Professional Documents
Culture Documents
Damages; Award of attorneys fees and litigation expenses and costs; justified when there is bad
faith. Even granting that Atty. Sabitsana has ceased to act as the Muertegui familys lawyer, he
still owed them his loyalty. The termination of attorney-client relation provides no justification
for a lawyer to represent an interest adverse to or in conflict with that of the former client on a
matter involving confidential information which the lawyer acquired when he was counsel. The
clients confidence once reposed should not be divested by mere expiration of professional
employment. This is underscored by the fact that Atty. Sabitsana obtained information from
Carmen which he used to his advantage and to the detriment of his client.
[F]rom the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in
pursuing the sale of the lot despite being apprised of the prior sale in respondents favor.
Moreover, petitioner Atty. Sabitsana has exhibited a lack of loyalty toward his clients, the
Muerteguis, and by his acts, jeopardized their interests instead of protecting them. Over and
above the trial courts and the CAs findings, this provides further justification for the award of
attorneys fees, litigation expenses and costs in favor of the respondent. Spouses Celemencio C.
Sabitsana, Jr. and Ma. Rosario M. Sabitsana v. Juanito F. Muertegui, represented by his
attorney-in-fact, Domingo A. Muertegui, Jr., G.R. No. 181359, August 5, 2013.
Damages; Attorneys fees; what constitute bad faith. There was no gross and evident bad faith on
the part of Asian Construction in filing its complaint against Sumitomo since it was merely
seeking payment of its unpaid works done pursuant to the Agreement. Neither can its subsequent
refusal to accept Sumitomos offered compromise be classified as a badge of bad faith since it
was within its right to either accept or reject the same owing to its contractual nature. Absent any
other just or equitable reason to rule otherwise, these incidents are clearly off-tangent with a
finding of gross and evident bad faith which altogether negates Sumitomos entitlement to
attorneys fees. Asian Construction and Development Corporation v. Sumitomo Corporation /
Sumitomo Corporation v. Asia Construction and Development Corporation, G.R. No. 196723 /
G.R. No. 196728, August 28, 2013.
Damages; Attorneys fees; when awarded. Jurisprudence dictates that in the absence of a
governing stipulation, attorneys fees may be awarded only in case the plaintiffs action or
defendants stand is so untenable as to amount to gross and evident bad faith. This is embodied
in Article 2208 of the Civil Code which states:
Article 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than
judicial costs, cannot be recovered, except:
xxxx
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs
plainly valid, just and demandable claim;
xxxx
Damages; Interests; Eastern Shipping Lines guidelines as modified by BSP-MB Circular No.
799. The Supreme Court set out the following guidelines on damages and interest due:
1. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or
quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under
Title XVIII on Damages of the Civil Code govern in determining the measure of recoverable
damages.
2. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
(a) When the obligation is breached, and it consists in the payment of a sum of money, i.e., a
loan or forbearance of money, the interest due should be that which may have been stipulated in
writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially
demanded. In the absence of of stipulation, the rate of interest shall be 6% per annum to be
computed from default, i.e., from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 the Civil Code.
(b) When an obligation, not constituting a loan or forbearance of money, is breached, an interest
on the amount of damages awarded may be imposed at the discretion of the court at the rate of
6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages,
except when or until the demand can be established with reasonable certainty. Accordingly,
where the demand is established with reasonable certainty, the interest shall begin to run from
the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such
certainty cannot be so reasonably established at the time the demand is made, the interest shall
begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The actual base
for the computation of legal interest shall, in any case, be on the amount finally adjudged.
(c) When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6%
per annum from such finality until its satisfaction, this interim period being deemed to be by then
an equivalent to a forbearance of credit. Dario Nacar v. Gallery Frames and/or Felipe Borde,
Jr., G.R. No. 189871, August 13, 2013.
Gross negligence; concept. Based on the provisions, a banking institution like Comsavings Bank
is obliged to exercise the highest degree of diligence as well as high standards of integrity and
performance in all its transactions because its business is imbued with public interest. As aptly
declared in Philippine National Bank v. Pike: [T]he stability of banks largely depends on the
confidence of the people in the honesty and efficiency of banks. Gross negligence connotes
want of care in the performance of ones duties; it is a negligence characterized by the want of
even slight care, acting or omitting to act in a situation where there is duty to act, not
inadvertently but willfully and intentionally, with a conscious indifference to consequences
insofar as other persons may be affected. It evinces a thoughtless disregard of consequences
without exerting any effort to avoid them. Comsavings Bank (now GSIS Family Bank) v. Sps.
Danilo and Estrella Capistrano, G.R. No. 170942, August 28, 2013.
Interest; Legal rate of interest effective July 1, 2013; pursuant to BSP Circular 799, series of
2013, the legal rate of interest shall be 6% per annum. The Court held that [P]ursuant to
Circular No. 799, series of 2013 of the Bangko Sentral ng Pilipinas which took effect July 1,
2013, the amount of P6,000.00, erroneously paid by Petitioner to the bank, shall earn interest at
the rate of 6% per annum computed from the filing of the Petition in Civil Case No. 5535 up to
its full satisfaction. Virginia M. Venzon v. Rural Bank of Buenavista, Inc., represented by
Lourdesita E. Parajes, G.R. No. 178031, August 28, 2013.
Interest; legal rate of interest; interest at 6% per annum imposed on award in favor of illegally
dismissed employees. Interest at the rate of 6% per annum must be imposed on the award for
separation pay, back wages, and attorneys fees to illegally dismissed employees in accordance
with Circular No. 799, Series of 2013 of the Bangko Sentral ng Pilipinas which took effect July
1, 2013. Vicente Ang v. Seferino San Joaquin, Jr., and Diosdado Fernandez, G.R. No. 185549,
August 7, 2013.
Interest; legal interest; where obligation constitutes a loan or forbearance of money, goods or
credit; legal rate allowed in judgments. In the absence of an express stipulation as to the rate of
interest that would govern the parties, the rate of legal interest for loans or forbearance of any
money, goods or credits and the rate allowed in judgments shall no longer be 12% per annum. As
reflected in the case of Eastern Shipping Lines and Subsection X305.1 of the Manual of
Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of
Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No.
799, the interest rate will now be 6% per annum effective July 1, 2013. Dario Nacar v. Gallery
Frames and/or Felipe Borde, Jr., G.R. No. 189871, August 13, 2013.
Interest; Legal interest; prospective application. It should be noted that the new rate could only
be applied prospectively and not retroactively. Consequently, the 12% per annum legal interest
shall apply only until June 30, 2013. Come July 1, 2013 the new rate of 6% per annum shall be
the prevailing rate of interest when applicable. Nonetheless, with regard to those judgments that
have become final and executory prior to July 1, 2013, said judgments shall not be disturbed and
shall continue to be implemented applying the rate of interest fixed therein. Dario Nacar v.
Gallery Frames and/or Felipe Borde, Jr., G.R. No. 189871, August 13, 2013.
Laches; definition. The Court observes that laches had already set in, thereby precluding the
Andrades from pursuing their claim. Case law defines laches as the failure to assert a right for
an unreasonable and unexplained length of time, warranting a presumption that the party entitled
to assert it has either abandoned or declined to assert it. Bobby Tan v. Grace Andrade, et
al./Grace Andrade, et al. v. Bobby Tan, G.R. Nos. 171904 & 172017, August 7, 2013.
Quasi-contracts; solutio indebiti; concept. In a controversy over payment made after the
foreclosure of the mortgaged property, the Court held: Since respondent was not entitled to
receive the said amount, as it is deemed fully paid from the foreclosure of petitioners property
since its bid price at the auction sale covered all that petitioner owed it by way of principal,
interest, attorneys fees and charges, it must return the same to petitioner. If something is
received when there is no right to demand it, and it was unduly delivered through mistake, the
obligation to return it arises. Virginia M. Venzon v. Rural Bank of Buenavista, Inc., represented
by
Lourdesita
E.
Parajes,
G.R.
No.
178031,
August
28,
2013.
Sales; double sale involving unregistered land; Article 1544 of the Civil Code does not apply;
prior sale, even if made through an unnotarized deed of sale, prevails; registration of second sale
is unavailing as registration does not vest title; Under Act 3344, registration if instruments
affecting unregistered lands is without prejudice to a third party with a better right; actual and
prior knowledge of the first sale makes the subsequent buyers purchasers in bad faith. Article
1544 of the Civil Code does not apply to sales involving unregistered land. Both the trial court
and the CA are, however, wrong in applying Article 1544 of the Civil Code. Both courts seem to
have forgotten that the provision does not apply to sales involving unregistered land. Suffice it to
state that the issue of the buyers 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.
The sale to respondent Juanito was executed on September 2, 1981 via an unnotarized deed of
sale, while the sale to petitioners was made via a notarized document only on October 17, 1991,
or ten years thereafter. Thus, Juanito who was the first buyer has a better right to the lot, while
the subsequent sale to petitioners is null and void, because when it was made, the seller Garcia
was no longer the owner of the lot. Nemo dat quod non habet.
The fact that the sale to Juanito was not notarized does not alter anything, since the sale between
him and Garcia remains valid nonetheless. Notarization, or the requirement of a public document
under the Civil Code, is only for convenience, and not for validity or enforceability. And because
it remained valid as between Juanito and Garcia, the latter no longer had the right to sell the lot
to petitioners, for his ownership thereof had ceased.
Nor can petitioners registration of their purchase have any effect on Juanitos rights. The mere
registration of a sale in ones favor does not give him any right over the land if the vendor was
no longer the owner of the land, having previously sold the same to another even if the earlier
sale was unrecorded. Neither could it validate the purchase thereof by petitioners, which is null
and void. Registration does not vest title; it is merely the evidence of such title. Our land
registration laws do not give the holder any better title than what he actually has.
Under Act No. 3344, registration of instruments affecting unregistered lands is without
prejudice to a third party with a better right. The aforequoted phrase has been held by the Court
to mean that the mere registration of a sale in ones favor does not give him any right over the
land if the vendor was not anymore the owner of the land having previously sold the same to
somebody else even if the earlier sale was unrecorded.
Petitioners defense of prescription, laches and estoppel are unavailing since their claim is based
on a null and void deed of sale. The fact that the Muerteguis failed to interpose any objection to
the sale in petitioners favor does not change anything, nor could it give rise to a right in their
favor; their purchase remains void and ineffective as far as the Muerteguis are concerned.
Spouses Celemencio C. Sabitsana, Jr. and Ma. Rosario M. Sabitsana v. Juanito F. Muertegui,
represented by his attorney-in-fact, Domingo A. Muertegui, Jr., G.R. No. 181359, August 5,
2013.
Sales; actual and prior knowledge of the first sale makes the subsequent buyers purchasers in bad
faith. Petitioners actual and prior knowledge of the first sale to Juanito makes them purchasers
in bad faith. It also appears that petitioner Atty. Sabitsana was remiss in his duties as counsel to
the Muertegui family. Instead of advising the Muerteguis to register their purchase as soon as
possible to forestall any legal complications that accompany unregistered sales of real property,
he did exactly the opposite: taking advantage of the situation and the information he gathered
from his inquiries and investigation, he bought the very same lot and immediately caused the
registration thereof ahead of his clients, thinking that his purchase and prior registration would
prevail. The Court cannot tolerate this mercenary attitude. Instead of protecting his clients
interest, Atty. Sabitsana practically preyed on him. Spouses Celemencio C. Sabitsana, Jr. and
Ma. Rosario M. Sabitsana v. Juanito F. Muertegui, represented by his attorney-in-fact, Domingo
A.
Muertegui,
Jr.,
G.R.
No.
181359,
August
5,
2013.
Succession; siblings are heirs of decedent who died without issue. Since Leon died without issue,
his heirs are his siblings, Romana and Gregoria, who thus inherited the property in equal shares.
In turn, Romanas and Gregorias 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. Antipolo Ining (deceased), survived by Manuel
Villanueva, Teodora Villanueva-Francisco, Camilo Francisco, Adolfo Francisco, Lucimo
Francisco, Jr., Milagros Francisco,Celedonio Francisco, Herminigildo Francisco; Ramon
Tresvalles, Roberto Tajonera, Natividad Ining-Ibea (deceased) survived by Edilberto Ibea,
Josefa Ibea, Martha Ibea, Carmen Ibea, Amparo Ibea-Fernandez, Henry Ruiz, Eugenio Ruiz and
Pastor Ruiz; Dolores Ining-Rimon (deceased) survived by Jesus Rimon, Cesaria Rimon Gonzales
and Remedios Rimon Cordero; and Pedro Ining (deceased) survived by Elisa Tan Ining (wife)
and Pedro Ining, Jr. v. Leonardo R. Vega, substituted by Lourdes Vega, Restonilo I. Vega,
Crispulo M. Vega, Milbuena Vega-Restituto and Lenard Vega, G.R. No. 174727, August 12,
2013.
Special Laws
Correction of name; adversary proceeding; impleading and notice to affected and interested
parties; when failure to implead and notify is cured by publication of notice of hearing; strict
compliance with the Rules of Court mandated when petition involves substantial and
controversial alterations. Respondents birth certificate shows that her full name is Anita Sy, that
she is a Chinese citizen and a legitimate child of Sy Ton and Sotera Lugsanay. In filing the
petition, however, she seeks the correction of her first name and surname, her status from
legitimate to illegitimate and her citizenship from Chinese to Filipino. Thus, respondent
should have impleaded and notified not only the Local Civil Registrar but also her parents and
siblings as the persons who have interest and are affected by the changes or corrections
respondent wanted to make.
The fact that the notice of hearing was published in a newspaper of general circulation and notice
thereof was served upon the State will not change the nature of the proceedings taken. A reading
of Sections 4 and 5, Rule 108 of the Rules of Court shows that the Rules mandate two sets of
notices to different potential oppositors: one given to the persons named in the petition and
another given to other persons who are not named in the petition but nonetheless may be
considered interested or affected parties. Summons must, therefore, be served not for the purpose
of vesting the courts with jurisdiction but to comply with the requirements of fair play and due
process to afford the person concerned the opportunity to protect his interest if he so chooses.
While there may be cases where the Court held that the failure to implead and notify the affected
or interested parties may be cured by the publication of the notice of hearing, earnest efforts were
made by petitioners in bringing to court all possible interested parties. Such failure was likewise
excused where the interested parties themselves initiated the corrections proceedings; when there
is no actual or presumptive awareness of the existence of the interested parties; or when a party
is inadvertently left out.
It is clear from the foregoing discussion that when a petition for cancellation or correction of an
entry in the civil register involves substantial and controversial alterations, including those on
citizenship, legitimacy of paternity or filiation, or legitimacy of marriage, a strict compliance
with the requirements of Rule 108 ofthe Rules of Court is mandated. If the entries in the civil
register could be corrected or changed through mere summary proceedings and not through
appropriate action wherein all parties who may be affected by the entries are notified or
represented, the door to fraud or other mischief would be set open, the consequence of which
might be detrimental and far reaching. Republic of the Philppines v. Dr. Norma S. Lugsanay Uy,
G.R. No. 198010, August 12, 2013.
Correction of name; Appropriate adversary proceeding; definition. What is meant by
appropriate adversary proceeding? Blacks Law Dictionary defines adversary proceeding as
follows:
One having opposing parties; contested, as distinguished from an ex parte application, one of
which the party seeking relief has given legal warning to the other party, and afforded the latter
an opportunity to contest it. Excludes an adoption proceeding. Republic of the Philppines v. Dr.
Norma S. Lugsanay Uy, G.R. No. 198010, August 12, 2013.
Correction of name; errors in a civil registry and facts established in an appropriate adversary
proceeding. It has been settled in a number of cases starting with Republic v. Valencia that even
substantial errors in a civil registry may be corrected and the true facts established provided the
parties aggrieved by the error avail themselves of the appropriate adversary proceeding. The
pronouncement of the Court in that case is illuminating:
It is undoubtedly true that if the subject matter of a petition is not for the correction of clerical
errors of a harmless and innocuous nature, but one involving nationality or citizenship, which is
indisputably substantial as well as controverted, affirmative relief cannot be granted in a
proceeding summary in nature. However, it is also true that a right in law may be enforced and a
wrong may be remedied as long as the appropriate remedy is used. This Court adheres to the
principle that even substantial errors in a civil registry may be corrected and the true facts
established provided the parties aggrieved by the error avail themselves of the appropriate
adversary proceeding. Republic of the Philppines v. Dr. Norma S. Lugsanay Uy, G.R. No.
198010, August 12, 2013.
Family Relations; Conjugal property; presumption that all property of the marriage is presumed
to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the
husband or to the wife; for presumption to apply, party invoking the same must preliminarily
prove that the property was indeed acquired during the marriage; presumption cannot apply
where there is no showing as to when the property alleged to be conjugal was acquired. Pertinent
to the resolution of this second issue is Article 160 of the Civil Code which states that [a]ll
property of the marriage is presumed to belong to the conjugal partnership, unless it be proved
that it pertains exclusively to the husband or to the wife. For this presumption to apply, the
party invoking the same must, however, preliminarily prove that the property was indeed
acquired during the marriage. As held in Go v. Yamane:
x x As a condition sine qua non for the operation of [Article 160] in favor of the conjugal
partnership, the party who invokes the presumption must first prove that the property was
acquired during the marriage.
In other words, the presumption in favor of conjugality does not operate if there is no showing of
when the property alleged to be conjugal was acquired. Moreover, the presumption may be
rebutted only with strong, clear, categorical and convincing evidence. There must be strict proof
of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party
asserting it.
In this case, there is no evidence to indicate when the property was acquired by petitioner
Josefina. Thus, we agree with petitioner Josefinas declaration in the deed of absolute sale she
executed in favor of the respondent that she was the absolute and sole owner of the property.
Bobby Tan v. Grace Andrade, et al./Grace Andrade, et al. v. Bobby Tan, G.R. Nos. 171904 &
172017, August 7, 2013.
Family relations. Under the Family Code, family relations, which is the primary basis for
succession, exclude relations by affinity. Antipolo Ining (deceased), survived by Manuel
Villanueva, Teodora Villanueva-Francisco, Camilo Francisco, Adolfo Francisco, Lucimo
Francisco, Jr., Milagros Francisco,Celedonio Francisco, Herminigildo Francisco; Ramon
Tresvalles, Roberto Tajonera, Natividad Ining-Ibea (deceased) survived by Edilberto Ibea,
Josefa Ibea, Martha Ibea, Carmen Ibea, Amparo Ibea-Fernandez, Henry Ruiz, Eugenio Ruiz and
Pastor Ruiz; Dolores Ining-Rimon (deceased) survived by Jesus Rimon, Cesaria Rimon Gonzales
and Remedios Rimon Cordero; and Pedro Ining (deceased) survived by Elisa Tan Ining (wife)
and Pedro Ining, Jr. v. Leonardo R. Vega, substituted by Lourdes Vega, Restonilo I. Vega,
Crispulo M. Vega, Milbuena Vega-Restituto and Lenard Vega, G.R. No. 174727, August 12,
2013.
Land titles; indefeasibility of certificate of title to public land issued pursuant to a grant or patent;
false statement exception; reversion of land. The certificate of title issued pursuant to any grant
or patent involving public lands is as conclusive and indefeasible as any other certificate of title
issued to private lands in the ordinary or cadastral registration proceedings. It is not subject to
collateral attack. However, Section 91 of Commonwealth Act No. 141 (The Public Land Act)
provides for the cancellation of the concession, title or permit granted for any false statement in
the application or omission of facts in the application.
Once a patent is registered and the corresponding certificate of title is issued, the land covered by
it ceases to be part of the public domain and becomes private property, and the Torrens Title
issued pursuant to the patent becomes indefeasible upon the expiration of one year from the date
of issuance of such patent. However, as held in The Director of Lands v. De Luna, et al., even
after the lapse of one year, the State may still bring an action under Section 101 of
Commonwealth Act No. 141 for the reversion to the public domain of land which has been
fraudulently granted to private individuals. The burden of proof rests on the party who asserts the
affirmative of an issue. Republic of the Philippines v. Angeles Bellate, and Spouses Jesus
Cabanto and Marieta Juanerio, G.R. No. 175685, August 7, 2013.
Land titles; Fraud in an application for grant of title to public land or patent; definition. It was
held on Libudan v. Gil that [t]he fraud must consist in an intentional omission of facts required
by law to be stated in the application or a willful statement of a claim against the truth. It must
show some specific acts intended to deceive and deprive another of his right. The fraud must be
actual and extrinsic, not merely constructive or intrinsic; the evidence thereof must be clear,
convincing and more than merely preponderant, because the proceedings which are assailed as
having been fraudulent are judicial proceedings which by law, are presumed to have been fair
and regular. Republic of the Philippines v. Angeles Bellate, and Spouses Jesus Cabanto and
Marieta Juanerio, G.R. No. 175685, August 7, 2013.
Trust receipts; purpose. To emphasize, the Trust Receipts Law was created to to aid in
financing importers and retail dealers who do not have sufficient funds or resources to finance
the importation or purchase of merchandise, and who may not be able to acquire credit except
through utilization, as collateral, of the merchandise imported or purchased. Hur Tin Yang v.
People of the Philippines, G.R. No. 195117, August 14, 2013.
Trust receipts; when not a trust receipts transaction. Nonetheless, when both parties enter into an
agreement knowing fully well that the return of the goods subject of the trust receipt is not
possible even without any fault on the part of the trustee, it is not a trust receipt transaction
penalized under Sec. 13 of PD 115 in relation to Art. 315, par. 1(b) of the RPC, as the only
obligation actually agreed upon by the parties would be the return of the proceeds of the sale
transaction. This transaction becomes a mere loan, where the borrower is obligated to pay the
bank the amount spent for the purchase of the goods. Hur Tin Yang v. People of the Philippines,
G.R. No. 195117, August 14, 2013.