1

G.R. No. L-48747 September 30, 1982 ANGEL JEREOS, petitioner, Private respondent, Domingo Pardorla, Jr. is the holder of a certificate of public convenience for the operation of a jeepney line in Iloilo City. On February 23, 1971, one of his jeepneys, driven by Narciso Jaravilla, hit Judge Jesus S. Rodriguez and his wife, Soledad, while they were crossing Bonifacio Drive, Iloilo City, causing injuries to them, which resulted in the death of Judge Rodriguez. Narciso Jaravilla was prosecuted and, on his plea of guilty, was convicted of the crime of Homicide and Physical Injuries through Reckless Imprudence and sentenced accordingly. Thereafter, Soledad Rodriguez and her children filed with the Court of First Instance of Iloilo an action for damages against Narciso Jaravilla, Domingo Pardorla, Jr., and Angel Jereos, the actual owner of the jeepney. 1 Angel Jereos denied ownership of the jeepney in question and claimed that the plaintiffs have no cause of action against him. Finally, the petitioner, citing the case of Vargas vs. Langcay, 7 contends that it is the registered owner of the vehicle, rather than the actual owner, who must be jointly and severally liable with the driver of the passenger vehicle for damages incurred by third persons as a consequence of injuries or death sustained in the operation of said vehicle. The contention is devoid of merit. While the Court therein ruled that the registered owner or operator of a passenger vehicle is jointly and severally liable with the driver of the said vehicle for damages incurred by passengers or third persons as a consequence of injuries or death sustained in the operation of the said vehicle, the Court did so to correct the erroneous findings of the Court of Appeals that the liability of the registered owner or operator of a passenger vehicle is merely subsidiary, as contemplated in Art. 103 of the Revised Penal Code. In no case did the Court exempt the actual owner of the passenger vehicle from liability. On the contrary, it adhered to the rule followed in the cases of Erezo vs. Jepte, 8 Tamayo vs. Aquino, 9 and De Peralta vs. Mangusang, 10 among others, that the registered owner or operator has the right to be indemnified by the real or actual owner of the amount that he may be required to pay as damage for the injury caused. The right to be indemnified being recognized, recovery by the registered owner or operator may be made in any formeither by a cross-claim, third-party complaint, or an independent action. The result is the same. WHEREFORE, the petition should be, as it is hereby, DENIED. With costs against the petitioner. G.R. No. 119729 January 21, 1997 ACE-AGRO DEVELOPMENT CORPORATION, petitioner, Petitioner Ace-Agro Development Corporation and private respondent Cosmos Bottling Corporation are corporations duly organized and existing under Philippine laws. Private respondent Cosmos Bottling Corp. is engaged in the manufacture of soft drinks. Since 1979 petitioner Ace-Agro Development Corp. (Ace-Agro) had been cleaning soft drink bottles and repairing wooden shells for Cosmos, rendering its services within the company premises in San Fernando, Pampanga. The parties entered into service contracts which they renewed every year. On January 18, 1990, they signed a contract covering the period January 1, 1990 to December 31, 1990. Private respondent had earlier contracted the services of Aren Enterprises in view of the fact that petitioner could handle only from 2,000 to 2,500 cases a day and could not cope with private respondent's daily production of 8,000 cases. Unlike petitioner, Aren Enterprises rendered service outside private respondent's plant. On April 25, 1990, fire broke out in private respondent's plant, destroying, among other places, the area where petitioner did its work. As a result, petitioner's work was stopped. On May 15, 1990, petitioner asked private respondent to allow it to resume its service, but petitioner was advised that on account of the fire, which had "practically burned all . . . old soft drink bottles and wooden shells," private respondent was terminating their contract. Petitioner expressed surprise at the termination of the contract and requested private respondent, on June 13, 1990, to reconsider its decision and allow petitioner to resume its work in order to "cushion the sudden impact of the unemployment of many of [its] workers." As it received no reply from private respondent, petitioner, on June 20, 1990, informed its employees of the termination of their employment.

Aparri vs CA GR L-30057 Facts: On January 15, 1960, private respondent approved the following resolution # 13, hereby appointing Mr. Bruno Aparri, as general manager of NARRA, with all the rights, prerogatives and compensations to take effect on January 116, 1960. On March 15, 1962, the board of directors approved resolution # 24 which stating thereat that the incumbent general manager shall perform his duty up to the close of office hour on March 31, 1962. In accordance with the provisions of section 8, sub-section 2 of RA 1160. It hereby fixes the term of office of the incumbent general manager until march 31, 1962. Petitioner file a mandamus with preliminary injunction with the first instance court. The petition pray for the annulment of the resolution of NARRA board. Issue: Whether or not board resolution No. 24 was a removal or dismissal of petitioner without cause. Held: It was affirmed that the term of office of petitioner expired on March 31, 1962. It is necessary in each case to interpret the word "Term" with the purview of the statutes so as to effectuate the statutory scheme pertaining to the office under examination. In the case at bar, the term of office is not fixed by law. However, the power to fix the term is rested in the board of directors subject to the recommendation of the office of economic coordination and the approval of the president of the philippines. Resolution No. 24 speaks of no removal but an expiration of the term of office of the petitioner. The statute is undeniably clear. "It is the rule in statutory construction that if the words and phrases of a statute are not obscure or ambiguous. Its meaning and intention of the legislative must be determined from the language employed and where there is no ambiguity in words, there is no room for construction. The petitioner in this case was not removed before the expiration of his term rather, his right to hold office ceased by the expiration on March 31, 1962, of his term to hold such office. This led the employees to file a complaint for illegal dismissal before the Labor Arbiter against petitioner and private respondent. question is whether private respondent is guilty of breach of contract, the fact that private respondent is blameless can only lead to the conclusion that the appealed decision is correct. WHEREFORE, the petition for review is DENIED and the decision of the Court of Appeals is AFFIRMED. The Court of Appeals was right that petitioner had no basis for refusing private respondent's offer unless petitioner was allowed to carry out its work in the company premises. That petitioner would incur additional cost for transportation was not a good reason for its refusal. Petitioner has not shown that on August 28, 1990, when it was notified of the private respondent's offer, the latter's premises had so far been restored so as to permit petitioner to resume work there. In fact, even when petitioner was finally allowed to resume work within the plant, it was not in the former work place but in a new one, which shows that private respondent's reason for not granting petitioner's request was not just a pretext. Nor was petitioner justified in refusing to resume work on November 7 when it was again notified by petitioner to work. Although it cited the pending labor case as reason for turning down private respondent's offer, it would appear that the real reason for petitioner's refusal was the fact that the term of the contract was expiring in two months and its request for an extension was not granted. But, as the appellate court correctly ruled, the suspension of work under the contract was brought about by force majeure. Therefore, the period during which work was suspended did not justify an extension of the term of the contract. 8 For the fact is that the contract was subject to a resolutory period which relieved the parties of their respective obligations but did not stop the running of the period of their contract. G.R. No. L-48210 January 31, 1984 #64

3
ipriano del Carmen, later substituted by herein private respondent Hermogenes del Carmen, commenced on action in the Court of First Instance of Bulacan, Branch V gainst herein petitioner Rosalinda San Juan-Rafols and the estate of the deceased Romeo San Juan for recovery of the possession and ownership of a 1,300 square meter parcel of unregistered residential lot situated in the Poblacion of Marilao, Bulacan. Judgment was rendered in favor of private respondent Hermogenes del Carmen. Court of Appeals, the decision was affirmed. respondent Judge issued an order a) denying the motion to dismiss, and b) ordering petitioners to file a bond of P50,000 in favor of private respondents, upon compliance of which, a writ of preliminary prohibitory injunction to suspend enforcement of the writ of execution and order of demolition in Civil Case No. SM-235 shall be issued. Petitioners moved for the reduction of the bond from P50,000 to P5,000 alleging that a) the only possible damage that may be caused to the defendants (private respondents) by virtue of the injunction is the reasonable value for the use and occupation of said parcel of land; b) of the several plaintiffs in this case, only the plaintiffs Crisanto San Miguel and Rosalinda San JuanRafols have houses on the land, occupying about 350 square meters, and this area should be the basis for the fixing of the amount of the bond. whether or not respondent Judge acted with grave abuse of discretion in requiring petitioners to post a bond for the issuance of a writ of preliminary injunction at P50,000 and subsequently refusing to reduce it to P5,000 as prayed for by petitioners. Petitioners do not claim and they cannot claim that in fixing the bond for the issuance of the writ of preliminary injunction at P50,000 and refusing to reduce it to P5,000 as prayed for by them, respondent Judge acted in a despotic or arbitrary manner. On the contrary, the amount of the bond required by respondent Judge is reasonable and justifiable under the circumstances obtaining in the instant case. Firstly, in fixing the amount of the bond at P50,000 respondent Judge took into consideration the market value of the subject property which is admittedly P50,000 and the fact that when only the third-party claim of petitioner Crisanto San Miguel was given cognizance by the court, private respondent Hermogenes del Carmen was required to post a bond of P25,000 in order that the writ of execution be enforced and the order of demolition implemented. 7 Secondly, as correctly pointed out by respondent Court of Appeals, the damages which private respondents may suffer by virtue of the issuance of the writ of preliminary injunction are not limited to the rent due for the use and enjoyment of the 350-square meter portion occupied by petitioners Crisanto San Miguel and Rosalinda San Juan Rafols but include those that may arise from their inability to enjoy the ownership and possession of the subject lot, with a market value of P50,000, pursuant to the final and executory decision in Civil Case No. SM-235 in favor of private respondents. We, therefore, hold that respondent judge did not act with grave abuse of discretion in requiring petitioners to file an injunction bond in the amount of P50,000 and refusing to reduce it at P5,000 as prayed for by petitioners. G.R. No. L-61744 June 25, 1984 MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner, Petitioner, on July 30, 1982, filed a Motion to Quash the writ of execution on the ground that the municipality's property or funds are all public funds exempt from execution. The said motion to quash was, however, denied by the respondent judge in an order dated August 23, 1982 and the alias writ of execution stands in full force and effect. When the treasurers (provincial and municipal) failed to comply with the order of September 13, 1982, respondent judge issued an order for their arrest and that they will be release only upon compliance thereof. whether the funds of the Municipality of San Miguel, Bulacan, in the hands of the provincial and municipal treasurers of Bulacan and San Miguel, respectively, are public funds which are exempt from execution for the satisfaction of the money judgment in Civil Case No. 604-B. Well settled is the rule that public funds are not subject to levy and execution. The reason for this was explained in the case of Municipality of Paoay vs. Manaois, 86 Phil. 629 "that they are held in trust for the people, intended and used for the accomplishment of the purposes for which municipal corporations are created, and that to subject said properties and public funds to execution would materially impede, even defeat and in some instances destroy said purpose." And, inTantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was held that "it is the settled doctrine of the law that not only the public property but also the taxes and public revenues of such corporations Cannot be seized under execution against them, either in the treasury or when in transit to it. Judgments rendered for taxes, and the proceeds of such judgments in the hands of officers of the law, are not subject to execution unless so declared by statute." Thus, it is clear that all the

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funds of petitioner municipality in the possession of the Municipal Treasurer of San Miguel, as well as those in the possession of the Provincial Treasurer of Bulacan, are also public funds and as such they are exempt from execution.

G.R. No. 138210

June 6, 2002

SPOUSES SINFRONIO PUERTO and ESPERANZA PUERTO, petitioners, Petitioners spouses Sinfronio and Esperanza Puerto were the former registered owners of a house and lot located at 89 Kapiligan, Araneta Subdivision, Quezon City, subject of the present controversy. They bought this property from one Mrs. Luna but did not have the title immediately transferred to their names until they mortgaged the same to private respondents spouses Inocencio and Eleuteria Cortes.4 It appears that on May 8, 1972, petitioners executed, in favor of private respondents, a Deed of Real Estate Mortgage 5 covering the said house and lot. This deed provides, among others, that petitioner spouses, obtained from private respondents a loan in the amount of P200,000, payable within one year from the date of the execution thereof. Ostensibly, the mortgage contract did not provide for any stipulated interest. It however provided that should petitioners fail to pay the principal loan, private respondents were authorized to immediately foreclose the mortgaged property, judicially or extrajudicially, under the provisions of Act No. 3135. Furthermore, private respondents would be appointed receiver in case of foreclosure. According to petitioner Esperanza Puerto, the Deed of Mortgage did not reflect the true intent of the parties, as in fact, the consideration of the mortgage was only P150,000. She claims that the one year interest was added to the P150,000, the additional P50,000 as advance payment, hence, the amount of P200,000 was stated in the deed. She further testified that the P150,000 constituted the advance of P8,000, with the corresponding receipt; another P2,000, without any receipt, received by petitioner Esperanza on May 8, 1972, for payment of taxes and to register the deed of sale when the property was first bought by petitioners from Mrs. Luna, and to register the mortgage in favor of private respondents; a Monte de Piedad cashiers check in the amount of P70,000 received by Esperanza on May 10, 1972;6 and several pieces of jewelry valued at P70,000 she received on May 9, 1972. She added that for the last transaction, she made out a receipt to the effect that she received the amount of P30,000 in cash and pieces of diamond jewelry worth P170,000.7 All the receipts presented by Esperanza were written and duly signed by her. The trial court dismissed the complaint whether the contract between the parties, which is a loan secured by the deed of real estate mortgage, violated the Usury Law (P.D. 116). In the affirmative, we must also inquire into its effect upon the real estate mortgage that secured the loan and its subsequent foreclosure. At the time of the questioned transaction, Act No. 2655, as amended by P.D. 116, known as the Usury Law, was in full force and effect. It is elementary that the laws in force at the time the contract was made generally govern the effectivity of its provision. Usury may be defined as contracting for or receiving something in excess of the amount allowed by law for the forbearance of money, goods or things in action. 17 The Usury Law prescribed that the legal rate of interest for the loan or forbearance of any money, goods or credits, where such loan or renewal or forbearance is secured in whole or in part by a mortgage upon real estate the title to which is duly registered, in the absence of express contract as to such rate of interest, shall be 12% per annum.18 Any amount of interest paid or stipulated to be paid in excess of that fixed by law is considered usurious, therefore unlawful. Republic v. Lacap, G.R. No. 158253 135 March 2, 2007 FACTS : Case is a petition for certoriari, assailing the decision of the Court of Appeals which affirmed, with modifications, ruling by the RTC granting the complaint for Specific Performance and damages filed by Lacap against RP Dist. Eng. Of Pampanga issued an invitation to bid dated Jan 27, 1992 where Lacap and two other contractors were pre-qualified Being the lowest bidder, Lacap won the bid for concreting of a certain baranggay, and thereafter undertook the works and purchased materials and labor in connection with On Oct 29, 1992, Office of the Dist. Eng conducted final investigation of end product and fount it 100% completed according to specs. Lacap thereafter sought the payment of the DPWH

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DPWH withheld payment on the grounds that the CoA disapproved final release of funds due to Lacaps license as contractor having expired Dist. Eng sought the opinion of DPWH legal. Legal then responded to Dist. Eng that the Contractors License Law (RA 4566) does not provide that a contract entered into by a contractor after expiry of license is void and that there is no law that expressly prohibits or declares void such a contract DPWH Legal Dept, through Dir III Cesar Mejia, issued First Indorsement on July 20 1994 recommending that payment be made to Lacap. Despite such recommendation, no payment was issued On July 3, 1995, respondent filed the complaint for Specific Performance and Damages against petitioner before the RTC.14 On September 14, 1995, petitioner, through the Office of the Solicitor General (OSG), filed a Motion to Dismiss the complaint on the grounds that the complaint states no cause of action and that the RTC had no jurisdiction over the nature of the action since respondent did not appeal to the COA the decision of the District Auditor to disapprove the claim. Following the submission of respondents Opposition to Motion to Dismiss,the RTC issued an Order dated March 11, 1996 denying the Motion to Dismiss. The OSG filed a Motion for Reconsideration but it was likewise denied by the RTC in its Order dated May 23, 1996. On August 5, 1996, the OSG filed its Answer invoking the defenses of non-exhaustion of administrative remedies and the doctrine of non-suability of the State Following trial, the RTC rendered on February 19, 1997 a decision ordering DPWH to pay Lacap for the contract of the project, 12% interest from demand until fully paid, and the costs of the suit CA affirmed the decision but lowered interest to 6% ISSUE: WON a contractor with an expired license is entitled to be paid for completed projects RULING: A contractor with an expired license is entitled payment for completed projects, but does not exonerate him from corresponding fines thereof. Section 35 of R.A. No. 4566 explicitly provides: SEC. 35. Penalties. Any contractor who, for a price, commission, fee or wage, submits or attempts to submit a bid to construct, or contracts to or undertakes to construct, or assumes charge in a supervisory capacity of a construction work within the purview of this Act, without first securing a license to engage in the business of contracting in this country; or who shall present or file the license certificate of another, give false evidence of any kind to the Board, or any member thereof in obtaining a certificate or license, impersonate another, or use an expired or revoked certificate or license, shall be deemed guilty of misdemeanor, and shall, upon conviction, be sentenced to pay a fine of not less than five hundred pesos but not more than five thousand pesos. The "plain meaning rule" or verba legis in statutory construction is that if the statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without interpretation. The wordings of R.A. No. 4566 are clear. It does not declare, expressly or impliedly, as void contracts entered into by a contractor whose license had already expired. Nonetheless, such contractor is liable for payment of the fine prescribed therein. Thus, respondent should be paid for the projects he completed. Such payment, however, is without prejudice to the payment of the fine prescribed under the law. [G.R. No. 126713. July 27, 1998] ADORACION E. CRUZ, THELMA DEBBIE E. CRUZ and GERRY E. CRUZ, petitioners, vs. COURT OF APPEALS and SPOUSES ELISEO and VIRGINIA MALOLOS, respondents. Delfin I. Cruz and Adoracion Cruz were spouses and their children were Thelma, Nerissa, Arnel and Gerry Cruz. Upon the death of Delfin I. Cruz, [his] surviving spouse and children executed on August 22, 1977 a notarized Deed of Partial Partition (Exhibit 2) by virtue of which each one of them was given a share of several parcels of registered lands all situated in Taytay, Rizal. The following day, August 23, 1977, the same mother and children executed a Memorandum Agreement (Exhibit H) which provided: That the parties hereto are common co-owners pro-indiviso in equal shares of the following registered real properties, all situated at Taytay, Rizal, Philippines, x x x. x x xThat sometime on August 22, 1977, a Deed of Partial Partition was executed among us before Atty. Virgilio J. Tamayo, Notary Public on and for the Province of Rizal, per Doc. No. 1776; Page No. 14; of his Notarial Register No. XLIX, Series of 1977;

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x x xThat as a result of said partial partition, the properties affected were actually partitioned and the respective shares of each party, adjudicated to him/her; That despite the execution of this Deed of Partial Partition and the eventual disposal or sale of their respective shares, the contracting parties herein covenanted and agreed among themselves and by these presents do hereby bind themselves to one another that they shall share alike and received equal shares from the proceeds of the sale of any lot or lots allotted to and adjudicated in their individual names by virtue of this deed of partial partition. That this Agreement shall continue to be valid and enforceable among the contracting parties herein up to and until the last lot covered by the Deed of [P]artial [P]artition above adverted to shall have been disposed of or sold and the proceeds thereof equally divided and their respective shares received by each of them. This Memorandum Agreement was registered and annotated in the titles of the lands covered by the Deed of Partial Partition. WHEREFORE, judgment is hereby rendered for the plaintiffs and against the defendants-spouses. On appeal, Respondent Court reversed the trial court.First Issue: No Novation or Cancellation In their Memorandum, petitioners insist that the MOA categorically and unmistakably named and covenanted them as co-owners of the parcels in issue and novated their earlier agreement, the Deed of Partial Partition. Petitioners claim that the MOA clearly manifested their intention to create a co-ownership. This is particularly evident in Exhibit 1-B, which provides: That despite the execution of this Deed of Partial Partition and eventual disposal or sale of their respective shares, the contracting parties herein covenanted and agreed among themselves and by these presents do hereby bind themselves to one another that they shall share and receive equal shares from the proceeds of the sale of any lot or lots allotted to and adjudicated in their individual names by virtue of this deed of partial partition. The Court disagrees. The foregoing provision in the MOA does not novate, much less cancel, the earlier DPP. Novation, one of the modes of extinguishing an obligation, requires the concurrence of the following: (1) there is a previous valid obligation; (2) the parties concerned agree to a new contract; (3) the old contract is extinguished; and (4) there is a valid new contract.[11]Novation may be express or implied. Article 1292 of the Code provides: In order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms [express novation],[12] or that the old and new obligations be on every point incompatible with each other [implied novation]. Tested against the foregoing standards, petitioners stance is shattered to pieces. The stipulation that the petitioners and Spouses Tamayo were co-owners was merely the introductory part of the MOA, and it reads: [13] That the parties are common co-owners pro-indiviso in equal shares of the following registered real properties, all situated at Taytay, Rizal, Philippines. xxx

[G.R. No. 110207. July 11, 1996]FLORENTINO REYES, a Deed of Extrajudicial Partition and Settlement was allegedly entered into between petitioner Florentino and his sisters (private respondents herein) Jacinta, Paula and Petra, all surnamed Reyes. The subject of the alleged partition was a parcel of land located in Bangkal, Makati measuring Three Hundred Eighty Three (383) Square Meters. Said parcel of land covered by Transfer Certificate of Title No. 22801 was registered in the name of Bernardino Reyes, the father of petitioner and private respondents. The Deed which allegedly partitioned the subject parcel of land extrajudicially among petitioner and private respondents stated that the latter waived their rights, interest and participation therein in favor of the former. Thereunder, one of the private respondents, Paula Reyes Palmenco was given a share of fifty (50) square meters. On March 16, 1971, petitioner caused the registration of the alleged Deed of Extrajudicial Partition and Settlement with the Register of Deeds of Rizal. Subsequently, he managed to obtain Transfer Certificate of Title No. 318944 with 333 square meters in his name and 50 square meters in the name of Paula Palmenco. Sometime in May 1985, private respondents, having discovered the registration of the said Deed denied having knowledge of its execution and disclaimed having signed the same; nor did they ever waive their rights, shares and interest in the subject parcel of land. Similarly, private respondent Paula Palmenco denied having ever executed said Deed. According to private respondents, subject Deed was fraudulently prepared by petitioner and that their signatures thereon were forged. They also assert that one Atty. Jose Villena, the Notary Public who notarized the said Deed was not even registered in the list of accredited Notaries Public of Pasay City. Thereafter, petitioner executed a Deed of Absolute Sale selling 240 square meters of the land to his children while retaining 93 square meters for himself. The 50 square meter portion given to Paula Palmenco as originally provided in the Deed remained in her name. After the property was partitioned, petitioner, his children and private respondent Paula Palmenco allegedly executed a Deed of Co-owners' Partition dividing the property among themselves. Each of the alleged co-owners, namely, petitioner, his children Eduardo, Teodoro, Engracia, Norma and Alberto, as well as Paula Palmenco, allocated for themselves a specific portion of one-seventh (1/7) each. On May 27, 1985, private respondents filed a Complaint for "Annulment of Sale and Damages With Prayer for Preliminary Injunction/Restraining Order" before the Makati Regional Trial Court against petitioner and the Register of Deeds of Makati. Private respondents Petra Reyes and Paula Palmenco who died on May 23, 1988 and October 20, 1987, respectively, were duly substituted by their respective children. Private respondent Jacinta Reyes and the children of Petra and Paula then filed an amended complaint praying for the annulment of the following: (1) Deed of Extrajudicial Partition and Settlement dated July 29, 1970 and TCT No. 318944 of the Registry of Deeds of Makati, Metro Manila; (2) Deed of Absolute Sale dated May 15, 1979; (3) Deed of Co-owners' Partition dated August 24, 1984 and (4) the seven (7) Transfer Certificates of Titles Nos. 135257, 135258, 135259, 135260, 135261, 135262, and 135263 of the Registry of Deeds of Makati, Metro Manila as null and void. On June 1, 1985, the lower court issued an order enjoining the Register of Deeds of Makati from issuing and delivering the Transfer Certificates of Title in question to the petitioners and from collecting the monthly rentals due on the subject parcel of land. After trial on the merits, the lower court ruled that the private respondents' signatures on the questioned Deed of Extrajudicial Partition and Settlement were indeed forged and simulated. Court of Appeals affirmed the decision of the lower court. Hence, this petition. ASSUMING ARGUENDO THE AFORESAID FORGERY, THE COURT A QUO ERRED NONETHELESS IN NOT FINDING THAT PETITIONER HAS BECOME AN ABSOLUTE OWNER OF THE LAND IN DISPUTE BY VIRTUE OF ACQUISITIVE PRESCRIPTION; This Court is not impressed with this argument. Petitioners cannot justify their ownership and possession of the subject parcel of land since they could not meet the requisites provided by the provisions they have cited. Regarding the requirement of good faith, the first paragraph of Article 526 states, thus: "He is deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it."

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From the above-cited provision, petitioners could not have been possessors in good faith of the subject parcel of land considering the finding that at the very inception they forged the Deed of Extrajudicial Partition and Settlement which they claim to be the basis for their just title. Having forged the Deed and simulated the signatures of private respondents, petitioners, in fact, are in bad faith. The forged Deed containing private respondents' simulated signatures is a nullity and cannot serve as a just title. Moreover, this Court agrees with the private respondents that there can be no acquisitive prescription considering that the parcel of land in dispute is titled property, i.e., titled in the name of the late Bernardino Reyes, the father of both petitioner Florentino and the private respondents.[14] This fact, petitioners do not deny.[15] Hence, even if they allege adverse possession that should ripen into ownership due to acquisitive prescription, their title cannot defeat the real rights of private respondents who stepped into the shoes, as it were, of their father as successors-in-interest. As it is, petitioners cannot even claim adverse possession as they admit that the private respondents likewise resided and continue to reside on the subject property.[16] WHEREFORE, finding no reversible error, the petition is DISMISSED. TEOFISTO GUINGONA, JR., ANTONIO MARTIN, and TERESITA SANTOS v. CITY FISCAL FLAMINIANO, ASST. CITY FISCAL LOTA and CLEMENT DAVID 1984 / Makasiar David invested several deposits with the Nation Savings and Loan Association [NSLA]. He said that he was induced into making said investments by an Australian national who was a close associate of the petitioners [NSLA officials]. On March 1981, NSLA was placed under receivership by the Central Bank, so David filed claims for his and his sisters investments. On June 1981, Guingona and Martin, upon Davids request, assumed the banks obligation to David by executing a joint promissory note. On July 1981, David received a report that only a portion of his investments was entered in the NSLA records . On December 1981, David filed I.S. No. 81-31938 in the Office of the City Fiscal, which case was assigned to Asst. City Fiscal Lota for preliminary investigation. David charged petitioners with estafa and violation of Central Bank Circular No. 364 and related regulations on foreign exchange transactions. Petitioners moved to dismiss the charges against them for lack of jurisdiction because David's claims allegedly comprised a purely civil obligation, but the motion was denied. After the presentation of David's principal witness, petitioners filed this petition for prohibition and injunction because: a. The production of various documents showed that the transactions between David and NSLA were simple loans (civil obligations which were novated when Guingona and Martin assumed them) b. David's principal witness testified that the duplicate originals of the instruments of indebtedness were all on file with NSLA. A TRO was issued ordering the respondents to refrain from proceeding with the preliminary investigation in I.S. No. 81-31938. Petitioners liability is civil in nature, so respondents have no jurisdiction over the estafa charge. TRO CORRECTLY ISSUED. GENERAL RULE: Criminal prosecution may not be blocked by court prohibition or injunction. EXCEPTIONS For the orderly administration of justice To prevent the use of the strong arm of the law in an oppressive and vindictive manner To avoid multiplicity of actions To afford adequate protection to constitutional rights In proper cases, because the statute relied upon is unconstitutional or was held invalid When David invested his money on time and savings deposits with NSLA, the contract that was perfected was a contract of simple loan or mutuum and not a contract of deposit. The relationship between David and NSLA is that of creditor and debtor. While the Bank has the obligation to return the amount deposited, it has no obligation to return or deliver the same money that was deposited. NSLAs failure to return the amount deposited will not constitute estafa through misappropriation , but it will only give rise to civil liability over which the public respondents have no jurisdiction. Considering that petitioners liability is purely civil in nature and that there is no clear showing that they engaged in foreign exchange transactions , public respondents acted without

1. 2. 3. 4. 5.

9
jurisdiction when they investigated the charges against the petitioners. Public respondents should be restrained from further proceeding with the criminal case for to allow the case to continue would work great injustice to petitioners and would render meaningless the proper administration of justice. Even granting that NSLAs failure to pay the time and savings deposits would constitute a violation of RPC 315, paragraph 1(b), any incipient criminal liability was deemed avoided. When NSLA was placed under receivership, Guingona and Martin assumed the obligation to David, thereby resulting in the novation of the original contractual obligation. The original trust relationbetween NSLA and David was converted into an ordinary debtor-creditor relation between the petitioners and David. While it is true that novation does not extinguish criminal liability, it may prevent the rise of criminal liability as long as it occurs prior to the filing of the criminal information in court. [G.R. No. 143403. January 22, 2003] FILONILA O. CRUZ, On Friday afternoon of January 15, 1999, petitioner went to the Regional Office of the Technological Education and Skills Development Authority (TESDA) in Taguig, Metro Manila for consultation with the regional director. [3] After the meeting, petitioner went back to her official station in Caloocan City, where she was the then Camanava district director of the TESDA, by boarding the Light Railway Transit (LRT) from Sen. Gil Puyat Avenue to Monumento. On board the LRT, her handbag was slashed and its contents stolen by an unidentified person. Among the items taken from her were her wallet and the government-issued cellular phone, which is the subject of the instant case. That same day, she reported the incident to police authorities who immediately conducted an investigation. However, all efforts to locate the thief and to recover the phone proved futile. Three days after, on January 18, 1999, petitioner reported the theft to the regional director of TESDA-NCR. She did so through a Memorandum, in which she requested relief from accountability of the subject property. In a 1st Indorsement dated January 19, 1999, the regional director, in turn, indorsed the request to the resident auditor. Under a 2nd Indorsement dated February 26, 1999, the resident auditor[4] denied the request of petitioner on the ground that the latter lacked the diligence required in the custody of government properties. Thus, petitioner was ordered to pay the purchase value of the cell phone (P3,988) and that of its case (P250), a total of P4,238. The auditors action was sustained by the director of the National Government Audit Office II (NGAO II). The matter was then elevated to the Commission on Audit. the COA found no sufficient justification to grant the request for relief from accountability.

The Commission Proper committed grave abuse of discretion amounting to excess of jurisdiction in finding that petitioner failed to exercise that degree of diligence required to prevent the loss of the government-issued cellular phone when she opted to take the light railway transit (LRT) in going to her official station in CAMANAVA District, Caloocan City Hall, Caloocan City[; and] First Issue: Required Degree of Diligence The crucial question to ask is whether petitioner should be deemed negligent when, on that fateful afternoon, she opted to board the LRT where the cellular phone was stolen. We answer in the negative. Riding the LRT cannot per se be denounced as a negligent act; more so under the circumstances in this case, in which petitioners mode of transit was influenced by time and money considerations. Petitioner boarded the LRT to be able to arrive in Caloocan in time for her 3:00 p.m. meeting. Any prudent or rational person under similar circumstances can reasonably be expected to do the same. Possession of a cellular phone would not and should not hinder one from boarding an LRT coach as petitioner did. After all, whether she took a bus or a jeepney, the risk of theft would have also been present. Because of her relatively low position and pay, she was not expected to have her own vehicle or to ride a taxicab. Neither had the government granted her the use of any vehicle. Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent man and reasonable man would not do.[8] Negligence is want of care required by the circumstances.[9] The diligence with which the law requires the individual at all times to govern his conduct varies with the nature of the situation in which he is placed, and the importance of the act which he is to perform. [10] (Emphasis supplied)

10
The Rules[11] provide that property for official use and purpose shall be utilized with the diligence of a good father of a family. Extra-ordinary measures are not called for in taking care of a cellular phone while in transit. Placing it in a bag away from covetous eyes and holding on to that bag, as done by petitioner, is ordinarily sufficient care of a cellular phone while travelling on board the LRT. The records do not show any specific act of negligence on her part. It is a settled rule that negligence cannot be presumed;[12] it has to be proven. In the absence of any shred of evidence thereof, respondents gravely abused their discretion in finding petitioner negligent. Granting that the presence or the absence of negligence is a factual matter, the consistent ruling of this Court is that findings of fact of an administrative agency must be respected, so long as they are supported by substantial evidence . [13] But lacking support, the factual finding of the COA on the existence of negligence cannot stand on its own and is therefore not binding on the Court. While we commend the Commission on Audit for its diligence in safeguarding State properties, we nonetheless hold that a government employee who has not been proven to be culpable or negligent should not be held accountable for the loss of a cellular phone, which was stolen from her while she was riding on the LRT. Ang Yu vs Court of Appeals G.R. No. 109125 December 2, 1994Facts: Herein plaintiff-petitioners (the buyers) are tenants or lessees of the residential and commercial propertiesowned by respondents Co Unjieng (vendors). On several occasions before October 9, 1986, defendantsinformed plaintiffs that they are offering to sell the premises and are giving them priority to acquire thesame. Respondents offered to sell the property for P6M, and plaintiffs counter-offered to buy for P5M.Plaintiffs asked the respondents to put the offer in writing, in which the respondents acceded (to expressapproval or give consent : give in to a request or demand). Upon receipt of the offer, plaintiffs asked therespondents specify the terms and conditions of the offer to sell. Since no response was made by the respondents, plaintiffs were compelled to file the complaint against respondents compelling them to sellthe property.The lower court decided in favor or the respondents reasoning that since parties did not agree upon theterms and conditions of the proposed sale, hence there was not contract of sale at all. Further, it ruledthat if the respondents decide to sell the proper for P11M or lower, then plaintiffs have the right of firstrefusal. Aggrieved by the decision, plaintiffs appealed to CA.The Court of Appeals affirmed the decision of the lower court with modification: In resume, there was nomeeting of the minds between the parties concerning the sale of the property. Absent such requirement,the claim for specific performance will not lie. Appellants demand for actual, moral and exemplarydamages will likewise fail as there exists no justifiable ground for its award. CA however granted the plaintiffs the right of first refusal regardless if the offer price exceeds P11M.Plaintiffs appealed with the Supreme court but was denied for insufficiency in form and substance.While plaintiff asked the SC for reconsideration, respondents transferred the properties in question to respondent Buen Realty and Development Corporation in consideration of P15M.Buen Realty after the properties came into its possession after the titles had been issued under its name,plaintiffs were asked to vacate the premises. Plaintiffs brought the matter to the trial court to enforce thed e c i s i o n r e n d e r e d b y t h e C A t h a t p l a i n t i f f s h a s t h e r i g h t o f f i r s t r e f u s a l . T h e l o w e r c o u r t o r d e r e d respondents to sell the property to plaintiffs for P15M. Respondents appealed to CA.The CA reversed the judgment of the lower court declaring that it has no force and effect.Hence this appeal for certiorari. Issue: May a buyer (in this case Buen Realty) be bound by the writ of execution by virtue of the notice of lispendens (while pending lawsuit), carried over on TCT No. 195816 issued in the name of Buen Realty, atthe time of the latters purchase of the property on 15 November 1991 (time when the decision of CA wasstill pending execution) from the Cu Unjiengs, given that Buen realty is not a party to the suit when thedecision was rendered? Held: No. What the petitioners have been granted of in the first place is just a mere right of first refusal. In thelaw on sales, the so-called right of first refusal is an innovative juridical relation. Needless to point out, itcannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the rightof first refusal, understood in its normal concept, per se be brought within the purview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offer under Article 1319 9 of the sameCode. An option or an offer would require, among other things, 10 a clear certainty on both the object andthe cause or consideration of the envisioned contract. In a right of first refusal, while the object might bemade determinate, the exercise of the right, however, would be dependent not only on the grantorseventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merelybelonging to a class of preparatory juridical relations governed not by contracts (since

11
the essentialelements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct Rural Bank of Caloocan Inc. vs CA Facts: In Dec 1959, Maxima Castro and Severino Valenciawent to the Rural Bank of Caloocan to apply for ani n d u s t r i a l l o a n . I t w a s V a l e n c i a w h o a r r a n g e d e v e r y t h i n g a b o u t t h e l o a n w i t h t h e b a n n d w h o supplied to the latter the personal data required for Castros loan application. The bank approved the P3K loan and on this loan wasexecuted a realestate mortgage on Castros houseand lot. In 1961, the sheriff of Manila sent a notice to Castrothat her property would be sold at public auction onMarch 1961 to satisfy the obligation covering the twoprom notes. It was moved to April 10, 1961 but it was declared aspecial holiday and so the prop was sold on April 11,1961. Castro alleged that it was only on Feb. 13, 1961 thats h e l e a r n e d f o r t h e f i r s t t i m e t h a t t h e m o r t g a g e contract was for 6K and not for 3K and that she wasmade to sign as co-maker in the prom note without informing her about this. She filed a suit against the Bank and spouses Valenciat h a t t h r u m i s t a k e o n h e r p a r t o r f r a u d , s h e w a s induced to sign as co-maker of the prom note. At thet i m e o f f i l i n g o f t h e c o m p l a i n t , s h e c o n s i g n t h e amount of P3.3K for full payment of her personal loanwith interest. Her house was sold at a public auction and the bankexecuted a deed of sale to Arsenio Reyes for P7K. S h e c l a i m s t h a t s h e i s a 7 0 - y e a r o l d w i d o w w h o cannot read and write the English language and thatshe only finished 2 nd grade. She was just asked to signpapers with no one explaining to her the nature andcontents of the documents and that she didnt evenreceive a copy of these documents.Issue:WON the promissory note was invalid because the mortgagecontract was valid up to P3K only.Held:No. The prom notes cannot be declared valid between the Banka n d C a s t r o a n d t h e m o r t g a g e c o n t r a c t b i n d i n g o n C a s t r o beyond the amount of P3K. For while the contracts may not be invalidated insofaras they affect the bank and Castro on the ground of fraud because the bank was not a participant thereto,such may however, be invalidated on the ground of substantial mistake mutually committed by them as aconsequence of the fraud and misrepresentation byValencias. Both Castro and the bank committed mistake in givingt h e i r c o n s e n t s . S u b s t a n t i a l m i s t a k e v i t i a t e d t h e i r consents given. 1342: Misrepresentation by a thirdp e r s o n d o e s n o t v i t i a t e c o n s e n t u n l e s s s u c h misrepresentation has crea ted substantial mistakeand the same is mutual. The bank and Castro were negligent in giving their consent to the contracts. A contract may be annulled on the ground of vitiatedconsent if deceit by third person even without theconnivance of complicity with one of the contractingparties, resulted in mutual error on the part of the parties to the contract.

12
Bank and Valencia were held liable and Reyes petitionf o r r e n t f r o m C a s t r o w a s d e n i e d a n d w a s p u t o n abeyance until resolution of the case is finalized. G.R. No. L-30786: Olegario Clarin vs Alberto Rulona and the Court of Appeals 20 February 1984, 127 scra 512Perfected Contract of SaleClarin was the owner of a 10 hectare land in Carmen, Bohol. The same was said to be his sharefrom the other co-owners. In 1959, he executed a Contract of Sale with Rulona as he wasselling his 10 hectare land. It was agreed that the purchase price would be P2500.00. Downpayment would be P1000.00 and the remaining balance would be paid monthly at P100.00 per month. Rulona paid the down payment as well as the 1 st installment but then later on Clarinreturned the P1100.00 against Rulonas will. Clarin said he could not convince the other co-owners about the selling of his share. Clarin also said there was no perfected sale between himand Rulona as he said that the sale was subject to the condition that the other co-owners shouldgive their consent to the sale. ISSUE: Whether or not there was a perfected contract of sale. HELD: Yes there is. During trial there were 3 documents shown. Exhibit A shows that uponpayment of P800.00 by Rulona, a survey of the land was authorized. Exhibit B shows thatP200.00, part of the down payment was paid to Clarin and that the 1 st installment of P100.00was also made. Though these exhibits are not the Contract of Sale, they show that there was acontract of sale between Rulona and Clarin.Construing Exhibits A and B together, it can be seen that the Clarin agreed to sell and Rulonaagreed to buy a definite object, that is, 10 hectares of land which is part and parcel of Lot 20PLD No. 4, owned in common by the Clarin and his sisters although the boundaries of the 10hectares would be delineated at a later date. The parties also agreed on a definite price which isP2,500.00. Exhibit B further shows that Clarin has received from Rulona as initial payment, theamount of P800.00. Hence, it cannot be denied that there was a perfected contract of salebetween the parties and that such contract was already partially executed when the petitioner received the initial payment of P800.00. The latter's acceptance of the payment clearly showedhis consent to the contract thereby precluding him from rejecting its binding effect.Further, Clarins letter to Rulona marked Exhibit C stated;"My dear Mr. Rulona:Replying to your letter of recent date, I deeply regret to inform you that my daughter, Alice, whois now in Manila, could not be convinced by me to sell the land in question, that is, the ten (10)hectares of land referred to in our tentative agreement. It is for this reason that I herebyauthorize the bearer, Mr. Paciano Parmisano, to return to you in person the sum of OneThousand and One Hundred (P1,100.00) Pesos which you have paid in advance for theproposed sale of the land in question."The reasons given by the Clarin cannot operate against the validity of the contract in question. Acontract is valid even though one of the parties entered into it against his better judgment. G.R. No. L-51369 July 29, 1987 160

.. Macario Badillo died intestate onFebruary 4, 1966,survived by his widow, Clarita Ferrer, and five minor children: Alberto, 16, Nenita, 14, Hilly 12, Cristy, 9, and Maria Salome, 5. He left a parcel of registered land of 77 square meters in Lumban, Laguna, with a house erected thereon, valued at P7,500.00, (the "PROPERTY", for short). Hence, each of the five minor plaintiffs had inherited a 1/12 share of the P7,500.00, or P625.00 each, which is less than the P2,000.00 mentioned in Article 320 of the Civil Code. On January 18, 1967, the surviving widow, in her own behalf and as natural guardian of the minor plaintiffs, executed a Deed of Extrajudicial Partition and Sale of the PROPERTY through which the PROPERTY was sold to defendantsappellants, the spouses Gregorio Soromero and Eleuteria Rana. The Register of Deeds at Sta. Cruz, Laguna, extended recognition to the validity of the Deed of Extrajudicial Partition and Sale, recorded the same, and issued a new transfer certificate of title to defendants-appellants. ... On November 11, 1968, Modesta Badillo, a sister of Macario Badillo, was able to obtain guardianship over the persons and properties of the minor plaintiffs, without personal notice to their mother, who was alleged "could not be located inspite of the efforts exerted" (ROA, p. 26). On July 23, 1970, their guardian caused the minor plaintiffs to file a complaint in the case below for the annulment of the sale of their participation in the PROPERTY to defendants-appellants and, conceding the validity of the sale of the widow's participation in the PROPERTY, they asked that, as co-owners, they be allowed to exercise the right of legal redemption. n case a voidable contract is annulled, Article 1398 requires the restitution by the contracting parties to each other of the things received by them under the contract. The appellants, however, concede that by express mandate of Article 1399,

13
full restitution cannot be ordered from the minors involved in the contract. Said minors can only be required to restore partially, only to the extent of the benefits they received by virtue of the questioned contract. This contention is untenable. The Deed of Extrajudicial Partition and Sale is not a voidable or an annullable contract under Article 1390 of the New Civil Code. Article 1390 renders a contract voidable if one of the parties is incapable of giving consent to the contract or if the contracting party's consent is vitiated by mistake, violence, intimidation, undue influence or fraud. In this case, however, the appellee minors are not even parties to the contract involved. Their names were merely dragged into the contract by their mother who claimed a right to represent them, purportedly in accordance with Article 320 of the New Civil Code. 10 The Deed of Extrajudicial Partition and Sale is an unenforceable or, more specifically, an unauthorized contract under Articles 1403 (1) and 1317 of the New Civil Code. These provisions state that: ART. 1403. The following contracts are unenforceable, unless they are ratified: (1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers; ... ART. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him. A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party. Clearly, Clarita Ferrer Badillo has no authority or has acted beyond her powers in conveying to the appellants that 5/12 undivided share of her minor children in the property involved in this case. 11 The powers given to her by the laws as the natural guardian covers only matters of administration and cannot include the power of disposition. 12 She should have first secured the permission of the court before she alienated that portion of the property in question belonging to her minor children.13 The appellee minors never ratified this Deed of Extrajudicial Partition and Sale. 1avvphi1 In fact, they question its validity as to them. Hence, the contract remained unenforceable or unauthorized. No restitution may be ordered from the appellee minors either as to that portion of the purchase price which pertains to their share in the property or at least as to that portion which benefited them because the law does not sanction any. The third error assigned need not be discussed further because Our pronouncement on the first assignment of error has rendered it academic. Suffice it to state that since the 30-day period for redemption had already lapsed, the appellants cannot be ordered to re-sell to the appellees the remaining 7/12 portion of the property in question. In view of the foregoing, the appellants are hereby ordered to restore to the appellees the full ownership and possession of the latter's 5/12 share in the undivided property by executing the proper deed of reconveyance. The appellants' ownership over the remaining 7/12 share in the undivided property is hereby confirmed. WHEREFORE, the decision under review is hereby modified accordingly and appellants are directed to deliver possession of above appellees' share, with no pronouncement as to costs. SO ORDERED. PILIPINAS BANK V CA (REYES) 234 SCRA 435PUNO; July 25, 1994 NATURE - Petition for review of CA decision FACTS - F L O R E N C I O R E Y E S i s s u e d t w o p o s t d a t e d c h e c k s . These are for WINNER INDUSTRIAL CORP. in amount of P21T due Oct.10, 1979 and for Vicente TUI in amount of P11.4T due Oct.12.- To cover the face value of

14
the checks, he requestedPCIB Money Shop's manager to effect the withdrawal of P32T from his savings account and have it depositedwith his current account with PILIPINAS BANK.- PILIPINAS BANKS Current Account Bookkeeper madean error in depositing the amount: he thought it was fora certain FLORENCIO AMADOR. He, thus, posted thedeposit in the latter's account not noticing that thedepositor's surname in the deposit slip was REYES.- O n O c t . 1 1 , t h e O c t . 1 0 c h e c k i n f a v o r o f W I N N E R INDUSTRIAL was presented for payment. Since theledger of Florencio REYES indicated that his account had only a balance of P4,078.43 , it was dishonored andthe payee was advised to try it for next clearing.- It was redeposited but was again dishonored. Thesame thing happened to the Oct.12 check. The payeethen demanded a cash payment of the checks facevalue which REYES did if only to save his name.- Furious, he immediately proceeded to the bank andurged an immediate verification of his account. That was only when they noticed the error. RTC: ordered petitioner to pay P200T compensatory damages, P100T moral damages, P25T attorneys fees,as well as costs of suit. CA: modified amount to just P50T moral damages andP25T attorneys fees and costs of suit. ISSUE WON Art.2179 8 of NCC is applicable NO- For it to apply, it must be established that privaterespondent's own negligence was the immediate andproximate cause of his injury. Definition of Proximate Cause: "any cause which, innatural and continuous sequence, unbroken by anye f f i c i e n t i n t e r v e n i n g c a u s e , p r o d u c e s t h e r e s u l t c o m p l a i n e d o f a n d without which would not haveo c c u r r e d a n d f r o m w h i c h i t o u g h t t o h a v e b e e n foreseen or reasonably anticipat e d b y a p e r s o n o f ordinary case that the injury complained of or some similar injury, would result therefrom as a natural andprobable consequence." Reasoning The proximate cause of the injury is the negligence of petitioner's employee in erroneously posting the cash deposit of private respondent in then a m e o f a n o t h e r d e p o s i t o r w h o h a d a s i m i l a r f i r s t name .- T h e b a n k e m p l o y e e i s d e e m e d t o h a v e f a i l e d t o e x e r c i s e t h e d e g r e e o f c a r e r e q u i r e d i n t h e performance of his duties. Dispositive Petition denied

G.R. No. 100942 August 12, 1992 LUCIO TAN, petitioner,

Private respondent Teresita Sanchez invested P100,000.00 in a restaurant called the Manila Bar, then owned and operated by Nilo Tiglao, who agreed that the amount would earn profit in the form of interest at the rate of 14% per annum and could be withdrawn by her at any time. This agreement was embodied in a Contract of Investment Subsequently, Tiglao assigned all his "rights, interests and good will" over the said restaurant to

Lucio Tan, the herein petitioner, in a Deed of Conveyance and Transfer dated March 1, 1982. 2 The consideration of the sale was P400,000.00. Upon learning of this transaction, Sanchez demanded the return of her investment from the petitioner. Tan acknowledged his obligation to Sanchez and agreed to pay her the full amount in accordance with the terms and conditions After the lapse of two years following the conclusion of this contract (and also the executor of the promissory note), Sanchez demanded from the petitioner payment of the balance of P50,000.00. The petitioner refused to pay, and Sanchez sued.

15 The petitioner now contends that the promissory note was issued by him in consideration of his taking over the management and operation of the restaurant and that his eviction therefrom constituted a failure of such consideration that absolved him from liability. It is a canon of interpretation that the words used in a contract should be given their natural and ordinary meaning unless a technical meaning was intended. An examination of the promissory note shows that it does not come under the exception. On the contrary, we agree with the courts below that the plain understanding of the parties was that the petitioner would pay the private respondent the balance of P50,000.00: (a) on or before the expiration of the two-year period of lease on March 6, 1984; b) regardless of the outcome of the operation of the Manila Bar; and c) in no case beyond the period of two years from March 6, 1982 (or March 26, 1982, date of the promissory note). The private respondent correctly observes that it would have been a simple matter for the promissor to state clearly in the promissory note that he would pay the balance of P50,000.00 only on condition that he would continue to manage and operate the restaurant during that two-year period of the lease. He did not see fit to include this condition in the promissory note he signed. Assuming an ambiguity in the instrument, we apply the rule in the Civil Code that the ambiguity must be resolved against the person who caused it, in this case the promissor. 13 Even on equitable grounds, we find that the private respondent is entitled to recover the balance of her investment. It was not her concern that the business failed for her investment was not dependent on its success
Gelano V. CA (1981) FACTS: Insular Sawmill, Inc. leased the paraphernal property of Guillermina M. Gelano (wife) for P1.2K/month November 19, 1947-December 26, 1950: Carlos Gelano (husband) obtained cash advances of P25,950 on account of rentals agreement: Insular Sawmill, Inc. could deduct the same from the monthly rentals of the leased premises until the cash advances are fully paid Carlos Gelano was able to pay only P5,950.00 thereby leaving an unpaid balance of P20,000.00 which he refused to pay Guillermina M. Gelano refused to pay on the ground that said amount was for the personal account of her husband asked for by, and given to him, without her knowledge and consent and did not benefit the family May 4, 1948 to September 11, 1949: Spouses Gelanos purchased lumber materials on credit leaving P946.46 unpaid July 14, 1952: Joseph Tan Yoc Su, as accomdating party, executed a joint and several promissory note with Carlos Gelano in favor of China Banking Corporation bank in the amount of P8,000.00 payable in 60 days to help renew the previous loan of the spouses the bank collected P9,106.00 including interests by debiting the current account of the corp. Carlos only paid P5,000 Guillermina refused to pay on the ground that she had no knowledge of such accomodation

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May 29, 1959: Insular thru Atty. German Lee, filed a complaint for collection against the spouses before the CFI In the meantime, private respondent amended its Articles of Incorporation to shorten its term of existence up to December 31, 1960 only November 20, 1964: CFI favored Insular holding Carlos Gelano liable August 23, 1973: held spouses jointly ad severally liable

ISSUE: W/N a corporation, whose corporate life had ceased by the expiration of its term of existence, could still continue prosecuting and defending suits after its dissolution and beyondthe period of 3 years provided for under Act No. 1459, otherwise known as the Corporation law, to wind up its affairs, without having undertaken any step to transfer its assets to a trustee or assignee. HELD: YES. Affirmed with mod - conjugal property is liable time during which the corporation, through its own officers, may conduct the liquidation of its assets and sue and be sued as a corporation is limited to 3 years from the time the period of dissolution commences; but that there is no time limited within which the trustees must complete a liquidation placed in their hands only the conveyance to the trustees must be made within the 3-year period effect of the conveyance is to make the trustees the legal owners of the property conveyed, subject to the beneficial interest therein of creditors and stockholders trustee may commence a suit which can proceed to final judgment even beyond the 3-year period "trustee" = general concept - include the counsel to whom was entrusted in the instant case The purpose in the transfer of the assets of the corporation to a trustee upon its dissolution is more for the protection of its creditor and stockholders Debtors may not take advantage of the failure of the corporation to transfer its assets to a trustee

Section 77 of the Corporation Law, when the corporate existence is terminated in any legal manner, the corporation shall nevertheless continue as a body corporate for 3 years after the time when it would have been dissolved, for the purpose of prosecuting and defending suits by or against it. G.R. No. L-66479 November 21, 1991 On April 14, 1965, private respondents, as plaintiffs, instituted a complaint for partition against Fausto Soy. They allow that they had a pro-indiviso share (to the extent of three fourths) in a parcel of residential land identified as Lot No. 6870B, located in Dagupan City, with an area of 480 square meters and covered by Torrens Certificate of Title No. 9144. Their claim was anchored on the fact that Fausto Soy was the brother of Emilia Soy, the deceased mother of Rosita Lopez; of Cornelia Soy, the deceased mother of Agueda Ubando, Amado Ubando and Felipe Ubando; and of Anastacia Soy, the deceased mother of Teodosia Lopez. 1 As a consequence of the filing of the complaint, a notice of lis pendens was annotated on the same day on TCT No. 9144.2 In his answer, Fausto Soy contested the claims of the plaintiffs and asserted exclusive title in his name. He countered that the land in question was never registered in the names of his parents Eugenio Soy and Ambrosia Marcella, that he had been the registered owner of the premises since 1932 in consequence of which Original Certificate of Title No. 49661 of the Register of Deeds of Pangasinan was issued in his favor, and that spouses Eugenio Soy and Ambrosia Marcella from whom the property allegedly came died more than 24 years age. 3

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During the pendency of the action for partition, Fausto Soy died and was substituted by his children named Jose, Antonio, Teofilo, Amparo and Walter, all surnamed Soy. Walter later died and was substituted by his wife Susing Cornel and minor children Myrna, Linda and Linly, all surnamed Soy. 4 On March 22, 1974, the trial court rendered its decision holding that private respondents and Fausto Soy were co-owners of Lot No. 6870-B and ordering the partition thereof. Significantly, the parties were enjoined to make the project of partition among themselves and to submit the same to the lower court for confirmation. If they could not agree, then the court would appoint commissioners who would undertake the partition on behalf of the co-owners. 5 The crucial issue to be resolved in the instant case is whether Lot 6870-B was held in trust by Fausto Soy for his sisters Emilia, Cornelia and Anastacia. We hold that after Fausto Soy, the predecessor-in-interest of herein petitioners, had appeared to be the registered owner of the lot for more than thirty years, his title had become indefeasible and his dominical rights over it could no longer be challenged. Any insinuation as to the existence of an implied constructive trust should not be allowed. Private respondent have invoked Article 1456 of the Civil Code which states that "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 trust alluded to in this case is a constructive trust arising by operation of law. It is not a trust in the technical sense. 13 Even assuming that there was an implied trust, private respondents' attempt at reconveyance (functionally, an action for partition is both an action for declaration of co-ownership, and for segregation and conveyance of a determinate portion of the subject property. See Roque vs. IAC, G.R. No. 75886, August 30, 1988, 165 SCRA 118) was clearly barred by prescription. Prescription is rightly regarded as a statute of repose whose object is to suppress fraudulent and stale claims from springing up at great distances of time and surprising the parties or their representatives when the facts have become obscure from the lapse of time or the defective memory or death or removal of witnesses. 14 It is well-settled that an action for reconveyance of real property to enforce an implied trust prescribes in ten years, the period reckoned from the issuance of the adverse title to the property which operates as a constructive notice. 15 In the case at bar, that assertion of adverse title, which was an explicit indication of repudiation of the trust for the purpose of the statute of limitations, took place when OCT No. 49661 was issued in the name of Fausto Soy in 1932, to the exclusion of his three sisters. 16