XXX HO#24 Chair's Cases in Civil Law

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3 Floor, Philippine Nurses Association,

# 1663 F. T. Benitez St, Malate, Manila
CIVIL LAW
Handout No. 24
CHAIR’S CASES
PERSONS
Computation of Period
In Commissioner of Internal Revenue v. Primetown Property Group, Inc., 531 SCRA 436 (2007), we said that as
between the Civil Code, which provides that a year is equivalent to 365 days, and the Administrative Code of 1987,
which states that a year is composed of 12 calendar months, it is the latter that must prevail following the legal
maxim, Lex posteriori derogat priori. Thus: Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of
the Administrative Code of 1987 deal with the same subject matter—the computation of legal periods. Under the
Civil Code, a year is equivalent to 365 days whether it be a regular year or a leap year. Under the Administrative
Code of 1987, however, a year is composed of 12 calendar months. Needless to state, under the Administrative Code
of 1987, the number of days is irrelevant. There obviously exists a manifest incompatibility in the manner of
computing legal periods under the Civil Code and the Administrative Code of 1987. For this reason, we hold that
Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being the more recent law, governs the
computation of legal periods. Lex posteriori derogat priori. Commissioner of Internal Revenue vs. Aichi Forging
Company of Asia, Inc., 632 SCRA 422, G.R. No. 184823 October 6, 2010
Abuse of Rights
Under Article 19 of the Civil Code, “(e)very person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.” Under Article 26, “(e)very
person shall respect the dignity, personality, privacy and peace of mind of his neighbors.” Petitioner’s action betrays
a perverse and deliberate intention to hurt and punish respondents for legally demanding a right-of-way which it
nevertheless knew was forthcoming, and which, considering the size of its land, it may give without the least
prejudice to its own rights. Naga Centrum, Inc. vs. Orzales, 803 SCRA 109, G.R. No. 203576 September 14, 2016
Unjust Enrichment
There is unjust enrichment “when a person unjustly retains a benefit to the loss of another, or when a person retains
money or property of another against the fundamental principles of justice, equity and good conscience.” The
principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or
justification, and (2) that such benefit is derived at the expense of another. The main objective of the principle
against unjust enrichment is to prevent one from enriching himself at the expense of another without just cause or
consideration. Locsin II vs. Mekeni Food Corporation, 711 SCRA 658, G.R. No. 192105 December 9, 2013
To constitute unjust enrichment, it must be shown that a party was unjustly enriched in the sense that the term
unjustly could mean illegally or unlawfully. A claim for unjust enrichment fails when the person who will benefit has
a valid claim to such benefit. The CBA has provided for MMPC’s limited liability which extends only up to the amount
to be paid to the hospital and doctor by the employees’ dependents, excluding those paid by other insurers.
Consequently, the covered employees will not receive more than what is due them; neither is MMPC under any
obligation to give more than what is due under the CBA. Moreover, since the subject CBA provision is an insurance
contract, the rights and obligations of the parties must be determined in accordance with the general principles of
insurance law. Being in the nature of a non-life insurance contract and essentially a contract of indemnity, the CBA
provision obligates MMPC to indemnify the covered employees’ medical expenses incurred by their dependents but
only up to the extent of the expenses actually incurred. This is consistent with the principle of indemnity which
proscribes the insured from recovering greater than the loss. Indeed, to profit from a loss will lead to unjust
enrichment and therefore should not be countenanced. As aptly ruled by the CA, to grant the claims of MMPSEU
will permit possible abuse by employees. Mitsubishi Motors Philippines Salaried Employees Union (MMPSEU) vs.
Mitsubishi Motors Philippines Corporation, 698 SCRA 599, G.R. No. 175773 June 17, 2013
Article 26(1) of the Civil Code protects an individual’s right to privacy and provides a legal remedy against abuses
that may be committed against him by other individuals
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This provision recognizes that a man’s house is his castle, where his right to privacy cannot be denied or even
restricted by others. It includes “any act of intrusion into, peeping or peering inquisitively into the residence of
another without the consent of the latter.” The phrase “prying into the privacy of another’s residence,” however,
does not mean that only the residence is entitled to privacy, because the law covers also “similar acts.” A business
office is entitled to the same privacy when the public is excluded therefrom and only such individuals as are allowed
to enter may come in. Hing vs. Choachuy, Sr., 699 SCRA 667, G.R. No. 179736 June 26, 2013
Reasonable Expectation of Privacy Test

In ascertaining whether there is a violation of the right to privacy, courts use the “reasonable expectation of privacy”
test. This test determines whether a person has a reasonable expectation of privacy and whether the expectation
has been violated. In Ople v. Torres, 504 SCRA 704 (2006), we enunciated that “the reasonableness of a person’s
expectation of privacy depends on a two-part test: (1) whether, by his conduct, the individual has exhibited an
expectation of privacy; and (2) this expectation is one that society recognizes as reasonable.” Customs, community
norms, and practices may, therefore, limit or extend an individual’s “reasonable expectation of privacy.” Hence, the
reasonableness of a person’s expectation of privacy must be determined on a case-to-case basis since it depends on
the factual circumstances surrounding the case. Hing vs. Choachuy, Sr., 699 SCRA 667, G.R. No. 179736 June 26,
2013
In this day and age, video surveillance cameras are installed practically everywhere for the protection and safety of
everyone. The installation of these cameras, however, should not cover places where there is reasonable expectation
of privacy, unless the consent of the individual, whose right to privacy would be affected, was obtained. Nor should
these cameras be used to pry into the privacy of another’s residence or business office as it would be no different
from eavesdropping, which is a crime under Republic Act No. 4200 or the Anti-Wiretapping Law. Hing vs. Choachuy,
Sr., 699 SCRA 667, G.R. No. 179736 June 26, 2013
Naturalization
The courts must always be mindful that naturalization proceedings are imbued with the highest public interest.
Naturalization laws should be rigidly enforced and strictly construed in favor of the government and against the appli
cant. The burden of proof rests upon the applicant to show full and complete compliance with the requirements of
law. Republic vs. Ong, 673 SCRA 485, G.R. No. 175430 June 18, 2012
Based on jurisprudence, the qualification of “some known lucrative trade, profession, or lawful occupation” means
“not only that the person having the employment gets enough for his ordinary necessities in life. It must be shown
that the employment gives one an income such that there is an appreciable margin of his income over his expenses
as to be able to provide for an adequate support in the event of unemployment, sickness, or disability to work and
thus avoid one’s becoming the object of charity or a public charge.” His income should permit “him and the members
of his family to live with reasonable comfort, in accordance with the prevailing standard of living, and consistently
with the demands of human dignity, at this stage of our civilization.” Republic vs. Ong, 673 SCRA 485, G.R. No.
175430 June 18, 2012
It has been held that in determining the existence of a lucrative income, the courts should consider only the
applicant’s income; his or her spouse’s income should not be included in the assessment. The spouse’s additional
income is immaterial “for under the law the petitioner should be the one to possess ‘some known lucrative trade,
profession or lawful occupation’ to qualify him to become a Filipino citizen.” Lastly, the Court has consistently held
that the applicant’s qualifications must be determined as of the time of the filing of his petition. Republic vs. Ong,
673 SCRA 485, G.R. No. 175430 June 18, 2012
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FAMILY RELATIONS
In a void marriage, any interested party may attack the marriage directly or collaterally without prescription,
which may be filed even beyond the lifetime of the parties to the marriage
Since A.M. No. 02-11-10-SC does not apply, Adib, as one of the children of the deceased who has property rights as
an heir, is likewise considered to be the real party in interest in the suit he and his mother had filed since both of
them stand to be benefited or injured by the judgment in the suit. Juliano-Llave vs. Republic, 646 SCRA 637, G.R.
No. 169766 March 30, 2011
Psychological Incapacity
Psychological incapacity is the downright incapacity or inability to take cognizance of and to assume the basic marital
obligations. The burden of proving psychological incapacity is on the plaintiff. The plaintiff must prove that the
incapacitated party, based on his or her actions or behavior, suffers a serious psychological disorder that completely
disables him or her from understanding and discharging the essential obligations of the marital state. The
psychological problem must be grave, must have existed at the time of marriage, and must be incurable. Kalaw vs.
Fernandez, 657 SCRA 822, G.R. No. 166357 September 19, 2011
The landmark case of Santos v. Court of Appeals, 240 SCRA 20 (1995), taught us that psychological incapacity under
Article 36 of the Family Code must be characterized by (a) gravity, (b) juridical antecedence, and (c) incurability. The
burden of proving psychological incapacity is on the petitioner, pursuant to Republic v. Court of Appeals, 268 SCRA
198 (1997), or the Molina case. Matudan vs. Republic, 808 SCRA 480, G.R. No. 203284 November 14, 2016
Sexual infidelity per se is a ground for legal separation, but it does not necessarily constitute psychological
incapacity
Even assuming arguendo that petitioner was able to prove that respondent had an extramarital affair with another
man, that one instance of sexual infidelity cannot, by itself, be equated with obsessive need for attention from other
men. Kalaw vs. Fernandez, 657 SCRA 822, G.R. No. 166357 September 19, 2011
Declaration of Presumptive Death

In the 2005 case of Republic v. Bermudez-Lorino, 449 SCRA 57, we held that the RTC’s Decision on a Petition for
declaration of presumptive death pursuant to Article 41 of the Family Code is immediately final and executory. Thus,
the CA has no jurisdiction to entertain a notice of appeal pertaining to such judgment. Concurring in the result,
Justice (later Chief Justice) Artemio Panganiban further therein pointed out that the correct remedy to challenge the
RTC Decision was to institute a petition for certiorari under Rule 65, and not a petition for review under Rule 45.
Republic vs. Sareñogon, Jr., 783 SCRA 615, G.R. No. 199194 February 10, 2016
In sum, under Article 41 of the Family Code, the losing party in a summary proceeding for the declaration of
presumptive death may file a petition for certiorari with the CA on the ground that, in rendering judgment thereon,
the trial court committed grave abuse of discretion amounting to lack of jurisdiction. From the Decision of the CA,
the aggrieved party may elevate the matter to this Court via a petition for review on certiorari under Rule 45 of the
Rules of Court. Republic vs. Sareñogon, Jr., 783 SCRA 615, G.R. No. 199194 February 10, 2016
Given the Court’s imposition of “strict standard” in a petition for a declaration of presumptive death under Article
41 of the Family Code, it must follow that there was no basis at all for the RTC’s finding that Jose’s Petition complied
with the requisites of Article 41 of the Family Code, in reference to the “well-founded belief” standard. If anything,
Jose’s pathetically anemic efforts to locate the missing Netchie are notches below the required degree of stringent
diligence prescribed by jurisprudence. For, aside from his bare claims that he had inquired from alleged friends and
relatives as to Netchie’s whereabouts, Jose did not call to the witness stand specific individuals or persons whom he
allegedly saw or met in the course of his search or quest for the allegedly missing Netchie. Neither did he prove that
he sought the assistance of the pertinent government agencies as well as the me dia. Nor did he show that he
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undertook a thorough, determined and unflagging search for Netchie, say for at least two years (and what those
years were), and naming the particular places, provinces, cities, barangays or municipalities that he visited, or went
to, and identifying the specific persons he interviewed or talked to in the course of his search. Republic vs.
Sareñogon, Jr., 783 SCRA 615, G.R. No. 199194 February 10, 2016
Suit Between Members of the Same Family

The procedural issue of lack of attempts at compromise should be resolved in respondent’s favor. True, no suit
between members of the same family shall prosper unless it should appear from the verified complaint or petition
that earnest efforts toward a compromise have been made. However, the failure of a party to comply with this
condition precedent is not a jurisdictional defect. If the opposing party fails to raise such defect in a motion to
dismiss, such defect is deemed waived. Romero vs. Singson, 764 SCRA 620, G.R. No. 200969 August 3, 2015
PROPERTY
The buyers cannot be considered in bad faith because the alleged flaw, the notice of lis pendens, was already
being ordered cancelled at the time of the sale and the cancellation of the notice terminated the effects of such
notice
Based on these established facts, petitioners correctly argue that the said notice of lis pendens cannot be made the
basis for holding that they are buyers in bad faith. Indeed, at the time of the sale of the subject lot by Spouses
Natividad to petitioners on July 7, 1986, the civil case filed by Magallanes against Spouses Natividad had long been
dismissed for lack of jurisdiction and the said order of dismissal had become final and executory. In Spouses Po Lam
v. Court of Appeals, 347 SCRA 86 (2000), the buyers similarly bought a property while a notice of lis pendens was
subsisting on its title. Pudadera vs. Magallanes, 633 SCRA 332, G.R. No. 170073 October 18, 2010
Thus, in case of a double sale of immovables, ownership shall belong to “(1) the first registrant in good faith; (2)
then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title.” However,
mere registration is not enough to confer ownership. The law requires that the second buyer must have acquired
and registered the immovable property in good faith. In order for the second buyer to displace the first buyer, the
following must be shown: “(1) the second buyer must show that he acted in good faith (i.e., in ignorance of the first
sale and of the first buyer’s rights) from the time of acquisition until title is transferred to him by registration or
failing registration, by delivery of possession; and (2) the second buyer must show continuing good faith and
innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration
as provided by law.” Pudadera vs. Magallanes, 633 SCRA 332, G.R. No. 170073 October 18, 2010
The burden of proof to establish the status of a purchaser and registrant in good faith lies upon the one who asserts
it. This onus probandi cannot be discharged by mere invocation of the legal presumption of good faith. Pudadera
vs. Magallanes, 633 SCRA 332, G.R. No. 170073 October 18, 2010
Builders in Good Faith

Article 448 of the Civil Code applies when the builder believes that he is the owner of the land or that by some title
he has the right to build thereon, or that, at least, he has a claim of title thereto. Concededly, this is not present in
the instant case. The subject property is covered by a Contract to Sell hence ownership still remains with petitioner
being the seller. Nevertheless, there were already instances where this Court applied Article 448 even if the builders
do not have a claim of title over the property. Communities Cagayan, Inc. vs. Nanol, 685 SCRA 453, G.R. No. 176791
November 14, 2012
In Tuatis, we ruled that the seller (the owner of the land) has two options under Article 448: (1) he may appropriate
the improvements for himself after reimbursing the buyer (the builder in good faith) the necessary and useful
expenses under Articles 546 and 548 of the Civil Code; or (2) he may sell the land to the buyer, unless its value is
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considerably more than that of the improvements, in which case, the buyer shall pay reasonable rent. Communities
Cagayan, Inc. vs. Nanol, 685 SCRA 453, G.R. No. 176791 November 14, 2012
Action to Recover
Article 434 of the Civil Code states that “[i]n an action to recover, the property must be identified, and the plaintiff
must rely on the strength of his title and not on the weakness of the defendant’s claim.” The plaintiff, therefore, is
duty-bound to clearly identify the land sought to be recovered, in accordance with the title on which he anchors his
right of ownership. It bears stressing that the failure of the plaintiff to establish the identity of the property claimed
is fatal to his case. Heirs of Telesforo Julao vs. De Jesus, 736 SCRA 596, G.R. No. 176020 September 29, 2014
Unlawful Detainer
The only issue in an ejectment case is the physical possession of real property — possession de facto and not
possession de jure.” But “[w]here the parties to an ejectment case raise the issue of ownership, the courts may pass
upon that issue to determine who between the parties has the better right to possess the property.” Here, both
parties anchor their right to possess based on ownership, i.e., the spouses Dela Cruz by their own ownership while
the spouses Capco by the ownership of Rufino as one of the heirs of the alleged true owner of the property. Thus,
the MeTC and the RTC correctly passed upon the issue of ownership in this case to determine the issue of possession.
However, it must be emphasized that “[t]he adjudication of the issue of ownership is only provisional, and not a bar
to an action between the same parties involving title to the property.” Dela Cruz vs. Capco, 719 SCRA 291, G.R. No.
176055 March 17, 2014
Accion Publiciana
Also known as accion plenaria de posesion, accion publiciana is an ordinary civil proceeding to determine the better
right of possession of realty independently of title. It refers to an ejectment suit filed after the expiration of one year
from the accrual of the cause of action or from the unlawful withholding of possession of the realty. The objective
of the plaintiffs in accion publiciana is to recover possession only, not ownership. However, where the parties raise
the issue of ownership, the courts may pass upon the issue to determine who between the parties has the right to
possess the property. This adjudication, however, is not a final and binding determination of the issue of ownership;
it is only for the purpose of resolving the issue of possession, where the issue of ownership is inseparably linked to
the issue of possession. The adjudication of the issue of ownership, being provisional, is not a bar to an action
between the same parties involving title to the property. The adjudication, in short, is not conclusive on the issue of
ownership. Urieta Vda. de Aguilar vs. Alfaro, 623 SCRA 130, G.R. No. 164402 July 5, 2010
Recovery of Possession
Article 434 of the Civil Code provides that “[i]n an action to recover, the property must be identified, and the plaintiff
must rely on the strength of his title and not on the weakness of the defendant’s claim.” In other words, in order to
recover possession, a person must prove (1) the identity of the land claimed, and (2) his title. Jakosalem vs.
Barangan, 666 SCRA 138, G.R. No. 175025 February 15, 2012
Quieting of Titles
An action for quieting of title is essentially a common law remedy grounded on equity. The competent court is tasked
to determine the respective rights of the complainant and other claimants, not only to place things in their proper
place, to make the one who has no rights to said immovable respect and not disturb the other, but also for the
benefit of both, so that he who has the right would see every cloud of doubt over the property dissipated, and he
could afterwards without fear introduce the improvements he may desire, to use, and even to abuse the property
as he deems best. But “for an action to quiet title to prosper, two indispensable requisites must concur, namely: (1)
the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action;
and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in
fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.” Mananquil vs. Moico, 686
SCRA 123, G.R. No. 180076 November 21, 2012
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Ownership cannot be acquired by mere occupation, unless coupled with the element of hostility towards the true
owner, occupation and use, however long, will not confer title by prescription or adverse possession
Despite 25 years of occupying the disputed lots, therefore, petitioners did not acquire ownership. Firstly, they had
no just title. Petitioners did not present any document to show how the titles over Lot Nos. 17526 and 17533 were
transferred to them, whether from respondent, his predecessor, or any other person. Petitioners, therefore, could
not acquire the disputed real property by ordinary prescription through possession for 10 years. Olegario vs. Mari,
608 SCRA 134, G.R. No. 147951 December 14, 2009
Mere material possession of land is not adverse possession as against the owner and is insufficient to vest title,
unless such possession is accompanied by the intent to possess as an owner
Petitioners’ acts of a possessory character—acts that might have been merely tolerated by the owner—did not
constitute possession. No matter how long tolerated possession is continued, it does not start the running of the
prescriptive period. There should be a hostile use of such a nature and exercised under such circumstance as to
manifest and give notice that the possession is under a claim of right. Olegario vs. Mari, 608 SCRA 134, G.R. No.
147951 December 14, 2009
Open, exclusive and undisputed possession of alienable public land for the period prescribed by law creates the
legal fiction whereby the land, upon completion of the requisite period, ipso jure and without the need of judicial
or other sanction, ceases to be public land and becomes private property
On the other hand, being the sole transferree of his father, respondent showed through his tax declarations which
were coupled with possessory acts that he, through his predecessor, had been in possession of the land for more
than 30 years since 1916. Ownership of immovable property is acquired by extraordinary prescription through
possession for 30 years. For purposes of deciding the instant case, therefore, the possession by respondent and his
predecessor had already ripened into ownership of the subject realty by virtue of prescription as early as 1946.
Olegario vs. Mari, 608 SCRA 134, G.R. No. 147951 December 14, 2009
Elements of Laches
Petitioners cannot find refuge in the principle of laches. It is not just the lapse of time or delay that constitutes laches.
The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which,
through due diligence, could or should have been done earlier, thus giving rise to a presumption that the party
entitled to assert it had earlier abandoned or declined to assert it. The essential elements of laches are: (a) conduct
on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay
in asserting complainant’s rights after he had knowledge of defendant’s acts and after he has had the opportunity
to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his
suit and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant. Olegario vs.
Mari, 608 SCRA 134, G.R. No. 147951 December 14, 2009
Easement of Right of Way

Under the law and unlike in purchase of a property, should the right of way no longer be necessary because the
owner of the dominant estate has joined it to another abutting on a public highway, and the servient estate demands
that the easement be extinguished, the value of the property received by the servient estate by way of indemnity
shall be returned in full to the dominant estate. De Guzman vs. Filinvest Development Corporation, 746 SCRA 65,
G.R. No. 191710 January 14, 2015
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. Here, petitioners argue that they are
entitled to demand an easement of right-of-way from respondent because they are the owners of the subject
property intended to be the dominant estate. They contend that they have already acquired ownership of the
subject property through ordinary acquisitive prescription. This is considering that their possession became adverse
as against the Blancos (under whose names the subject property is declared for taxation) when Carlos formally
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registered his claim of ownership with the DENR and sought to declare the subject property for taxation purposes in
1998. And since more than 10 years had lapsed from that time without the Blancos doing anything to contest their
continued possession of the subject property, petitioners aver that ordinary acquisitive prescription had already set
in their favor and against the Blancos. Andres vs. Sta. Lucia Realty & Development, Incorporated, 768 SCRA 56, G.R.
No. 201405 August 24, 2015
Under Presidential Decree No. 1096, the authority of the Building Official to order the repair, vacation or
demolition as the case may be, is without prejudice to further action that may be undertaken under the relevant
provisions of the Civil Code
What is more, contrary to the position of the petitioners that the provisions of the Civil Code on abatement of
nuisances should have been applied in their case, the fact that the buildings in question could also constitute
nuisances under the Civil Code does not preclude the Building Official from issuing the assailed Demolition Order.
Hipolito vs. Cinco, 661 SCRA 312, G.R. No. 174143 November 28, 2011
Prescription
Even if timely raised, such argument of petitioners, as well as with respect to extraordinary acquisitive prescription,
fails. “Prescription is one of the modes of acquiring ownership under the Civil Code.” There are two modes of
prescription through which immovables may be acquired — ordinary acquisitive prescription which requires
possession in good faith and just title for 10 years and extraordinary prescription wherein ownership and other real
rights over immovable property are acquired through uninterrupted adverse possession for 30 years without need
of title or of good faith. However, it was clarified in the Heirs of Mario Malabanan v. Republic of the Philippines, 704
SCRA 561 (2013), that only lands of the public domain subsequently classified or declared as no longer intended for
public use or for the development of national wealth, or removed from the sphere of public dominion and are
considered converted into patrimonial lands or lands of private ownership, may be alienated or disposed through
any of the modes of acquiring ownership under the Civil Code. And if the mode of acquisition is prescription, whether
ordinary or extraordinary, it must first be shown that the land has already been converted to private ownership prior
to the requisite acquisitive prescriptive period. Otherwise, Article 1113 of the Civil Code, which provides that
property of the State not patrimonial in character shall not be the subject of prescription, applies. Andres vs. Sta.
Lucia Realty & Development, Incorporated, 768 SCRA 56, G.R. No. 201405 August 24, 2015
WILLS AND SUCCESSION
Under Article 777 of the Civil Code, the rights to the succession are transmitted from the moment of death
Since Leon died without issue, his heirs are his siblings, Romana and Gregoria, who thus inherited the property in
equal shares. In turn, Romana’s and Gregoria’s heirs ― the parties herein ― became entitled to the property upon
the sisters’ passing. Under Article 777 of the Civil Code, the rights to the succession are transmitted from the moment
of death. Having succeeded to the property as heirs of Gregoria and Romana, petitioners and respondents became
co-owners thereof. As co-owners, they may use the property owned in common, provided they do so in accordance
with the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or
prevent the other co-owners from using it according to their rights. They have the full ownership of their parts and
of the fruits and benefits pertaining thereto, and may alienate, assign or mortgage them, and even substitute
another person in their enjoyment, except when personal rights are involved. Each co-owner may demand at any
time the partition of the thing owned in common, insofar as his share is concerned. Finally, no prescription shall run
in favor of one of the co-heirs against the others so long as he expressly or impliedly recognizes the co-ownership.
Ining vs. Vega, 703 SCRA 406, G.R. No. 174727 August 12, 2013
Administration of Property
The title of the property owned by a person who dies intestate passes at once to his heirs. Such transmission is
subject to the claims of administration and the property may be taken from the heirs for the purpose of paying debts
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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 by Filomena Santos Vda. de Alfonso and Jose
evidences their intention to partition the inherited property. It delineated what portion of the inherited property
would belong to whom. Alfonso vs. Andres, 626 SCRA 149, G.R. No. 166236 July 29, 2010
The sale to respondents was made after the execution of the deed of extrajudicial settlement of the estate. The
extrajudicial settlement of estate, even though not published, being deemed a partition of the inherited property,
Jose could validly transfer ownership over the specific portion of the property that was assigned to him. Alfonso vs.
Andres, 626 SCRA 149, G.R. No. 166236 July 29, 2010
Due execution of the will or its extrinsic validity pertains to whether the testator, being of sound mind, freely
executed the will in accordance with the formalities prescribed by law
These formalities are enshrined in Articles 805 and 806 of the New Civil Code, to wit: Art. 805. Every will, other than
a holographic will, must be subscribed at the end thereof by the testator himself or by the testator’s name written
by some other person in his presence, and by his express direction, and attested and subscribed by three or more
credible witnesses in the presence of the testator and of one another. The testator or the person requested by him
to write his name and the instrumental witnesses of the will, shall also sign, as aforesaid, each and every page
thereof, except the last, on the left margin, and all the pages shall be numbered correlatively in letters placed on the
upper part of each page. The attestation shall state the number of pages used upon which the will is written, and
the fact that the testator signed the will and every page thereof, or caused some other person to write his name,
under his express direction, in the presence of the instrumental witnesses, and that the latter wit nessed and signed
the will and all the pages thereof in the presence of the testator and of one another. If the attestation clause is in a
language not known to the witnesses, it shall be interpreted to them. Art. 806. Every will must be acknowledged
before a notary public by the testator and the witnesses. The notary public shall not be required to retain a copy of
the will, or file another with the Office of the Clerk of Court. Baltazar vs. Laxa, 669 SCRA 249, G.R. No. 174489 April
11, 2012
The state of being forgetful does not necessarily make a person mentally unsound so as to render him unfit to
execute a Will
We agree with the position of the CA that 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. Baltazar vs. Laxa, 669 SCRA 249, G.R. No. 174489 April 11, 2012
A purported will is not to be denied legalization on dubious grounds

It is worth stressing that bare arguments, no matter how forceful, if not based on concrete and substantial evidence
cannot suffice to move the Court to uphold said allegations. Furthermore, “a purported will is not [to be] denied
legalization on dubious grounds. Otherwise, the very institution of testamentary succession will be shaken to its
foundation, for even if a will has been duly executed in fact, whether x x x it will be probated would have to depend
largely on the attitude of those interested in [the estate of the deceased].” Baltazar vs. Laxa, 669 SCRA 249, G.R.
No. 174489 April 11, 2012
The very existence of the Will is in itself prima facie proof that the supposed testatrix has willed that her estate be
distributed in the manner therein provided, and it is incumbent upon the state that, if legally tenable, such desire
be given full effect independent of the attitude of the parties affected thereby
It bears stressing that “[i]rrespective x x x of the posture of any of the parties as regards the authenticity and due
execution of the will x x x in question, it is the mandate of the law that it is the evidence before the court and/or
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[evidence that] ought to be before it that is controlling.” This, coupled with Lorenzo’s established relationship with
Paciencia, the evidence and the testimonies of disinterested witnesses, as opposed to the total lack of evidence
presented by petitioners apart from their self-serving testimonies, constrain us to tilt the balance in favor of the
authenticity of the Will and its allowance for probate. Baltazar vs. Laxa, 669 SCRA 249, G.R. No. 174489 April 11,
2012
OBLIGATIONS AND CONTRACTS
Interpretation of Contracts
Well-settled is the rule that in case of doubt, it is the intention of the contracting parties that prevails, for the
intention is the soul of a contract, not its wording which is prone to mistakes, inadequacies, or ambiguities. To hold
otherwise would give life, validity, and precedence to mere typographical errors and defeat the very purpose of
agreements. Marquez vs. Espejo, 629 SCRA 117, G.R. No. 16838 August 25, 2010
Three Stages of a Contract

Contracts undergo three stages: “[a) n]egotiation [which] begins from the time the prospective contracting parties
indicate interest in the contract and ends at the moment of their agreement[; b) p]erfection or birth[,] x x x which
takes place when the parties agree upon all the essential elements of the contract x x x; [and c) c]onsummation[,
which] occurs when the parties fulfill or perform the terms agreed upon, culminating in the extinguishment thereof.”
In the case at bench, the transaction between Al-Amanah and PELA remained in the negotiation stage. The offer
never materialized into a perfected sale, for no oral or documentary evidence categorically proves that Al-Amanah
expressed amenability to the offered P300,000.00 purchase price. Before the lapse of the 1-year period PELA had
set to pay the remaining ‘balance,’ Al-Amanah expressly rejected its offered purchase price, although it took the
latter around seven months to inform the former and this entitled PELA to award of damages. Al-Amanah’s act of
selling the lot to another buyer is the final nail in the coffin of the negotiation with PELA. Clearly, there is no double
sale, thus, we find no reason to disturb the consummated sale between Al-Amanah and Robern. Rebern
Development Corporation vs. People's Landless Association, 693 SCRA 24, G.R. No. 173622 March 11, 2013
Freedom of contract is not absolute; It is understood to be subject to reasonable legislative regulation aimed at
the promotion of public health, morals, safety and welfare
Petitioners’ contentions deserve scant consideration. In Abe v. Foster Wheeler Corporation, 110 Phil. 198 (1960) we
held that the freedom of contract is not absolute. The same is understood to be subject to reasonable legislative
regulation aimed at the promotion of public health, morals, safety and welfare. One such legislative regulation is
found in Article 1306 of the Civil Code which allows the contracting parties to “establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs,
public order or public policy.” Castro vs. Tan, 605 SCRA 231, G.R. No. 168940 November 24, 2009
Contracts take effect only between the parties, their assigns and heirs
In the first place, under Article 1311 of the Civil Code, contracts take effect only between the parties, their assigns
and heirs (subject to exceptions not applicable here). Thus, only a party to the contract can maintain an action to
enforce the obligations arising under said contract. Consequently, petitioners, not being parties to the contracts of
sale between Ygoña and the petitioners’ siblings, cannot sue for the enforcement of the supposed obligations arising
from said contracts. Heirs of Mario Pacres vs. Heirs of Cecilla Ygoña, 620 SCRA 213, G.R. No. 174719 May 5, 2010
Courts have no power to relieve parties from obligations voluntarily assumed, simply because their contracts
turned out to be disastrous or unwise investments
“[A] party to a contract cannot deny the validity thereof after enjoying its benefits without outrage to one’s sense
of justice and fairness.” “It is a long established doctrine that the law does not relieve a party from the effects of an
unwise, foolish or disastrous contract, entered into with all the required formalities and with full awareness of what
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she was doing. Courts have no power to relieve parties from obligations voluntarily assumed, simply because their
contracts turned out to be disastrous or unwise investments.” Toledo vs. Hyden, 637 SCRA 540, G.R. No. 172139
December 8, 2010
“As a general rule, a contract is the law between the parties. Thus, ‘from the moment the contract is perfected, the
parties are bound not only to the fulfilment of what has been expressly stipulated but also to all consequences which,
according to their nature, may be in keeping with good faith, usage and law.’ Also, ‘the stipulations of the contract
being the law between the parties, courts have no alternative but to enforce them as they were agreed [upon] and
written’ x x x.” Land Bank of the Philippines vs. Oñate, 713 SCRA 678, G.R. No. 192371 January 15, 2014
Stipulation Pour Autrui

It is true that third parties may seek enforcement of a contract under the second paragraph of Article 1311, which
provides that “if a contract should contain some stipulation in favor of a third person, he may demand its fulfillment.”
This refers to stipulations pour autrui, or stipulations for the benefit of third parties. However, the written contracts
of sale in this case contain no such stipulation in favor of the petitioners. While petitioners claim that there was an
oral stipulation, it cannot be proven under the Parol Evidence Rule. Under this Rule, “[w]hen the terms of an
agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be,
between the parties and their successors in interest, no evidence of such terms other than the contents of the
written agreement.” While the Rule admits of exception, no such exception was pleaded, much less proved, by
petitioners. Heirs of Mario Pacres vs. Heirs of Cecilla Ygoña, 620 SCRA 213, G.R. No. 174719 May 5, 2010
Penalty Clause
Under Article 1226 of the Civil Code, the penalty clause takes the place of indemnity for damages and the payment
of interests in case of non-compliance with the obligation, unless there is a stipulation to the contrary. In this case,
since there is no stipulation to the contrary, the penalty in the amount of P987.25 per day of delay covers all other
damages (i.e. production loss, labor cost, and rental of the crane) claimed by petitioner. Continental Cement
Corporation vs. Asea Brown Boveri, Inc., 659 SCRA 137, G.R. No. 171660 October 17, 2011
Dacion en Pago
Like in all contracts, the intention of the parties to the dation in payment is paramount and controlling. The
contractual intention determines whether the property subject of the dation will be considered as the full equivalent
of the debt and will therefore serve as full satisfaction for the debt. “The dation in payment extinguishes the
obligation to the extent of the value of the thing delivered, either as agreed upon by the parties or as may be proved,
unless the parties by agreement, express or implied, or by their silence, consider the thing as equivalent to the
obligation, in which case the obligation is totally extinguished.” In the case at bar, the Dacion en Pago executed by
DELTA and the BANK indicates a clear intention by the parties that the assigned properties would serve as full
payment for DELTA’s entire obligation. Luzon Development Bank vs. Enriquez, 639 SCRA 332, G.R. No. 168646
January 12, 2011
A dacion en pago is governed by the law of sales. Contracts of sale come with warranties, either express (if explicitly
stipulated by the parties) or implied (under Article 1547 et seq. of the Civil Code). In this case, however, the BANK
does not even point to any breach of warranty by DELTA in connection with the Dation in Payment. To be sure, the
Dation in Payment has no express warranties relating to existing contracts to sell over the assigned properties. As to
the implied warranty in case of eviction, it is waivable and cannot be invoked if the buyer knew of the risks or danger
of eviction and assumed its consequences. As we have noted earlier, the BANK, in accepting the assigned properties
as full payment of DELTA’s “total obligation,” has assumed the risk that some of the assigned properties are covered
by contracts to sell which must be honored under PD 957. Luzon Development Bank vs. Enriquez, 639 SCRA 332,
G.R. No. 168646 January 12, 2011
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Rescission
Petitioners’ argument that the applicable law in this case is Article 1381(3) of the Civil Code on rescissible contracts
and not Article 1409 on void contracts is not a question of first impression. This issue had already been settled several
decades ago when we held that “an action to rescind is founded upon and presupposes the existence of a contract”.
A contract which is null and void is no contract at all and hence could not be the subject of rescission. Campos vs.
Pastrana, 608 SCRA 55, G.R. No. 175994 December 8, 2009
As a general rule, “rescission will not be permitted for a slight or casual breach of the contract, but only for such
breaches as are substantial and fundamental as to defeat the object of the parties in making the agreement.” In the
case at bar, we find that respondent Rowena’s act of transferring the title to the subject land in her name, without
the knowledge and consent of petitioners and despite non-payment of the full price thereof, constitutes a
substantial and fundamental breach of the contract to sell. As previously noted, the main object or purpose of a
seller in entering into a contract to sell is to protect himself against a buyer who intends to buy the property in
installments by withholding ownership over the property until the buyer effects full payment therefor. As a result,
the seller’s obligation to convey and the buyer’s right to conveyance of the property arise only upon full payment of
the price. Thus, a buyer who willfully contravenes this fundamental object or purpose of the contract, by covertly
transferring the ownership of the property in his name at a time when the full purchase price has yet to be paid,
commits a substantial and fundamental breach which entitles the seller to rescission of the contract. Tumibay vs.
Lopez, 697 SCRA 21, G.R. No. 171692 June 3, 2013
Constructive Fulfillment
As aptly pointed out by the CA, Article 1186 of the Civil Code, which states that “the condition shall be deemed
fulfilled when the obligor voluntarily prevents its fulfillment,” does not apply in this case, viz.: Article 1186 enunciates
the doctrine of constructive fulfillment of suspensive conditions, which applies when the following three (3)
requisites concur, viz.: (1) The condition is suspensive; (2) The obligor actually prevents the fulfillment of the
condition; and (3) He acts voluntarily. Suspensive condition is one the happening of which gives rise to the obligation.
It will be irrational for any Bank to provide a suspensive condition in the Promissory Note or the Restructuring
Agreement that will allow the debtor-promissor to be freed from the duty to pay the loan without paying it. Besides,
petitioners have no one to blame but themselves for the cancellation of the Restructuring Agreement. It is significant
to point out that when the Regional Credit Committee reconsidered petitioners’ proposal to restructure the loan, it
imposed additional conditions. In fact, when DBP’s General Santos Branch forwarded the Restructuring Agreement
to the Legal Services Department of DBP in Makati, petitioners were required to pay the amount of P1,300,672.75,
plus a daily interest of P632.15 starting November 16, 1993 up to the date of actual payment of the said amount.
This, petitioners failed to do. DBP therefore had reason to cancel the Restructuring Agreement. Lim vs. Development
Bank of the Philippines, 700 SCRA 210, G.R. No. 177050 July 1, 2013
Casino Chips as payment

Though casino chips do not constitute legal tender, there is no law which prohibits their use or trade outside of the
casino which issues them. In any case, it is not unusual — nor is it unlikely — that respondent could be paid by his
Chinese client at the former’s car shop with the casino chips in question; said transaction, if not common, is
nonetheless not unlawful. These chips are paid for anyway; petitioner would not have parted with the same if their
corresponding representative equivalent — in legal tender, goodwill, or otherwise — was not received by it in return
or exchange. Given this premise — that casino chips are considered to have been exchanged with their
corresponding representative value — it is with more reason that this Court should require petitioner to prove
convincingly and persuasively that the chips it confiscated from Ludwin and Deoven were indeed stolen from it; if
so, any Tom, Dick or Harry in possession of genuine casino chips is presumed to have paid for their representative
value in exchange therefor. If petitioner cannot prove its loss, then Article 559 cannot apply; the presumption that
the chips were exchanged for value remains. Subic Bay Legend Resorts and Casinos, Inc. vs. Fernandez, 736 SCRA
667, G.R. No. 193426 September 29, 2014
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Vouchers are not Receipts
The documents it submitted were composed only of a master list of daily and monthly paid employees, summarized
and itemized lists and computations of payroll costs during the covered period of shoring installation, salary
structures, and vouchers prepared by the accounting department. These pieces of evidence, as well as the bare
assertion of the TMX President, do not show a reasonable degree of certainty of actual payment to and actual receipt
by its workers but only reflect the list of disbursements. No other witnesses who could corroborate the actual
payment of the salaries of the employees during the shutdown period were presented. Vouchers are not receipts. A
receipt is a written and signed acknowledgment that money has been received or goods have been delivered, while
a voucher is documentary record of a business transaction. Hence, the RTC correctly preferred the payroll documents
(which contain the signatures of employees), implying that these are the primary/best evidence of payment, or “that
which [afford] the greatest certainty of the fact in question.” Adrian Wilson International Associates, Inc. vs. TMX
Philippines, Inc., 625 SCRA 321, G.R. No. 162608 July 26, 2010
Consignation
Under Article 1256 of the Civil Code, the debtor shall be released from responsibility by the consignation of the thing
or sum due, without need of prior tender of payment, when the creditor is absent or unknown, or when he is
incapacitated to receive the payment at the time it is due, or when two or more persons claim the same right to
collect, or when the title to the obligation has been lost. Applying Article 1256 to the petitioners’ case as shaped by
the allegations in their Complaint, the Court finds that a case for consignation has been made out, as it now appears
that there are two entities which petitioners must deal with in order to fully secure their title to the property: 1) the
Rural Bank (through PDIC), which is the apparent creditor under the July 4, 1994 Loan and Mortgage Agreement;
and 2) AFPMBAI, which is currently in possession of the loan documents and the certificate of title, and the one
making demands upon petitioners to pay. Clearly, the allegations in the Complaint present a situation where the
creditor is unknown, or that two or more enti ties appear to possess the same right to collect from petitioners.
Whatever transpired between the Rural Bank or PDIC and AFPMBAI in respect of petitioners’ loan account, if any,
such that AFPMBAI came into possession of the loan documents and TCT No. 37017, it appears that petitioners were
not informed thereof, nor made privy thereto. Cacayorin vs. Armed Forces and Police Mutual Benefit Assocaition,
Inc., 696 SCRA 311, G.R. No. 171298 April 15, 2013
The lack of prior tender of payment by the petitioners is not fatal to their consignation case. They filed the case for
the exact reason that they were at a loss as to which between the two―the Rural Bank or AFPMBAI―was entitled
to such a tender of payment. Besides, as earlier stated, Article 1256 authorizes consignation alone, without need of
prior tender of payment, where the ground for consignation is that the creditor is unknown, or does not appear at
the place of payment; or is incapacitated to receive the payment at the time it is due; or when, without just cause,
he refuses to give a receipt; or when two or more persons claim the same right to collect; or when the title of the
obligation has been lost. Cacayorin vs. Armed Forces and Police Mutual Benefit Assocaition, Inc., 696 SCRA 311,
G.R. No. 171298 April 15, 2013
“Consignation is the act of depositing the thing due with the court or judicial authorities whenever the creditor
cannot accept or refuses accept payment. [I]t generally requires a prior tender of payment.” Under Article 1256 of
the Civil Code, consignation alone is sufficient even without a prior tender of payment: a) when the creditor is absent
or unknown or does not appear at the place of payment; b) when be is incapacitated to receive the payment at the
time it is due; c) when, without just cause, he refuses to give a receipt; d) when two or more persons claim the same
right to collect; and e) when the title of the obligation has been lost. Philippine National Bank vs. Chan, 820 SCRA
161, G.R. No. 206037 March 13, 2017
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
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had been made, the persons interested were notified thereof. “Failure in any of these requirements is enough
ground to render a consignation ineffective.” Philippine National Bank vs. Chan, 820 SCRA 161, G.R. No. 206037
March 13, 2017
Although it is true that consignment has a retroactive effect, such payment is deemed to have been made only at
the time of the deposit of the thing in court or when it was placed at the disposal of the judicial authority. Philippine
National Bank vs. Chan, 820 SCRA 161, G.R. No. 206037 March 13, 2017
SALES AND LEASE
Perfection of the Contract of Sale

As to whether there was a contract of sale between the parties, we hold that there was, and the absence of a written
contract of sale does not mean otherwise. A contract of sale is perfected the moment the parties agree upon the
object of the sale, the price, and the terms of payment. Once perfected, the parties are bound by it whether the
contract is verbal or in writing because no form is required. Contrary to the view of petitioner, the Statute of Frauds
does not apply in the present case as this provision applies only to executory, and not to completed, executed or
partially executed contracts. Duarte vs. Duran, 657 SCRA 607, G.R. No. 173038 September 14, 2011
Contract to Sell
A contract to sell is one where the prospective seller reserves the transfer of title to the prospective buyer until the
happening of an event, such as full payment of the purchase price—what the seller obliges himself to do is to sell
the subject property only when the entire amount of the purchase price has already been delivered to him. “In other
words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which
prevents the obligation to sell from arising and thus, ownership is retained by the prospective seller without further
remedies by the prospective buyer.” It does not, by itself, transfer ownership to the buyer. Luzon Development Bank
vs. Enriquez, 639 SCRA 332, G.R. No. 168646 January 12, 2011
This stipulation, i.e., to execute a deed of absolute sale upon full payment of the purchase price, is a unique and
distinguishing characteristic of a contract to sell. In Reyes v. Tuparan, 650 SCRA 283 (2011), this Court ruled that a
stipulation in the contract, “[w]here the vendor promises to execute a deed of absolute sale upon the completion
by the vendee of the payment of the price,” indicates that the parties entered into a contract to sell. According to
this Court, this particular provision is tantamount to a reservation of ownership on the part of the vendor. Explicitly
stated, the Court ruled that the agreement to execute a deed of sale upon full payment of the purchase price “shows
that the vendors reserved title to the subject property until full payment of the purchase price.” Diego vs. Diego,
691 SCRA 361, G.R. No. 179965 February 20, 2013
A contract to sell has been defined as “a bilateral contract whereby the prospective seller, while expressly reserving
the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the
said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment
of the purchase price.” In a contract to sell, “ownership is retained by the seller and is not to pass until the full
payment of the price x x x.” It is “commonly entered into so as to protect the seller against a buyer who intends to
buy the property in installment[s] by withholding ownership over the property until the buyer effects full payment
therefor.” Tumibay vs. Lopez, 697 SCRA 21, G.R. No. 171692 June 3, 2013
In a contract to sell, it would be unusual for the seller to consent to the transfer of ownership of the property to the
buyer prior to the full payment of the purchase price because the reservation of the ownership in the seller is
precisely intended to protect the seller from the buyer. We, therefore, find that petitioners’ claim that they did not
ratify the subject sale, which was done without their knowledge and consent, and that the subsequent discovery of
the aforesaid fraudulent sale led them to promptly file this case with the courts to be more credible and in accord
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with the evidence on record. To rule otherwise would be to reward respondent Rowena for the fraud that she
committed on petitioners. Tumibay vs. Lopez, 697 SCRA 21, G.R. No. 171692 June 3, 2013
This ponente has had the occasion to rule that 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 but rather just an event that prevents
the prospective buyer from compelling the prospective seller to convey title. In other words, the nonfulfillment of
the condition of full payment renders the contract to sell ineffective and without force and effect. Domingo vs.
Manzano, 809 SCRA 175, G.R. No. 201883 November 16, 2016
In a contract of sale, the seller loses ownership over the property and cannot recover it until and unless the contract
is resolved or rescinded; In a contract to sell, title is retained by the seller until full payment of the price. Montecalvo
vs. Heirs of Eugenia T. Primero, 624 SCRA 575, G.R. No. 165168 July 9, 2010
Right First Refusal; Option Contract

From the foregoing, it is thus clear that an option contract is entirely different and distinct from a right of first refusal
in that in the former, the option granted to the offeree is for a fixed period and at a determined price. Lacking these
two essential requisites, what is involved is only a right of first refusal. Tuazon vs. Del Rosario-Suarez, 637 SCRA 728,
G.R. No. 168325 December 13, 2010
It is clear from the provision of Article 1324 0that there is a great difference between the effect of an option which
is without a consideration from one which is founded upon a consideration. If the option is without any
consideration, the offeror may withdraw his offer by communicating such withdrawal to the offeree at anytime
before acceptance; if it is founded upon a consideration, the offeror cannot withdraw his offer before the lapse of
the period agreed upon. Tuazon vs. Del Rosario-Suarez, 637 SCRA 728, G.R. No. 168325 December 13, 2010
In this case, it is undisputed that Roberto did not accept the terms stated in the letter of Lourdes as he negotiated
for a much lower price. Roberto’s act of negotiating for a much lower price was a counter-offer and is therefore not
an acceptance of the offer of Lourdes. Article 1319 of the Civil Code provides: “Consent is manifested by the meeting
of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must
be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer.” (Emphasis supplied.)
Tuazon vs. Del Rosario-Suarez, 637 SCRA 728, G.R. No. 168325 December 13, 2010
In view of the above disquisition, petitioner’s claim that he was deprived of his preemptive rights because he was
not notified of the intended sale, likewise crumbles. Besides, the right of first refusal, also referred to as the
preferential right to buy, is available to lessees only if there is a stipulation thereto in the contract of lease or where
there is a law granting such right to them (i.e., Presidential Decree No. 1517 (1978), which vests upon urban poor
dwellers who merely lease the house where they have been residing for at least ten years, preferential right to buy
the property located within an area proclaimed as an urban land reform zone). Unlike co-owners and adjacent lot
owners, there is no provision in the Civil Code which grants to lessees preemptive rights. Nonetheless, the parties to
a contract of lease may provide in their contract that the lessee has the right of first refusal. In this case, there is
nothing in the Contract of Lease which grants petitioner preferential right to buy the subject premises. We are
likewise unaware of any applicable law which vests upon him priority right to buy the commercial building subject
matter of this case. Yuki, Jr. vs. Co, 606 SCRA 211, G.R. No. 178527 November 27, 2009
Earnest Money
In a potential sale transaction, the prior payment of earnest money even before the property owner can agree to
sell his property is irregular, and cannot be used to bind the owner to the obligations of a seller under an otherwise
perfected contract of sale; to cite a well-worn cliché, the carriage cannot be placed before the horse. The property
owner-prospective seller may not be legally obliged to enter into a sale with a prospective buyer through the latter’s
employment of questionable practices which prevent the owner from freely giving his consent to the transaction;
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this constitutes a palpable transgression of the prospective seller’s rights of ownership over his property, an anomaly
which the Court will certainly not condone. An agreement where the prior free consent of one party thereto is
withheld or suppressed will be struck down, and the Court shall always endeavor to protect a property owner’s rights
against devious practices that put his property in danger of being lost or unduly disposed without his prior knowledge
or consent. As this ponente has held before, “[t]his Court cannot presume the existence of a sale of land, absent any
direct proof of it.” First Optima Realty Corporation vs. Securitron Security Services, Inc., 748 SCRA 534, G.R. No.
199648 January 28, 2015
Buyer in Good Faith

The issue of the buyer’s good or bad faith is relevant only where the subject of the sale is registered land, and the
purchaser is buying the same from the registered owner whose title to the land is clean. In such case, the purchaser
who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value. Act No.
3344 applies to sale of unregistered lands. What applies in this case is Act No. 3344, as amended, which provides for
the system of recording of transactions over unregistered real estate. Act No. 3344 expressly declares that any
registration made shall be without prejudice to a third party with a better right. The question to be resolved
therefore is: who between petitioners and respondent has a better right to the disputed lot? Sabitsana, Jr. vs.
Muertegui, 703 SCRA 145, G.R. No. 181359 August 5, 2013
Eviction
Eviction shall take place whenever by a final judgment based on a right prior to the sale or an act imputable to the
vendor, the vendee is deprived of the whole or of a part of the thing purchased. In case eviction occurs, the vendee
shall have the right to demand of the vendor, among others, 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; the expenses of the contract, if the vendee has
paid them; and the damages and interests, and ornamental expenses, if the sale was made in bad faith. Bignay Ex-
Im Philippines, Inc. vs. Union Bank of the Philippines, 716 SCRA 21, G.R. No. 171598, G.R. No. 171590 February 12,
2014
Maceda Law governs sales of real estate on installments

Under the Maceda Law, the defaulting buyer who has paid at least two years of installments has the right of either
to avail of the grace period to pay or, the cash surrender value of the payments made: Section 3. In all transactions
or contracts involving the sale or financing of real estate on installment payments, including residential
condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under Republic
Act Numbered Thirty-eight Hundred Forty-four, as amended by Republic Act Numbered Sixty-three Hundred Eighty-
nine, where the buyer has paid at least two years of installments, the buyer is entitled to the following rights in case
he defaults in the payment of succeeding installments: (a) To pay, without additional interest, the unpaid
installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace
period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer
only once in every five years of the life of the contract and its extensions, if any. (b) If the contract is canceled, the
seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty per cent
of the total payments made, and, after five years of installments, an additional five percent every year but not to
exceed ninety per cent of the total payments made: Provided, That the actual cancellation of the contract shall take
place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act and upon full payment of the cash surrender value to the buyer. Down payments, deposits
or options on the contract shall be included in the computation of the total number of installment payments made.
Moldex Realty, Inc. vs. Saberon, 695 SCRA 331, G.R. No. 176289 April 8, 2013
Considering that this case stemmed from a Contract to Sell executed by the petitioner and the respondent-spouses,
we agree with petitioner that the Maceda Law, which governs sales of real estate on installment, should be applied.
Sections 3, 4, and 5 of the Maceda Law provide for the rights of a defaulting buyer, to wit: Section 3. In all transactions
or contracts involving the sale or financing of real estate on installment payments, including residential
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condominium apartments but excluding industrial lots, commercial buildings and sales to tenants under Republic
Act Numbered Thirty-eight hundred forty-four, as amended by Republic Act Numbered Sixty-three hundred eighty-
nine, where the buyer has paid at least two years of installments, the buyer is entitled to the following rights in case
he defaults in the payment of succeeding installments: (a) To pay, without additional interest, the unpaid
installments due within the total grace period earned by him which is hereby fixed at the rate of one month grace
period for every one year of installment payments made: Provided, That this right shall be exercised by the buyer
only once in every five years of the life of the contract and its extensions, if any. (b) If the contract is canceled, the
seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to fifty percent
of the total payments made, and, after five years of installments, an additional five percent every year but not to
exceed ninety percent of the total payments made: Provided, That the actual cancellation of the contract shall take
place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act and upon full payment of the cash surrender value to the buyer. Down payments, deposits
or options on the contract shall be included in the computation of the total number of installment payments made.
(Emphasis supplied.) Section 4. In case where less than two years of installments were paid, the seller shall give the
buyer a grace period of not less than sixty days from the date the installment became due. If the buyer fails to pay
the installments due at the expiration of the grace period, the seller may cancel the contract after thirty days from
receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act.
Section 5. Under Sections 3 and 4, the buyer shall have the right to sell his rights or assign the same to another
person or to reinstate the contract by updating the account during the grace period and before actual cancellation
of the contract. The deed of sale or assignment shall be done by notarial act. Communities Cagayan, Inc. vs. Nanol,
685 SCRA 453, G.R. No. 176791 November 14, 2012
We deem it necessary to point out that, 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. Communities Cagayan, Inc. vs. Nanol, 685 SCRA 453, G.R. No. 176791
November 14, 2012
Contract for a Piece of Work

Under Article 1715 of the Civil Code, if the work of a contractor has defects which destroy or lessen its value or
fitness for its ordinary or stipulated use, he may be required to remove the defect or execute another work. If he
fails to do so, he shall be liable for the expenses by the employer for the correction of the work. The demand required
of the employer under the subject provision need not be in a particular form. In the case at bar, we agree with the
CA that Owen was given the opportunity to rectify his work. Subsequent to Zameco II’s disapproval to supply the
Caswells electricity for several reasons, the Court gives credence to the latter’s claim that they looked for Owen to
demand a rectification of the work, but Owen and his group were nowhere to be found. Had Owen really been
readily available to the Caswells to correct any deficiency in the work, the latter would not have entertained the
thought that they were deceived and would not have been constrained to undergo the rigors of filing a criminal
complaint and testifying therein. Without doubt, the Caswells exercised due diligence when they demanded from
Owen the proper rectification of his work. Mackay vs. Caswell, 740 SCRA 419, G.R. No. 183872 November 17, 2014
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AGENCY
Implied Agency
The basis of agency is representation and the same may be constituted expressly or impliedly. In an implied agency,
the principal can be bound by the acts of the implied agent. The same is true with an oral agency. Acting for and in
petitioner’s behalf by virtue of the implied or oral agency, Ong was thus able to sell the vehicle to Chua, but he failed
to remit the proceeds thereof to petitioner; his guarantee checks bounced as well. This entitled petitioner to sue for
estafa through abuse of confidence. This is exactly what petitioner did: on May 18, 2011, he filed a complaint for
estafa and carnapping against Ong before the Quezon City Prosecutor’s Office. Since Ong was able to sell the subject
vehicle to Chua, petitioner thus ceased to be the owner thereof. Nor is he entitled to the possession of the vehicle;
together with his ownership, petitioner lost his right of possession over the vehicle. His argument that respondent
is a buyer in bad faith, when the latter nonetheless proceeded with the purchase and registration of the vehicle on
March 7, 2011, despite having been apprised of petitioner’s earlier November, 2010 “Failed to Return Vehicle” report
filed with the PNP-HPG, is unavailing. Petitioner had no right to file said report, as he was no longer the owner of
the vehicle at the time; indeed, his right of action is only against Ong, for collection of the proceeds of the sale. Siy
vs. Tomlin, 824 SCRA 106, G.R. No. 205998 April 24, 2017
In many cases as well, busy vehicle owners selling their vehicles actually leave them, together with all the documents
of title, spare keys, and deeds of sale signed in blank, with secondhand car traders they know and trust, in order for
the latter to display these vehicles for actual viewing and inspection by prospective buyers at their lots, warehouses,
garages, or showrooms, and to enable the traders to facilitate sales on-the-spot, as-is-where-is, without having to
inconvenience the owners with random viewings and inspections of their vehicles. For this kind of arrangement, an
agency relationship is created between the vehicle owners, as principals, and the car traders, as agents. The situation
is akin to an owner of jewelry who sells the same through an agent, who receives the jewelry in trust and offers it
for sale to his/her regular clients; if a sale is made, the agent takes payment under the obligation to remit the same
to the jewelry owner, minus the agreed commission or other compensation. Siy vs. Tomlin, 824 SCRA 106, G.R. No.
205998 April 24, 2017
TRUST
Implied Trust
“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. Philippine National Bank vs. Jumamoy, 655 SCRA 54, G.R. No. 169901
August 3, 2011
CREDIT TRANSACTIONS
Credit card arrangements are simple loan arrangements between the card issuer and the cardholder
It would not hurt the cause of justice to remand the case to the MeTC where petitioner would be required to amend
its Complaint and adduce additional evidence to prove its case; that way, the lower court can better understand the
nature of the claim, and this time it may arrive at a just resolution of the case. This is to say that while the Court
believes that petitioner’s claim may be well-founded, it is not enough as to allow judgment in its favor on the basis
of extant evidence. It must prove the validity of its claim; this it may do by amending its Complaint and adducing
additional evidence of respondent’s credit history and proving the loan transactions between them. After all, credit
card arrangements are simple loan arrangements between the card issuer and the cardholder. Simply put, every
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credit card transaction involves three contracts, namely: (a) the sales contract between the credit cardholder and
the merchant or the business establishment which accepted the credit card; (b) the loan agreement between the
credit card issuer and the credit cardholder; and lastly, (c) the promise to pay between the credit card issuer and the
merchant or business establishment. Bankard, Inc. vs. Alarte, 824 SCRA 1, G.R. No. 202573 April 19, 2017
The general rule that a mortgagee need not look beyond the title does not apply to banks and other financial
institutions as greater care and due diligence is required of them
Imbued with public interest, they “are expected to be more cautious than ordinary individuals.” Thus, before
approving a loan, the standard practice for banks and other financial institutions is to conduct an ocular inspection
of the property offered to be mortgaged and verify the genuineness of the title to determine the real owner or
owners thereof. Failure to do so makes them mortgagees in bad faith. Alano vs. Planter's Development Bank, 651
SCRA 766, G.R. No. 171628 June 13, 2011
When a mortgage relies upon what appears on the face of a Torrens title and lends money in all good faith on the
basis of the title in the name of the mortgagor, only thereafter to learn that the latter’s title was defective, being
thus an innocent mortgagee for value, his or her right or lien upon the land mortgaged must be respected and
protected
The rationale for this ruling is, if the rule were otherwise public confidence, in the certificate of title would be
impaired as everyone dealing with property registered under the Torrens system would have to inquire on the
regularity of its issuance. Mahinay vs. Gako, Jr., 661 SCRA 274, G.R. No. 165338 November 28, 2011
No valid mortgage will arise unless the mortgagor has a valid title or ownership over the mortgaged property
By way of exception, a mortgagee can invoke that he or she derived title even if the mortgagor’s title on the property
is defective, if he or she acted in good faith. Ruiz vs. Dimailig, 808 SCRA 295, G.R. No. 204280 November 9, 2016
The doctrine of mortgagee in good faith assumes that the title to the subject property had already been
transferred or registered in the name of the impostor who thereafter transacts with a mortgagee who acted in
good faith
In the case at bench, it must be emphasized that the title remained to be registered in the name of Bernardo, the
rightful and real owner, and not in the name of the impostor. Ruiz vs. Dimailig, 808 SCRA 295, G.R. No. 204280
November 9, 2016
A Mortgagor is allowed to take a second or subsequent mortgage on a property already mortgaged, subject to
the prior rights of the previous mortgages
Likewise flawed is petitioners’ reasoning that TCT Nos. T-225131 and T-225132 could not have been included in the
list of properties mortgaged as these were still mortgaged with the PNB at that time. Under our laws, a mortgagor
is allowed to take a second or subsequent mortgage on a property already mortgaged, subject to the prior rights of
the previous mortgages. Palada vs. Solidbank Corporation, 653 SCRA 10, G.R. No. 172227 June 29, 2011
Rule on Interest Rates

Anent the interest rate, the general rule is that the applicable rate of interest “shall be computed in accordance with
the stipulation of the parties.” Absent any stipulation, the applicable rate of interest shall be 12% per annum “when
the obligation arises out of a loan or a forbearance of money, goods or credits. In other cases, it shall be six percent
(6%).” In this case, the parties did not stipulate as to the applicable rate of interest. The only question remaining
therefore is whether the 6% as provided under Article 2209 of the Civil Code, or 12% under Central Bank Circular No.
416, is due. Estores vs. Supangan, 670 SCRA 95, G.R. No. 175139 April 18, 2012
In Crismina Garments, Inc. v. Court of Appeals, 304 SCRA 356 (1999), “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.” This definition describes a loan where a debtor is given a period within
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which to pay a loan or debt. In such case, “forbearance of money, goods or credits” will have no distinct definition
from a loan. We believe however, that the phrase “forbearance of money, goods or credits” is meant to have a
separate meaning from a loan, otherwise there would have been no need to add that phrase as a loan is already
sufficiently defined in the Civil Code. Forbearance of money, goods or credits should therefore refer 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. In this case, the respondent-spouses parted with
their money even before the conditions were fulfilled. They have therefore allowed or granted forbearance to the
seller (petitioner) to use their money pending fulfillment of the conditions. They were deprived of the use of their
money for the period pending fulfillment of the conditions and when those conditions were breached, they are
entitled not only to the return of the principal amount paid, but also to compensation for the use of their money.
And the compensation for the use of their money, absent any stipulation, should be the same rate of legal interest
applicable to a loan since the use or deprivation of funds is similar to a loan. Estores vs. Supangan, 670 SCRA 95,
G.R. No. 175139 April 18, 2012
The Monetary Board issued Resolution No. 796 dated May 16, 2013, stating that in the absence of express stipulation
between the parties, the rate of interest in loan or forbearance of any money, goods or credits and the rate allowed
in judgments shall be 6% per annum. Said Resolution is embodied in Bangko Sentral ng Pilipinas Circular No. 799,
Series of 2013, which took effect on July 1, 2013. Hence, the 12% annual interest mentioned above shall apply only
up to June 30, 2013. Thereafter, or starting July 1, 2013, the applicable rate of interest for both the debited amount
and undocumented withdrawals shall be 6% per annum, compounded annually, until fully paid. Land Bank of the
Philippines vs. Oñate, 713 SCRA 678, G.R. No. 192371 January 15, 2014
As to the imposition of additional interest and penalties not stipulated in the Promissory Notes, this should not be
allowed. Article 1956 of the Civil Code specifically states that “no interest shall be due unless it has been expressly
stipulated in writing.” Thus, the payment of interest and penalties in loans is allowed only if the parties agreed to it
and reduced their agreement in writing. Lim vs. Development Bank of the Philippines, 700 SCRA 210, G.R. No.
177050 July 1, 2013
Monetary Interest and Compensatory Interest

There are two kinds of interest — monetary and compensatory. “Monetary interest refers to the compensation set
by the parties for the use or forbearance of money.” No such interest shall be due unless it has been expressly
stipulated in writing. “On the other hand, compensatory interest refers to the penalty or indemnity for damages
imposed by law or by the courts.” The interest mentioned in Articles 2209 and 2212 of the Civil Code applies to
compensatory interest. Sun Life of Canada (Philippines), Inc. vs. Tan Kit, 738 SCRA 371, G.R. No. 183272 October
15, 2014
While we agree with petitioners that parties to a loan agreement have wide latitude to stipulate on any interest rate
in view of the Central Bank Circular No. 905 s. 1982 which suspended the Usury Law ceiling on interest effective
January 1, 1983, it is also worth stressing that interest rates whenever unconscionable may still be declared illegal.
There is certainly nothing in said circular which grants lenders carte blanche authority to raise interest rates to levels
which will either enslave their borrowers or lead to a hemorrhaging of their assets. Castro vs. Tan, 605 SCRA 231,
G.R. No. 168940 November 24, 2009
In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests are contrary to
morals, if not against the law. In Medel v. Court of Appeals, 299 SCRA 481 (1998) we annulled a stipulated 5.5% per
month or 66% per annum interest on a P500,000.00 loan and a 6% per month or 72% per annum interest on a
P60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and exorbitant. In Ruiz v. Court of
Appeals, 401 SCRA 410 (2003) we declared a 3% monthly interest imposed on four separate loans to be excessive.
In both cases, the interest rates were reduced to 12% per annum. Castro vs. Tan, 605 SCRA 231, G.R. No. 168940
November 24, 2009
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Pactum Commisorium
Pactum commissorium is “a stipulation empowering the creditor to appropriate the thing given as guaranty for the
fulfillment of the obligation in the event the obligor fails to live up to his undertakings, without further formality,
such as foreclosure proceedings, and a public sale.” “The elements of pactum commissorium, which enable the
mortgagee to acquire ownership of the mortgaged property without the need of any foreclosure proceedings, are:
(1) there should be a property mortgaged by way of security for the payment of the principal obligation, and (2)
there should be a stipulation for automatic appropriation by the creditor of the thing mortgaged in case of non-
payment of the principal obligation within the stipulated period.” Edralin vs. Philippine Veterans Bank, 645 SCRA
75, G.R. No. 168523 March 9, 2011
Suretyship
A contract of suretyship is defined as “an agreement whereby a party, called the surety, guarantees the performance
by another party, called the principal or obligor, of an obligation or undertaking in favor of a third party, called the
obligee. It includes official recognizances, stipulations, bonds or undertakings issued by any company by virtue of
and under the provisions of Act No. 536, as amended by Act No. 2206.” We have consistently held that a surety’s
liability is joint and several, limited to the amount of the bond, and determined strictly by the terms of contract of
suretyship in relation to the principal contract between the obligor and the obligee. It bears stressing, however, that
although the contract of suretyship is secondary to the principal contract, the surety’s liability to the obligee is
nevertheless direct, primary, and absolute. The Manila Insurance Company, vs. Amurao, 688 SCRA 609, G.R. No.
179628 January 16, 2013
Pledge
Under Article 2096 of the Civil Code, “[a] pledge shall not take effect against third persons if a description of the
thing pledged and the date of the pledge do not appear in a public instrument.” Hence, just like the chattel mortgage
executed in favor of petitioner, the pledge executed by Juniat in favor of Nonwoven cannot bind petitioner. Union
Bank of the Philippines vs. Juniat, 655 SCRA 19, G.R. No. 171569 August 1, 2011
It bears stressing that there can be no transfer of ownership if the delivery of the property to the creditor is by way
of security. In fact, in case of doubt as to whether a transaction is one of pledge or dacion en pago, the presumption
is that it is a pledge as this involves a lesser transmission of rights and interests. Union Bank of the Philippines vs.
Juniat, 655 SCRA 19, G.R. No. 171569 August 1, 2011
LAND TITLES AND DEEDS
The Land Registration Act

The Certification issued by the LRA stating that Decree No. 190622 was issued for Lot 54 means nothing. The Land
Registration Act expressly recognizes two classes of decrees in land registration proceedings, namely, (i) decrees
dismissing the application and (ii) decrees of confirmation and registration. In the case at bench, we cannot ascertain
from said Certification whether the decree alluded to by the respondents granted or denied Julio Ramos’ claim.
Moreover, the LRA’s Certification did not state to whom Lot 54 was decreed. Thus, assuming that Decree No. 190622
is a decree of confirmation, it would be too presumptuous to further assume that the same was issued in the name
and in favor of Julio Ramos. Furthermore, said Certification did not indicate the number of the original certificate of
title and the date said title was issued. In Tahanan Development Corporation v. Court of Appeals, 118 SCRA 273
(1982) we held that the absence of any document, private or official, mentioning the number of the certificate of
title and date when the certificate of title was issued, does not warrant the granting of such petition. Republic vs.
Heirs of Julio Ramos, 613 SCRA 314, G.R. No. 169481 February 22, 2010
Our land registration statute extends its protection to an innocent purchaser for value, defined as “one who buys
the property of another, without notice that some other person has a right or interest in such property and pays the
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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.” An “innocent purchaser for value” includes an innocent lessee, mortgagee, or other
encumbrancer for value. Philippine National Bank vs. Jumamoy, 655 SCRA 54, G.R. No. 169901 August 3, 2011
The Torrens System merely confirms ownership and does not create it
Indeed, the Torrens system of land registration “merely confirms ownership and does not create it. It cannot be used
to divest lawful owners of their title for the purpose of transferring it to another one who has not acquired it by any
of the modes allowed or recognized by law.” Nicolas vs. Mariano, 799 SCRA 56, G.R. No. 201070 August 1, 2016
The fact that petitioners were able to secure titles in their names did not operate to vest upon them ownership over
the subject properties. That act has never been recognized as a mode of acquiring ownership. The Torrens system
does not create or vest title. It only confirms and records title already existing and vested. It does not protect a
usurper from the true owner. It cannot be a shield for the commission of fraud. Campos vs. Pastrana, 608 SCRA 55,
G.R. No. 175994 December 8, 2009
Certificate of Title
The CA is therefore correct in its pronouncement — citing Spouses Esmaquel and Sordevilla v. Coprada, 638 SCRA
428 (2010) — that TCT T-47318 constitutes evidence of respondents’ ownership over the subject property, which
lies within the area covered by said title; that TCT T-47318 serves as evidence of indefeasible and incontrovertible
title to the property in favor of respondents, whose names appear therein; and that as registered owners, they are
entitled to possession of the subject property. As against possession claimed by the petitioners, respondents’
certificate of title prevails. “[M]ere possession cannot defeat the title of a holder of a registered [T]orrens title x x x.”
Trinidad II vs. Palad, 777 SCRA 309, G.R. No. 203397 December 9, 2015
A certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the
person whose name appears therein
In this case, it is petitioner who must be protected under the Torrens system — as the registered owner of the
subject property.. The real purpose of the Torrens system of land registration is to quiet title to land and put a stop
forever to any question as to the legality of the title. Mahilum vs. Ilano, 760 SCRA 1, G.R. No. 197923 June 22, 2015
Well-settled is the rule that every person dealing with registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the
condition of the property. “However, this rule shall not apply when the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has
knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to
inquire into the status of the title of the property in litigation.” “His mere refusal to believe that such defect exists,
or his willful closing of his eyes to the possibility of the existence of a defect in his vendor’s title will not make him
an innocent purchaser for value if it later develops that the title was in fact defective, and it appears that he had
such notice of the defect had he acted with that measure of precaution which may reasonably be required of a
prudent man in a like situation.” Pudadera vs. Magallanes, 633 SCRA 332, G.R. No. 170073 October 18, 2010
Presumption of Regularity
There is a presumption of regular performance of official duty only when there is nothing on record that would
arouse suspicions of irregularity. The refusal of the Bureau of Lands and DAR officials to affirm their written findings
in open court indicates that the presumption should not apply in the evaluation of these reports. Palomata vs.
Colmenares, 638 SCRA 590, G.R. No. 174251 December 15, 2010
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Public Lands
Lands within the Baguio Townsite Reservation are public land. Laws and decrees such as PD 1271 were passed
recognizing ownership acquired by individuals over portions of the Baguio Townsite Reservation, but evidently,
those who do not fall within the coverage of said laws and decrees — the petitioners included — cannot claim
ownership over property falling within the said reservation. This explains why they have pending applications to
purchase the portions of the subject property which they occupy; they have no legal or equitable claim to the same,
unless ownership by acquisitive prescription is specifically authorized with respect to such lands, in which case they
may prove their adverse possession, if so. As far as this case is concerned, the extent of petitioners’ possession has
not been sufficiently shown, and by their application to purchase the subject property, it appears that they are not
claiming the same through acquisitive prescription. Residents of Lower Atab & Teacher's Village, Barangay Sto.
Tomas Proper, Baguio City vs. Sta. Monica Industrial & Development Corporation, 738 SCRA 450, G.R. No. 198878
October 15, 2014
Regalian Doctrine
The well-entrenched rule is that all lands not appearing to be clearly of private dominion presumably belong to the
State. The onus to overturn, by incontrovertible evidence, the presumption that the land subject of an application
for registration is alienable and disposable rests with the applicant.” “[P]ublic lands remain part of the inalienable
land of the public domain unless the State is shown to have reclassified or alienated them to private persons.”
“Unless public land is shown to have been reclassified or alienated to a private person by the State, it remains part
of the inalienable public domain. Indeed, occupation thereof in the concept of owner, no matter how long, cannot
ripen into ownership and be registered as a title.” Republic vs. Benigno, 753 SCRA 135, G.R. No. 205492 March 11,
2015
Under the Regalian doctrine, all lands of the public domain belong to the State. The classification and reclassification
of such lands are the prerogative of the Executive Department. The President may at any time transfer these public
lands from one class to another. While in 1955 the President — through Presidential Proclamation No. 209 —
declared particular lands in Baguio City as alienable and disposable, they may have been reclassified by the President
thereafter. This is precisely the reason why an applicant for registration of title based on an executive proclamation
is required to present evidence on the alienable and disposable character of the land applied for, such as a certificate
of land classification status from the Department of Environment and Natural Resources (DENR), which only the
Community Environment and Natural Resources Officer (CENRO) and the Provincial Environment and Natural
Resources Officer (PENRO) are authorized to issue under DENR Administrative Order No. 38, Series of 1990 (DAO
38). Republic vs. Dayaoen, 762 SCRA 310, G.R. No. 200773 July 8, 2015
Application for Registration

Applicants for registration of title under PD 1529 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. Section
14(1) of the law requires that the property sought to be registered is already alienable and disposable at the time
the application for registration is filed.” And, in order to prove that the land subject of the application is alienable
and disposable public land, “the general rule remains: all applications for original registration under the Property
Registration Decree must include both (1) a CENRO or PENRO certification and (2) a certified true copy of the original
classification made by the DENR Secretary.” Republic vs. Benigno, 753 SCRA 135, G.R. No. 205492 March 11, 2015
While judicial notice of Presidential Proc lamation No. 209 may be taken, the DENR certificate of land classification
status or any other proof of the alienable and disposable character of the land may not be dispensed with, because
it provides a more recent appraisal of the classification of the land as alienable and disposable, or that the land has
not been reclassified in the meantime. The applicable law — Section 14(1) of Presidential Decree No. 1529 —
requires that the property sought to be registered is alienable and disposable at the time the application for
registration of title is filed; one way of establishing this material fact is through the DENR certificate of land
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classification status which is presumed to be the most recent appraisal of the status and character of the property.
Republic vs. Dayaoen, 762 SCRA 310, G.R. No. 200773 July 8, 2015
Procedure in the Erasure, Alteration, or Amendments of a Certificate of Title

Under Section 108 of PD 1529, the proceeding for the erasure, alteration, or amendment of a certificate of title may
be resorted to in seven instances: (1) when registered interests of any description, whether vested, contingent,
expectant, or inchoate, have terminated and ceased; (2) when new interests have arisen or been created which do
not appear upon the certificate; (3) when any error, omission or mistake was made in entering a certificate or any
memorandum thereon or on any duplicate certificate; (4) when the name of any person on the certificate has been
changed; (5) when the registered owner has been married, or, registered as married, the marriage has been
terminated and no right or interest of heirs or creditors will thereby be affected; (6) when a corporation, which
owned registered land and has been dissolved, has not conveyed the same within three years after its dissolution;
and (7) when there is reasonable ground for the amendment or alteration of title. The present case falls under (3)
and (7), where the Registrar of Deeds of Bulacan committed an error in issuing TCT T-145321 in the name of “Adriano
M. Tambuyat married to Rosario E. Banguis” when, in truth and in fact, respondent Wenifreda — and not Banguis
— is Adriano’s lawful spouse. Banguis-Tambuyat vs. Balcom-Tambuyat, 754 SCRA 165, G.R. No. 202805 March 23,
2015
Proceedings under Section 108 of the Property Registration Decree

Proceedings under Section 108 are “summary in nature, contemplating corrections or insertions of mistakes which
are only clerical but certainly not controversial issues.” Banguis’ opposition to the petition for cancellation ostensibly
raised controversial issues involving her claimed ownership and the hereditary rights of Adrian, which she claims to
be her son by Adri ano. However, apart from the fact that evidence of Banguis’s ownership is irrelevant in
Wenifreda’s petition, the evidence apparently indicates that Banguis could not be the owner of the subject property,
while a resolution of the issue of succession is irrelevant and unnecessary to the complete determination of
Wenifreda’s petition. The Court is thus led to the conclusion that the Registrar of Deeds of Bulacan simply erred in
including Banguis in TCT T-145321 as Adriano’s spouse. Banguis-Tambuyat vs. Balcom-Tambuyat, 754 SCRA 165,
G.R. No. 202805 March 23, 2015
The underlying objectives or reliefs sought in both the quieting-of-title and the annulment-of-title cases are
essentially the same
It has been held that “[t]he underlying objectives or reliefs sought in both the quieting-of-title and the annulment-
of-title cases are essentially the same — adjudication of the ownership of the disputed lot and nullification of one of
the two certificates of title.” Nonetheless, petitioner should not have been so simplistic as to think that Civil Case
No. 6975 is merely a quieting of title case. It is more appropriate to suppose that one of the effects of cancelling
Bernardo Tumaliuan’s unnumbered OCT would be to quiet title over Lot 421; in this sense, quieting of title is
subsumed in the annulment of title case. Guntalilib vs. dela Cruz, 796 SCRA 1, G.R. No. 200042 July 7, 2016
A person who has a Torrens title over a land has a better right than one with only a notarized but unregistered
deed of sale to support a claim of ownership
It is settled that a Torrens title is evidence of indefeasible title to property in favor of the person in whose name the
title appears. It is conclusive evidence with respect to the ownership of the land described therein. It is also settled
that the titleholder is entitled to all the attributes of ownership of the property, including possession. Thus, in
Arambulo v. Gungab, 471 SCRA 648 (2005), this Court declared that the “age-old rule is that the person who has a
Torrens title over a land is entitled to possession thereof.” In the present case, there is no dispute that petitioner is
the holder of a Torrens title over the entire Lot 83. Respondents have only their notarized but unregistered Kasulatan
sa Bilihan to support their claim of ownership. Thus, even if respondents’ proof of ownership has in its favor a juris
tantum presumption of authenticity and due execution, the same cannot prevail over petitioner’s Torrens title.
Urieta Vda. de Aguilar vs. Alfaro, 623 SCRA 130, G.R. No. 164402 July 5, 2010
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A certificate of title shall not be subject to collateral attack
Respondents’ attack on the validity of petitioner’s title by claiming that their mother became the true owner of the
southern portion of Lot 83 even before the issuance of OCT No. P-9354 constitutes as a collateral attack on said title.
It is an attack incidental to their quest to defend their possession of the property in an accion publiciana, not in a
direct action whose main objective is to impugn the validity of the judgment granting the title. This cannot be
allowed. Under Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, a
certificate of title cannot be the subject of collateral attack. Thus: SEC. 48. Certificate not subject to collateral
attack.—A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or canceled
except in a direct proceeding in accordance with law. A collateral attack tran spires when, in another action to obtain
a different relief and as an incident to the present action, an attack is made against the judgment granting the title.
This manner of attack is to be distinguished from a direct attack against a judgment granting the title, through an
action whose main objective is to annul, set aside, or enjoin the enforcement of such judgment if not yet
implemented, or to seek recovery if the property titled under the judgment had been disposed of. Urieta Vda. de
Aguilar vs. Alfaro, 623 SCRA 130, G.R. No. 164402 July 5, 2010
The prohibition against collateral attack does not apply to spurious or non-existent titles, since such titles do not
enjoy indefeasibility
In the first place, the prohibition against collateral attack does not apply to spurious or non-existent titles, since such
titles do not enjoy indefeasibility. “Well-settled is the rule that the indefeasibility of a title does not attach to titles
secured by fraud and misrepresentation. In view of these circumstances, it was as if no title was ever issued in this
case to the petitioner and therefore this is hardly the occasion to talk of collateral attack against a title.” Oliveros vs.
San Miguel Corporation, 664 SCRA 618, G.R. No. 173531 February 1, 2012
Prescription and laches can not apply to registered land covered by the Torrens system
As to the issue of laches and prescription, we agree with the CA that these do not apply in the instant case.
Jurisprudence consistently holds that “prescription and laches can not apply to registered land covered by the
Torrens system” because “under the Property Registration Decree, no title to registered land in derogation to that
of the registered owner shall be acquired by prescription or adverse possession.” Jakosalem vs. Barangan, 666 SCRA
138, G.R. No. 175025 February 15, 2012
The principle that the earlier title prevails over a subsequent one applies when there are two apparently valid
titles over a single property
The principle that the earlier title prevails over a subsequent one applies when there are two apparently valid titles
over a single property. The existence of the earlier valid title renders the subsequent title void because a single
property cannot be registered twice. As stated in Metropolitan Waterworks and Sewerage Systems v. Court of
Appeals, 215 SCRA 783 (1992), which petitioners themselves cite, “a certificate is not conclusive evidence of title if
it is shown that the same land had already been registered and an earlier certificate for the same is in existence.”
Clearly, a mere allegation of an earlier title will not suffice. Oliveros vs. San Miguel Corporation, 664 SCRA 618, G.R.
No. 173531 February 1, 2012
Reconstitution of Titles
Perusal of respondents’ Petition for Reconstitution, for the purpose of verifying whether the strict and mandatory
requirements of RA 26, particularly Section 12 (b) and (e) thereof, have been faithfully complied with, would reveal
that it did not contain an allegation that no co-owner’s, mortgagee’s or lessees duplicate had been issued or, if any
had been issued, the same had been lost or destroyed. The petition also failed to state the names and addresses of
the present occupants of Lot 54. Correspondingly, the Notice of Hearing issued by the court a quo did not also
indicate the names of the occupants or persons in possession of Lot 54, in gross violation of Section 13 of RA 26.
Because of these fatal omissions, the trial court never acquired jurisdiction over respondents’ petition.
Consequently, the proceedings it conducted, as well as those of the CA, are null and void. It is unfortunate that
despite the mandatory nature of the above requirements and our constant reminder to courts to scrutinize and
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verify carefully all supporting documents in petitions for reconstitution, the same still escaped the attention of the
trial court and the CA. And while petitioner also overlooked those jurisdictional infirmities and failed to incorporate
them as additional issues in its petition, this Court has sufficient authority to pass upon and resolve the same since
they affect jurisdiction. Republic vs. Heirs of Julio Ramos, 613 SCRA 314, G.R. No. 169481 February 22, 2010
The survey plan and technical description are not competent and sufficient sources of reconstitution when the
petition is based on Section 2(f) of Republic Act No. 26—they are mere additional documentary requirements.
Thus, in Lee v. Republic of the Philippines, 366 SCRA 524 (2001) where the trial court ordered reconstitution on the
basis of the survey plan and technical description, we declared the order of reconstitution void for want of factual
support. Republic vs. Heirs of Julio Ramos, 613 SCRA 314, G.R. No. 169481 February 22, 2010
Tax Declarations; A tax declaration can only be prima facie evidence of claim of ownership, which, however, is not
the issue in a reconstitution proceeding
Anent the tax declaration submitted, the same covered only taxable year 1998. Obviously, it had no bearing with
what occurred before or during the last world war. Besides, a tax declaration is not a reliable source of reconstitution
of a certificate of title. As we held in Republic of the Philippines v. Santua, a tax declaration can only be prima facie
evidence of claim of ownership, which, however, is not the issue in a reconstitution proceeding. A reconstitution of
title does not pass upon the ownership of land covered by the lost or destroyed title but merely determines whether
a re-issuance of such title is proper. Republic vs. Heirs of Julio Ramos, 613 SCRA 314, G.R. No. 169481 February 22,
2010
The non-submission of an affidavit of loss by the person who was allegedly in actual possession of a certificate of
land title at the time of its loss, casts doubt on respondents’ claim that such title once existed and subsequently
got lost
We also share the observation of petitioner that the non-submission of an affidavit of loss by the person who was
allegedly in actual possession of OCT No. 3613 at the time of its loss, casts doubt on respondents’ claim that OCT No.
3613 once existed and subsequently got lost. Under Section 109 of Presidential Decree No. 1529, the owner must
file with the proper Registry of Deeds a notice of loss executed under oath. Here, despite the lapse of a considerable
length of time, the alleged owners of Lot 54 or the persons who were in possession of the same, i.e., respondents’
grandparents, never executed an affidavit relative to the loss of OCT No. 3613. Republic vs. Heirs of Julio Ramos,
613 SCRA 314, G.R. No. 169481 February 22, 2010
Since a new title was never issued in respondents’ favor and, instead, title remained in petitioner’s name, the
former never came within the coverage and protection of the Torrens system, where the issue of good or bad faith
becomes relevant
Since respondents never acquired a new certificate of title in their name, the issue of their good or bad faith which
is central in an annulment of title case is of no consequence; petitioner’s case is for annulment of the Agreement
and Deed of Absolute Sale, and not one to annul title since the certificate of title is still in her name. The
jurisprudential bases for the CA’s pronouncement that there is a failure to state a cause of action if there is no
allegation in the complaint that respondents were purchasers in bad faith — Castillo v. Heirs of Vicente Madrigal,
198 SCRA 556 (1991), and Heirs of Julian Tiro v. Philippine Estates Corporation, 563 SCRA 309 (2008) — involved
complaints for annulment of new titles issued to the buyers; they cannot apply to petitioner’s case where title
remains in her name. Mahilum vs. Ilano, 760 SCRA 1, G.R. No. 197923 June 22, 2015
Legal title denotes registered ownership, while equitable title means beneficial ownership
Beneficial ownership has been defined as ownership recognized by law and capable of being enforced in the courts
at the suit of the beneficial owner. Black’s Law Dictionary indicates that the term is used in two senses: first, to
indicate the interest of a beneficiary in trust property (also called “equitable ownership”); and second, to refer to
the power of a corporate shareholder to buy or sell the shares, though the shareholder is not registered in the
corporation’s books as the owner. Usually, beneficial ownership is distinguished from naked ownership, which is the
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enjoyment of all the benefits and privileges of ownership, as against possession of the bare title to property.
Residents of Lower Atab & Teacher's Village, Barangay Sto. Tomas Proper, Baguio City vs. Sta. Monica Industrial
& Development Corporation, 738 SCRA 450, G.R. No. 198878 October 15, 2014
Mere casual cultivation of the land does not amount to exclusive and notorious possession that would give rise to
ownership.
Even if we were to assume that the coffee was planted by petitioner’s predecessor-in-interest, “mere casual
cultivation” of the land does not amount to exclusive and notorious possession that would give rise to ownership.
The presence of an unspecified number of coffee plants, without proof that petitioner or her predecessor-in-interest
actually and deliberately cultivated them is not sufficient to support a claim of title. In fact, the five tax declarations
in the name of Julian Gonzales described the lot as “unirrigated riceland”. No improvements or plantings were
declared or noted in any of these tax declarations. It was only in petitioner’s 1993 tax declaration that the land was
described as planted with coffee. Wee vs. Republic, 608 SCRA 72, G.R. No. 177384 December 8, 2009
Ancestral Lands
The application for issuance of a Certificate of Ancestral Land Title pending before the NCIP is akin to a registration
proceeding. It also seeks an official recognition of one’s claim to a particular land and is also in rem. The titling of
ancestral lands is for the purpose of “officially establishing” one’s land as an ancestral land. Just like a registration
proceeding, the titling of ancestral lands does not vest ownership upon the applicant but only recognizes ownership
that has already vested in the applicant by virtue of his and his predecessor-in-interest’s possession of the property
since time immemorial. Lamsis vs. Dong-e, 634 SCRA 154, G.R. No. 173021 October 20, 2010
Given that a registration proceeding (such as the certification of ancestral lands) is not a conclusive adjudication of
ownership, it will not constitute litis pendentia on a reivindicatory case where the issue is ownership. “For litis
pendentia to be a ground for the dismissal of an action, the following requisites must concur: (a) identity of parties,
or at least such parties who represent the same interests in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts; and (c) the identity with respect to the two preceding
particulars in the two cases is such that any judgment that may be rendered in the pending case, regardless of which
party is successful, would amount to res judicata in the other case.” The third element is missing, for any judgment
in the certification case would not constitute res judicata or be conclusive on the ownership issue involved in the
reivindicatory case. Since there is no litis pendentia, there is no reason for the reivindicatory case to be suspended
or dismissed in favor of the certification case. Lamsis vs. Dong-e, 634 SCRA 154, G.R. No. 173021 October 20, 2010
TORTS AND DAMAGES
Quasi-delict
A quasi-delict is an act or omission, there being fault or negligence, which causes damage to another. Quasi-delicts
exist even without a contractual relation between the parties. Equitable’s argument is misplaced and beside the
point. SSPI’s cause of action is not based on the three checks. SSPI does not ask Equitable or Uy to deliver to it the
proceeds of the checks as the rightful payee. SSPI does not assert a right based on the undelivered checks or for
breach of contract. Instead, it asserts a cause of action based on quasi-delict. Equitable Banking Corporation vs.
Special Steel Products, Inc., 672 SCRA 212, G.R. No. 175350 June 13, 2012
The fact that a person, other than the named payee of the crossed check, was presenting it for deposit should have
put the bank on guard. It should have verified if the payee (SSPI) authorized the holder (Uy) to present the same in
its behalf, or indorsed it to him. Considering however, that the named payee does not have an account with Equitable
(hence, the latter has no specimen signature of SSPI by which to judge the genuineness of its indorsement to Uy),
the bank knowingly assumed the risk of relying solely on Uy’s word that he had a good title to the three checks. Such
misplaced reliance on empty words is tantamount to gross negligence, which is the “absence of or failure to exercise
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even slight care or diligence, or the entire absence of care, evincing a thoughtless disregard of consequences without
exerting any effort to avoid them.” Equitable Banking Corporation vs. Special Steel Products, Inc., 672 SCRA 212,
G.R. No. 175350 June 13, 2012
Proximate Cause
“Proximate cause is ‘that cause, which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury and without which the result would not have occurred.’ x x x To determine the proximate
cause of a controversy, the question that needs to be asked is: If the event did not happen, would the injury have
resulted? If the answer is no, then the event is the proximate cause.” Philippine National Bank vs. Cheah Chee
Chong, 671 SCRA 49, G.R. No. 170865 April 25, 2012
Solutio Indebiti
“[T]he indispensable requisites of the juridical relation known as solutio indebiti, are, (a) that he who paid was not
under obligation to do so; and (b) that the payment was made by reason of an essential mistake of fact. In the case
at bench, PNB cannot recover the proceeds of the check under the principle it invokes. In the first place, the gross
negligence of PNB, as earlier discussed, can never be equated with a mere mistake of fact, which must be something
excusable and which requires the exercise of prudence. No recovery is due if the mistake done is one of gross
negligence. Philippine National Bank vs. Cheah Chee Chong, 671 SCRA 49, G.R. No. 170865 April 25, 2012
Contributory Negligence
“Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard to which he is required to conform for his own protection.” The CA found
Ofelia’s credulousness blameworthy. We agree. Indeed, Ofelia failed to observe caution in giving her full trust in
accommodating a complete stranger and this led her and her husband to be swindled. Considering that Filipina was
not personally known to her and the amount of the foreign check to be encashed was $300,000.00, a higher degree
of care is expected of Ofelia which she, however, failed to exercise under the circumstances. Another circumstance
which should have goaded Ofelia to be more circumspect in her dealings was when a bank officer called her up to
inform that the Bank of America check has already been cleared way earlier than the 15-day clearing period. The
fact that the check was cleared after only eight banking days from the time it was deposited or contrary to what
Garin told her that clearing takes 15 days should have already put Ofelia on guard. She should have first verified the
regularity of such hasty clearance considering that if something goes wrong with the transaction, it is she and her
husband who would be put at risk and not the accommodated party. However, Ofelia chose to ignore the same and
instead actively participated in immediately withdrawing the proceeds of the check. Thus, we are one with the CA
in ruling that Ofelia’s prior consultation with PNB officers is not enough to totally absolve her of any liability. In the
first place, she should have shunned any participation in that palpably shady transaction. Philippine National Bank
vs. Cheah Chee Chong, 671 SCRA 49, G.R. No. 170865 April 25, 2012
Vicarious Liability
In the present case, it has been established that on the day of the collision — or on February 25, 2003 — URC was
the registered owner of the URC van, although it appears that it was designated for use by NURC, as it was officially
assigned to the latter’s Logistics Manager, Florante Soro-Soro (Soro-Soro); that Bicomong was the Operations
Manager of NURC and assigned to the First Cavite Industrial Estate; that there was no work as the day was declared
a national holiday; that Bicomong was on his way home to his family in Quezon province; that the URC van was not
assigned to Bicomong as well, but solely for Soro-Soro’s official use; that the company ser vice vehicle officially
assigned to Bicomong was a Toyota Corolla, which he left at the Cavite plant and instead, he used the URC van; and
that other than the Cavite plant, there is no other NURC plant in the provinces of Quezon, Laguna or Bicol. Applying
the above pronouncement in the Caravan Travel and Tours International, Inc. v. Abejar, 783 SCRA 368 (2016), it must
be said that when by evidence the ownership of the van and Bicomong’s employment were proved, the presumption
of negligence on respondents’ part attached, as the registered owner of the van and as Bicomong’s employer. The
burden of proof then shifted to respondents to show that no liability under Article 2180 arose. This may be done by
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proof of any of the following: 1. That they had no employment relationship with Bicomong; or 2. That Bicomong
acted outside the scope of his assigned tasks; or 3. That they exercised the diligence of a good father of a family in
the selection and supervision of Bicomong. Greenstar Express, Inc. vs. Universal Robina Corporation, 806 SCRA 125,
G.R. No. 205090 October 17, 2016
Doctrine of Last Clear Chance

The doctrine of last clear chance provides that where both parties are negligent but the negligent act of one is
appreciably later in point of time than that of the other, or where it is impossible to determine whose fault or
negligence brought about the occurrence of the incident, the one who had the last clear opportunity to avoid the
impending harm but failed to do so, is chargeable with the consequences arising therefrom. Stated differently, the
rule is that the antecedent negligence of a person does not preclude recovery of damages caused by the supervening
negligence of the latter, who had the last fair chance to prevent the impending harm by the exercise of due diligence.
Greenstar Express, Inc. vs. Universal Robina Corporation, 806 SCRA 125, G.R. No. 205090 October 17, 2016
Emergency Rule
The ‘Emergency Rule’ invoked by petitioners will not apply. Such principle states: [O]ne 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. Considering the wet and slippery condition of the road that night, Antonio should have been prudent to
reduce his speed and increase his distance from the Pathfinder. Had he done so, it would be improbable for him to
have hit the vehicle in front of him or if he really could not avoid hitting it, prevent such extensive wreck to the
vehicle in front. With the glaring evidence, he obviously failed to exercise proper care in his driving. Orix Metro
Leasing and Finance Corporation vs. Mangalinao, 664 SCRA 87, G.R. No. 174089 January 25, 2012
Res Ipsa Loquitur

Civil Law; Quasi-Delicts; Doctrine of Res Ipsa Loquitur; Under the doctrine of res ipsa loquitur, where the thing that
caused the injury complained of is shown to be under the management of the defendant or his servants; and the
accident, in the ordinary course of things, would not happen if those who had management or control used proper
care, it affords reasonable evidence—in the absence of a sufficient, reasonable and logical explanation by
defendant—that the accident arose from or was caused by the defendant’s want of care; The doctrine is based partly
on the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of
the accident or has the best opportunity of ascertaining it while the plaintiff has no such knowledge, and is therefore
compelled to allege negligence in general terms. Del Carmen, Jr. vs. Bacoy, 671 SCRA 91, G.R. No. 173870 April 25,
2012
The requisites of the doctrine of res ipsa loquitur as established by jurisprudence are as follows: 1) the accident is of
a kind which does not ordinarily occur unless someone is negligent; 2) the cause of the injury was under the exclusive
control of the person in charge and 3) the injury suffered must not have been due to any voluntary action or
contribution on the part of the person injured. Del Carmen, Jr. vs. Bacoy, 671 SCRA 91, G.R. No. 173870 April 25,
2012
In Aguilar, Sr. v. Commercial Savings Bank, 360 SCRA 395 (2001), the car of therein respondent bank caused the
death of Conrado Aguilar, Jr. while being driven by its assistant vice president. Despite Article 2180, we still held the
bank liable for damages for the accident as said provision should defer to the settled doctrine concerning accidents
involving registered motor vehicles, i.e., that the registered owner of any vehicle, even if not used for public service,
would pri marily be responsible to the public or to third persons for injuries caused the latter while the vehicle was
being driven on the highways or streets. Del Carmen, Jr. vs. Bacoy, 671 SCRA 91, G.R. No. 173870 April 25, 2012
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Nature of Damages
Damages claimed must be the natural and probable consequences of the breach, which the parties have foreseen
or could have reasonably foreseen at the time the obligation was constituted. Continental Cement Corporation vs.
Asea Brown Boveri, Inc., 659 SCRA 137, G.R. No. 171660 October 17, 2011
Actual Damages
To justify an award of actual damages, there must be competent proof of the actual amount of loss, credence can
be given only to claims which are duly supported by receipts. Mackay vs. Caswell, 740 SCRA 419, G.R. No. 183872
November 17, 2014
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, 301 SCRA 387 (1999) we held that “(a)ctual
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.
Dueñas vs. Guce-Africa, 603 SCRA 11, G.R. No. 165679 October 5, 2009
Besides, consequential damages, such as loss of profits on account of delay or failure of delivery, may be recovered
only if such damages were reasonably foreseen or have been brought within the contemplation of the parties as the
probable result of a breach at the time of or prior to contracting. Considering the nature of the obligation in the
instant case, respondent ABB, at the time it agreed to repair petitioner’s Kiln Drive Motor, could not have reasonably
foreseen that it would be made liable for production loss, labor cost and rental of the crane in case it fails to repair
the motor or incurs delay in delivering the same, especially since the motor under repair was a spare motor.
Continental Cement Corporation vs. Asea Brown Boveri, Inc., 659 SCRA 137, G.R. No. 171660 October 17, 2011
Actual damages puts the claimant in the position in which he had been before he was injured. The award thereof
must be based on the evidence presented, not on the personal knowledge of the court; and certainly not on flimsy,
remote, speculative and nonsubstantial proof. Under the Civil Code, one is entitled to an adequate compensation
only for such pecuniary loss suffered by him as he has duly proved. Adrian Wilson International Associates, Inc. vs.
TMX Philippines, Inc., 625 SCRA 321, G.R. No. 162608 July 26, 2010
Temperate Damages
In the past, we awarded temperate damages in lieu of actual damages for loss of earning capacity where earning
capacity is plainly established but no evidence was presented to support the allegation of the injured party’s actual
income. Orix Metro Leasing and Finance Corporation vs. Mangalinao, 664 SCRA 87, G.R. No. 174089 January 25,
2012
Temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount
cannot, from the nature of the case, be proved with certainty. The amount thereof is usually left to the discretion of
the courts but the same should be reasonable, bearing in mind that temperate damages should be more than
nominal but less than compensatory. Dueñas vs. Guce-Africa, 603 SCRA 11, G.R. No. 165679 October 5, 2009
Moral Damages
Moral damages are awarded to enable the injured party to obtain means, diversions, or amusements that will serve
to alleviate the moral suffering he/she had undergone due to the other party’s culpable action and must, perforce,
be proportional to the suffering inflicted. Orix Metro Leasing and Finance Corporation vs. Mangalinao, 664 SCRA
87, G.R. No. 174089 January 25, 2012
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The recovery of moral damages for malicious prosecution is allowed under Article 2219 of the Civil Code, while
attorney’s fees and expenses of litigation may be adjudged in malicious prosecution cases pursuant to Article 2208
of the same Code. Meyr Enterprises Corporation vs. Cordero, 734 SCRA 253, G.R. No. 197336 September 3, 2014
Moral damages are recoverable only when they are the proximate result of the defendant’s wrongful act or omission.
Both the trial and appellate courts found that Pardo indeed suffered as a result of the diversion of the three checks.
It does not matter that the things he was worried and anxious about did not eventually materialize. It is rare for a
person, who is beset with mounting problems, to sift through his emotions and distinguish which fears or anxieties
he should or should not bother with. So long as the injured party’s moral sufferings are the result of the defendants’
actions, he may recover moral damages. Equitable Banking Corporation vs. Special Steel Products, Inc., 672 SCRA
212, G.R. No. 175350 June 13, 2012
Nominal Damages
Nominal damages “may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for
the purpose of vindicating or recognizing that right, and not for indemnifying the plaintiff for any loss suffered by
him. Its award is thus not for the purpose of indemnification for a loss but for the recognition and vindication of a
right.” The amount of nominal damages to be awarded the employee is addressed to the sound discretion of the
court, taking into consideration the relevant circumstances. Libcap Marketing Corp. vs. Baquil, 727 SCRA 520, G.R.
No. 192011 June 30, 2014
The law and jurisprudence, on the other hand, allow the award of nominal damages in favor of an employee in a
case where a valid cause for dismissal exists but the employer fails to observe due process in dismissing the
employee. Financial assistance is granted as a measure of equity or social justice, and is in the nature or takes the
place of severance compensation. Libcap Marketing Corp. vs. Baquil, 727 SCRA 520, G.R. No. 192011 June 30, 2014
Exemplary Damages
In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence, plaintiff must
show his entitlement first to moral, temperate, or compensatory damages. Orix Metro Leasing and Finance
Corporation vs. Mangalinao, 664 SCRA 87, G.R. No. 174089 January 25, 2012
Article 2229 of the Civil Code provides that exemplary damages may be imposed “by way of example or correction
for the public good, in addition to the moral, temperate, liquidated or compensatory damages.” They are, however,
not recoverable as a matter of right. They are awarded only if the guilty party acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner. Ching vs. Bantolo, 687 SCRA 134, G.R. No. 177086 December 5, 2012
Attorney’s Fees
Because exemplary damages are awarded and that we find it equitable that expenses of litigation should be
recovered, we find it sufficient and reasonable enough to grant attorney’s fees. Orix Metro Leasing and Finance
Corporation vs. Mangalinao, 664 SCRA 87, G.R. No. 174089 January 25, 2012
Under Article 2208 of the Civil Code, attorney’s fees may be recovered when the defendant acted in gross and
evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim, or in any other case
where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered.
Subic Bay Legend Resorts and Casinos, Inc. vs. Fernandez, 736 SCRA 667, G.R. No. 193426 September 29, 2014
0942 – 949 91 76
0995 – 213 82 58
Page 30 of 30

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rd

3 Floor, Philippine Nurses Association,

Reasonable Expectation of Privacy Test

Declaration of Presumptive Death

Suit Between Members of the Same Family

Builders in Good Faith

Easement of Right of Way

WILLS AND SUCCESSION

A purported will is not to be denied legalization on dubious grounds

OBLIGATIONS AND CONTRACTS

Three Stages of a Contract

Stipulation Pour Autrui

Casino Chips as payment

SALES AND LEASE

Perfection of the Contract of Sale

Right First Refusal; Option Contract

Buyer in Good Faith

Maceda Law governs sales of real estate on installments

Contract for a Piece of Work

Rule on Interest Rates

Monetary Interest and Compensatory Interest

LAND TITLES AND DEEDS

The Land Registration Act

Application for Registration

Procedure in the Erasure, Alteration, or Amendments of a Certificate of Title

Proceedings under Section 108 of the Property Registration Decree

TORTS AND DAMAGES

Doctrine of Last Clear Chance

Res Ipsa Loquitur

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