Civil Law Survey of Cases

Persons and Family Relations by Atty. Amparita Sta. Maria

- A19 : Abuse of Right

• BDO v. Gomez, nov2015

- May PCIB validly deduct amounts from its employee’s (X) salary while the
investigation for misconduct was pending?

• NO. PCIB’s actions were contrary to A19 and 21 of the NCC. While it had a right to
penalize employees for acts of negligence, the right must not be exercised unjustly
and illegally.

• PCIB made deductions on X’s salary even if investigation was still pending.
belatedly, the bank issued a memorandum finding X grossly negligent and
requiring her to pay the amount. When X asked for legal and factual basis for the
finding of negligence, the bank refused to give any. The bank continued to make
deduction on her salary, allowances, and bonuses. x was penalized while other
employees involved in the subject transaction were not.

• Coca-Cola Bottlers PHL v. Sps. Bernardo, nov2016

- May Coca-Cola, on the pretext of formulating a new policy, require the submission of
its dealer’s list of customer but in reality deal with those persons directly?

• NO. A19, 20, and 21 of the NCC provide the legal bedrock for the award of
damages to a party who suffers damage whenever another person commits an act
in violation of some legal provisions; or an act which, though not constituting a
transgression of positive law, nevertheless violates certain rudimentary rights of
the party aggrieved. The use of unjust, oppressive, or high-handed business
methods resulting in unfair competition gives a right of action to the injured party.

• Belo-Henares v. Atty. Guevarra, dec2016

- Does freedom of speech shield one from an action for damages arising from his
facebook post insulting and verbally abusing another?

• NO. While the freedom of expression and the right of speech and of the press are
among the most zealously protected rights in the Consitution, every person
exercising them, as the NCC stresses, is obliged to act with justice, give everyone
his due, and observe honesty and good faith.

• Respondent’s facebook remarks were ostensibly made with malice tending to insult
and tarnish the reputation of complainant and BMGI. Calling complainant a “quack
doctor,” “Reyna ng Kaplastikan,” “Reyna ng Payola,” and “Reyna ng Kapalpakan,”
and insinuating that she has been bribing people to destroy respondent smack bad

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 faith and reveals an intention to besmirch the name and reputation of complainant
and BMGI.

• Sps. Hing v Choachuy, jun2013

- May a CCTV directed at another’s place of business or front yard be considered as
intruding into one’s privacy?

• YES. A26(1) of the NCC should not be confined to his house or residence as it may
extend to places where he has the right to exclude the public or deny them access.
The phrase “prying into the privacy of another’s residence,” therefore, covers
places, locations, or even situations which an individual considers as private. And
as long as his right is recognized by society, other individuals may not infringe on
his right to privacy.

- Includes a place of business or office

- Absence of essential elements of marriage

• Capin-Cadiz v. Brent Hospital and Colleges, Inc.

- May a condition that the employee marry be imposed before she can be admitted
back to work after having been suspended for unwed pregnancy?

• NO. Brent’s condition is coercive, oppressive, and discriminatory. It forces Cadiz to

marry for economic reasons and deprives her of the freedom to choose her status
— an intangible and inalienable right.

• While a marriage or no-marriage qualification may be justified as a bona fide

occupational qualification, Brent must prove 2 factors necessitating its imposition,
viz:

- That the employment qualification is reasonably related to the essential

operation of the job involved, and

- That there is factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the duties of the
job.

• Brent has not shown the presence of neither of these factors. Perforce, the Court
cannot uphold the validity of said condition.

- A4, 35(3) - Marriage license requirement

• Abbas v. Abbas, jan2013

- Is a certification issued by the LCR declaring that it has not issued a marriage license
to the couple and the the marriage license indicated in the couple’s marriage contract
was issued to different couple sufficient to prove non-issuance of a marriage license?

• YES. the fact that the names in said license do not correspond to those of the
Abbas couple does not overturn the presumption that the registrar conducted a

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 diligent search of the records of her office. The certification of the LCR that their
office had no record of a marriage license was adequate to prove the non-issuance
of said license.

• Go-Bangayan v. Bangayan, Jul2013

- Is an LCR certification stating that “only Marriage License Series No. 100-150 were
issued for the month of Feb1982” and that the purported Marriage License 568 was
not issued to the couple sufficient to prove non-issuance of marriage license to the
couple?

• YES. Such certification is adequate to prove the non-issuance of a marriage license

and absent suspicious circumstance, the certification enjoys probative value. Under
A35 of the FC, a marriage solemnized without a license shall be void from the
beginning.

• The purported marriage of the couple had no valid marriage license because the
LCR confirmed that the ML of the couple did not match the ML series issued for
that month. The CR also said that it did not issue ML 568 to the couple.

• Vitangcol v. People, Jan2016

- Is an LCR certification stating that the office has no record could be found of the
alleged issuance ML issued in favor of Vitangcol and his 1st wife a valid defense in a
prosecution for bigamy?

• NO. The LCR certification was not sufficient proof of absence of marriage license.
The certification does not prove petitioner’s first marriage was solemnized without
a marriage license. It does not categorically state that such ML does not exist.

• To prove that a marriage was solemnized without an ML, the law requires that the
absence of such ML must be apparent on the marriage contract, or at the very
least, supported by a certification from the LCR that no such marriage license was
issued to the parties.

• The certification from the OCR that it has no record of the marriage license is
suspect. Assuming that it is true, it does not categorically prove that there was no
marriage license. Furthermore, marriages are not dissolved through mere
certifications by the CR.

• Kho v. RP, Jun2016

- Is an LCR certification stating that it has no record nor copy of any marriage license
ever issued in favor of the couple” sufficient to prove that no ML was in fact issued?

• YES. Based on such certification, coupled with respondent’s failure to produce a

copy of the alleged ML or of any evidence to show that such license was ever
issued, the only conclusion that can be reached is that no valid ML was, in fact,
issued.

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- A26 : Divorce of foreign spouse

• Noveras v. Noveras, Aug2014

- Is divorce obtained in foreign state valid in our jurisdiction?

• NO. Divorce is not valid and the trial court should not have recognized the divorce
decree. The foreign judgment and its authenticity must be proven as facts under
our rules on evidence, plus the alien’s applicable national law to show the effect of
the judgment on the alien himself.

• Based on the records, only the divorce decree was presented. The required
certification to prove its authenticity as well as the California law on divorce were
not presented. Even if We apply the Doctrine of Processual Presumption, as the
lower courts did, with respect to the property regime of the parties, the recognition
of divorce is entirely a different matter because, to begin with, divorce is not
recognized between Filipino citizens in the PH. Absent a valid recognition of the
divorce decree, it follows that the parties are still legally married in the PH.

• For PH courts to recognize a foreign judgment relating to the status of a marriage,

a copy of the foreign judgment may be admitted in evidence and proven as a fact.
Under S24R132, the record of public documents of a sovereign authority or
tribunal may be proved by:

- An official publication thereof, or

- A copy attested by the officer having the legal custody thereof
- May the divorce be used as a basis for filing a petition for judicial separation of
absolute community property?

• YES. The petition for separation of absolute community of property should be

granted. The records are replete with evidence that the spouses had indeed
separated for more than a year and that reconciliation is highly improbable. More
significantly, they filed for divorce in California. These facts show that reconciliation
is highly improbable.

• The PH courts did not acquire jurisdiction over the California properties of the
couple. Indeed A16 of the NCC clearly states that real property as well as personal
property is subject to the law of the country where it is situated. Thus, liquidation
shall only be limited to the PH properties.

• Del Socorro v. Van Wilsem, Dec2014

- Does a foreign national have an obligation to support his minor child under PH law?

• NO. petitioner cannot rely on A195 in demanding support from respondent, who is
a foreign citizen, since A15 stresses the principle of nationality. In other words,
insofar as PH laws are concerned, specifically the provisions of the FC on support,
the same only applies to Filipino citizens. By analogy, the same principle applies to

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 foreigners such that they are governed by their national law with respect to family
rights and duties.

• Furthermore, being still aliens, they are not in position to invoke the provisions of
the NCC for it cleaves tot he principle that family rights and duties are governed by
their personal laws, i.e., the laws of the nation to which they belong even when
staying in a foreign country.

• This does not, however, mean that respondent is not obliged to support petitioner’s
son altogether.

• In international law, the party who wants to have a foreign law applied to a dispute
or case has the burden of proving the foreign law. While respondent pleaded the
laws of Netherlands in advancing his position that his is not obliged to support his
son, he never proved the same.

• In view of respondent’s failure to prove the national law of Netherlands, the

Doctrine of Processual Presumption shall govern. Under this doctrine, if the foreign
law involved is not properly pleaded and proved, our courts will presume that the
foreign law is the same as our local or domestic or internal law. Thus, the law in
the Netherlands is presumed to be the same with PH law, which enforces the
obligation of parents to support their children and penalizing the noncompliance
therewith.

• Moreover, foreign law should not be applied when its application would work
undeniable injustice to the citizens or residents of the forum.

• To give justice is the most important function of law; a law or judgment that is
obviously unjust negates the fundamental principles of Conflict of Laws.

• Thus, when the foreign law, judgment or contract is contrary to a sound and
established public policy of the forum, the said foreign law, judgment or order shall
not be applied.

- Can a foreign national be held criminally liable under RA9262 for his failure to
support his minor child?

• YES. Additionally, prohibitive laws concerning persons, their acts or property, and
those which have for their object public order, public policy and good customs shall
not be rendered ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign country.

• Medina v. Koike, Jul2016

• Both the divorce decree and the governing personal law of the alien spouse who
obtained the divorce must be proven.

• Since the validity of the divorce decree between the couple, as well as the
existence of pertinent laws of Japan are essentially factual that calls for a re-

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 evaluation of the evidence presented, the issue raised in the instant appeal is
obviously a question of fact that is beyond the ambit of an R45 petition for review.

• Republic v. Manalo, Apr2018

- May a Filipino obtain a divorce in a foreign state against his alien spouse and invoke
A26 of the FC?

• YES. A26(2) speaks of a divorce validly obtained abroad by the alien spouse
capacitating him or her to remarry. Based on a clear and plain reading, it only
requires that there be a divorce validly obtained abroad.

• The letter of the law does not demand that the alien spouse should be the one who
initiated the proceeding. It does not distinguish whether the Filipino spouse is the
petitioner or the respondent in the foreign divorce proceeding.

• A Filipino who initiated a foreign divorce is in the same place and in like
circumstances as a Filipino who is at the receiving end of an alien initiated
proceeding. In both instances, it is extended as a means to recognize the residual
effect of the foreign divorce decree on Filipinos whose marital ties to their alien
spouses are severed by operation of the latter’s national law.

• Moreover, blind adherence to A15 must be disallowed if it would cause unjust

discrimination and oppression to those whose rights are equally protected by law.
The courts have the duty to enforce the laws of divorce as written y Legislature
only if they are constitutional.

• In this case, the SC found that A26(2) violates one of the essential requisites of
the equal protection clause. Particularly, the limitation of the provision only yo a
foreign divorce decree initiated by the alien spouse is unreasonable as it is based
on superficial, arbitrary, and whimsical classification.

• Indeed, where the interpretation of a statute according to tis exact and literal
import would lead to mischievous results or contravene the clear purpose of the
legislature, it should be construed according to its spirit and reason, disregarding
as far as necessary the letter of the law. A statute may, therefore, be extended to
cases not within the literal meaning of its terms, so long as they come within its
spirit or intent.

• Fujiki v. Marinay, Jun2013

- May the 1st alien husband file a petition for judicial recognition of foreign judgment
(declaring the 2nd marriage void on the ground of bigamy) and declaration of nullity
of the 2nd marriage on the ground of bigamy in PH courts?

• YES. The Rules on Declaration of Nullity do not apply in a petition to recognize a

foreign judgment relating to the status of a marriage where one of the parties is a
citizen of a foreign country. The rules also do not apply if the ground is bigamy.
The parties in a bigamous marriage are neither the husband nor the wife under the
law. Since the recognition of a foreign judgment only requires proof of fact of the

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 judgment, it may be made in a special proceeding for cancellation or correction of
entries in the CR under R108 of the ROC.

• Fujiki has the personality to file a petition to recognize the Japanese Family Court
judgment nullifying the marriage between Marinay and Maekara on the ground of
bigamy because the judgment concerns his civil status as married to Marinay. For
the courts to recognize a foreign judgment relating to the status of a marriage
where one of the parties is an alien, the petitioner only needs to prove the foreign
judgment as a fact under the ROC.

- A35 : Void ab initio marriages

• Montañez v. Cipriano, Oct2012

- Does the declaration of nullity of the 1st marriage (on the ground of PI) justify the
dismissal of the action for bigamy? (Note that the 2nd marriage was solemnized in
1983 and the existing law at that time did not require judicial declaration of nullity as
a condition to remarry; both marriages are governed by the CC)

• No. The declaration of nullity of the 1st marriage does not justify the dismissal of
the bigamy case. The subsequent judicial declaration of nullity of the 1st marriage
would not change the fact that she contracted the 2nd marriage during the
subsistence of the 1st marriage.

• As long as there is no judicial declaration, the marriage is presumed to be existing.

Therefore, he who contracts a subsequent marriage before the judicial declaration
of nullity of the 1st marriage can be prosecuted for bigamy. Parties to the marriage
should not be permitted to judge for themselves its nullity, for the same must be
submitted to the judgment of competent courts and only when the nullity of the
marriage is so declared can it be held as void, and so long as there is no
declaration, the presumption is that the marriage exists.

• Here, at the time the 2nd marriage was contracted, there was no ground yet that
made the 1st marriage null and void. By the time a case under A36 of the FC was
filed against the 1st marriage, A40 of the FC was also already in effect. Thus, a
petition for nullity of the 1st marriage should have been filed first before the 2nd
marriage because A40 already made a declaration of nullity a requirement before a
person with a prior void marriage can validly contract a 2nd marriage.

• Castillo v. Castillo, Apr2016

- May the 2nd marriage be declared void where the 1st marriage was solemnized by an
officer to which neither party belonged and where no ML was obtained if there was no
declaration of nullity of the 1st marriage? (Note that both marriages were governed
by the Old Civil Code)

• No. The validity of a marriage and all its incidents must be determined in
accordance with the law in effect at the time of its celebration. In this case, the law
in force at the time Lea contracted both marriages was the CC. The children of the

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 parties were also born while the CC was in effect. Hence, the Court must resolve
the case using the provisions under the CC on void marriages.

• The Court held that the CC contains no express provision on the necessity of a
judicial declaration of nullity of a void marriage. The requirement of a judicial
decree of nullity does not apply to marriages that were celebrated before the
effectivity of the FC, particularly if the children of the parties were born while the
CC was in force. Since the 2nd marriage took place and all the children were born
before the effectivity of the FC, there is no need for a judicial declaration of nullity
of the 1st marriage pursuant to prevailing jurisprudence at that time.

• The subsequent marriage is valid in view of the invalidity of the 1st marriage
because of the absence of a marriage license. That there was no judicial
declaration that the 1st marriage was void ab initio before the 2nd marriage was
contracted is immaterial as this is not a requirement under the CC.

• People v. Odtuhan, Jul2013

- May a person who contracts a 2nd marriage without securing a judicial declaration of
nullity of marriage be prosecuted for bigamy? (Note that, here, 1st marriage was
governed by the CC while the 2nd marriage was governed by the FC)

• Yes. What makes a person criminally liable for bigamy is when he/she contracts a
subsequent marriage during the subsistence of a valid marriage. Parties to the
marriage should not be permitted to judge for themselves its nullity, for the same
must be submitted to the judgment of competent courts and only when the nullity
of the marriage is so declared can it be held as void, and so long as there is no
declaration, the presumption is that the marriage exists.

• Therefore, s/he who contracts a 2nd marriage before the judicial declaration of
nullity of the 1st marriage assumes the risk of being prosecuted for bigamy.

- A36 : Psychological incapacity (PI)

• Tilar v. Tilar and RP, Jul2017

- May the court refuse to pass upon the validity of church marriages on the ground of
separation of church and state?

• No. The marriage of the petitioner and respondent which was solemnized by a
Catholic priest and was held in a church was in accordance with the FC. Although
marriage is considered a sacrament in the Catholic church, it has civil and legal
consequences which are governed by the FC. The petitioner only seeks to nullify
the marriage contract between the parties as postulated in the FC and the
declaration of nullity of the parties’ marriage in the religious and ecclesiastical
aspect is another matter. Thus, the principle of separation of the church and state
finds no application in this case.

• Republic v. Pangasinan, Aug2016

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 - Is medical/professional declaration of a psychological disorder required in an action
under A36?

• No. Although it is not necessary that a physician examine a person to be declared

psychologically incapacitated, it is important to present evidence that can
adequately establish a party’s PI.

• Here, there was no reliable or independent evidence to establish W’s PI. The
evidence of H failed to establish PI. The doctor’s findings were based on
generalities and lacking in factual bases.

• The findings were mostly based on psychological examination on H, H’s sister, and
their son, and not from W herself. The doctor even testified that she merely
interviewed W through a phone call. This undermines the credibility of the
psychological evaluation of W.

• Matudan v. RP, Nov2016

- Is abandonment of spouse by itself a ground of PI?

• No. For PI to be established, it is important that the presence of the evidence can
adequately establish the party’s psychological condition. The complete facts should
allege the physical manifestation, if any, as are indicative of PI at the time of the
celebration of the marriage.

• Petitioner harped on the abandonment of respondent. He even admitted that this is

the only reason why he want their marriage to be dissolved. Abandonment of
spouse, however, is not PI. It is only a ground for legal separation.

• Garlet v. Garlet, Aug2017

• The illness must be grave enough to bring about the disability of the party to
assume the essential obligations of marriage. Thus, mild characteriological
peculiarities, mood changes, occasional emotional outbursts cannot be accepted as
root causes. The illness must be shown as downright incapacity or inability, not a
refusal, neglect or difficulty, much less ill will. In other words, there is natal or
supervening disabling factor in the person, an adverse integral element in the
personality structure that effectively incapacitates the person from really accepting
and thereby complying with the obligations essential to marriage.

• Del Rosario v. Del Rosario, Feb2017

• An expert opinion is not absolutely necessary. However, the totality of the evidence
must still establish the characteristics that Santos laid down:

- Gravity
- Incurability
- Juridical antecedence

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 • PI must be more than just a difficulty, refusal or neglect in the performance of the
marital obligations; it is not enough that a party prove that the other failed to meet
the responsibility and duty of a married person. There must be proof of a natal or
supervening disabling factor in the person — an adverse integral element in the
personality structure that effectively incapacitates the person from really accepting
and thereby complying with the obligations essential to marriage — which must be
linked with the manifestations of the PI.

• A36 is not a divorce law that cuts the marital bond at the time the grounds fir
divorce manifest themselves; a marriage, no matter how unsatisfactory, is not a
null and void marriage. Thus, absent sufficient evidence establishing PI within the
context of A36, the Court is compelled to uphold the indissolubility of the marital
tie.

• Dela Fuente v. Dela Fuente, Mar2017

- May a marriage be declared void under A36 where H was diagnosed with paranoid
personality disorder caused by pathogenic parental model?

• Yes. The testimony of the doctor plus the corroboration of W proved that H has PI.
The root cause of his paranoid personality was hereditary since his father suffered
from a similar disorder. It started during his late childhood years and progressed as
he reached his adolescent years.

• H’s repeated behaviour of psychological abuse by intimidating, stalking, and

isolating W from her family and friends, as well as his increasing acts of physical
violence, are proof of his depravity and utter lack of comprehension of what
marriage and partnership entail. It would be of utmost cruelty to decree that W
should remain married to H. After she had exerted efforts to save their marriage
and family, H simply refused to believed that there was anything wrong in their
marriage. This shows that H could not comprehend and perform his marital
obligations. This is persuasive enough for the Court to believe that H’s mental
illness is incurable.

• Barrido v. Nonato, Oct2014

• A147 is applicable, not A129 (requirement of delivery of presumptive legitime),
where the marriage is declared void under A36. A147 states that if the marriage is
void, wages and salaries shall be owned by them in equal shares, and the property
acquired by both of them through their work or industry shall be governed by the
rules on co-ownership. This particular kind of co-ownership applies when the
following elements are present:

- Must be capacitated to marry each other

- Live exclusively with each other as H and W
- Their union is without benefit of marriage or their marriage is void.
- A40 : Judicial declaration of nullity of marriage

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 • SSC v. Azote, Apr2015
- May SSS determine the validity of a beneficiary’s marriage?

• Yes. Although the SSC is not intrinsically empowered to determine the validity of
marriages, RA8282 requires the SSC to examine available statistics to ensure that
benefits go to the right beneficiaries.

- Note, however, that the SSC’s determination is merely provisional.

- A41 : Presumptive death

• Republic v. Narceda, Apr2013

- May the OSG appeal the RTC’s declaration of presumptive death?

• No. No appeal can be had of the RTC’s judgment in a summary proceeding for the
declaration of presumptive death of an absent spouse under A41 of the FC. Hearing
of a petition for the declaration of presumptive death is a summary proceeding.
A247 of the FC provides that judgment of the trial court in a summary proceeding
shall be immediately final and executory. Thus, by the express provision of law, the
judgment of the RTC is not appealable.

• Republic v. Sareñongan, Feb2016

• A petition for certiorari under R65 is the proper remedy to question the RTC’s
decision in a summary proceeding for the declaration of presumptive death.

• By express provision of law, the judgment of the court in a summary proceeding

shall be immediately final and executory. As a matter of course, it follows that no
appeal can be had of the trial court’s judgment in a summary proceeding for the
declaration of presumptive death of an absent spouse under A41 of the FC. It foes
without saying, however, that an aggrieved party may file a petition for certiorari
to question abuse of discretion amounting to lack of jurisdiction.

• Republic v. Tampus, Mar2016

• Other than making inquiries with H’s parents, relatives and neighbors, W made no
further efforts to find her husband. She never called or proceeded to the AFP HQ to
request information about H. She did not even seek the help of the authorities or
the AFP in finding him. W did not present H’s family, relatives, or neighbors as
witnesses who could have corroborated her asseverations that she earnestly looked
for H

• Because of this, W failed to actively look for her missing H, and her purported
earnest efforts to find him by asking his parents, relatives, and friends did not
satisfy the strict standard and degree of diligence required to created a well-
founded belief of his death.

- A42 : Reappearance of absent spouse

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 • Santos v. Santos, Oct2016
- What is the proper remedy for a spouse who was not in fact absent but was declared
presumptively dead — annulment of judgment or affidavit of reappearance?

• Annulment of judgment is the proper remedy when the RTC’s judgment, order, or
resolution has become final and the remedies of NT, appeal, petition for relief or
other appropriate remedies are no longer available through no fault of the
petitioner.

• An affidavit of reappearance is not the proper remedy when the person declared
presumptively dead has never been absent.

- A83 : Donation propter nuptias (DPN)

• Several cases, Dec2017

• The foregoing rule applies only to DPN made prior to the FC. At the time, A129 of
the CC allowed acceptance of those donations to be made impliedly. In the FC, DPN
are now subject to the rules on ordinary donations. As a result, donations of
immovables, including those. Made by reason of marriage, must now be expressly
accepted by the donee in a public instrument.

- A116 : Property relations of spouses

• Onstott v. Utnai, Sept2016

• A160 of the NCC provides that all property of the marriage is presumed to belong
to the conjugal partnership unless it is proved that it pertains exclusively to the H
or to the W.

• However, the party who invokes this presumption must first prove that the
property in controversy was acquired during the marriage. Proof of acquisition
during the coverture is a condition sine qua non for the operation of the
presumption in favor of the conjugal property. the presumption refers only to the
property acquired during the marriage and does not operate when there is no
showing as to when the property alleged to be conjugal was acquired.

- A121 : Alienation of common properties

• PNB v. Reyes, Oct2016

- Is REM constituted over a conjugal property without the consent of the other spouse
valid?

• No. The REM over the conjugal property is void for want of consent from H. A124
of the FC is clear; written consent of the spouse who did not encumber the
property is necessary before any disposition of conjugal property can be valid.

• The principal obligation to pay the loan remains valid despite the declaration of a
void mortgage. The conjugal partnership should be made liable to the extent that it

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 redounded to the benefit of the family. A122 of the FC applies to debts that were
contracted by a spouse and redounded to the benefit of the family. It applies
specifically to the loan that W contracted but not to the mortgage.

• A mortgagee is merely an accessory agreement and does not affect the principal
contract of loan. The mortgage, while void, can still be considered as instruments
evidencing the indebtedness.

• If the conjugal partnership is insufficient to cover the liability, A121 holds that the
spouses shall be solidarily liable for the unpaid balance with their separate
properties. If the conjugal properties are not enough to answer for the loan,
petitioner can recover the remaining unpaid balance from the separate properties
of either respondent of his wife.

• Boston Equity v. Hernandez, Nov2017

• That the mortgaged properties could be made liable for the obligation contracted
solely by H on the basis that the proceeds of the loan had redounded to the benefit
of the family is unwarranted. The mortgage was but an accessory agreement, and
was distinct from the principal contract of loan. Since the REM was an
encumbrance on the conjugal properties, the contracting thereof by H sans the
written consent of W rendered only the REM void and legally inexistent. The
petitioners could still recover the loan from the conjugal partnership in a proper
case for the purpose.

• Ko v. Aramburo, Aug2017
• The FC does not provide a period within which the wife who gave no consent may
assail her husband’s sale of real property. It provides that without the other
spouse’s written consent or a court order, the sale would be void.

- A147 & 148 : Property relations in a void marraige

• Ocampo v. Ocampo, Aug2015

• In a void marriage, as in those declared void under A36 of the FC, the property
relations of the parties during the period of cohabitation is governed either by
A147 or A148 of the FC.

• A147 applies to a union of parties who are legally capacitated and not barred by
any legal impediment to contract marriage, but whose marriage is nonetheless
void.

• A147 provides that in the absence of proof to the contrary, properties acquired
while they lived together shall be presumed to have been obtained by their joint
efforts, work or industry, and shall be owned by them in equal shares.

• Attempts to establish R as an irresponsible and unfaithful husband as well as family

man were made but the testimonies adduced towards that end failed to fully
convince the court that R should be punished by depriving him of his share of the

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 conjugal property because of his indiscretion. Thus, the presumption remains that
said properties were obtained by the spouses’ joint efforts, work or industry, and
shall be jointly owned by them in equal shares.

• Lavadia v. Luna, Jul2015

• The divorce obtained in Dominican Republic did not dissolve the marriage between
the H and W1. Pursuant to the nationality rule, PH laws governed this case by
virtue of H and W1 having remained Filipino’s until H’s death. H’s marriage to W2,
being bigamous, was void and the properties acquired during their marriage are
governed by the rules on co-ownership.

• A148 provides that only the property acquired by both of the parties through their
actual joint contribution of money, property, or industry shall be owned in common
and in proportion to their respective contributions. Such contribution and
corresponding shares were prima facie presumed to be equal. However, for this
presumption to arise, proof of actual contribution is required. W2 failed to prove
that she made an actual contribution to purchase the property. Also, it is logical
that W2, not being a lawyer, had no participation in the law firm or in the purchase
of books for the firm.

- A172 : Proof of filiation

• Aguilar v. Siasat, Jan2015

- Are school records, ITR, and SSS form (public instrument subscribed under oath)
sufficient to prove filiation?

• Yes. SSS Form E-1 satisfies the requirement for the proof of filiation and
relationship of petitioner to the Aguilar spouses under A172 of the FC.

• San Agustin v. Sales, Aug2016

- Are documents bearing the thumb mark of the putative father (PF) who can still write
despite old age sufficient proof of filiation?

• Yes. That a thumb mark is not sufficient, as PF was still able to write during old
age, is without merit. A thumb mark has been repeatedly considered as a valid
mode of signature.

• Ara v. Pizarro, Feb2017

• A175 : illegitimate children may establish their illegitimate filiation in the same way
and on the same evidence as legitimate children.

• The action must be brought within the same period specified in A173, except when
the action is based on A172(2), in which case, the action may be brought during
the lifetime of the alleged parent.

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 • A person who seeks to establish illegitimate filiation after the death of a putative
parent must do so via a record of birth appearing in the CR or a final judgment, or
an admission of legitimate filiation.

• The evidence of pictures, testimonies, and marriage certificates are insufficient as

there were no acts, declarations, or omissions which attributed directly to the
putative parent, much less ones pertaining to the filiation of the petitioners.

• Abella v. Cabañero, Aug2017

• While it is true that the grant of support was contingent on ascertaining paternal
relations between R and P’s D, it was unnecessary for P’s action for support to have
been dismissed and terminated by the CA in the manner that it did. Instead of
dismissing the case, the CA should have remanded the case to the RTC where P
and her D should have been enabled to present evidence to establish their cause of
action — inclusive of their underlying claim of paternal relations — against R.

• Roldan v. De Guzman, Sep2017

- Are baptismal and marriage certificates competent evidence to prove filiation?

• No. As regards the baptismal and marriage certificates of S, the same were not
competent evidence to prove that he was the illegitimate child of PM. While these
certificates may be considered public documents, since these documents were
executed without her participation.

• All told, the baptismal certificate and the marriage contract of S, which merely
stated that N is his mother, are inadequate to prove his filiation with the property
owner.

- Surnames and A176

• In re petition for cancellation of live birth of Tinitigan v. Republic, Aug2017

- May the biological father apply for a certification of live birth of his biological children
and use his surname therein?

• No. The declaration of either parent of the newborn legitimate child shall be
sufficient for the registration of his birth in the CR, and only in the registration of
birth of an illegitimate child does the law require that the BC be signed and sworn
jointly by the parents of the infant, or only by the mother if the father refuses to
acknowledge the child.

• It is mandatory that the mother of an IC signs the BC of her child in all cases,
irrespective of whether the father recognizes the child as his or not. Since it
appears on the face of the BC that the mother did not sign the documents, the LCR
had no authority to register the subject BCs. The CR shall see to it that the CLB
presented for registration is properly and completely filled up and the entries are
correct.

15 of 41
 • Grande v. Antonio, Feb2014
• As to the matter of the change of surname of the IC, there is no legal basis for the
court to change the surname of the children. To do otherwise would be to
contravene the explicit and unequivocal provision of the law.

• A176 give the IC the right to decide if they want to use the surname of their father
or not. It is not the father or the mother who is granted by law the right to dictate
the surname of their IC.

- Correction of entries

• Gan v. Republic, Sep2016

- May P file a petition for correction of entries to use her father’s surname despite lack
of proof of filiation?

• No. P failed to adduce any evidence that would show that she indeed was duly
acknowledged by her father. P’s evidence consisted only of her BC signed by her
mother, school records, employment records, marriage contract, baptismal
certificate and other government records. Assuming she is a natural child pursuant
to A269 of the CC, she could still not insist on using her father’s surname.

• Republic v. Sali, Apr2017

- Is a petition under R108 proper for a change in first name from Lorena to Dorothy,
and date of birth from April 24, 2968 to June 24, 1968?

• Yes. Her petition is not for change of name under R103 but for correction of entries
under R108. What she seeks is the correction of clerical errors committed in the
recording of her name and DOB. Not all alterations allowed in one’s name are
confined under R103 and corrections for clerical errors may be set right under
R108.

• The remedy should have been to file a petition with the LCR under RA9048. For
failure to exhaust administrative remedies, the RTC should have dismissed the
petition to correct her first name.

• On the other hand, considering that she filed her petition to correct her DOB from
April to June in 2008, R108 is the appropriate remedy. (RA10172 amending
RA9048 took effect in 2012)

- A194 : Support

• Lua v. Lua, Jun2013

- May the value of expensive cares bought by P for his children plus maintenance cost,
travel expenses, and purchases be deducted from the amount of support due him?

• No. The amount of support which those related by marriage and family relationship
is generally obliged to give each other shall be in proportion to the resources or

16 of 41
 means of the giver and to the needs of the recipient. Such support comprises
everything indispensable for sustenance, dwelling, clothing, medical attendance,
education and transportation, in keeping with the financial capacity of the family.

• The value of the expensive cars bought by P for his children plus maintenance cost,
travel expenses, etc should have been disallowed as these bear no relation to the
judgment awarding support pendente lite. Any amount P seeks to be credited as
monthly support should only cover those incurred for sustenance and household
expenses.

• Calderon v. Roxas & CA, Jan2013

- Are orders on the matter of support pendente lite final?

• No. Orders on matters of support pendente lite are interlocutory. The proper
remedy is an SCA, not an appeal, of the interlocutory order.

- A213 : Parental authority

• Beckett v. Sarmiento, Jan2013

• The matter of custody is not permanent and unalterable and can always be re-
examined and adjusted. The situation of the parents and even of the child can
change, such that sticking to the agreed arrangement would no longer be to the
latter’s best interest.

• Under the FC, in parental authority, the court shall take into account all relevant
considerations, especially the choice of the child over 7yo unless the parent chosen
is unfit.

- RA7610

• Rosaldes v. People, Oct2014

• Not every instance of laying of hands on a child constitutes the crime of child
abuse. Only when the laying of hands is shown beyond reasonable doubt to be
intended by the accused to debase, degrade or demean the intrinsic worth and
dignity of a child as a human being should it be punished as child abuse.
otherwise, it is punished under the RPC.

• Jabalde v. People, Jun2016

- A is guilty of slight physical injuries only and not child abuse under RA7610. A was
accused of slapping and striking C but she did not intend to debase, degrade, or
demean the intrinsic worth and dignity of C as a human being. The laying of hands on
C was an effect of A’s emotional outrage after being informed that her daughter’s
head was punctured which made her think that she was already dead. 


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Civil Law Survey of Cases

Property by Dean Hofileña

- Immovable properties

• Capitol Wireless, Inc v. Treasurer of Batangas, may2016

- Undersea/submarine communication cables are akin to electric transmission lines
which are not directly adhered to the soil but pass through posts, relays or landing
stations and may be qualified as machinery under a415(5) for the simple reason that
they tend to meet the needs of an industry or works which are on real estate

- Even objects on a body of water may be classified as such as waters is an immovable

under a415(8) of the NCC

- Movable properties

• Provincial Assessor of Agusan del Sur v. Filipinas Palm, oct2016

- Despite the land being lease by R when the roads were constructed, the ownership of
the improvement still belongs to NGPI. The land is owned by the cooperatives at the
time R built the roads. Hence, whatever is incorporated in the land, either naturally
or artificially, belongs to the NGPI as landowner.

- The roads inured to the benefit of NGPI as owners of the land not only by right of
accession but through express provision in the lease.

- Property of public dominion

• Heirs of Malabanan v. Republic, 2013

- Rules relative to the disposition of public land or lands of public domain

• As a general rule and pursuant to the Regalian Doctrine, all lands of the public
domain belong to the State and are inalienable. Lands that are not clearly under
private ownership are also presumed to belong to the State and therefore, may not
be alienated or disposed;

- The following are excepted from the general rule, to wit:

• Lands of public domain subsequently classified or declared as no longer

intended for public use or for development of national wealth are removed
from the sphere of public dominion and are considered converted into
patrimonial lands or lands of private ownership that may be alienated or
disposed through any of the modes of acquiring ownership under the NCC.

- If the mode of acquisition is prescription, whether ordinary or extraordinary,

proof that the land has been already converted to private ownership prior to
the requisite acquisitive prescriptive period is a condition sine qua non in

18 of 41
 observance of the law that property of the State not patrimonial in
character shall not be the object of prescription.

• Sps. Fortuna v. Republic, mar2014

- Agricultural lands of the public domain are rendered alienable and disposable through
any of the exclusive modes enumerated under s11 of the PLA.

- If the mode judicial confirmation of imperfect title, the agricultural land subject of the
application needs only to be classified as alienable and disposable as of the time of
the application, provided that applicant’s possession and occupation of the land dated
back to 6/12/1945 or earlier

• Republic v. Gielczyjk, oct2013

- In Heirs of Malabanan v. Republic, the Court further clarified the difference between
s14(2) and s14(2) of PD1529. The former refers to registration of title on the basis of
possession, while the latter entitled the applicant to registration of his property on
the basis of prescription.

• Heirs of Maravilla v. Tupas, sep2016

- One cannot dispose of a thing he does not own.
- In this case, at the time of the sale of the subject property, Tupas has no right to sell
a property that has not been declared alienable by the State; hence, he cannot pass
unto another any right or title to own or posses the land. Therefore, the sale entered
into between Tupas and Maravilla has become null and void because the subject
property of the contract is a forest land and cannot be alienated at the time the sale
was executed. A1347 provides that only things which are not outside the commerce
of man, including future things, may be objects of the contracts and a1409 states
that contracts whose objects are outside the commerce of man are non-existent and
void ab initio.

- Properties of provinces, cities, and municipalities

• Sangguniang Panlalawigan ng Bataan v. Garcia, oct2016

- Legislative control over a municipal corporation is not absolute even when it comes to
its property devoted to public use, for such control must not be exercised to the
extent of depriving persons of their property or rights without due process of law, or
in a manner impairing the obligations of contracts.

- nevertheless, when it comes to property of the municipality which it did not acquire
in its private or corporate capacity with its own funds, the legislature can transfer its
administration and disposition to an agency of the NG to be disposed of according to
its discretion.

- Here, it did so in obedience to the constitutional mandate of promoting social justice

to insure the well-being and economic security of the people.

19 of 41
- Ownership

• Fullido v. Grilli, feb2016

- A contract that violates the Constitution and the law is null and void ab initio and
vests no rights and creates no obligations. It produces no legal effect at all. Hence,
as void contracts could not be the source of rights, Grilli had no possessory right over
the land.

- A person who does not have any right over a property from the beginning cannot
eject another person possessing the same.

- Limitations on ownership

• Vda. De Ouano v. Republic

- A condemnor should commit to use the property pursuant to the purpose stated in
the petition for expropriation, failing which it should file another petition for the new
purpose. If not, then it behooves the condemnor to return said property to its private
owner, if the latter so desires. The government cannot plausibly keep the property it
expropriated in any manner it please and, in the process, dishonor the judgment of
expropriation. This is not in keeping with the idea of fair play.

• Republic v. Sps. Regulto, apr2016

- Ang originally acquired through free patent carries a reservation imposed by the PLA
that it is subject to an easement of right of way I favor of the government for public
highways and similar works, with payment of damages for improvements only.
Government may acquire said land without payment of just compensation but for
consequential damages to the rest of the land.

- Accession continua

• Padilla v. Malicsi, sep2016

- The burden of proving the status of a purchase in good faith lies on the person
asserting that status. It is not enough to invoke the ordinary presumption of good
faith; that is, that everyone is presumed to act in good faith. As party asserting the
status of builder in good faith must substantiate their claim through preponderance of
evidence.

• Aguirre v. aguilar, 2015

- I some instances, the court has allowed the application of a448 to a builder who has
constructed improvements on the land of another with the consent of the owner. In
those cases, the court found that the owners knew and approved of the construction
of improvements on the property. Hence, we ruled that the structures were built in
good faith, even though the builders knew that they were constructing the
improvement on land owned by another.

• Pen Development v. Leyba, aug2017

20 of 41
- Although "[i]n overlapping of titles disputes, it has always been the practice for the
[trial] court to appoint a surveyor from the government land agencies [such as] the
Land Registration Authority or the DENR to act as commissioner," this is not
mandatory procedure; the trial court may rely on the parties' respective evidence to
resolve the case. In this case, respondent presented the results of a verification
survey conducted on its lands. On the other hand, petitioners did not present proof
like the results of a survey conducted upon their initiative to contradict respondent's
evidence; nor did they move for the appointment by the trial court of government or
private surveyors to act as commissioners. Their sole defense is that they acquired
their land in good faith and for value; but this does not squarely address
respondent's claim of overlapping.

- For the RTC and CA, respondent's undisputed evidence proved its claim of
overlapping. This Court agrees. As a public document containing the certification and
approval by the Regional Technical Director of Lands, Verification Survey Plan Vs-
Q4-000394 can be relied upon as proof of the encroachment over respondent's lands.
More so when petitioners could not present contradictory proof.

- On the issue of being a builder in had faith, there is no question that petitioners
should be held liable to respondent for their obstinate refusal to abide by the latter's
repeated demands to cease and desist from continuing their construction upon the
encroached area. Petitioners' sole defense is that they purchased their property in
good faith and for value; but this does not squarely address the issue of
encroachment or overlapping. To repeat, while petitioners may have been innocent
purchasers for value with respect to their land, this does not prove that they are
equally innocent of the claim of encroachment upon respondent's lands. The evidence
suggests otherwise: despite being apprised of the encroachment, petitioners turned a
blind eye and deaf ear and continued to construct on the disputed area. They did not
bother to conduct their own survey to put the issue to rest, and to avoid the
possibility of being adjudged as builders in bad faith upon land that did not belong to
them.

- Under the Civil Code,

• Art. 449. He who builds, plants or sows in bad faith on the land of another, loses
what is built, planted or sown without right to indemnity.

• Art. 450. The owner of the land on which anything has been built, planted or sown
in bad faith may demand the demolition of the work, or that the planting or sowing
be removed, in order to replace things in their former condition at the expense of
the person who built, planted or sowed; or he may compel the builder or planter to
pay the price of the land, and the sower the proper rent.

• Art. 451. In the cases of the two preceding articles, the landowner is entitled to
damages from the builder planter or sower.

- Moreover, it has been declared that

21 of 41
 • The right of the owner of the land to recover damages from a builder in bad faith is
clearly provided for in Article 451 of the Civil Code. Although said Article 451 does
not elaborate on the basis for damages, the Court perceives that it should
reasonably correspond with the value of the properties lost or destroyed as a result
of the occupation in bad faith, as well as the fruits (natural, industrial or civil) from
those properties that the owner of the land reasonably expected to obtain. x x x

- For their part, petitioners are not entitled to reimbursement for necessary expenses.
Indeed, under Article 452 of the Civil Code, the builder, planter or sower in bad faith
is entitled to reimbursement for the necessary expenses of preservation of the land.
However, in this case, respondent's lands were not preserved: petitioners'
construction and use thereof in fact caused dan1age, which must be undone or
simply endured by respondent by force of law and circumstance. Respondent did not
in any way benefit from petitioners' occupation of its lands.

- Finally, on the question of laches, the CA correctly held that as owners of the subject
property, respondent has the imprescriptible right to recover possession thereof from
any person illegally occupying its lands. Even if petitioners have been occupying
these lands for a significant period of time, respondent as the registered and lawful
owner has the right to demand the return thereof at any time.

- Accretion

• Daclison v. Baytion, apr2016

-

22 of 41
Civil Law Survey of Cases

Obligations and Contracts by Atty. Crisostomo Uribe

- Sources of obligations

• MBTC v. Rosales, jan2014, DC

- Whether respondents have an obligation to the bank under the Hold Out clause
(which provides the bank authority to withhold as security for any and all obligations
with the Bank all monies of the depositor now or which may come into the possession
or under the control of the Bank) to apply

• NO
• The Hold Out clause applies only if there is a valid and existing obligation arising
from any of the sources of obligation enumerated in A1157 of the NCC, to wit :
law, contracts, quasi-contracts, delict, and quasi-delicts.

• In this case, petitioner failed to show that respondents have an obligation to it

under any law, contract, quasi-contract, delict, or quasi-delict.

• There can be no civil liability arising from delict without a conviction.

• CBK Power Company v. CIR, jan2014
- Whether the principle of solutio indebiti is applicable in the case of denial of an
application for zero-rated VAT registration

• NO
• The applicability of the principle of solutio indebiti to the present case is devoid of
merit. According to the principle, if something is received when there is no right to
demand it, and it was unduly delivered through mistake, the obligation to return
arises. In that situation, a creditor-debtor relationship is created under a quasi-
contract whereby the payor becomes the creditor who then has the right to
demand the return of payment made by mistake and the person who has no right
to receive the payment becomes obligated to return it. The quasi-contract of
solutio indebiti is based on the ancient principle that no one shall enrich oneself
unjustly at the expense of another.

• There is solutio indebiti when:

- Payment is made when there exists no binding relation between the payor, who
has no duty to pay, and the person who received the payment, and

- Payment is made through mistake and not through liberality or some other
cause

- Kinds of obligation

23 of 41
• Arco Pulp and Santos v. Lim, jun2014
- Whether the debtor can still perform the other prestation after having communicated
her choice

• NO
• Having chosen and communicated, and in a way performed, the other prestation,
the obligation became a simple obligation. Therefore, debtor is no longer allowed
to perform the other prestation.

- Here, the obligation was alternative — either payment in money or through

delivery of goods.

• Ruks Konsult v. Adworld Sign, jan2015

- Whether petitioner is jointly and solidarily liable with Transworld (because it
constructed the bottom part of the billboard)

• YES
• As joint tortfeasors, they are solidarily liable to Adworld. verily, joint tortfeasors are
those who command, instigate, encourage, advise, countenance, cooperate in, aid
or abet the commission of a tort or approve of it after it is done, if done for their
benefit. They are also referred to as those who act together in committing wrong
or whose acts, if independent of each other, unite in causing a single injury.

• Under A2194 of the NCC, joint tortfeasors are solidarily liable for the resulting
damage. In other words, joint tortfeasors are each liable as principals to the same
extent and in the same manner as if they had performed the wrongful act
themselves.

• Torres-Madrid Brokerage v. Feb Mitsui Marine Insurance and BMT, jul2016

- Whether TMBI and BMT should be solidarily held liable to Mitsui

• NO
• The sources of obligation of TMBI and BMT were different contracts. The 1st
contract was a contract of carriage between Sony and TMBI, but the 2nd was a
contract of carriage between TMBI and BMT. There is no basis to hold TMBI and
BMT solidarily liable. There was no stipulation of solidary liability, nor was there
any law providing for solidary liability under the circumstance. Finally, the nature of
the obligation does not require solidarity.

• Sps. Lam v. Kodak PHL, jan2016

- Whether the obligation of Kodak to deliver 3 equipment was severable, divisible and
susceptible of partial performance

• NO

24 of 41
 • Through the specified terms and conditions, the tenor of the Letter of Agreement
indicated an intention for a single transaction. This intent must prevail even though
the articles involved are physically separable and capable of being paid for and
delivered individually, consisted with the NCC.

• A1225 provides that even though the object or service may be physically divisible,
an obligation is indivisible if so provided by law or intended by the parties.

• An obligation is indivisible when it cannot be validly performed in parts, whatever

may be the nature of the thing which is the object thereof. The indivisibility refers
to the prestation and not to the object thereof.

• Sps. Poon v. Prime Savings Bank, jun2016

- Whether the clause “all advanced rentals shall be forfeited in favor of the lessor” is a
penal clause which can be invoked by the lessor if the bank closes

• YES
• The reasonableness of a penalty depends on the facts in a case. In resolving the
issue, courts may consider:

- type, extent and purpose of the penalty,

- nature of the obligation,
- mode of breach and its consequences,
- supervening penalties, and
- the standing in relations of the parties.

• In the case, it was neither fair nor reasonable to deprive depositors and creditors
of potentially their last chance to recoup bank assets or receivables. Moreover,
nothing prevented petitioners from using the building for other profitable uses
since respondent surrendered the premises immediately after closure.

• Castillo v. Security Bank, jul2014

- Whether the interest of 16% and penalty charges of 24% imposed by SBC are just
and not excessive or unconscionable

• NO
• SBC’s 16% rate of interest is not computed per month but rather per annum or
only 1.33% per month. The interest rate of 24% per annum on a loan of 244K is
not considered as unconscionable and excessive. As such, the debtors cannot
renege on their obligation to comply with what is incumbent upon them under the
contract of loan as they are bound by its stipulations.

• Also, the 24% per annum rate or 2% per month for the penalty charges imposed
on account of default cannot be considered as skyrocketing.

25 of 41
- Compliance with obligations

• Honrado v. GMA Network, jan2015

- Whether is liable for breach of the TV Rights Agreement

• YES
• The Agreement, as its full title denotes, is a licensing contract, the essence of
which is the transfer by the licensor (petitioner) to the licensee (GMA) for a fee of
the exclusive right to telecast the films listed in the Agreement.

• Stipulations for payment of commission to the licensor is incongruous to the nature

of such contracts unless the licensor merely acted as agent of film owners.
Nowhere in the Agreement did the parties stipulate that petitioner signed the
contract in such capacity.

• On the contrary, the Agreement repeatedly refers to petitioner as licensor and GMA
as licensee. Nor did the parties stipulate that the fees paid by GMA for the films
listed will be turned over by petitioner to the film owners. instead, the Agreement
provides that the total fees will be paid in 3 instalments.

• Sanico v. Colipano, sep2017

- Whether there was breach of contract of carriage

• YES
• The extraordinary diligence, following A1755 of the NCC, means that common
carriers have the obligation to carry passengers safely as far as human care and
foresight can provide using the utmost diligence of a very cautious person with due
regard for all the circumstances. In case of death or injury to the passenger, A1756
provides that common carriers are presumed to have been at fault or negligent,
and this presumption can be overcome only by proof of the extraordinary diligence
exercised to ensure the safety of the passengers.

• Allowing the respondent to be seated in an extension seat which was a wooden

stool at the rear of the jeepney placed the respondent in peril greater than that to
which other passengers were exposed. The petitioner was not only unable to
overcome the presumption of negligence on him for the injury sustained by
respondent, but also, the evidence shows he was actually negligent in transporting
passengers.

• Rivera v. Sps. Chua, jan2015

- Whether demand is necessary for Rivera to be in delay where the PN provides that “it
is agreed and understood that failure on my part to pay on 12/31/95, I agree to pay
5% interest monthly from the date of default until the entire obligation is fully paid
for”

• NO

26 of 41
 • A1169 provides that those obliged to deliver or to do something incur in delay from
the time the obligee judicially or extrajudicially demands from them the fulfilment
of their obligation. however, the demand by the creditor shall not be necessary in
order that delay may exist when:

- The obligation or the law expressly so declare

- From the nature and the circumstances of the obligation, it appears that the
designation of the time when the thing is to be delivered or the service is to be
rendered was a controlling motive for the establishment of the contract

- When demand would be useless, as when the obligor has rendered it beyond his
power to perform

- In reciprocal obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is incumbent
upon him. From the moment one of the parties fulfils his obligation, delay by the
other begins, this tie even without demand.

• Swire Realty v. Specialty Contracts, aug2017

- Whether there was a breach of contract on the part of respondents who performed
90% of his obligation

• YES
• The respondents are obligated to complete the waterproofing works on 4/6/97 but
failed. The remaining work to be done had to be performed by a 3rd party who
accomplished the same on 4/5/98. In light of these, the respondents are liable for
delay for a period of 365 days which corresponds to 3.65M as penalty under the
agreement which may be reduced due to substantial performance.

• Fil-estate Properties v. Sps. Ronquillo, jan2014

- Whether the Asian financial crisis constitute a fortuitous even which would justify
delay by petitioners in the performance of their obligation

• NO
• We cannot generalize that the Asian financial crises was unforeseeable and beyond
the control of a business corporation. It is unfortunate the petitioner apparently
met with considerable difficulty even before the scheduled commencement of its
real estate project. However, a real estate enterprise engaged in pre-selling of
condominium units is concededly a master in projections on commodities and
currency movements and business risks. The fluctuating movement of the PHP in
the foreign exchange market is an everyday occurrence and fluctuations in
currency exchange rates happen everyday, thus, not an instance of caso fortuito.

• S23 PD957 provides that no installment payment made by a buyer in a subdivision

or condominium project for the lot or unit he contracted to buy shall be forfeited in

27 of 41
 favor of the owner or developer when the buyer, after due notice tot he owner or
developer, desists from further payment due to the failure of the owner or
developer to develop the subdivision or condominium project according to the
approved plans and within the time limit for complying with the same. Such buyer
may, at his option, be reimbursed the total amount paid, including amortization
interests but excluding delinquency interests, with interest thereon at the legal
rate.

• Torres-Madrid Brokerage Inc v. Feb Mitsui and BMT, jul2016

- Whether hijacking is a fortuitous event the freed TMBI from liability for lost shipment

• NO
• A1734 : Common carriers are responsible for the loss, destruction or deterioration
of the goods unless the same is due to any of the following causes only:

- flood, storm, earthquake, or other natural disaster or calamity

- Act of the public enemy in war
- Act or omission of the shipper or owner of the goods
- The character of the goods or defect in the packing or in the containers
- Order or act of competent public authority

• A1735 : In all cases other than those mentioned above, if the goods are lost,
destroyed or deteriorated, common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they observed extraordinary
diligence as required in A1733.

• Theft or robbery is not considered a fortuitous event or force majeure. However, a

common carrier may still absolve itself of liability for a resulting loss if:

- It proves that it exercised extraordinary diligence in transporting and

safekeeping the goods, or

- It stipulated with the shipper/owner of the goods to limit its liability for the loss,
destruction or deterioration of the goods to a degree less than extraordinary
diligence.

• In the latter case, the robbery must have been attended by grave or irresistible
threat, violence, or force, otherwise, the stipulation is void for being contrary to
public policy. Here, there was no showing that the hijacking was attended by force
or intimidation.

• Olivarez Realty v. Castillo, jul2014

- Whether buyer is entitled to rescind under A1191 a contract to sell (although
denominated as conditional sale)

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 • NO
• Because in a contract to sell, there is no obligation yet. Hence, there can be no
rescission without an obligation to rescind.

• In both contracts to sell and contracts of conditional sale, title to the property
remains with the seller until the buyer fully pays the purchase price. Both contracts
are subject to the positive suspensive condition of the buyer’s full payment of the
purchase price.

• In a contract of conditional sale, the buyer automatically acquires title to the

property upon full payment of the purchase price. This transfer of title is by
operation of law without any further act having to be performed by the seller.

• In a contract to sell, transfer of title to the prospective buyer is not automatic. The
prospective seller must convey title to the property through a deed of conditional
sale.

• Swire Realty v. Yu, mar2015

- Whether buyer is entitled to rescind under A1191 a contract to sell

• YES
• Basic is the rule that the right of rescission of a party to an obligation under A1191
is predicated on a breach of faith by the other party who violates the reciprocity
between them. The breach contemplated in the said provision is the obligor’s
failure to comply with an existing obligation. When the obligor cannot comply with
what is incumbent upon it, the obligee may seek rescission and, in the absence of
any just cause for the court to determine the period of compliance, the court shall
decree the rescission.

• To distinguish this from the Olivarez case, the condition for the contract to seek
was fulfilled here.

• Nissan v. Lica, jan2016

- Whether rescission under A1191 can be invoked extrajudicially despite lack of
contractual stipulation

• YES
• Whether a contract provides for it or not, the remedy of rescission is always
available as a remedy against a defaulting party. When done without prior judicial
imprimatur, it may still be subject to a possible court review. The only practical
effect of a contractual stipulation allowing extrajudicial rescission is merely to
transfer to the defaulter the initiative of instituting suit instead of the rescinder.

• Rescissory act shall take effect upon notice to the other party. However, such other
party may result to the courts to question the validity of the rescissory act. If the

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 court sustains the validity of the rescissory act, it shall take effect upon notice to
such other party and not the time of filing the action in court.

- Modes of extinguishment

• Bognot v. RRI Lending, sep2014

- Whether the obligation was extinguished by payment

• One who pleads payment has the burden of proving it. The burden rests on the
defendant to prove payment rather than on the plaintiff to prove non-payment.
Indeed, once the existence of an indebtedness is duly established by evidence, the
burden of showing with legal certainty that the obligation has been discharged by
payment rests on the debtor.

• NPC v. Ibrahim, feb2015

- Whether payment made in good faith to the wrong party but in possession of the
credit extinguishes the obligation

• YES
• A1242 : payment made in good faith to any person in possession of credit shall
release the debtor

• A1242 is an exception to the rule that a valid payment of an obligation can only be
made to the person to whom such obligation is rightfully owed.

• A finding of bad faith usually assumes the presence of 2 elements

- That the actor knew or should have known that a particular course of action is
wrong or illegal, and

- That despite such actual or imputable knowledge, the actor voluntarily,

consciously and out of his own free will proceeds with such course of action

• Only with the concurrence of these 2 elements can it be considered that the wrong
committed had been done deliberately and in bad faith.

• Here, payment by NPC was made to the wrong party because of judgment in the
expropriation proceeding. It cannot be said, therefore, that it acted in bad faith
when it paid the wrong party.

• PNB v. Dee, feb2014

• Dacion en pago or dation in payment is the delivery and transmission of ownership
of a thing by the debtor to the creditor as an accepted equivalent of the
performance of the obligation. It is a mode of extinguishing an existing obligation
and partakes the nature of sale as the creditor is really buying the thing or
property of the debtor, the payment for which is to be charged against the debtor’s
debt.

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 • Dation in payment extinguishes the obligation to the extent of the value of the
thing delivered, either as agreed upon by the parties or as may be proved, unless
the parties by agreement — express or implied, or by their silence — consider the
thing as equivalent to the obligation in which case the obligation is totally
extinguished.

• Relate to A1235
• Union Bank v. DBP, jan2014
- Whether Union Bank can claim legal compensation against DBP, being debtors and
creditors of each other

• NO
• A1279 : In order that compensation may be proper, it is necessary that :
- Each one of the debtors be bound principally, and that he be at the same time a
principal creditor of the other

- The both debts consists in a sum of money, or if the things due are consumable,
they be of the same kinds and also of the same quality if the latter has been
stated

- The 2 debts be due

- They be liquidated and demandable

• Here, the assumption agreement provided that DBP would pay Union Bank 30% of
the rentals that would be paid by Food Masters, but it turned out that Food Masters
did not pay DBP. Therefore, DBP did not have the obligation to pay 30% of what it
did not receive. There was no due obligation as far as DBP was concerned as
regards Union Bank. As to the balance of the 30%, there can still be no legal
compensation because the same was not yet liquidated.

• Arco Pulp and Santos v. Lim, jun2014

- Whether the MOA between Santos and Sy (whereby Sy would deliver the finished
products to Lime instead of Santos) constituted a novation of the original contract
between Santos and Lim

• NO
• A1293 : Novation which consists in substituting a new debtor on the place of the
original one may be made even without the knowledge or against the will of the
latter, but not without the consent of the creditor. Payment by the new debtor gives
him the rights mentioned in A1236 & 1237

• For novation to take place, the following requisites must concur :

- There must be a previous valid obligation

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 - The parties concerned must agree to a new contract
- The old contract must be extinguished
- There must be a valid new contract

• Odiamar v. Valencia, jun2016

- Whether there was a novation when Odiamar issued a check in payment of her
parent’s debt after the latter’s death

• NO
• While petitioner admitted admitted that she settled her late parent’s debt, there
was no allegation nor proof that the estates of her deceased parents were released
from liability by the 2.1M check she issued.

• To constitute novation by substitution of debtor, the former debtor must be

expressly released from the obligation and the new debtor must assume the
former’s place in the contractual relations. Moreover, the fact that the creditor
accepts payments from a third person who has assumed the obligation will result
merely in addition of debtors, not novation.

• Novation is never presumed and the intention to novate must appear by express
agreement of the parties or by their clear and unequivocal acts. In this case,
respondent failed to prove their intent to novate the original debt. At best,
petitioner only manifested her desire to shoulder her parent’s debt which does not
amount to novation.

- Fundamental characteristics of contracts

• New World Developers v. AMA, feb2015

- Whether AMA is liable to pay liquidated damages for pre-termination of its lease
contract

• YES
• A1159 : Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith.

• A1306 : The contracting parties may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order or public policy.

• A2227 : Liquidate damages, whether intended as an indemnity or a penalty, shall

be equitably reduced if they are iniquitous or unconscionable.

• The resolution of whether a penalty is reasonable or iniquitous or unconscionable

would depend on factors including but not limited to the type, extent and purpose
of the penalty, the nature of the obligation, the mode of the breach and its
consequences, the supervening realities, and the standing and relationship of the

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 parties. The appreciation of these factors is essentially addressed to the sound
discretion of the court.

• Ejercito v. Oriental Assurance, jul2015

- Whether petitioners gave their consent to the renewal of the surety bond

• YES
• A stipulation in the contract provides that the parties shall hold themselves jointly
and severally liable to the company for the original bond or for any extension or
renewal thereof until the full amount is paid up.

- Whether the Deed of Indemnity is a contract of adhesion, hence, void

• NO
• Contracts of adhesion are not invalid per se and that their binding effects are
upheld on numerous occasions. Moreover, Ejercito is a lawyer.

• Sanico and Castro v. Colipano, sep2017

- Whether Colipano has a cause of action against Castro (the driver)

• NO
• Because this is an action based on breach of contract. Only Sanico breached the
contract of carriage. Only Sanico was party to the contract of carriage with
Colipano. Since the cause of action is based on a breach of contract of carriage, the
liability of Sanico is direct as the contract is between and Colipano. Castro, being
merely the driver of Sanico’s jeepney, cannot be made liable as he is not a party to
the contract of carriage.

- Perfection of contracts

• First Optima Realty c. Securitron Security, jan2015, DC

- Whether there was a perfected contract of sale upon payment of earnest money

• NO
• Since there is no perfected sale between the parties, respondent had no obligation
to make payment through check nor did it possess the right to deliver earnest
money to petitioner in order to bind the latter to a sale.

• As contemplated in A1482, there must first be a perfected contract of sale before

we can speak of earnest money. Where the parties merely exchanged offers and
counter-offers, no contract is perfected since they did not yet give their consent to
such offers.

• Earnest money applies to a perfected sale.

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 - The provision of the law provides that the earnest money is a proof of a
perfected sale.

• Sps. Aguinaldo v. Torres, sep2017

- Whether an improper notarization of a deed of sale nullify a contract of sale of parcel
of land

• NO
• The legal requirement that the sale of real property must appear in a public
instrument is merely a coercive means granted to the contracting parties to enable
them to reciprocally compel the observance of the prescribed form, and
considering that the existence of the sale of the subject properties in respondent’s
favor had been duly established, the Court upholds the CA’s directive for
petitioners to execute a registrable deed of conveyance in respondent’s favor
within 30 days from finality of the decision in accordance with the prescribed form
under A1357 and 1358(1) of the NCC.

- Defective contracts

• Poole-Blunden v. Union Bank, nov2017

- Whether Union Bank committed fraud as would entitle the buyer to have the sale
nullified

• YES
• The bank’s insistence on how common spaces should be included in reckoning the
unit’s total area runs afoul of how RA4726 (Condominium Act) reckons what forms
part of a condominium unit. The Act specifies the reckoning of a condominium
unit’s bounds. It also specifies that areas of common use are not part of the unit.

• Fraud presupposes bad faith or malicious intent. It transpires when insidious words
or machinations are deliberately employed to induce agreement to a contract.
Thus, one could conceivably claim that respondent could not be guilty of fraud as it
does not appear to have crafted a deceptive strategy directed specifically at
petitioner.

• Ko v. Aramburo, aug2017
- Whether the action has prescribed (action was declaration of nullity of the sale on the
ground of lack of written consent of the other spouse)

• For the share of A’s heirs sold by S, the sale of the same is void as the object of
such sale, not being owned by the seller, did not exist at the time of the
transaction. Being a void contract, thus, the CA correctly ruled that the action to
impugn the sale of the same is imprescriptible pursuant to A1410 of the NCC.

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Civil Law Survey of Cases

Sales by Atty. Alexander Dy

- Nature of sale

• Guison v. Heirs of Terry, 2017

- The lack of consensus as to the price prevented the perfection of the sale. The law
requires a definite agreement as to a price certain; otherwise there is not true
meeting of the minds between the parties.

- The price must be certain, otherwise, there is no true consent between the parties.
There can be no sale without a price.

- As there was no sufficient evidence of a meeting of the minds between the parties
with regard to the consideration for the sale, we are compelled to declare the
transaction null and void.

• PEZA v. Pilhina Sales, 2016

- A contract of sale entails reciprocal obligations. The seller obligates himself to
transfer the ownership of and deliver a determinate thing, and the buyer to pay
therefor a price certain in money or its equivalent.

- Rescission under a1191 results in mutual restitution. However, such mutual

restitution is no license for the negation of contractually stipulated liquidated
damages.

- The options of rescission and specific performance come with the payment of
damages in either case. The very same breach or delay in performance triggers
rescission is what makes damages due.

• Pen v. Julian, 2016

- The absence of the consideration from Linda’s copy of the DOS was credible proof of
the lack of an essential requisite for the sale. The conclusion that the DOS was a
pactum commisorium holds, for, all the element of pactum commisorium were
present.

- Dacion en pago is in the nature of a sale because property is alienated in favor of the
creditor in satisfaction of a debt in money.

- To have a valid dacion en pago, the alienation of the property must fully extinguish
the debt. Yet, the debt of the respondents subsisted despite the transfer of the
property in favor of Adelaida.

- Parties to contract of sale

• Nobleza v. Nuega, 2015

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 - Regardless of their respective contribution to its acquisition before their marriage,
and despite the fact that only H’s name appears in the TCT as owner, the property is
owned jointly by the spouses W and H and forms part of their absolute community of
property.

- In ACP, if H, without knowledge and consent of W, sells their property, such sale is
void. The consent of both H and W is required and the absence of the consent of one
renders the entire sale null and void including the portion of the subject property
pertaining to H who contracted the sale with the buyer.

• Alejo v. Cortez, 2017

- The law is unequivocal when it states that the disposition of conjugal property of one
spouse sans the written consent of the other is void.

- Nevetheless, the DOS constitutes a continuing offer from W and buyer B, and that H
had the option of either accepting or rejecting the offer before it was withdrawn by
either, or both, W or B.

- Clearly, H’s 1st letter (informing B that he did not consent to the sale) was an
outright and express repudiation of the DOS. The 2nd letter (demanding the payment
of the balance of the purchase price on or before Oct 5, failing which the purchase
price shall be increased to 700K) varied its terms on material points. consequently,
such counter-offer cannot be construed as evidencing H’s consent to or acceptance of
the DOS for it is settled that where the other spouse’s putative consent to the sale of
the conjugal property appears in a separate document which does not contain the
same terms and conditions as in the 1st document signed by the other spouse, a
valid transaction could not have arisen.

- Subject matter

• Heirs of Maravilla v. Tupas, 2016

- Once cannot dispose a thing he does not own.
- In this case, Tupas had not right to sell a property that has not been declared
alienable by the State; hence, he cannot pass unto another any right or title to own
or possess the land.

- A sale involving a forest land is null and void; the subject matter cannot be alienated
at the time the DOS was executed.

- A1347 provides that only things which are not outside the commerce of men,
including future things, may be the objects of the contracts and a1409 also states
that contracts whose objects are outside the commerces of man are non-existent and
void ab initio.

- Perfection of a COS

• FEBTC v. PDIC, 2015

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 - Negotiation covers the period from the time the prospective contracting parties
indicate interest in the contract to the time the contract is concluded/perfected. The
perfection of the contract takes place upon the concurrence of its essential elements.
A contract which is consensual as to perfection is so established upon a mere meeting
of minds, i.e. the concurrence of offer and acceptance, on the object and on the
cause or consideration. The consummation stage begins when the parties perform
their respective undertakings under the contract, culminating in its extinguishment.

- Mutual consent, as a state of mind, may only be inferred from the confluence of 2
acts of the parties :

• An offer certain as to the object of the contract and its consideration, and
• An absolute acceptance of the offer, i.e., with respect to the exact object and
consideration embodied in the offer.

- While it may not be possible to expect the acceptance to each every nuance of the
offer, it is imperative that it assents to those points in the offer that, under the
operative facts of each contract, are not material but motivating as well.

- A COS is perfected upon the meeting of the minds of the parties on the essential
elements of the contract, i.e., consent, object certain, and the consideration of the
contract, regardless of whether it was reduced to writing.

- The fact that the DOS still had to be signed and notarized did not mean that no
contract had been perfected. A sale of land, once consummated, is valid regardless of
the form it may have been entered into.

- In view of the perfection of the contract of sale, the execution of the purchase
agreements (PA) over the fixed assets, like the executed PA over the non-fixed
assets, falls under the consummation stage and not the perfection stage.

• First Optima Realty Corp v. SSS, 2015

- R’s offer to purchase the subject property was never accepted bu P at any instance,
even after negotiation were held between them. Thus, as between them, there is no
sale to speak of. When there is merely an offer by one party without acceptance of
the other, there is no contract.

- Since there is no perfected sale between the parties, R had no obligation to make
payment through the check; nor did it possess the right to deliver earnest money to
P in order to bind the latter to a sale. As contemplated under a1482 of the NCC,
there must first be a perfected COS before we can speak of earnest money.

- In a potential sale transaction, the prior payment of earnest money even before the
property owner can agree to sell his property is irregular, and cannot be used to bind
the owner to the obligations of an S under an otherwise perfected COS; the carriage
cannot be placed before the horse.

- Form of sale, for validity

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 • Bautista-Spille v. NICORP, 2015
- The rule is when a sale of a parcel of land or any interest therein is through an agent,
the authority of the latter shall be in writing, otherwise, the sale shall be void.

- Nowhere in the General Power of Attorney was A granted, expressly or impliedly, any
power to sell the land or a portion thereof. The authority expressed in the GPA was
couched in very broad terms covering P’s businesses and properties. The power of
administration does not include acts of disposition, which are acts of strict ownership.
As such, an authority to dispose cannot proceed from an authority to administer, and
vice versa, for the 2 powers may only exercised by an agent by following the
provisions on agency of the NCC.

• MIAA v. Unchuan, 2016

- The sale transaction executed between S, acting as an agent of his fellow co-owners,
and the CAA was void insofar as the other owners were concerned. They were
represented without a written authority from them clearly in violation of the
requirement under a1874 and 1878 of the NCC.

- Without an SPA specifying his authority to dispose of an immovable, S could not be

legally considered as the representative of the other registered co-owners of the
properties in question.

• Bitte v. Jonas, 2015

- A138 requires that the form of a contract transmitting or extinguishing real rights
over immovable property should be in a public document.

- Not having been properly and validly notarized, the DOS cannot be considered a
public document. however, the failure to observe the proper form does not render the
transaction invalid. A sale of real property, though not consigned in a public
instrument or formal writing is, nevertheless, valid and binding among the parties,
for the rule is that even a verbal contract of sale of real estate produces legal effects
between the parties.

- Delivery of SM

• Badilla v. Brogat, 2015

- Ownership of the thing sold is transferred to the vendee upon the actual or
constructive delivery of the same. And the thing is understood as delivered when it is
placed in the control and possession of the vendee. Payment of the purchase price is
not essential to the transfer of ownership as long as the property sold has been
delivered; and such delivery operated to divest the vendor of title to the property
which may not be regained or recovered until and unless the contract is resolved in
accordance with law.

- When a verbal contract has been completed, executed or partially consummated, its
enforceability will not be barred by the SOF which applies only to executory

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 agreement. Thus, were it was proven that one party had delivered the thing sold to
another, then the contract was partially executed and the SOF does not apply.

• NFF Industrial v. G & L Associated, 2015

- The ownership of thing sold is considered acquired by the vendee once it is delivered
to him.

- Ownership does not pass by mere stipulation but only by delivery.

- The purpose of delivery is not only for the enjoyment of the thing but also a mode of
acquiring dominion and determines the transmission of ownership, the birth of real
right.

• Arcaina v. Ingram, 2017

- Where both the area and the boundaries of the immovable are declared in a sale of
RP for a lump sum, the area covered within the boundaries of the immovable prevails
over the stated area.

• S is obliged to deliver all that is included within the boundaries regardless of

whether the actual area is more than what was specified in the COS; and he shall
do so without a corresponding increase in the contract price.

- however, in case there is conflict between the area actually covered by the
boundaries and the estimated area stated in the contract of sale, he shall do so only
when the excess or deficiency between the formed and the latter is reasonable.

- Double sale

• Spring Homes Subdivision v. Tablada, 2017

- Knowledge gained by the 1st buyer of the 2nd sale cannot defeat the 1st buyer’s
rights except only as provided by law, as in cases where the 2nd buyer first registers
in good faith the 2nd sale ahead of the 1st. Such knowledge of the first buyer does
not bar her from availing of her rights under the law, among them, first her purchase
as against the 2nd buyer. But conversely, knowledge gained by the 2nd buyer of the
1st sale defeats his rights even if he is first to register the 2nd sale, since such
knowledge taints his prior registration with bad faith.

- Sale and delivery by non-owner

• Cahayag v. Commercial Credit Corp, 2016

- The fact that S was no longer the owner of the property in question at the time of the
sale did not affect the validity of the contract. Lack of title goes into the performance
of a contract of sale.

- Here, delivery coincided with the perfection of the contract. S could not have validly
transferred ownership of the real property it had sold to B because it was no longer
the owner on that date.

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 - The correct conclusion is that while there was a valid sale, there was no valid transfer
of title to B since S was no longer the owner at the time of the execution of the DAS.

• Badilla v. Brogat, 2015

- The sale is void since both S and B2 knew at the time of its execution of S’ lack of
ownership, the property being sold.

- S could no longer sell any part of the property to B2 on such later dates because S
had already previously sold the same to B1. No one can give what he does not have.
Nemo dat quot non habet.

• Gonzales v. Pena, 2017

- A1505 instructs that where goods are sold by a person who is not the owner thereof,
and who does not sell them under authority or with the consent of the owner, the
buyer acquires no better title to the goods than the seller had, unless the owner of
the goods is by his conduct precluded from denying the seller’s authority to sell.

- The true owners of the goods are not legally precluded from claiming the ownership
of their actual properties.

- Sale by a co-owner

• MIAA v. Unchuan, 2016

- The sale of the subject lots affect only the S’ share pro indiviso, and the B gets only
what corresponds to his grantor’s share in the partition of the property owned in
common. Since a co-owner is entitled to sell his undivided share, a sale of the entire
property by 1 co-owner without the consent of the other co-owners is not null and
void; only the rights of the co-owner/seller are transferred, thereby making the buyer
a co-owner of the property.

- Remedies of seller

• Equitable Savings Bank v. Palces, 2016

- This case involved a car sale via bank financing.
- A1484 does not apply where there is no vendor-vendee relationship between the
parties. R never bought the vehicle from P but from a 3rd party, and merely sought
financing from P for its full purchase price.

- A loan contract with the accessory chattel mortgage contract — and not a COS of
personal property in installments — was entered into by the parties with R as the
debtor-mortgagor and P as the creditor-mortgagee.

- CTS v. COS

• Felix Plazo v. Lipat, 2017

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 - In a CTS, the obligation of the seller to sell becomes demandable only upon the
occurrence of the suspensive condition.

- In a CTS, payment of the full purchase price is a positive suspensive condition, failure
of which is not considered a breach of the same but an occurrence that prevents the
obligation of the seller to transfer title from becoming effective.

- Warranties

• Pabillo v. COMELEC, 2015

- A warranty has been ordinarily considered as an agreement to be responsible for all
damages that arise from the falsity or a statement or assurance of fact. In other
words, a warranty promises indemnity against defects in an article sold.

• Geromo v. La Paz Housing, 2017

- The structural cracks and water seepage were evident indications that the soil
underneath the said structures could be unstable. The condition of the soil
underneath the said structures would not be in the checklist that a potential buyer
would normally inquire about from the developer considering that it is the latter’s
prime obligation to ensure suitability and stability of the ground.

• RCBC v. Odrada, 2016

- Hidden defect is one which would render the thing sold unfit for the use for which it is
intended, or would diminish its fitness for such use to such an extent that, had the
vendee been aware thereof, he would not have acquired it or would have given a
lower price for it.

- A misrepresentation as to the Montero’s roadworthiness constitutes a breach of

warranty against hidden defects.

- Conventional redemption

• Cebu State College v. Misterio, 2015

- A1606 provides that in the absence of an agreement as to the period within which
the vendor a retro may exercise his RTR, the same must be done within 4 years from
the execution of the contract. In the event that a contract specifies a period, the
same cannot exceed 10 years.

- The Court consistently implements the law and limits the periods within which the
RTR may be exercised, adamantly striking down as illicit stipulations providing for an
unlimited right to repurchase. It would be absurd to permit R to repurchase the
property upon the occurrence of the 2nd suspensive condition (nearly 41 years after
execution of the DOS).

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