2019 VVL Reformatted 34 Pages Significant Rulings in Civil Law
2019 VVL Reformatted 34 Pages Significant Rulings in Civil Law
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motives or interest or ill will that partakes of the nature of fraud. Malice connotes ill will or spite and speaks not
in response to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad
motive.” (Citations omitted.)
St. Martin Polyclinic, Inc., v. LWV Construction Corporation, G.R. No. 217426, December 4, 2017, J. Perlas-
Bernabe
Q. LWV Construction Corporation recruits Filipino workers for deployment to Saudi Arabia. St. Martin
Polyclinic, Inc. (SMPI) is an entity authorized to conduct medical examinations of prospective applicants for
overseas employment.
Jonathan Raguindin, a prospective applicant was referred to SMPI for a pre-deployment
medical examination. Raguindin was found “fit for employment.” Raguindin was eventually deployed to Saudi
Arabia. Raguindin underwent another medical examination with the General Care Dispensary of Saudi Arabia
and he tested positive for Hepatitis C Virus. May LMV institute an action against SMPI based on Articles 19, 20
and 21?
Answer: The action for damages should be anchored on Art. Art. 2176 and not based on Articles 19, 20 and 21
of the Civil Code. An action for damages due to the negligence of another may be instituted on the basis of Art.
2176 of the Civil Code which defines a quasi-delict.
Art. 2176 applies when the negligent act causing damage to another does not constitute “a breach of an existing
law or a pre-existing contractual obligation.”
ESSENTIALS OF MARRIAGE
Alcantara vs. Alcantara, G.R. No. 167746, August 28, 2007)
Q. Is the marriage void on the ground of absence of a marriage license?
Answer: To be considered void on the ground of absence of a marriage license, the law requires that
the absence of such marriage license must be apparent on the marriage contract, or at the very least,
supported by a certification from the local civil registrar that no such marriage license was issued to
the parties.
The Certification moreover is precise in that it specifically identified the parties to whom the marriage
license was issued, further validating the fact that a license was in fact issued to the parties herein. This
Certification enjoys the presumption that official duty has been regularly performed and the issuance
of the marriage license was done in the regular conduct of official business.
Q. Is it material that the party must be a resident of the place where the license was applied?
Answer: Issuance of a marriage license in a city or municipality, not the residence of either of the
contracting parties, and issuance of a marriage license despite the absence of publication or prior to the
completion of the
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10-day period for publication are considered mere irregularities that do not affect the validity of the
marriage. An irregularity in any of the formal requisites of marriage does not affect its validity but the
party or parties responsible for the irregularity are civilly, criminally and administratively liable.
Q. Can consul-generals, consuls, or vice-consuls solemnize a marriage abroad between a Filipino and an
alien?
Answer: No, consul-generals, consults, or vice-consuls cannot solemnize mixed marriages. Only marriages
between Filipino citizens abroad may be solemnized by a consul-general, consul or vice-consul of the
Philippines. With this, their authority is limited to marriages of both Filipinos residing abroad. (Art. 10, Family
Code)
Q. As a rule, all marriages solemnized outside the Philippines, in accordance with the laws
in force in the country where they were solemnized, and valid there as such, shall also be
valid in the Philippines. What are the exceptions to this rule?
Answer: Marriages under Arts. 35 (1), (4), (5) and (6), 36, 37 and 38 of the Family Code shall be void from the
beginning even if solemnized outside the Philippines, and valid there as such. More specifically:
(1) Marriages contracted by any party below 18 years of age even with the consent of parents or
guardians;
(2) Bigamous or polygamous marriages not failing under Art. 41 which provides that where
before the celebration of a subsequent marriage, a prior spouse had been absent for four
consecutive years (or four years in case of disappearance where there is danger of death)
and the spouse present has a well-founded belief that the absent spouse was already dead,
and the spouse present will institute a summary proceeding for the declaration of
presumptive death of the absentee;
(3) Marriages contracted through mistake of one contracting party as to the identity of the
other;
(4) Subsequent marriages that are void under Art. 53, i.e., when there is non-compliance with
the requirement of recording in the appropriate civil registry and registries of property the
judgment of annulment or of absolute nullity of the marriage, the partition and distribution of
the properties of the spouses and the delivery of the children’s presumptive legitimes, and
either of the former spouses marry again;
(5) A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, even if such
incapacity becomes manifest only after its solemnization;
(6) Incestuous marriages, whether relationship between the parties be legitimate or illegitimate:
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a. between ascendants and descendants of any degree; or
b. between brothers and sisters, whether of the full or half blood; and
(7) Void marriages for reasons of public policy:
a. Between collateral blood relatives whether legitimate or illegitimate, up to the fourth
civil degree;
b. Between step-parents and step-children;
c. Between parents-in-law and children-in-law;
d. Between the adopting parent and the adopted child;
e. Between the surviving spouse of the adopting parent and the adopted child;
f. Between the surviving spouse of the adopted child and the adopter;
g. Between an adopted child and a legitimate child of the adopter;
h. Between adopted children of the same adopter; and
i. Between parties where one, with the intention to marry the other, killed that other
person's spouse, or his or her own spouse.
(a) Does abandonment constitute incapacity that will merit annulment of marriage?
Answer: No, abandonment does not indicate one’s incapacity. Psychological incapacity refers to no less than
mental- not physical– incapacity that causes a party to be truly incognitive of the basic marital covenants that
concomitantly must be assumed and discharged by the parties to the marriage, as expressed in Article 68 of the
Family Code.
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Republic v. Reghis M. Romero II (GR No. 209180, FIRST DIVISION, February 24, 2016, PERLAS-
BERNABE, J.)
Q. Reghis and Olivia were married and were blessed with two (2) children. After having been married for more
than a decade, the couple parted ways in 1986. Reghis then filed a petition for declaration of nullity of marriage
citing his psychological incapacity to comply with his essential marital obligations. The clinical psychologist
submitted a report and testified that Reghis suffered from Obsessive Compulsive Personality Disorder (OCPD).
This gave him a strong obsession for whatever endeavour he chooses, such as his work, to the exclusion of other
responsibilities and duties such as those pertaining to his roles as father and husband. Dr. Basilio surmised that
Reghis’ OCPD was the root of the couple’s disagreements and that the same is incurable. The Office of the
Solicitor General (OSG), representing the Republic, opposed the petition. Rule on the petition.
Answer: I will deny the petition for nullity of Reghis. It has consistently been held that psychological
incapacity, as a ground to nullify a marriage under Article 36 of the Family Code, should refer to the most
serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning
and significance to the marriage.
Article 36 of the Family Code must not be confused with a divorce law that cuts the marital bond at the time the
grounds for divorce manifest themselves; rather, it must be limited to cases where there is a downright
incapacity or inability to assume and fulfill the basic marital obligations, not a mere refusal, neglect or difficulty,
much less, ill will, on the part of the errant spouse.
Rachel A. Del Rosario v. Jose O. Del Rosario and Court of Appeals (G.R. No. 222541, FIRST DIVISION,
February 15, 2017, PERLAS-BERNABE, J.)
Q. Rachel worked as a domestic helper in Hong Kong. She married Jose and settled in a house they
acquired. The married life ran smoothly up until Rachel filed a petition for declaration of nullity of
marriage. Her petition was anchored on the ground that Jose was psychologically incapacitated to fulfill his
essential marital obligations. Rachel presented the testimony of Dr. Tayag who prepared the psychological report
stating that Jose suffered from Antisocial Personality Disorder (APD). The RTC declared the marriage between
Jose and Rachel void on the ground of psychological incapacity relying mainly on the testimony of Dr. Tayag,
declaring that Jose's APD interferes with his capacity to perform his marital and paternal duties, as he in fact
even refused to take responsibility for his actions, notwithstanding the overwhelming evidence against him. The
Republic appealed the decision of the trial court. Rule on the appeal of the Republic.
Answer: The declaration of nullity of marriage of the trial court must be reversed.
Following the case of Republic v. Molina, the totality of evidence must show that psychological incapacity exists
and its gravity, juridical antecedence, and incurability must be duly established.
There must be proof of a natal or supervening disabling factor in the person - an adverse integral element in the
personality structure that effectively incapacitates the person from really accepting and thereby complying with
the obligations essential to marriage - which must be linked with the manifestations of the psychological
incapacity.
Republic v. Gina P. Tecag, (G.R. No. 229272, SECOND DIVISION, November 19, 2018, PERLAS-
BERNABE, J.)
Q. After living together as husband and wife for two years, Gina and Marjune formalized their marital union
through civil rites. As a means of livelihood, they engaged in vegetable farming until Gina found employment in
Macau, where she likewise searched for job opportunities for Marjune but was not successful. The marriage was
marred with animosities between the spouses.
Thus, Gina filed a petition to declare her marriage with Marjune null and void on the basis of the latter's
psychological incapacity. During trial, Gina presented the findings of Professor Emma Astudillo-Sanchez (Prof.
Sanchez), the psychologist who conducted a psychological examination of the parties. Was the testimony of
Prof. Sanchez sufficient to establish the incapacity of the spouses?
Answer: Under Article 36 of the Family Code, as amended, psychological incapacity is a valid ground to nullify
a marriage. However, in deference to the State's policy on marriage, psychological incapacity does not merely
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pertain to any psychological condition; otherwise, it would be fairly easy to circumvent our laws on marriage so
much so that we would be practically condoning a legal
subterfuge for divorce. Psychological incapacity has a specific and peculiar denotation.
The requirements for proving psychological incapacity can be traced in a long line of cases.
In Santos v. CA, the SC emphasized "that psychological incapacity must be characterized by:
(a) gravity (i.e., it must be grave and serious such that the party would be incapable of carrying out
the ordinary duties required in a marriage); (b) juridical antecedence (i.e., it must be rooted in the
history of the party antedating the marriage, although the overt manifestations may emerge only
after the marriage); and (c) incurability (i.e., it must be incurable, or even if it were otherwise, the
cure would be beyond the means of the party involved)."
Q. What are the requisites to institute an action to declare a spouse to be presumptively dead? Answer:
Art. 41 of the Family Code requires that:
(1) The absent spouse has been missing for four consecutive years, or two consecutive years if
the disappearance occurred where there is danger of death under the circumstances laid
down in Art. 391 of the Civil Code;
(2) The present spouse wishes to remarry;
(3) The present spouse has a well-founded belief that the absentee is dead; and
(4) The present spouse files a summary proceeding for the declaration of presumptive death of
the absentee.
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action to declare a person presumptively dead under Arts. 390 and 391 of the Civil Code would be unnecessary.
The presumption in the said articles is already established by law.
CONFLICT OF LAWS
Norma A. Del Socorro for and in behalf of her minor child Rodrigo Norjo Van Wilsem v. Ernst Johan
Brinkman Van Willem (G.R. No. 193707, 10 December 2014)
Q. Petitioner Norma married Ernst, a Dutch national. Wilhelm was born out their marriage. The spouses were
divorced when Wilhelm was only 8 years old. After the divorce, Norma decided to return to the Philippines with
Wilhelm. Ernst agreed to support Wilhelm but he never made good his promise.
When Ernst returned to the Philippines, he remarried another Filipina. Norma filed an action against Ernst to
obtain support from him. She hinged her claim based on Article 195 of the Family Code which provides the
parent’s obligation to support his child. Petitioner contends that notwithstanding the existence of a divorce
decree issued in relation to Article 26 of the Family Code, respondent is not excused from complying with his
obligation to support his minor child with petitioner. On the other hand, respondent contends that there is no
sufficient and clear basis presented by petitioner that she, as well as her minor son, are entitled to financial
support. Respondent also added that by reason of the Divorce Decree, he is not obligated to petitioner for any
financial support. Norma also instituted a criminal action against Ernst for violation of VAWC Act.
(a) Does Ernst have an obligation to support his minor child under Philippine law?
Answer: No, petitioner cannot rely on Article 195 of the New Civil Code in demanding support from
respondent, who is a foreign citizen, since Article 15 of the New Civil Code stresses the principle of nationality.
In other words, insofar as Philippine laws are concerned, specifically the provisions of the Family Code on
support, the same only applies to Filipino citizens. By analogy, the same principle applies to foreigners such that
they are governed by their national law with respect to family rights and duties.
Under the Doctrine of Processual Presumption, if the foreign law involved is not properly pleaded and proved,
our courts will presume that the foreign law is the same as our local or domestic or internal law. For Ernst’s
failure to prove a foreign law, it will bar its application in the Philippines. Applying the foregoing, even if the
laws of the Netherlands does not enforce a parent’s obligation to support his child, such obligation is still duly
enforceable in the Philippines because it would be of great injustice to the child to be denied of financial support
when the latter is entitled thereto.
(b) Can Ernst be held criminally liable under R.A. No. 9262 for his unjustified failure to support his
minor child?
Answer: Respondent may be made liable under Section 5(e) and (i) of R.A. No. 9262 for unjustly refusing or
failing to give support to petitioner’s son. The deprivation or denial of financial support to the child is
considered an act of violence against women and children. The act of denying support to a child under Section
5(e)(2) and (i) of R.A. No. 9262 is a continuing offense and will not prescribe for as long as respondent has not
provided support to his son.
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property. The trial court ruled that in accordance with the doctrine of processual presumption, Philippine law
should apply. It held that the absolute community properties cannot be forfeited in favor of Leticia and her
children.
On appeal, the Court of Appeals modified the trial court’s Decision by directing the equal division of the
Philippine properties between the spouses.
(a) Is the divorce decree issued by the California Court binding to the trial court?
Answer: No, the divorce decree should not be judicially recognized for the requisites were not complied with.
The requirements of presenting the foreign divorce decree and the national law of the foreigner must comply
with our Rules of Evidence. Specifically, for Philippine courts to recognize a foreign judgment relating to the
status of a marriage, a copy of the foreign judgment may be admitted in evidence and proven as a fact under
Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court.
(b) Was the petition for judicial separation of the absolute community of property of the spouses proper?
Answer: Yes, having established that Leticia and David had actually separated for at least one year, the petition
for judicial separation of absolute community of property should be granted.
Separation in fact for one year as a ground to grant a judicial separation of property was not tackled in the trial
court’s decision because, the trial court erroneously treated the petition as liquidation of the absolute community
of properties.
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PERSONS AND FAMILY RELATIONS: THE FAMILY HOME
Willem Beumer v Avelina Amores, G.R. No. 195670. SECOND DIVISION. December 3, 2012. PERLAS-
BERNABE, J.
Q. Beumer, a Dutch National, and Amores, a Filipina, were married. After several years of marriage, the RTC
of Negros Oriental, declared the nullity of their marriage on the basis of the former’s psychological incapacity.
Beumer filed a Petition for Dissolution of Conjugal Partnership praying for the
distribution of the properties claimed to have been acquired during the subsistence of their
marriage. The RTC of Negros Oriental rendered its Decision, dissolving the parties’ conjugal partnership,
awarding all the parcels of land to respondent as her paraphernal properties; the tools and equipment in favor of
Beumer as his exclusive properties; the two (2) houses standing on Lots 1 and 2142 as co-owned by the parties
holding that he used his personal funds to purchase the subject parcels of land. The CA affirmed the Decision of
RTC.
(a) Can Beumer legally own land in the Philippines?
Answer: No, Beumer, being a Dutch national, cannot legally acquire land in the Philippines. He acquired no
right whatsoever over the subject properties by virtue of its unconstitutional purchase. It is well-established that
equity as a rule will follow the law and will not permit that to be done indirectly which, because of public
policy, cannot be done
directly. Surely, a contract that violates the Constitution and the law is null and void, vests no rights, creates no
obligations and produces no legal effect at all.
(b) Can Beumer claim reimbursement of the funds he used to purchase the subject parcels of land?
Answer: No, Beumer cannot claim reimbursement of the funds he used to purchase the subject parcels of land.
A claim for reimbursement of the value of purchased parcels of Philippine land instituted by a foreigner against
his former Filipina spouse cannot prosper on the ground of equity where it is clear that he willingly and
knowingly bought the property despite the prohibition against foreign ownership of Philippine land enshrined
under Section 7, Article XII of the 1987 Philippine Constitution. Corollary thereto, under Article 1412 of the
Civil Code, petitioner cannot have the subject
properties titled to him or allow him to recover the money he had spent for the purchase
thereof. The law will not aid either party to an illegal contract or agreement; it leaves the parties where it finds
them. Indeed, one cannot salvage any rights from an unconstitutional transaction knowingly entered into.
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(b) Can the Muslim Code be applied retroactively as to affect provisions of the Civil Code which govern
the marriage of Tamano and Zorayda?
Answer: The Muslim Code took effect only on February 4, 1977, and this law cannot retroactively override the
Civil Code which already bestowed certain rights on the marriage of Sen. Tamano and Zorayda. The marriage of
the two was still subsisting when Tamano contracted his second marriage.
(c) Do Zorayda and Adib have locus standi to file the Petition?
Answer: Zorayda and Adib, as the injured parties, have the legal personalities to file the declaration of nullity of
marriage. A.M. No. 02-11-10-SC, which limits to only the husband or the wife the filing of a petition for nullity
is prospective in application and does not shut out the prior spouse from filing suit if the ground is a bigamous
subsequent marriage.
PARENTAL AUTHORITY
Q. May grandparents be granted temporary custody of a grandchild?
Answer: A full trial is required. In the case of Bagtas v. Santos, which was a tug-of-war between the maternal
grandparents of the illegitimate minor child and the actual custodians of the latter, the Court faulted the trial
court for hastily dismissing the petition for habeas corpus and awarding the custody of the minor to the
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grandparents without conducting any trial. The import of such decision is that the preference accorded by Article
216 of the Family Code does not automatically attach to the grandparents, and is conditioned upon the
determination of their fitness to take care of their grandchild. In ruling as it did, the Court ratiocinated that the
child's welfare being the most important consideration, it is not bound by any legal right of a person over the
child.
Renalyn A. Masbate and Spouses Renato Masbate and Marlyn Masbate v. Ricky James Relucio
(G.R. No. 235498, SECOND DIVISION, July 30, 2018, PERLAS-BERNABE, J.)
Q. May the court grant “limited and temporary custody” to a parent who is deprived of the
care and custody of a child below 7 years old pending final determination of who has the right to custody?
Answer: No, it is not proper to grant temporary custody of child because Sec. 15 of A.M. No. 03-04-04-SC
(Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors) provides for
temporary visitation rights, not temporary custody. It is only after trial, when the court renders its judgment
awarding the custody of the minor to the proper party, that the court may likewise issue “any order that is just
and reasonable permitting the parent who is deprived of the care and custody of the minor to visit or have
temporary custody.” By granting temporary albeit limited custody ahead of trial, the trial court will overturn the
tender-age presumption with nothing but bare allegations, to which the Court cannot give its imprimatur. Even
way back, Article 363 of the Civil Code provides that in all questions relating to the care, custody, education and
property of the children, the latter's welfare is paramount. Under present rules, A.M. No. 03-04-04-SC explicitly
states that "[i]n awarding custody, the court shall consider the best interests of the minor and shall give
paramount consideration to [her] material and moral welfare. The best interests of the minor refer to the totality
of the circumstances and conditions as are most congenial to the survival, protection, and feelings of security of
the minor encouraging to [her] physical, psychological and emotional development. It also means the least
detrimental available alternative for safeguarding the growth and development of the minor."
ADOPTION
Q. Who are qualified to adopt under R.A. No. 8552 (Domestic Adoption Act of 1998)?
Answer: The following may adopt:
(1) Any Filipino citizen –
a. of legal age,
b. in possession of full civil capacity and legal rights,
c. of good moral character,
d. has not been convicted of any crime involving moral turpitude,
e. emotionally and psychologically capable of caring for children,
f. at least 16 years older than the adoptee, and
g. who is in a position to support and care for his children in keeping with the means of
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the family; or
(2) Any alien possessing the same qualifications as above stated for Filipino nationals, provided –
a. His country has diplomatic relations with the Republic of the Philippines,
b. He has been living in the Philippines for at least three (3) continuous years prior to
the filing of the application for adoption and maintains such residence until the
adoption decree is entered,
c. He has been certified by his diplomatic or consular office or any appropriate
government agency that he has the legal capacity to adopt in his country, and
d. His government allows the adoptee to enter his country as his adopted child.
(3) The guardian with respect to the ward after the termination of the guardianship and
clearance of his financial accountabilities. (Sec. 7, RA 855)
Q. May an alien claim exemption from the requirements of residency and certification of the alien’s
qualification to adopt?
Answer: The requirements on residency and certification of the alien’s qualification to adopt in his country
may be waived for the following:
(1) A former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of
consanguinity or affinity;
(2) One who seeks to adopt the legitimate child of his Filipino spouse; or
(3) One who is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative
within the fourth degree of consanguinity or affinity of the Filipino spouse. (Sec. 7, RA 855)
Bartolome v. Social Security System, G.R. No. 192531 November 12, 2014
Q. A was employed in Katta Shipping Company and was enrolled under the government’s
Employees’ Compensation Program (ECP). He died while on board a vessel of Katta.
A was, at the time of his death, childless and unmarried.
B, A’s biological mother filed a claim for death benefits. SSS denied the claim on the ground that B was no
longer considered as the parent of A since the latter was legally adopted by a certain C. According to the records,
C died during A’s minority. Can B claim the death benefits of A?
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Answer: Yes, B can claim A’s death benefits. The death of an adopting parent during the minority of the
adopted child automatically revives the filial relationship of the child to his/her biological parents. State policies
behind RA 8552 wherein the paramount consideration is the best interest of the child justify such disposition. It
is, after all, for the best interest of the child that someone will remain charged for his welfare and upbringing
should his or her adopter fail or is rendered incapacitated to perform his duties as a parent at a time the adoptee
is still in his formative years, and in the absence or, as in this case, death of the adopter, no one else could
reasonably be expected to perform the role of a parent other than the adoptee’s biological one.
RULES ON ACCESSION
Heirs of Francisco I. Narvasa, Sr. et al. v. Emiliana Imbornal et al., G.R. No. 182908, August 6, 2014,
SECOND DIVISION, PERLAS-BERNABE, J
Q. Who has the right over alluvial deposits?
Answer: Alluvial deposits along the banks of a creek or a river do not form part of the public domain as the
alluvial property automatically belongs to the owner of the estate to which it may have been added. The only
restriction provided for by law is that the owner of the adjoining property must register the same under the
Torrens system; otherwise, the alluvial property may be subject to acquisition through prescription by third
persons.
QUIETING OF TITLE
Bilag v. Ay Ay et al., G.R. No. 189950, FIRST DIVISION, April 24, 2017, PERLAS-BERNABE, J.
Q. May parties claim registration of parcels of land covered the Baguio Townsite Reservation after July
31, 1973?
Answer: In a catena of cases, and more importantly, in PD 1271, it was expressly declared that all orders and
decisions issued by the Court of First Instance of Baguio and Benguet in connection with the proceedings for the
reopening of Civil Reservation Case No. 1, GLRO Record 211, covering lands within the Baguio Townsite
Reservation are null and void and without force and effect. While PD 1271 provides for a means to validate
ownership over lands forming part of the Baguio Townsite Reservation, it requires, among others, that a
Certificate of Title be issued on such lands on or before July 31, 1973. In this case, records reveal that the
subject lands are unregistered and untitled, as petitioners' assertion to that effect was not seriously disputed by
respondents. In view of the foregoing, it is only reasonable to conclude that the subject lands should be properly
classified as lands of the public domain as well.
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System is intended to guarantee the integrity and conclusiveness of the certificate of registration but is not
intended to perpetrate fraud against the real owner of the land. The certificate of title cannot be used to protect a
usurper from the true owner.
Augusto Ong Trinidad II et. al. v. Spouses Bonifacio Palad and Felicidad Kausapin (G.R. No. 203397, 9
December 2015)
Q: What are the purposes or effects of Transfer of Certificate of Title?
Answer: Transfer Certificate of Title constitutes as evidence of ownership over the subject property, which lies
within the area covered by said title; it serves as evidence of indefeasible and incontrovertible title to the
property in favor of whose names appear therein; and that as registered owners, they are entitled to possession of
the subject property.
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EVIDENTIARY PROOFS IN REGISTRATION OF ORIGINAL LAND TITLES
Republic of the Philippines v. Spouses Dante and Lolita Benigno (G.R. No. 205492, 11 March 2015)
Q: What must an applicant prove for registration of title under PD 1529?
Answer: Applicants for registration of title under PD 152950 must prove: (1) that the subject land forms part of
the disposable and alienable lands of the public domain; and (2) that they have been in open, continuous,
exclusive and notorious possession and occupation of the land under a bona fide claim of ownership since 12
June 1945 or earlier.
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ENCROACHMENT OVER PROPERTY OF ANOTHER; BUILDER IN BAD FAITH
Q. An RTC Decision reconveying to X a portion of Lot 123 which was erroneously included in Y's free patent
application became final and executory. In so ruling, the RTC acknowledged X's actual and exclusive
possession, cultivation, and claim of ownership. The Deed of Conveyance issued in favor of X, however, could
not be annotated on the OCT of Lot 123 because said title had been cancelled because the area over by the title
of his property was included in homestead title of Y. X’s title was cancelled because Y previously mortgaged the
lot to the bank as security for series of loans, and the mortgage was eventually foreclosed. Thus, title to the lot
was transferred to PNB. X filed a complaint against PNB and Y for Declaration of Nullity of Mortgage,
Foreclosure Sale, Reconveyance and Damages. According to X, PNB was not an innocent purchaser/mortgagee
for value. According to the bank, the action of X had prescribed. Rule on the respective party's contentions.
Answer: (1) Ruling on PNB’s contention: PNB is not an innocent purchaser for value or "one who buys the
property of another, without notice that some other person has a right or interest in such property and pays the
full price for the same, at the time of such purchase or before he has notice of the claims or interest of some
other person in the property. PNB has the burden of evidence that it acted in good faith from the time the land
was offered as collateral. However, PNB miserably failed to overcome this burden. There was no showing at all
that it conducted an investigation; that it observed due diligence and prudence by checking for flaws in the title;
that it verified the identity of the true owner and possessor of the land; and, that it visited subject premises to
determine its actual condition before accepting the same as collateral. A banking institution is expected to
exercise due diligence before entering into a mortgage contract. The ascertainment of the status or condition of a
property offered to it as security for a loan must be a standard and indispensable part of its operations.
(2) Ruling X’s Action for Reconveyance: An action for reconveyance filed by a person claiming to be the owner
and who is in actual possession of the property does not prescribe. The reason for this is that one who is in
actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed
or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed
possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature
of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who
is in possession. In X’s case, as it has been judicially established that he is in actual possession of the property
he claims as his and that he has a better right to the disputed portion, his suit for reconveyance is in effect an
action for quieting of title. Hence, PNB’s defense of prescription against X does not lie.
(3) Ruling on Y’s defense: If property is acquired through mistake or fraud, the person obtaining it is, by force
of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. An
action for reconveyance based on implied trust prescribes in 10 years as it is an obligation created by law, to be
counted from the date of issuance of the Torrens title over the property. This rule, however, applies only when
the plaintiff or the person enforcing the trust is not in possession of the property. (PNB v. Jumamoy, G.R. No.
169901, August 3, 2011)
EASEMENTS
Q. What are the requisites for entitlement to a right of way?
Answer: To be entitled to an easement of right of way, the following requisites should be met: (1) An
immovable is surrounded by other immovables belonging to other persons, and is without adequate outlet to a
public highway;
(2) Payment of proper indemnity by the owner of the surrounded immovable;
(3) The isolation of the immovable is not due to its owner’s acts; and
(4) The proposed easement of right of way is established at the point least prejudicial to the servient estate, and
insofar as consistent with this rule, where the distance of the dominant estate to a public highway may be the
shortest. (Naga Centrum v. Sps. Orzals, G.R. No. 203576, September 14, 2016)
Page 16 of 35
Andres et. Al. v. Sta. Lucia Realty and Development Inc. (G.R. No. 201405, August 24, 2015)
Q. Can the petitioners demand an easement of right-of-way from respondent despite the fact that they
have not acquired ownership over the supposed dominant estate?
Answer: Under Article 649 of the Civil Code, an easement of right-of-way may be demanded by the owner of
an immovable or by any person who by virtue of a real right may cultivate or use the same.
It appears that the subject property is an unregistered public agricultural land. Thus, being a land of the public
domain, petitioners, in order to validly claim acquisition thereof through prescription, must first be able to show
that the State has -expressly declared through either a law enacted by Congress or a proclamation issued by the
President that the subject [property] is no longer retained for public service or the development of the national
wealth or that the property has been converted into patrimonial.
Consequently, without an express declaration by the State, the land remains to be a property of public dominion
and hence, not susceptible to acquisition by virtue of prescription.
In the absence of such proof of declaration in this case, petitioners' claim of ownership over the subject property
based on prescription necessarily crumbles. Conversely, they cannot demand an easement of right-of-way from
respondent for lack of personality.
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(b) Was Leyba guilty of laches in enforcing its putative rights?
Answer: Leyba is not guilty of laches because as owner of the land, it has an imprescriptible right to recover
possession thereof from any person illegally occupying its lands. “prescription and laches cannot apply to
registered land covered by the Torrens system” pursuant to Section 47 of the Property Registration Decree 1529,
which states that “no title to registered land in derogation of the title of the registered owner shall be acquired by
prescription or adverse possession.”
CO-OWNERSHIP
Neri et. al v Heirs of Hadji Yusop Uy, G.R. No. 194366. SECOND DIVISION. October 10, 2012,
PERLAS-BERNABE, J.
Q. What are rights of a co-owner?
Answer: Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining
thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the
termination of the co-ownership.
Q. What is the effect of the execution of the Extra-Judicial Settlement of the Estate with Absolute Deed of
Sale when not all the co-owners participated in the transaction?
Answer: Where in the execution of the Extra-Judicial Settlement of the Estate with Absolute Deed was
executed without the participation of the other co-owners, the settlement was not valid and binding upon them
and consequently, a total nullity.
Antipolo Ining (deceased), survived by Manuel Villanueva, et. al. v. Leonardo R. Vega, substituted by
Lourdes Vega, et. al. (G.R. No. 174727, 12 August 2013)
Q: What are the requisites in order that the title may prescribe in favor of a co-owner?
Answer: The requisites in order that the title may prescribe in favor of a co-owner are: (1) the co-owner has
performed unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) such positive acts
of repudiation have been made known to the other co-owners; and (3) the evidence thereof is clear and
convincing.
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(a) In case the sale should be cancelled, is the seller required to refund all the monthly installments paid
by the buyer?
Answer: No, the sale should not canceled since the buyer paid at least two (2) years of installment, he is only
entitled to receive the cash surrender value of the payments he made which, under Section 3(b) of the Maceda
Law, is equivalent to 50% of the total payments made. Under the Maceda Law, the actual cancellation of a
contract to sell takes place after 30 days from receipt by the buyer of the notarized notice of cancellation, and
upon full payment of the cash surrender value to the buyer. In other words, before a contract to sell can be
validly and effectively cancelled, the seller has (1) to send a notarized notice of cancellation to the buyer and (2)
to refund the cash surrender value. Until and unless the seller complies with these twin mandatory requirements,
the contract to sell between the parties remains valid and subsisting. Thus, the buyer has the right to continue
occupying the property subject of the contract to sell, and may still reinstate the contract by updating the account
during the grace period and before the actual cancellation of the contract. In this case, the seller complied only
with the first condition by sending a notarized notice of cancellation to the buyer. It failed, however, to refund
the cash surrender value to him. Thus, the Contract to Sell remains valid and subsisting and supposedly, the
buyer has the right to continue occupying the subject property.
(b) Is the seller required to pay the buyer the value of the house erected on the subject lot?
Answer: Yes, the buyer is entitled to reimbursement of the improvements made on the property. In view of the
special circumstances obtaining in this case, the Court is constrained to rely on the presumption of good faith on
the part of the buyer. Thus, the buyer is presumed builder in good faith.
(a) Is rescission the proper remedy for failure to pay the installments in a Contract to Sell real property?
Answer: No, rescission is not the property remedy. In a Contract to Sell, payment of the price is a positive
suspensive condition. Failure of which is not a breach of contract warranting rescission under Article 1191 of the
Civil Code, but rather just an event that prevents the supposed seller from being bound to convey the title to the
supposed buyer.
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Answer: There was no valid tender of payment. Tender of payment, without money, produces no effect. To have
the effect of payment and the consequent extinguishment of the obligation to pay, the law requires the
companion acts of tender of payment and consignation.
Q. What are the options of the landowner as seller under the foregoing situation?
Answer: The seller, as landowner, has two options. It may appropriate the new house by reimbursing buyer the
current market value thereof minus the cost of the old house. Under this option, buyer would have "a right of
retention which negates the obligation to pay rent." In the alternative, seller may sell the lots to buyer at a price
equivalent to the current fair value thereof. However, if the value of the lots is considerably more than the value
of the improvement, buyer cannot be compelled to purchase the lots. He can only be obliged to pay reasonable
rent. (Communities Cagayan v. Sps. Nanoy, G.R. No. 17679, November 14, 2012)
Q. Petitioners are co-owners for more than 50 years of an unregistered agricultural land in Rizal.
Respondent owns the lands surrounding the petitioner’s property. Respondent developed the lands, built
a concrete perimeter fence around it. As a result, petitioners were denied access from their property to the
nearest public road and vice versa. Petitioners filed a Complaint for Easement or Right of Way before the
RTC to gain access to the public road. Should the Complaint be granted?
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Answer: No. Under Article 649 of the Civil Code, an easement of right of way may be demanded by the owner
or an immovable or by any person who by virtue of a real right may cultivate or use the same. Only lands of the
public domain subsequently declared as such and no longer intended for public use or for development of
national wealth, or removed from the sphere of public dominion are considered converted into patrimonial lands
or lands of private ownership. The property in this case, being an unregistered agricultural land, is a land of
public domain. Petitioners, in order to validly claim acquisition thereof through prescription must first be able to
show that the state has expressly declared through either a law enacted by Congress or a proclamation issued by
the President that the subject property is no longer retained for public service or development of national wealth
or that the property has been converted into patrimonial. Thus, no right of way may be granted to petitioners.
(Andres v. Realty & Development Inc., GR No. 201405, August 24, 2015)
(c) What reliefs may the trail court grant to Spouses Domingo?
Answer: The court may order Spouses Manzano to reimburse Spouses Domingo of the amount they paid in
installments plus nominal damages and interests.
SALE OF REAL PROPERTY: BAD FAITH ON THE PART OF THE SELLER; MORTGAGE
WITHOUT THE CONSENT OF SPOUSE
Bignay EX-IM Phils. Inc. v. Union Bank of the Phil. (G.R. No. 171590, February 12, 2014)
Page 21 of 35
Q. Bignay bought from Union Banka a foreclosed property subject of a pending case between Union Bank and
Rosario De Leon, the mortgagor. De Leon had filed an action for annulment of mortgage as the foreclosed
property was mortgaged by her husband without her consent. The trial court annulled the mortgage and ruled
that Rosario was the owner of the undivided half of the property. Bignay filed a case against Union Bank for
breach of warranty against eviction under Article 1547 and 1548 of the Civil Code. The RTC held that Union
Bank acted in bad faith in selling the property to Bignay. The CA made Union Bank liable for the amount of the
land and building constructed on it by Bignay. Was the judgment against Union Bank making it liable to pay
Bignay the cost of the land and building correct?
Page 22 of 35
Answer: The judgment is correct. Union Bank is liable to Bignay. It appears that Union Bank did not inform
Bignay of the pending case between Union Bank and Rosario. Under the law, Bignay shall have the right to
demand of Union Bank the return of the value which the thing sold had at the time of the eviction, be it greater
or less than the price of the sale as well as the expenses of the contract, if the vendee has paid them and the
damages and interests, and ornamental expenses, if the same was made in bad faith.
(b) Can the P100,000.00 deposited to the account of First Optima be considered earnest money?
Answer: Earnest money applies to a perfected sale. Article 1482 states that “there must be first a perfected
contract of sale before we can speak of earnest money.”
FORBEARANCE
Hermojina Estores v. Spouses Arturo and Laura Supangan (G.R. No. 175139, 18 April 2012)
Q. What is forbearance?
Answer: In Crismina Garments, Inc. v. Court of Appeals, "forbearance" was defined as a "contractual obligation
of lender or creditor to refrain during a given period of time, from requiring the borrower or debtor to repay a
loan or debt then due and payable." In such case, "forbearance of money, goods or credits" will have no distinct
definition from a loan. Forbearance of money, goods or credits refers to arrangements other than loan
agreements, where a person acquiesces to the temporary use of his money, goods or credits pending happening
of certain events or fulfillment of certain conditions.
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purpose of paying debts and expenses, but this does not prevent an immediate passage of the title, upon the
death of the intestate, from himself to his heirs. The deed of extrajudicial settlement executed evidences their
intention to partition the inherited property.
Mendoza v. Delos Santos, G.R. No. 176422, March 20, 2013; Chua vs. CFI, G.R. No. L-29901 August 31,
1977
Q. What is reserva troncal?
Answer: Reserva troncal is a special rule designed primarily to assure the return of a reservable property to the
third degree relatives belonging to the line from which the property originally came, and avoid its being
dissipated into and by the relatives of the inheriting ascendant. The principle of reserva troncal is provided in
Art. 891 of the Civil Code.
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(1) First transmission is by gratuitous title, whether by inheritance or donation, from an
ascendant/brother/sister to a descendant called the prepositus;
(2) Second transmission is by operation of law from the prepositus to the other ascendant or
reservor, also called the reservista.
(3) Third and last transmission is from the reservista to the reservees or reservatarios who must
be relatives within the third degree from which the property came.
Antonio B. Baltazar, Sebastian M. Baltazar, Antonio L. Mangalindan, Rosie M. Mateo, Nenita A. Pacheco,
Virgilio Regala, Jr., and Rafael Titco v. Lorenzo Laxa (G.R. No. 174489, 11 April 2012)
Q: Is the state of being forgetful will make an individual mentally unsound to render him unfit to execute
a will?
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Answer: No, the state of being forgetful does not necessarily make a person mentally unsound so as to render
him unfit to execute a Will. Forgetfulness is not equivalent to being of unsound mind. Besides, Article 799 of the
New Civil Code states:
Art. 799. To be of sound mind, it is not necessary that the testator be in full possession of
all his reasoning faculties, or that his mind be wholly unbroken, unimpaired, or unshattered
by disease, injury or other cause.
It shall be sufficient if the testator was able at the time of making the will to know the
nature of the estate to be disposed of, the proper objects of his bounty, and the character of
the testamentary act.
The testimony of subscribing witnesses to a Will concerning the testator’s mental condition is entitled to great
weight where they are truthful and intelligent. More importantly, a testator is presumed to be of sound mind at
the time of the execution of the Will and the burden to prove otherwise lies on the oppositor. Article 800 of the
New Civil Code states:
Art. 800. The law presumes that every person is of sound mind, in the absence of proof to
the contrary.
The burden of proof that the testator was not of sound mind at the time of making his
dispositions is on the person who opposes the probate of the will; but if the testator, one
month, or less, before making his will was publicly known to be insane, the person who
maintains the validity of the will must prove that the testator made it during a lucid
interval.
DONATIONS
Q. X is the registered owner of a parcel of land issued in 1986 pursuant to an emancipation patent. X filed a case
for Forcible Entry against Y who, with violence, ousted X from the land. Y filed a Motion to Dismiss claiming
that the land was agricultural land which allegedly rendered the dispute an agrarian matter within the jurisdiction
of the DAR. Y also claimed that he obtained title through Z whose claim to the property is by virtue of an
unregistered Deed of Donation executed prior to 1972.
(a) Is the case an agrarian dispute which divests the regular court of jurisdiction?
Answer: No. A case involving an agricultural land does not immediately qualify as an agrarian dispute. For the
DAR to acquire jurisdiction over the case, there must be a tenancy relationship between the parties. It is
necessary to establish the indispensable elements of tenancy:
(1) that the parties are the landowner and tenant or agricultural lessee;
(2) the subject matter of the relationship is an agricultural land;
(3)there is consent between the parties to the relationship; 4)that the purpose of the relationship is bring about
agricultural production;
(5) that there is personal cultivation on the part of the tenant or agricultural lessee; and
(6) that the harvest is shared between the parties. In this case, not all the conditions are present.
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(b) Is X bound by the unregistered deed of donation?
Answer: No, in order that the donation of an immovable may be valid, it must be made in a public document.
Article 709 explicitly states that “the titles of ownership, or other rights over immovable property, which are not
duly inscribed or annotated in the Registry of Property shall not prejudice third persons.” Although the non-
registration of a deed of donation shall not affect its validity, the necessity of registration comes into play when
the rights of third persons are affected, as in the case at bar. The donation executed in this case, although in
writing and duly notarized, has not been registered in accordance with law. When X’s title was issued in 1986, it
became indefeasible and incontrovertible. Certificates of title issued pursuant to emancipation patents acquire
the same protection accorded to other titles, and become indefeasible upon expiration of one year from the date
of the issuance of the order for the issuance of the patent. Land so titled may no longer be the subject matter of a
cadastral proceeding; nor can they be decreed to other individuals. (Bumagat, et al. v.Arribay, GR No. 194818,
June 9, 2014)
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CREDIT TRANSACTION
Bankard v. Alarte (G.R. No. 202573, April 19, 2017)
Q: Petitioner Bankard, Inc. (Bankard, now RCBC Bankard Services Corporation) is a duly constituted domestic
corporation doing business as a credit card provider, extending credit accommodations to its member-
cardholders for the purchase of goods and services obtained from Bankard-accredited business establishments,
to be paid later on by the member-cardholders following billing.
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Q: What is the effect of rescission of contract?
Answer: In cases involving rescission under Article 1191, mutual restitution is required. The parties should be
brought back to their original position prior to the inception of the contract. "Accordingly, when a decree of
rescission is handed down, it is the duty of the court to require both parties to surrender that which they have
respectively received and to place each other as far as practicable in [their] original situation.” If both parties
failed to comply with their respective obligations, Article 1192 will be applied which reads, “In case both parties
have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the
courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed
extinguished, and each shall bear his own damages.”
UNENFORCEABLE CONTRACTS
Elena Jane Duarte v. Miguel Samuel A.E. Duran (G.R. No. 173038, 14 September 2011)
Q: When may a party seek the application of the Statute of Frauds?
Answer: The Statute of Frauds applies only to executory, and not to completed, executed or partially executed
contracts.
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thinking that the latter will just show it to a possible buyer. Unfortunately, EC obtained a loan from RBES Bank
and as security, she mortgaged the property. Due to failure to settle the loan, the property was foreclosed and
sold in favor of RBES Bank. NB claimed that she did not allow EC to mortgage the property. Is there an agency
relationship between NB and EC?
Answer: No, in order to bind the principal by a deed executed by an agent, the deed must upon its face purport
to be made, signed and sealed in the name of the principal. In other words, the mere fact that the agent was
authorized to mortgage the property is not sufficient to bind the principal, unless the deed was executed and
signed by the agent for and on behalf of his principal. In this case, the authorized agent failed to indicate in the
mortgage that she was acting for and on behalf of her principal. The Real Estate Mortgage, explicitly shows on
its face, that it was signed by EC in her own name and in her own personal capacity. In fact, there is nothing in
the document to show that she was acting or signing as an agent of NB. Thus, consistent with the law on agency
and established jurisprudence, NB cannot be bound by the acts of EC.
EC acted beyond the scope of his authority.
VALID CONSIGNATION
Q. What are the requirements for a valid consignation?
Answer: For consignation to be valid, the debtor must comply with the following requirements under the law:
1) there was a debt due; 2) valid prior tender of payment, unless the consignation was made because of some
legal cause provided in Article 1256; 3) previous notice of the consignation has been given to the persons
interested in the performance of the obligation; 4) the amount or thing due was placed at the disposal of the
court; and, 5) after the consignation had been made, the persons interested were notified thereof:
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"Failure in any of the requirements is enough ground to render a consignation ineffective.” (PNB v.
Chan, G.R. No. 206037, March 13, 2017)
COMPENSATION
Q. What are the requirements in order for legal compensation to take place and extingusih an obligation?
Answer: For legal compensation to take place, the requirements set forth in 1279 of the Civil Code must be
present, namely: (1) That each one of the obligors be bound principally, and that he be at the same time a
principal creditor of the other; (2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if the latter has been stated; (3) That the two
debts be due; (4) That they be liquidated and demandable; (5) That over neither of them there be any retention or
controversy, commenced by third persons and communicated in due time to the debtor.
STIPULATION ON RESCISSION
Q. May the parties to a contract validly stipulate its rescission?
Answer: Yes, parties may validly stipulate the unilateral rescission of a contract. Such is the case here since the
parties conferred upon GSIS the right to unilaterally rescind the MOA. It is basic that a contract is the law
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between the parties, and the stipulations therein – provided that they are not contrary to law, morals, good
customs, public order or public policy – shall be binding as between the parties. (Goodloop Properties vs.
GSIS, G.R. No. 171076, August 1, 2012)
THE CONCEPTS AND DOCTRINES OF RES IPSA LOQUITUR, LAST CLEAR CHANCE,
PROXIMATE CAUSE, DAMNUM ABSQUE INJURIA, PRESUMPTION OF NEGLIGENCE,
VICARIOUS LIABILITY
EMERGENCY RULE
Q. Explain the “Emergency Rule.”
Answer: The Emergency Rule states that one who suddenly finds himself in a place of danger, and is required to
act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of
negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method,
unless the emergency in which he finds himself is brought about by his own negligence. (Orix Metro Lising vs.
Mangalinao, G.R. No. 174089, January 25, 2012)
ACTUAL DAMAGES
Q. May actual damages be awarded sans proof of the actual amount lost?
Answer: Article 2199 of the Civil Code provides that "one is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved." In Ong v. Court of Appeals, we held that "actual damages
are such compensation or damages for an injury that will put the injured party in the position in which he had
been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of
measurement." To be recoverable, actual damages must not only be capable of proof, but must actually be
proved with reasonable degree of certainty. We cannot simply rely on speculation, conjecture or guesswork in
determining the amount of damages. Thus, it was held that before actual damages can be awarded, there must be
competent proof of the actual amount of loss, and credence can be given only to claims which are duly
supported by receipts. Here, respondent did not present documentary proof to support the claimed necessary
expenses for the repair and completion of the house. (Dueñas vs. Africa, G.R. No. 165679, October 5, 2009 )
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MORAL DAMAGES
Q. What constitutes bad faith?
Answer: Bad faith means breach of a known duty through some motive or interest or ill will. By refusing to
honor her solemn obligations under the lease, and instead unduly profiting from these violations, Z is guilty of
bad faith. Moral damages may be awarded when the breach of contract is attended with bad faith. Exemplary
damages may also be awarded when a wrongful act is accompanied by bad faith or when the defendant acted in
a wanton, fraudulent, reckless, oppressive, or malevolent manner. And since the award of exemplary damages is
proper in this case, attorney's fees and costs of the suit may also be recovered as stipulated in the lease
agreement. (Sps. Castro vs. Palenzuela, G.R. No. 184698, January 21, 2013)
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petitioners are not entitled to exemplary damages. (Ching vs. Bantolo, et al., G.R. No. 17708, December 5,
2012)
COMPROMISE AGREEMENT
Sonley v. Anchor Savings Bank/Equicom Savings Bank (G.R. No. 205623, August 10, 2016)
Q: Conchita Sonley entered into a Contract to Sell with Anchor for the purchase of the foreclosed property.
Sonley defaulted hence Anchor rescinded the Contract. Sonley filed an action for the court to declare the
rescission as null and void. They however entered into a Compromise Agreement. To settle the matter, the
parties agreed to enter into a Compromise Agreement. Under the Judgment based on the Compromise
Agreement, Sonley would repurchase the property from Anchor. Sonley again defaulted prompting Anchor to
move for execution. It prayed that (a) the Compromise Agreement be rescinded; (b) it be allowed to apply the
payments as rentals; and (c) Sonley be evicted from the property.
Can Anchor ask for execution of the judgment based on a compromise agreement?
Answer: Yes, Anchor may move for execution of judgment based on the Compromise Agreement executed by
the party-litigants and duly approved by the trial court. A compromise agreement is the law between the parties.
Its purpose is to put an end to litigation because of the uncertainty that may arise from it. Once the compromise
is perfected, the parties are bound to abide by it in good faith. Should a party fail or refuse to comply with the
terms, the other party could either enforce the compromise by a writ of execution A compromise agreement is
equivalent to a ruling on the merits.
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PLEDGE, MORTGAGE AND ANTICHRESIS, CHATTEL MORTGAGE (INLCUDE ACT NO. 1508
AND SECTION 47 OF R.A. NO. 8791 OR THE GENERAL BANKING ACT OF 2000)
Q: Union Bank of the Philippines v. Alain Juniat, Winwood Apparel, Inc., Wingyan Apparel, Inc., Nonwoven
Fabric Philippines (G.R. No. 171569, 1 August 2011)
Question: AJ obtained a loan from UB which was secured by a Chattel Mortgage over the motorized sewing
machines. When AJ failed to pay, UB filed an action for Sum of Money with Issuance of a Writ of Preliminary
Attachment. At the time of issuance of the writ, the possession of the machines is with NF. The latter argued that
it has a better title considering that the Chattel Mortgage was not notarized. Will the argument of NF prevail?
Answer: No, NF’s argument will not prevail. Indeed, the unnotarized Chattel Mortgage executed by AJ in favor of UB
does not bind NF. However, it must be pointed out that UB’s primary cause of action is for a sum of money with prayer for
the issuance of ex-parte writs of attachment and replevin against AJ and the person in possession of the motorized sewing
machines and equipment. Thus, the fact that the Chattel Mortgage executed in favor of UB was not notarized does not
affect UB’s cause of action. UB only needed to show that the loan of AJ remains unpaid and that it is entitled to the
issuance of the writs prayed for. Considering that writs of attachment and replevin were issued by the RTC. NF had to
prove that it has a better right of possession or ownership over the attached properties. This it failed to do.
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