November 2011 Philippine Supreme Court Decisions on Civil Law

Here are select November 2011 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Contracts; interpretation. Article 1332. When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

We cannot accede to the petitioner’s plea.   It is quite notable that the petitioner did not specify which of the stipulations of the deed of conditional sale she had difficulty or deficiency in understanding. Her generalized averment of having been misled should, therefore, be brushed aside as nothing but a last attempt to salvage a hopeless position. Our impression is that the stipulations of the deed of conditional sale were simply worded and plain enough for even one with a slight knowledge of English to easily understand.

The petitioner was not illiterate. She had appeared to the trial court to be educated, its cogent observation of her as “lettered” (supra, at p. 7 hereof) being based on how she had composed her correspondences to DBP. Her testimony also revealed that she had no difficulty understanding English.

Nor was the petitioner’s ignorance of the true nature of the deed of conditional sale probably true. By her own admission, she had asked the bank officer why she had been made to sign a deed of conditional sale instead of an absolute sale, which in itself reflected her full discernment of the matters subject of her dealings with DBP.

Clearly, Article 1332 of the Civil Code does not apply to the petitioner. According to Lim v. Court of Appeals, the provision came into being because a sizeable percentage of the country’s populace had comprised of illiterates, and the documents at the time had been written either in English or Spanish, viz:

In calibrating the credibility of the witnesses on this issue, we take our mandate from Article 1332 of the Civil Code which provides: “When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.” This substantive law came into being due to the finding of the Code Commission that there is still a fairly large number of illiterates in this country, and documents are usually drawn up in English or Spanish. It is also in accord with our state policy of promoting social justice. It also supplements Article 24 of the Civil Code which calls on court to be vigilant in the protection of the rights of those who are disadvantaged in life. (Emphasis supplied)

Lina Calilap-Asmeron vs. Development Bank of the Philippines, et al.; G.R. No. 157330. November 23, 2011.

Contracts; rescission. Article 1191 of the Civil Code did not prohibit the parties from entering into an agreement whereby a violation of the terms of the contract would result to its cancellation. In Pangilinan v. Court of Appeals, the Court upheld the vendor’s right in a contract to sell to extrajudicially cancel the contract upon failure of the vendee to pay the installments and even to retain the sums already paid, holding:

[Article 1191 of the Civil Code] makes it available to the injured party alternative remedies such as the power to rescind or enforce fulfillment of the contract, with damages in either case if the obligor does not comply with what is incumbent upon him. There is nothing in this law which prohibits the parties from entering into an agreement that a violation of the terms of the contract would cause its cancellation even without court intervention. The rationale for the foregoing is that in contracts providing for automatic revocation, judicial intervention is necessary not for purposes of obtaining a judicial declaration rescinding a contract already deemed rescinded by virtue of an agreement providing for rescission even without judicial intervention, but in order to determine whether or not the rescission was proper. Where such propriety is sustained, the decision of the court will be merely declaratory of the revocation, but it is not itself the revocatory act. Moreover, the vendor’s right in contracts to sell with reserved title to extrajudicially cancel the sale upon failure of the vendee to pay the stipulated installments and retain the sums and installments already received has long been recognized by the well-established doctrine of 39 years standing. The validity of the stipulation in the contract providing for automatic rescission upon non-payment cannot be doubted. It is in the nature of an agreement granting a party the right to rescind a contract unilaterally in case of breach without need of going to court. Thus, rescission under Article 1191 was inevitable due to petitioner’s failure to pay the stipulated price within the original period fixed in the agreement.

Lina Calilap-Asmeron vs. Development Bank of the Philippines, et al.; G.R. No. 157330. November 23, 2011.

Special Laws

National Building Code; nuisances. It is unquestionable that the Building Official has the authority to order the condemnation and demolition of buildings which are found to be in a dangerous or ruinous condition. This authority emanates from Sections 214 and 215 of the National Building Code (Presidential Decree [P.D.] No. 1096) which provides:

Section 214. Dangerous and Ruinous Buildings or Structures                       

Dangerous buildings are those which are herein declared as such or are structurally unsafe or not provided with safe egress, or which constitute a fire hazard, or are otherwise dangerous to human life, or which in relation to existing use, constitute a hazard to safety or health or public welfare because of inadequate maintenance, dilapidation, obsolescence, or abandonment; or which otherwise contribute to the pollution of the site or the community to an intolerable degree.

Section 215. Abatement of Dangerous Buildings

When any building or structure is found or declared to be dangerous or ruinous, the Building Official shall order its repair, vacation or demolition depending upon the degree of danger to life, health, or safety. This is without prejudice to further action that may be taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of the Philippines.

As found by the CA, the records show that the OBO issued the resolution and Demolition Order only after ocular inspections and hearings were conducted. Notably, the Inspectorate Team of the DPWH came up with the same conclusion as the OBO when it conducted its own ocular inspection of the premises, that is both Buildings 1 and 2 had structural, sanitary, plumbing and electrical defects of up to 80%.

What is more, contrary to the position of the petitioners that the provisions of the Civil Code on abatement of nuisances should have been applied in their case, the fact that the buildings in question could also constitute nuisances under the Civil Code does not preclude the Building Official from issuing the assailed Demolition Order. As provided by P.D. No. 1096, the authority of the Building Official to order the repair, vacation or demolition, as the case may be, is without prejudice to further action that may be undertaken under the relevant provisions of the Civil Code. Spouses Ricardo Hipolito, Jr. and Liza Hipolito vs. Atty. Carlos Cinco, et al.; G.R. No. 174143. November 28, 2011.

P.D. No. 1529; amendment of title. The proceeding for the amendment and alteration of a certificate of title under Section 108 of P.D. No. 1529 is applicable in seven instances or situations, namely: (a) when registered interests of any description, whether vested, contingent, expectant, or inchoate, have terminated and ceased; (b) when new interests have arisen or been created which do not appear upon the certificate; (c) when any error, omission or mistake was made in entering a certificate or any memorandum thereon or on any duplicate certificate; (d) when the name of any person on the certificate has been changed; (e) when the registered owner has been married, or, registered as married, the marriage has been terminated and no right or interest of heirs or creditors will thereby be affected; (f) when a corporation, which owned registered land and has been dissolved, has not conveyed the same within three years after its dissolution; and (g) when there is reasonable ground for the amendment or alteration of title.

In this case, the petitioner was in reality seeking the reconveyance of the property covered by OCT No. 684, not the cancellation of a certificate of title as contemplated by Section 108 of P.D. No. 1529. Thus, his petition did not fall under any of the situations covered by Section 108, and was for that reason rightly dismissed.

Moreover, the filing of the petition would have the effect of reopening the decree of registration, and could thereby impair the rights of innocent purchasers in good faith and for value. To reopen the decree of registration was no longer permissible, considering that the one-year period to do so had long ago lapsed, and the properties covered by OCT No. 684 had already been subdivided into smaller lots whose ownership had passed to third persons.

Nor is it subject to dispute that the petition was not a mere continuation of a previous registration proceeding. Shorn of the thin disguise the petitioner gave to it, the petition was exposed as a distinct and independent action to seek the reconveyance of realty and to recover damages. Accordingly, he should perform jurisdictional acts, like paying the correct amount of docket fees for the filing of an initiatory pleading, causing the service of summons on the adverse parties in order to vest personal jurisdiction over them in the trial court, and attaching a certification against forum shopping (as required for all initiatory pleadings). He ought to know that his taking such required acts for granted was immediately fatal to his petition, warranting the granting of the respondents’ motion to dismiss. Luciano P. Paz vs. Republic of the Philippines, et al.; G.R. No. 157367. November 23, 2011.

P.D. No. 1529; cancellation of title.     The RD claimed that it cannot execute the order to cancel the GSIS’s titles over Lot 10, Block 2 and Lot 8, Block 8 because it has no record of GSIS’s title over these two lots. The RD theorized that these lots are included in a ‘mother title’ in GSIS’s possession and would still have to be segregated therefrom. To effectuate such segregation, the RD needed the technical descriptions of the two lots and the ‘mother title.’ Thus, petitioners ask that the GSIS be compelled to surrender its title over, as well as the technical descriptions of, Lot 10, Block 2 and Lot 8, Block 8.

GSIS refused to turn over the needed documents and information, claiming that these acts go beyond what were ordered in the Decision in G.R. No. 140398. GSIS’s protestations ring hollow.

The order contained in the Decision in G.R. No. 140398 is for the RD to cancel GSIS’s titles over Lot 10, Block 2 and Lot 8, Block 8, inter alia. Whether these titles are individual or contained in a mother title is of no consequence. The RD has to cause their cancellation. If the cancellation can only be carried out by requiring GSIS or the Bureau of Lands to provide the necessary information, then they can be compelled to do so. Otherwise, the Court’s decision would be rendered inefficacious, and GSIS would retain ostensible ownership over the lots by the simple expedience that they are included in a mother title, instead of individual titles. That result is manifestly contrary to the Court’s ruling and would subvert the very purpose of bringing this case for a complete resolution. Col. Francisco Dela Merced, substituted by his heirs, namely Blanquita E. Dela Merced, et al. vs. Government Service Insurance System, et al.;  G.R. No. 167140. November 23, 2011.

P.D. No. 1529; notice of lis pendens. A notice of lis pendens is an announcement to the whole world that a particular real property is in litigation, serving as a warning that one who acquires an interest over said property does so at his own risk, or that he gambles on the result of the litigation over the said property.”  Once a notice of lis pendens has been duly registered, any cancellation or issuance of the title of the land involved as well as any subsequent transaction affecting the same, would have to be subject to the outcome of the litigation. In other words, upon the termination of the litigation there can be no risk of losing the property or any part thereof as a result of any conveyance of the land or any encumbrance that may be made thereon posterior to the filing of the notice of lis pendens. Col. Francisco Dela Merced, substituted by his heirs, namely Blanquita E. Dela Merced, et al. vs. Government Service Insurance System, et al.;  G.R. No. 167140. November 23, 2011.

P.D. No. 1529; registration of title over land of the public domain. Under the Regalian doctrine, which is embodied in our Constitution, all lands of the public domain belong to the State, which is the source of any asserted right to any ownership of land. All lands not appearing to be clearly within private ownership are presumed to belong to the State. Accordingly, public lands not shown to have been reclassified or released as alienable agricultural land or alienated to a private person by the State remain part of the inalienable public domain. Unless public land is shown to have been reclassified as alienable or disposable to a private person by the State, it remains part of the inalienable public domain. Property of the public domain is beyond the commerce of man and not susceptible of private appropriation and acquisitive prescription. Occupation thereof in the concept of owner no matter how long cannot ripen into ownership and be registered as a title. The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable. To overcome this presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.

There must be a positive act declaring land of the public domain as alienable and disposable. To prove that the land subject of an application for registration is alienable, the applicant must establish the existence of a positive act of the government, such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. The applicant may also secure a certification from the government that the land claimed to have been possessed for the required number of years is alienable and disposable.

No such evidence was offered by the petitioners to show that the land in question has been classified as alienable and disposable land of the public domain. In the absence of incontrovertible evidence to prove that the subject property is already classified as alienable and disposable, we must consider the same as still inalienable public domain. Verily, the rules on the confirmation of imperfect title do not apply unless and until the land subject thereof is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain.  Pacifico M. Valiao, et al. vs. Republic of the Philippines, et al.; G.R. No. 170757. November 28, 2011.

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