December 2012 Philippine Supreme Court Decisions on Civil Law

Here are select December 2012 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Damages; When Applicable. It is essential that for damages to be awarded, a claimant must satisfactorily prove during the trial that they have a factual basis, and that the defendant’s acts have a causal connection to them. Article 2229 of the Civil Code provides that exemplary damages may be imposed “by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.” They are, however, not recoverable as a matter of right. They are awarded only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. Albert M. Ching, et al. vs. Felix M. Bantolo, et al.; G.R. No. 177086. December 5, 2012

Sale of Real Property; Must be in a Public Document; requirement only for convenience. Article 1358 of the Civil Code provides that acts and contracts which have for their object the transmission of real rights over immovable property or the sale of real property must appear in a public document. If the law requires a document or other special form, the contracting parties may compel each other to observe that form, once the contract has been perfected. In Fule v. Court of Appeals, the Court held that Article 1358 of the Civil Code, which requires the embodiment of certain contracts in a public instrument, is only for convenience, and registration of the instrument only adversely affects third parties. Formal requirements are, therefore, for the benefit of third parties. Non-compliance therewith does not adversely affect the validity of the contract nor the contractual rights and obligations of the parties thereunder. Lagrimas de Jesus Zamora v. Spouses Beatriz Zamora et al., G.R. No. 162930. December 5, 2012.

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November 2012 Philippine Supreme Court Decisions on Civil Law

Here are select November 2012 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Co-ownership; validity of partition contracts. Contrary to the finding of the Court of Appeals, the subdivision agreements forged by Mendoza and her alleged co-owners were not for the partition of pro-indiviso shares of co-owners of Lot 733 but were actually conveyances, disguised as partitions, of portions of Lot 733 specifically Lots 733-A and 733-B, and portions of the subsequent subdivision of Lot 733-C. It cannot be overemphasized enough that the two deeds of absolute sale over portions of substantially the same parcel of land antedated the subdivision agreements in question and their execution acknowledged too before a notary public. Rupeta Cano Vda. De Viray and Jesus Carlo Gerard Viray v. Spouses Jose Usi and Amelita Usi,  G.R.No.192486. November 21,2012.

Constructive delivery; execution of public instrument only prima facie presumption of delivery. Article 1477 of the Civil Code recognizes that the “ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.” Related to this article is Article 1497 which provides that “[t]he thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee.” With respect to incorporeal property, Article 1498 of the Civil Code lays down the general rule: the execution of a public instrument “shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.” However, the execution of a public instrument gives rise only to a prima facie presumption of delivery, which is negated by the failure of the vendee to take actual possession of the land sold. “[A] person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public instrument.” In this case, no constructive delivery of the land transpired upon the execution of the deed of sale since it was not the spouses Villamor, Sr. but the respondents who had actual possession of the land. The presumption of constructive delivery is inapplicable and must yield to the reality that the petitioners were not placed in possession and control of the land. Sps. Erosto Santiago and Nelsi Santiago v. Mancer Villamor, et al.; G.R. No. 168499. November 26,2012

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October 2012 Philippine Supreme Court Decisions on Civil Law

Here are select October 2012 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Assignment of credit; dation in payment. An assignment of credit is an agreement by virtue of which the owner of a credit, known as the assignor, by a legal cause, such as sale, dation in payment, exchange or donation, and without the consent of the debtor, transfers his credit and accessory rights to another, known as the assignee, who acquires the power to enforce it to the same extent as the assignor could enforce it against the debtor. It may be in the form of sale, but at times it may constitute a dation in payment, such as when a debtor, in order to obtain a release from his debt, assigns to his creditor a credit he has against a third person. As a dation in payment, the assignment of credit operates as a mode of extinguishing the obligation; the delivery and transmission of ownership of a thing (in this case, the credit due from a third person) by the debtor to the creditor is accepted as the equivalent of the performance of the obligation.

The terms of the compromise judgment of the parties, however, did not convey an intent to equate the assignment of Magdalena’s retirement benefits as the equivalent of the payment of the debt due the spouses Serfino. There was actually no assignment of credit; if at all, the compromise judgment merely identified the fund from which payment for the judgment debt would be sourced. Only when Magdalena has received and turned over to the spouses Serfino the portion of her retirement benefits corresponding to the debt due would the debt be deemed paid. Since no valid assignment of credit took place, the spouses Serfino cannot validly claim ownership of the retirement benefits that were deposited with FEBTC. Without ownership rights over the amount, they suffered no pecuniary loss that has to be compensated by actual damages. Sps. Godfrey and Gerardina Serfino vs. Far East Bank and Trust Company, Inc., now Bank of the Philippine Islands.G.R. No. 171845. October 10, 2012

Compromise agreement; relation to original agreement; interest. Petitioner argues that the compromise agreement created an obligation separate from the original loan, for which respondent is now liable. By stating that the compromise agreement and the original loan transaction are distinct, petitioner would now attempt to exact payment on both. This goes against the very purpose of the parties entering into a compromise agreement, which was to extinguish the obligation under the loan. Petitioner may not seek the enforcement of both the compromise agreement and payment of the loan, even in the event that the compromise agreement remains unfulfilled.

The Court had previously tagged a 5% monthly interest rate agreed upon as “excessive, iniquitous, unconscionable and exorbitant, contrary to morals, and the law.” We need not unsettle the principle we had affirmed in a plethora of cases that stipulated interest rates of 3% per month and higher are excessive, iniquitous, unconscionable, and exorbitant. Arthur F. Mechavez vs. Marlyn M, Bermudez G.R. No. 185368. October 11, 2012

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September 2012 Philippine Supreme Court Decisions on Criminal Law and Procedure

Here are select September 2012 rulings of the Supreme Court of the Philippines on criminal law and procedure:

1.            REVISED PENAL CODE

Conspiracy; evidence. Conspiracy existed here as may be inferred from the concerted actions of the appellants and their co-accused, namely: (1) appellants and their co-accused brought Samuel to a waiting shed located on the left side of the road where the yellow pick-up service vehicle boarded by Mayor Tawan-tawan and his group would pass; (2) appellants and their co-accused, thereafter, assembled themselves on both sides of the road and surreptitiously waited for the aforesaid yellow pick-up service vehicle; (3) the moment the yellow pick-up service vehicle passed by the waiting shed, appellants and their co-accused opened fire and rained bullets thereon resulting in the killing and wounding of the victims; (4) immediately, appellants and their co-accused ran towards the house of Samuel’s aunt to get their bags and other stuff; (5) Samuel followed appellants and their co-accused; and (6) appellants and their co-accused fled. Conspiracy is very much evident from the afore-enumerated actuations of the appellants and their co-accused. They were synchronized in their approach to riddle with bullets the vehicle boarded by Mayor Tawan-tawan and his group. They were motivated by a single criminal impulse ─ to kill the victims. Conspiracy is implied when the accused persons had a common purpose and were united in its execution. People of the Philippines v. Wenceslao Nelmida, et al, G.R. No. 184500, September 11, 2012.

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August 2012 Philippine Supreme Court Decisions on Civil Law

Here are select August 2012 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Accion reivindicatoria.  Article 434 of the Civil Code provides that in an action to recover, the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendant’s claim.

The first requisite is the identity of the land. In an accion reinvindicatoria, the person who claims that he has a better right to the property must first fix the identity of the land he is claiming by describing the location, area and boundaries thereof. Anent the second requisite, i.e., the claimant’s title over the disputed area, the rule is that a party can claim a right of ownership only over the parcel of land that was the object of the deed. It is settled that what really defines a piece of land is not the area mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. We have held, however, that in controversial cases where there appears to be an overlapping of boundaries, the actual size of the property gains importance. Leonardo Notarte et al. v. Godofredo Notarte, G.R. No. 180614, August 29, 2012.

Damages; actual and moral damages; factual and legal support required. Article 2199 of the Civil Code is the statutory basis for the award of actual damages, which entitles a person to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. As such, actual damages if allowed by the RTC, being bereft of factual support, are speculative and whimsical. Without the clear and distinct findings of fact and law, the award amounts only to an ipse dixit on the part of the RTC, and do not attain finality.

Absent a clear and distinct statement of the factual and legal support for the award of moral damages, the award is thus also speculative and whimsical. Moral damages constitute another judicial ipse dixit, the inevitable consequence of which is to render the award of moral damages incapable of attaining finality. In addition, the grant of moral damages in that manner contravenes the law that permit the recovery of moral damages as the means to assuage “physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.” Moral damages are not intended to enrich the plaintiff at the expense of the defendant, but to restore the plaintiff to his status quo ante as much as possible. University of the Philippines, et al. v. Hon. Agustin Dizon et al., G.R. No. 171182, Aug. 23, 2012.

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August 2012 Philippine Supreme Court Decisions on Civil Law

Here are select August 2012 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Common carrier; damages. The operator of a. school bus service is a common carrier in the eyes of the law. He is bound to observe extraordinary diligence in the conduct of his business. He is presumed to be negligent when death occurs to a passenger. His liability may include indemnity for loss of earning capacity even if the deceased passenger may only be an unemployed high school student at the time of the accident. Spouses Teodorico and Nanette Pereña v. Spouses Nicolas and Teresita L. Zarate, et al.; G.R. No. 157917. August 29, 2012.

Contracts; rescission; consequences are restitution and in this case, each party will bear its own damage.  As correctly observed by the RTC, the rescissory action taken by GSIS is pursuant to Article 1191 of the Civil Code. In cases involving rescission under the said provision, mutual restitution is required. The parties should be brought back to their original position prior to the inception of the contract. “Accordingly, when a decree of rescission is handed down, it is the duty of the court to require both parties to surrender that which they have respectively received and to place each other as far as practicable in [their] original situation.” Pursuant to this, Goldloop should return to GSIS the possession and control of the property subject of their agreements while GSIS should reimburse Goldloop whatever amount it had received from the latter by reason of the MOA and the Addendum.

Relevant also is the provision of Article 1192 of the Civil Code which reads: “In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages.” (Emphasis suppied.)

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July 2012 Philippine Supreme Court Decisions on Civil Law

Here are select July 2012 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Contracts; reciprocal obligations. Reciprocal obligations are those which arise from the same cause, and in which each party is a debtor and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They are to be performed simultaneously such that the performance of one is conditioned upon the simultaneous fulfillment of the other. For one party to demand the performance of the obligation of the other party, the former must also perform its own obligation. Accordingly, petitioner, not having provided the services that would require the payment of service fees as stipulated in the Lease Development Agreement, is not entitled to collect the same. Subic Bay Metropolitan Authority vs. Honorable Court of Appeals and Subic International Hotel Corporation; G.R. No. 192885, July 4, 2012.

Contracts; contract of sale vs. contract to sell. The elements of a contract of sale are, to wit: a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; b) Determinate subject matter; and c) Price certain in money or its equivalent.  It is the absence of the first element which distinguishes a contract of sale from that of a contract to sell.

In a contract to sell, the prospective seller explicitly reserves the transfer of title to the prospective buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of the property subject of the contract to sell until the happening of an event, such as, in most cases, the full payment of the purchase price. What the seller agrees or obliges himself to do is to fulfill his promise to sell the subject property when the entire amount of the purchase price is delivered to him. In other words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and, thus, ownership is retained by the prospective seller without further remedies by the prospective buyer.

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