June 2013 Philippine Supreme Court Decisions on Civil Law Posted on July 15, 2013 Posted in Civil Law,

, Philippines - Cases, Philippines - Law Here are select June 2013 rulin s o! the "upre#e Court o! the Philippines on civil law$ Civil Code Contract% contract o! carria e% de!inition% co##on carrier% de!inition% &reach o! contract o! carria e% entitle#ent to da#a es% contract o! services% standard o! care re'uired% da#a es% when recovera&le% 'uasidelict% solidary lia&ility o! (oint tort!easors) * contract o! carria e is de!ined as one where&y a certain person or association o! persons o&li ate the#selves to transport persons, thin s, or news !ro# one place to another !or a !i+ed price) ,n its !ace, the airplane tic-et is a valid written contract o! carria e) .his Court has held that when an airline issues a tic-et to a passen er con!ir#ed on a particular !li ht, on a certain date, a contract o! carria e arises, and the passen er has every ri ht to e+pect that he would !ly on that !li ht and on that date) /! he does not, then the carrier opens itsel! to a suit !or &reach o! contract o! carria e) 0nder *rticle 1132 o! the Civil Code, this 2persons, corporations, !ir#s, or associations en a ed in the &usiness o! carryin or transportin passen ers or oods or &oth, &y land, water, or air, !or co#pensation, o!!erin their services to the pu&lic3 is called a co##on carrier) /n contrast, the contractual relation &etween "a#pa uita .ravel and respondents is a contract !or services) 4 "ince the contract &etween the parties is an ordinary one or services, the standard o! care re'uired o! respondent is that o! a ood !ather o! a !a#ily under *rticle 1113 o! the Civil Code) .his connotes reasona&le care consistent with that which an ordinarily prudent person would have o&served when con!ronted with a si#ilar situation) .he test to deter#ine whether ne li ence attended the

per!or#ance o! an o&li ation is$ did the de!endant in doin the alle ed ne li ent act use that reasona&le care and caution which an ordinarily prudent person would have used in the sa#e situation5 /! not, then he is uilty o! ne li ence) 6or one to &e entitled to actual da#a es, it is necessary to prove the actual a#ount o! loss with a reasona&le de ree o! certainty, pre#ised upon co#petent proo! and the &est evidence o&taina&le &y the in(ured party) .o (usti!y an award o! actual da#a es, there #ust &e co#petent proo! o! the actual a#ount o! loss) Credence can &e iven only to clai#s which are duly supported &y receipts) 0nder *rticle 2220 o! the Civil Code o! the Philippines, an award o! #oral da#a es, in &reaches o! contract, is in order upon a showin that the de!endant acted !raudulently or in &ad !aith) 7hat the law considers as &ad !aith which #ay !urnish the round !or an award o! #oral da#a es would &e &ad !aith in securin the contract and in the e+ecution thereo!, as well as in the en!orce#ent o! its ter#s, or any other -ind o! deceit) /n the sa#e vein, to warrant the award o! e+e#plary da#a es, de!endant #ust have acted in wanton, !raudulent, rec-less, oppressive, or #alevolent #anner) 8o#inal da#a es are recovera&le where a le al ri ht is technically violated and #ust &e vindicated a ainst an invasion that has produced no actual present loss o! any -ind or where there has &een a &reach o! contract and no su&stantial in(ury or actual da#a es whatsoever have &een or can &e shown) 0nder *rticle 2221 o! the Civil Code, no#inal da#a es #ay &e awarded to a plainti!! whose ri ht has &een violated or invaded &y the de!endant, !or the purpose o! vindicatin or reco ni9in that ri ht, not !or inde#ni!yin the plainti!! !or any loss su!!ered) .he a#ount to &e awarded as no#inal da#a es shall &e e'ual or at least co##ensurate to the in(ury sustained &y respondents considerin the concept and purpose o! such da#a es) .he a#ount o! no#inal da#a es to &e awarded #ay also depend on certain special reasons e+tant in the

case) .he a#ount o! such da#a es is addressed to the sound discretion o! the court and ta-in into account the relevant circu#stances, such as the !ailure o! so#e respondents to &oard the !li ht on schedule and the sli ht &reach in the le al o&li ations o! the airline co#pany to co#ply with the ter#s o! the contract, i.e), the airplane tic-et and o! the travel a ency to #a-e the correct &oo-in s) Cathay Paci!ic and "a#pa uita .ravel acted to ether in creatin the con!usion in the &oo-in s which led to the erroneous cancellation o! respondents: &oo-in s) .heir ne li ence is the pro+i#ate cause o! the technical in(ury sustained &y respondents) .here!ore, they have &eco#e (oint tort!easors, whose responsi&ility !or quasi-delict, under *rticle 21;< o! the Civil Code, is solidary) Cathay Pacific Airways v. Juanita Reyes, et al), =)>) 8o) 1?5?;1, June 2@, 2013 Contract% contract o! sale% disputa&le presu#ptions% !ailure to pay the price% e!!ect o!% dou&le sale% e!!ect% re istration in ood !aith% &uyer in ood !aith% duty o! a &uyer when a piece o! land is in the actual possession o! third persons) 0nder "ection 3, >ule 131 o! the >ules o! Court, the !ollowin are disputa&le presu#ptions$ A1B private transactions have &een !air and re ular% A2B the ordinary course o! &usiness has &een !ollowed% and A3B there was sufficient consideration for a contract) .hese presu#ptions operate a ainst an adversary who has not introduced proo! to re&ut the#) .hey create the necessity o! presentin evidence to re&ut the prima facie case they created, and which, i! no proo! to the contrary is presented and o!!ered, will prevail) .he &urden o! proo! re#ains where it is &ut, &y the presu#ption, the one who has that &urden is relieved !or the ti#e &ein !ro# introducin evidence in support o! the aver#ent, &ecause the presu#ption stands in the place o! evidence unless re&utted) =rantin that there was no delivery o! the consideration, the seller would have no ri ht to sell a ain what he no lon er owned) His re#edy would &e to rescind the sale !or !ailure on the part o! the &uyer to per!or# his part o! their o&li ation pursuant to *rticle 11;1 o! the 8ew Civil Code)

/n the case o! Clara M. Balat at v. Court !f Appeals and "pouses Jose Repuyan and Aurora Repuyan, it was written$ .he failure of the buyer to ma e !ood the price does not" in law" cause the ownership to revest to the seller unless the &ilateral contract o! sale is !irst rescinded or resolved pursuant to *rticle 11;1 o! the 8ew Civil Code) #on$payment only creates a ri!ht to demand the fulfillment of the obli!ation or to rescind the contract% CD#phases suppliedE C,Ewnership o! an i##ova&le property which is the su&(ect o! a dou&le sale shall &e trans!erred$ A1B to the person ac'uirin it who in ood !aith !irst recorded it in the >e istry o! Property% A2B in de!ault thereo!, to the person who in ood !aith was !irst in possession% and A3B in de!ault thereo!, to the person who presents the oldest title, provided there is ood !aith) .he re'uire#ent o! the law then is two-!old$ ac'uisition in ood !aith and re istration in ood !aith) =ood !aith #ust concur with the re istration) /! it would &e shown that a &uyer was in &ad !aith, the alle ed re istration they have #ade a#ounted to no re istration at all) 7hen a piece o! land is in the actual possession o! persons other than the seller, the &uyer #ust &e wary and should investi ate the ri hts o! those in possession) #ithout ma$in% such inquiry, one cannot claim that he is a uyer in %ood faith. 7hen a #an proposes to &uy or deal with realty, his duty is to read the pu&lic #anuscript, that is, to loo- and see who is there upon it and what his ri hts are) * want o! caution and dili ence, which an honest #an o! ordinary prudence is accusto#ed to e+ercise in #a-in purchases, is in conte#plation o! law, a want o! ood !aith) .he &uyer who has !ailed to -now or discover that the land sold to hi# is in adverse possession o! another is a &uyer in &ad !aith) C/E! a vendee in a dou&le sale re isters the sale a!ter he has ac'uired -nowled e o! a previous sale, the re istration constitutes a re istration in &ad !aith and does not con!er upon hi# any ri ht) /! the re istration is done in &ad !aith, it is as i! there is no re istration at all, and the &uyer

who has !irst ta-en possession o! the property in ood !aith shall &e pre!erred) &ospicio '. Rosaroso, et al. v. (ucila (a orte "oria, et al., =)>) 8o) 1;<?<@, June 1;, 2013 Contract% contract o! sale% ele#ents% contract to sell% ele#ents% di!!erence &etween a contract o! sale and a contract to sell% e!!ect o! non-pay#ent in a contract o! sale% laches% de!inition% .orrens syste#% e+ception to eneral rule that action to recover re istered land covered &y the .orrens "yste# #ay not &e &arred &y laches) * contract o! sale is de!ined under *rticle 1<5? o! the Civil Code$ Fy the contract o! sale, one o! the contractin parties o&li ates hi#sel! to trans!er the ownership o! and to deliver a deter#inate thin , and the other to pay there!ore a price certain in #oney or its e'uivalent) .he ele#ents o! a contract o! sale are$ AaB consent or #eetin o! the #inds, that is, consent to trans!er ownership in e+chan e !or the price% A&B deter#inate su&(ect #atter% and AcB price certain in #oney or its e'uivalent) * contract to sell, on the other hand, is de!ined &y *rticle 1<1; o! the Civil Code$ C*E &ilateral contract where&y the prospective seller, while e+pressly reservin the ownership o! the su&(ect property despite delivery thereo! to the prospective &uyer, &inds hi#sel! to sell the said property e+clusively to the prospective &uyer upon !ul!ill#ent o! the condition a reed upon, that is, !ull pay#ent o! the purchase price) /n a contract o! sale, the title to the property passes to the &uyer upon the delivery o! the thin sold, whereas in a contract to sell, the ownership is, &y a ree#ent, retained &y the seller and is not to pass to the vendee until !ull pay#ent o! the purchase price) Dven assu#in , ar%uendo, that the petitioner was not paid, such non pay#ent is i##aterial and has no e!!ect on the validity o! the contract o!

sale) * contract o! sale is a consensual contract and what is re'uired is the #eetin o! the #inds on the o&(ect and the price !or its per!ection and validity) /n this case, the contract was per!ected the #o#ent the petitioner and the respondent a reed on the o&(ect o! the sale G the twohectare parcel o! land, and the price G .hree .housand Pesos AP3,000)00B) 8on-pay#ent o! the purchase price #erely ave rise to a ri ht in !avor o! the petitioner to either de#and speci!ic per!or#ance or rescission o! the contract o! sale) Laches has &een de!ined as the !ailure or ne lect, !or an unreasona&le and une+plained len th o! ti#e, to do that which, &y e+ercisin due dili ence could or should have &een done earlier) /t should &e stressed that laches is not concerned only with the #ere lapse o! ti#e) *s a eneral rule, an action to recover re istered land covered &y the .orrens "yste# #ay not &e &arred &y laches) 8either can laches &e set up to resist the en!orce#ent o! an i#prescripti&le le al ri ht) /n e+ceptional cases, however, the Court allowed laches as a &ar to recover a titled property) .hus, in Romero v. )atividad, the Court ruled that laches will &ar recovery o! the property even i! the #ode o! trans!er was invalid) Li-ewise, in *da. de Ca rera v. CA, the Court ruled$ /n our (urisdiction, it is an enshrined rule that even re!istered owners of property may be barred from recoverin! possession of property by virtue of laches% 0nder the Land >e istration *ct Anow the Property >e istration HecreeB, no title to re istered land in dero ation to that o! the re istered owner shall &e ac'uired &y prescription or adverse possession) .he sa#e is not true with re ard to laches) Iore particularly, laches will &ar recovery o! a property, even i! the #ode o! trans!er used &y an alle ed #e#&er o! a cultural #inority lac-s e+ecutive approval) .hus, in &eirs of 'icman v. Cari+o, the Court upheld the Heed o! Conveyance o! Part >i hts and /nterests in * ricultural Land e+ecuted &y .in -el Hic#an in !avor o! "ioco CariJo despite lac- o! e+ecutive approval) .he Court stated that 2despite the (udicial pronounce#ent that the sale o! real property &y illiterate ethnic

#inorities is null and void !or lac- o! approval o! co#petent authorities, the ri ht to recover possession has nonetheless &een &arred throu h the operation o! the e'uita&le doctrine o! laches)3 Ali A$an% v. Municipality of ,sulan, "ultan -udarat Province, =)>) 8o) 1?@01<, June 2@, 2013 Contract% contract o! sale% dis'uali!ication o! a lawyer to &uy under *rticle 1<;1% ele#ents o! a contract% autono#ous nature% o&li atory nature o! contract% interpretation% courts have no authority to alter a contract &y construction or to #a-e a new contract !or the parties% penal clause% enerally su&stitutes the inde#nity !or da#a es and the pay#ent o! interests in case o! non-co#pliance) *d#ittedly, *rticle 1<;1 A5B o! the Civil Code prohi&its lawyers !ro# ac'uirin &y purchase or assi n#ent the property or ri hts involved which are the o&(ect o! the liti ation in which they intervene &y virtue o! their pro!ession) .he C* lost si ht o! the !act, however, that the prohi&ition applies only durin the pendency o! the suit and enerally does not cover contracts !or contin ent !ees where the trans!er ta-es e!!ect only a!ter the !inality o! a !avora&le (ud #ent) He!ined as a #eetin o! the #inds &etween two persons where&y one &inds hi#sel!, with respect to the other to ive so#ethin or to render so#e service, a contract re'uires the concurrence o! the !ollowin re'uisites$ AaB consent o! the contractin parties% A&B o&(ect certain which is the su&(ect #atter o! the contract% and, AcB cause o! the o&li ation which is esta&lished) Kiewed in the li ht o! the autono#ous nature o! contracts enunciated under *rticle 130@ o! the Civil Code, on the other hand, we !ind that the -asunduan was correctly !ound &y the >.C to &e a valid and &indin contract &etween the parties) ,&li ations arisin !ro# contracts, a!ter all, have the !orce o! law &etween the contractin parties who are e+pected to a&ide in ood !aith with their contractual co##it#ents, not weasel out o! the#) Ioreover, when the ter#s o! the contract are clear and leave no dou&t as to the

intention o! the contractin parties, the rule is settled that the literal #eanin o! its stipulations should overn) /n such cases, courts have no authority to alter a contract &y construction or to #a-e a new contract !or the parties) "ince their duty is con!ined to the interpretation o! the one which the parties have #ade !or the#selves without re ard to its wisdo# or !olly, it has &een ruled that courts cannot supply #aterial stipulations or read into the contract words it does not contain) /ndeed, courts will not relieve a party !ro# the adverse e!!ects o! an unwise or un!avora&le contract !reely entered into) *n accessory underta-in to assu#e reater lia&ility on the part o! the o&li or in case o! &reach o! an o&li ation, the !ore oin stipulation is a penal clause which serves to stren then the coercive !orce o! the o&li ation and provides !or li'uidated da#a es !or such &reach) 2.he o&li or would then &e &ound to pay the stipulated inde#nity without the necessity o! proo! o! the e+istence and the #easure o! da#a es caused &y the &reach)3 /n o&li ations with a penal clause, the penalty enerally su&stitutes the inde#nity !or da#a es and the pay#ent o! interests in case o! nonco#pliance) 0sually incorporated to create an e!!ective deterrent a ainst &reach o! the o&li ation &y #a-in the conse'uences o! such &reach as onerous as it #ay &e possi&le, the rule is settled that a penal clause is not li#ited to actual and co#pensatory da#a es) &eirs of Manuel .y /$ (ion% v. Mauricia Meer Castillo, &eirs of Buenaflor C. .mali, represented y )ancy .mali, et al., =)>) 8o) 11@<25, June 5, 2013) Contract% de!ault o! de&tor% de!inition% re'uisites% li'uidated da#a es% stipulation there!or% dou&le !unction% penalty clause% de!inition% !unction) He!ault or mora on the part o! the de&tor is the delay in the !ul!ill#ent o! the prestation &y reason o! a cause i#puta&le to the !or#er) /t is the non!ul!ill#ent o! an o&li ation with respect to ti#e)

/t is a eneral rule that one who contracts to co#plete certain worwithin a certain ti#e is lia&le !or the da#a e !or not co#pletin it within such ti#e, unless the delay is e+cused or waived) /n this (urisdiction, the !ollowin re'uisites #ust &e present in order that the de&tor #ay &e in de!ault$ A1B that the o&li ation &e de#anda&le and already li'uidated% A2B that the de&tor delays per!or#ance% and A3B that the creditor re'uires the per!or#ance (udicially or e+tra(udicially) Lia&ility !or li'uidated da#a es is overned &y *rticles 222@ to 222? o! the Civil Code) * stipulation !or li'uidated da#a es is attached to an o&li ation in order to ensure per!or#ance and has a dou&le !unction$ A1B to provide !or li'uidated da#a es, and A2B to stren then the coercive !orce o! the o&li ation &y the threat o! reater responsi&ility in the event o! &reach) .he a#ount a reed upon answers !or da#a es su!!ered &y the owner due to delays in the co#pletion o! the pro(ect) *s a precondition to such award, however, there #ust &e proo! o! the !act o! delay in the per!or#ance o! the o&li ation) * penalty clause, e+pressly reco ni9ed &y law, is an accessory underta-in to assu#e reater lia&ility on the part o! the o&li or in case o! &reach o! an o&li ation) /t !unctions to stren then the coercive !orce o! o&li ation and to provide, in e!!ect, !or what could &e the li'uidated da#a es resultin !ro# such a &reach) .he o&li or would then &e &ound to pay the stipulated inde#nity without the necessity o! proo! on the e+istence and on the #easure o! da#a es caused &y the &reach) /t is well-settled that so lon as such stipulation does not contravene law, #orals, or pu&lic order, it is strictly &indin upon the o&li or) J Plus Asia 'evelopment Corporation v. .tility Assurance Corporation, =)>) 8o) 1;;@50, June 2@, 2013 Contract% rescission under *rticle 11;1% #utual restitution% contracts% de!inition) Iutual restitution is re'uired in cases involvin rescission under *rticle 11;1 o! the Civil Code% such restitution is necessary to

&rin &ac- the parties to their ori inal situation prior to the inception o! the contract) *s a eneral rule, a contract is a #eetin o! #inds &etween two persons) .he Civil Code upholds the spirit over the !or#% thus, it dee#s an a ree#ent to e+ist, provided the essential re'uisites are present) * contract is upheld as lon as there is proo! o! consent, su&(ect #atter and cause) Ioreover, it is enerally o&li atory in whatever !or# it #ay have &een entered into) 6ro# the #o#ent there is a #eetin o! #inds &etween the parties, Cthe contractE is per!ected) 0il-/state 1old and 'evelopment, ,nc., et al. v. *erte2 "ales and 3radin%, ,nc), =)>) 8o) 20201;, June 10, 2013) Contract% void contracts% e!!ect) * void contract is e'uivalent to nothin % it produces no civil e!!ect% and it does not create, #odi!y or e+tin uish a (uridical relation) Joselito C. Borromeo v. Juan 3. Mina, =)>) 8o) 1;31<1, June 5, 2013) Credit% concurrence and pre!erence o! credit% ta+ clearance is not re'uired !or the approval o! a pro(ect o! partition) .he position o! the F/>, insistin on prior co#pliance with the ta+ clearance re'uire#ent as a condition !or the approval o! the pro(ect o! distri&ution o! the assets o! a &an- under li'uidation, is contrary to &oth the letter and intent o! the law on li'uidation o! &an-s &y the PH/C) .he law e+pressly provides that de&ts and lia&ilities o! the &an- under li'uidation are to &e paid in accordance with the rules on concurrence and pre!erence o! credit under the Civil Code) Huties, ta+es, and !ees due the =overn#ent en(oy priority only when they are with re!erence to a speci!ic #ova&le property, under *rticle 22<1A1B o! the Civil Code, or i##ova&le property, under *rticle 22<2A1B o! the sa#e Code) However, with re!erence to the other real and personal property o! the de&tor, so#eti#es re!erred to as 2!ree property,3 the ta+es and assess#ents due the 8ational =overn#ent, other than those in *rticles 22<1A1B and 22<2A1B o! the Civil Code, such as the corporate inco#e ta+, will co#e

only in ninth place in the order o! pre!erence) ,n the other hand, i! the F/>:s contention that a ta+ clearance &e secured !irst &e!ore the pro(ect o! distri&ution o! the assets o! a &an- under li'uidation #ay &e approved, then the ta+ lia&ilities will &e iven a&solute pre!erence in all instances, includin those that do not !all under *rticles 22<1A1B and 22<2A1B o! the Civil Code) /n order to secure a ta+ clearance which will serve as proo! that the ta+payer had co#pletely paid o!! his ta+ lia&ilities, PH/C will &e co#pelled to settle and pay !irst all ta+ lia&ilities and de!iciencies o! the &an-, re ardless o! the order o! pre!erence under the pertinent provisions o! the Civil Code) 6ollowin the F/>:s stance, there!ore, only then #ay the pro(ect o! distri&ution o! the &an-:s assets &e approved and the other de&ts and clai#s therea!ter settled, even thou h under *rticle 22<< o! the Civil Code such de&ts and clai#s en(oy pre!erence over ta+es and assess#ents due the 8ational =overn#ent) Philippine 'eposit ,nsurance Corporation v. Bureau of ,nternal Revenue, =)>) 8o) 112?;2, June 13, 2013 Ha#a es% *ttorney:s !ees% dual concept o! attorney:s !ees% an award o! attorney:s !ees under *rticle 220? de#ands !actual, le al, and e'uita&le (usti!ication) *rticle 220? o! the 8ew Civil Code o! the Philippines states the policy that should uide the courts when awardin attorney:s !ees to a liti ant) *s a eneral rule, the parties #ay stipulate the recovery o! attorney:s !ees) /n the a&sence o! such stipulation, this article restrictively enu#erates the instances when these !ees #ay &e recovered) /n AB"-CB) Broadcastin% Corp. v. CA, this Court had the occasion to e+pound on the policy &ehind the rant o! attorney:s !ees as actual or co#pensatory da#a es$ A.Bhe law is clear that in the a&sence o! stipulation, attorney:s !ees #ay &e recovered as actual or co#pensatory da#a es under any o! the circu#stances provided !or in *rticle 220? o! the Civil Code) .he eneral rule is that attorney:s !ees cannot &e recovered as part o! da#a es &ecause o! the policy that no pre#iu# should &e placed on the

ri ht to liti ate) .hey are not to &e awarded every ti#e a party wins a suit) .he power o! the court to award attorney:s !ees under *rticle 220? de#ands !actual, le al, and e'uita&le (usti!ication) Dven when a clai#ant is co#pelled to liti ate with third persons or to incur e+penses to protect his ri hts, still attorney:s !ees #ay not &e awarded where no su!!icient showin o! &ad !aith could &e re!lected in a party:s persistence in a case other than an erroneous conviction o! the ri hteousness o! his cause) 7e have consistently held that an award o! attorney:s !ees under *rticle 220? de#ands !actual, le al, and e'uita&le (usti!ication to avoid speculation and con(ecture surroundin the rant thereo!) Hue to the special nature o! the award o! attorney:s !ees, a ri id standard is i#posed on the courts &e!ore these !ees could &e ranted) Hence, it is i#perative that they clearly and distinctly set !orth in their decisions the &asis !or the award thereo!) /t is not enou h that they #erely state the a#ount o! the rant in the dispositive portion o! their decisions) /t &ears reiteration that the award o! attorney:s !ees is an e+ception rather than the eneral rule% thus, there #ust &e co#pellin le al reason to &rin the case within the e+ceptions provided under *rticle 220? o! the Civil Code to (usti!y the award) Philippine )ational Construction Corporation v. Apac Mar$etin% Corporation, represented y Cesar M. !n%, Jr., =)>) 8o) 1;0;51, June 5, 2013) Ha#a es% no#inal da#a es% when warranted in la&or cases) C7Ehile Kan Hoorn has a (ust and valid cause to ter#inate the respondents: e#ploy#ent, it !ailed to #eet the re'uisite procedural sa!e uards provided under *rticle 2?3 o! the La&or Code) /n the ter#ination o! e#ploy#ent under *rticle 2?3, Kan Hoorn, as the e#ployer, is re'uired to serve a written notice to the respondents and to the H,LD o! the intended ter#ination o! e#ploy#ent at least one #onth prior to the cessation o! its !ishin operations) Poseidon could have easily !iled this notice, in the way it represented Kan Hoorn in its dealin s in the Philippines) 7hile this o#ission does not a!!ect the validity o! the

ter#ination o! e#ploy#ent, it su&(ects the e#ployer to the pay#ent o! inde#nity in the !or# o! no#inal da#a es) Poseidon ,nternational Maritime "ervices, ,nc. v. 3ito R. 3amala, et al., =)>) 8o) 1?@<15, June 2@, 2013 Ha#a es% te#perate da#a es% when warranted) *rticle 222< o! the 8ew Civil Code provides that 2AtBe#perate or #oderate da#a es, which are #ore than no#inal &ut less than co#pensatory da#a es #ay &e recovered when the court !inds that so#e pecuniary loss has &een su!!ered &ut its a#ount cannot, !ro# the nature o! the case, proved with certainty)3 People of the Philippines v. Re%%ie Bernardo, =)>) 8o) 1;?1?;, June 3, 2013) /nterest rates% a stipulated interest o! 2<L per annu# is not unconsciona&le% surchar e on principal loan% a surchar e o! 1L per #onth on the principal loan is valid% surchar e or penalty parta-es o! the nature o! li'uidated da#a es% di!!erent !ro# interest pay#ent) /n *illanueva v. Court of Appeals, where the issue raised was whether the 2<L p)a) stipulated interest rate is unreasona&le under the circu#stances, we answered in the ne ative and held$ /n "pouses 4acarias Bacolor and Catherine Bacolor v. Banco 0ilipino "avin%s and Mort%a%e Ban$, 'a%upan City Branch, this Court held that the interest rate o! 2<L per annum on a loan o! P2<<,000)00, a reed upon &y the parties, #ay not &e considered as unconsciona&le and e+cessive) *s such, the Court ruled that the &orrowers cannot rene e on their o&li ation to co#ply with what is incu#&ent upon the# under the contract o! loan as the said contract is the law &etween the parties and they are &ound &y its stipulations) *lso, in 1arcia v. Court of Appeals, this Court sustained the a ree#ent o! the parties to a 2<L per annum interest on an P?,@<;,250)00 loan !indin the sa#e to &e reasona&le and clearly evidenced &y the a#ended credit line a ree#ent entered into &y the parties as well as two pro#issory notes e+ecuted &y the &orrower in !avor o! the lender)

Fased on the a&ove (urisprudence, the Court !inds that the 2<L per annum interest rate, provided !or in the su&(ect #ort a e contracts !or a loan o! P225,000)00, #ay not &e considered unconsciona&le) Ioreover, considerin that the #ort a e a ree#ent was !reely entered into &y &oth parties, the sa#e is the law &etween the# and they are &ound to co#ply with the provisions contained therein) /n Rui5 v. CA, we held$ .he 1L surchar e on the principal loan !or every #onth o! de!ault is valid) .his surchar e or penalty stipulated in a loan a ree#ent in case o! de!ault parta-es o! the nature o! li'uidated da#a es under *rt) 2221 o! the 8ew Civil Code, and is separate and distinct !ro# interest pay#ent) *lso re!erred to as a penalty clause, it is e+pressly reco ni9ed &y law) /t is an accessory underta-in to assu#e reater lia&ility on the part o! an o&li or in case o! &reach o! an o&li ation) .he o&li or would then &e &ound to pay the stipulated a#ount o! inde#nity without the necessity o! proo! on the e+istence and on the #easure o! da#a es caused &y the &reach) "pouses 0lorentino 3. Mallari and Aurea *. Mallari v. Prudential Ban$ of the Philippines, =)>) 8o) 1;1?@1, June 5, 2013 .ort% collateral source rule% un(ust enrich#ent% ele#ents) *s part o! *#erican personal in(ury law, the collateral source rule was ori inally applied to tort cases wherein the de!endant is prevented !ro# &ene!itin !ro# the plainti!!:s receipt o! #oney !ro# other sources) 0nder this rule, i! an in(ured person receives co#pensation !or his in(uries !ro# a source wholly independent o! the tort!easor, the pay#ent should not &e deducted !ro# the da#a es which he would otherwise collect !ro# the tort!easor) /n a recent Hecision &y the /llinois "upre#e Court, the rule has &een descri&ed as 2an esta&lished e+ception to the eneral rule that da#a es in ne li ence actions #ust &e co#pensatory)3 .he Court went on to e+plain that althou h the rule appears to allow a dou&le recovery, the collateral source will have a lien or su&ro ation ri ht to prevent such

a dou&le recovery) /n Iitchell v) Haldar, the collateral source rule was rationali9ed &y the "upre#e Court o! Helaware$ .he collateral source rule is Mpredicated on the theory that a tort!easor has no interest in, and there!ore no ri ht to &ene!it !ro# #onies received &y the in(ured person !ro# sources unconnected with the de!endant:) *ccordin to the collateral source rule, Ma tort!easor has no ri ht to any #iti ation o! da#a es &ecause o! pay#ents or co#pensation received &y the in(ured person !ro# an independent source): .he rationale !or the collateral source rule is &ased upon the 'uasi-punitive nature o! tort law lia&ility) /t has &een e+plained as !ollows$ .he collateral source rule is desi ned to stri-e a &alance &etween two co#petin principles o! tort law$ A1B a plainti!! is entitled to co#pensation su!!icient to #a-e hi# whole, &ut no #ore% and A2B a de!endant is lia&le !or all da#a es that pro+i#ately result !ro# his wron ) * plainti!! who receives a dou&le recovery !or a sin le tort en(oys a wind!all% a de!endant who escapes, in whole or in part, lia&ility !or his wron en(oys a wind!all) Fecause the law #ust sanction one wind!all and deny the other, it !avors the victi# o! the wron rather than the wron doer) .hus, the tort!easor is re'uired to &ear the cost !or the !ull value o! his or her ne li ent conduct even i! it results in a wind!all !or the innocent plainti!!) ACitations o#ittedB *s seen, the collateral source rule applies in order to place the responsi&ility !or losses on the party causin the#) /ts application is (usti!ied so that 2Mthe wron doer should not &ene!it !ro# the e+penditures #ade &y the in(ured party or ta-e advanta e o! contracts or other relations that #ay e+ist &etween the in(ured party and third persons)3 .hus, it !inds no application to cases involvin no-!ault insurances under which the insured is inde#ni!ied !or losses &y insurance co#panies, re ardless o! who was at !ault in the incident eneratin the losses)

.o constitute un(ust enrich#ent, it #ust &e shown that a party was un(ustly enriched in the sense that the ter# un(ustly could #ean ille ally or unlaw!ully) * clai# !or un(ust enrich#ent !ails when the person who will &ene!it has a valid clai# to such &ene!it) Mitsu ishi Motors Philippines "alaried /mployees .nion v. Mitsu ishi Motors Philippines Corporation, =)>) 8o) 115113, June 11, 2013) 0n(ust enrich#ent% de!inition% ele#ents) 0n(ust enrich#ent is a ter# used to depict result or e!!ect o! !ailure to #a-e re#uneration o! or !or property or &ene!its received under circu#stances that ive rise to le al or e'uita&le o&li ation to account !or the#) .o &e entitled to re#uneration, one #ust con!er &ene!it &y #ista-e, !raud, coercion, or re'uest) 0n(ust enrich#ent is not itsel! a theory o! reconveyance) >ather, it is a prere'uisite !or the en!orce#ent o! the doctrine o! restitution) .here is un(ust enrich#ent when$ 1) * person is un(ustly &ene!ited% and 2) "uch &ene!it is derived at the e+pense o! or with da#a es to another) Philippine 3ransmarine Carriers, ,nc. v. (eandro (e%aspi, =)>) 8o) 2021;1, June 10, 2013) Special Laws 6a#ily Code% support% in proportion to the resources or #eans o! the iver and to the needs o! the recipient% support pendente lite in cases o! le al separation and petitions !or declaration o! nullity or annul#ent o! #arria e% (udicial deter#ination is uided &y the >ule on Provisional ,rders% support in arrears% deductions !ro# accrued support pendente lite6 (ud #ent !or support does not &eco#e !inal) *s a #atter o! law, the a#ount o! support which those related &y #arria e and !a#ily relationship is enerally o&li ed to ive each other shall &e in proportion to the resources or #eans o! the iver and to the needs o! the recipient) "uch support co#prises everythin indispensa&le !or sustenance,

dwellin , clothin , #edical attendance, education and transportation, in -eepin with the !inancial capacity o! the !a#ily) 0pon receipt o! a veri!ied petition !or declaration o! a&solute nullity o! void #arria e or !or annul#ent o! voida&le #arria e, or !or le al separation, and at any ti#e durin the proceedin , the court, motu proprio or upon veri!ied application o! any o! the parties, uardian or desi nated custodian, #ay te#porarily rant support pendente lite prior to the rendition o! (ud #ent or !inal order) Fecause o! its provisional nature, a court does not need to delve !ully into the #erits o! the case &e!ore it can settle an application !or this relie!) *ll that a court is tas-ed to do is deter#ine the -ind and a#ount o! evidence which #ay su!!ice to ena&le it to (ustly resolve the application) /t is enou h that the !acts &e esta&lished &y a!!idavits or other docu#entary evidence appearin in the record) Judicial deter#ination o! support pendente lite in cases o! le al separation and petitions !or declaration o! nullity or annul#ent o! #arria e are uided &y the provisions o! the >ule on Provisional ,rders) ,n the issue o! creditin o! #oney pay#ents or e+penses a ainst accrued support, we !ind as relevant the !ollowin rulin s &y 0" courts) /n Bradford v. 0utrell, appellant sou ht review o! the decision o! the Circuit Court which !ound hi# in arrears with his child support pay#ents and entered a decree in !avor o! appellee wi!e) He co#plained that in deter#inin the arreara e !i ure, he should have &een allowed !ull credit !or all #oney and ite#s o! personal property iven &y hi# to the children the#selves, even thou h he re!erred to the# as i!ts) .he Court o! *ppeals o! Iaryland ruled that in the suit to deter#ine a#ount o! arrears due the divorced wi!e under decree !or support o! #inor children, the hus&and AappellantB was not entitled to credit !or chec-s which he had clearly desi nated as i!ts, nor was he entitled to credit !or an auto#o&ile iven to the oldest son or a television set iven to the children) .hus, i! the children re#ain in the custody o! the #other, the

!ather is not entitled to credit !or #oney paid directly to the children i! such was paid without any relation to the decree) /n Martin, Jr. v. Martin, the "upre#e Court o! 7ashin ton held that a !ather, who is re'uired &y a divorce decree to #a-e child support pay#ents directly to the #other, cannot clai# credit !or pay#ents voluntarily #ade directly to the children) However, special considerations o! an e'uita&le nature #ay (usti!y a court in creditin such pay#ents on his inde&tedness to the #other, when such can &e done without in(ustice to her) "u!!ice it to state that the #atter o! increase or reduction o! support should &e su&#itted to the trial court in which the action !or declaration !or nullity o! #arria e was !iled, as this Court is not a trier o! !acts) .he a#ount o! support #ay &e reduced or increased proportionately accordin to the reduction or increase o! the necessities o! the recipient and the resources or #eans o! the person o&li ed to support) *s we held in Advincula v. Advincula7 Jud #ent !or support does not &eco#e !inal) .he ri ht to support is o! such nature that its allowance is essentially provisional% !or durin the entire period that a needy party is entitled to support, his or her ali#ony #ay &e #odi!ied or altered, in accordance with his increased or decreased needs, and with the #eans o! the iver) /t cannot &e re arded as su&(ect to !inal deter#ination) "usan (im-(ua v. 'anilo 8. (ua, =)>) 8os) 11521;-?0, June 5, 2013) 6a#ily Code% >ule on Heclaration o! *&solute 8ullity o! Koid Iarria es and *nnul#ent o! Koida&le Iarria es% not applica&le in an action !or reco nition o! !orei n (ud #ent% !orei n (ud #ent relatin to the #arital status o! a person% special proceedin !or cancellation or correction o! entries in the civil re istry under >ule 10? o! the >ules o! Court% the !irst hus&and has a ri ht to !ile the petition% e!!ect o! a !orei n divorce decree to a 6ilipino spouse% *rticle 2@ o! the 6a#ily Code) .he

>ule on Heclaration o! *&solute 8ullity o! Koid Iarria es and *nnul#ent o! Koida&le Iarria es A*)I) 8o) 02-11-10-"CB does not apply in a petition to reco ni9e a !orei n (ud #ent relatin to the status o! a #arria e where one o! the parties is a citi9en o! a !orei n country) Ioreover, in Juliano-(lave v. Repu lic, this Court held that the rule in *)I) 8o) 02-11-10-"C that only the hus&and or wi!e can !ile a declaration o! nullity or annul#ent o! #arria e 2does not apply i! the reason &ehind the petition is &i a#y)3 * !orei n (ud #ent relatin to the status o! a #arria e a!!ects the civil status, condition and le al capacity o! its parties) However, the e!!ect o! a !orei n (ud #ent is not auto#atic) .o e+tend the e!!ect o! a !orei n (ud #ent in the Philippines, Philippine courts #ust deter#ine i! the !orei n (ud #ent is consistent with do#estic pu&lic policy and other #andatory laws) *rticle 15 o! the Civil Code provides that 2ClEaws relatin to !a#ily ri hts and duties, or to the status, condition and le al capacity o! persons are &indin upon citi9ens o! the Philippines, even thou h livin a&road)3 .his is the rule o! le2 nationalii in private international law) .hus, the Philippine "tate #ay re'uire, !or e!!ectivity in the Philippines, reco nition &y Philippine courts o! a !orei n (ud #ent a!!ectin its citi9en, over who# it e+ercises personal (urisdiction relatin to the status, condition and le al capacity o! such citi9en) * petition to reco ni9e a !orei n (ud #ent declarin a #arria e void does not re'uire reliti ation under a Philippine court o! the case as i! it were a new petition !or declaration o! nullity o! #arria e) Philippine courts cannot presu#e to -now the !orei n laws under which the !orei n (ud #ent was rendered) .hey cannot su&stitute their (ud #ent on the status, condition and le al capacity o! the !orei n citi9en who is under the (urisdiction o! another state) .hus, Philippine courts can only reco ni9e the !orei n (ud #ent as a fact accordin to the rules o! evidence)

"ince the reco nition o! a !orei n (ud #ent only re'uires proo! o! !act o! the (ud #ent, it #ay &e #ade in a special proceedin !or cancellation or correction o! entries in the civil re istry under >ule 10? o! the >ules o! Court) >ule 1, "ection 3 o! the >ules o! Court provides that 2CaE special proceedin is a re#edy &y which a party see-s to esta&lish a status, a ri ht, or a particular !act)3 >ule 10? creates a re#edy to recti!y !acts o! a person:s li!e which are recorded &y the "tate pursuant to the Civil >e ister Law or *ct 8o) 3153) .hese are !acts o! pu&lic conse'uence such as &irth, death or #arria e, which the "tate has an interest in recordin ) .here is no dou&t that the prior spouse has a personal and #aterial interest in #aintainin the inte rity o! the #arria e he contracted and the property relations arisin !ro# it) .here is also no dou&t that he is interested in the cancellation o! an entry o! a &i a#ous #arria e in the civil re istry, which co#pro#ises the pu&lic record o! his #arria e) .he interest derives !ro# the su&stantive ri ht o! the spouse not only to preserve Aor dissolve, in li#ited instancesB his #ost inti#ate hu#an relation, &ut also to protect his property interests that arise &y operation o! law the #o#ent he contracts #arria e) .hese property interests in #arria e include the ri ht to &e supported 2in -eepin with the !inancial capacity o! the !a#ily3 and preservin the property re i#e o! the #arria e) "ection 2AaB o! *)I) 8o) 02-11-10-"C does not preclude a spouse o! a su&sistin #arria e to 'uestion the validity o! a su&se'uent #arria e on the round o! &i a#y) ,n the contrary, when "ection 2AaB states that 2CaE petition !or declaration o! a&solute nullity o! void #arria e #ay &e !iled solely by the husband or the wife3 Nit re!ers to the hus&and or the wi!e o! the su&sistin #arria e) 0nder *rticle 35A<B o! the 6a#ily Code, &i a#ous #arria es are void !ro# the &e innin ) .hus, the parties in a &i a#ous #arria e are neither the hus&and nor the wi!e under the law) .he hus&and or the wi!e o! the prior su&sistin #arria e is the one who has the personality to !ile a petition !or declaration o! a&solute nullity o! void #arria e under "ection 2AaB o! *)I) 8o) 02-11-10-"C)

C*E 6ilipino citi9en cannot dissolve his #arria e &y the #ere e+pedient o! chan in his entry o! #arria e in the civil re istry) However, this does not apply in a petition !or correction or cancellation o! a civil re istry entry &ased on the reco nition o! a !orei n (ud #ent annullin a #arria e where one o! the parties is a citi9en o! the !orei n country) .here is neither circu#vention o! the su&stantive and procedural sa!e uards o! #arria e under Philippine law, nor o! the (urisdiction o! 6a#ily Courts under >)*) 8o) ?3@;) * reco nition o! a !orei n (ud #ent is not an action to nulli!y a #arria e) /t is an action !or Philippine courts to reco ni9e the e!!ectivity o! a !orei n (ud #ent, which presupposes a case which was already tried and decided under forei!n law% .he procedure in *)I) 8o) 02-11-10-"C does not apply in a petition to reco ni9e a !orei n (ud #ent annullin a &i a#ous #arria e where one o! the parties is a citi9en o! the !orei n country) 8either can >)*) 8o) ?3@; de!ine the (urisdiction o! the !orei n court) *rticle 2@ o! the 6a#ily Code con!ers (urisdiction on Philippine courts to e+tend the e!!ect o! a !orei n divorce decree to a 6ilipino spouse without under oin trial to deter#ine the validity o! the dissolution o! the #arria e) .he second para raph o! *rticle 2@ o! the 6a#ily Code provides that 2CwEhere a #arria e &etween a 6ilipino citi9en and a !orei ner is validly cele&rated and a divorce is therea!ter validly o&tained a&road &y the alien spouse capacitatin hi# or her to re#arry, the 6ilipino spouse shall have capacity to re#arry under Philippine law)3 .he second para raph o! *rticle 2@ o! the 6a#ily Code only authori9es Philippine courts to adopt the e!!ects o! a !orei n divorce decree precisely &ecause the Philippines does not allow divorce) Philippine courts cannot try the case on the #erits &ecause it is tanta#ount to tryin a case !or divorce) Minoru 0u9i$i v. Maria Pa5 1alela Marinay, et al., 1.R. )o. :;<=>;, June 2@, 2013) 6a#ily Courts *ct o! 1;;1% Kiolence * ainst 7o#en and Children *ct o! 200<% 6a#ily Courts% (urisdiction% a special court o! the sa#e level as >.C% >.Cs desi nated as !a#ily courts re#ain possessed o! authority as courts o! eneral ori inal (urisdiction) *t the outset, it #ust &e stressed

that 6a#ily Courts are special courts, o! the sa#e level as >e ional .rial Courts) 0nder >)*) ?3@;, otherwise -nown as the 26a#ily Courts *ct o! 1;;1,3 !a#ily courts have e+clusive ori inal (urisdiction to hear and decide cases o! do#estic violence a ainst wo#en and children) /n accordance with said law, the "upre#e Court desi nated !ro# a#on the &ranches o! the >e ional .rial Courts at least one 6a#ily Court in each o! several -ey cities identi!ied) .o achieve har#ony with the !irst #entioned law, "ection 1 o! >)*) ;2@2 now provides that >e ional .rial Courts desi nated as 6a#ily Courts shall have ori inal and e+clusive (urisdiction over cases o! K*7C de!ined under the latter law) /nspite o! its desi nation as a !a#ily court, the >.C o! Facolod City re#ains possessed o! authority as a court o! eneral ori inal (urisdiction to pass upon all -inds o! cases whether civil, cri#inal, special proceedin s, land re istration, uardianship, naturali9ation, ad#iralty or insolvency) /t is settled that >.Cs have (urisdiction to resolve the constitutionality o! a statute, 2this authority &ein e#&raced in the eneral de!inition o! the (udicial power to deter#ine what are the valid and &indin laws &y the criterion o! their con!or#ity to the !unda#ental law)3 .he Constitution vests the power o! (udicial review or the power to declare the constitutionality or validity o! a law, treaty, international or e+ecutive a ree#ent, presidential decree, order, instruction, ordinance, or re ulation not only in this Court, &ut in all >.Cs) Jesus C. 1arcia v. 3he &on. Ray Alan 3. 'rilon, et al., =)>) 8o) 11;2@1, June 25, 2013 .orrens syste#% purpose) .orrens title% enerally conclusive evidence o! the ownership o! the land% not su&(ect to collateral attac-% Land >e istration *uthority% !unctions) .he real purpose o! the .orrens syste# is to 'uiet title to land and to stop !orever any 'uestion as to its le ality) ,nce a title is re istered, the owner #ay rest secure, without the necessity o! waitin in the portals o! the court, or sittin on the 2mirador su casa,3 to avoid the possi&ility o! losin his land) * .orrens title is enerally a conclusive evidence o! the ownership o! the land re!erred to therein) * stron presu#ption e+ists that .orrens titles are re ularly issued and that they are valid)

"ection <? o! Presidential Hecree 8o) 152;, otherwise -nown as the Property >e istration Hecree, e+plicitly provides that 2CaE certi!icate o! title shall not &e su&(ect to collateral attac-) /t cannot &e altered, #odi!ied, or cancelled e+cept in a direct proceedin in accordance with law)3 .he duty o! L>* o!!icials to issue decrees o! re istration is #inisterial in the sense that they act under the orders o! the court and the decree #ust &e in con!or#ity with the decision o! the court and with the data !ound in the record) .hey have no discretion in the #atter) However, i! they are in dou&t upon any point in relation to the preparation and issuance o! the decree, these o!!icials ou ht to see- clari!ication !ro# the court) .hey act, in this respect, as o!!icials o! the court and not as ad#inistrative o!!icials, and their act is the act o! the court) .hey are speci!ically called upon to 2e+tend assistance to courts in ordinary and cadastral land re istration proceedin s)3 'eo%enes !. Rodri%ue5 v. &on. Court of Appeals and Philippine Chinese Charita le Association, ,nc., =)>) 8o) 1?<5?;, June 13, 2013 ?Rose than$s /arla, 0rances and Rory for assistin% in the preparation of this post.@