November 2009 Philippine Supreme Court Decisions on Civil Law

Here are selected November 2009 Philippine Supreme Court decisions on civil law and related laws:

Civil Code

Contract;  contract of adhesion.     A contract of adhesion is defined as one in which one of the parties imposes a ready-made form of contract, which the other party may accept or reject, but which the latter cannot modify. One party prepares the stipulation in the contract, while the other party merely affixes his signature or his “adhesion” thereto, giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing. Contracts of adhesion are not invalid per se.  Contracts of adhesion, where one party imposes a ready-made form of contract on the other, are not entirely prohibited. The one who adheres to the contract is, in reality, free to reject it entirely; if he adheres, he gives his consent.  Norton Resources and Development Corporation vs. All Asia Bank Corporation, G.R. No. 162523. November 25, 2009

Contract;  freedom of contract. Petitioners allege that the Kasulatan was entered into by the parties freely and voluntarily. They maintain that there was already a meeting of the minds between the parties as regards the principal amount of the loan, the interest thereon and the property given as security for the payment of the loan, which must be complied with in good faith. Hence, they assert that the Court of Appeals should have given due respect to the provisions of the Kasulatan. They also stress that it is a settled principle that the law will not relieve a party from the effects of an unwise, foolish or disastrous contract, entered into with all the required formalities and with full awareness of what he was doing.

Petitioners’ contentions deserve scant consideration. In Abe v. Foster Wheeler Corporation, we held that the freedom of contract is not absolute. The same is understood to be subject to reasonable legislative regulation aimed at the promotion of public health, morals, safety and welfare. One such legislative regulation is found in Article 1306 of the Civil Code which allows the contracting parties to “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.”

To reiterate, we fully agree with the Court of Appeals in holding that the compounded interest rate of 5% per month, is iniquitous and unconscionable. Being a void stipulation, it is deemed inexistent from the beginning. The debt is to be considered without the stipulation of the iniquitous and unconscionable interest rate. Accordingly, the legal interest of 12% per annum must be imposed in lieu of the excessive interest stipulated in the agreement, in line with our ruling in Ruiz v. Court of Appeals.  Sps. Isagani & Diosdada Castro vs. Angelina de Leon Tan, G.R. No. 168940, November 24, 2009.

Contract; laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could have been done earlier, thus giving rise to a presumption that the party entitled to assert it had either abandoned or declined to assert it.

Respondent discovered in 1991 that a new owner’s copy of OCT No. 535 was issued to the Eniceo heirs. Respondent filed a criminal case against the Eniceo heirs for false testimony. When respondent learned that the Eniceo heirs were planning to sell the Antipolo property, respondent caused the annotation of an adverse claim. On 16 January 1996, when respondent learned that OCT No. 535 was cancelled and new TCTs were issued, respondent filed a civil complaint with the trial court against the Eniceo heirs and petitioner. Respondent’s actions negate petitioner’s argument that respondent is guilty of laches.  Kings Properties Corporation, Inc. vs. Canuto A. Galido, G.R. No. 170023. November 27, 2009

Contract; liquidated damage. In its June 11, 2002 Decision, the trial court granted an additional 1% per month penalty as liquidated damages beginning February 17, 1994 up to June 21, 2000.

Article 2226 of the Civil Code provides that “[L]iquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.”
In the instant case, a cursory reading of the Kasulatan would show that it is devoid of any stipulation with respect to liquidated damages. Neither did any of the parties allege or prove the existence of any agreement on liquidated damages. Hence, for want of any stipulation on liquidated damages in the Kasulatan entered into by the parties, we hold that the liquidated damages awarded by the trial court and affirmed by the Court of Appeals to be without legal basis and must be deleted.  Sps. Isagani & Diosdada Castro vs. Angelina de Leon Tan, G.R. No. 168940, November 24, 2009.

Contract; voidable contract. Pending approval or disapproval by the Provincial Governor of a contract entered into by a municipality which falls under the provisions of Section 2196 of the Revised Administrative Code, such contract is considered voidable. In the instant case, there is no showing that the contract of sale entered into between Pedro and the Municipality of Marikina was ever acted upon by the Provincial Governor. Hence, the subject contract should be considered voidable. Voidable or annullable contracts, before they are set aside, are existent, valid, and binding, and are effective and obligatory between the parties.

In the present case, since the contract was never annulled or set aside, it had the effect of transferring ownership of the subject property to Pedro. Having lawfully acquired ownership of Lots A and C, Pedro, in turn, had the full capacity to transfer ownership of these parcels of land or parts thereof, including the subject property which comprises a portion of Lot C.  The Estate of Pedro C. Gonzales and Heirs of Pedro C. Gonzales vs. The Heirs of Marcos Perez, G.R. No. 169681, November 5, 2009.

Damage’s attorney’s fees. As a rule, an award of attorney’s fees should be deleted where the award of moral and exemplary damages is not granted. Nonetheless, attorney’s fees may be awarded where the court deems it just and equitable even if moral and exemplary damages are unavailing. In the instant case, we find no reversible error in the grant of attorney’s fees by the CA.  Prosource International, Inc. vs. Horphag Research Management SA, G.R. No. 180073. November 25, 2009

Interest;  attorney’s fees. The imposition of any interest, as prayed for in this instant petition, on any amount payable to petitioners is, however, unwarranted. Contracts for attorney’s services are unlike any other contracts for the payment of compensation for any other services which allow the imposition of interest in case of delay under the provisions of the Civil Code. The practice of law is a profession, not a moneymaking venture. Jose Feliciano Loy, et al. vs. San Miguel Corporation Employees Union-Philippine Transport and General Workers Organization (SMCEU-PTGWO), et al., G.R. No. 164886. November 24, 2009

Lease;  implied new lease.   Under Article 1670, an implied new lease will set in if it is shown that: (a) the term of the original contract of lease has expired; (b) the lessor has not given the lessee a notice to vacate; and (c) the lessee continued enjoying the thing leased for 15 days with the acquiescence of the lessor. This acquiescence may be inferred from the failure of the lessor to serve notice to vacate upon the lessee.  Joven Yuki, Jr. vs. Wellington Co, G.R. No. 178527. November 27, 2009

Lease;  right to buy. The right of first refusal, also referred to as the preferential right to buy, is available to lessees only if there is a stipulation thereto in the contract of lease or where there is a law granting such right to them (i.e., Presidential Decree No. 1517 (1978), which vests upon urban poor dwellers who merely lease the house where they have been residing for at least ten years, preferential right to buy the property located within an area proclaimed as an urban land reform zone). Unlike co-owners and adjacent lot owners, there is no provision in the Civil Code which grants to lessees preemptive rights. Nonetheless, the parties to a contract of lease may provide in their contract that the lessee has the right of first refusal.

In this case, there is nothing in the Contract of Lease which grants petitioner preferential right to buy the subject premises. We are likewise unaware of any applicable law which vests upon him priority right to buy the commercial building subject matter of this case.  Joven Yuki, Jr. vs. Wellington Co, G.R. No. 178527. November 27, 2009

Loan;  interest. While we agree with petitioners that parties to a loan agreement have wide latitude to stipulate on any interest rate in view of the Central Bank Circular No. 905 s. 1982 which suspended the Usury Law ceiling on interest effective January 1, 1983, it is also worth stressing that interest rates whenever unconscionable may still be declared illegal. There is certainly nothing in said circular which grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets.

In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests are contrary to morals, if not against the law. In Medel v. Court of Appeals, we annulled a stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan and a 6% per month or 72% per annum interest on aP60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and exorbitant. In Ruiz v. Court of Appeals, we declared a 3% monthly interest imposed on four separate loans to be excessive. In both cases, the interest rates were reduced to 12% per annum.

In this case, the 5% monthly interest rate, or 60% per annum, compounded monthly, stipulated in the Kasulatan is even higher than the 3% monthly interest rate imposed in the Ruiz case. Thus, we similarly hold the 5% monthly interest to be excessive, iniquitous, unconscionable and exorbitant, contrary to morals, and the law. It is therefore void ab initio for being violative of Article 1306 of the Civil Code. With this, and in accord with the Medel and Ruiz cases, we hold that the Court of Appeals correctly imposed the legal interest of 12% per annum in place of the excessive interest stipulated in the Kasulatan. Sps. Isagani & Diosdada Castro vs. Angelina de Leon Tan, G.R. No. 168940, November 24, 2009.

Marriage; conjugal property. The registration of the trade name in the name of one person – a woman – does not necessarily lead to the conclusion that the trade name as a property is hers alone, particularly when the woman is married. By law, all property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved. Our examination of the records of the case does not show any proof that Kargo Enterprises and the properties or contracts in its name are conjugal. If at all, only the bare allegation of Navarro to this effect exists in the records of the case.

Thus, for purposes solely of this case and of resolving the issue of whether Kargo Enterprises as a sole proprietorship is conjugal or paraphernal property, we hold that it is conjugal property. Roger V. Navarro Vs. Hon. Jose L. Escobido, Presiding Judge, RTC, Branch 37, Cagayan de Oro City, and Karen T. Go, doing business under the name Kargo Enterprises, G.R. No. 153788, November 27, 2009.

Marriage;  conjugal propety. Artilce 124 od the Family Code, by its terms, allows either Karen or Glenn Go to speak and act with authority in managing their conjugal property, i.e., Kargo Enterprises. No need exists, therefore, for one to obtain the consent of the other before performing an act of administration or any act that does not dispose of or encumber their conjugal property.

Under Article 108 of the Family Code, the conjugal partnership is governed by the rules on the contract of partnership in all that is not in conflict with what is expressly determined in this Chapter or by the spouses in their marriage settlements. In other words, the property relations of the husband and wife shall be governed primarily by Chapter 4 on Conjugal Partnership of Gains of the Family Code and, suppletorily, by the spouses’ marriage settlement and by the rules on partnership under the Civil Code. In the absence of any evidence of a marriage settlement between the spouses Go, we look at the Civil Code provision on partnership for guidance.

Under Article 1181 of the Civil Code, Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties registered under this name; hence, both have an equal right to seek possession of these properties. Applying Article 484 of the Civil Code, which states that “in default of contracts, or special provisions, co-ownership shall be governed by the provisions of this Title,” we find further support in Article 487 of the Civil Code that allows any of the co-owners to bring an action in ejectment with respect to the co-owned property.  Roger V. Navarro Vs. Hon. Jose L. Escobido, Presiding Judge, RTC, Branch 37, Cagayan de Oro City, and Karen T. Go, doing business under the name Kargo Enterprises, G.R. No. 153788, November 27, 2009.

Mortgage; foreclosure proceedings. It is undisputed that sometime after the maturity of the loan, respondent Tan attempted to pay the mortgage debt of P30,000.00 as principal and some interest. Said offer was refused by petitioners because they demanded payment of the total accumulated amount of P359,000.00. Moreover, the trial court also mentioned an offer by respondent Tan of the amount of P200,000.00 to petitioners in order for her to redeem or re-acquire the property in litis.

From these, it is evident that despite considerable effort on her part, respondent Tan failed to redeem the mortgaged property because she was unable to raise the total amount of P359,000.00, an amount grossly inflated by the excessive interest imposed. Thus, it is only proper that respondents be given the opportunity to repay the real amount of their indebtedness.

On this basis, we nullify the foreclosure proceedings held on March 3, 1999 since the amount demanded as the outstanding loan was overstated. Consequently, it has not been shown that the respondents have failed to pay the correct amount of their outstanding obligation. Accordingly, we declare the registration of the foreclosure sale invalid and cannot vest title over the mortgaged property.   Sps. Isagani & Diosdada Castro vs. Angelina de Leon Tan, G.R. No. 168940, November 24, 2009.

Sale;  buyer in bad faith. In Agricultural and Home Extension Development Group v. Court of Appeals, a buyer in good faith is defined as “one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property.”

In Balatbat v. Court of Appeals, the Court held that in the realm of double sales, the registration of an adverse claim places any subsequent buyer of the registered land in bad faith because such annotation was made in the title of the property before the Register of Deeds and he could have discovered that the subject property was already sold. The Court explained further, thus:

A purchaser of a valued piece of property cannot just close his eyes to facts which should put a reasonable man upon his guard and then claim that he acted in good faith and under the belief that there were no defect in the title of the vendor. One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as be necessary to acquaint him with the defects in the title of his vendor.

Petitioner does not dispute that respondent registered his adverse claim with the Registry of Deeds on 14 March 1995. The registration of the adverse claim constituted, by operation of law, notice to the whole world. From that date onwards, subsequent buyers were deemed to have constructive notice of respondent’s adverse claim.   Kings Properties Corporation, Inc. vs. Canuto A. Galido, G.R. No. 170023. November 27, 2009
Sale;  equitable mortgage. An equitable mortgage is “one which although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law.” The essential requisites of an equitable mortgage are:

1. The parties entered into a contract denominated as a contract of sale; and

2. Their intention was to secure existing debt by way of a mortgage.

In Lim v. Calaguas, the Court held that in order for the presumption of equitable mortgage to apply, there must be: (1) something in the language of the contract; or (2) in the conduct of the parties which shows clearly and beyond doubt that they intended the contract to be a mortgage and not a pacto de retro sale. Proof by parol evidence should be presented in court. Parol evidence is admissible to support the allegation that an instrument in writing, purporting on its face to transfer the absolute title to property, was in truth and in fact given merely as security for the payment of a loan. The presumption of equitable mortgage under Article 1602 of the Civil Code is not conclusive. It may be rebutted by competent and satisfactory proof of the contrary.   Kings Properties Corporation, Inc. vs. Canuto A. Galido, G.R. No. 170023. November 27, 2009

Sale; obligations. It is said that when the buyer enters into a contract of sale, he assumes two obligations, first, the payment of the consideration and, second, the performance of such first obligation in good faith, an implied obligation but just as binding and as important as the first. Good faith is of course a matter of intent. It means giving what one owes to the other without concealment and evasion. Since intent is a state of mind, however, good faith needs a face that one can see. The steps that a party takes in fulfilling his obligation usually constitute the face that expresses good faith or lack of it. Ricardo C. Siverio vs. Eufemia Almeda and Ponciano Almeda, et al., G.R. No. 178255, November 24, 2009.

Sale;  real property. Under Article 1403(2), the sale of real property should be in writing and subscribed by the party charged for it to be enforceable. In the case before the Court, the Deed of Sale between Pedro and Marcos is in writing and subscribed by Pedro and his wife Francisca; hence, it is enforceable under the Statute of Frauds.

However, not having been subscribed and sworn to before a notary public, the Deed of Sale is not a public document and, therefore, does not comply with Article 1358 of the Civil Code.

Nonetheless, it is a settled rule that the failure to observe the proper form prescribed by Article 1358 does not render the acts or contracts enumerated therein invalid. It has been uniformly held that the form required under the said Article is not essential to the validity or enforceability of the transaction, but merely for convenience. The Court agrees with the CA in holding that 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 time-honored rule is that even a verbal contract of sale of real estate produces legal effects between the parties. Stated differently, although a conveyance of land is not made in a public document, it does not affect the validity of such conveyance. Article 1358 does not require the accomplishment of the acts or contracts in a public instrument in order to validate the act or contract but only to insure its efficacy. Thus, based on the foregoing, the Court finds that the CA did not err in ruling that the contract of sale between Pedro and Marcos is valid and binding.  The Estate of Pedro C. Gonzales and Heirs of Pedro C. Gonzales vs. The Heirs of Marcos Perez, G.R. No. 169681, November 5, 2009.

Sale;  simulated sale. The primary consideration in determining the true nature of a contract is the intention of the parties. Such intention is determined not only from the express terms of their agreement, but also from the contemporaneous and subsequent acts of the parties.

Simulation takes place when the parties do not really want the contract they have executed to produce the legal effects expressed by its wordings.[20] This Court’s pronouncement in Valerio v. Refresca is instructive — “Article 1345 of the Civil Code provides that the simulation of a contract may either be absolute or relative. In absolute simulation, there is a colorable contract but it has no substance as the parties have no intention to be bound by it. The main characteristic of an absolute simulation is that the apparent contract is not really desired or intended to produce legal effect or in any way alter the juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void, and the parties may recover from each other what they may have given under the contract. However, if the parties state a false cause in the contract to conceal their real agreement, the contract is relatively simulated and the parties are still bound by their real agreement. Hence, where the essential requisites of a contract are present and the simulation refers only to the content or terms of the contract, the agreement is absolutely binding and enforceable between the parties and their successors in interest.”

Based on the foregoing, the subject deed of sale can hardly be considered simulated. There is no showing that the parties did not intend to be bound by the contract and to comply with its terms. In fact, Villadares surrendered to petitioners any right he had over the property. He caused the titling of the property and the transfer of the tax declaration in petitioners’ names, and thereafter, delivered the certificate of title and the tax declaration to petitioners and accepted the purchase price from them. To recall, Villadares admitted that he was swayed by petitioners’ claim that they had a right over the property and thus, he agreed to sell it to them. Such motivation for entering into the contract would not negate the efficacy of the contract. In the same way, petitioners’ opposition in the land registration case does not necessarily mean that petitioners did not really intend to purchase the property. Petitioners could have accepted or acquiesced to Villadares’ title and entered into the agreement to finally settle their claim over the property.  Spouses Exequiel Lopez and Eusebia Lopez  vs. Spouses Eduardo Lopez, et al., G.R. No. 161925. November 25, 2009.

Sale;  validity. The contract between the Eniceo heirs and respondent executed on 10 September 1973 was a perfected contract of sale. A contract is perfected once there is consent of the contracting parties on the object certain and on the cause of the obligation. In the present case, the object of the sale is the Antipolo property and the price certain is P250,000.

The contract of sale has also been consummated because the vendors and vendee have performed their respective obligations under the contract. In a contract of sale, the seller obligates himself to transfer the ownership of the determinate thing sold, and to deliver the same to the buyer, who obligates himself to pay a price certain to the seller. The execution of the notarized deed of sale and the delivery of the owner’s duplicate copy of OCT No. 535 to respondent is tantamount to a constructive delivery of the object of the sale. In Navera v. Court of Appeals, the Court ruled that since the sale was made in a public instrument, it was clearly tantamount to a delivery of the land resulting in the symbolic possession thereof being transferred to the buyer.

Petitioner alleges that the deed of sale is a forgery. The Eniceo heirs also claimed in their answer that the deed of sale is fake and spurious. However, as correctly held by the CA, forgery can never be presumed. The party alleging forgery is mandated to prove it with clear and convincing evidence. Whoever alleges forgery has the burden of proving it. In this case, petitioner and the Eniceo heirs failed to discharge this burden. Kings Properties Corporation, Inc. vs. Canuto A. Galido, G.R. No. 170023. November 27, 2009

Tort; negligence. Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation.

The Civil Code characterizes negligence as the omission of that diligence required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. Negligence, as it is commonly understood, is conduct that creates an undue risk of harm to others. It is the failure to observe that degree of care, precaution and vigilance that the circumstances justly demand. It is the omission to do something which a reasonable man, guided by considerations that ordinarily regulate the conduct of human affairs, would do, or doing something that a prudent and reasonable man would not do.

To determine whether there is negligence in a given situation, this Court laid down this test: Did defendant, in doing the alleged negligent act, use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, the person is guilty of negligence.

Based on the foregoing test, we can conclude that Saycon was negligent. In the first place, he should not have been driving alone. The law clearly requires that the holder of a student-driver’s permit should be accompanied by a duly licensed driver when operating a motor vehicle. Further, there is the matter of not wearing a helmet and the fact that he was speeding. All these prove that he was negligent.Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation.

The Civil Code characterizes negligence as the omission of that diligence required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. Negligence, as it is commonly understood, is conduct that creates an undue risk of harm to others. It is the failure to observe that degree of care, precaution and vigilance that the circumstances justly demand. It is the omission to do something which a reasonable man, guided by considerations that ordinarily regulate the conduct of human affairs, would do, or doing something that a prudent and reasonable man would not do.

To determine whether there is negligence in a given situation, this Court laid down this test: Did defendant, in doing the alleged negligent act, use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, the person is guilty of negligence.

Based on the foregoing test, we can conclude that Saycon was negligent. In the first place, he should not have been driving alone. The law clearly requires that the holder of a student-driver’s permit should be accompanied by a duly licensed driver when operating a motor vehicle. Further, there is the matter of not wearing a helmet and the fact that he was speeding. All these prove that he was negligent.  Stephen Cang and George Nardo y Josol vs. Herminia Cullen,  G.R. No. 163078, November 25, 2009.

Tort;  negligence. Under Article 2179 of the Civil Code, [w]hen the plaintiff’s own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.

Considering that Saycon was the negligent party, he would not have been entitled to recover damages from petitioners had he instituted his own action. Consequently, respondent, as his employer, would likewise not be entitled to claim for damages.  Stephen Cang and George Nardo y Josol vs. Herminia Cullen,  G.R. No. 163078, November 25, 2009.

Tort;  negligence. When an employee causes damage due to his own negligence while performing his own duties, there arises the juris tantum presumption that his employer is negligent, rebuttable only by proof of observance of the diligence of a good father of a family. Thus, in the selection of prospective employees, employers are required to examine them as to their qualifications, experience and service records. With respect to the supervision of employees, employers must formulate standard operating procedures, monitor their implementation and impose disciplinary measures for breaches thereof. These facts must be shown by concrete proof, including documentary evidence.

The fact that Saycon was driving alone with only a student’s permit is, to our minds, proof enough that Cullen was negligent – either she did not know that he only had a student’s permit or she allowed him to drive alone knowing this deficiency. Whichever way we look at it, we arrive at the same conclusion: that she failed to exercise the due diligence required of her as an employer in supervising her employee. Thus, the trial court properly denied her claim for damages. One who seeks equity and justice must come to this Court with clean hands.  Stephen Cang and George Nardo y Josol vs. Herminia Cullen,  G.R. No. 163078, November 25, 2009.

Tort;  negligence. Negligence is defined as the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, by reason of which such other person suffers injury. The test to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in the performance of the alleged negligent act use reasonable care and caution which an ordinary person would have used in the same situation? If not, then he is guilty of negligence. The existence of negligence in a given case is not determined by reference to the personal judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and determines liability by that norm.

ANECO’s act of leaving unprotected and uninsulated the main distribution line over Balen’s residence was the proximate cause of the incident which claimed Exclamado’s life and injured respondents Balen and Lariosa. Proximate cause is defined as any cause that produces injury in a natural and continuous sequence, unbroken by any efficient intervening cause, such that the result would not have occurred otherwise. Agusan Del Norte Electric Cooperative, Inc. (ANECO), etc. vs. Angelina Balen, et al., G.R. No. 173146, November 25, 2009.

Special laws

Homestead;  alienation.  A grantee or homesteader is prohibited from alienating to a private individual a land grant within five years from the time that the patent or grant is issued. A violation of this prohibition renders a sale void. This, however, expires on the fifth year. From then on until the next 20 years, the land grant may be alienated provided the Secretary of Agriculture and Natural Resources approves the alienation. The Secretary is required to approve the alienation unless there are “constitutional and legal grounds” to deny the approval. In this case, there are no apparent or legal grounds for the Secretary to disapprove the sale of the Subject Land.

The failure to secure the approval of the Secretary does not ipso factomake a sale void. The absence of approval by the Secretary does not a sale made after the expiration of the 5-year period, for in such event the requirement of Section 118 of the Public Land Act becomes merely directory or a formality. The approval may be secured later, producing the effect of ratifying and adopting the transaction as if the sale had been previously authorized.   Kings Properties Corporation, Inc. vs. Canuto A. Galido, G.R. No. 170023. November 27, 2009

Unrecorded sale;  effect.  Unrecorded sales of land brought under Presidential Decree No. 1529 or the Property Registration Decree (PD 1529) are effective between and binding only upon the immediate parties. The registration required in Section 51 of PD 1529 is intended to protect innocent third persons, that is, persons who, without knowledge of the sale and in good faith, acquire rights to the property.  Kings Properties Corporation, Inc. vs. Canuto A. Galido, G.R. No. 170023. November 27, 2009

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