SURVEY OF 2010-2012 SC DECISIONS IN CIVIL LAW - DEAN ED

VINCENT S. ALBANO
SURVEY OF 2010-2012 SC DECISIONS IN
CIVIL LAW
Dean ED VINCENT S. ALBANO
Note: These questions are patterned from the sample questions by the SC
in this years Bar Examination. The answers were intended to be lengthen
in order that the reason behind the law and the decision may be reflected
to guide the Bar Candidates. The candidates can shorten the answers to
make it convenient for the examiners to correct.
FAMILY LAW
Adultery of a woman.
Q Is the adultery of the woman a ground to declare the marriage void on
the ground of psychological incapacity? Explain.
Answer: No. The adulterous acts of a woman do not even rise to the level of the psychological
incapacity that the law requires. Her act of living an adulterous life cannot automatically be
equated with a psychological disorder, especially when no specific evidence was shown that
promiscuity was a trait already existing at the inception of marriage. The husband must be able
to establish that the wife's unfaithfulness is a manifestation of a disordered personality, which
makes her completely unable to discharge the essential obligations of the marital state. The root
cause of the psychological incapacity must be identified as a psychological illness, its
incapacitating nature fully explained and established by the totality of the evidence presented
during trial.
Doubtless, the woman was far from being a perfect wife and a good mother. She certainly had
some character flaws. But these imperfections do not warrant a conclusion that she had a
psychological malady at the time of the marriage that rendered her incapable of fulfilling her
marital and family duties and obligations. (Navales v. Navales, G.R. No. 167523, June 27,
2008, 556 SCRA 272; Silvino A. Ligeralde v. May Ascension A. Patalinhug, et al., G.R. No.
168796, April 15, 2010; Ochocoso v. Alano, et al., G.R. No. 167459, January 26, 2011; Villalon
v. Villalon; Rosalino Marable v. Myrna Marable, G.R. No. 178741, January 17, 2011).
Refusal to have sex with husband.
Q A and B are married. The man contended that the wife refused to
consummate their marriage by refusing to have sexual intercourse with
him during the marriage. He alleged that their last intercourse was prior
to their marriage. He contended that the wife was suffering from
psychological incapacity. Is the contention correct? Explain.
Answer: No. The husbands evidence merely established that the wife refused to have sexual
intercourse with him after their marriage, and that she left him after their quarrel when he
confronted her about her alleged miscarriage. He failed to prove the root cause of the alleged
psychological incapacity and establish the requirements of gravity, juridical antecedence, and
incurability. There must be proof that the psychological disorder renders her truly incognitive of
the basic marital covenants that concomitantly must be assumed and discharged by the parties
to the marriage. Psychological incapacity must be more than just a difficulty, a refusal, or a

neglect in the performance of some marital obligations. An unsatisfactory marriage is not a

null and void marriage. In Marcos v. Marcos, it was ruled that Article 36 of the Family Code, we
stress, is not to be confused with a divorce law that cuts the marital bond at the time the causes
therefor manifest themselves. It refers to a serious psychological illness afflicting a party even
before the celebration of the marriage. It is a malady so grave and so permanent as to deprive
one of awareness of the duties and responsibilities of the matrimonial bond one is about to
assume. (Noel Baccay v. Maribel Baccay, et al., G.R. No. 173138, December 1, 2010).
Effect of a foreign divorce.
Q A former Filipino citizen got married to a Filipina. Due to work and
other personal commitments, the man returned to Canada after the
wedding. He returned to the Philippines to surprise his wife, but he was
shocked to discover that his wife was having an affair with another man.
He filed a petition for divorce in Canada which was granted. Wanting to
marry his girlfriend, he registered the Canadian divorce with the Civil
Registry of Pasig but despite the registration of the same, the Local Civil
Registrar refused to issue a license for him to remarry. He filed a petition
for judicial recognition of the foreign judgment which was denied by the
RTC, holding that he was not the proper party to file the petition as he is a
naturalized Canadian citizen. It ruled that only Filipinos can avail of the
remedy under the second paragraph of Article 26, Family Codeand in
accordance with the legislative intent as determined by the Court in
Republic v. Orbecido III, 472 SCRA 114 (2005), to avoid the absurd
situation where the Filipino spouse remains married to the alien spouse
who, after obtaining a divorce, is no longer married to the Filipino
spouse.
He contended that the second paragraph of Article 26 of the Family Code
extends to aliens the right to petition a court of this jurisdiction for the
recognition of a foreign divorce decree. Is the contention correct? Explain.
Answer: No. The alien spouse can claim no right under the second paragraph of Article 26 of
the Family Code as the substantive right established is in favor of the Filipino spouse. As held
in Van Dorn v. Romillo, G.R. No. L-68470, October 8, 1985, 139 SCRA 139 and Pilapil v.
Somera, G.R. No. 80116, June 30, 1989, 74 SCRA 653:
To maintain x x x that, under our laws, [the Filipino spouse] has to be
considered still married to [the alien spouse] and still subject to a wife's
obligations x x x cannot be just. [The Filipino spouse] should not be obliged to live
together with, observe respect and fidelity, and render support to [the alien spouse]. The latter
should not continue to be one of her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country if the ends of
justice are to be served.
The provision was included in the law to avoid the absurd situation where the Filipino spouse
remains married to the alien spouse who, after obtaining a divorce, is no longer married to the
Filipino spouse. The legislative intent is for the benefit of the Filipino spouse, by clarifying his or
her marital status, settling the doubts created by the divorce decree. Essentially, the
second paragraph of Article 26 of the Family Code provided the Filipino
spouse a substantive right to have his or her marriage to the alien spouse

considered as dissolved, capacitating him or her to remarry. The capacity of

the Filipino spouse to remarry, however, depends on whether the foreign divorce decree
capacitated the alien spouse to do so. Without the second paragraph of Article 26 of the Family
Code, the judicial recognition of the foreign decree of divorce, whether in a proceeding instituted
precisely for that purpose or as a related issue in another proceeding, would be of no
significance to the Filipino spouse since our laws do not recognize divorce as a mode of
severing the marital bond; (Art. 17, NCC) Article 17 of the Civil Code provides that the policy
against absolute divorces cannot be subverted by judgments promulgated in a foreign
country. The inclusion of the second paragraph in Article 26 of the Family Code provides the
direct exception to this rule and serves as basis for recognizing the dissolution of the marriage
between the Filipino spouse and his or her alien spouse. (Gilbert B. Corpus v. Daisylyn Tirol Sto.
Tomas, et al., G.R. No. 186571, August 11, 2010).
Judgment declaring a spouse presumptively dead is immediately final and
executory; remedy is Rule 65, not Rule 45.
Q Yolanda Granada and Cyrus Granada got married in 1991. In 1994,
Cyrus went to Taiwan to seek employment but since then, he never
communicated with Yolanda. After nine (9) years of waiting, she filed a
Petition to have Cyrus declared presumptively dead which the RTC
granted. The Republic of the Philippines appealed from the decision
contending that Yolanda failed to prove earnest efforts to locate Cyrus
and thus, failed to prove well-founded belief that he was already dead.
Yolanda moved to dismiss the appeal contending that the Petition for
Declaration of Presumptive Death based under Art. 41, Family Code was a
summary judicial proceedings in which the judgment is immediately final
and executory and, thus, not appealable. The CA granted the motion. Is
the dismissal of the appeal correct? Explain.
Answer: The CA is correct. The RTC decision is immediately final and executory and not subject
to ordinary appeal.
Since a petition for declaration of presumptive death is a summary proceeding, the judgment of
the court therein shall be immediately final and executory. The appropriate remedy is a special
civil action for certiorari if there is a showing of grave abuse of discretion amounting to lack or
excess of jurisdiction. (Rep. v. Yolanda Granada, G.R. No. 187512, July 13, 2012).
By express provision of law, (Art. 247, F.C.), the judgment of the court in a summary proceeding
shall be immediately final and executory. As a matter of course, it follows that no appeal can be
had of the trial court's judgment in a summary proceeding for the declaration of presumptive
death of an absent spouse under Article 41 of the Family Code. It goes without saying, however,
that an aggrieved party may file a petition for certiorari to question abuse of discretion
amounting to lack of jurisdiction. Such petition should be filed in the Court of Appeals in
accordance with the Doctrine of Hierarchy of Courts. To be sure, even if the Court's original
jurisdiction to issue a writ of certiorari is concurrent with the RTCs and the Court of Appeals in
certain cases, such concurrence does not sanction an unrestricted freedom of choice of court
forum. From the decision of the Court of Appeals, the losing party may then file a petition for
review on certiorari under Rule 45 of the Rules of Court with the Supreme Court. This is
because the errors which the court may commit in the exercise of jurisdiction are merely errors
of judgment which are the proper subject of an appeal.

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. (Rep. v.
Yolanda C. Granada, G.R. No. 187512, July 13, 2012, Sereno, J).
Mortgage of conjugal property without consent of spouse is void;
subsequent execution of SPA perfects the contract.
Q - On October 31, 1995, the woman obtained a loan secured by a Real
Estate Mortgage over a real proper under their names but without the
consent of the husband. She issued checks as partial payments but the
same were dishonoured, hence, the creditor filed a complaint for
Foreclosure of the Mortgage with damages. The RTC dismissed the case as
the mortgage was executed without the consent of the husband even as it
noted that he executed a Special Power of Attorney for the wife to
execute the mortgage on November 4, 1995. The RTC however ruled that
the subsequent execution of the SPA cannot be made to retroact to the
date of the execution of the real estate mortgage. Is the ruling correct?
Why?
Answer: No, because the execution of the SPA can be considered as acceptance of the
mortgage by the other spouse that perfected the contract or continuing offer.
Both Article 96 and Article 124 of the Family Code provide that the powers of the administration
do not include disposition or encumbrance without the written consent of the other spouse. Any
disposition or encumbrance without the written consent shall be void. However, both provisions
also state that the transaction shall be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be perfected as a binding contract upon the
acceptance by the other spouse x x x before the offer is withdrawn by either or both offerors.
(Arturo Sarte Flores v. Sps. Enrico & Edna Lindo, G.R. No. 183984, April 13, 2011).
Note: This is an example of a void contract that can be ratified. (See: Art. 5, NCC).
Sale of conjugal property by a spouse without consent of the other; void,
even if separated in fact.
Q In a case, there was an action for legal separation. It was ruled by the
CA that the undivided share of the offending spouse in the property was
already forfeited in favor of their daughter based on the ruling of the RTC
that the offending spouse in an action for legal separation is deprived of
his share in the net profits of the conjugal properties. Is the ruling
correct? Why?
Answer: No. If there is a decree of legal separation, under Article 63 of the Family Code, the
absolute community or the conjugal partnership shall be dissolved and liquidated but the
offending spouse shall have no right to any share of the net profits earned by the absolute
community or the conjugal partnership, which shall be forfeited in accordance with the
provisions of Article 43(2).
Thus, among the effects of the decree of legal separation is that the conjugal partnership is
dissolved and liquidated and the offending spouse would have no right to any share of the net
profits earned by the conjugal partnership. It is only the share in the net profits which is forfeited

in favor of their daughter. Article 102(4) of the Family Code provides that [f]or purposes of
computing the net profits subject to forfeiture in accordance with Article 43, No. (2) and 63, No.
(2), the said profits shall be the increase in value between the market value of the community
property at the time of the celebration of the marriage and the market value at the time of its
dissolution. Clearly, what is forfeited in favor of their daughter is not his share in the conjugal
partnership property but merely in the net profits of the conjugal partnership property. (Siochi v.
Gozon, et al., G.R. No. 169900; Interdimensional Realty, Inc. v. Siochi, et al., G.R. No. 169977,
March 18, 2010).
The family homes exemption from execution must be set up and proved
to the Sheriff before the sale of the property at public auction.
Q A and B are married. They have a family home, A issued a check which
was dishonored. He was convicted with civil indemnity. The family home
was levied upon and sold where C, the judgment creditor was the
purchaser in sheriffs sale. They did not invoked the exemption from levy
of the family home. They however renamed as lessees but for failure to
pay the rentals, they were sued for ejectment where judgment was
rendered. In the execution, they invoked the exemption of the family
home from levy but the plaintiff contended that the spouses did not assert
and prove that their house and lot was a family home prior to the public
auction conducted by the sheriff. State the effect of such failure. Explain.
Answer: Their failure to invoke and prove that the house and lot was a family home is a waiver
of such defense or right. In Honrado v. CA,512 Phil. 657 (2005), it was said that at no other time
can the status of a residential house as a family home can be set up and proved and its
exemption from execution be claimed but before the sale thereof at public auction:
While it is true that the family home is constituted on a house and lot from the time it is occupied
as a family residence and is exempt from execution or forced sale under Article 153 of the
Family Code, such claim for exemption should be set up and proved to the Sheriff before the
sale of the property at public auction. Failure to do so would estop the party from later claiming
the exemption.
The settled rule is that the right to exemption or forced sale under Article 153 of the Family Code
is a personal privilege granted to the judgment debtor and as such, it must be claimed not by
the sheriff, but by the debtor himself before the sale of the property at public auction. It is not
sufficient that the person claiming exemption merely alleges that such property is a family home.
This claim for exemption must be set up and proved to the Sheriff.
Having failed to set up and prove to the sheriff the supposed exemption of the subject property
before the sale thereof at public action, they now are barred from raising the same. Failure to do
so estop them from later claiming the said exemption. (De Mesa v. Acero, et al., G.R. No.
185064, January 16, 2012, Reyes, J).
A child must establish filiation before support may be granted.
Q Petitioner filed a petition with prayer for the issuance of a temporary
protection order against the respondent for alleged woman and child
abuse under RA 9262 and asked for financial support. She alleged that
respondent is the father of her child. He denied being the father of the
child and that the signature appearing in the child Certificate of Live Birth
is not his signature. The RTC dismissed the petition on the ground that

there is no prior judgment establishing the filiation of the child hence,

there is no basis to order support. Is the dismissal correct? Why?
Answer: Yes. Dolina evidently filed the wrong action to obtain support for her child. The object of
RA 9262 under which she filed the case is the protection and safety of women and children who
are victims of abuse or violence. Although the issuance of a protection order against the
respondent in the case can include the grant of legal support for the wife and the child, this
assumes that both are entitled to a protection order and to legal support.
Dolinas remedy is to file for the benefit of her child an action against Vallecera for compulsory
recognition in order to establish filiation and then demand support. Alternatively, she may
directly file an action for support, where the issue of compulsory recognition may be integrated
and resolved.
To be entitled to legal support, petitioner must, in proper action, first establish the filiation of the
child, if the same is not admitted or acknowledged. Since Dolinas demand for support for her
son is based on her claim that he is Valleceras illegitimate child, the latter is not entitled to such
support if he had not acknowledged him, until Dolina shall have proved his relation to him. (Art.
195, Family Code). The childs remedy is to file through her mother a judicial action for
compulsory recognition. (Tayag v. Tayag-Gallor, G.R. No. 174680, March 24, 2008, 549 SCRA
68). If filiation is beyond question, support follows as matter of obligation. (Montefalcon v.
Vasquez, G.R. No. 165016, June 17, 2008, 554 SCRA 513). In short, illegitimate children are
entitled to support and successional rights but their filiation must be duly proved. (De la Puerta
v. CA, G.R. No. 77867, February 6, 1990, 181 SCRA 861; Dolina v. Vallecera, G.R. No. 182367,
December 15, 2010).
Q In a complaint for support alleging that a child is an illegitimate child
of the alleged father, the bases were the record of birth although
unsigned by the alleged father and the baptismal certificate identifying
the alleged father, as the father of the child without the signature of the
alleged father. The RTC granted the support based on those documents. Is
the decision correct? Why?
Answer: No, because the two (2) documents are not proofs of filiation. Before a child may be
entitled to support, he must be recognized by the alleged father. Time and again, this Court has
ruled that a high standard of proof is required to establish paternity and filiation. An order for x x
x support may create an unwholesome situation or may be an irritant to the family or the lives of
the parties so that it must be issued only if paternity or filiation is established by clear and
convincing evidence.
The Rules for establishing filiation are found in Articles 172 and 175 of the Family Code. One
such proof is the record of birth appearing in the civil register, Article 172(1) and any other
means allowed by the Rules of Court and special laws, (Art. 172(2)(2), Family Code.
It is settled that [a] certificate of live birth purportedly identifying the putative father is not
competent evidence of paternity when there is no showing that the putative father had a hand in
the preparation of said certificate.
The baptismal certificate is not a good proof paternity. Just like in a birth certificate, the lack of
participation of the supposed father in the preparation of a baptismal certificate renders this
document incompetent to prove paternity. And while a baptismal certificate may be considered
a public document, it can only serve as evidence of the administration of the sacrament on the
date specified but not the veracity of the entries with respect to the childs paternity. Thus, x x x

baptismal certificates are per se inadmissible in evidence as proof of filiation and they cannot be
admitted indirectly as circumstantial evidence. (Antonio Perla v. Mirasol Baring, et al., G.R. No.
172471, November 12, 2012, Brion, J; See: Gotardo v. Buling, G.R. No. 165166, August 15,
2010, Brion, J).
PROPERTY
Oral partition is invalid.
Q A, B, and C are the co-owners of a real property having inherited from
their parents. They orally partitioned the same. Is the agreement valid?
Explain.
Answer: Yes. The validity of an oral partition is already well-settled. It is not required that the
partition agreement be registered or annotated in the title to be valid. After exercising acts of
ownership over their respective portions of the contested estate, they are estopped from
denying the existence of an oral partition.
Regardless of whether a parol partition or agreement to partition is valid or enforceable at law,
equity will in proper cases, where the parol partition has actually been consummated by the
taking of possession in severalty and the exercise of ownership by the parties of their respective
portions set off to each other, recognize and enforce such parol partition and the rights of the
parties thereunder. (Hernandez v. Andal, 78 Phil. 196 (1947); Tan v. Lim, G.R. No. 128004,
September 25, 1998, 296 SCRA 445; Notarte, et al. v. Notarte, G.R. No. 180614, August 29,
2012).
Existence of partnership necessary in cases of partition.
Q Parties lived together as husband and wife without the benefit of
marriage despite the fact that respondent was legally married. During
their coverture, they were able to organize a manpower services company
where petitioner owned 3.33%. Five (5) properties were acquired by them
and registered under their names ostensibly as husband and wife. But the
relationship did not last long, hence, they agreed to divide the properties.
Petitioner demanded for some more, but respondent refused, hence, an
action for partition was filed. Respondent contended that the properties
were acquired out of his personal funds. At the trial, petitioner admitted
that the properties were acquired from the income of the manpower
services company, hence, the RTC ruled that respondent was the sole
owner. On appeal, she contended that she was a pro indiviso owner of
one-half of the properties and that the courts decision subjected the
certificates of title to collateral attack. She further contended that it is
improper to thresh out the issue on ownership in an action for partition.
Decide.
Answer: The contentions are not correct. The determination as to the existence of co-ownership
is necessary in the resolution of an action for partition. (Municipality of Bian v. Garcia, G.R.
No. 69260, December 22, 1989, 180 SCRA 576).
While it is true that the complaint involved here is one for partition, the same is premised on the
existence or non-existence of co-ownership between the parties. Petitioner insists she is a coowner pro indiviso of the five real estate properties based on the transfer certificates of title
(TCTs) covering the subject properties. Respondent maintains otherwise. Indubitably, therefore,
until and unless this issue of co-ownership is definitely and finally resolved, it would be

premature to effect a partition of the disputed properties. (Fabrica v. CA, 146 SCRA 250
(1986). More importantly, the complaint will not even lie if the claimant, or petitioner in this case,
does not even have any rightful interest over the subject properties. (Catapusan v. CA, G.R. No.
109262, November 21, 1996, 264 SCRA 534; Betty Lacbayan v. Bayani Samoy, Jr., G.R. No.
165427, March 21, 2011).
Action publiciana or reinvindicatoria is the remedy if a property is
encroached upon.
Q In a case, there was a complaint for a writ of demolition filed by the
owners of a property alleging that they discovered that their lot was
encroached upon by the structures built by the adjacent owner without
their knowledge and consent. Such encroachment was confirmed by the
relocation survey of the property. Despite demands, the other party
refused to remove the structures hence, the complaint was filed. The trial
court rendered a judgment in favor of the plaintiff directing the removal of
the structures. The CA reversed holding that a complaint for recovery of
possession should have been filed. The writ of demolition can be granted
only as an effect of a final judgment or order hence, dismissed the same.
Is the dismissal correct? Why?
Answer: No. While inaccurately captioned as an action for a Writ of Demolition with Damages
is in reality an action to recover a parcel of land or an accion reivindicatoria under Article 434 of
the Civil Code which provides that in 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 defendants
claim. Accion reivindicatoria seeks the recovery of ownership and includes the jus utendi and
the jus fruendi brought in the proper regional trial court. Accion reivindicatoria is an action
whereby plaintiff alleges ownership over a parcel of land and seeks recovery of its full
possession. (Javier v. Veridiano II, G.R. No. 48050, 10 October 1994, 237 SCRA 565; Sps.
Elegio and Dolia Caezo v. Sps. Bautista, G.R. No. 170189, September 1, 2010).
DONATION
Designation of donation as mortis causa is not controlling.
Q There was a donation by the spouses to their children and
granddaughter denominated as Donation Mortis Causa stating that it is
irrevocable. It had no attestation clause, and had only two (2) witnesses.
The donees accepted the donation. After the death of one of the donors,
the donation was submitted to probate but the RTC ruled it to be a
donation inter vivos due to its irrevocability. The CA, on appeal, ruled it to
be one of mortis causa and since it did not comply with the formalities of
a will, it is void. Is the ruling of the CA correct? Why?
Answer: No. The designation that it is a Donation Mortis Causa is not controlling. If a donation
by its terms is inter vivos, this character is not altered by the fact that the donor styles it mortis
causa. (Concepcion v. Concepcion, 91 Phil. 823 (1952)).
In Austria-Magat v. Court of Appeals, 426 SCRA 263 (2002), it was held that irrevocability is a
quality absolutely incompatible with the idea of conveyances mortis causa, where revocability
is precisely the essence of the act. A donation mortis causa has the following characteristics:

1. It conveys no title or ownership to the transferee before the death of the transferor; or, what
amounts to the same thing, that the transferor should retain the ownership (full or naked) and
control of the property while alive;
2. That before his death, the transfer should be revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of a reserved power in the donor to dispose
of the properties conveyed; and
3. That the transfer should be void if the transferor should survive the transferee. (Aluad v.
Aluad, G.R. No. 176943, October 17, 2008, 569 SCRA 697; Del Rosario v. Ferrer, et al., G.R.
No. 187056, September 20, 2010).
Since the donation in this case was one made inter vivos, it was immediately operative and
final. The reason is that such kind of donation is deemed perfected from the moment the donor
learned of the donees acceptance of the donation. The acceptance makes the donee the
absolute owner of the property donated. (Heirs of Sevilla v. Sevilla, 450 SCRA 598 (2003)).
Donation inter vivos; when is it one.
Q The petitioner filed an action to recover a property claiming that they
purchased it from Casimiro Vere in July 1971, who bought it from Alvegia
Rodrigo in August 1970. The respondents answered and claimed that they
purchased the property from Eufracia Rodriguez to whom Rodrigo donated
in May 1965. The deed of donation stated among others:
(1)
a property was given to the done, his heirs and successors;
(2)
the Deed of Donation or that ownership be vested on her upon my
demise.
(3)
if the Donee predeceases me, the same land will not be reverted to
the Donor, but will be inherited by the heirs of EUFRACIA RODRIGUEZ;
(4)
The done accepted the land donated;
What is the nature of the donation? Explain.
Answer: It is immediately apparent that Rodrigo passed naked title to Rodriguez under a
perfected donation inter vivos. First. Rodrigo stipulated that if the Donee predeceases me, the
[Property] will not be reverted to the Donor, but will be inherited by the heirs of x x x Rodriguez,
signaling the irrevocability of the passage of title to Rodriguezs estate, waiving Rodrigos right
to reclaim title. This transfer of title was perfected the moment Rodrigo learned of Rodriguezs
acceptance of the disposition (Art. 734, NCC) which, being reflected in the Deed, took place on
the day of its execution on 3 May 1965. Rodrigos acceptance of the transfer underscores its
essence as a gift in presenti, not in futuro, as only donations inter vivos need acceptance by the
recipient. (Alejandro v. Geraldez, 168 Phil 404; Concepcion v. Concepcion, 91 Phil. 823; Laureta
v. Mata, 44 Phil. 668). Indeed, had Rodrigo wished to retain full title over the property, she could
have easily stipulated, as the testator did in another case, that the donor, may transfer, sell, or
encumber to any person or entity the properties here donated x x x (Puig v. Peaflorida) or
used words to that effect. Instead, Rodrigo expressly waived title over the Property in case
Rodriguez predeceases her. (Gonzalo Villanueva represented by his heirs v. Sps. Branoco, G.R.
No. 172804, January 24, 2011).
NUISANCE
A structure if declared illegal does not mean it is a nuisance per se.
Q MMDA claimed that the wing walls of a building constructed by Justice
Gancayco on his property was a nuisance per se. In 1996 the City Council

gave him an exemption from constructing an arcade. Is it a nuisance per

se? Why?
Answer: No. The fact that he was given an exemption from constructing an arcade is an
indication that the wing walls of the building are not nuisance per se. The wing walls do not per
se immediately and adversely affect the safety of persons and property. The fact that an
ordinance may declare a structure illegal does not necessarily make that structure a nuisance.
Article 694 of the Civil Code defines nuisance as any act, omission, establishment, business,
condition or property, or anything else that (1) injures or endangers the health or safety of
others; (2) annoys or offends the senses; (3) shocks, defies or disregards decency or morality;
(4) obstructs or interferes with the free passage of any public highway or street, or any body of
water; or, (5) hinders or impairs the use of property. A nuisance may be per se or per
accidens. A nuisance per se is that which affects the immediate safety of persons and property
and may summarily be abated under the undefined law of necessity. (Tolentino v. Bustamante,
G.R. No. 182567, July 13, 2009, 592 SCRA 552; Tayabas v. People, 517 SCRA 448 (2007)).
Clearly, when Justice Gancayco was given a permit to construct the building, the city council or
the city engineer did not consider the building, or its demolished portion, to be a threat to the
safety of persons and property. This fact alone should have warned the MMDA against
summarily demolishing the structure. (Emilio Gancayco v. City Govt. of Quezon City, et al., G.R.
No. 177807; MMDA v. Gancayco, G.R. No. 177933, October 11, 2011).
SUCCESSION
Effect if will provides for indivision of property among heirs; contrary to
public policy.
Q The will of Basilio Santiago stated that a house and lot in the City of
Manila shall be transferred in the names of Maria Pilar and Clemente, the
children, for purposes of administration only but no one shall be the
owner of the same. Is the condition in the will valid? Why?
Answer: No, it is contrary to law and public policy. When a will provides for indivision of a
property, it is subject to statutory limitation as the law provides that the prohibition to divide a
property in a co-ownership can only last for twenty (20) years. (Arts. 494, 870 and 1083, NCC).
While the Civil Code is silent as to the effect of the indivision of a property for more than 20
years, it would be contrary to public policy to sanction co-ownership beyond the period
expressly mandated by the Civil Code. (In Re: Petition for Probate of Last Will & Testament of
Basilio Santiago, Ma. Pilar Santiago, et al. v. Zoilo Santiago, et al., G.R. No. 179859, August 9,
2010).
Forgetfulness is not equivalent to being unsound mind.
Q After the will was admitted to probate, petitioners appealed and
contended that the testator was magulyan or forgetful, so much so that
it effectively stripped her of her testamentary capacity. She was likewise
suffering from paranoia. Petitioners, however, did not present medical
evidence to show that she was of unsound mind. There was no showing
that she was one month or less, before making the will, she was publicly
known to be insane. Is the admission of the will to probate correct?
Explain.
Answer: Yes. The state of being forgetful does not necessarily make a person mentally unsound
so as to render him unfit to execute a will. (Torres & Lopez de Bueno v. Lopez, 48 Phil. 772

(1926); Sancho v. Abella, 728 Phil. 728 (1933)). Forgetfulness is not equivalent to being of
unsound mind. Besides, Article 799 of the New Civil Code states that to be of sound mind, it is
not necessary that the testator be in full possession of all his reasoning faculties, or that his
mind be wholly unbroken, unimpaired, or unshattered by disease, injury or other cause. It shall
be sufficient if the testator was able at the time of making the will to know the nature of the
estate to be disposed of, the proper objects of his bounty, and the character of the testamentary
act.
The testimony of subscribing witnesses to a will concerning the testators mental condition is
entitled to great weight where they are truthful and intelligent. More importantly, a testator is
presumed to be of sound mind at the time of the execution of the will (Art. 800, NCC) and the
burden to prove otherwise lies on the oppositor. Article 800 of the New Civil Code states:
The burden of proof to show that the testator was of unsound mind at the time of the execution
of the will lies in the oppositors. (Baltazar, et al. v. Laxa, G.R. No. 174489, April 11, 2012, Del
Castillo, J).
PRESCRIPTION
10-year prescriptive period for reconveyance does not apply if the
contract is void.
Q - There was an application for a renewal and increase in their loan using
a title but the bank disapproved it without returning the title. Yet, there
was foreclosure and sale of the property. Title was issued. The owner filed
an action for reconveyance. The bank contended that it has already
prescribed since 30 years have already lapsed. Is the contention correct?
Why?
Answer: No. The prescriptive period for the reconveyance of fraudulently registered real
property is ten (10) years from the date of the issuance of the certificate of title. But while this is
true, the 10-year prescriptive period applies only when the reconveyance is based on fraud
which makes a contract voidable (and that the aggrieved party is not in possession of the land
whose title is to be actually reconveyed). It does not apply to an action to nullify a contract which
is void ab initio. Article 1410 of the Civil Code categorically states that an action for the
declaration of the inexistence of a contract does not prescribe. (Abalos, et al. v. Sps. Darapa,
G.R. No. 164693, March 23, 2011).
In this case, the action was an action for Annulment of Tile, Recovery of Possession and
Damages, grounded on the theory that the DBP foreclosed their land covered by TCT No. T1,997 without any legal right to do so, rendering the sale and the subsequent issuance of TCT in
DBPs name void ab initio and subject to attack at any time conformably to the rule in Article
1410 of the Civil Code.
OBLIGATIONS AND CONTRACTS
Rescission is the remedy for reparation of the damage done.
Q After the death of their predecessor-in-interest, the heirs became the
co-owners of several parcels of land. Some of them took possession of the
properties hence, there was a complaint for partition filed by one of the
heirs as the other refused to partition the properties. While the action was
pending, one of them donated a property belonging to the co-ownership
to one of her nephews, without approval of the court, hence, after
learning that there was a Donation Inter Vivos, they filed a Supplemental

Pleading praying that the donation be rescinded in accordance with Article

1381(4) of the Civil Code. The donee opposed the Supplemental Pleading
contending that rescission under Article 1384(1), NCC applies only when
there is already a prior judicial decree on who between the contending
parties actually owned the properties under litigation. The RTC ordered
the rescission of the deed of donation as it was done without the
knowledge and approval of the other parties or plaintiffs or the Court. On
appeal, the CA reversed the judgment on the ground that before an action
for rescission may be filed there must first be a judicial determination that
the same actually belonged to the estate of the donor. Hence, the petition
raising such issue. Decide.
Answer: Rescission is a remedy granted by law to the contracting parties and even to third
persons, to secure the reparation of damages caused to them by a contract, even if it should be
valid, by means of the restoration of things to their condition at the moment prior to the
celebration of said contract. It is a remedy to make ineffective a contract, validly entered into
and therefore obligatory under normal conditions, by reason of external causes resulting in a
pecuniary prejudice to one of the contracting parties or their creditors. Contracts which are
rescissible are valid contracts having all the essential requisites of a contract, but by reason of
injury or damage caused to either of the parties therein or to third persons are considered
defective and, thus, may be rescinded.
The assertion that rescission may only be had after the RTC had finally determined that the
parcels of land belonged to the estate of Spouses Baylon does not intrinsically amiss. The
petitioners right to institute the action for rescission pursuant to Article 1381(4) of the Civil Code
is not preconditioned upon the RTCs determination as to the ownership of the said parcels of
land.
The right to ask for the rescission of a contract under Article 1381(4) of the Civil Code is not
contingent upon the final determination of the ownership of the thing subject of litigation. The
primordial purpose of Article 1381(4) of the Civil Code is to secure the possible effectivity of the
impending judgment by a court with respect to the thing subject of litigation. It seeks to protect
the binding effect of a courts impending adjudication vis--vis the thing subject of litigation
regardless of which among the contending claims therein would subsequently be upheld.
Accordingly, a definitive judicial determination with respect to the thing subject of litigation is not
a condition sine qua non before the rescissory action contemplated under Article 1381(4) of the
Civil Code may be instituted.
Moreover, conceding that the right to bring the rescissory action pursuant to Article 1381(4) of
the Civil Code is preconditioned upon a judicial determination with regard to the thing subject
litigation, this would only bring about the very predicament that the said provision of law seeks
to obviate. Assuming arguendo that a rescissory action under Article 1381(4) of the Civil Code
could only be instituted after the dispute with respect to the thing subject of litigation is judicially
determined, there is the possibility that the same may had already been conveyed to third
persons acting in good faith, rendering any judicial determination with regard to the thing subject
of litigation illusory. Surely, this paradoxical eventuality is not what the law had envisioned. (Lilia
Ada, et al. v. Florante Baylon, G.R. No. 182435, August 13, 2012, Reyes, J).
Provision in contract of lease granting the lessee exclusive right to renew;
valid; principle of mutuality of contracts.

Q The parties entered into a lease contract over a parcel of land granting
unto the lessee the exclusive option to renew the contract subject to the
condition that it should comply with a 60-day notice of the intention to
exercise the option to renew the contract which the lessee did. The lessor
refused to renew the contract, hence, a complaint to compel the lessor to
renew it was filed. The lessor argued that the renewal of the contract
cannot be made to depend upon the sole will of the lessee, otherwise, the
same would be void for being a potestative condition. Will the action
prosper? Why?
Answer: Yes, because of the principle of mutuality of contracts.
An express agreement which gives the lessee the sole option to renew the lease is frequent and
subject to statutory restrictions, valid and binding on the parties. This option, which is provided
in the same lease agreement, is fundamentally part of the consideration in the contract and is
no different from any other provision of the lease carrying an undertaking on the part of the
lessor to act conditioned on the performance by the lessee. It is a purely executory contract and
at most confers a right to obtain a renewal if there is compliance with the conditions on which
the right is made to depend. The right of renewal constitutes a part of the lessee's interest in
the land and forms a substantial and integral part of the agreement.
The fact that such option is binding only on the lessor and can be exercised only by the lessee
does not render it void for lack of mutuality. After all, the lessor is free to give or not to give the
option to the lessee. And while the lessee has a right to elect whether to continue with the lease
or not, once he exercises his option to continue and the lessor accepts, both parties are
thereafter bound by the new lease agreement. Their rights and obligations become mutually
fixed, and the lessee is entitled to retain possession of the property for the duration of the new
lease, and the lessor may hold him liable for the rent therefor. The lessee cannot thereafter
escape liability even if he should subsequently decide to abandon the premises. Mutuality
obtains in such a contract and equality exists between the lessor and the lessee since they
remain with the same faculties in respect to fulfillment. (MIAA v. Ding Velayo Sports Center, Inc.,
G.R. No. 161718, December 14, 2011).
Foreclosure of mortgage void for lack of demand; no default.
Q An obligation was contracted secured by a mortgage, but it was
foreclosed even as there was no demand for payment. What was done was
for GMC to request the debtors to go to their office and discuss the
settlement of their account. Thereafter, GMC proceeded to foreclose the
mortgage. There was no provision on extrajudicial foreclosure of the
mortgage without need of demand. When it was foreclosed, the
mortgagor contended that it was void. Is the foreclosure valid? Why?
Answer: No, because there was no delay. There are three requisites necessary for a finding of
default. First, the obligation is demandable and liquidated; second, the debtor delays
performance; and third, the creditor judicially or extrajudicially requires the debtors
performance.
As the contract carries no such provision on demand not being necessary for delay to exist,
GMC should have first made a demand on the spouses before proceeding to foreclose the real
estate mortgage. The act of asking to go to the office for a possible settlement of the account is
not the demand required.

In Development Bank of the Philippines v. Licuanan it was ruled that demand made before the
foreclosure is effected is essential. If demand was made and duly received by the respondents
and the latter still did not pay, then they were already in default and foreclosure was
proper. However, if demand was not made, then the loans had not yet become due and
demandable. This meant that respondents had not defaulted in their payments and the
foreclosure by petitioner was premature. Foreclosure is valid only when the debtor
is in default in the payment of his obligation. (G.R. No. 150097, February 26, 2007,
516 SCRA 644; General Milling Corp. v. Sps. Ramos, G.R. No. 193723, July 20, 2011).
Substantial breach, like sale of property within the prohibitory period is a
ground for rescission.
Q NHA sought to rescind the sale made by housing beneficiaries of a
property they bought from it within the prohibited period of five (5) years
from the date of release of the mortgage without prior written consent of
the NHA. The beneficiaries sold the same to their son, within the
prohibitory period. The beneficiaries contended that as owners, they have
the right to dispose of the same. Is the sale valid? Why?
Answer: No. The resale without the NHAs consent is a substantial breach, hence, void.
The restriction clause is more of a condition on the sale of the property to the beneficiaries
rather than a condition on the mortgage constituted on it. Indeed, the prohibition against resale
remained even after the land had been released from the mortgage. The five-year restriction
against resale, counted from the release of the property from the NHA mortgage, measures out
the desired hold that the government felt it needed to ensure that its objective of providing
cheap housing for the homeless is not defeated by wily entrepreneurs.
The essence of the governments socialized housing program is to preserve the beneficiarys
ownerships for a reasonable length of time, here at least within five years from the time he
acquired it free from any encumbrance. (Lalicon, et al. V. NHA, G.R. No. 185440, July 1, 2011).
Period to file action for rescission under Article 1191, NCC.
Q It was claimed that under Article 1389 of the Civil Code the action to
claim rescission must be commenced within four years from the time of
the commission of the cause for it. The NHA filed the action after four (4)
years, hence, the contention is that it has already prescribed. Is the
contention correct? Why?
Answer: No. NHA sought annulment/rescission of the sale because they violated the five-year
restriction against such sale provided in their contract. Such violation comes under Article 1191
where the applicable prescriptive period is that provided in Article 1144 which is 10 years from
the time the right of action accrues. The NHAs right of action accrued on February 18, 1992
when it learned of the forbidden sale of the property. Since the NHA filed its action for
annulment of sale on April 10, 1998, it did so well within the 10-year prescriptive
period. (Lalicon, et al. V. NHA, G.R. No. 185440, July 1, 2011).
STATUTE OF FRAUDS
Statute of frauds is inapplicable if oral compromise has been performed.
Q The property of the respondent was declared condemned for public
use to expand the Lahug International Airport. On appeal, there was a
compromise to stop the respondent from pursuing with the appeal, but
with an oral assurance that if the purpose would not be pursued, the

property would be resold to him. The public use was not pursued, hence,
there was a demand for the resale of the property, especially so that it
has been converted to a commercial area, but the petitioner contended
that it is not bound by the oral assurance that it would be resold, using
the Statute of Frauds as defense. Is the defense proper? Why?
Answer: No. The Statute of Frauds operates only with respect to executory contracts, and does
not apply to contracts which have been completely or partially performed. The reason is that, in
executory contracts there is a wide field for fraud because unless they be in writing there is no
palpable evidence of the intention of the contracting parties. The statute has precisely been
enacted to prevent fraud. However, if a contract has been totally or partially performed, the
exclusion of parol evidence would promote fraud or bad faith, for it would enable the defendant
to keep the benefits already delivered by him from the transaction in litigation, and, at the same
time, evade the obligations, responsibilities or liabilities assumed or contracted by him thereby.
(Mactan-Cebu International Airport Authority v. Tudtud, G.R. No. 174012, November 14, 2008,
571 SCRA 165).
The Statute of Frauds cannot apply, the oral compromise settlement having been partially
performed. By reason of such assurance made in their favor, respondents relied on the same
by not pursuing their appeal before the CA. (Mactan-Cebu International Airport Authority, et al. v.
Lozada, Sr., et al., G.R.No. 176625, February 25, 2010).
Effect if document states that there was consideration, but no money was
involved.
Q The contract provided for a consideration of P2,000.00 in the sale of 6
parcels of land, but no money was involved. Is the sale valid? Why?
Answer: No, it is void, for, while it appears to be supported by a valuable consideration, there
was no money involved in the sale, hence, a simulated contract, which is void.
It is well-settled that where a deed of sale states that the purchase price has been paid but in
fact has never been paid, the deed of sale is null and void for lack of consideration. (Montecillo
v. Reyes, 434 Phil. 456 (2002)). Thus, although the contract states that the purchase price of
P2,000.00 was paid to the seller for the subject properties, it has been proven that such was
never in fact paid as there was no money involved. It must, therefore, follow that the Deed of
Sale is void for lack of consideration. (Heirs of Policronio Ureta, Sr., et al. v. Heirs of Liberato
Ureta, et al., G.R. No. 165748).
Even third persons may file an action for nullity if they directly affected.
Q In a case, the heirs of an owner of a property whose signature was
forged in a contract of sale filed an action to declare it void. It was
contended that since the heirs of a party were not privies to the contract
of sale, they have no personality to question its validity. It was further
contended that defense of illegality of a contract is not available to third
persons whose interests are not directly affected (Art. 1421, NCC). Is the
contention correct? Why?
Answer: No. Article 1311 and Article 1421 of the Civil Code provide that contracts take effect
only between the parties, their assigns and heirs, x x x and the defense of illegality of contracts
is not available to third persons whose interests are not directly affected, respectively.
The right to set up the nullity of a void or non-existent contract is not limited to the parties, as in
the case of annullable or voidable contracts; it is extended to third persons who are directly

affected by the contract. Thus, where a contract is absolutely simulated, even third persons who
may be prejudiced thereby may set up its inexistent. (Arsenal v. IAC, 227 Phil. 36 (1986)). In this
case, the parties are not strangers to the parties to the contract, but heirs, hence, they have the
right to question the same. (Heirs of Ureta, Sr., et al. v. Heirs of Ureta, et al., G.R. No. 165748,
and other cases, September 14, 2011).
A forged deed is a nullity; it passes no right; it is held in trust.
Q In a case, the heirs of a decedent sought the annulment or nullity of a
deed of extrajudicial settlement and sale upon a claim that the signatures
of some of the heirs had been falsified and that the remaining signatories
could not have signed the deed as they were already dead. May the action
prosper? Why?
Answer: Yes, because the deed is void, for lack of consent, hence, subject to attack anytime. It
is recognized in our jurisprudence that a forged deed is a nullity and conveys no title. An action
to declare the inexistence of a void contract does not prescribe.
When there is a showing of such illegality, the property registered is deemed to be simply held
in trust for the real owner by the person in whose name it is registered, and the former then has
the right to sue for the reconveyance of the property. The action for the purpose is also
imprescriptible, and as long as the land wrongfully registered under the Torrens system is still in
the name of the person who caused such registration, an action in personam will lie to compel
him to reconvey the property to the real owner.
While a certificate of title was issued in respondents favor, such title could not vest upon them
ownership of the entire property; neither could it validate a deed 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. (Sps. Fernando, et al. v.
Fernando, G.R. No. 191889, January 31, 2011)
ESTOPPEL
Tenant cannot deny the title of the lessor due to estoppel; exception.
Q There was a contract of lease over a property but the lessor did not
inform the lessee that there was a mortgage over the property subject of
the lease contract. For failure of the lessor to pay the loan, the bank
foreclosed the mortgage and eventually the property was transferred to
the bank. For failure to pay the rentals, demand was made to pay and
vacate, but the lessee contended that since the lessor was no longer the
owner, he had not right to sue for ejectment. The lessor contended that
the lessee is stopped from questioning the title of the lessor. Is the
contention of the lessee correct? Explain.
Answer: Yes. The conclusive presumption found in Sec. 2(b), Rule 131 of the Rules of Court
known as estoppel against tenants provides the tenant is not permitted to deny the title of his
landlord at the time of the commencement of the relation of landlord and tenant between them.
The rule is not absolute.
What a tenant is estopped from denying x x x is the title of his landlord at the time of the
commencement of the landlord-tenant relation. If the title asserted is one that is alleged to have
been acquired subsequent to the commencement of that relation, the presumption will not
apply. Hence, the tenant may show that the landlords title has expired or been conveyed to

another or himself; and he is not estopped to deny a claim for rent, if he has been ousted or
evicted by title paramount.
It is true that the tenant cannot assert ownership of the property by a third person. However, a
tenant in proper cases such as this, may show that the landlords title has been conveyed to
another. In order to do this, the tenant must essentially assert that title to the leased premises
already belongs to a third person who need not be a party to the ejectment case, as what the
tenant did in this case. (Enrico Santos v. National Statistic Office, G.R. No. 171129, April 6,
2011).
TRUST
Fraudulent acquisition of property; same held in trust; action for
reconveyance; except if passed to an innocent purchaser for value.
Q A property was wrongfully included in the title of another. The titled
owner even acknowledged such error. The owner filed an action to recover
the erroneously included property. He alleged that he was in possession of
the property all the time even if registered under the name of the other
party, who contended that the action has already prescribed. Will the
action prosper? Why?
Answer: Yes, because he is holding it under the rule of implied trust for the benefit of the true
owner. Under Article 1456, NCC, 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.
The party thus aggrieved has the right to recover his or their title over the property by way of
reconveyance while the same has not yet passed to an innocent purchaser for value. (Huang v.
A, 236 SCRA 420 (1994)).
The contention that he action has already prescribed because of the lapse of ten (10) years is
not correct. An action for reconveyance of registered land based on implied trust prescribes in
ten (10) years, the point of reference being the date of registration of the deed or the date of the
issuance of the certificate of title over the property. The ten-year prescriptive period applies only
when the person enforcing the trust is not in possession of the property, the right to seek
reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason
is that the one who is in actual possession of the land claiming to be its owner may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right.
(Fernando, Jr., et al. v. Acua, et al., G.R. No. 161030, September 30, 2010).
SALES
Q In a foreclosure sale of a property worth P5M, it was sold for only
P900,000.00. It was contended that the sale is void. is the contention
correct? Why?
Answer: No. Unlike in an ordinary sale, inadequacy of the price at a forced sale is immaterial
and does not nullify a sale since, in a forced sale, a low price is more beneficial to the mortgage
debtor for it makes redemption of the property easier. (New Sampaguita Builders Construction,
Inc. v. PNB, 479 Phil. 453 (2004); The National Loan and Investment Board v. Meneses, 67 Phil.
498 (1939)). The fact that a property is sold at public auction for a price lower than its alleged
value, is not of itself sufficient to annul said sale, where there has been
strict compliance with all the requisites marked out by law to obtain the
highest possible price, and where there is no showing that a better price

is obtainable. (Government of the Philippines vs. De Asis, G. R. No. 45483, April 12,
1939; Guerrero vs. Guerrero, 57 Phil., 442; La Urbana vs. Belando, 54 Phil., 930; Bank of the
Philippine Islands v . Green, 52 Phil., 491; Hulst v. PR Builders, Inc., G.R. No. 156364,
September 3, 2007, 532 SCRA 747; Bank of PI v. Reyes, G.R. No. 182769, February 1, 2012).
Written notice to prospective redemption is mandatory.
Q The owner of a real property offered the sale to the adjoining owners
and one of them agreed to the sale to take place after the harvest season.
But he later sold the same to another. The heirs of one of the adjoining
owners learned about the sale a day after it was sold and conveyed their
intention to redeem the property but the seller answered, saying that
there was already a contract of sale executed with the buyer and that
they never tendered the redemption amount. A complaint for legal
redemption was filed but it was opposed on the ground that he complied
with the requirement of notice under Article 1623, NCC but they failed to
exercise the right of redemption. There was likewise no need to comply
with the written notice requirement since they already knew of the sale. Is
the contention correct? Why?
Answer: No, because of the lack of written notice to the prospective redemption. (Art. 1623,
NCC). Such written notice is mandatory. Without a written notice, the period of thirty days within
which the right of legal pre-emption may be exercised, does not start.
The indispensability of a written notice had long been discussed in the early case of Conejero v.
Court of Appeals, 123 Phil. 695 (1966) where the SC said that such notice is indispensable, and
that, in view of the terms in which Article of the Philippine Civil Code is couched, mere
knowledge of the sale, acquired in some other manner by the redemptioner, does not satisfy the
statute. The written notice was obviously exacted by the Code to remove all uncertainty as to
the sale, its terms and its validity, and to quiet any doubts that the alienation is not definitive.
The statute not having provided for any alternative, the method of notification prescribed
remains exclusive. (Barcellano v. Banas, et al., G.R. No. 165287, September 14, 2011).
Obligation of seller to transfer ownership.
Q There was contract of sale where the seller sold properties in a
manner absolute and irrevocable requiring the buyer to pay P415,000.00
upon the execution of the deed of sale with the balance payable directly
to the mortgagee bank within a reasonable time. Nothing in the contract
showed that the seller reserved the right of ownership. There was a
conflict between the buyer and seller since the seller sold it again on the
contention that the first contract was a contract to sell. The buyer
contended that it was a contract of absolute sale. Whose contention is
correct? Why?
Answer: The contention of the buyer is correct that it is a contract of absolute sale. The terms
and conditions of the contract only affected the manner of payment, not the immediate transfer
of ownership upon the execution of the notarized contract. The terms and conditions pertained
to the performance of the contract and not the perfection therefore or the transfer of ownership.
Settled is the rule that the seller is obliged to transfer title over the properties and deliver the
same to the buyer. In this regard, Article 1498 of the Civil Code provides that, as a rule, the

execution of a notarized deed of sale is equivalent to the delivery of a thing sold. (De Leon v.
Ong, G.R. No. 170405, February 2, 2010).
Mirror doctrine once again applied.
Q Real properties were sold by Ines Ouano to Salvador Cobarde although
the same was never registered and titles were never obtained by the
latter. Cobarde made representations that he owned the lots and sold the
same to Cabigas, although no title was shown to him. Ouano sold the lots
to National Airport Authority for the use of the Cebu-Lahug Airport but
when the use fell, Ouanos heirs were able to get back the properties.
After obtaining titles, they sold the same to several buyers. The heirs of
Cabigas sought to recover the properties, alleging that their predecessor
bought the properties from Cobarde. They never alleged that NAA was in
bad faith in purchasing the same from Ouano. Are the heirs of Cabigas
entitled to recover the properties from the buyers from NAA? Why?
Answer: No, because their predecessors in-interest are not buyers in good faith and for value.
At the time of the sale to the Cabigas spouses, however, the land was registered not in
Cobardes name, but in Ouanos name. By itself, this fact should have put the Cabigas spouses
on guard and prompted them to check with the Registry of Deeds as to the most recent
certificates of title to discover if there were any liens, encumbrances, or other attachments
covering the lots in question. In Abad v. Sps. Guimba, it was said that the law protects to a
greater degree a purchaser who buys from the registered owner himself. Corollarily, its requires
a higher degree of prudence from one who buys from a person who is not the registered owner,
although the land object of the transaction is registered. While one who buys from the registered
owner does not need to look behind the certificate of title, one who buys from one who
is not the registered owner is expected to examine not only the certificate
of title but all factual circumstances necessary for one to determine if
there are any flaws in the title of the transferor, or in the capacity to transfer the
land. (503 Phi. 321, (2005); Revilla v. Galindez, 07 Phil. 480 (1960)).
Instead, the Cabigas spouses relied completely on Cobardes representation that he owned the
properties in question, and did not even bother to perform the most perfunctory of investigations
by checking the properties titles with the Registry of Deeds. Had the Cabigas spouses only
done so, they would easily have learned that Cobarde had no legal right to the properties they
were acquiring since the lots had already been registered in the name of the National Airports
Corporation in 1952. Their failure to exercise the plain common sense expected of real estate
buyers bound them to the consequences of their own inaction. (Heirs of Nicolas Cabigas, et al.
v. Limbaco, et al., G.R. No. 175291, July 27, 2011).
Execution of public instrument is equivalent to delivery.
Q The owner of a titled property sold it twice to different buyers. There
was no inscription of both documents, but respondent took possession of
the property, but petitioner did not because of the presence of tenants.
Petitioner however, contended that upon execution of the public
instrument, she already acquired possession and thus, considering that
the execution thereof took place ahead of the actual possession by the
respondent, she has a better right. Is petitioner correct? Why?

Answer: No. Indeed, the execution of a public instrument shall be equivalent to the delivery of
the thing that is the object of the contract. However, the execution of a public instrument gives
rise only to a prima facie presumption of delivery. It is deemed negated by the failure of the
vendee to take actual possession of the land sold. (Ten Forty Realty & Dev. Corp. v. Cruz, 457
Phil. 603 (2003)).
Admittedly, the two sales were not registered with the Registry of Property. Since there was no
inscription, the next question is who, between petitioner and respondent, first took possession of
the subject property in good faith. As aptly held by the trial court, it was respondent who took
possession of the subject property and, therefore, has a better right. (Beatingo v. Gasis, G.R.
No. 179641, February 9, 2011).
LEASE
Extension of lease cannot be done if lessee committed grounds for
ejectment; extension is a matter of equity.
Q The lessee failed to pay the rentals for fourteen (14) months. Yet, it
was asking the court to extend the lease. Is the contention correct? Why?
Answer: No. In asking for an extension of lease under Article 1687, the lessee lost sight of the
restriction provided in Article 1675 of the Civil Code. It states that a lessee that commits any of
the grounds for ejectment cited in Article 1673, including non-payment of lease rentals and
devoting the leased premises to uses other than those stipulated, cannot avail of the periods
established in Article 1687. (LL & Co. Dev. & Agro-Industrial Corp. v. Huang Chao Chun. 428
Phil. 665 (2002)
Moreover, the extension in Article 1687 is granted only as a matter of equity. The law simply
recognizes that there are instances when it would be unfair to abruptly end the lease contract
causing the eviction of the lessee. It is only for these clearly unjust situations that Article 1687
grants the court the discretion to extend the lease. An extension will only benefit the wrongdoer
and punish the long-suffering property owner. (Lo Chua v. CA, 408 Phil. 877 (2001); Guiang v.
Samano, G.R. No. 50501, April 22, 1991, 196 SCRA 114; Umale, et al. v. ASB Realty Corp.,
G.R. No. 181126, June 15, 2011).
Lease with option to buy.
Q There was a contract of lease with option to buy, the price to be
negotiated and determined at the time the option to purchase is
exercised. The property was however sold to PUP by NDC upon order of
the President. Before however the sale was made, the lessee wrote a
letter to the lessor manifesting the exercise of the option to buy. There
was, however, no action on the offer to buy, hence, the contract expired
without exercising the right. The lessee contended that NDC, the lessor
violated its right of first refusal by the sale of the property to PUP. It was
contended on the other hand by the lessor that since the contract has
already expired, with the right of first refusal not being carried over into
the impliedly renewed contract, there was no violation. Is the contention
correct? Why?
Answer: No, because the right of first refusal was exercised before the contract of lease expired
and before it was sold to PUP by the lessor.
An option is a contract by which the owner of the property agrees with another person that the
latter shall have the right to buy the formers property at a fixed price within a certain time. It is a

condition offered or contract by which the owner stipulates with another that the latter shall have
the right to buy the property at a fixed price within a certain time, or under, or in compliance with
certain terms and conditions; or which gives to the owner of the property the right to sell or
demand a sale. (Eulogio v. Apeles, G.R. No. 167884, January 20, 2009, 576 SCRA 561,
citing Tayag v. Lacson, G.R. No. 134971, March 25, 2004, 426 SCRA 282, 304). It binds the
party, who has given the option, not to enter into the principal contract with any other person
during the period designated, and, within that period, to enter into such contract with the one to
whom the option was granted, if the latter should decide to use the option. (Carcellar v. Court of
Appeals, G.R. No. 124791, February 10, 1999, 302 SCRA 718, 724; Polytechnic Univ. of the
Phils. v. Golden Horizon Realty Corp., G.R. No. 183612; National Dev. Co. v. Golden Horizon
Realty Corp., G.R. No. 184260, March 15, 2010).
Q It was contended that the right of first refusal was not impliedly
renewed when the lease contract expired. Is the contention correct? Why?
Answer: No, because the right was exercised before the contract of lease expired. Hence,
whether it was carried over into the impliedly renewed contract is irrelevant. As the right was still
existing when it was exercised and when the property was sold to PUP, the lessor violated the
right of first refusal.
When a lease contract contains a right of first refusal, the lessor has the legal duty to the lessee
not to sell the leased property to anyone at any price until after the lessor has made an offer to
sell the property to the lessee and the lessee has failed to accept it. Only after the lessee has
failed to exercise his right of first priority could the lessor sell the property to other buyers under
the same terms and conditions offered to the lessee, or under terms and conditions more
favorable to the lessor. (Polytechnic Univ. of the Phils. v. Golden Horizon Realty Corp., G.R. No.
183612; National Dev. Co. v. Golden Horizon Realty Corp., G.R. No. 184260, March 15, 2010).
Q There was a contract of lease with right of first refusal. The lessor
however sold the property to another without offering the property first
to the lessee. Sued, he contended that the right of first refusal provision
is not binding upon him as there was no consideration. Is there a
consideration in the grant of a right of first refusal such that it cannot be
withdrawn at any time? Explain.
Answer: Yes. Basic is the rule that a party to a contract cannot unilaterally withdraw a right of
first refusal that stands upon valuable consideration. It is not correct to say that there is no
consideration for the grant of the right of first refusal if such grant is embodied in the same
contract of lease. Since the stipulation forms part of the entire lease contract, the consideration
for the lease includes the consideration for the grant of the right of first refusal. In entering into
the contract, the lessee is in effect stating that it consents to lease the premises and to pay the
price agreed upon provided the lessor also consents that, should it sell the leased property,
then, the lessee shall be given the right to match the offered purchase price and to buy the
property at that price.
Not even the avowed public welfare or the constitutional priority accorded to education, invoked
by petitioner PUP in the Firestone case, would serve as license for the Court, and any party for
that matter, to destroy the sanctity of binding obligations. While education may be prioritized for
legislative and budgetary purposes, it is doubtful if such importance can be used to confiscate
private property such as the right of first refusal granted to a lessee. (Polytechnic Univ. of the

Phils. v. Golden Horizon Realty Corp., G.R. No. 183612; National Dev. Co. v. Golden Horizon
Realty Corp., G.R. No. 184260, March 15, 2010).
Prohibition against subleasing of land does not include the building
constructed by the lessee.
Q In a lease contract over a parcel of land, the agreement was that the
lessee shall establish a sports center and parking area to ease the parking
congestion at the Domestic Airport. There was an exclusive option to
renew the contract of lease granted to the lessee, but the lessor refused
to renew on the ground that it violated the prohibition against subleasing
of the premises. Is the contention correct? Why?
Answer: No, because the prohibition against subleasing the premises refers only to the subject
property, the land. Being the builder of the improvements on the subject property, said
improvements are owned by it until the turn over to the lessor at the end of the contract. The
lessee was not leasing the improvements from the lessor, thus; then it is not subleasing the
same to third persons. (MIAA v. Ding Velayo Sports Center, Inc., supra.)
When there is implied renewal of a contract of lease.
Q The contract of lease between the parties commenced on January 1,
1997 and expired on December 31, 1997. The lessor did not give a notice
to vacate the premises upon the expiration of the lease and the lessee
continued to possess the same for more than 15 days without objection
from the lessor. The notice to vacate was given only on August 5, 1998.
What is the effect of the inaction of the lessor? Explain.
Answer: By the inaction of the lessor, there can be no inference that it intended to discontinue
the lease contract (Bowe v. CA, G.R. No. 95771, March 19, 1993, 220 SCRA 158). There was
an impliedly renewed contract. An implied new lease or tacita reconcluccion will set in when the
following requisites are found to exist: (a) the term of the original contract of lease has expired;
(b) the lessor has not given the lessee a notice to vacate; (c) the lessee continued enjoying the
thing leased for fifteen days with the acquiescence of the lessor. (Paterno v. CA, 339 Phil. 154
(1997); Samelo v. Manotok Services, Inc., G.R. No. 170509, June 27, 2012, Brion, J).
Q In case of an impliedly renewed contract, the lessee contended that
the period is the same as that of the original. It was contended otherwise
by the lessor. Whose contention is correct? Explain.
Answer: The contention of the lessor is correct. Since the rent is paid on a monthly basis, the
period of lease is considered to be from month to month, in accordance with Article 1687 of the
Civil Code. A lease from month to month is considered to be one with a definite period which
expires at the end of each month upon a demand to vacate by the lessor. (Arquelda v. Phil.
Veterans Bank, 385 Phil. 1200 (2000)). When the lessor sent a notice to vacate to the lessee on
August 5, 1998, the tacita reconduccion was aborted, and the contract is deemed to have
expired at the end of that month. A notice to vacate constitutes an express act on the part of
the lessor that it no longer consents to the continued occupation by the lessee of its property.
(Tagbilaran Integrated Sellers Assn. v. CA, 486 Phil. 386 (2004)). After such notice, the lessees
right to continue in possession ceases and her possession becomes one of detainer. (Lim v. CA,
G.R. Nos. 84154-55, July 20, 2010; Samelo v. Manotok Services, Inc., G.R. No. 170509, June
27, 2012, Brion, J).

In a complaint for ejectment, the lessor may simultaneously eject the

lessee and demand for rescission of the contracts.
Q General Milling Corporation is the owner of a property which was
leased to Cebu Autometic Motors, Inc. It was stipulated that it shall be
used as garage and repair shop for vehicles, but allegedly, it was
subleased without the consent of the lessor. The lessor contended that
the lessee violated the contract by subleasing and for failure to deliver
the required advance rental and deposit. This was denied by the lessee.
The lessor sent a letter to the lessee terminating the contract and
demanding the vacation of the premises and settlement of unpaid
accounts. Later, it filed a complaint for unlawful detainer alleging that it
terminated the contract for violation of the terms of the same and
continued to do so despite repeated demands and reminders for
compliance that the lessee refused to vacate the premises. The MTC
rendered a judgment ordering the lessee to vacate, but the RTC reversed
the judgment holding that the lessor failed to comply with the requisite
demand under Rule 70, Sec. 2. The CA ruled that the claim of failure to
comply with Sec. 2, Rule 70 is belated, hence, it cannot be entertained
anymore. Before the SC, it was contended that there was no proper
demand since the letter merely stated that the lessor expected the lessee
to vacate the premises and pay the unsettled accounts. The letter did not
demand compliance with the terms of the contract, hence, the lessee
cannot be considered in default and the lessor had no cause to terminate
the lease. It contended that since the lessor never sent a proper demand
letter, it cannot be considered in delay invoking Article 1169, NCC. Rule on
the contention of the lessee. Explain.
Answer: The lessee is correct. The lessor did not send the proper demand letter.
The lessee, in invoking Article 1169, apparently overlooked that what is involved is not a
mere mora or delay in the performance of a generic obligation to give or to do that would
eventually lead to the remedy of rescission or specific performance. What is involved in the
case is a contract of lease and the twin remedies of rescission and judicial ejectment after either
the failure to pay rent or to comply with the conditions of the lease. This situation calls for the
application, not of Article 1169 of the Civil Code but, of Article 1673 in relation to Section 2, Rule
70 of the Rules of Court. Article 1673 states that the lessor may judicially eject the lessee
for any violation of any of the conditions agreed upon in the contract.
Based on this provision, a lessor may judicially eject (and thereby likewise rescind the contract
of lease) the lessee if the latter violates any of the conditions agreed upon in the lease
contract. Implemented in accordance with Section 2, Rule 70, the lessor is not required to first
bring an action for rescission, but may ask the court to do so and simultaneously seek the
ejecment of the lessee in a single action for unlawful detainer. (Abaya Investments Corp. v.
Merit Phils., Inc., G.R. No. 176324, April 14, 2008, 551 SCRA 646). Section 2, Rule 70 of the
Rules of Court provides that unless otherwise stipulated, such action by the lessor shall be
commenced only after demand to pay or comply with the conditions of the lease and to vacate
is made upon the lessee, or by serving written notice of such demand upon the person found on
the premises, or by posting such notice on the premises if no person be found thereon, and the

lessee fails to comply therewith after fifteen (15) days in the case of land or five (5) days in the
case of buildings. (Cebu Autometic Motors, Inc., et al. v. General Milling Corp., G.R. No. 151168,
August 25, 2012, Brion, J).
DEPOSIT
Nature of liability of banks; one imbued with public interest.
Q Petitioner had a credit line with the bank. Due to failure to pay the
interest on the loan, the bank terminated the credit line but without
notice to petitioner. Hence, a check was dishonoured resulting in great
embarrassment and humiliation especially that he had a heated argument
with a friend and their falling out. He sued for damages for the unjust
dishonour of the check but the RTC found no fault of the bank in the
termination of the credit line as the dishonour of the check was proper
considering that the credit line had already been terminated or revoked
before the presentment of the check. Was the termination of the credit
line proper? Why?
Answer: No. It was not enough to apprise petitioner of his default and outstanding dues. It must
inform the client of the aggregate amount due and the dates they became due.
The business of banking is impressed with public interest and great reliance is made on the
banks sworn profession of diligence and meticulousness in giving irreproachable service. Like a
common carrier whose business is imbued with public interest, a bank should exercise
extraordinary diligence to negate its liability to the depositors. (Solidbank
Corporation/Metropolitan Bank and Trust Company v. Tan, G.R. No. 167346, April 2, 2007, 520
SCRA 123, 129-130). In this instance, the bank is sorely remiss in the diligence required in
treating with its client, Gonzales. It may not wantonly exercise its rights without respecting and
honoring the rights of its clients.
Art. 19 of the New Civil Code clearly provides that [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. This is the basis of the principle of abuse of right which, in turn, is
based upon the maxim suum jus summa injuria (the abuse of right is the greatest possible
wrong). (Arlegui v. CA, 378 SCRA 322 (2002); Gonzales v. PCIB, et al., G.R. No. 180257,
February 23, 2011).
Deposit in hotels.
Q Upon arrival of guest at City Garden Hotel, the guest gave notice to
the doorman and parking attendant of the hotel when he entrusted the
ignition of his car to the latter. The attendant issued a valet parking
customer claim stab and parked the car at the Equitable PCI Bank parking
area which the latter allowed as parking space for vehicles of the hotel
guests in the evening after banking hours. Is the hotel management is
liable for damages for the loss of the car? Explain.
Answer: Yes, because there was a contract of deposit with the hotelkeeper. The contract of
deposit was perfected from the owners delivery, when he handed over the keys to his vehicle
with the parking attendant with the obligation of safely keeping and returning it. Hence, it is
liable for damages for the loss of the car. (Durban Apartments Corp. v. Pioneer Insurance &
Surety Corp., G.R. No. 179419, January 12, 2011, (Abad, J)).

A deposit is constituted from the moment a person receives a thing belonging to another, with
the obligation of safety keeping it and returning the same. If the safekeeping of the thing
delivered is not the principal purpose of the contract, there is no deposit but some other
contract. (Art. 1962, NCC).
The deposit of effects made by travellers in hotels or inns shall also be regarded as necessary.
The keepers of hotels or inns shall be responsible for them as depositaries, provided that notice
was given to them, or to their employees, of the effects brought by the guests and that, on the
part of the latter, they take the precautions which said hotel-keepers or their substitutes advised
relative to the care and vigilance of their effects. (Art. 1998, NCC).
GUARANTY/MORTGAGE
Indivisibility of mortgage does not apply after it is extinguished by
complete foreclosure; there can be piecemeal redemption.
Q After the foreclosure of a mortgage, where the amount of the auction
sale was P216,040.93 there was tender of P40,000.00 to redeem a
property. The mortgagee contended that there must be complete tender
of the amount of the price since mortgage is indivisible, hence, the entire
auction price must be paid. Is the contention correct? Why?
Answer: No. As held in the case of Philippine National Bank v. De los Reyes, G.R. No. 4689899, November 28, 1989, 179 SCRA 619, the doctrine of indivisibility of mortgage does not apply
once the mortgage is extinguished by a complete foreclosure thereof. It provides that a pledge
or mortgage is indivisible, even though the debt may be divided among the successors in
interest of the debtor or of the creditor. (Art. 2089, NCC; Sps. Yap v. Sps. Dy, Sr., G.R. No.
171868; Dumaguete Rural Bank, Inc. v. Sps. Dy, Sr., G.R. No. 171991, July 27, 2011).
Q - What is the meaning of the indivisibility of a mortgage? Explain.
Answer: What the law proscribes is the foreclosure of only a portion of the property or a number
of the several properties mortgaged corresponding to the unpaid portion of the debt where
before foreclosure proceedings partial payment was made by the debtor on his total outstanding
loan or obligation. This also means that the debtor cannot ask for the release of any portion of
the mortgaged property or of one or some of the several lots mortgaged unless and until the
loan thus, secured has been fully paid, notwithstanding the fact that there has been a partial
fulfillment of the obligation. Hence, it is provided that the debtor who has paid a part of the debt
cannot ask for the proportionate extinguishment of the mortgage as long as the debt is not
completely satisfied. (Sps. Yap v. Sps. Dy, Sr., G.R. No. 171868;Dumaguete Rural Bank, Inc. v.
Sps. Dy, Sr., G.R. No. 171991, July 27, 2011).
Q May the mortgagor sell the property mortgaged without the consent of
the mortgage? Explain.
Answer: Yes, but, when a mortgagor sells the mortgaged property to a third person, the creditor
may demand from such third person the payment of the principal obligation. The reason for this
is that the mortgage credit is a real right, which follows the property wherever it goes, even if its
ownership changes. Article 2129 of the Civil Code gives the mortgagee, the option of collecting
from the third person in possession of the mortgaged property in the concept of owner. (Teoco v.
Metrobank, G.R. No. 162333, December 23, 2008, 575 SCRA 82) More, the mortgagor-owners
sale of the property does not affect the right of the registered mortgagee to foreclose on the
same even if its ownership had been transferred to another person. The latter is bound by the
registered mortgage on the title he acquired.

The contract cannot absolutely forbid the mortgagor, as owner of the mortgaged property, from
selling the same while her loan remained unpaid. Such stipulation contravenes public policy,
being an undue impediment or interference on the transmission of property. (Cinco v. CA, G.R.
No. 151903, October 9, 2009, 603 SCRA 108; Sps. Antonio & Leticia Vega v. SSS, et al., G.R.
No. 181672, September 20, 2010; Pablo Garcia v. Yolanda Villar, G.R. No. 158891, June 27,
2012).
Pactum commissorium
Q In a mortgage contract there was a stipulation appointing the
mortgagee as the mortgagors attorney-in-fact, to sell the property in
case of default in the payment of the loan. It was contended that there
was a violation of the prohibition on pactum commissorium. Is the
contention correct? Why?
Answer: No, as there was no automatic appropriation of the thing mortgaged. Instead, it was
sold to her.
The following are the elements of pactum commissorium:
(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. (DBP
v. CA, 348 Phil. 15 (1998)).
Mortgagees purchased of the subject property did not violate the prohibition on pactum
commissorium. The power of attorney provision did not provide that the ownership over the
subject property would automatically pass to mortgagee upon the mortgagors failure to pay the
loan on time. What it granted was the mere appointment of Villar as attorney-in-fact, with
authority to sell or otherwise dispose of the subject property, and to apply the proceeds to the
payment of the loan. This provision is customary in mortgage contracts, and is in conformity with
Article 2087 of the Civil Code, which reads:
Art. 2087. It is also of the essence of these contracts that when the principal obligation becomes
due, the things in which the pledge or mortgage consists may be alienated for the payment to
the creditor. (Garcia v. Villar, G.R. No. 158891, June 27, 2012, Del Castillo, J).
QUASI-DELICT and DAMAGES
Employer is liable for the loss of cargo due to acts of its employees.
Q A and B entered into a contract for the delivery of cargo, but there was
failure to deliver because the employees were instrumental in the
hijacking or robbery of the shipment. A sued B for damages, but B
contended that the employees alone are liable. Rule on the contention.
Explain.
Answer: Bs contention is not correct. The employer should be made answerable for damages.
Whenever an employees negligence causes damage or injury to another, there instantly arises
a presumption juris tantum that the employer failed to exercise diligentissimi patris families in
the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. (Tan v.
Jam Transit, Inc., G.R. No. 183198, November 25, 2009, 605 SCRA 659, 675, citing Delsan
Transport Lines, Inc. v. C & A Construction, Inc., 459 Phil. 156 (2003)). To avoid liability for a
quasi-delict committed by its employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good father of a family

in the selection and supervision of his employee. In this regard, Loadmasters failed.
(Loadmasters Customs Services, Inc. v. Glodel Brokerage Corp., et al., G.R. No. 179446,
January 10, 2011).
Effect if there are several causes for the resulting damages.
Q There was a head-on collision of two (2) vehicles belonging to A and B
resulting in the injuries to C who sued both A and B. A contended that B
was negligent, hence, he alone should be liable. The RTC ruled in favor of
B. What is the extent of the respective liabilities of several parties if the
cause of loss is due to their negligence? Explain.
Answer: Each wrongdoer is liable for the total damage suffered. Where there are several
causes for the resulting damages, a party is not relieved from liability, even partially. It is
sufficient that the negligence of a party is an efficient cause without which the damage would not
have resulted. It is no defense to one of the concurrent tortfeasors that the damage would not
have resulted from his negligence alone, without the negligence or wrongful acts of the other
concurrent tortfeasor. As stated in the case of Far Eastern Shipping v. Court of Appeals, 357
Phil 703 (1998):
x x x. Where several causes producing an injury are concurrent and each is an efficient cause
without which the injury would not have happened, the injury may be attributed to all or any of
the causes and recovery may be had against any or all of the responsible persons although
under the circumstances of the case, it may appear that one of them was more culpable, and
that the duty owed by them to the injured person was not the same. No actor's negligence
ceases to be a proximate cause merely because it does not exceed the negligence of other
actors. Each wrongdoer is responsible for the entire result and is liable as though his acts were
the sole cause of the injury.
There is no contribution between joint tortfeasors whose liability is solidary since both of them
are liable for the total damage. Where the concurrent or successive negligent acts or omissions
of two or more persons, although acting independently, are in combination the direct and
proximate cause of a single injury to a third person, it is impossible to determine in what
proportion each contributed to the injury and either of them is responsible for the
whole injury. Where their concurring negligence resulted in injury or damage to a third party,
they become joint tortfeasors and are solidarily liable for the resulting damage under Article
2194 of the Civil Code. (Loadmasters Customs Services, Inc. v. Glodel Brokerage Corp., et al.,
G.R. No. 179446, January 10, 2011).
The operator on record of a vehicle is primarily responsible to third
persons for the deaths or injuries consequent to its operation, regardless
of whether the employee drove the registered owners vehicle in
connection with his employment.
Q A is the owner of a motor vehicle which met an accident resulting in
injuries to B. Sued for damages, the owner of the vehicle contended that
Allan drove the jeep in his private capacity and thus, an employers
vicarious liability for the employees fault under Article 2180 of the Civil
Code cannot apply to him. Is the contention correct? Why?
Answer: No. The contention is no longer novel. In Aguilar Sr. v. Commercial Savings Bank, 412
Phil. 834 (2001), where the car of the bank caused the death of a victim while being driven by
its assistant vice president. The bank was made 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
primarily 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. (St. Marys Academy v. Carpetanos, 426
Phil. 878 (2002); Aguilar v. Commercial Savings Bank, 412 Phil. 834 (2001); Erezo v. Jepte, 102
Phil. 103 (1957)). The court had already ratiocinated that:
The main aim of motor vehicle registration is to identify the owner so that if any accident
happens, or that any damage or injury is caused by the vehicle on the public highways,
responsibility therefor can be fixed on a definite individual, the registered owner. Instances are
numerous where vehicles running on public highways caused accidents or injuries to
pedestrians or other vehicles without positive identification of the owner or drivers, or with very
scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial
to the public, that the motor vehicle registration is primarily ordained, in the interest of the
determination of persons responsible for damages or injuries caused on public highways.
(Erezo v. Jepte, 102 Phil. 103 (1957)).
Absent the circumstance of unauthorized use (Doquillo v. Bayot, 67 Phil. 121 (1939)) or that the
subject vehicle was stolen (Duavit v. CA, 255 Phil. 470 (1989)) which are valid defenses
available to a registered owner, the vehicle owner cannot escape liability for quasidelict resulting from his jeeps use. (Oscar Del Carmen, Jr. V. Geronimo Bacoy, et al., G.R. No.
173870, April 25, 2012).
Liability of hotel for the death of a guest.
Q A hotel guest of Makati Shangri-La Hotel & Resort, Inc. was murdered
inside his room. When sued for damages, it contended that it was the
guests fault for having allowed other people to enter his room, hence, his
own negligence was the proximate cause of his own death as the hotel is
not an insurer of the safety of its guests. The evidence shows that the
management practice before the murder had been to deploy one security
or roving guard every three or four floors of the building which its witness
admitted to be inadequate considering the L-shape configuration of the
hotel that rendered the hallways not visible from one or the other end and
that despite his recommendation, the management did not approve it
because the hotel was not doing well at that time as it was only halfbooked. Is the contention of the defendant-hotel correct? Why?
Answer: No. The hotel business is imbued with public interest. Catering to the public,
hotelkeepers are bound to provide not only lodging for their guests but also security to the
persons and belongings of their guests. The twin duty constitutes the essence of the business.
(YHT Realty Corp. v. CA, G.R. No. 126780, February 17, 2005, 451 SCRA 638). Applying by
analogy Article 2000, Article 2001, and Article 2002 of the Civil Code (all of which concerned the
hotelkeepers degree of care and responsibility as to the personal effects of their guests), it was
held that there is much greater reason to apply the same if not greater degree of care and
responsibility when the lives and personal safety of their guests are involved. Otherwise, the
hotelkeepers would simply stand idly by as strangers have unrestricted access to all the hotel
rooms on the pretense of being visitors of the guests, without being held liable should anything
untoward befall the unwary guests. That would be absurd, something that no good law would

ever envision. (Makati Shang-ri La Hotel & Resort, Inc. v. Harper, et al., G.R. No. 189998,
August 29, 2012, Bersamin, J).
Driving beyond required speed limit is negligence.
Q There was a collision of a car and a shuttle bus along Katipunan Road
(White Plains) in Quezon City resulting in the dragging of the car about 12
meters from the point of impact. The car burst into flames and burned the
passengers to death beyond recognition. Actions for damages were filed
against the defendants where the defendant employer proved that it
exercised the diligence of a good father of a family in the selection and
supervision of the employee. It showed the drivers proficiency and
physical examinations as well as NBI Clearances as well as daily
operational briefings. At the time of the accident the vehicle belonging to
the petitioner was travelling at the speed of 70 kilometers per hour. After
trial, judgment was rendered holding the defendants liable for damages,
for failure to exercise the diligence of a good father of a family in the
selection and supervision of the employee. Is the employer liable? Explain.
Answer: Yes. It was well established that the driver was driving at a speed beyond the rate of
speed required by law, (Section 35 of Republic Act No. (RA) 4136)). The allowed rate of speed
for the vehicle was 50 kilometers per hour, he was driving at the speed of 70 kilometers per
hour. Under the New Civil Code, unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the time of the mishap, he was violating
any traffic regulation. (Art. 2185, NCC) Apparently, the driver's violation of the traffic rules does
not erase the presumption that he was the one negligent at the time of the collision. Even apart
from statutory regulations as to speed, a motorist is nevertheless expected to exercise ordinary
care and drive at a reasonable rate of speed commensurate with all the conditions encountered
(Caminos, Jr. v. People, G.R. No. 147437, May 8, 2009, 587 SCRA 348, 361, citing Foster v.
ConAgra Poultry Co., 670 So.2d 471) which will enable him to keep the vehicle under control
and, whenever necessary, to put the vehicle to a full stop to avoid injury to others using the
highway. (Nunn v. Financial Indem. Co., 694 So.2d 630; Filipinas Synthetic Fiber Corp. v.
Wilfredo delos Santos, et al., G.R. No. 152033, March 16, 2011).
Banks are required to exercise higher degree of diligence in dealing with
the accounts of clients.
Q Respondent issued PCIB check dated 5/3/0/92 in the amount of
P34,588.72 in favour of Sulpicio Lines, Inc., hence, the bank debited the
amount from the account of respondent leaving a balance of only P558.87.
He subsequently issued two (2) checks but were dishonored because of
insufficient funds. The respondent sued petitioner for damages
contending that the check was postdated hence, it should not have
debited the amount immediately. Petitioner contended that it was not
postdated and in fact, he created confusion on the true date of the check
by writing the date of the check as 5/3/0/92. Is the contention correct?
Why?
Answer: No. The proximate cause of the damage done was the banks negligence in debiting
the account prior to the date as appearing in the check which resulted in the subsequent
dishonour of several checks.

If, indeed, petitioner was confused on whether the check was dated May 3 or May 30 because
of the / which allegedly separated the number 3 from the 0, petitioner should have required
respondent drawer to countersign the said / in order to ascertain the true intent of the drawer
before honoring the check. As a matter of practice, bank tellers would not receive nor honor
such checks which they believe to be unclear, without the counter-signature of its
drawer. Petitioner should have exercised the highest degree of diligence required of it by
ascertaining from the respondent the accuracy of the entries therein, in order to settle the
confusion, instead of proceeding to honor and receive the check.
The diligence required of banks, therefore, is more than that of a good father of a family.
(Samsung Construction Company Philippines, Inc. v. Far East Bank and Trust Company, G.R.
No. 129015, August 13, 2004, 436 SCRA 402, 421) In every case, the depositor expects the
bank to treat his account with the utmost fidelity, whether such account consists only of a few
hundred pesos or of millions. The bank must record every single transaction accurately, down to
the last centavo, and as promptly as possible. This has to be done if the account is to reflect at
any given time the amount of money the depositor can dispose of as he sees fit, confident that
the bank will deliver it as and to whomever he directs. (Metropolitan Bank and Trust Company v.
Cabilzo, G.R. No. 154469, December 6, 2006, 510 SCRA 259, 270) From the foregoing, it is
clear that petitioner bank did not exercise the degree of diligence that it ought to have exercised
in dealing with its client. (Equitable Bank v. Tan, G.R. No. 165339, August 23, 2010).
In the absence of a positive duty there could be no breach; no liability for
damages.
Q The spouses Serfino invoke American common law that imposes a duty
upon a bank receiving a notice of adverse claim to the fund in a
depositors account to freeze the account for a reasonable length of time,
sufficient to allow the adverse claimant to institute legal proceedings to
enforce his right to the fund. In other words, the bank has a duty not to
release the deposits unreasonably early after a third party makes known
his adverse claim to the bank deposit. Acknowledging that no such duty is
imposed by law in this jurisdiction, the spouses Serfino asked the Court to
adopt this foreign rule. Is the contention correct? Why?
Answer: No. To adopt the foreign rule, however, goes beyond the power of the Court to
promulgate rules governing pleading, practice and procedure in all courts. (Art. VIII, Sec. 5(5),
Constitution)). The rule reflects a matter of policy that is better addressed by
the other branches of government, particularly, the Bangko Sentral ng Pilipinas, which
is the agency that supervises the operations and activities of banks, and which has the power to
issue rules of conduct or the establishment of standards of operation for uniform application to
all institutions or functions covered. (Sec. 4.1, A 8791, The General Banking Act of 2000). To
adopt this rule will have significant implications on the banking industry and practices, as the
American experience has shown. Recognizing that the rule imposing duty on banks to freeze
the deposit upon notice of adverse claim adopts a policy adverse to the bank and its functions,
and opens it to liability to both the depositor and the adverse claimant, many American states
have since adopted adverse claim statutes that shifted or, at least, equalized the burden.
Essentially, these statutes do not impose a duty on banks to freeze the deposit upon a mere
notice of adverse claim; they first require either a court order or an indemnity bond.

In the absence of a law or a rule binding on the Court, it has no option but to uphold the existing
policy that recognizes the fiduciary nature of banking. It likewise rejects the adoption of a
judicially-imposed rule giving third parties with unverified claims against the deposit of another a
better right over the deposit. As current laws provide, the banks contractual relations are with its
depositor, not with the third party; (Gendler v. Sibley State Bank, 62 F. Supp. 805 (1945) a bank
is under obligation to treat the accounts of its depositors with meticulous care and always to
have in mind the fiduciary nature of its relationship with them. (Prudential Bank v. Lim, G.R. No.
136371, November 11, 2005, 511 SCRA 100). In the absence of any positive duty of the bank to
an adverse claimant, there could be no breach that entitles the latter to moral damages. (Serfino
v. FEBTC, et al., G.R. No. 171845, October 10, 2012, Brion, J).