompensatory damaes should beincreased from #<,. to#/<,.. The :C has previously heldthat =if the crime of rape is committed oreffectively &ualified by any of thecircumstances under which the deathpenalty is authori'ed by the presentamended law, the indemnity of the victimshall be in the increased amount of not

less than #/<,.. ?n the 2ndcriminalcase however, while appellant wassentenced to reclusion perpetua, as thecrime of rape was committed when thevictim is already above years old, thecompensatory damae should be thesame 5#/<,.*. The trauma,inominy, pain and shame suffered bythe complainant can not be treated orrearded any lesser.

?n crimes of rape, moraldamaes may additionally be awarded tothe victim in the criminal proceedin, insuch amount as the Court deems $ust,without the need for pleadin or proof ofthe basis thereof. The fact thatcomplainant has suffered the trauma ofmental, physical and psycholoicalsufferins which constitute the bases formoral damaes are too obvious to stillre&uire the recital thereof at the trial bythe victim, since the Court itself evenassumes and ac0nowledes such aonyon her part as a aue of her credibility.Nevertheless, the award of #2,.as moral damaes is excessive. Anaward of #<,. for each count of

rape is more reasonable. The award of exemplary orcorrective damaes is deleted in theabsence of any leal basis therefor.

PEOPLE vs. AUTISTAG.R. No. 1$1'0, A)"*+ 27, 2000

Fa/sH The TC of i'al found 3enryand Nilo Eautista uilty of murder andsentenced them to suffer the penalty ofreclusion perpetua and to pay $ointly theamounts of #2-,7;. as actualdamaes and #7,. as civilindemnity to the heirs of the victim,

?midio Jra$o. The prosecution witnessichard Jra$o, son of the victim, testifiedon the commission of the crime by theaccused. #urita Jra$o testified on theamount of damaes) funeral expenses,earnin capacity, hospital bill amountinto #2-,7;..

Iss!H Hhat are the nature and theamount of damaes that may beawarded by the court

&+H Kvery person criminally liablefor a felony is also civilly liable. Theamount and nature of damaes to beawarded are)

. ?ndemnity for 9eath. Art.226,NCC provides for the payment ofindemnity for death caused by a crime.?nitially fixed in Art. 226 at #7,.,the amount of indemnity for death has,throuh the years, been raduallyincreased in view of the declinin valueof the peso. ?t is presently fixed at#<,.. 3ence, the trial courtcorrectly awarded indemnity for death tothe heirs of ?midio in this amount.

2. Actual 9amaes. Art.2;;,NCC provides that Bexcept asprovided by law or by stipulation, one isentitled to an ade&uate compensation

only for such pecuniary loss suffered byhim as he has duly proved.B Theprosecution submitted receipts andpresented the testimony of #urita, thewidow of ?midio, showin that his familyincurred expenses in the total amount of#2-,7;. for his wa0e and burial.3ence, the trial court li0ewise correctlyawarded actual damaes to the heirs of?midio in this amount.

The civil liability of accused forindemnity for death and actual and moraldamaes, however, is solidary and not

$oint as ruled by the trial court.7. (oral 9amaes. Gnder

Art. 226,NCC, the spouse, leitimateand illeitimate descendants andascendants of the deceased are entitledto moral damaes Bfor mental anuish byreason of the death of the deceased.B#urita testified that she suffered painfrom the death of her husband. Thus, inaccordance with recent decisions of thisCourt, accused should be liable to paythe additional amount of #<,. asmoral damaes.

-. Kxemplary 9amaes. Gnder

Art. 227,NCC, Bexemplary damaes asa part of the civil liability may be imposedwhen the crime was committed with oneor more aravatin circumstances.B ?nthis case, the aravatin circumstanceof abuse of superior strenth should beappreciated aainst Nilo. Thus, accusedNilo Eautista should be ordered to paythe heirs of ?midio the additional sum of#7,. as exemplary damaes.

*!.! Accused were found uilty ofhomicide not murder.

PEOPLE :S. PASCUAL

G.R. No. 127761, A)"*+ 2', 2000

Fa/sH The accused, #edro .#ascual, and a certain 8ohn 9oe werechared with the crime of murder.#ascual was found uilty of 0illin 9r.#icio by testimony of prosecution witness(arissa obles. osalinda :.#icio, wifeof the late 9r.#icio, testified on the civilaspect of the case. :he stated shespent around #7, for the wa0e andfuneral service. :he also declared thather husband used to receive a monthlysalary of #7, as municipal healthofficer in addition to the #2-, annualincome he used to earn in farmin and

rains business.

Iss!H Hhat are the nature and theamount of damaes that may beawarded

&+H ?n view of the death of thevictim, 9r. (aximino #icio, 8r., his forcedheirs are entitled to #<,.representin civil indemnity ex delicto.They are also entitled to #<,. byway of moral damaes inasmuch as thewidow of the victim, osalinda #icio,testified on how she felt over the loss of



her husband. Additionally, the accusedis liable to pay to the heirs of the victimdamaes for loss of earnin capacity ofthe deceased. 3owever, actual damaesmay not be awarded in view of theabsence of competent evidence tosupport the same.

?t appears that 9r. #icio was6- years old at the time of his death on(arch -, ;;<. 3er widow testified thathe used to receive a monthly salary of#7,. as (unicipal 3ealth Dfficerof :an (anuel, ?sabela. ?n accordancewith the American Kxpectancy Table of(ortality which was adopted by theCourt, the loss of earnin capacity shallbe computed as follows)Net Karnin Capacity 5W* S LifeKxpectancy x 5Jross Annual ?ncome ILivin Kxpenses e.. <Q of annualross income*S 2 546-* x 5<6,.4/,.* 7S .66/ x /,.S #72,26.

OROSA vs. COURT OF APPEALSG. R. No. 1110'0, A)"*+ -, 2000

Fa/sH #eti tioner 8ose Drosapurchased a "ord :edan on installmentfrom "iesta (otor :ales Corporation5"(:C*, executin and deliverin to thelatter a promissory note payable inmonthly installments. To securepayment, he executed a chattelmortae over the sub$ect motor vehiclein favor of "(:C which in turn assinedthe promissory note and chattelmortae to private respondent "C#

Credit Corporation. Drosa failed to paypart of an installment as well as three 57*other consecutive installments.Conse&uently, "C# Credit Corporationdemanded from him payment of theentire outstandin balance of theobliation with accrued interest and tosurrender the vehicle which petitionerwas alleedly detainin. As Drosa failedto do so, "(:C filed a complaint forreplevin and damaes in the TC of(anila aainst the former. ?t was able toprovisionally secure the writ. The trial court ruled that "(:C isnot entitled to the writ of replevin sinceDrosa already made payments on the

installments, albeit late and irreular. ?tordered the return of the sub$ect vehicle,or its e&uivalent, to petitioner. ?t li0ewiseranted petitioner!s counterclaim formoral damaes, exemplary damaes,and attorney!s fees.

Iss!H ?s Drosa entitled to moraldamaes, exemplary damaes, andattorney!s fees

&+H ND. Drosa!s claim must bedenied. As to the matter of moraldamaes, the law clearly states that onemay only recover moral damaes if they

are the proximate result of the otherparty!s wronful act or omission. Twoelements are re&uired. "irst, the act oromission must be the proximate result ofthe physical sufferin, mental anuish,friht, serious anxiety, besmirchedreputation, wounded feelins, moralshoc0, social humiliation and similarin$ury. :econd, the act must bewronful. Accordin to Drosa, the car sub$ectof this case was bein used by hisdauhter, married to 8ose Concepcion???, a scion of a prominent family. 3emaintains that when the complaint wasfiled aainst him, he suffered untoldembarrassment as he had to explain thesuit to his dauhter!s in4laws. 3owever,that could have been avoided had he notassined the car to his dauhter and hadhe been faithful and prompt in payin theinstallments re&uired. Drosa brouht thesituation upon himself and cannot nowcomplain that "(:C is liable for themental anuish and humiliation hesuffered. "urther, "(:C brouht thecomplaint only to exercise a leal riht,

believin that it had a meritorious causeof action clearly borne out by a mereperusal of the promissory note andchattel mortae. The rule has alwaysbeen that moral damaes cannot berecovered from a person who has filed acomplaint aainst another in ood faith. Anent the award of exemplarydamaes, $urisprudence provides thatwhere a party is not entitled to actual ormoral damaes, an award of exemplarydamaes is li0ewise baseless.

?n the matter of attorney!s fees,it should li0ewise be denied. Nopremium should be placed on the riht tolitiate and not every winnin party isentitled to an automatic rant of

attorney!s fees. The party must showthat he falls under one of the instancesenumerated in Article 22 of the CivilCode. This, Drosa failed to do."urthermore, where the award of moraland exemplary damaes is eliminated,so must the award for attorney!s fees bedeleted.

PEOPLE vs. CAANDEG.R. No. 1$277, F<"!a"# ', 2000

Fa/sH @icente Trinidad and @ictorTrinidad and accused Cabande, had

serious misunderstandin over Lot No.;; of the Euenavista Kstate inEulacan. ?n convictin Cabande, the trialcourt relied on the eyewitness account ofChristopher Trinidad, son of @ictor, whowas five years old when the crime wascommitted and who was then ridin the

$eepney toether with the two victims.The court a &uo also noted that therewas a feud between accused and thevictims over the ownership of a parcel ofland. ?t concluded that the 0illin was&ualified by treachery, because thevictims Bwere totally defenseless and hadno opportunity to defend themselves or

retaliate when shot.B The trial courtli0ewise ordered the accused to pay#<,. as civil indemnity,#,. for the wa0e and burialexpenses, moral damaes andexemplary damaes each to the heirs ofthe victims, as well as indemnity for lossof income in the amount of #.< millionto the heirs of @ictor and #77/,. tothe heirs of @icente.

Iss!H ?s the award of damaes andcivil indemnity proper and correct underthe circumstances

&+H ?n line with current $urisprudence, we affirm the award ofindemnity ex delicto to the heirs of eachvictim in the sum of #<, or a total of#,. This may be awarded withoutneed of proof other than the commissionof the crime. Li0ewise, we sustain theaward of #,. to the heirs ofeach victim for the wa0e and burialexpenses, for these were duly proven.

Althouh the records show that theywere entitled to moral damaes, we hold

that the award should be reduced to#, or #<, for each set ofheirs of the victims.

He cannot sustain, however,the award of exemplary damaes, whichare awarded only in the presence of oneor more aravatin circumstances.None was established in this case.Li0ewise, we hold that the trial courterred in awardin the amount of #.<million and #77/,. as loss of income.The amount of indemnity for loss ofearnin capacity is based on the incomeat the time of death and the probable lifeexpectancy of the victim. ?t should bestressed that the amount recoverable isnot the entire earnins, but only that

portion which the beneficiaries wouldhave received. Thus, indemnity for lostincome refers to the victimFs totalearnins minus the necessary livinexpenses. ?n the case of @ictor, his wifetestified that the annual income fromtheir piery business was #7,.Considerin that the two of themoperated and manaed the business, theprofits should be divided e&ually betweenthem. Accordinly, the annual income of@ictor, who was 7; years old at the timeof his death, was #<,. Considerinthat his livin expenses have not beenproven, the Court exercises thediscretion to ascertain and fix the same.

Gnder the circumstances, we4find theamount of #<, as reasonable livinexpenses.

A;AS, JR. vs. COURT OF APPEALSG.R. No. 102?67, F<"!a"# 10, 2000

Fa/sH A sale of land and nonpaymentof income tax thereon resulted to thefilin by E? eional 9irector A&uilinoLarin of a criminal complaint for taxevasion aainst petitioner Eanas. :uchfilin of the case aainst him was



publici'ed in several newspapers.eactin to the complaint for tax evasionand the news reports, Eanas filed withthe TC of (anila an action for damaesaainst respondents Larin, et al. forextortion and malicious publication of theE?Fs tax audit report. 3e claimed thatthe filin of criminal complaints aainsthim for violation of tax laws wereimproper because he had alreadyavailed of the tax amnesty laws.

The trial court decided in favorof the respondents and awarded Larin#2,. as actual damaes.

Iss!H ?s the award of damaes toLarin proper

&+H ND. Any person who see0s tobe awarded actual or compensatorydamaes due to acts of another has theburden of provin said damaes as wellas the amount thereof. Larin says theextortion cases filed aainst himhampered his immediate promotion,caused him stron anxiety and socialhumiliation. The trial court awarded him

actual damaes. 3owever, the appellatecourt stated that, despite pendency ofthis case, Larin was iven a promotion atthe E?. :aid respondent court foundnothin on record, to show that hesuffered loss of seniority that alleedlybarred his promotion. ?n fact, he waspromoted to his present position despitethe pendency of the instant case(oreover, the records of the casecontain no statement whatsoever of theamount of the actual damaes sustainedby the respondents. Actual damaescannot be allowed unless supported byevidence on the record. The courtcannot rely on speculation, con$ecturesor uesswor0 as to the fact and amount

of damaes. To $ustify a rant of actualor compensatory damaes, it isnecessary to prove with a reasonablederee of certainty, the actual amount ofloss. :ince we have no basis with whichto assess, with certainty, the actual orcompensatory damaes counter4claimedby Larin, the award of such damaesshould be deleted.

(oral damaes may berecovered in cases involvin actsreferred to in Art. 2, NCC. As a rule, apublic official may not recover damaesfor chares of falsehood related to hisofficial conduct unless he proves that thestatement was made with actual malice.

PEOPLE vs. ALAGONG.R. Nos. 126-$6=$7, F<"!a"# 10,

2000

Fa/sH The TC of #asi City foundaccused Alaon and afael uilty of twocounts of murder for the death of(ano and Earcelona and ordered themto pay actual, moral and exemplarydamaes, as well as indemnity for thedeaths to the heirs of the two victims.

Iss!H ?s the award of damaes andindemnity proper and correct under thecircumstances

&+H As to actual damaes, ND. Hecannot sustain the award of actualdamaes in favor of the heirs of (anofor failure to substantiate the bareassertion of the widow with othercorroborative evidence. The Court canonly rant such amount for expenses ifthey are supported by receipts. ?n theabsence thereof, no award for actualdamaes can be ranted. "or the samereason, the award of actual damaes tothe heirs of ?sidro Earcelona should bereduced as the amount duly supportedby documentary evidence.

As to the award of #<,.each to the heirs of the victims asindemnity for the deaths of (anoand Earcelona, PK:. He affirm suchaward as this is in accord with prevailin

$urisprudence. As to moral and exemplary

damaes, ND. The trial court erred inawardin to the heirs of the two victims

lump sums of #,. each formoral and exemplary damaes. Theseare separate in nature and re&uireseparate determination. Considerin thatthe heirs of the victims as0ed for it andtestified that they experienced moralsufferin, moral damaes in the amountof #<,. is awarded to the heirs ofthe victims to compensate them for thein$uries to their feelins. The award forexemplary damaes must be deleted,considerin the crime was committedwithout any other aravatincircumstances.

"inally, we must also add theaward for loss of earnin capacity. Thesister of the deceasedEarcelona testified

that the victim was earnin #-<. aday or #-,7<. per month and therecords reveal that he was 2/ years oldat the time of his death. Dn the otherhand, it was established that (ano was7 years old at the time of his death andearnin #-,<. per month.

PEOPLE vs. DANDOG.R. No. 12066, F<"!a"# 1, 2000.

Fa/sH The TC of Launa foundaccused #D7 Apolinar 9ando uilty ofmurder for the 0illin of Cesar Castro and

awarded to the heirs of the victims civilindemnity for the death of Castro,reimbursement for actual expensesincurred for the wa0e and burial, as wellas indemnity for loss of earnin capacityin the amount of #,62,..

Iss!H ?s the award of damaes andindemnity proper and correct under thecircumstances

&+H As to the amount of #<, asindemnity for the death for Castro, PK:.:aid amount is awarded, without need offurther proof other than the death of the

victim. ?n addition, the heirs are alsoentitled to receive a compensation for theloss of earnin capacity of the victim.The formula for computin the same asestablished in decided cases is asfollows)Jross NecessaryNet Karnin S Life x Annual 4LivinCapacity Kxpectancy?ncome Kxpenses

The life expectancy ise&uivalent to two thirds 52M7* multipliedby the difference of and the ae of thedeceased. :ince Castro was -/ yearsold at the time of his death, his lifeexpectancy was 22 more years. Celso,Castro!s son, testified that his fatherearned #7,. monthly or #76,.annually from the sash factory. ?naddition, the victimFs annual income fromfarmin as found by the trial court was#<7,.. The ross annual income ofthe deceased was #;,.. Allowinfor necessary livin expenses of fiftypercent 5<Q* of his ross earnins, histotal net earnin capacity amounts to

#;/;,.. 7; As to the expenses actually

incurred by the family of the victim for thewa0e and burial, Celso was able to provedurin trial that they incurred the sum of#7;,;/-.. The amount of #7<,;/-.awarded by the trial court asreimbursement of funeral expenses is,accordinly, increased to #7;,;/-..

A//o"#s Fs * /4 Co)/ oDaas

INDUSTRIAL INSURANCE COMPANYvs. ONDAD

G.R. No. 1$6722, A)"*+ 12, 2000

Fa/sH The present #etition finds itsroots in an incident which involved threevehicles) a Jalant :ima car driven byJrace (orales, a pac0ed passener

$eepney oriinally driven by LiorioEondad, and a 9( Transit Eus driven byKduardo (endo'a. The respondentsasserted that their vehicle was on fullstop because of a flat tire and it was thebus which hit (oralesF car. (oreover,they contended that petitioner had actedin bad faith in impleadin them and that,contrary to its alleation, no prior

demand had been made upon them.The trial court exculpated theEondads and ordered petitioner to paythem actual, moral and exemplarydamaes, as well as attorneyFs fees.

Iss!H (ay attorney!s fees and otherlitiation expenses be awarded if onewho claims it is compelled to litiate withthird persons

&+H PK:. AttorneyFs fees may beawarded if one who claims it iscompelled to litiate with third persons orto incur expenses to protect oneFs



interests by reason of an un$ustified actor omission on the part of the party fromwhom it is souht. ?n $ustifyin the awardof attorneyFs fees and other litiationexpenses, the court held thatrespondents were compelled to litiatean unfounded suit because of petitionerFsnelience and lac0 of prudence in notverifyin the facts before filin this action.The facts of this case clearly show thatpetitioner was motivated by bad faith inimpleadin respondents. ?ndeed, apersonFs riht to litiate, as a rule, shouldnot be penali'ed. This riht, however,must be exercised in ood faith. Absenceof ood faith in the present case isshown by the fact that petitioner clearlyhas no cause of action aainstrespondents but it rec0lessly filed suitanyway and wantonly pursued pointlessappeals, thereby causin the latter tospend valuable time, money and effort inunnecessarily defendin themselves,incurrin damaes in the process. ?n thiscase, the records show that petitionerFssuit aainst respondents was manifestlyun$ustified.

LIAILITY FOR DAMAGES IN ACTIONASED ON MALICIOUSPROSECUTION

AYANI vs. PANAY ELECTRIC CO.G.R. No. 1$?6'0, A)"*+ 12, 2000

Fa/sH ?n (arch ;;6, #anay KlectricCompany, ?nc. 5#KCD* discontinuedsupplyin electrical services to twopension houses owned by petitioner.

Allein that it had discovered theft ofelectricity in petitionerFs businessestablishments, #KCD filed twocomplaints for violation of .A. No. /72aainst petitioner with the City#rosecutor of ?loilo City. The City#rosecutor dismissed the complaints on

Auust , ;;6 and Auust ;, ;;6,respectively. #KCD appealed thedismissal to the :ecretary of 8ustice.

Dn Dctober , ;;6,petitioner filed with the TC of ?loilo Cityan action for in$unction and damaesarisin from malicious prosecution, thenamended his complaint to add a prayerfor writ of preliminary prohibitoryin$unction to ma0e #KCD desist fromma0in Bfalse imputations that plaintiffalleedly continued to commit violationsB

of .A. No. /72. #KCD filed a motion todismiss the amended complaint, but saidmotion was denied. Dn :eptember 2,;;/, the trial court ranted petitionerFsre&uest for the issuance of a writ ofpreliminary mandatory in$unction. DnNovember /, ;;/, #KCD filed apetition for certiorari and prohibition withthe Court of Appeals, prayin that theappellate court declare the orders of thetrial court denyin the motion to dismissand rant of writ of #(? null and void andli0ewise souht the dismissal of hereinpetitionerFs complaint in the lower court.

The :ecretary of 8usticeupheld the dismissal of the complaintsfor violations of .A. No. /72 on (arch-, ;;. The CA dismissed the complaintfor in$unction and damaes filed byEayani.

Iss!H ?s the action for maliciousprosecution premature

&+H PK:. The re&uisites for anaction for damaes based on maliciousprosecution are) 5* the fact of theprosecution and the further fact that thedefendant was himself the prosecutor,and that the action was finally terminatedwith an ac&uittal+ 52* that in brinin theaction, the prosecutor acted withoutprobable cause+ and 57* the prosecutorwas actuated or impelled by lealmalice. Considerin the facts in thiscase, we aree with the appellate courtthat one of the elements for an actionbased on malicious prosecution, theelement of final termination of the actionresultin in an ac&uittal, was absent atthe time petitioner filed civil case. The

records show that petitionerFs action forin$unction and damaes was filed onDctober , ;;6, whereas the :ecretaryof 8ustice dismissed with finality #KCDFscriminal complaints aainst hereinpetitioner only on (arch -, ;;. 3ence,the civil case for malicious prosecutionwas prematurely filed.

:ILLANUE:A vs. UNITED COCONUTPLANTERS AN>

G.R. No. 1$'2?1, Ma"4 7, 2000

Fa/sH 3erminiildo @illanueva, fatherof the petitioner, applied for and was

ranted a loan by GC#E which at thetime was manaed by Eobby Caf[. ?n thecourse of the ban0 audit, certain fraud,anomalies and irreularities werediscovered in the application, processinand &uantity of said amount whichprompted GC#E to conduct investiationon the matter. GC#E filed criminalcomplaints which resulted to the ac&uittalof the defendants. ?n view of theac&uittal, 3ector @illanueva filed anaction for damaes on the round ofalleed malicious prosecution with TC.?n its answer, GC#E denied thealleation in the complaint and assertedthat there is no cause of action since the

fillin of the criminal complaint was nottainted with malice.

Iss!H ?s GC#E liable for damaes

&+H ND. The adverse result of anaction does not ma0e the prosecutionthereof wronful neither does it sub$ectthe action to payment of damaes. Thelaw does not impose a penalty to theriht to litiate. esort to $udicialprocesses, by itself, is not an evidence ofill will. As the mere act of filin criminalcomplaint does not ma0e thecomplainant liable for malicious

prosecution. These must be proof thatthe suit was performed by leal malice.

An inexcusable intent to oppress, vex,annoy or humiliate. A contrary rule woulddiscourae peaceful resources to thecourt and un$ustly penali'e the exerciseof a citi'en!s riht to litiate. Hhere theaction is filed in ood faith, no penaltyshould be imposed thereon.

Rov"# o Daas * N+*/A/s

CALALAS vs. COURT OF APPEALSG.R. No. 1220$?, Ma# $1, 2000

Fa/sH Dn the way to #oblacion:ibulan, Neros Dccidental, #etitioner@icente Calalas! passener $eepney wasbumped by an ?su'u truc0 owned by"rancisco :alva. #rivate respondentKli'a :una, a passener in the $eepneysustained in$uries. Kli'a filed a complaintfor damaes aainst @icente based onbreach of contract of carriae by the

latter in failin to exercise the diliencere&uired of him as a common carrier.@icente, on the other hand, filed a7rd party complaint aaint "rancisco.

The lower court rendered $udment, aainst "rancisco andabsolved @icente of liability. ?t too0coni'ance of another case 5Civil CaseNo. 7-;* filed by @icente aainst"rancisco and his driver @erena, for&uasi4delict, in which the latter were held

$ointly liable to @icente for the damae tohis $eepney.

Dn appeal to the CA, the rulinof the lower court was reversed on theround that Kli'a!s cause of action wasbased on a contract of carriae, not

&uasi4delict, and that the common carrierfailed to exercise the dilience re&uiredunder the Civil Code. The appellate courtdismissed the third4party complaintaainst "rancisco and ad$uded @icenteliable for damaes to Kli'a.

Iss!H ?s Kli'a bound by the rulin inthe earlier case 5Civil Case No. 7-;*findin the driver and the owner of thetruc0 liable for &uasi4delict

&+H ND. The issue in the formercase 5Civil Case No. 7-;* is not thesame as those in the present. The issuein Civil Case No. 7-; was whether

:alva and his driver @erena were liablefor &uasi4delict for the damae caused topetitionerFs $eepney. Dn the other hand,the issue in this case is whetherpetitioner is liable on his contract ofcarriae. The first, &uasi4delict, also0nown as culpa a&uiliana or culpa extracontractual, has as its source thenelience of the tortfeasor. The second,breach of contract or culpa contractual, ispremised upon the nelience in theperformance of a contractual obliation.

Conse&uently, in &uasi4delict,the nelience or fault should be clearlyestablished because it is the basis of the



action, whereas in breach of contract, theaction can be prosecuted merely byprovin the existence of the contract andthe fact that the oblior, in this case thecommon carrier, failed to transport hispassener safely to his destination.

N+*5 Eas/

REMMAN ENTERPRISES vs. COURTOF APPEALS

G. R. No. 12-01', A)"*+ 6, 2000

Fa/sH #etitioner K((ANKnterprises, ?nc. 5K((AN* and privaterespondent Crispin Lat are owners ofad$oinin lots. Lat!s land is ariculturaland planted mostly with fruit tress, whileK((AN devotes its land to its pierybusiness. K((AN!s land is V metershiher in elevation than that ofrespondent Lat. :ometime in 8uly ;-,Lat noticed that K((AN!s wastedisposal laoon was already overflowinand inundatin his plantation. 3e made

several representations with K((ANbut the latter fell on deaf ears. Dn (arch-, ;<, after almost one hectare ofLat!s plantation was already inundatedwith an0le4deep water containin pimanure, as a result of which treesrowin on the flooded portion started towither and die, Lat filed a complaint fordamaes with preliminary mandatoryin$unction aainst K((AN. K((ANdenied the alleations and arued thatadditional measures such as theconstruction of additional laoons werealready adopted to contain the wastewater comin from its piery to preventany damae to the ad$oinin estates. The trial court held K((AN liable

for damaes. ?n this petition, K((ANcontends that its nelience and liabilityfor damaes were not sufficientlyestablished. ?t also raises the defense offortuitous event 5heavy rains* whichcaused the inundation of Lat!s plantation,and the supposed natural easementimposed upon Lat!s property.

Iss!H ?s K((AN nelient andshould be held liable for damaes

&+H PK:. K((AN!s neliencewas clearly established. Lat!s propertywas practically made a catch basin ofpolluted water and other noxious

substances emptyin from K((AN!spiery which could have beenprevented had it not been for thenelience of appellant arisin from its)5a* failure to monitor the increases in thelevel of water in the laoons before,durin and after the heavy downpours+5b* failure to aument the existinlaoons prior to the incident,notwithstandin the fact that at the timeof the floodin, the piery had rown toa capacity of , heads, andconsiderin that it was reasonablyforeseeable that the existin wastedisposal facilit ies were no loner

ade&uate to accommodate theincreasin volume of waste matters+ and5c* the repeated failure to comply with itspromise to private respondent. K((AN!s assertion that thedamaes, if any, were due to a fortuitousevent is not well ta0en. Kven if theheavy rains constituted an act of Jod,K((AN was still uilty of nelience.The event was not occasionedexclusively by an act of Jod or forcema$eure+ a human factor I nelience orimprudence I had intervened. The effectthen of the force ma$eure in &uestionmay be deemed to have, even if onlypartly, resulted from the participation ofman. Thus, the whole occurrence wasthereby humani'ed, as it were, andremoved from the rules applicable to actsof Jod. As reards the contended naturaleasement imposed upon Lat!s property,

Article 67/ provides that lower estatesare imposed the obliation to receive thewaters which naturally and without theintervention of man descend from hiherestates. 3owever, where the waters

which flow from a hiher state are thosewhich are artificially collected in man4made laoons, any damae occasionedthereby entitles the owner of the lower orservient estate to compensation.

R!+ Aa*s/ Do!<+ Rov"# *N+* Cass

RAFAEL REYES TRUC>INGCORPORATION vs. PEOPLEG.R. No. 12?02?, A)"*+ $, 2000

Fa/sH #etitioner afael eyesTruc0in Corporation is a domestic

corporation enaed in the business oftransportin beer products for :an(iuel Corporation. Amon its fleet ofvehicles is a truc0 driven by the accusedomeo 9unca who met an accident in?sabela with a Nissan #ic04up. 9unca!svehicle rammed the Nissan, causinsevere damaes to it and the instantdeath to its driver, Ealcita, andpassener, 9y. An ?nformation was filed in the TCof ?sabela aainst omeo 9unca forrec0less imprudence resultin in doublehomicide and damae to property.Dffended parties, heirs of the twodeceased, made a reservation to file a

separate civil action aainst the accusedarisin from the offense chared.Thereafter, they actually filed with theTC of ?sabela a complaint aainstpetitioner Corporation, as employer ofomeo 9unca, based on quasi delict .#etitioner settled the claim of heirs ofEalcita. The heirs of 9y opted tocontinue with the criminal and civilactions. Later, they withdrew theirreservation to file a separate civilaction ex delicto aainst the accusedand manifested their intention toprosecute the same in the criminalaction. They did not, however, withdraw

the separate civil action based onquasidelict aainst petitioner. Gponareement of the parties, both criminaland civil cases were consolidated. The trial court found 9unca uiltyand ordered him to indemnify privaterespondents with damaes. #etitionercorporation was ordered to pay privaterespondents actual damaes. #rivaterespondents moved for amendment ofthe dispositive portion to hold petitionersubsidiarily liable for all the damaesexdelicto awarded to them in the event ofinsolvency of the accused.

Iss!H (ay petitioner be heldsubsidiarily liable for the damaesawarded to the offended parties in thecriminal action aainst the accuseddespite the filin of a separate civil actionaainst said petitioner

&+H ND. #etitioner cannot be heldsubsidiarily liable. ?n nelience cases,the arieved party has the choicebetween 5* an action to enforce civilliability arisin from crime under Article

of the evised #enal Code+ and 52*a separate action for &uasi delict under

Article 2/6 of the Civil Code. Dnce thechoice is made, the in$ured party can notavail himself of any other remedybecause he may not recover damaestwice for the same nelient act oromission of the accused. This is the ruleaainst double recovery. ?n other words,the same act or omission can create two0inds of liability on the part of theoffender, that is, civil liability ex delicto,and civil liability quasi delicto, either ofwhich may be enforced aainst theculprit, sub$ect to the caveat under Article2// of the Civil Code that the offendedparty can not recover damaes under

both types of liability. ?n the instant case, the offendedparties elected to file a separate civilaction for damaes aainst petitionerunder Article 2/6,NCC to hold himvicariously liable for the fault ornelience of the accused4employee,based on quasi delict . 3avin madesuch choice, private respondents cannotnow recover their claim in a civilaction for damaes ex delicto primarilyaainst the accused, and subsidiarilyaainst petitioner.

Eased on the foreoin, andon ule , :ec. , par. 7 of the ;<ules on Criminal #rocedure which

provides that the reservation to file or thefilin of a separate civil action results in awaiver of other available civil actionsarisin from the same act or omission ofthe accused, the trial court rievouslyerred in holdin, and the court of Appealsin affirmin, that petitioner is subsidiarilyliable for damaes arisin from crime 5exdelicto* in the criminal action. Therewould be no occasion to rule on theaccused!s ex delicto civil liability, andpetitioner!s subsidiary liability, becauseof the aforesaid waiver and proscriptionaainst double recovery.



Liability of an Kducational ?nstitution

GN?@K:?TP D" T3K KA:T @. 8A9KG.R. NO. 1$2$, F<"!a"# 17, 2000

Fa/sH espondent was enrolled inthe plaintiff!sCollee of Law. ?n the firstsemester of his senior year, he failed tota0e the reular final examinationin#ractice Court ? for which he was ivenan incomplete rade. 3e enrolled for thesecond semester as senior student andon "ebruary , ; he fi led anapplication for the removal of theincomplete rade iven by #rofessorCarlos Drtea which was approved by9ean Tionson after payment of there&uired fee. 3e too0 the examinationon (arch 2, ;. Dn (ay 7, ;,#rofessor Drtea flun0ed therespondent.

The respondent!s name appeared inthe Tentative List of Candidates for

raduation. The respondent attendedthe investiture ceremonies.

espondent thereafter preparedhimself for the bar examination. 3e too0a leave of absence without pay from his

$ob and enrolled at the pre4bar reviewclass in "ar Kastern Gniversity. 3avinlearned of his deficiency he dropped hisreview class and was not able to ta0e thebar examinations.

Iss!sH . (ay an educationalinstitution be held liable for damaes formisleadin a student into believin thatthe latter had satisfied all there&uirements for raduation

2. (ay he be awarded moraldamaes

&+H . Pes. ?t is the contractualobliation of the school to timely informand furnish sufficient notice andinformation to each and every student asto whether he or she had alreadycomplied with all the re&uirements for theconferment of a deree or whether theywould be included amon those who willraduate. Althouh commencementexercises are but a formal ceremony, itnonetheless is not an ordinary occasion,since such ceremony is the educationalinstitution!s way of announcin to the

whole world that the students included inthe list of those who will be conferred aderee durin the ceremony havesatisfied all the re&uirements for suchderee. The nelient act of professor whofails to observe the rules of the school,for instance by not promptly submitted astudent!s rade, is not only imputable tothe professor but is an act of the school,bein his employer. Kducationalinstitutions are duty4bound to inform thestudent of their academic status and notwait for the latter to in&uire from theformer. The conscious indifference of a

person to the rihts or welfare of thepersonMpersons who may be affected byhis act or omission can support a claimfor damaes. (ant of care to theconscious disregard of civil obligationcoupled with a conscious knowledge thecause naturally calculated to producethem would make the erring party liable!

2. ND. Hhile petitioner was uilty ofnelience and thus liable for respondentfor actual damaes, we hold thatrespondent should not be awarded moraldamaes. ?t behooves upon respondentto verify for himself whether he hascompleted all necessary re&uirements tobe eliible for the bar examinations. As asenior law student, respondent shouldhave been responsible enouh to ensurethat all his affairs, specifically thosepertainin to his academic achievement,are in order.

:I. LAND TITLES ANDDEEDSAGRICULTURAL TENANCYLA3S

R*s/"a/*o o La U"/4 To""sS#s/

DP vs. COURT OF APPEALSG.R. No. 12?71, A)"*+ 2', 2000

Fa/sH The land in dispute consistinof ;.- hectares was oriinally owned byGlpiano (umar, whose ownership since

;/ was evidenced by Tax 9eclarationNo. 7-. ?n ;<, (umar sold the landto respondent Ca$es who was issued Tax9eclaration No. 4-/< that same year.Ca$es occupied and cultivated the saidland. ?n ;6;, un0nown to Ca$es, 8ose

Alvare' succeeded in obtainin thereistration of a parcel of land with anarea of ,<2, -6. s&uare meters, inhis name for which he was issued DCTNo. <-6 on 8une 6, ;6;. The parcel ofland included the ;.- hectares occupiedby respondent. Alvare' never occupiednor introduced improvements on saidland.?n ;/2, Alvare' sold the land to the

spouses Jaudencio and osario Eeduyato whom TCT No. was issued.That same year, the spouses Eeduyaobtained a loan from petitioner 9E# for#<26,. and, as security, mortaedthe land covered by TCT No. tothe ban0. ?n ;/, the :AA9 ?nvestmentCorp., and the :AA9 Aro4?ndustries,?nc., represented by Jaudencio Eeduya,and the spouses Eeduya personallyexecuted another mortae over the landin favor of 9E# to secure a loan of#,-7,.. The spouses Eeduyalater failed to pay their loans, as a resultof which, the mortae on the property

was foreclosed and sold to 9E# as thehihest bidder. As the spouses Eeduyafailed to redeem the property, 9E#consolidated its ownership. ?t appearsthat Ca$es had also applied for a loanfrom 9E# in ;/, offerin his ;.-hectare property under Tax 9eclarationNo. 9422-/ as security for the loan.Ca$es! loan application was laterapproved. 3owever, it was found that theland mortaed by Ca$es was included inthe land covered by TCT No. inthe name of the spouses Eeduya. 9E#,therefore, cancelled the loan anddemanded immediate payment of theamount. Ca$es paid the loan to 9E# forwhich the former was issued aCancellation of (ortae releasin theproperty in &uestion from encumbrance.9E# as0ed Ca$es to vacate theproperty. As the latter refused to do so,9E# filed a complaint for recovery ofpossession with damaes aainst him.The TC of Tabilaran City declared9E# the lawful owner of the entire landcovered by TCT No. on theround that the decree of reistration

was bindin upon the land.

Iss!H ?s reistration of land under theTorrens :ystem a mode of ac&uirinownership over an immovable

&+H ND. eistration has neverbeen a mode of ac&uirin ownershipover an immovable property. Thepurpose of the Land eistration Act isnot to create or vest title but to confirmand reister already created and alreadyvested.

P"oo "B!*" * +a"*s/"a/*o )"o*s

MARIANO TUR@UESA, ET AL.vs. ROSARIO:ALERA

G.R. No. 76$71 Ja!a"# 20, 2000

Fa/sH (ore than half a century ao,private respondent osario @aleraapplied for the reistration of 2 parcels ofland located in Earrio #ulot, Lauyan,

Abra. Lot has an area of 2,/6/ s&.m. and Lot 2 has an area of 22,- s&.m. ?n support of her application, privaterespondent presented documentsshowin that she bouht Lot durin the

years ;2;4;72 from Cristeta Tranuedand the heirs of 8uan @alera ufino whowere alleedly in possession thereofsince the :panish reime in the conceptof owners and who declared it in theirname for taxation purposes. "rom ;2;,she continued possession of said land inthe concept of owner and continued topay the tax thereon in her name. The9irector of Lands toether withpetitioners and other persons opposedthe application of osario.

osario was ad$uded to havea reistrable title over the 2 lots. The9irector of LandsF opposition was denied



for failure to substantiate his claim thatthe sub$ect lands were part of the publicdomain. After this decision became finaland executory, osariofiled with the trialcourt a motion for the issuance of writ ofpossession over the lots. #ortionsof Lot were respectively claimed by:antiao #artolan 5not an oppositor inthe land reistration case* and CrispinEaltar 5one of the oppositors*. The(otion was denied. Dn appeal, the then?AC issued the writ.

Iss!H ?s private respondent osario@alera properly entitled to a writ ofpossession of portions ofLot occupiedby #artolan and Ealtar

&+H No. osario failed to showevidence of her rihtful claim whetherpossessory or proprietary over thesub$ect areas. The burden of proof inland reistration cases is incumbent onthe applicant who must show that he isthe real and absolute owner in fee simpleof the land applied for. Dn him also reststhe burden to overcome the presumption

that the land souht to be reisteredforms part of the public domainconsiderin that the inclusion in a title ofa part of the public domain nullifies thetitle.

The declaration by theapplicant that the land applied for hasbeen in the possession of herpredecessor4in4interest for a certainperiod, does not constitute the Bwell4nihincontrovertibleB and BconclusiveBevidence re&uired in land reistration."urther, it should be noted that taxdeclaration, by itself, is not consideredconclusive evidence of ownership in landreistration cases. osario should havesubstantiated her claim with clear and

convincin evidence specifically showinthe nature of her claim. The applicantmust li0ewise prove the identity of theland. ?t must be borne in mind that whatdefines a piece of land is not the si'e orarea mentioned in its description, but theboundaries therein laid down, asenclosin the land and indicatin itslimits.

Considerin that the writ ofpossession was souhtby osario aainst persons who were inBactual possession under claim ofownership,B the latterFs possession raisesa disputable presumption of ownership.This unrebutted presumption militates

aainst the claim of osario, especiallyconsiderin the evidentiary rule under Article -7- of the Civil Code that aclaimant of a parcel of land, suchas osario, must rely on the strenth ofhis title and not on the wea0ness of thedefendantFs claim.

Ev* o O"s4*)

SANTIAGO vs. COURT OF APPEALSG.R. No. 10?111, J! 2', 2000

Fa/sH ?n ;, the (H:: filed withthe TC of i'al an application forreistration of title of eleven 5* parcelsof land, situated in :an (ateo, i'al. Ana&ueduct pipeline belonin to (H::was buried under the sub$ect lands lonbefore Horld Har ??. (H:: furtheralleed ownership of the sub$ectproperties since ;-<. #etitionersopposed claimin ownership over certainportions of the properties and supportedtheir respective claims by presentincertificates of title. TC decided in favor ofpetitioners, relyin mainly on thecertificates of title presented. (H::appealed to the CA which ruleddifferently. easonin) * the propertycovered by the certificates of titlepresented by petitioners merely ad$oinsand are ad$acent to the property claimedby (H::. :uch is shown by thetechnical descriptions in the certificatesof title presented. The parcels of landcovered by the certificates of title do notoverlap or encroach on the propertyclaimed by (H::. 2* the a&ueductswere installed and buried lon before

HH ??, under untitled land, ivin rise tothe presumption that such land wasBpublic landB. 7* (H:: ac&uiredownership by prescription. ?t is a matterof public 0nowlede and $udicial noticethat the pipes existed and were buriedunder the land before HH ?? and itsexistence was indicated above theround by B pilapilsB.

Iss!H ?s the (H:: the owner of thelands in controversy&+H PK:.The titles presented by petitioners, whileshowin ownership, is not of the landclaimed, but over the ad$oinin parcels ofland. The technical descriptions in the

titles presented by petitioners betraythem as ad$acent and ad$oinin ownersof the land claimed by (H:: forreistration. A torrens certificate of titlecovers only the land described thereintoether with improvements existinthereon, if any, nothin more.

(H:: presented taxdeclarations to buttress its ownership ofthe land. True, tax declarations do notprove ownership. 3owever, taxdeclarations can be stron evidence ofownership when accompanied bypossession for a period sufficient forprescription. :ince (H:: possessedthe land in the concept of owner for more

than thirty 57* years precedin theapplication, (H:: ac&uired ownershipby prescription. Ey placin the pipelinesunder the land, there was materialoccupation of the land by (H::,sub$ectin the land to its will and control.#etitioners cannot arue that (H::Fpossession was not BopenB. Theexistence of the pipes was indicatedabove the round by B pilapilsB. Kvenassumin aruendo that the pipes wereBhiddenB from siht, petitioner cannotclaim inorance of the existence of thepipes. The possession must be public inorder to be the basis for prescription.

#etitioners also cannot claim that (H::abandoned its possession. There is noshowin that by discontinuin the use ofthe pipes, (H:: voluntarily renouncedits claim over the land. #etitioners did notprove that the spes recuperendi wasone and the animus revertendi wasiven up.

G"a/ o T*/+Co*"a/*o oI)"/ T*/+ o Las

RACE3ELL vs. COURT OFAPPEALS

G.R. No. 10727, Ja!a"# 2-, 2000

Fa/sH ?n ;, (aria Cailles ac&uiredcertain parcels of land in Las #inas,(etro (anila. ?n ;6, Cailles sold thesame to her son, petitioner 8amesEracewell, 8r. ?n ;67, Eracewell filedbefore the C"? an action for confirmationof imperfect title under :ec -5b* of CANo. -. The :olicitor Jeneral opposed

petitioner!s application on the roundsthat neither he nor his predecessors4in4interest possessed sufficient title to thesub$ect land nor have they been in open,continuous, exclusive and notoriouspossession and occupation of the samefor at least thirty 57* years prior to theapplication, and that the sub$ect parcelsof land were only classified as alienableor disposable on (arch 2/, ;/2.

Iss!H Are the lands in &uestionalienable or disposable at the time of theapplication for confirmation of imperfecttitle

&+H ND. Gnder the ealian

doctrine, all lands of the public domainbelon to the :tate, and that the :tate isthe source of any asserted riht toownership in land and chared withconservation of such patrimony. Thissame doctrine also states all lands nototherwise appearin to be clearly withinprivate ownership are presumed tobelon to the :tate. 3ence, the burdenof proof in overcomin the presumptionof :tate ownership of lands of the publicdomain is on the person applyin forreistration. The applicant must alsoshow that the land sub$ect of theapplication is alienable or disposable.This Eracewell failed to do. Dn the

contrary, it was conclusively shown bythe overnment that the same were onlyclassified as alienable or disposable on(arch 2/, ;/2. Thus, even rantinthat Eracewell and his predecessors4in4interest had occupied the same since;, he still cannot claim title thereto byvirtue of such possession since thesub$ect parcels of land were not yetalienable land at that time nor capable ofprivate appropriation. The adversepossession which may be the basis of arant of title or confirmation of animperfect title refers only to alienable ordisposable portions of the public domain.



&+H ND. The free patent issued isnot valid. ?n the liht of their open,continuous and notorious possessionand occupation of the land, petitionersare deemed to have ac&uired byoperation of law, a riht to a rant, aovernment rant without a necessity ofa certificate of title bein issued. Theland was =sereated from the publicdomain>. Accordinly, the 9irector ofLands had no authority to issue a freepatent thereto in favor of another person.@erily, $urisprudence holds that freepatent coverin private land is void.

P"s!)/*v Co+!s*vsso To""s T*/+

LIM vs. COURT OF APPEALSG.R. No. 1271-, Ja!a"# 2, 2000

Fa/sH #etitioner ufina Lim is thesurvivin spouse of the late #astor Lim

whose estate is the sub$ect of estateproceedins. #rivate respondents AutoTruc0 Corp., et al. are domesticcorporations which owned real propertiescovered under theTorrens system.These properties were included in theinventory of the estate of #astor.espondent corporations filed a motionfor the liftin of the lis pendens and theexclusion of said properties from theestate of the decedent. ufina, on theother hand, arued that said propertiesmust be included because the assets,capital, and e&uity of respondentcorporations are personally owned by#astor.

Iss!H :hould the properties in&uestion be included in the inventory ofthe estate of #astor

&+H ND. ?f a property covered byTorrens title is involved, the presumptiveconclusiveness of such title should beiven due weiht, and in the absence ofstron compellin evidence to thecontrary, the holder thereof should beconsidered as the owner of the propertyin controversy until his title is nullified ormodified in an appropriate ordinaryaction, particularly, when possession ofthe property itself is in the personsnamed in the title. A perusal of the

records would reveal that no stroncompellin evidence was ever presentedby petitioner to bolster her bareassertions as to the title of the deceased#astor Lim over the properties. Kven so,#.9. <2; 5The #roperty eistration9ecree* proscribes collateral attac0 onTorrens Title. ?t provides that acertificate of title shall not be sub$ect tocollateral attac0. ?t cannot be altered,modified or cancelled except in a directproceedin in accordance with law.

?nasmuch as the realproperties included in the inventory of theestate of #astor are in the possession of

and are reistered in the name of privaterespondent corporations, which underthe law possess a personality separateand distinct from their stoc0holders, andin the absence of any coency to shredthe veil of corporate f iction, thepresumption of conclusiveness of saidtitles in favor of private respondentsshould stand undisturbed. Therefore,the properties in &uestion should not beincluded from the inventory of theproperty of the estate.

Ta#

AUTISTA vs. ARANETAG.R. No. 1$-'2?, F<"!a"# 22, 2000

Fa/sH ?n ;/, petitioner EayaniEautista alleedly entered into an oraltenancy areement with Jreorio

Araneta ?? and had since then, cultivatedand possessed the land in an open,peaceful and continuous manner.Eayani!s possession however was

disturbed when in ;;, a roup ofarmed men sent by respondent, #atricia

Araneta, successor of JA ??, orderedEayani to vacate the land. Eayani filed acomplaint prayin for in$unctive relief andfor reconition of his riht as tenant.#atricia, on the other hand, filed acounterclaim to dismiss the complaintand e$ect Eayani. The #rovincial Ad$udicator decidedin favor of Eayani. The CA reversed thesame. ?t held that Eayani has not beenconstituted as a tenant by the landowner.

Iss!H ?s respondent #atricia Aranetabound by the alleed oral leaseholdareement between Eayani and Jreorio

Araneta ??

&+H ND. The re&uisites of a tenancyrelationship are) 5* the parties are thelandowner and the tenant+ 52* thesub$ect is aricultural land+ 57* there isconsent by the landowner+ 5-* there ispersonal cultivation+ and 5<* there issharin of harvest. Eayani is not atenant of the disputed land. Eayaniadmitted in his own testimony that hedoes not even 0now the landowner as hewas not introduced to the same. "urther,Eayani did not establish that Jreorio,whom he has 0nown and believed as theowner of the land, became or was ever,

the landowner. :ince he hines his rihton his alleed areement with Jreorio,it follows that his position is untenablesince it was never shown that Jreoriohas a riht on the landholdin. ?nLastimosa vs. Elanco, the :C has ruledthat Otenancy relationship can only becreated with the consent of the true andlawful landholder who is either theowner, lessee, usufructuary or lealpossessor of the land, and not thru theacts of the supposed landholder who hasno riht to the land sub$ect of thetenancy.!

RUPA, SR. vs. COURT OF APPEALSG.R. No. '012?, Ja!a"# 2-, 2000

Fa/sH Claimin that he was thearicultural share tenant and overseer ofparcels of coconut lands, petitionerJerardo upa commenced an action forredemption on (arch 26, ; aainstprivate respondent (ain :alipot, thevendee in the sale made by spouses@icente and #atrocinia Lim in 8anuary; without any prior written or verbalnotice re&uired by law. upa came to0now about the sale when he wasinformed in writin by the formerlandowner on "ebruary 6, ;.

Eoth the TC and CA sharedthe view that upa is not a share tenantand accordinly dismissed the complaintfor redemption.

Iss!H ?s upa a share tenant so asto be entitled to the riht of redemption

&+H PK:. A tenant is defined

under :ection < 5a* of epublic Act No.;; as a person who himself and withthe aid available from within hisimmediate farm household cultivates theland belonin to or possessed byanother, with the latterFs consent, forpurposes of production, sharin theproduce with the landholder under theshare tenancy system, or payin to thelandholder a price certain orascertainable in produce or in money orboth under the leasehold tenancysystem. Eriefly stated, for thisrelationship to exist, it is necessary that). The parties are the landowner andthe tenant+2. The sub$ect is aricultural land+

7. There is consent+-. The purpose is ariculturalproduction+<. There is personal cultivation+ and6. There is sharin of harvests.

Gpon proof of the existence ofthe tenancy relationship, upa couldavail of the riht of redemption under A7--. This riht of redemption is validlyexercised upon compliance with thefollowin re&uirements) a* theredemptioner must be an ariculturallessee or share tenant+ b* the land musthave been sold by the owner to a thirdparty without prior written notice of thesale iven to the lessee or lessees and

the 9A in accordance with :ec. , A7--, as amended+ c* only the areacultivated by the aricultural lessee maybe redeemed+ d* the riht of redemptionmust be exercised within days fromnotice+ and e* there must be an actualtender or valid consination of the entireamount which is the reasonable price ofthe land souht to be redeemed.

The statements of upa in thecriminal case that he is an =administrator>of the landowners are not sufficient basisto overcome the rihts of the petitioneras provided in the Constitution and

Ararian statutes. The essence of



aricultural tenancy l ies in theestablishment of owner4cultivatorshipand the economic family4si'e farm as thebasis of #hilippine ariculture, and as aconse&uence, divert landlord capital inariculture to industrial development.upa!s evidence to prove the tenancyrelationship consisted of his owntestimony and those of his witnessesfrom whose declarations it appears thatthe petitioner has physically possessedthe landholdin continuously until he wase$ected from it. upa lives on thelandholdin and he has built a housenext to the copra 0iln. ?t has also beenestablished that upa has cultivated theland from the t ime he has ta0enpossession thereof, althouh there mayhave already been existin coconut treesin the landholdin. The fact that upahas been plantin coconut seedlins andminor crops in the vacant portions of thesub$ect land as well as cleanin andatherin coconuts to process them intocopra is borne out by the records."urther indicatin the tenancyrelationship between the landlord and

upa is their areement to share <M<.The sharin arranement ta0en toetherwith other factors characteristic oftenancy shown to be present in the caseat bar, strenthens the claim of upathat indeed, he is a tenant.

P&ILANCOR FINANCE vs. COURTOF APPEALS

G.R. No. 12?-72, J! 26, 2000

Fa/sH #etitioner @icente 3i'on, 8r. isthe owner of aricultural lands located inEalite, :an "ernando, #ampana andthe private respondents Alfredo #are,#ablo Jalan and Amado @ie are the

leitimate and bona fide tenants thereof.The said lands were mortaed by 3i'onto petitioner #hilbancor which were lateron extra$udicially foreclosed upon defaultof 3i'on in the payment of hisobliations. :ubse&uently, the landswere sold at public auction to petitioner#hilbancor. :even years after thereistration of the sale with the eisterof 9eeds, private respondents filed withthe #rovincial Ararian eform

Ad$udication Eoard 5#AAE* a complaintfor maintenance of possession withredemption and tenancy riht of pre4emption aainst petitioners #hilbancorand 3i'on.

Iss!H Can the private respondentsmaintain their possession of the sub$ectlands

&+H PK:. #rivate respondents maycontinue in possession and en$oyment ofthe land in &uestion as leitimatetenants because the riht of tenancyattaches to the landholdin by operationof law. The leasehold relation is notextinuished by the alienation or transferof the leal possession of thelandholdin.

GREENFIELD REALTY CORP. vs.CARDAMA

G.R. No. 12?26, Ja!a"# 2-, 2000

Fa/sH #rivate respondents LoretoCardama, et al. claim to have succeededtheir father 3ermoenes Cardama whodied in ;; in the latter!s tenancy rihts,and should be declared as leaseholdtenants and actual tillers of the sub$ectirriated rice land. ?t is alleed that theleasehold tenancy bean in ;/throuh a verbal areement entered intoby and between ?ndependent ealtyCorp. 5?C* and the late 3ermoeneswherein the former had desinated thelatter to ta0e over the maintenance ofsaid landholdin which was thenundeveloped and uncultivated but withthe aid of the immediate members oftheir respective families becameproductive as irriated rice land. Toprove their contention, the Cardamassubmitted their up4to4date payment of thelease rentals as evidenced by thereceipts issued by ?C and petitioner

Jreenfield ealty Corp. 5JC*.

Iss!H Are the private respondentsbona fide tenants of the sub$ect irriatedrice land

&+H PK:. The 9AAE ruled thatLoreto, et al. cannot simultaneouslyclaim the riht to succeed since A 7--allows only one heir to succeed to thetenancy of the deceased tenant in theorder of preference prescribed by:ection ; of the said law. ?n this casehowever, the land is not cultivated by3ermoenes alone but with other tenantswho are li0ewise &ualified and who arerelated to him. Thus, it can be said that

the entitlement of the other possessors isnot by virtue of succession to the rihtsof a predecessor4in4interest, but in theirindividual capacity as tenants thereinsimultaneously with an ascendant. ?t is tobe noted that the land herein involved ismore than hectares which cannot bepersonally cultivated by 3ermoenesalone.

Gnder :ection 22 of A 66</,the Comprehensive Ararian eformLaw, those entitled to the award of theland are) =:ection 22. %ualifiedEeneficiaries I the lands covered by theCA# shall be distributed as much aspossible to landless residents of the

same baranay or in the absencethereof, landless residents of the samemunicipality in the followin order ofpriority)

h.* aricultural lessees and share tenantsi.* reular farm wor0ers

$.* seasonal farmwor0ers0.* other farmwor0ersl.* actual tillers or occupants of public landsm.* collective or cooperatives of the above

beneficiariesn.* others directly wor0in on the land

Eein the aricultural lessees on theland, Loreto et al. are &ualifiedbeneficiaries

absent any showin that they have beenvalidly e$ected or removed therefrom.

#referential ihts of Tenants under #.9.</

9KK v. CDGT D" A##KAL:G.R. No.10'20-, F<"!a"# 1-, 2000

Fa/sH #etitioners are occupants ofthe lands that beloned to Ale$androCastro. Gpon Castro!s death, his wifeand son sold the lands for #< pers&uare meter to Cesar Jatdula, a tenantof the land. #endin the transfer of thetitles, Jatdula offered to sell the disputedlots at #7, per s&uare meter to eachof the petitioners who were occupants ofthe lands.. #etitioners did not buy at theprice offered. They filed a complaintaainst Jatdula for the exercise of theirpreferential riht to purchase the landsunder :ec.6 of #.9. </, which rantspre4emptive rihts to 5* leitimatetenants who have resided on the land for

ten years or more who have built theirhomes on the land and 52* residents whohave leally occupied the land bycontract, continuously for the last tenyears.

Iss!H Has the sale to Jatdula alone,amon the many tenants sufficientcompliance with #.9. </

&+H PK:. The Castro heirs offeredpetitioners the chance to buy the landwhich they respectively occupied.Jatdula, a tenant, expressed hisintention to buy the land provided he beiven time to raise the funds. #etitionersstopped payin rent after the death of

Ale$andro Castro, and they offered noproof that they did pay. They also failedto show that they have resided on theland for ten years or more. Nor have theyshown that they are residents who haveleally occupied the land by contract,continuously for the last ten years andwere entitled to benefit from theprovisions of #.9. </. Hith their failureto establish entitlement thereto, the offerand sale of the land to Jatdula could notbe said to be outside the pale of the9ecree.

J!"*s*/*oa+ RB!*"/s o"

Ros/*/!/*o o T*/+

&EIRS OF EULALIO RAGUA vs.COURT OF APPEALS

G.R. ''-21=22 '?$66=67, Ja!a"# $1,2000

Fa/sH A petition for reconstitution oftitle was filed by Kulalio aua in ;6-coverin -7; hectares of land situated in%C. 3e averred that the owner!sduplicate of the DCT was lost anddestroyed in ;-< when his personal



effects and papers were eaten bytermites. The petition was opposed byseveral parties contendin that there wasfailure to comply with the $urisdictionalre&uirements for $udicial reconstitutionunder A 26 :ec. 2 7. The lowercourt ordered the eister of 9eeds toreconstitute in the name of Kulalio.3owever, the CA reversed the decision,holdin that the TC had no $urisdictionbecause of Kulalio!s failure to complywith the re&uirements of the said law andthat the latter!s action is also barred bylaches.

Iss!H 9id the trial court ac&uire $urisdiction over the proceedins forreconstitution of title

&+H #etitioners admittedly did notcomply with the re&uirements of :ec. 25d*, 5e* and 5*, namely) The petition didnot state 5* the nature and description ofthe buildins and improvements, if any,which do not belon to the owner of theland, and the names and addresses ofthe owners of such buildin and

improvements, 52* the names andaddresses of the occupants of thead$oinin properties and of all personswho may have any interest in theproperty, and 57* that no deeds or otherinstrument affectin the property mayhave been presented for reistration.Neither do this data appear in the noticeof hearin. Eesides, petitioners also didnot comply with the notice andpublication under :ec. 7 because theorder directed that the notice be postedat the Caloocan City 3all, not in %C,where the land is situated. He have ruled that the failure tocomply with the re&uirements ofpublication and postin of notices

prescribed in A 26 :ec. 2 7 is fatalto the $urisdiction of the court. 3ence,non4compliance with the $urisdictionalre&uirements renders its decisionapprovin the reconstitution and allproceedins therein utterly null and void. (oreover, petitioners filed thepetition for reconstitution ; years afterthe title was alleedly lost or destroyed.3ence, petitioners are uilty of laches

persons and family relations provcas

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